Mealey's California Insurance

  • August 14, 2020

    Judge Refuses To Remand, Dismiss Coverage Suits Arising From Coronavirus Shutdown

    LOS ANGELES — A federal judge in California on Aug. 12 denied an insured's motion to remand its lawsuit seeking coverage for its losses arising from the novel coronavirus and also denied the insured's motion to dismiss its insurer's declaratory judgment lawsuit challenging coverage for its coronavirus claims (Travelers Casualty Insurance Company of America v. Geragos & Geragos, Nos. 20-3619 and 20-4414, C.D. Calif., 2020 U.S. Dist. LEXIS 145146).

  • August 14, 2020

    Panel: Court Erred In Granting Summary Judgment As To Bad Faith, UCL Claims

    SANTA ANA, Calif. — A California appeals panel on Aug. 7 held that a lower court erred in granting summary judgment in favor of a health insurer and the administrator of the policy's mental health benefit on the plaintiffs' bad faith and California unfair competition (UCL) claims, clarifying "that to avoid bad faith liability, it is not enough that an insurer's ultimate decision might be considered reasonable at first glance" (Rafi Ghazarian, et al. v. Magellan Health, Inc., et al., No. G057113, Calif. App., 4th Dist., Div. 3, 2020 Cal. App. LEXIS 74).

  • August 14, 2020

    9th Circuit Affirms Ruling In Coverage Suit Over Adult Film Actors' HIV Claims

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Aug. 13 affirmed a lower court's findings that coverage is barred for actors' underlying lawsuit alleging that they contracted the human immunodeficiency virus (HIV) in the course of filming sexual activity at the insured's premises and that the insurer is not entitled to reimbursement of more than $150,000 incurred to settle the underlying lawsuit (Atain Specialty Insurance Company Inc. v. Armory Studios LLC, et al., Nos. 19-15745 and 19-15820, 9th Cir., 2020 U.S. App. LEXIS 25703).

  • August 13, 2020

    Judge: Dispute Remains On Whether Reinsurance Services Were Provided To Mortgagors

    FRESNO, Calif. — Citing a genuine dispute over whether a mortgage company's affiliate provided actual reinsurance services, a federal judge in California on Aug. 12 denied summary judgment to both sides in a dispute brought by a class of mortgagers alleging claims under Section 8(a) of the Real Estate Settlement Procedures Act (RESPA), based upon alleged anti-kickback violations through the use of captive reinsurance agreements with private mortgage insurers (Efrain Munoz, et al. v. PHH Mortgage Corp., et al., No. 08-759, E.D. Calif.).

  • August 13, 2020

    California Panel Lacks Jurisdiction Over Relator's Dismissal Of Her Fraud Suit

    LOS ANGELES — A California appeals panel on Aug. 12 ruled that it lacked jurisdiction to review a relator's voluntary dismissal with prejudice of a qui tam action brought under the state's Insurance Fraud Prevention Act (IFPA) against companies accused of submitting fraudulent insurance bills for substance abuse treatment and found that the lower court should vacate the ruling because the woman did not obtain the required court approval before seeking dismissal (California ex rel. Alison Tonti v. Living Rebos LLC, et al., No. B295815, Calif. App., 2nd Dist., 1st Div., 2020 Cal. App. Unpub. LEXIS 5140).

  • August 13, 2020

    Mental Health Limitation Does Not Apply To Limit Disability Benefits

    OAKLAND, Calif. — A California federal magistrate judge on Aug. 10 granted a disability claimant's motion for judgment after determining that a mental health limitation does not apply because the claimant proved by a preponderance of the evidence that his disability was not caused by a mental health condition (Hans Furey v. Metropolitan Life Insurance Co., No. 19-2144, N.D. Calif., 2020 U.S. Dist. LEXIS 144049).

  • August 13, 2020

    JPMDL Denies Motions To Centralize COVID-19 Business Interruption Coverage Suits

    WASHINGTON, D.C. — The Judicial Panel on Multidistrict Litigation (JPMDL) on Aug. 12 denied motions to transfer lawsuits seeking business interruption coverage for losses arising from the novel coronavirus and related governmental closure orders to the U.S. District Court for the Eastern District of Pennsylvania or the Northern District of Illinois, finding that the requested "industry-wide centralization" "will not serve the convenience of the parties and witnesses or further the just and efficient conduct of" the litigation, but opined that insurer-specific MDLs "could achieve the convenience and efficiency benefits" pursuant to 28 U.S. Code Section 1407 (In re:  COVID-19 Business Interruption Insurance Coverage Litigation, No. 2942, JPMDL).

  • August 12, 2020

    Magistrate Judge Grants Motion To Compel Arbitration, Stays Suit Over Canceled Cruise

    SAN FRANCISCO — A federal chief magistrate judge in California on Aug. 4 granted a deluxe travel company's motion to compel arbitration and stay a University of California alumnus' breach of contract and bad faith class complaint arising from the travel company's failure to provide a refund for a cruise canceled because of the novel coronavirus pandemic (Guy Saperstein v. Thomas P. Gohagan & Company, et al., No. 20-03143, N.D. Calif.).

  • August 11, 2020

    Relocated Insureds Seek Full Replacement Cost For Home Destroyed By Wildfire

    SAN FRANCISCO — Insureds recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court's dismissal of their breach of contract and bad faith lawsuit against their homeowners insurer, arguing that they are entitled to the maximum potential coverage for the full replacement cost of their property destroyed by the Hidden Valley Lake, Calif., wildfire in September 2015 (Raelene Galusha, et al. v. Unigard Insurance Company, No. 19-16396, 9th Cir.).

  • August 07, 2020

    Suit Seeking Business Income Losses Caused By Coronavirus Remains In Federal Court

    LOS ANGELES — A California federal judge on Aug. 4 denied an insured's motion to remand a breach of contract and bad faith lawsuit stemming from an insurer's denial of coverage for business income losses caused by the novel coronavirus because complete diversity of citizenship exists as the Los Angeles health officer was fraudulently joined as a defendant (Pez Seafood DTLA LLC v. The Travelers Indemnity Co., et al., No. 20-4699, C.D. Calif., 2020 U.S. Dist. LEXIS 139928).

  • August 06, 2020

    Claimant Met Burden Of Proving She Is Entitled To LTD Benefits For Migraines

    SANTA ANA, Calif. — A California federal judge on July 27 determined that a disability claimant is entitled to long-term disability (LTD) benefits for migraines because the claimant met her burden of proving that migraine headaches prevented her from performing the duties of her own occupation (Amy Olis v. Unum Life Insurance Company of America, No. 19-1347, C.D. Calif., 2020 U.S. Dist. LEXIS 137728).

  • August 06, 2020

    Panel Majority Says Rescission Of Disability Policy Was Not Warranted

    SAN FRANCISCO — The majority of the Ninth Circuit U.S. Court of Appeals panel on Aug. 5 reversed a district court's ruling that a disability insurer was entitled to rescind a policy based on an insured's misrepresentations after determining that the record does not indisputably show that the insured made misrepresentations about his treatment for musculoskeletal problems (Great-West Life & Annuity Insurance Co. v. Michael Harrington, No. 18-55878, 9th Cir., 2020 U.S. App. LEXIS 24656).

  • August 04, 2020

    VIZIO Seeks Coverage From Insurers For Smart TV Litigation Costs, Settlement

    LOS ANGELES — VIZIO Inc. on July 30 sued its insurers in a California federal court, seeking defense and indemnity for an underlying $17 million settlement and defense costs arising from class claims over the insured's unauthorized collections of consumers' television viewing data (VIZIO Inc. v.  Navigators Insurance Company, et al., No. 20-6864, C.D. Calif.).

  • August 04, 2020

    Judge:  Insurer Fails To Allege Claim Against Another Insurer Over Defense Costs

    LOS ANGELES — A federal judge in California on July 30 dismissed, without leave to amend and with prejudice, The Travelers Indemnity Company of America's lawsuit against another insurer seeking to recover $159,876.20 in defense costs of a mutual insured against allegations that the insured negligently designed support piers for a building (The Travelers Indemnity Company v. The Hanover Insurance Company, No. 20-3513, C.D. Calif., 2020 U.S. Dist. LEXIS 136704).

  • August 04, 2020

    9th Circuit:  Rehearing Bid Withdrawn In Insolvent Surety's Reimbursement Case

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Aug. 3 granted the withdrawal of builders' petition for a rehearing of a summary judgment ruling in an insolvent surety's case alleging that the builders breached a continuing agreement of indemnification (CAI) by refusing to reimburse claims of $1,925,880.84 (Western Insurance Co. in liquidation v. Frontier Homes LLC, et al., No. 19-55101, 9th Cir., 2020 U.S. App. LEXIS 24410).

  • August 03, 2020

    Breach Of Contract, Bad Faith Claims Fail As No Coverage Owed For Water Damages

    SAN DIEGO — A California federal judge on July 31 granted an insurer's motion for summary judgment on breach of contract and bad faith claims after determining that no additional coverage  is afforded for water damages caused by an overflowing toilet (Victoria Family Limited Liability Partnership v. Ohio Security Insurance Co., et al., No. 19-2159, S.D. Calif., 2020 U.S. Dist. LEXIS 136804).

  • August 03, 2020

    Insurer: No Coverage For $1.59M Arbitration Over Construction Defects

    LOS ANGELES — In a July 28 complaint, an insurer seeks a declaration from a California federal court of its obligations toward a $1.59 million underlying construction defects arbitration (Kinsale Insurance Company v. Josh D. Moorvitch, et al., No. 20-6750, C.D. Calif.).

  • July 30, 2020

    Disability Claimant's LTD Benefits Must Be Reinstated, Federal Judge Determines

    SANTA ANA, Calif. — A disability claimant's long-term disability (LTD) benefits must be reinstated because the claimant proved by a preponderance of the evidence that he is disabled from performing the duties of any occupation, a California federal judge said July 27 (Darren Cohen v. Aetna Life Insurance Co., No. 19-1506, C.D. Calif., 2020 U.S. Dist. LEXIS 132818). 

  • July 29, 2020

    Federal Judge: Los Angeles Mayor Fraudulently Joined In Coronavirus Coverage Suit

    LOS ANGELES — A federal judge in California on July 27 denied an insured's motion to remand its novel coronavirus coverage suit to a California superior court, finding that the insured fraudulently joined Los Angeles Mayor Eric Garcetti (Mark's Engine Company No. 28 Restaurant, LLC v. The Travelers Indemnity Company of Connecticut, et al., No. 20-04423, C.D. Calif., 2020 U.S. Dist. LEXIS 132841).

  • July 28, 2020

    Insurers Seek Declaratory Relief About Rights Under Reinsurance Agreements

    SAN FRANCISCO — Ceding insurers ask a California federal court in a July 27 complaint to declare that a loss portfolio transfer does not cancel or impact their rights under reinsurance agreements and that there has been no novation on the replacement of reinsurers (Fireman's Fund Insurance Company, et al. v. Bothnia International Insurance Company Limited, No. 20-5132, N.D. Calif.).

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