Mealey's California Insurance

  • February 23, 2017

    9th Circuit Reverses, Remands Excess Coverage Suit Over Racial Discrimination Claim

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Feb. 21 reversed and remanded a lower federal court’s ruling in a dispute over excess coverage for a settlement demand in an underlying racial discrimination lawsuit against the city of Montebello, Calif. (Security National Insurance Co. v. City of Montebello, Nos. 15-56199 and 15-56263, 9th Cir., 2017 U.S. App. LEXIS 2965).

  • February 17, 2017

    9th Circuit Set To Decide Whether Court Erred In Dismissing Bad Faith Claim

    SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel will hear oral arguments on March 7 in an appeal of a federal district court ruling granting an insurer’s motion for summary judgment on its insured’s insurance bad faith claim in which the lower court held that no genuine issue of material fact existed showing that the insurer acted in bad faith in its investigation and handling of the insured’s underinsured motorist claim (Chris “Wyatt” Hicks v. Progressive Casualty Insurance, No. 15-55953, 9th Cir.).

  • February 17, 2017

    9th Circuit: Insurance Policy Bars Damage Caused By ‘Subsidence’

    SAN FRANCISCO — Claims against a mutually insured subcontractor for damage caused by “subsidence” are excluded under an insurance policy, the Ninth Circuit U.S. Court of Appeals ruled Feb. 14, finding that an insurer had no duty to defend and thus was not responsible to share in costs incurred by a defending insurer (St. Paul Mercury Insurance Co. v. Navigators Specialty Insurance Co., No. 14-56723, 9th Cir., 2017 U.S. App. LEXIS 2586).

  • February 16, 2017

    Insureds Failed To File Suit Within 1-Year Limitation Period, Federal Judge Says

    LOS ANGELES — Because insureds seeking coverage for damages to their home caused by a sewage backup did not file their lawsuit against their insurers until well after the policy’s one-year limitation period expired, a California federal judge on Feb. 13 granted the insurers’ motion for summary judgment and dismissed the insureds’ complaint in its entirety (Jacqueline Keller, et al. v. Federal Insurance Co., et al., No. 16-3946, C.D. Calif., 2017 U.S. Dist. LEXIS 20820).

  • February 16, 2017

    Claimant’s Suit Was Timely Filed, California Federal Judge Says

    SAN FRANCISCO — A disability claimant’s suit alleging wrongful termination of benefits was timely filed, a California federal judge said Feb. 13 after determining that the plan’s three-year limitations period did not begin to run until after the 180-day deadline to appeal the termination of benefits ended (Nancy Hart v. UNUM Life Insurance Company of America, No. 15-5392, N.D. Calif., 2017 U.S. Dist. LEXIS 20198).

  • February 15, 2017

    Disability Plan Is Governed By ERISA, California Federal Judge Determines

    LOS ANGELES — A California federal judge on Feb. 10 denied a plaintiff’s motion to remand a disability suit to state court because the disability plan at issue is not a “church plan” and is governed by the Employee Retirement Income Security Act (Melvyn L. Durham v. The Prudential Insurance Company of America et al., No. 16-8202, C.D. Calif., 2017 U.S. Dist. LEXIS 19402).

  • February 14, 2017

    California Appeals Panel Says No Additional Coverage Owed For Water Damages

    SAN FRANCISCO — An insurer owes no additional coverage for water damages to an insured’s condominium, the First District California Court of Appeal, Division Four,  said Feb. 10 after determining that substantial evidence supports a jury’s verdict in favor of the insurer (Greg Kawai v. State Farm Fire and Casualty Co., et al., No. A136569, Calif. App., 1st Dist., Div. 4, 2017 Cal. App. Unpub. LEXIS 1006).

  • February 13, 2017

    Judge: Breach Of Contract, Bad Faith Claims Not Filed Within Limitations Period

    SACRAMENTO, Calif. — An insured’s claims for insurance breach of contract and bad faith against his insurer were not timely filed within the contractual limitations period and the insured failed to show that the insurer engaged in any outrageous conduct to support a claim for intentional infliction of emotional distress in failing to provide coverage under a comprehensive long-term care policy, a federal judge in California ruled Feb. 9 in granting the insurer’s motion to dismiss (Donald Mann v. Mutual of Omaha, et al., No. 16-2560, E.D. Calif., 2017 U.S. Dist. LEXIS 18732).

  • February 6, 2017

    Insureds Sufficiently Pleaded Claims Against Broker, Panel Says In Reversal

    LOS ANGELES — A California appeals panel on Feb. 1 found that insureds have sufficiently pleaded claims for fraud, negligent misrepresentation, negligence and breach of contract against a surplus line insurance broker, reversing a lower court (A Plus Fabrics, Inc., et al. v. Yates & Associates Insurance Services, et al., No. B260767, Calif. App., 2nd Dist., Div. 3, 2017 Cal. App. Unpub. LEXIS 728).

  • February 3, 2017

    Progressive Injury Exclusion Bars Coverage For Water Damage Suits, Judge Says

    SAN FRANCISCO — A policy’s continuous or progressive injury exclusion bars coverage for two underlying suits filed against an insured because the insured’s repair work to address the water intrusion problems was completed more than four years before the inception of the policy, a California federal judge said Jan. 31 (Saarman Construction Ltd. v. Ironshore Specialty Insurance Co., No. 15-3548, N.D. Calif., 2017 U.S. Dist. LEXIS 13633).

  • February 3, 2017

    Yahoo Sues Insurer Over Coverage Of Email Scanning Suits

    SAN JOSE, Calif. — On Jan. 31, Yahoo! Inc. sued its commercial general liability (CGL) provider in California federal court, alleging breach of contract and bad faith related to the insurer’s decision not to defend or indemnify the internet firm in four class actions alleging privacy violations in certain email-scanning practices (Yahoo! Inc. v. National Union Fire Insurance Company of Pittsburgh, Pa., No. 5:17-cv-00489, N.D. Calif.).

  • February 2, 2017

    Farm Says It Should Have Been Given Information Regarding Criminal Investigation

    SAN FRANCISCO — An agricultural business has told the Ninth Circuit U.S. Court of Appeals that information allegedly withheld by its federal crop insurer should have been divulged before the farm signed a settlement that led to a criminal indictment (POCO, LLC v. Farmer’s Crop Insurance Alliance, Inc., No. 16-35310, 9th Cir.).

  • January 30, 2017

    9th Circuit: Insurer Has Duty To Defend Against Product Disparagement Claims

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Jan. 27 affirmed a lower federal court’s judgment against an insurer on an insured’s breach of contract and bad faith claims, finding that the insurer has a duty to defend its insured against two underlying product disparagement lawsuits brought by competitors (Millennium Laboratories, Inc. v. Darwin Select Insurance Co., No. 15-55227, 9th Cir., 2017 U.S. App. LEXIS 1533).

  • January 25, 2017

    Breach Of Contract, Bad Faith Suits Consolidated For Discovery Purposes

    LOS ANGELES — A federal judge in California on Jan. 13 granted an insured’s motion to consolidate its insurance breach of contract and bad faith lawsuit with a related action for discovery purposes, ruling that consolidation was appropriate because no parties opposed (Aspen Specialty Insurance Co. v. Riddell Inc., et al, No. 15-6324; and Bell Sports Inc. v. Aspen Specialty Insurance Co., et al., No. 16-8409, C.D. Calif.; 2017 U.S. Dist. LEXIS 7655).

  • January 25, 2017

    California High Court: Statutory Authority Supports Replacement Cost Regulation

    SAN FRANCISCO — The Supreme Court of California on Jan. 23 held that statutory authority supports the California Insurance commissioner's 2011 regulation covering replacement cost estimates for homeowners insurance, reversing and remanding an appeals court’s judgment that invalidated the regulation (Association of California Insurance Companies et al., v. Dave Jones, as commissioner, etc., No. S226529, Calif. Sup.; 2017 Cal. LEXIS 217).

  • January 25, 2017

    Couple Says Insurer’s Abuse Exclusion Clause Was Improperly Applied

    SAN FRANCISCO — A doctor and his wife recently told the Ninth Circuit U.S. Court of Appeals that a federal judge in Arizona erred when awarding summary judgment to their insurer, arguing that they were entitled to coverage for an adverse verdict in a wrongful death suit because the policy’s abuse exclusion was not applicable (Carlos F. Verdugo, et al. v. American Family Insurance Company, Nos. 16-15687, 16-5717, 9th Cir.).

  • January 24, 2017

    Insurer Says No Defense Owed For Defective Mattress Class Action Complaint

    SAN FRANCISCO — A California federal judge erred in finding that an insurer has a duty to defend its insured against an underlying consumer class action lawsuit alleging that the insured’s mattresses were defective because the underlying suit does not allege any claims for bodily injury or property damage, the insurer argues in a Jan, 17 brief filed in the Ninth Circuit U.S. Court of Appeals (Hartford Fire Insurance Co. v. Tempur-Sealy International Inc., et al., No. 16-16056, 9th Cir.).

  • January 20, 2017

    Panel: Failure To Request Written Consent Before Settlement Negates Coverage

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Jan. 19 found that a lower federal court properly applied California law in finding that a bank insured breached its professional liability insurance policy by failing to request or obtain the insurer’s written consent before executing a settlement in an underlying mortgage loan dispute (OneWest Bank, FSB, v. Houston Casualty Co., No. 15-55579, 9th Cir.; 2017 U.S. App. LEXIS 993).

  • January 19, 2017

    Reinsured Says It And Reinsurer Have Reached A Settlement In Principle

    SAN FRANCISCO — An insurer tells a federal court in California in a Jan. 11 letter that it and its reinsurer have reached a settlement in principle of their asbestos-related reinsurance dispute (The American Insurance Co. v. R&Q Reinsurance Co., No. 16-3044, N.D. Calif.).

  • January 18, 2017

    Federal Investigation Is Single Claim; Exclusions Apply, Insurer Tells 9th Circuit

    SAN FRANCISCO — A health care organization’s directors and officers liability insurer has responded to an insured’s appeal asking the Ninth Circuit U.S. Court of Appeals to reverse or “at the very least” remand a lower federal court's finding in favor of the insurer in a coverage dispute arising from an underlying investigation brought by the U.S. Department of Justice (Millennium Laboratories, Inc. v. Allied World Insurance Company [U.S.], Inc., No. 16-55432, 9th Cir.).