Mealey's California Insurance

  • July 02, 2020

    Panel Won’t Reconsider Revival Of Bad Faith, Punitive Damages Claims In Wildfire Suit

    SAN FRANCISCO — A California appeals panel on July 1 denied a homeowners insurer’s petition to rehear its reversal of a lower court’s grant of summary judgment in favor of the insurer on insureds’ bad faith and punitive damages claims after finding that it cannot determine that it is undisputed that the insurer’s basis for denying the insureds’ supplemental wildfire damage claims was reasonable (Leonard Fadeeff, et al. v. State Farm General Insurance Co., No. A155691, Calif. App., 1st Dist., Div. 2).

  • June 30, 2020

    Disability Claimant Is Owed Own-Occupation Disability Benefits, Federal Judge Says

    SANTA ANA, Calif. — A disability insurer must pay long-term disability (LTD) benefits to a claimant for the entirety of the disability plan’s own-occupation period because the claimant met her burden of proving that she was disabled from performing the duties of her own occupation, a California federal judge said June 16 (Nancy DeVries v. Aetna Life Insurance Co., No. 19-1499, C.D. Calif., 2020 U.S. Dist. LEXIS 105555).

  • June 23, 2020

    Insurer Has Duty To Defend Trademark Dispute, Insured Argues To 9th Circuit

    SAN FRANCISCO — An insured recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling that its insurer has no duty to defend it against an underlying trademark dispute (Premier Pools Management Corp. v. Colony Insurance Corp., No. 18-16551, 9th Cir.).

  • June 22, 2020

    Attorney Fee Award Of Almost $125K Warranted In Disability Dispute

    SAN FRANCISCO — A California federal judge on June 19 awarded a disability claimant almost $125,000 in attorney fees and prejudgment interest because the claimant achieved some success on the merits as the court previously determined that the claimant is entitled to long-term disability (LTD) benefits under the disability plan’s own-occupation standard (Anis Shaikh v. Aetna Life Insurance Co., No. 18-4394, N.D. Calif., 2020 U.S. Dist. LEXIS 107923).

  • June 22, 2020

    Insured’s Claims Are Not Barred By Alabama Statute Of Limitations, Judge Says

    SAN FRANCISCO — A California federal judge on May 8 granted an insured’s motion for summary judgment in an environmental coverage dispute after determining that the insured’s claims against its insurers are not barred by the applicable Alabama statute of limitations (Arrow Electronics Inc. v. Aetna Casualty & Surety Co., et al., No. 18-55810, C.D. Calif., 2020 U.S. Dist. LEXIS 104269).

  • June 22, 2020

    Insurer’s Delay In Providing Policy Benefits Not In Bad Faith, Panel Rules

    SAN FRANCISCO — A federal district court did not err in granting summary judgment in favor of an automobile insurer in an insurance bad faith and breach of contract lawsuit stemming from an automobile accident because it was correct in determining that no reasonable jury could find that the insurer acted in bad faith in its handling of a third party’s claim for damages, a Ninth Circuit U.S. Court of Appeals panel ruled June 15 (Antonio Pureco, et al. v. Allstate Indemnity Co., No. 19-55061, 9th Cir., 2020 U.S. App. LEXIS 18848).

  • June 22, 2020

    Claims In Business Loss Income Suit Precluded By Virus Exclusion, Insurer Says

    LOS ANGELES — Dismissal of an insured bar’s claims in an insurance breach of contract and bad faith lawsuit stemming from its insurer’s denial of its business income loss coverage claim for losses sustained when the bar was forced to cease operations as a result of the spread of the novel coronavirus is necessary because the insured’s policy explicitly excludes coverage for such losses under a virus exclusion, the insurer argues in a June 3 motion to dismiss filed in California federal court (Pez Seafood DTLA LLC v. The Travelers Indemnity Co., et al., No. 20-4699, C.D. Calif.).

  • June 19, 2020

    Bars Sue Insurer For Bad Faith Over Denial Of Business Interruption Claims

    SAN FRANCISCO — Two bars sued their insurer in California federal court on June 18, alleging that the insurer breached the terms of their insurance policies and acted in bad faith in denying their claims for business interruption coverage after they were forced to cease operations in light of San Francisco’s shelter-in-place orders issued to combat the novel coronavirus pandemic (Grubstake Holdings LLC, et al. v. First Mercury Insurance Co., No. 20-4060, N.D. Calif.).

  • June 19, 2020

    No Coverage Owed For Suits Alleging Labor Code Violations, 9th Circuit Affirms

    SEATTLE— The Ninth Circuit U.S. Court of Appeals on June 18 affirmed a lower federal court’s ruling that a directors, officers and organization liability insurer did not owe coverage for underlying  wage and hour putative class action lawsuits brought against the insured by two of its former employees (U.S. Telepacific Corp. v. U.S. Specialty Insurance Company, No. 19-55828, 9th Cir., 2020 U.S. App. LEXIS 19072).

  • June 18, 2020

    No Coverage Owed For Environmental Contamination Remediation Costs, Panel Says

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on June 15 reversed a district court’s ruling in favor of an insured seeking coverage for environmental contamination remediation costs ordered by a governmental agency because the excess policies at issue provide coverage only for lawsuits filed against the insured (San Diego Unified Port District v. Landmark Insurance Co. et al., No. 19-55409,  9th Cir., 2020 U.S. App. LEXIS 18846).

  • June 16, 2020

    Disability Insurer Met Burden Of Proving Bad Faith Suit Belongs In Federal Court

    LOS ANGELES — A California federal judge on June 15 denied a disability claimant’s motion to remand a breach of contract and bad faith suit after determining that the disability insurer met its burden of proving that the amount in controversy exceeds the federal jurisdictional minimum of $75,000 (Roger Bourban v. AXA Equitable Life Insurance Co., et al., No. 20-3376, C.D. Calif., 2020 U.S. Dist. LEXIS 103994).

  • June 16, 2020

    Insured: Insurer ‘Unreasonably’ Adjusted, ‘Unjustifiably’ Denied Wildfire Claim

    LOS ANGELES —A homeowner on June 11 sued her insurer in a California court for breach of contract, bad faith and violation of California’s unfair competition law (UCL), alleging that the insurer unreasonably adjusted and unjustifiably denied her claim for home and personal property damage caused by the 2018 Woolsey fire (Tracey Bregman v. Certain Underwriters at Lloyd’s, London, No. 20-00792, Calif. Super., Los Angeles Co.).

  • June 12, 2020

    Pollution Exclusions Bar Coverage For Underlying Lead, Arsenic Exposure Suits

    LOS ANGELES — No coverage is owed for underlying lawsuits arising out of exposure to emissions of lead and arsenic at an insured’s lead battery recycling plant because pollution exclusions included in the applicable policies bar coverage for the underlying claims, the Ninth Circuit U.S. Court of Appeals said June 10 (Craig R. Jalbert v. XL Insurance America Inc., et al., No. 19-55188, 9th Cir., 2020 U.S. App. LEXIS 18362).

  • June 11, 2020

    Panel: Insurer Equitably Subrogated To Defense Costs In 2 Defect Cases

    RIVERSIDE, Calif. — A California appeals panel on June 10 reversed a lower court’s decision on an insurer’s equitable subrogation claim against six subcontractors over defense costs spent for a general contractor against two construction defect actions and remanded for a determination on the amount of defense costs to shift to each subcontractor (Pulte Home Corporation v. CBR Electric, Inc., et al., No. E068353, Calif. App., 4th Dist., Div. 2, 2020 Cal. App. LEXIS 519).

  • June 09, 2020

    Insured: Insurers Have Proven During Pandemic Their ‘Solid Reputation’ Is Undeserved

    STANISLAUS, Calif. — A hotel operator insured on June 4 filed a class action complaint for breach of contract and declaratory relief against insurers for denying business interruption coverage claims, alleging that they have proven during the novel coronavirus pandemic that their “solid reputation for doing the right thing for the right reason” is undeserved (American Traders Inc. v.  Mid-Century Insurance Company, et al., No. 20-002477, Calif. Super., Stanislaus Co.).

  • June 09, 2020

    Class Action: Policy ‘Specifically’ Covers Trip Cancellation Due To Quarantine

    LOS ANGELES — A class action complaint for breach of contract, bad faith and violations of California Business and Professions Code Sections 17200 and 17500 was filed against a travel insurer in a California federal court on June 2, alleging that the insurance policy “specifically provides coverage benefits for trip cancellation due to various stated occurrences, including ‘Being hijacked or Quarantined’” (Richard Robbins v. Generali Global Assistance, Inc., et al., No. 20-04904, C.D. Calif.).

  • June 08, 2020

    Landlord’s Insurer Owes No Duty To Defend Personal Injury Suit, Panel Affirms

    RIVERSIDE, Calif. — A California appeals panel on June 3 affirmed a lower court’s ruling that a landlord’s commercial general liability insurer has no duty to defend against an underlying personal injury lawsuit because the landlord had not paid the required $250,000 self-insured retention and its policy was excess to a tenant’s CGL policy pursuant to the “other insurance” clause (State Farm General Insurance Company v. Columbia Casualty Company, No. E072918, Calif. App., 4th Dist., Div. 2, 2020 Cal. App. Unpub. LEXIS 3475).

  • June 05, 2020

    Panel:  Insured’s Assignee Lacks Standing To Seek Damages In Bad Faith Suit

    SAN FRANCISCO — An insured’s assignee lacks standing to seek consequential damages after obtaining a $3.5 million default judgment against the insurer in a breach of contract and bad faith lawsuit because the assignee’s default judgment against the insured expired and was thus, unenforceable, a Ninth Circuit U.S. Court of Appeals panel ruled June 4 (James Nalder, et al. v. United Automobile Insurance Co., No. 13-17441, 9th Cir.).

  • June 04, 2020

    Insured Accuses Insurer Of ‘Forum Shopping’ In Coronavirus Coverage Dispute

    LOS ANGELES — A law firm insured on June 2 asked a federal court in California to dismiss or, alternatively, stay a business owners insurer’s lawsuit seeking a declaration that the presence or suspected presence of the novel coronavirus does not constitute “direct physical loss or damage” to trigger coverage for the insured’s claimed loss of income (Travelers Casualty Insurance Company of America v. Geragos & Geragos, No. 20-03619, C.D. Calif.).

  • June 02, 2020

    Burger Chain Sues Insurer Over Restaurant Closures Due To Pandemic

    SANTA ANA, Calif. — In-N-Out Burgers sued its commercial property insurer for breach of contract in a California federal court on May 29, arguing that the novel coronavirus pandemic has caused “direct physical loss of or damage to” its insured properties and seeking coverage for time element losses, contingent time element losses, decontamination costs, civil authority losses and extra expenses (In-N-Out Burgers v. Zurich American Insurance Company, No. 20-01000, C.D. Calif.).