Mealey's California Insurance
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March 11, 2021
Disability Insurer Properly Rescinded Policy Based On Insured’s Misrepresentations
PHOENIX — A disability insurer did not breach its contract or act in bad faith in rescinding a disability policy because the insured’s misrepresentations on the disability policy application were material and cannot be imputed to the disability insurer, the Ninth Circuit U.S. Court of Appeals said March 4.
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March 10, 2021
Policy Exclusion Bars Coverage In Bad Faith Suit Over Floral Supply Losses
SAN DIEGO — In a March 8 order, a federal judge in California granted a commercial property insurance provider’s motion to dismiss, ruling that insureds failed to sufficiently show that the insurer breached the terms of its insurance agreement with them or acted in bad faith by denying coverage for losses of “stock” sustained as a result of governmental actions during the novel coronavirus pandemic.
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March 08, 2021
Judge: Plausible That Salon’s ‘Direct Physical Loss’ Includes Physical Dispossession
RIVERSIDE, Calif. — Denying in part an insurer’s motion to dismiss a class action seeking coverage for losses arising from the novel coronavirus pandemic, a federal judge in California on March 4 held that it is plausible that “direct physical loss” of a beauty salon’s property “includes physical dispossession because of dangerous conditions (a virus in the air) or a civil authority order” that required the salon to close.
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March 08, 2021
Insurer Did Not Act In Bad Faith, Breach Contract By Not Paying For Counsel Fees
SANTA ANA, Calif. — A California federal judge on Feb. 26 granted a general liability and truckers liability insurer’s motion for summary judgment on breach of contract and bad faith claims after determining that the insurer did not breach its contract or act in bad faith by refusing to pay costs for the insured’s independent counsel because there was no conflict of interest that warranted the appointment of independent counsel.
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March 05, 2021
Bad Faith Claim Cannot Proceed Against Auto Insurer As Benefits Were Paid
LOS ANGELES — A California federal judge on Feb. 19 granted an auto insurer’s motion for summary judgment after determining that the insured’s claim alleging bad faith cannot proceed because the auto insurer paid the insured benefits owed under the policy.
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March 04, 2021
Pretrial Conference Scheduled In Mortgagors’ Suit Against Insurers, Reinsurer
FRESNO, Calif. — A California federal judge on Feb. 9 issued a tentative pretrial order scheduling a pretrial conference for April 27 and outlining the disputed issues of facts in a suit filed by a class of mortgagors who allege that private mortgage insurers and a captive reinsurer violated anti-kickback provisions of the Real Estate Settlement Procedures Act (RESPA).
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March 03, 2021
Insurer’s Contribution Suit Toward Contractor’s Settlement Time-Barred
SAN FRANCISCO — A federal judge in California on Feb. 25 ruled that an insurer’s suit seeking contribution from another insurance company toward the defense and settlement of a suit brought against a concrete contractor that both companies issued policies to was untimely because it was brought more than two years after the contractor was dismissed from an underlying lawsuit and because the selective tender rule was inapplicable.
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March 03, 2021
Appeals Court Rejects Insurer’s Argument That Performance Bond Was Void
SAN FRANCISCO — A California appeals panel on Feb. 26 sustained a trial court judge’s ruling that an insurer must satisfy its surety obligations under a performance bond it issued to a state housing authority, finding that the insurer could not argue on appeal that the bond was void under California law because the bid for the rehabilitation project was submitted by an unlicensed contractor.
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March 03, 2021
Payroll Services Company Says Claim In ERISA, Reinsurance Suit Must Be Dismissed
SANTA ANA, Calif. — A third-party claim filed by a self-insured employee benefit plan’s third-party administrators against a payroll services company must be dismissed because the administrators failed to show that the payroll services company served as a fiduciary under the Employee Retirement Income Security Act, the payroll services company asserts in a Feb. 19 motion to dismiss.
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March 02, 2021
Duty To Defend Additional Insured Ended When Project Was Completed, Judge Says
LOS ANGELES — A federal judge in California on Feb. 24 granted an insurer’s motion for summary judgment in a suit brought by a construction manager seeking indemnification and defense in a school district’s lawsuit, finding that the construction manager was not listed as an additional insured on the policy at issue and that the agreement between the subcontractor and the school district required that the construction manager be included as an additional insured only until the project was complete.
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February 26, 2021
Judge Denies Request To Amend Complaint In Asbestos Contamination Suit
SAN DIEGO — A California federal judge on Feb. 23 denied a motion to file an amended complaint in a suit filed by insureds seeking coverage for asbestos contamination after determining that the insureds failed to prove that the addition of an insurance agent as a defendant is necessary to get complete relief.
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February 24, 2021
Insurers Request Dismissal Of California Camp Fire Suit Against PG&E
SACRAMENTO, Calif. — Four insurers standing in the shoes of their Butte County, Calif., insureds on Feb. 2 requested that a California court dismiss with prejudice their lawsuits alleging that PG&E Corp. and/or Pacific Gas & Electric Co.’s “well-documented disregard for safety regulations and risk management practices” and “blind eye towards the use of effective maintenance and inspection practices for their facilities and equipment” triggered various factors that caused and/or contributed to causing the “most destructive and deadly wildfire California has ever experienced."
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February 23, 2021
Couple’s Request For New Trial Over Insurance Fraud Denied By Judge
LOS ANGELES — A federal judge in California on Feb. 17 denied requests for a new trial and a reduction of punitive damages filed by a couple who were found liable by a jury for submitting false claims for benefits under long-term care policies they had from Lincoln Life Benefit Co., finding that the jury’s decision did not go against the weight of the evidence on the issue of the statute of limitations and that the couple’s conduct warranted the $300,000 punitive damages award.
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February 22, 2021
Minor League Baseball Teams Seek Reversal Of Dismissal Of COVID-19 Coverage Suit
SAN FRANCISCO — Small businesses that own and operate Minor League Baseball (MiLB) teams on Feb. 8 asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s dismissal of their breach of contract and declaratory judgment lawsuit seeking business interruption coverage for their losses arising from the novel coronavirus pandemic.
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February 19, 2021
Self-Reported Limitation Provision In Disability Policy Is Subject To California Law
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Feb. 17 reversed and remanded a ruling in favor of a disability insurer after determining that the disability policy’s self-reported limitations provision is subject to a California insurance law that bars the application of a self-reported limitations provision in disability contracts.
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February 18, 2021
Judge Remands UCL Class Action Claiming Hospital Asserted Inflated Liens
SAN FRANCISCO — A California federal judge on Feb. 12 remanded a putative class action against a group of medical institutions to state court and denied the institutions’ motion to dismiss after finding that the plaintiffs’ California unfair competition law (UCL) claims that the institutions improperly asserted liens against prospective civil judgments in their favor at an inflated retail rate rather than billing their insurers do not arise under federal law.
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February 18, 2021
Trial Court Did Not Err In Finding Questions Of Fact Exist On Bad Faith Claim
SAN DIEGO — The Fourth District California Court of Appeal on Feb. 8 affirmed a trial court’s ruling on an auto insurer’s motion for summary judgment on a bad faith claim because questions of fact existed as to whether the insurer’s delay in the handling of the insured’s claim was reasonable and further affirmed a jury’s award of economic damages entered in favor of the insured after determining that the insured sustained economic damages in the form of attorney fees and arbitration costs.
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February 17, 2021
Ceding Insurers Dismiss Suit Seeking Relief Under Reinsurance Agreements
SAN FRANCISCO — Ceding insurers that filed a suit in California federal court seeking a declaration that a loss portfolio transfer does not cancel or affect their rights under reinsurance agreements on Feb. 1 notified the court that they were voluntarily dismissing their suit.
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February 17, 2021
Environmental Claims Payment Dispute Between Insurer, Reinsurer Dismissed
LOS ANGELES — A California federal judge on Jan. 15 granted an insurer and reinsurer’s motion to dismiss a dispute over the reinsurer’s alleged failure to indemnify environmental claims payments after the parties reached an agreement to dismiss the suit with prejudice.
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February 17, 2021
9th Circuit Vacates Woman’s 14-Month Sentence For Filing False Insurance Claim
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Feb. 12 vacated a woman’s 14-month prison sentence, ruling that while a federal judge in California did not err when making four evidentiary rulings on testimony admitted during the trial, the judge did not provide any factual findings to support the sentence.