Mealey's California Insurance

  • November 02, 2020

    Insurer Breached Duty To Defend Damages From Leaks, Federal Magistrate Judge Says

    OAKLAND, Calif. — A commercial general liability insurer breached its contractual duty to defend a window manufacturer regarding property damage caused by leaks from windows that were installed in a mixed-use residential community, a California federal magistrate judge held on Oct. 29 granting partial summary judgment to the manufacturer (Ply Gem Industries Inc. v. James River Insurance Company, No. 20-2475, N.D. Calif., 2020 U.S. Dist. LEXIS 203137).

  • October 30, 2020

    Reinsurer Is Entitled To $239,238.88 From Trust As Property, Federal Judge Says

    SAN DIEGO — A California federal judge on Oct. 29 ruled that Odyssey Reinsurance Co., a judgment creditor, is entitled to $239,238.88 as property in a trust belonging to a principal of an insurance agency that had been found in breach of a series of reinsurance agreements (Odyssey Reinsurance Company v. Richard Keith Nagby, et al., No. 16-3038, S.D. Calif.).

  • October 29, 2020

    Jury Could Find Auto Insurer Engaged In Bad Faith In Handling Claim, Judge Says

    SAN DIEGO — A California federal judge on Oct. 27 granted an auto insurer’s motion for summary judgment on a breach of contract claim because the insurer paid an arbitration award to the insured, but the judge denied the insurer’s motion on the claims for bad faith and intentional infliction of emotional distress because a jury could find that the insurer engaged in bad faith in handling the insured’s claim for underinsured motorist benefits and the insured’s demand for arbitration (Paul Harner v. USAA General Indemnity Co., No. 18-1993, S.D. Calif., 2020 U.S. Dist. LEXIS 199896).

  • October 27, 2020

    Restaurant’s Insurer Owes Landlord’s Insurer Half Of Settlement, Panel Affirms

    LOS ANGELES — A California appeals panel on Oct. 26 affirmed a lower court’s ruling that a restaurant’s insurer has a duty to indemnify a landlord’s insurer for half of an underlying settlement over a car accident that injured two of the restaurant’s patrons, finding that the landlord’s liability arose from the restaurant owner's use of the premises (Truck Insurance Exchange v. AMCO Insurance Company, No. B298798, Calif. App., 2nd Dist., Div. 4, 2020 Cal. App. LEXIS 1009).

  • October 26, 2020

    Panel Upholds Fraud Defendant’s Probation, Finds Recorded Interview Authentic

    VENTURA, Calif. — A California appeals panel on Oct. 22 upheld a woman’s sentence to three years of probation after being convicted of insurance fraud and workers’ compensation insurance fraud, finding that the trial court judge did not err when finding that the prosecution provided sufficient evidence demonstrating that a recorded interview between the defendant and a now-deceased investigator was authentic.

  • October 23, 2020

    Virus Exclusion Bars Business Interruption Claim, Insurer Argues

    SANTA ANA, Calif. — Dismissal of an insured business’s breach of contract and bad faith lawsuit against its business interruption insurers for failure to pay lost income benefits stemming from government closures due to the novel coronavirus pandemic is warranted because the plain language of the policy precludes coverage under its virus exclusion, one of the insurers argues in an Oct. 8 motion to dismiss filed in California federal court (Long Affair Carpet and Rug Inc. v. Liberty Mutual Insurance Co., et al., No. 20-1713, C.D. Calif.).

  • October 23, 2020

    Judge Refers Professional Services Coverage Suit To Mediation After Coverage Ruling

    LOS ANGELES — Two days after ruling that FedEx Office and Print Services Inc. is entitled to coverage for underlying class actions alleging that it violated the Fair and Accurate Credit Transactions Act (FACTA), a federal judge in California on Oct. 22 ordered FedEx and its professional solutions insurer to private mediation (FedEx Office and Print Services, Inc. v. Continental Casualty Company, No. 20-4799, C.D. Calif.).

  • October 23, 2020

    No Professional Liability Coverage Owed For Drug Overdose Death, Panel Affirms 

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Oct. 21 affirmed a lower federal court’s summary judgment in favor of an insurer in its lawsuit disputing coverage for an underlying wrongful death lawsuit brought against its doctor insured who pleaded guilty to distributing controlled substances in violation of 21 U.S. Code Sections 841(a)(1) and (b)(1)(C), finding that the professional liability insurance policy “obviously and unambiguously” precludes coverage for willful violations of law (National Fire & Marine Insurance Company v. Scott Hampton, et al., No. 19-17235, 9th Cir., 2020 U.S. App. LEXIS 33215).

  • October 22, 2020

    Insurer:  California Regulators Filed Bad Faith Conservatorship Plan On Former Affiliate

    SACRAMENTO, Calif. — Applied Underwriters Inc. filed a complaint on Oct. 20 in California federal court accusing the state’s insurance department of an “unlawful and bad faith campaign” to place a former affiliate of Applied into conservatorship in response to several favorable rulings to Applied in litigation involving its reinsurance participation agreement (RPA) with insureds (Applied Underwriters, Inc., et al. v. Ricardo Lara, et al., No. 20-1029, E.D. Calif.).

  • October 22, 2020

    Disability Claimant Failed To Exhaust Administrative Remedies, Panel Says

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Oct. 21 affirmed a district court’s ruling that a disability claimant’s suit must be dismissed for failure to exhaust all administrative remedies because the claimant clearly failed to timely file an administrative appeal of the insurer’s termination of her long-term disability (LTD) benefits claim (Patricia D. White v. Anthem Life Insurance Co., No. 19-16954, 9th Cir., 2020 U.S. App. LEXIS 33213).

  • October 19, 2020

    Reinsurer’s Parent Companies: Insurers Conflate Ownership Interest With Acting As Agent

    LOS ANGELES — The parent companies of a reinsurer say in their Oct. 16 reply brief that a California federal court should dismiss four insurers’ intentional interference and inducement of breach of contract case with regard to reinsurance billings because the insurers “conflate holding an ownership interest in a company with acting as an agent for that same company” (California Capital Insurance Company, et al. v. Enstar Holdings [US] LLC, et al., No. 20-7806, C.D. Calif.).

  • October 14, 2020

    Contractor Claims Defense Against Arbitration Owed, Says Insurer Breached Contract

    LOS ANGELES — A general contractor claims in an Oct. 9 complaint filed in California federal court that an insurer breached its contract and acted in bad faith by refusing to defend the contractor in an arbitration arising out of a construction defects dispute (Tutor Perini Building Corp. v. First Mercury Insurance Co. et al., No. 20-9329, C.D. Calif.)

  • October 14, 2020

    Insurer Asks 9th Circuit To Reverse ‘Excessive’ Attorney Fee Award In Favor Of Yahoo

    SAN FRANCISCO — In a Sept. 16 cross-appeal filed in the Ninth Circuit U.S. Court of Appeals, a commercial general liability insurer argues that Yahoo forfeited its claim to $618,380 in attorney fees under Brandt v. Superior Court in their data privacy coverage dispute but defends the lower court’s ruling that the policy’s deductible coverage endorsement is enforceable and precludes coverage for additional damages (Yahoo! Inc. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 19-16475, 9th Cir.).

  • October 13, 2020

    Insurers Oppose Dismissal Of Intentional Interference Case Over Reinsurance Billings

    LOS ANGELES — Four insurers argue in their Oct. 9 opposition brief to a California federal court that the parent companies of a reinsurer are “straddling a line” that does not exist under California law in seeking to dismiss their lawsuit alleging intentional interference and inducement of breach of contract with regard to reinsurance billings (California Capital Insurance Company, et al. v. Enstar Holdings [US] LLC, et al., No. 20-7806, C.D. Calif.).

  • October 13, 2020

    Carrier Owes Duty To Defend Against Negligence Claim In Water Damage Dispute

    SANTA ANA, Calif. — A homeowners insurer has a duty to defend its insureds against a negligence claim stemming from the sale of their home and their failure to properly correct the home’s water intrusion issues because there is a possibility of coverage under the policy at issue, a California federal judge said Sept. 18 (Vivian Schwartz, et al. v. Kemper Independence Insurance Co., et al., No. 19-0559, C.D. Calif., 2020 U.S. Dist. LEXIS 187626).

  • October 13, 2020

    Insureds Failed To Provide Evidence Of Physical Damage To Their Home, Panel Says

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Oct. 9 affirmed a district court’s ruling in favor an insurer in a breach of contract and bad faith suit stemming from a wildfire damage claim after determining that the insureds failed to present a genuine dispute of material fact regarding the alleged physical damage to their home (Jensen Shirley, et al. v. Allstate Insurance Co., No. 19-56066, 9th Cir., 2020 U.S. App. LEXIS 32069).

  • October 07, 2020

    Insured Asks 9th Circuit To Reverse No Coverage Ruling For Alleged Phishing Attack

    SAN FRANCISCO — An insured on Sept. 8 asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court's ruling in favor of its insurer in a lawsuit seeking coverage for its alleged "security failure" that was caused by a phishing attack by an unknown perpetrator, contending that a letter demanding monetary relief from one of its clients constituted a "claim" under its "security & privacy risk response" policy (Alorica Inc. v. Starr Surplus Lines Insurance Company, No. 20-55458, 9th Cir.).

  • October 06, 2020

    Reinsurer's Parent Companies: No Liability For Intentional Interference, Inducement

    LOS ANGELES — In seeking dismissal of four insurers' dispute over the mishandling of reinsurance billings, the parent companies of the reinsurer on Oct. 2 argue to a California federal court that it "is blackletter law that agents cannot be liable for intentional interference with contracts or for inducing a principal to breach those contracts" (California Capital Insurance Company, et al. v. Enstar Holdings [US] LLC, et al., No. 20-7806, C.D. Calif.).

  • October 06, 2020

    Federal Judge Dismisses Restaurant's Coronavirus Coverage Suit With Prejudice

    LOS ANGELES — A federal judge in California on Oct. 2 granted an insurer's motion to dismiss a restaurant's coronavirus coverage lawsuit, finding that the insured failed to plausibly assert that it incurred a "physical loss of or damage to" its restaurant and that the policy's virus exclusion further bars all coverage (Mark's Engine Company No. 28 Restaurant, LLC v. The Travelers Indemnity Company of Connecticut, et al., No. 20-04423, C.D. Calif.).

  • October 06, 2020

    Insured Failed To Show How Property Insurer Breached Contract, Acted In Bad Faith

    LOS ANGELES — A California federal judge on Oct. 2 granted summary judgment in favor of a commercial property insurer on breach of contract and bad faith claims after determining that the insured failed to show how the insurer breached its contract in adjusting the insured's fire damage (Carson Cogeneration Company v. Scottsdale Insurance Company, et al., No. 19-10797, C.D. Calif., 2020 U.S. Dist. LEXIS 183283).

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