Mealey's California Insurance
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August 6, 2018
Parties Consent To Filing Of Documents Under Seal In Reinsurance Dispute
SACRAMENTO, Calif. — In two putative class actions over a reinsurance participation agreement (RPA), a California federal judge on July 25 approved a stipulation and proposed order by the parties consenting to the filing of documents under seal and the redaction of documents (Shasta Linen Supply Inc. v. Applied Underwriters Inc., et al., Nos. 16-00158 & 16-01211, E.D. Calif., 2018 U.S. Dist. LEXIS 126405).
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August 6, 2018
Reinsurer Seeks Judgment Against Broker’s Former Owners For $3.2M Judgment
SAN DIEGO — In a California federal court dispute over breached reinsurance agreements from fraudulent transfers, a reinsurer on July 27 sought summary judgment against the former owners of an insurance brokerage company for payment of a $3.2 million judgment (Odyssey Reinsurance Co. v. Richard Keith Nagby, et al., No. 16-3038, S.D. Calif.).
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August 6, 2018
Appeals Panel Upholds Woman’s Insurance Fraud Conviction, Tosses Failure To Appear
SACRAMENTO, Calif. — A California appeals panel on Aug. 1 affirmed a woman’s conviction on three counts of insurance fraud, holding that evidence presented during the trial sufficiently showed that she was not a passenger in a vehicle when it was struck by another vehicle (People of the State of California v. Deborah Carter, No. C083541, C084717, Calif. App., 3rd Dist., 2018 Cal. App. Unpub. LEXIS 5269).
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August 1, 2018
Insurers Seek Equitable Contribution For Defense Costs Of Defects Lawsuit
LOS ANGELES — Two insurers allege in a July 18 complaint filed in a California federal court that three other insurers owe equitable contribution for the defense of an underlying construction defects case against a mutual additional insured (St. Paul Mercury Insurance Co., et al. v. Everest National Insurance Co., et al., No. 18-06222, C.D. Calif.).
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August 1, 2018
Used Car Seller, Shell Reinsurer Allegedly Behind Fraud Schemes
FRESNO, Calif. — A used-vehicle seller and its affiliates, including an illegal shell reinsurance company, are accused by a California man in a July 17 complaint in a state court of being behind three fraudulent schemes in the sale of used vehicles and violating California’ unfair competition law (UCL) (Gustavo Diaz-Samaniego v. Paul Blanco’s Good Car Company Fresno Inc., et al., No. 18CECG02632, Calif. Super., Fresno Co.).
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July 30, 2018
Intellectual Property Exclusion Bars Coverage For All Claims, 9th Circuit Affirms
PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on July 26 affirmed a lower federal court’s finding that a commercial general liability insurer has no duty to defend its insured against an underlying trademark and trade dress infringement lawsuit because the insurance policy's intellectual property exclusion bars coverage for all claims (Secard Pools Inc, et al. v. Kinsale Insurance Company, No. 17-55534, 9th Cir., 2018 U.S. App. LEXIS 20839).
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July 26, 2018
Evidence Supported Restitution Amount Ordered In Disability Fraud Suit, Panel Says
SACRAMENTO, Calif. — A trial court judge did not abuse his discretion when ordering a man to repay $5,502 to his employer for temporary disability benefits he unlawfully received, a California appeals court panel ruled July 24, finding that the evidence presented by the state sufficiently supported the amount (People of the State of California v. Michael William Williams, No. C086000, Calif. App., 3rd Dist., 2018 Cal. App. Unpub. LEXIS 5057).
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July 26, 2018
Motion For Attorney Fees Denied; Court Made No Ruling On Merits Of Disability Claim
SACRAMENTO, Calif. — A disability claimant is not entitled to attorney fees and costs because she did not achieve success in an “action” under the Employee Retirement Income Security Act’s attorney fee provision, a California federal judge said July 23, noting that the court did not rule on any substantive motions of the merits in the suit (Brenda Culbertson-Chavira v. Life Insurance Company of North America, No. 17-1702, E.D. Calif., 2018 U.S. Dist. LEXIS 122872).
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July 26, 2018
Insolvent Insurer’s Liquidator Denies Bank’s Allegations In Reimbursement Lawsuit
LOS ANGELES — In a California federal court, the liquidator of an insolvent medical professional liability insurer on July 16 answered a bank’s lawsuit seeking reimbursement under a letter of credit issued to the insurer to stay enforcement of an underlying $2.5 million medical malpractice judgment (MUFG Union Bank, N.A. v. Steven C. Taylor, No. 18-02772, C.D. Calif.).
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July 26, 2018
Judge Approves Financial Report, Expenses In Insurer’s Liquidation Proceeding
SAN FRANCISCO — A liquidator on June 28 provided notice of entry of a California judge’s approval of a financial report and expenses of administration in an insurer’s liquidation proceeding (Dave Jones v. CastlePoint National Insurance Co., et al., No. CPF-16-515183, Calif. Super., San Francisco Co.).
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July 25, 2018
California Panel Holds Insurer Did Not Misrepresent Payment For Medical Services
SAN DIEGO — A California court on July 20 affirmed a summary judgment ruling in favor of a health insurance company, holding that a noncontracted provider of medical services failed to show that the insurer violated California’s unfair competition law (UCL) or that it misrepresented how much he would be paid for his services (James Ochi v. Anthem Blue Cross, et al., No. D071966, Calif. App., 4th Dist., Div. 1, 2018 Cal. App. Unpub. LEXIS 4915).
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July 25, 2018
Insurer’s Termination Of Disability Benefits Was Reasonable Based On Evidence
SACRAMENTO, Calif. — A disability insurer did not act in bad faith in terminating an insured’s benefits, a federal judge in California said July 23 after determining that based on the insured’s misrepresentations about her ability to work, the insurer had a reasonable basis to terminate the benefits (Devra Bommarito v. The Northwestern Mutual Life Insurance Co., et al., No. 15-1187, E.D. Calif., 2018 U.S. Dist. LEXIS 122853).
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July 24, 2018
9th Circuit Affirms Award For HOA, Holds Fees Were Covered By Policy
HONOLULU — The Ninth Circuit U.S. Court of Appeals on July 20 affirmed a trial court’s award of fees to a homeowners association (HOA), holding that fees incurred by property owners seeking coverage for damage caused by water leaks were within the scope of the policy (Association of Apartment Owners of The Moorings Inc. v. Dongbu Insurance Co., Ltd., No. 16-16666, 9th Cir., 2018 U.S. App. LEXIS 20251).
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July 23, 2018
Panel: Insurers Have No Duty To Indemnify Subcontractor’s Negligence
SAN FRANCISCO — An agreement was void insofar as it provided that insurers were required to indemnify a subcontractor for its negligence, the Ninth Circuit U.S. Court of Appeals ruled July 20, upholding the entry of summary judgment to insurers against a county as assignee of the subcontractor’s claims (First Mercury Insurance Co., et al. v. Westchester Surplus Line Insurance Co., et al., No. 16-35888, 9th Cir., 2018 U.S. App. LEXIS 20253).
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July 18, 2018
Federal Judge Extends Class Certification Motion Deadline In Reinsurance Dispute
SACRAMENTO, Calif. — A California federal judge on July 17 extended deadlines for a class certification motion, a response and a reply in two putative class actions over a reinsurance participation agreement (RPA) (Shasta Linen Supply Inc. v. Applied Underwriters Inc., et al., Nos. 16-00158 & 16-01211, E.D. Calif.).
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July 17, 2018
California Man Sues Used Car Seller, Shell Reinsurer For Fraud
FRESNO, Calif. — A California man filed a complaint on July 12 in a California court against a used-vehicle seller and its affiliates, including an illegal shell reinsurance company, accusing them of being involved in three fraudulent schemes in the sale of used vehicles and violating California’ unfair competition law (UCL) (Richard Harkins v. Paul Blanco’s Good Car Company Fresno Inc., et al., No. 18CECG02582, Calif. Super., Fresno Co.).
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July 17, 2018
California Panel Affirms Restitution Amount For Unemployment Benefits Fraud
SAN FRANCISCO — A California appeals court panel on July 16 affirmed a trial court’s ruling requiring a flower shop owner to pay $14,200 in restitution to a former employee after she pleaded no contest to fraud charges stemming from her failure to pay for unemployment and workers’ compensation insurance, finding that while the former employee’s work records “were a mess,” the trial judge properly calculated the amount needed to make the victim whole (People of California v. Cynthia Ann Smith, No. A153490, Calif. App., 1st Dist., 5th Div., 2018 Cal. App. Unpub. LEXIS 4769).
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July 17, 2018
Judge Dismisses UCL Claim Related To Insurance Sales, Grants Leave To Amend
LOS ANGELES — A California federal judge on July 12 granted motions filed by insurers to dismiss claims against them in relation to an alleged unlawful scheme that involved one insurer profiting from the sale of its policies on behalf of two other insurers, holding that insureds failed to state claims for relief under California’s unfair competition law (UCL), false advertising law (FAL) and for financial elder abuse, but the judge granted them leave to file an amended complaint (Simon Levay, et al. v. AARP Inc., et al., No. 17-09041, C.D. Calif., 2018 U.S. Dist. LEXIS 116585).
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July 10, 2018
No Coverage Afforded For Contamination Caused By Dry Cleaning Business
SACRAMENTO, Calif. — Insurers of decedents who owned a dry cleaning business and the property on which the business was located owe no coverage for environmental contamination discovered on the property’s site because the environmental contamination was not sudden and accidental as required by the policies’ pollution exclusions, a California federal judge said July 2 (Miller Marital Deduction Trust, et al. v. Estate of Mark B. DuBois, et al., No. 16-1883, E.D. Calif., 2018 U.S. Dist. LEXIS 111348).
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July 9, 2018
Landscape Company Gives Notice To Appeal Reinsurer’s Arbitration Award
LOS ANGELES — A landscape company filed a notice of appeal on July 6 regarding a California federal judge’s final judgment issued that same day confirming a reinsurer’s $82,130.44 arbitration award against it (Applied Underwriters Captive Risk Assurance Company Inc. v. O’Connell Landscape Maintenance Inc., No. 18-00683, C.D. Calif.).