Mealey's California Insurance

  • February 16, 2018

    Judge Declines To Apply ‘Fraudulent Misjoinder’ Standard In Bad Faith Suit

    SAN FRANCISCO — Remand of an insurance breach of contract and bad faith lawsuit to state court is necessary because the Ninth Circuit U.S. Courts of Appeals has yet to adopt the “fraudulent misjoinder” standard established by the 11th Circuit, which an insurer argues is the basis for the action’s removal to federal court in the first place, a federal judge in California ruled Feb. 13 in remanding the action to state court (Maria I. Delgado v. Primerica Life Insurance Co., et al., No. 17-3744, N.D. Calif., 2017 U.S. Dist. LEXIS 23615).

  • February 14, 2018

    Reviewer’s Deposition Testimony Sparks California Investigation Into Aetna Claims Process

    SACRAMENTO, Calif. — California launched an investigation into Aetna Inc.’s health insurance claims approval and prior authorization process after learning that one of the company’s medical reviewers testified in a deposition that he was trained not to review medical records but instead rely on what was provided to him by the company’s nurses, the state’s insurance commissioner announced in a Feb. 12 statement.

  • February 14, 2018

    Judge Extends Deadlines In Cases Over Reinsurance Participation Agreement

    SACRAMENTO, Calif. — In two putative class actions over a reinsurance participation agreement (RPA), a California federal judge on Feb. 6 issued extensions on deadlines for expert disclosures, completion of discovery and discovery motions (Shasta Linen Supply Inc. v. Applied Underwriters Inc., et al., Nos. 16-00158 & 16-01211, E.D. Calif., 2018 U.S. Dist. LEXIS 6079).

  • February 13, 2018

    Judge Remands UCL, Other Claims Against Insurer To California Court

    LOS ANGELES — After finding that an insurance broker was not improperly joined in an action in which a moving company asserts claims for violation of California’s unfair competition law (UCL) and other causes of action in relation to an insurer’s refusal to defend it in an underlying lawsuit, a California federal judge on Feb. 8 remanded the case to state court and declined to consider dismissal of the action (Earl Wayne Pullen, dba Carole & Jan’s Moving & Storage, v. TransGuard Insurance Company of America Inc., et al., No. 17-08631, C.D. Calif., 2018 U.S. Dist. LEXIS 21177).

  • February 9, 2018

    Motion To Transfer Disability Suit Denied; Suit Remains In California

    LOS ANGELES — A California federal judge on Feb. 6 denied a motion to transfer a disability claimant’s suit to Pennsylvania federal court because the defendants failed to prove that transferring the suit would serve the convenience of the parties and would promote the interests of justice (Stephanie Stefan v. Life Insurance Company of North America, et al., No. 17-6165, C.D. Calif., 2018 U.S. Dist. LEXIS 20356).

  • February 9, 2018

    Drug Treatment Providers Say Allegations Support Contract, Health, UCL Claims

    LOS ANGELES — Substance abuse “coverage gaps” require an insurer to pay 100 percent of billed charges under California law, a trio of providers told a federal court in California on Feb. 5 (Casa Bella Recovery International Inc. v. Humana Inc., et al., Nos. 17-1801, 17-1804, 17-1807, C.D. Calif.).

  • February 8, 2018

    Disability Benefits Claim Was Properly Denied, California Federal Judge Determines

    SAN FRANCISCO — A claim for pension disability benefits was properly denied because the disability claimant failed to submit medical records detailing his disability as requested on multiple occasions by the plan at issue, a California federal judge said Feb. 6 (Vanmark Strickland v. AT&T Pension Benefit Plan, No. 17-01393, N.D. Calif., 2018 U.S. Dist. LEXIS 19566).

  • February 6, 2018

    Theft Over Multiple Days Constitutes 1 Occurrence, 9th Circuit Affirms

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Feb. 5 affirmed a lower court’s ruling in favor of a business insurer on insureds’ claims for breach of contract and bad faith, finding that theft of business merchandise over the course of multiple days is still considered to be one "occurrence” under the insurance policy (Patrick E. Patterson, et al. v. American Economy Insurance Co., No. 16-16445, 9th Cir., 2018 U.S. App. LEXIS 2846).

  • February 5, 2018

    Judge: California Law Bars Discretionary Clause In ERISA Health Insurance Case

    SAN FRANCISCO — De novo review applies to an insurer’s denial of coverage for mental health treatments under the Employee Retirement Income Security Act because the California Insurance Code treats health insurance as a form of disability insurance and bars discretionary clauses, a federal judge in the state held Jan. 31 (Mahlon D., et al. v. Cigna Health and Life Insurance Co., No. 16-7230, N.D. Calif., 2018 U.S. Dist. LEXIS 16332).

  • January 30, 2018

    Federal Judge Enters Amended Judgment After Parties Drop Appeal Of Coverage Suit

    SAN FRANCISCO — Five days after a boat business insured and its insurer stipulated to a voluntary dismissal of the insured’s appeal in the Ninth Circuit U.S. Court of Appeals challenging a no-coverage ruling, a California federal judge on Jan. 29 entered an amended judgment ordering the insured to pay $24,870.71 in costs to its insurer (Pacific Marine Center, Inc. v. Philadelphia Indemnity Insurance Co., No. 13−00992, E.D. Calif.).

  • January 29, 2018

    Federal Judge Again Allows Intervention Into ACA Contraceptive Mandate Suit

    SAN FRANCISCO — An anti-abortion group has sufficient interests in the outcome of a suit challenging rules broadening the exemptions to the Patient Protection and Affordable Care Act (ACA) contraceptive mandate to allow permissive intervention, a federal judge in California held Jan. 26 (California, et al. v. Don J. Wright, et al., No. 17-5783, N.D. Calif., 2018 U.S. Dist. LEXIS 13290).

  • January 26, 2018

    Insurer Asks High Court To Allow Arbitration Of Coverage Suit With School District

    WASHINGTON, D.C. — An excess insurer argues in a Dec.21 petition that absent intervention by the U.S. Supreme Court, it will be compelled to litigate in court a coverage dispute that contracting parties agreed to arbitrate and, that, the insurer says, violates the Federal Arbitration Act (FAA) (Safety National Casualty Corp. v. Los Angeles Unified School District, No. 17-921, U.S. Sup.)

  • January 26, 2018

    Insurer Paints Rehab Centers’ Allegations As Vague, Wants Them Dismissed

    LOS ANGELES — Amended complaints from three drug rehabilitation centers contain the same insufficiently broad allegations regarding the formation of contracts and the services provided as a previously dismissed pleading, an insurer told a federal judge in California on Jan. 25 (Casa Bella Recovery International Inc. v. Humana Inc., et al., Nos. 17-1801, 17-1804, 17-1807, C.D. Calif.).

  • January 25, 2018

    Insureds’ Bad Faith, Breach Of Contract Claims Barred By Statute Of Limitations

    LOS ANGELES — A California federal judge on Jan. 16 granted an insurer’s motion to dismiss claims for breach of contract and bad faith alleged by insureds seeking coverage for property damages to their home after determining that the claims are barred by the applicable one-year statute of limitations (Rosalie Rains v. Allstate Insurance Company, et al., No. 17-301, C.D. Calif., 2018 U.S. Dist. LEXIS 7594).

  • January 24, 2018

    Panel Finds No Conflict To Support Insured’s Right To Independent Counsel

    SACRAMENTO, Calif. — Any possible or potential conflict is not legally sufficient to require an insurer to provide independent counsel, a California appeals panel ruled Jan. 22, affirming summary judgment against an additional insured regarding a coverage dispute over defense provided in a construction defect lawsuit (Centex Homes, et al. v. St. Paul Fire and Marine Insurance Co., No. C081266, Calif. App., 3rd Dist., 2018 Cal. App. LEXIS 45).

  • January 24, 2018

    Motion To Strike Health Care Provider’s Pleading Remains After Briefing Vacated

    LOS ANGELES — A federal judge in California on Jan. 23 vacated briefing on a motion to dismiss an emergency health services provider’s case against an insurer, but let stand a motion to strike the new filing, which the defendant claims ignores the court’s order not to add defendants (Long Beach Memorial Medical Center v. Blue Cross and Blue Shield of South Carolina Inc., et al., No. 17-8181, C.D. Calif.).

  • January 23, 2018

    Judge Refuses To Dismiss UCL, Contract Claims Against Geico

    SAN JOSE, Calif. — A California federal judge on Jan. 19 granted the majority of an insurer’s motion for summary judgment as to claims for fraud and declaratory relief asserted against it by an insured who sought coverage for vehicle theft, but allowed part of his claim for violation of California’s unfair competition law (UCL) and breach of contract to proceed, finding that issues of  triable fact exist as to whether the coverage claim was denied based solely on his inability to produce cell phone records that were not available (Christopher T. Monroe v. Geico General Insurance Company, No. 5:14-cv-05174, N.D. Calif., 2018 U.S. Dist. LEXIS 9106).

  • January 22, 2018

    Employment Practices Liability Insurer Has Duty To Defend, 9th Circuit Affirms

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Jan. 17 affirmed a lower federal court’s finding that an employment practices liability insurer has a duty to defend its insured against an underlying class action lawsuit (PHP Insurance Service Inc., et al. v. Greenwich Insurance Co., No. 16-15083, 9th Cir., 2018 U.S. App. LEXIS 1128).

  • January 18, 2018

    Out-Of-State Insurer Wants Emergency Care Provider’s California Suit Dismissed

    LOS ANGELES — An emergency health services provider relies on “phantom allegations” and evidence outside the complaint in opposing dismissal of implied-in-fact contract and quantum meruit claims, a South Carolina insurer told a California federal judge on Jan. 17 (Long Beach Memorial Medical Center v. Blue Cross and Blue Shield of South Carolina Inc., et al., No. 17-8181, C.D. Calif.).

  • January 18, 2018

    United States Says California Abortion Law Governing Licensed Speakers Fails

    WASHINGTON, D.C. — Neither pregnancy counseling centers challenging a law requiring that they disclose the availability of abortion services nor the state of California advances the correct standard for analyzing the case, and the law at the heart the case partially fails when properly evaluated, the United States tells the U.S. Supreme Court in a Jan. 16 brief (NIFLA, et al. v. Xavier Becerra, et al., No. 16-1140, U.S. Sup.).