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Mealey's California Insurance

  • January 14, 2019

    Contract-Based Claims Survive Summary Judgment In Insurance Bad Faith Suit

    SACRAMENTO, Calif. — An insurer is not entitled to summary judgment on claims that it breached its contract and acted in bad faith in denying its insureds’ claim for automobile insurance coverage after the theft of their car because a genuine issue of material fact exists as to whether the insureds sought to deceive the insurer during the claim investigation process, a federal judge in California ruled Dec. 30 (Arsen Abramyan, et al. v. GEICO Insurance Co., et al., No. 16-1069, E.D. Calif., 2018 U.S. Dist. LEXIS 218211).

  • January 10, 2019

    CIGA: Claims Against Government Were Improperly Dismissed On Preemption

    SAN FRANCISCO — In a dispute with Secretary of Health and Human Services Alex Azar II on who is responsible for payment to insureds of workers’ compensation plans that become insolvent, the California Insurance Guarantee Association (CIGA) argues in a Jan. 8 reply brief to the Ninth Circuit U.S. Court of Appeals that a lower court erred in dismissing claims based on preemption grounds and based on the government’s failure to timely file proofs of claims (California Insurance Guarantee Association v. Alex Azar II, et al., Nos. 17-56526 & 17-56528, 9th Cir.).

  • January 10, 2019

    Disney Insurer Asks 9th Circuit To Reverse Arbitration Ruling In ‘Pink Slime’ Suit

    SAN FRANCISCO — A Walt Disney Co. insurer recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling that granted the insured’s motion to compel arbitration in a coverage dispute stemming from "pink slime" defamation claims against Disney’s subsidiary (The Walt Disney Co. v. AIG Specialty Insurance Co., No. 17-56840, 9th Cir.).

  • January 10, 2019

    Insurers Say PG&E ‘Places Profits Over Public Safety’ In California Camp Fire Suit

    SACRAMENTO, Calif. — Four insurers standing in the shoes of their Butte County, Calif., insureds filed one of four lawsuits in a California Superior Court on Dec. 21, 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” (United Services Automobile Association, et al. v. Pacific Gas and Electric Co., No. 34-2018-00247013, Calif. Super., Sacramento Co.).

  • January 9, 2019

    Class Allegation Claim Stricken From Insured’s Bad Faith Complaint

    LOS ANGELES — A California federal judge on Jan. 4 granted an insurer’s motion to strike an insured’s class allegation claim in a breach of contract and bad faith suit arising out of an auto coverage dispute after determining that the claim is immaterial to the insured’s dispute with the auto insurer (Natalie Nadira John v. AIG Property Casualty Company Group Inc. et al., No. 18-8664, C.D. Calif., 2019 U.S. Dist. LEXIS 1862).

  • January 8, 2019

    Final Denial Of Disability Claim Never Issued, Federal Judge Says

    SAN FRANCISCO — A disability insurer did not issue a final denial of a claim for total disability benefits, a California federal judge said Jan. 4 in granting the insurer’s motion for summary judgment in a breach of contract and bad faith suit filed by an insured (Sunil Srinivasan, DDS v. Continental Assurance Co., et al., No. 18-4371, N.D. Calif., 2019 U.S. Dist. LEXIS 1894).

  • January 8, 2019

    District Court Failed To Address All Alleged Procedural Irregularities

    SAN FRANCISCO — A majority of a Ninth Circuit U.S. Court of Appeals panel on Jan. 4 reversed and remanded a district court’s ruling in favor of a disability plan and the plan administrator after determining that the district court failed to address all of the procedural irregularities that allegedly occurred during the claim review process (Leslie Hoffman v. Screen Actors Guild Producers Pension Plan, No. 16-56663, 9th Cir., 2019 U.S. App. LEXIS 284).

  • January 8, 2019

    Disability Suit Remanded; Wrong Standard Of Review Applied, Panel Says

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Jan. 4 reversed and remanded a judgment entered in favor of a disability insurer after determining that a district court erred in applying the abuse of discretion standard of review rather than the de novo standard of review (Robert Gordon v. Metropolitan Insurance Co., No. 17-16821, 9th Cir., 2019 U.S. App. LEXIS 292).

  • January 7, 2019

    California High Court Denies Review To State’s Insurance Guaranty Association

    SAN FRANCISCO — The California Supreme Court on Jan. 2 denied a petition filed by the California Insurance Guarantee Association (CIGA) to review a question on whether a medical care provider’s lien claim is a covered claim and whether subdivision (c)(9)(B) of California Insurance Code Section 1063.1 bars that claim (California Insurance Guarantee Association v. Workers’ Compensation Appeals Board, et al., No. S252560, Calif. Sup., 2019 Cal. LEXIS 78).

  • January 4, 2019

    Claims Adjuster Dismissed From Insureds’ Water Damage Coverage Suit

    SACRAMENTO, Calif. — A California federal judge on Jan. 3 dismissed an insurance adjuster from a water damage coverage dispute because the insureds failed to present any authority that the adjuster could be held individually liable for acts committed within the scope of her employment with the insurer (Robin L. Dobbel, et al., v. Liberty Insurance Corp., et al., No. 17-2114, E.D. Calif., 2018 U.S. Dist. LEXIS 218207).

  • January 4, 2019

    Disability Insurer Did Not Abuse Discretion In Denying STD Benefits, Panel Says

    SAN FRANCISCO — A disability insurer did not abuse its discretion in terminating a claimant’s short-term disability benefits because none of the claimant’s treating physicians found that the claimant was functionally impaired from performing the duties of his own occupation, the Ninth Circuit U.S. Court of Appeals said Dec. 10 (Daniel Johnson v. Aetna Life Insurance Co., et al., No. 17-55501, 9th Cir., 2018 U.S. App. LEXIS 34657).

  • January 4, 2019

    Bad Faith Claim Barred By Statute Of Limitations, Federal Judge Determines

    SAN DIEGO — A California federal judge on Dec. 10 dismissed a disability claimant’s bad faith claim after determining that the claim is barred by the applicable two-year statute of limitations because accrual of the bad faith claim began when the insurer issued its initial benefits determination and not when the insurer issued its decision on appeal (Frank L. Pavel v. Unum Life Insurance Company of America, et al., No. 18-1778, S.D. Calif.,  2018 U.S. Dist. LEXIS 209019).

  • January 2, 2019

    Magistrate Judge: No Error In Ruling Denying Claim Under Federally Reinsured Crop Policy

    FRESNO, Calif. — A California federal magistrate judge on Dec. 28 found that a government agency properly upheld through the agency’s good farming practices determination a farmer’s denied claim under a federally reinsured crop insurance policy (Kewal Singh v. Federal Crop Insurance Corp., No. 17-01373, E.D. Calif., 2018 U.S. Dist. LEXIS 217559).

  • December 18, 2018

    Insured Says Allocation Ruling In Asbestos Dispute Must Be Affirmed

    LOS ANGELES — An insured involved in a long-standing asbestos insurance coverage dispute argues in a Nov. 21 brief filed in the Second District California Court of Appeal that a trial court correctly ruled that a primary insurer’s allocation approach is prohibited by the “all sums” rule of allocation (Truck Insurance Exchange v. Kaiser Cement & Gypsum Corp., et al., No. B278091, Calif. App., 2nd Dist., Div. 4, 2018 CA App. Ct. Briefs LEXIS 7843).

  • December 13, 2018

    Class Certification Sought In Disputes Over Reinsurance Participation Agreement

    SACRAMENTO, Calif. — In two putative class actions over a reinsurance participation agreement (RPA) of hundreds of California businesses that bought a workers’ compensation program, plaintiffs argue in a Dec. 11 brief that a California federal court should certify a class because whether the program and RPA are illegal is a common question for all class members (Shasta Linen Supply Inc. v. Applied Underwriters Inc., et al., No. 16-00158, Pet Food Express Ltd., et al. v. Applied Underwriters Inc., et al., No. 16-01211, E.D. Calif.).

  • December 12, 2018

    California Appeals Panel Finds Man’s Guilty Plea To Fraud Claim Valid

    SAN FRANCISCO — A California appellate panel on Nov. 29 upheld a man’s sentence of one year in prison and restitution of $10,000 after pleading guilty to one count of insurance fraud, finding that he failed to obtain a probable cause certificate from the trial court (People v. Glenn Josue Barrera-Izaba, No. A151037, Calif. App., 1st Dist., 5th Div., 2018 Cal. App. Unpub. LEXIS 8054).

  • December 12, 2018

    California Court Sets Aside Default Judgments Against Defunct Company, Insurer

    SAN FRANCISCO — An insurer had no reason to believe that it was liable for a defunct company’s asbestos liabilities until after entry of default judgment and has shown that it could possibly raise a meritorious defense, a California appeals court held Dec. 11 in setting aside millions of dollars in judgments (William Mechling v. Asbestos Defendants, et al., James Greely v. Asbestos Defendants, et al., Omar Barstad v. Lamons Gasket Co., et al., Alexander Corns v. Amcord Inc., et al., Nos. A150132, A150134, A150125, A150138, Calif. App., 1st Dist.).

  • December 10, 2018

    Insured Urges 9th Circuit To Take Judicial Notice Of Briefs Filed In 2 Cases

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals should grant an insured’s motion for judicial notice regarding briefs filed in two cases that address similar facts to the insured’s argument in its appeal of a district court’s ruling that California law, rather than Alabama law, applies to an environmental contamination coverage suit, the insured argues in response to the insurers’ objection to the motion for judicial notice (Arrow Electronics Inc. v. Aetna Casualty & Surety Co., et al., No. 18-55810, 9th Cir.).

  • December 10, 2018

    Bad Faith Dispute Over Denial Of Health Insurance Coverage Remanded

    LOS ANGELES — A federal judge in California on Nov. 29 remanded an insurance breach of contract and bad faith lawsuit to state court, ruling that an insured’s state law claims do not arise under the Medicare Act and that the insured failed to show that federal question jurisdiction exists (Rosalie Vaccarino v. Aetna Inc., et al., No. 18-2349, C.D. Calif., 2018 U.S. Dist. LEXIS 202672).

  • December 6, 2018

    Denial Of Disability Benefits Not Supported By Medical Evidence, Judge Says

    OAKLAND, Calif. — A California federal judge on Dec. 5 granted a disability claimant’s motion for summary judgment after determining that the disability insurer’s denial of long-term disability (LTD) benefits is not supported by the medical evidence (Dale Holmgren v. Sun Life and Health Insurance Co., No. 17-3028, N.D. Calif., 2018 U.S. Dist. LEXIS 205649).