Mealey's California Insurance

  • March 24, 2017

    Plan Did Not Wrongfully Deny Benefits To Claimant, California Federal Judge Says

    LOS ANGELES — The decision to deny disability benefits to a claimant who was rendered quadriplegic was not an abuse of discretion because the claimant failed to timely file his claim for benefits, a California federal judge said March 20 (Gregory Clark v. Provident Life and Accident Ins. Co., et al., No. 15-6458, C.D. Calif., 2017 U.S. Dist. LEXIS 39825).

  • March 23, 2017

    9th Circuit Dismisses Appeal In Coverage Dispute Over Trademark Claims

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on March 21 dismissed an insured’s appeal in an advertising injury coverage dispute after a lower federal court determined on remand that it lacked subject matter jurisdiction over the case (Vogue International, LLC, d.b.a. Vogue International v. Hartford Casualty Insurance Co., No. 14-56394, 9th Cir., 2017 U.S. App. LEXIS 5011).

  • March 23, 2017

    9th Circuit Affirms $6.1M Judgment In Favor Of Insured In Dispute With Excess Insurer

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on March 21 affirmed a lower federal court’s $6,080,568 judgment in favor of an insured in a breach of contract and bad faith lawsuit against its excess general liability insurer arising from an underlying patent infringement dispute (Teleflex Medical Incorporated v. National Union Fire Insurance Company of Pittsburgh, Pa., No. 14-56366, 9th Cir., 2017 U.S. App. LEXIS 4996).

  • March 22, 2017

    Judge: Coverage For Negligence In Performing Insurance Services Was Not Triggered

    LOS ANGELES — A California federal judge on March 17 dismissed without prejudice a breach of contract and bad faith lawsuit against a professional liability insurer in a coverage dispute arising from the insured’s alleged breach of a loan agreement (GemCap Lending, LLC v. Scottsdale Indemnity Co., et al., No. 15-09942, C.D. Calif., 2017 U.S. Dist. LEXIS 38931).

  • March 21, 2017

    California Federal Judge Says Complete Diversity Does Not Exist, Remands Mold Suit

    LOS ANGELES — Because a plaintiff can arguably state a claim against an insurance claims adjuster for intentional infliction of emotional distress, the claims adjuster is not a sham defendant and was not fraudulently joined to defeat federal jurisdiction, a California federal judge said March 17 in remanding the insureds’ suit seeking additional coverage for mold damage to California state court (Health Pro Dental Corp., et al. v. Travelers Property Casualty Company of America, et al., No. 17-637, C.D. Calif., 2017 U.S. Dist. LEXIS 38944).

  • March 16, 2017

    Federal Judge Orders Forty Niners’ Insurer To Equally Contribute To Defense

    SAN JOSE, Calif. —  A California federal judge on March 14 found that San Francisco Forty Niners Football Co.’s primary commercial general liability insurer has a duty to contribute by equal shares with another insurer to defense costs in an underlying lawsuit against the football team and others (First Mercury Insurance Co. v. Great Divide Insurance Co., No. 16-02114, N.D. Calif., 2017 U.S. Dist. LEXIS 36501).

  • March 16, 2017

    Financial Services Exclusion Bars Coverage, Federal Judge Rules Following Remand

    SANTA ANA, Calif. — A California federal judge on March 13 held that an insurance policy’s financial services exclusion precludes coverage for an underlying lawsuit alleging Lanham Act and unfair competition claims against an insured, further finding that the underlying claims asserting that the insured illegally charged up-front fees to homeowners seeking mortgage advice are uninsurable under California law (First One Lending Corporation, et al. v. The Hartford Casualty Insurance Co., et al., No. 13-01500, C.D. Calif., 2017 U.S. Dist. LEXIS 36548).

  • March 16, 2017

    Breach Of Contract Claim Completely Preempted By ERISA, Federal Judge Says

    SAN DIEGO — A California federal judge on March 13 denied a disability claimant’s motion to remand and granted a disability insurer’s motion to dismiss after determining that a breach of contract claim is completely preempted by the Employee Retirement Income Security Act and fails to state a claim upon which relief can be granted (James Heldt v. Guardian Life Insurance Company of America, No. 16-885, S.D. Calif.; 2017 U.S. Dist. LEXIS 36490).

  • March 15, 2017

    Insurer, Reinsurer Stipulate To Dismissal Of Asbestos Reinsurance Case

    SYRACUSE, N.Y. — An insurer and its reinsurer agreed to the dismissal of their asbestos-related breach of contract dispute in a federal court in New York on March 15 (Utica Mutual Insurance Company v. R&Q Reinsurance Company, No. 13-cv-01332, N.D. N.Y.).

  • March 13, 2017

    Fraudulent Wire Transfer Emails Did Not Trigger Coverage, 9th Circuit Rules

    PASADENA, Calif. — Affirming a trial court’s judgment, a Ninth Circuit U.S. Court of Appeals panel on March 9 found no coverage under a crime insurance policy for funds lost by an accounting firm’s wire transfers pursuant to fraudulently sent emails, concluding that provisions for forgery, computer fraud and funds transfer fraud did not apply (Taylor & Lieberman v. Federal Insurance Co., No. 15-56102, 9th Cir., 2017 U.S. App. LEXIS 4205).

  • March 13, 2017

    ‘Continuous, Progressive Injury’ Exclusion Relieves Insurer Of Duty To Defend, Indemnify

    SACRAMENTO, Calif. — In recommending that default judgment be granted for an insurer, a federal magistrate judge in California on March 9 found that the insurer has no duty to defend or indemnify an underlying construction defects case against an insured because the “continuous or progressive injury and damage” exclusion precludes coverage (Mt. Hawley Insurance Co. v. Crane Development Corp., et al., No. 16-0892, E.D. Calif.; 2017 U.S. Dist. LEXIS 34175).

  • March 13, 2017

    Panel Partly Reverses Ruling In Directors, Officers Liability Coverage Dispute

    LOS ANGELES — In reversing a lower court in part, a California appeals panel on March 8 held that although a directors and officers liability insurance policy’s “Willful Misconduct Exclusion” barred coverage for losses brought about by fraud or criminal acts, the exclusion did not apply to defense expenses (Mitchell J. Stein v. Axis Insurance Company, et al., No. B265069, Calif. App., 2nd Dist., Div. 1, 2017 Cal. App. Unpub. LEXIS 1628).

  • March 10, 2017

    Panel Reverses District Court’s Summary Judgment Ruling In Bad Faith Suit

    SAN FRANCISCO — A federal district court erred in granting a third party’s motion for summary judgment on her breach of the implied duty to settle claim in an insurance bad faith and breach of contract lawsuit because no reasonable jury could conclude that the insurer “unreasonably failed to accept” the third party’s offer to settle, a Ninth Circuit U.S. Court of Appeals panel ruled March 7 in reversing (Amy J. McDaniel v. Government Employees Insurance Co., No. 14-17203, 9th Cir., 2017 U.S. App. LEXIS 4029).

  • March 9, 2017

    Federal Judge Decides Motions In Construction Defects Insurance Dispute

    SAN JOSE, Calif. — In a coverage dispute between various insurers over their responsibility toward an underlying construction defects settlement, a California federal judge on March 7 addressed four summary judgment motions on multiple key issues from the duty to defend to the number of occurrences (St. Paul Fire and Marine Insurance Co. v. Insurance Company of the State of Pennsylvania, et al., No. 15-02744, N.D. Calif.; 2017 U.S. Dist. LEXIS 32551).

  • March 9, 2017

    Insurer Has Article III Standing To Sue Insured, Assignees, Panel Says, Reversing

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Feb. 28 reversed and remanded a lower federal court’s finding that an insurer has no standing to sue its doctor insured and the insured’s patients for declaratory relief and rescission of insurance policies (Allied Professionals Insurance Co. v. Michael Scott Anglesey, M.D., et al., No. 15-55231, 9th Cir., 2017 U.S. App. LEXIS 3658).

  • March 7, 2017

    9th Circuit: Business Risk Exclusions Bar Coverage For Construction Defects Suit

    SAN FRANCISCO — Two business risk exclusions found in a commercial general liability (CGL) insurance policy bar coverage for a construction defects lawsuit, the Ninth Circuit U.S. Court of Appeals held March 2, affirming summary judgment to an insurer on breach of contract and bad faith claims (Archer Western Contractors Ltd. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 15-55648, 9th Cir.; 2017 U.S. App. LEXIS 3796).

  • March 6, 2017

    Excess Insurer’s Duty To Additional Insured At Issue Before 9th Circuit

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Feb. 9 received a reply brief in a case involving the scope of duty an excess insurer owes to an additional insured employee who used her vehicle for work purposes and was involved in an accident with a motorcycle, resulting in a $150,000 coverage gap (Judy Bamberger v. National Union Fire Insurance Co., No. 16-55252, 9th Cir.).

  • March 3, 2017

    California Federal Judge OKs Settlement In Dispute Over Offset Of Veterans’ Benefits

    OAKLAND, Calif. — A California federal on March 1 approved a class action settlement between former U.S. veterans and Liberty Life Assurance Company of Boston after determining that the terms of the settlement, which provides compensation to class members whose disability benefits were offset or reduced by Liberty Life, are reasonable (James L. Bush v. Liberty Life Assurance Company of Boston, et al., No. 14-1507, N.D. Calif.).

  • March 3, 2017

    Panel: Evidence Supports $3.5M Jury Verdict In Tainted Onions Coverage Dispute

    VENTURA, Calif. — A California appeals panel on March 1 affirmed a jury verdict against an excess insurer in an equitable contribution dispute over $3.5 million that the primary insurer paid to settle a lawsuit arising from a deadly outbreak of hepatitis A caused by contaminated onions that were marketed by the wholesaler insured (National Fire Insurance Company of Hartford v. Great American Insurance Co., No. B264238, Calif. App., 2nd Dist., Div. 6, 2017 Cal. App. Unpub. LEXIS 1453).

  • February 28, 2017

    California Panel Upholds Rulings Requiring Man To Repay Unemployment Benefits

    SAN JOSE, Calif. — A California appeals panel on Feb. 24 upheld a trial court’s decision to deny a man’s request for a writ of mandate that would allow him to retain unemployment benefits he received from November 2008 through March 2013, finding that he obtained the benefits through misrepresentations (Abhijit Prasad v. California Unemployment Insurance Appeals Board, No. H041590, Calif. App., 6th Dist., 2017 Calif. App. Unpub. LEXIS 1349).