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Mealey's California Insurance

  • October 15, 2018

    Judge: Professional Services Exclusion Bars Coverage For Suit Over Diabetic Shoes

    RIVERSIDE, Calif. — A California federal judge on Oct. 5 found that the “entirety” of an insured’s conduct in selling orthotic shoes and inserts to an underlying claimant is “unambiguously providing professional services” and excluded from coverage under the policy (Employers Mutual Casualty Company v. Brilsilco, Inc., No. 18-225, C.D. Calif., 2018 U.S. Dist. LEXIS 174632).

  • October 15, 2018

    Jury Must Decide If Insurer Handled Yahoo Email Scanning Suits In Bad Faith

    SAN JOSE, Calif. — A California federal judge on Oct. 12 held that issues of fact preclude summary judgment as to whether a commercial general liability insurer acted in bad faith in its claims handling of underlying class actions filed against Yahoo! Inc. over its practice of scanning the content of emails (Yahoo! Inc. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 17-00489, N.D. Calif., 2018 U.S. Dist. LEXIS 176115).

  • October 9, 2018

    Disability Claimant Awarded $20,000 In Attorney Fees Incurred As A Result Of Appeal

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Oct. 4 awarded a disability claimant $20,000 in attorney fees incurred in his appeal over a dispute regarding the claimant’s entitlement to own-occupation long-term disability (LTD) benefits (Dave Nagy v. Group Long Term Disability Plan for Employees of Oracle America Inc., et al., Nos. 16-16160, 9th Cir., 2018 U.S. App. LEXIS 28166).

  • October 8, 2018

    Bad Faith Claim Against Insurer’s Parent Company Cannot Survive, Judge Says

    SAN FRANCISCO — An insured’s bad faith claim cannot be sustained against the parent company of a homeowners insurer because the insured failed to prove that the parent company acted in bad faith in the handling of her claim for water damages, a California federal judge said Oct. 3 (Tam Vu v. Liberty Mutual Insurance Co., et al., No. 18-3594, N.D. Calif., 2018 U.S. Dist. LEXIS 171347).

  • October 2, 2018

    U.S. High Court Denies Petitions In Reinsurance Participation Agreement Suit

    WASHINGTON, D.C. — In breach of contract disputes over reinsurance participation agreements (RPA), the U.S. Supreme Court on Oct. 1 denied petitions asking whether a choice-of-law clause imports “state substantive law without importing state rules impairing arbitration” or whether the clause incorporates “both state substantive law and state arbitration principles” (Applied Underwriters Captive Risk Assurance Company Inc. v. Citizens of Humanity, et al., No. 18-174; Applied Underwriters Inc., et al. v. Citizens of Humanity, et al., No. 18-175, U.S. Sup.).

  • October 1, 2018

    High Court Denies Review Of 9th Circuit’s Disability Offset Ruling

    WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 1 denied a disability claimant’s petition for writ of certiorari in a dispute regarding the offsetting of the claimant’s long-term disability (LTD) benefits to account for Social Security disability income (SSDI) benefits received on behalf of the claimant’s dependents (Susan Rene Jones v. Merck Sharpe & Dohme Corp., et al., No. 17-1478, U.S. Sup.).

  • September 28, 2018

    Negligent Infliction Of Emotional Distress Claim Stands, Federal Judge Says

    SAN DIEGO — An insured sufficiently stated a claim for negligent infliction of emotional distress but failed to sufficiently state a claim for intentional infliction of emotional distress against his auto insurer, which allegedly handled his underinsured motorist benefits claim in bad faith, a California federal judge said Sept. 25 (Russell Kane v. United Services Automobile Association, et al., No. 17-2581, S.D. Calif., 2018 U.S. Dist. LEXIS 164605).

  • September 27, 2018

    Disability Suit Will Remain In California; Transfer To Georgia Not Warranted

    SAN FRANCISCO — A California federal judge on Sept. 24 denied a disability plan’s motion to transfer a disability claimant’s suit to Georgia, where the claimant lived and was treated for his disability, after determining that the claimant’s choice of forum is entitled to some deference and that none of the convenience factors weighs strongly in favor of transferring the suit (Mark Ennis v. Aetna Life Insurance Co. et al., No. 18-1617, N.D. Calif., 2018 U.S. Dist. LEXIS 163442).

  • September 27, 2018

    Insurer Failed To Consider If Claimant Could Perform Job With ‘Reasonable Continuity’

    OAKLAND, Calif. — A disability insurer wrongfully denied long-term disability (LTD) benefits to a plan participant suffering from liver cancer because the insurer failed to consider whether the participant could continue to perform the duties of his job with “reasonable continuity,” a California federal judge said Sept. 19 (Shelley Lyttle v. United of Omaha Life Insurance Co., No. 17-1361, N.D. Calif., 2018 U.S. Dist. LEXIS 160300).

  • September 26, 2018

    Reinsurer Says No Fact Issues On Its Status As Creditor In Breach Case

    SAN DIEGO — In a California federal court case over breached reinsurance agreements from fraudulent transfers, a reinsurer in a Sept. 21 summary judgment reply brief says an insurance broker’s former owners fail to present a genuine disputed material fact as to the reinsurer’s status as a creditor (Odyssey Reinsurance Co. v. Richard Keith Nagby, et al., No. 16-3038, S.D. Calif.).

  • September 24, 2018

    No Valid Exception To No-Voluntary Payments Provision Applies To Coverage Dispute

    PASADENA, Calif.— The Ninth Circuit U.S. Court of Appeals on Sept. 20 affirmed a lower court’s ruling that insureds breached an insurance policy’s  “no-voluntary payments” provision by executing an underlying settlement with a former employee without the insurer’s knowledge or consent and that no exception to the provision applies (AMCO Insurance Company v. Jennifer Morfe, No. 17-55383 9th Cir., 2018 U.S. App. LEXIS 26923).

  • September 24, 2018

    Panel Reverses Order Enjoining Insurance Commissioner From Enforcing 3 Regulations

    SANTA ANA, Calif. — A California appeals panel on Sept. 20 reversed a lower court’s order that imposed a preliminary injunction that prohibited the Insurance commissioner’s enforcement of California Code of Regulations, Titles 2695.1(a), 2695.2(l) and 2695.2(y), remanding for the lower court to also reverse its order granting the insurer’s motion for judgment on the pleadings as to its claim for declaratory relief (PacifiCare Life And Health Insurance Company v. Dave Jones, as Insurance Commissioner, etc., No. G053914, Calif. App., 4th Dist., Div. 3, 2018 Cal. App. LEXIS 836).

  • September 21, 2018

    Suit Alleging Auto Insurer Undervalued Total Loss Vehicles Will Move Forward

    SAN FRANCISCO — An insureds’ claims for breach of contract, bad faith, misrepresentation and fraud against an auto insurer accused of undervaluing vehicles that were rendered a total loss will move forward against the insurer because the insured offered sufficient facts to support the claims, a California federal judge said Sept. 19 (Bobby Jones, et al. v. Progressive Casualty Insurance Co., et al., No. 16-6941, N.D. Calif., 2018 U.S. Dist. LEXIS 160313).

  • September 21, 2018

    Panel Stands By Ruling In Dispute Over Legal Fees Arising From Sexual Abuse Claim

    SAN DIEGO — On a motion for rehearing, a California appeals panel on Sept. 20 reaffirmed a lower court's ruling that an insurer has no duty to pay $106,102.63 in legal fees that were purportedly incurred by the insured's general counsel in defending a lawsuit arising from the sexual abuse of a foreign exchange student (Pacific Intercultural Exchange v. Scottsdale Insurance Company, No. D071478, Calif. App., 4th Dist., Div. 1, 2018 Cal. App. Unpub. LEXIS 6432).

  • September 21, 2018

    Judge Affirms $3.5 Million Award To Asbestos Trust Against Fire Brick Insurer

    OAKLAND, Calif. — A California federal bankruptcy judge properly entered a more than $3.5 million judgment against an insurance company in a long-running dispute over the amount of coverage owed to a company’s liquidating trust for asbestos personal injury claims, a federal judge held Sept. 17 in affirming the award, plus a $60,000 penalty for the insurer’s “vexatious and unreasonable conduct” (Continental Casualty Company v. Barry A. Chatz, Nos. 17-cv-05281, 17-cv-06989, N.D. Calif., 2018 U.S. Dist. LEXIS 158352).

  • September 18, 2018

    Insurance Broker’s Former Owners Oppose Reinsurer’s Summary Judgment Motion

    SAN DIEGO — Arguing that there are triable issues of fact, the former owners of an insurance brokerage company in separate Sept. 14 briefs oppose a reinsurer’s request for summary judgment against them for payment of a $3.2 million judgment in a California federal court dispute over breached reinsurance agreements from fraudulent transfers (Odyssey Reinsurance Co. v. Richard Keith Nagby, et al., No. 16-3038, S.D. Calif.).

  • September 18, 2018

    Health Insurer Says ERISA Preempts, Pleading Deficiencies Defeat UCL Claim

    LOS ANGELES — An out-of-network substance abuse services provider’s claims are preempted by the Employee Retirement Income Security Act, and the provider fails to adequately plead its California unfair competition law (UCL) claim, an insurer tells a California federal judge in a reply Sept. 14 (Miriam Hamideh Ph.D., et al. v. Anthem Blue Cross Life and Health Insurance Co., et al., No. 18-3044, C.D. Calif.).

  • September 18, 2018

    Panel Affirms Verdict In Insurer’s Favor In Water Damage Coverage Dispute

    SAN DIEGO — The Fourth District California Court of Appeal on Sept. 17 affirmed a jury verdict entered in an insurer’s favor in a water damage dispute after determining that the trial court did not abuse its discretion in excluding testimony from the insured’s expert regarding whether the water damage occurred suddenly or over a period of time (Robert Dorfman v. State Farm General Insurance Co., No. D072214, Calif. App., 4th Dist., Div. 1, 2018 Cal. App. Unpub. LEXIS 6329).

  • September 14, 2018

    Majority: Insurer Fails To Show Fact Issues Existed As To Cause Of Poinsettia Fire

    SAN DIEGO — A majority of a California appeals court on Sept. 11 held that an insurer has failed to satisfy its burden of demonstrating that there was a triable issue of material fact regarding what caused the Poinsettia Fire that started at the defendant’s golf course and spread to its adjacent insured properties, affirming a lower court (Axis Insurance Company v. Omni Hotels Management Corp., No. D071572, Calif. App., 4th Dist., Div. 1, 2018 Cal. App. Unpub. LEXIS 6210).

  • September 12, 2018

    Insurer Did Not Act In Bad Faith By Accepting Lower Repair Cost Estimate

    SACRAMENTO, Calif. — A California federal judge on Sept. 7 granted an insurer’s motion on a bad faith claim arising out of the insurer’s payment of repair costs for an insured home damaged by a fire after determining that the insurer did not act unreasonably in accepting a lower estimate for the repair costs (Donald Durben, et al. v. State Farm General Insurance Co., et al., No. 16-754, E.D. Calif., 2018 U.S. Dist. LEXIS 153166).