Mealey's California Insurance
-
November 5, 2018
Judge Dismisses UCL, FAL Claims Over Insurance Scheme, Allows Amendment
LOS ANGELES — A California federal judge on Nov. 2 granted motions to dismiss claims for violation of California’s unfair competition law (UCL), false advertising law (FAL) and financial elder abuse asserted by a putative class of purchasers of insurance who allege that insurers engaged in an unlawful scheme that involved one insurer profiting from the sale of its policies on behalf of two other insurers, holding that the insureds could amend their UCL and FAL claims to properly plead reliance (Simon Levay, et al. v. AARP Inc., et al., No. 17-09041, C.D. Calif., 2018 U.S. Dist. LEXIS 116585).
-
November 5, 2018
Panel: Developer Is Not Additional Insured; No Reimbursement Of Costs
LOS ANGELES — In an equitable contribution dispute, a California appeals panel on Oct. 31 held that an insurer failed to show that a real estate developer was an additional insured under another insurer’s policies for purpose of reimbursement of defense costs in an underlying construction defect action (Interstate Fire and Casualty Co. v. Axis Surplus Insurance Co., No. B286980, Calif. App., 2nd Dist., Div. 8, 2018 Cal. App. Unpub. LEXIS 7393).
-
November 1, 2018
Insurers Seek Equitable Reimbursement For Costs Of Construction Defects Claims
LOS ANGELES — In an Oct. 18 complaint filed California federal court, insurers for subcontractors seek equitable reimbursement from contractors as additional insureds for defense costs incurred in 51 underlying construction defects cases (The Travelers Indemnity Company of Connecticut, et al. v. Pulte Group Inc., et al., No. 18-08994, C.D. Calif.).
-
October 31, 2018
Judge Orders Insurance Broker’s Former Owner To Address Contempt Application
SAN DIEGO — In a case over breached reinsurance agreements from fraudulent transfers, a California federal judge on Oct. 15 allowed an insurance broker’s former owner time to respond to why she should not be held in contempt of court regarding an injunction order (Odyssey Reinsurance Co. v. Richard Keith Nagby, et al., No. 16-3038, S.D. Calif.).
-
October 31, 2018
Insurers Seek Equitable Contribution Of $1.3M In Defense Of Defects Claims
LOS ANGELES — Insurance companies in an Oct. 17 complaint in a California federal court request equitable contribution from two other insurers of $1.3 million incurred in the defense of seven underlying construction defects actions (Travelers Property Casualty Company of America, et al. v. Lexington Insurance Co., et al., No. 18-08964, C.D. Calif.).
-
October 30, 2018
Judge Rejects UCL Claim For Insurer’s Alleged Failure To Pay For Services
SAN FRANCISCO — After finding that claims for violation of California’s unfair competition law (UCL) in relation to an insurer’s alleged failure to pay hospitals for noncontracted services could not be based on the improper application of the California Code of Regulations, a California federal judge on Oct. 26 granted the insurer’s motion for partial summary judgment on the UCL claims (NorthBay Healthcare Group – Hospital Division v. Blue Shield of California Life & health Insurance, et al., No. 17-cv-02929, N.D. Calif., 2018 U.S. Dist. LEXIS 184180).
-
October 30, 2018
Insured’s Bad Faith Suit Cannot Proceed, Panel Determines
LOS ANGELES — The Second District California Court of Appeal on Oct. 26 affirmed a trial court’s demurrer to an insured’s bad faith suit after determining that the finality of judgments doctrine precludes the insured from challenging the insurer’s behavior before and during an arbitration proceeding because the arbitration award was a final judgment (Haik Kivorkian v. Star Insurance Co., No. B272162, Calif. App., 2nd Dist., Div. 3, 2018 Cal. App. Unpub. LEXIS 7300).
-
October 30, 2018
Reinsurer Opposes Class Certification In Dispute Over Workers’ Comp Program
SACRAMENTO, Calif. — A reinsurer and its affiliates in an Oct. 12 opposition brief ask that a California federal court deny classification in two putative class actions over a reinsurance participation agreement (RPA) of hundreds of California businesses that bought a workers’ compensation program (Shasta Linen Supply Inc. v. Applied Underwriters Inc., et al., Nos. 16-00158 & 16-01211, E.D. Calif.).
-
October 26, 2018
Loss Of Use Of Property Constitutes Property Damage, Panel Says In Reversal
RIVERSIDE, Calif. — A California appeals panel on Oct. 25 found that a property owner’s loss of the ability to use a property as a nightclub following a fatal shooting constituted property damage under a security guard service provider’s insurance policy, reversing a lower court’s ruling that there is no coverage under the policy (Thee Sombrero, Inc. v. Scottsdale Insurance Company, No. E067505, Calif. App., 4th Dist., Div. 2, 2018 Cal. App. LEXIS 966).
-
October 25, 2018
9th Circuit Panel Upholds Convictions For Making False Statements To Grand Jury
SAN FRANCISCO — A federal judge in California did not err when refusing to sever charges against two defendants accused of making false statements to a grand jury regarding their roles in a scheme to fraudulently obtain employment and disability insurance benefits, a Ninth Circuit U.S. Court of Appeals panel ruled Oct. 17, finding that the defendants were properly joined because the allegations stemmed from the same aspects of the alleged scheme and that there was sufficient evidence to support the convictions (United States v. Jasvir Kaur, et al., Nos. 17-10306, 17-10307, 9th Cir., 2018 U.S. App. LEXIS 29193).
-
October 22, 2018
Panel: Reinsurer’s Arbitration Provisions Are Unenforceable Based On Violation
RIVERSIDE, Calif. — A violation by a reinsurer and related entities of California Insurance Code Section 11658 renders arbitration provisions unenforceable, a California appeals panel held Oct. 19, affirming a lower court’s denial of motions to compel arbitration of a dispute involving workers’ compensation insurance (Low Desert Empire Pizza Inc., et al. v. Applied Underwriters Inc., et al., No. E067081, Calif. App., 4th Dist., Div. 2, 2018 Cal. App. Unpub. LEXIS 7154).
-
October 22, 2018
9th Circuit Reverses Ruling In Insurer’s Favor In Dispute Over Negligence Claims
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Oct. 19 found that reversal of a lower federal court’s ruling in favor of an insurer is warranted after a majority of the California Supreme Court, in answer to a certified question, concluded that third-party claims against an employer for negligent hiring, retention and supervision of its employee qualify as an "occurrence" under the employer's commercial general liability policy (Liberty Surplus Insurance Corporation, et al. v. Ledesma and Meyer Construction Company, Inc., et al., No. 14-56120, 9th Cir., 2018 U.S. App. LEXIS 29548).
-
October 19, 2018
No Duty To Indemnify Construction Defects Case, Insurer Contends
LOS ANGELES — In an Oct. 11 complaint filed in a California federal court, an insurer argues that it has no duty to defend or indemnify a contractor and subcontractor because a total pollution exclusion and a professional liability exclusion bar coverage for an underlying construction defects case (Houston Casualty Co. v. Rosebud Ventures LLC, et al., No. 18-8777, C.D. Calif.).
-
October 18, 2018
Opening Briefs Offered In Suit Over Reimbursement Demands Made To CIGA
SAN FRANCISCO — In appeals regarding the vacating and setting aside of three reimbursement demands made to the California Insurance Guarantee Association (CIGA), the state insurance guaranty association and U.S. Secretary of Health and Human Services Alex Azar II recently filed their opening briefs with the Ninth Circuit U.S. Court of Appeals (California Insurance Guarantee Association v. Alex Azar II, et al., Nos. 17-56526 & 17-56528, 9th Cir.).
-
October 18, 2018
9th Circuit Affirms No CGL Coverage For Suit Against Security Company, Cruise Line
PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Oct. 17 affirmed a lower federal court’s finding that a commercial general liability insurer has no duty to defend its security company insured and a cruise line against an underlying lawsuit brought by a security guard who alleged that she was injured while securing deck furniture on the ship (American Guard Services, Inc. v. First Mercury Insurance Company, No. 17-55704, 9th Cir., 2018 U.S. App. LEXIS 29186).
-
October 18, 2018
Insurers’ Dispute On Equitable Contribution For Defect Claims Heard
LOS ANGELES — A California appeals court on Sept. 27 heard arguments in an equitable contribution dispute between two insurers regarding fees incurred in the defense of a real estate developer as an additional insured in an underlying construction defect action (Interstate Fire and Casualty Co. v. Axis Surplus Insurance Co., No. B286980, Calif. App., 2nd Dist., Div. 8).
-
October 17, 2018
Panel Reverses Ruling In Favor Of Life Insurer, Says Carrier Was Not Prejudiced
LOS ANGELES — The beneficiaries of a life insurance policy are entitled to benefits because the life insurance policy cannot be considered to have lapsed as the insurer failed to show that it was prejudiced by the insured’s failure to timely notify the insurer of a disability that would have entitled her to a deduction waiver under the policy, the Second District California Court of Appeal said Oct. 16 (Marty Lat v. Farmers New World Life Insurance Co., No. B282008, Calif. App., 2nd Dist., Div. 1, 2018 Cal. App. LEXIS 932).
-
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).