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Mealey's California Insurance

  • June 23, 2017

    Panel: Court Did Not Err In Dismissing Bad Faith Claim In Coverage Dispute

    SAN FRANCISCO — A federal district court did not err in granting an insurer’s motion for summary judgment on an insured’s claim for insurance bad faith because the insured failed to plead any genuine issues of material facts to support the claim, a Ninth Circuit U.S. Court of Appeals panel ruled June 19 in affirming (Jesse Kalberer v. American Family Mutual Insurance Co., No. 14-17220, 9th Cir., 2017 U.S. App. LEXIS 10779).

  • June 21, 2017

    California Appeals Panel Says Issue Of Fact Exists On Insurer’s Denial Of Coverage

    SANTA ANA, Calif. — The Fourth District California Court of Appeal on June 19 reversed a summary judgment ruling entered in favor of an insurer after determining that a genuine issue of material fact exists as to whether the insurer’s refusal to cover an insured’s epidural injections for injuries sustained in an automobile accident was reasonable (Carmen Zubillaga v. Allstate Indemnity Co., No. G052603, Calif. App., 4th Dist., Div. 3, 2017 Cal. App. LEXIS 562).

  • June 21, 2017

    Company: Insurer Owes Coverage For Fraudulent Email That Led To Financial Loss

    SAN FRANCISCO — A company that was the victim of fraud by way of email has asked the Ninth Circuit U.S. Court of Appeals to reverse a lower court’s decision and find that an insurer must provide coverage under the terms of a policy regarding losses by computer fraud (Aqua Star [USA] Corp. v. Travelers Casualty and Surety Company of America, No. 16-35614, 9th Cir.).

  • June 20, 2017

    9th Circuit Panel Upholds Court’s Bad Faith Ruling In Auto Coverage Suit

    PASADENA, Calif. — A federal district court did not err in denying an insurer’s motion for judgment as a matter of law on an insurance bad faith claim because a reasonable jury could have determined that the insurer had a reasonable opportunity to settle the claims against its insured, a Ninth Circuit U.S. Court of Appeals panel ruled June 15 in affirming (Carlos Madrigal, et al. v. Allstate Indemnity Co., Nos. 16-55839 and 16-55863, 9th Cir.).

  • June 20, 2017

    Professional Services Exclusion Does Not Bar Coverage, Insured Tells 9th Circuit

    SAN FRANCISCO — An insured has asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s finding that coverage for an underlying qui tam action brought against it under the False Claims Act (FCA) is barred because the claims arose out of its professional services (HotChalk Inc. v. Scottsdale Insurance Co., No. 16-17287, 9th Cir.).

  • June 16, 2017

    Panel Denies Rehearing Of Ruling On Joint Reinsurance Association’s Duty To Costs

    SAN FRANCISCO — Denying a petition for rehearing, a California appeals panel on June 14 upheld its earlier ruling that an insurance industry placement facility and joint reinsurance association is obligated by California Insurance Code Section 2051 to pay the costs to repair an insured’s home, less depreciation, even if the amount exceeds the fair market value of her home (California Fair Plan Association v. Marlene Garnes, No. A143190, Calif. App., 1st Dist., Div. 2, 2017 Cal. App. LEXIS 552).

  • June 16, 2017

    California Federal Judge Orders Insurer To Prove That Parties Are Completely Diverse

    LOS ANGELES — A California federal judge on June 13 ordered an insurer to show cause as to why an insured’s breach of contract and bad faith lawsuit should be litigated in federal court and not be dismissed for lack of subject matter jurisdiction (Reseda Medical Clinic, et al. v. Liberty Mutual Ins. Company, et al., No. 17-3686, C.D. Calif., 2017 U.S. Dist. LEXIS 90932).

  • June 15, 2017

    Termination Of Disability Benefits Was Reasonable, 9th Circuit Panel Affirms

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on June 12 affirmed a district court’s ruling that the termination of a disability claim was reasonable based on the plan’s mental health coverage limitation and the medical evidence considered by the disability insurer (Kathee A. Colman v. American International Group Inc. Group Benefit Plan, et al., No. 15-15903, 9th Cir., 2017 U.S. App. LEXIS 10394).

  • June 14, 2017

    Claimant Owed Disability Benefits Under Plan’s ‘Own Occupation’ Provision

    SAN FRANCISCO — Following a one-day bench trial, a California federal judge on June 13 determined that a disability claimant submitted sufficient evidence showing that he was disabled under a plan’s “own occupation” provision but failed to prove that he was disabled under the plan’s “any occupation” standard (Robert Bosley v. Metropolitan Life Insurance Co., No. 16-00139, N.D. Calif., 2017 U.S. Dist. LEXIS 90803).

  • June 14, 2017

    Appeals Court Says Evidentiary Hearing Needed In Insurance Fraud Suit

    LOS ANGELES — An evidentiary hearing should have been held to determine whether a California Highway Patrol (CHP) officer had sufficient information in 2010 to begin an investigation into whether a man committed insurance fraud by further damaging a tow truck, a California appeals panel ruled June 12 (Mark Jeffrey Tornow v. Superior Court of Los Angeles County, et al., No. B271895, Calif. App., 2nd Dist., 7th Div., 2017 Cal. App. Unpub LEXIS 4020).

  • June 14, 2017

    9th Circuit Majority Vacates Ruling In Suit Seeking Coverage Under Surety Bond

    PASADENA, Calif. — A majority of the Ninth Circuit U.S. Court of Appeals on June 2 vacated and remanded a lower federal court’s ruling in favor of an insurer in a suit seeking to recover $305,000 under a surety bond (Nacimiento Water Company, Inc. v. International Fidelity Insurance Co., Nos. 15-56323 and No. 16-55311, 9th Cir., 2017 U.S. App. LEXIS 9810).

  • June 14, 2017

    9th Circuit: Court Properly Dismissed Complaint Without Leave To Amend

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on June 13 affirmed a lower federal court’s dismissal of an insured’s lawsuit against its partners management liability reimbursement insurer, finding that the lower court did not abuse its discretion in denying the insured leave to amend its complaint (Cove Partners, LLC v. XL Specialty Insurance Company, No. 16-55315, 9th Cir., 2017 U.S. App. LEXIS 10504).

  • June 14, 2017

    Insurer Was Not Entitled To Rescind Policy, California Panel Says In Reversal

    SAN FRANCISCO — A California appeals panel on June 12 reversed a lower court’s finding that an insurer was entitled to rescind an “Owners, Landlords & Tenants Liability Coverage” insurance policy, finding that the insurer failed to satisfy its burden of showing that the insured made material misrepresentations on the insurance application  (Victor Duarte v. Pacific Specialty Insurance Co., No. A143828, Calif. App., 1st Dist., Div. 2).

  • June 9, 2017

    Magistrate Judge Grants Voluntary Dismissal Of FDIC Suit Against Insolvent Insurer

    FRESNO, Calif. — A California federal magistrate judge on June 8 granted the voluntary dismissal of a coverage lawsuit between the Federal Deposit Insurance Corp., as assignee of certain claims by a failed bank, and an insolvent insurer’s receiver (Thomas T. Hawker, et al. v. John D. Doak, insurance commissioner as receiver for Red Rock Insurance Co. f/k/a BancInsure Inc., No. 12-1261 E.D. Calif., 2017 U.S. Dist. LEXIS 88319).

  • June 8, 2017

    California Federal Judge: Disability Insurer Failed To Properly Weigh All Evidence

    SAN JOSE, Calif. — A California federal judge on June 5 reversed a disability insurer’s termination of long-term disability (LTD) benefits after determining that the insurer failed to properly consider the reports of the claimant’s treating physicians when it found that the claimant was not disabled from the duties of her regular occupation (Lisa Gallegos v. The Prudential Insurance Company of America, No. 16-1268, N.D. Calif., 2017 U.S. Dist. LEXIS 86123).

  • June 6, 2017

    Investors: District Court’s Ruling On Insurance Policy Limit Was In Error

    SAN FRANCISCO — A company that contends that a federal judge in Montana wrongly dismissed its case against an insurance company recently filed an appeal brief in the Ninth Circuit U.S. Court of Appeals, arguing that the judge erred in determining that interrelated claims constituted a legal issue rather than a factual one (Sauerbier Ranches Inc., et al. v. Catlin Specialty Insurance Company, No. 16-35280, 9th Cir.).

  • June 5, 2017

    Magistrate Dismisses Yahoo’s Suit Seeking Coverage For TCPA Class Action Claims

    SAN JOSE, Calif. — A California federal magistrate on June 2 granted a commercial general liability insurer’s motion to dismiss Yahoo! Inc.’s breach of contract lawsuit seeking coverage for underlying class action allegations that it violated the Telephone Consumer Protection Act (TCPA) by transmitting unsolicited text messages (Yahoo! Inc. v. National Union Fire Insurance Company of Pittsburgh, Pa., No. 17-00447, N.D. Calif., 2017 U.S. Dist. LEXIS 85200).

  • June 5, 2017

    California Panel Reverses Ruling In Lawsuit Alleging Claim Under Elder Abuse Act

    SAN FRANCISCO — A California appeals panel held June 2 that a first amended complaint sufficiently alleges “deprivation” of “the property of an elder” pursuant to the Elder Abuse and Dependent Adult Civil Protection Act, 42 U.S. Code Section 3058(i), 42 U.S.C. § 3058i, reversing and remanding a lower court (Frederick Mahan, et al. v. Charles W. Chan Insurance Agency, Inc., et al., No. A147236. Calif. App., 1st Dist., 2017 Cal. App. LEXIS 507).

  • June 2, 2017

    FDIC, Insolvent Insurer Seek Joint Dismissal Of Negligence Dispute

    LOS ANGELES — Following an appeal that saw a reversal of summary judgment on negligence claims, the Federal Deposit Insurance Corp., as receiver for a failed bank, and an insolvent insurer on May 30 submitted to a California federal court a joint stipulation asking for dismissal of a dispute over directors and officers liability coverage (Federal Deposit Insurance Corp., as receiver for Security Pacific Bank v. BancInsure Inc., No. 12-9882, C.D. Calif.).

  • May 30, 2017

    Panel: Joint Reinsurance Association Is Required To Pay Costs To Repair Home

    SAN FRANCISCO — An insurance industry placement facility and joint reinsurance association is obligated by California Insurance Code Section 2051 to pay the costs to repair an insured’s home, less depreciation, even if the amount exceeds the fair market value of her home, a California appeals panel ruled May 26 (California Fair Plan Association v. Marlene Garnes, No. A143190, Calif. App., 1st Dist., Div. 2, 2017 Cal. App. LEXIS 479).