Mealey's California Insurance

  • April 13, 2018

    California Jury Finds Insurer Acted In Bad Faith, Awards Insured More Than $22M

    SANTA ANA, Calif. — Following an almost $10 million award to an insured injured in an auto accident, a California state jury on April 10 awarded the insured $13 million in punitive damages after determining that the insurer acted in bad faith in handling the insured’s claim for underinsured motorist benefits (Omar Dauod v. GEICO Indemnity Insurance Co., No. 30-2014-00761274, Calif. Super., Orange Co.).

  • April 6, 2018

    Insurer Has No Duty To Defend False Advertising Suit, 11th Circuit Affirms

    ATLANTA — The 11th Circuit U.S. Court of Appeals on April 3 affirmed a lower court’s finding that an insurer had no duty to defend or indemnify its insured in a false advertising lawsuit because coverage is barred by a policy exclusion and the insured failed to provide timely notice of the underlying action (Scott, Blane and Darren Recovery, LLC, et al. v. Auto-Owners Insurance Company, No. 17-12945, 11th Cir., 2018 U.S. App. LEXIS 8630).

  • April 4, 2018

    Impaired Property Exclusion Bars Coverage For Negligence Suit, Panel Affirms

    LOS ANGELES — A California appeals panel on March 19 affirmed a lower court’s finding that an insurer has no duty to defend its insured against underlying claims that it negligently installed electrical equipment for a medical scanner because the policy excludes coverage for loss of use of property caused by a deficiency in the insured’s work (All Green Electric, Inc. v. Security National Insurance Company, No. B279456, Calif. App., 2nd Dist., Div. 8, 2018 Cal. App. Unpub. LEXIS 1817).

  • April 2, 2018

    9th Circuit Rejects Investors’ Argument That Excess Coverage Was Triggered

    PASADENA, Calif. — The Ninth Circuit U.S Court of Appeals on March 30 held that under either New York or California law, excess coverage was not triggered in a coverage dispute arising from a breach of fiduciary class action brought against a bankrupt subprime mortgage company’s officers and directors (Ruth Ann Wunderman-Cooper, et al. v. Certain Underwriters at Lloyd's London, No. 15-56671, 9th Cir., 2018 U.S. App. LEXIS 8127).

  • April 2, 2018

    Magistrate Federal Judge Orders Production Of Tax Documents In Reinsurance Case

    SAN DIEGO — In a dispute over a reinsurer’s alleged breach of reinsurance agreements because of a series of fraudulent transfers, a California federal magistrate judge on March 29 ordered a tax accountant to produce documents related to tax services (Odyssey Reinsurance Co. v. Richard Keith Nagby, et al., No. 16-3038, S.D. Calif., 2018 U.S. Dist. LEXIS 53520).

  • March 30, 2018

    Parties Address Insurer’s Insolvency For Personal Injury Coverage Dispute

    SAN FRANCISCO — In a coverage dispute for personal injuries from an accident, an injured driver and her auto insurer submitted letters to a California federal court on March 28 on whether the at-fault driver’s insurer was insolvent within a timeframe for the injured to qualify as an underinsured motorist (Monique Arreola v. MAPFRE Insurance Co., No. 17-05642, N.D. Calif.).

  • March 28, 2018

    Magistrate Judge Recommends $159,876.20 Award To Insurer On Reimbursement Claim

    SACRAMENTO, Calif. — A California federal magistrate judge on March 26 recommended that an insurer be awarded $159,876.20 as damages for its equitable reimbursement claim after the insured failed to respond to a coverage dispute over costs incurred in the defense of an underlying negligent construction design lawsuit (The Travelers Indemnity Company of America v. SFA Design Group LLC, No. 16-1238, E.D. Calif., 2018 U.S. Dist. LEXIS 49702).

  • March 28, 2018

    Federal Judge Stays Breach Of Contract Suit Against Insolvent Insurer

    LOS ANGELES — A California federal judge on March 22 stayed insureds’ breach of contract case against an insolvent insurer pending resolution of the insurer’s liquidation (Yancy Alvarez, et al. v. Access General Insurance Co., No. 18-336, C.D. Calif., 2018 U.S. Dist. LEXIS 47741).

  • March 26, 2018

    9th Circuit Upholds Amount Of Loss Medicare Sustained From Fraud Scheme

    PASADENA, Calif. — A federal judge in California did not err when ordering a woman who pleaded guilty to health care fraud to pay $4 million in restitution, a Ninth Circuit U.S. Court of Appeals panel ruled March 23, finding that the judge did not err when calculating the amount of loss (United States of America v. L’Tanya Denise Smith, No. 16-50322, 9th Cir., 2018 U.S. App. LEXIS 7411).

  • March 21, 2018

    Substantial Evidence Supports Summary Judgment In Bad Faith Suit, Judge Rules

    SAN FRANCISCO — An insurer did not act in bad faith in its handling of an automobile insurance claim because “substantial evidence” uncovered in the insurer’s claim investigation outweighed an insured’s assertions regarding the alleged theft of her vehicle, a federal judge in California ruled March 16 in granting the insurer’s summary judgment motion (Kevineshia Island v. State Farm Fire and Casualty Co., et al., No. 16-5449, N.D. Calif., 2018 U.S. Dist. LEXIS 44737).

  • March 20, 2018

    Insurer Must Pay Full Amount Of Underlying Asbestos Suit Settlement

    SAN FRANCISCO — An insurer is obligated to pay its insured more than $2.5 million for the settlement of an underlying wrongful death suit arising out of the use of asbestos in the insured’s product because the policy at issue clearly requires that an all sums method of allocation be applied, a California federal judge said March 15 (Polar-Mohr Maschinenvertriebsgesellschaft Gmbh v. Zurich Am. Ins. Co., No. 17-1804, N.D. Calif., 2018 U.S. Dist. LEXIS 42955).

  • March 19, 2018

    Fraud, Negligence Claims Dismissed In Water Damages Suit; Bad Faith Claim Remains

    OAKLAND, Calif. — A California federal judge on March 9 dismissed a number of claims in an insured’s bad faith suit arising out of the insured’s claim for water damages after determining that the insured failed to provide sufficient facts in support of the claims for fraud, negligence and punitive damages (Stephen G. Opperwall v. State Farm Fire and Casualty Co., et al., No. 17-7083, N.D. Calif., 2018 U.S. Dist. LEXIS 39328).

  • March 19, 2018

    Insured Says Facts Were Overlooked In Coverage Dispute Over Federal Investigation

    PASADENA, Calif. — A health care organization insured on March 14 filed a petition for a panel rehearing challenging the Ninth Circuit U.S. Court of Appeals’ ruling in favor of a directors and officers liability insurer in a coverage dispute arising from an underlying investigation brought by the U.S. Department of Justice against the insured (Millennium Laboratories, Inc. v. Allied World Assurance Company [U.S.] Inc., No. 16-55432, 9th Cir.).

  • March 19, 2018

    Insureds Failed To Allege Facts Supporting Fraud Claim Against Auto Insurer

    SAN DIEGO — A California federal judge on March 14 granted an insurer’s motion to dismiss a fraud claim after determining that the insureds failed to allege facts supporting their contention that the insurer acted fraudulently in handling the insureds’ uninsured motorist claim (James Davis, et al. v. Sentinel Insurance Co., No. 17-1845, S.D. Calif., 2018 U.S. Dist. LEXIS 42176).

  • March 16, 2018

    Real Estate Property Managed Endorsement Rendered Policy Excess, 9th Circuit Affirms

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on March 13 affirmed a lower federal court’s finding that a real estate property managed endorsement rendered an insurer's policies excess with respect to an underlying personal injury claim and, therefore, the insurer has no duty to defend or indemnity its property manager insured (Atain Specialty Insurance Co. v. Sierra Pacific Management Co., et al., No. 16-17221, 9th Cir., 2018 U.S. App. LEXIS 6232).

  • March 15, 2018

    Federal Judge Remands NFL Player’s Disability Claim For Re-Evaluation Of Benefits

    SAN FRANCISCO — A California federal judge on March 12 remanded a former National Football League player’s claim for disability benefits after determining that the plan failed to provide support for its denial of the player’s claim (Charles Dimry v. The Bert Bell/Pete Rozelle NFL Player Retirement Plan, et al., No. 16-1413, N.D. Calif., 2018 U.S. Dist. LEXIS 41359).

  • March 12, 2018

    Judge: Providers Don’t Need Detailed Policy Allegations At Pleading Stage

    LOS ANGELES — Requiring health care providers to detail policies’ specific conditions, exclusions and limitations at the pleading stage would likely make it impossible for them to ever sue insurers, a federal judge said Feb. 26 in holding that California unfair competition law (UCL) and other claims survive motions to dismiss (Casa Bella Recovery International Inc. v. Humana Inc., et al., Nos. 17-1801, 17-1804, 17-1807, C.D. Calif.).

  • March 9, 2018

    Work Incentive Benefit Was Properly Applied To Offset Disability Benefits

    SAN FRANCISCO — A work incentive benefit included in a disability policy’s summary plan description does not violate the disclosure requirements of the Employee Retirement Income Security Act and was properly applied to offset a disability claimant’s monthly benefits, the Ninth Circuit U.S. Court of Appeal said March 7 (Howard Lyle Abrams v. Life Insurance Company of North America, et al., No. 16-55858, 9th Cir., 2018 U.S. App. LEXIS 5780).

  • March 8, 2018

    9th Circuit Affirms Ruling In Insurer’s Favor In Suit Over Federal Investigation

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on March 7 affirmed a lower federal court’s ruling in favor of a directors and officers liability insurer in a coverage dispute arising from an underlying investigation brought by the U.S. Department of Justice against its health care organization insured (Millennium Laboratories, Inc. v. Allied World Assurance Company [U.S.] Inc., No. 16-55432, 9th Cir., 2018 U.S. App. LEXIS 5782).

  • March 8, 2018

    Supreme Court Opens Abortion Disclosure Arguments To Solicitor General

    WASHINGTON, D.C. — The U.S. Supreme Court on March 5 divided oral arguments and granted the solicitor general permission to participate in a case questioning whether California law governing disclosures regarding the availability of abortions infringes on First Amendment rights of crisis pregnancy centers (NIFLA, et al. v. Xavier Becerra, et al., No. 16-1140, U.S. Sup.).