Mealey's California Insurance

  • 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).

  • October 05, 2020

    JPMDL Creates Insurer-Specific MDLs For Ski Pass Coronavirus Coverage Suits

    WASHINGTON, D.C. — The U.S. Judicial Panel on Multidistrict Litigation on Oct. 2 granted parties' request for the creation of defendant-specific MDLs against two insurers in lawsuits seeking coverage for passes for ski resorts that were prematurely closed due to the novel coronavirus, finding that the suits "involve common questions of fact" and that centralization against one insurer in the U.S. Western District of Missouri and the other insurer in the U.S. Northern District of California "will serve the convenience of the parties and witnesses and promote the just and efficient conduct of the litigation" (In Re: National Ski Pass Insurance Litigation, No. 2955, JPMDL).

  • October 02, 2020

    Outback Steakhouse's Franchisee Sues Insurer For Losses Arising Out Of Coronavirus

    SAN FRANCISCO — The franchisee of Outback Steakhouse restaurants in Arizona, Colorado, Nevada, New Mexico and California and its parent and affiliated companies on Sept. 29 sued an insurer in a California federal court, alleging that an all-risk insurance policy unambiguously provides coverage for its "direct and/or imminent physical loss" and property damage related to the novel coronavirus (Out West Restaurant Group Inc., et al. v.  Affiliated FM Insurance Company, No. 20-06786, N.D. Calif.).

  • October 01, 2020

    Insureds' Breach Of Contract, Bad Faith Claims To Proceed In Contamination Suit

    SANTA ANA, Calif. — A California federal judge on Sept. 30 denied an insurer's motion to dismiss a second amended complaint filed by insureds seeking a coverage declaration for underlying environmental contamination lawsuits because the insureds have proven that the insurer owes a duty to defend and the insureds supported their claims for breach of contract and bad faith (L.A. Terminals, et al. v. United National Insurance Co., No. 19-286, C.D. Calif., 2020 U.S. Dist. LEXIS 180268).

  • September 30, 2020

    Contractor Sues 3 Insurers Over Coverage For Defects In Fire Sprinkler System

    SAN FRANCISCO — A general contractor accuses three insurers in a Sept. 25 complaint filed in a California federal court of breaching their contract and acting in bad faith in denying a defense for claims of alleged damages related to a fire sprinkler system caused by allegedly defective construction (Build Group, Inc. v. Rockhill Insurance Company, et al., No. 20-6728, N.D. Calif.).

  • September 30, 2020

    Motion Picture Production Company Sues Insurer Over Delays Caused By Coronavirus

    LOS ANGELES — A motion picture production company on Sept. 9 filed suit in a California federal court alleging that its insurer refused to extend its “film producers risk” insurance policy when the production of the  movie “Hypnotic” starring Ben Affleck was delayed by risks associated with the novel coronavirus pandemic and instead indicated that the policy would be “renewed” with the addition of an exclusion for losses relating to the coronavirus (Hoosegow [Hypnotic] Productions Inc. v. Chubb National Insurance Company, No. 20-08253, C.D. Calif.).

  • September 29, 2020

    Conservator Timely Filed Suit Within Disability Plan's Limitations Provision

    SANTA ANA, Calif. — A California federal judge on Sept. 21 denied a disability insurer's motion to dismiss a conservator's claims for benefits and equitable relief under the Employee Retirement Income Security Act because tolling of the disability plan's three-year limitations provision did not begin until the conservator of the disability plan participant was appointed (Joyce Poisson v. Aetna Life Insurance Co., No. 20-1030, C.D. Calif., 2020 U.S. Dist. LEXIS 177216).

  • September 29, 2020

    Magistrate Judge Issues Protective Orders In Disputes Between Reinsurer, Insurers

    LOS ANGELES — A California federal magistrate judge on Sept. 28 granted stipulated protective orders in two cases filed by four insurers against a reinsurer and the reinsurer's parent companies over a billings dispute under reinsurance agreements (California Capital Insurance Company, et al. v. Enstar Holdings [US] LLC, et al., No. 20-7806, California Capital Insurance Co., et al. v. Maiden Reinsurance North America, Inc., et al., No. 20-1264, C.D. Calif.).

  • September 25, 2020

    COVID-19 Suit Dismissed Without Prejudice Due To 'Rapidly Evolving Legal Landscape'

    SAN FRANCISCO — A federal magistrate judge in California on Sept. 22 dismissed a waxing salon's lawsuit seeking coverage for its economic losses caused by the state's closure orders to stop the spread of the novel coronavirus, allowing the insured to amend all but two of their claims because of "the rapidly evolving legal landscape involving COVID-19 business interruption coverage" (Franklin EWC, Inc., et al. v. The Hartford Financial Services Group, Inc., et al., No. 20-04434, N.D. Calif., 2020 U.S. Dist. LEXIS 174010).

  • September 25, 2020

    Disability Claimant's Benefits Were Properly Offset, Federal Judge Says

    SACRAMENTO, Calif. — A disability insurer properly offset a claimant's long-term disability (LTD) benefits based on settlement proceeds awarded to the claimant, a California federal judge said Sept. 22, noting that the disability plan at issue clearly permits the offset (Fadi G. Haddad v. SMG Long Term Disability Plan, et al., No. 16-1700, E.D. Calif., 2020 U.S. Dist. LEXIS 173981).

  • September 24, 2020

    Judge Dismisses Dispute Over Coverage For 600 Construction Defect Claims

    FRESNO, Calif. — A federal judge in California on Sept. 22 dismissed a contribution and subrogation lawsuit brought by two insurers against Clarendon National Insurance Co. concerning coverage for 600 underlying construction defect claims and suits because there is a lack of subject matter jurisdiction (United Specialty Insurance Company, et al. v. Clarendon National Insurance Company, No. 19-1715, E.D. Calif., 2020 U.S. Dist. LEXIS 174054).

  • September 24, 2020

    Entities: Claims Arising From Trust Preferred Securities Are Part Of Insurer's Liquidation

    SAN FRANCISCO — Defendants in a New York action concerning trust preferred securities (TruPS) argue in an Aug. 28 response brief that a lower court properly enjoined the New York plaintiffs' claims potentially worth hundreds of millions of dollars because the claims were based on damages to an insolvent insurer and, thus, property to the insurer's estate and liquidation proceeding (Dave Jones v. CastlePoint National Insurance Co., No. A158646, Calif. App., 1st Dist., Div. 5).

  • September 22, 2020

    California Law Applies To Interpret Policies, Insurer Argues To Delaware High Court

    WILMINGTON, Del. — An excess insurer recently asked the Delaware Supreme Court to reverse a lower court's finding that Delaware law applies to interpret primary and excess insurance policies in a coverage dispute arising from fraud claims against its insured and its directors and officers, arguing that the "overwhelming evidence demonstrates that the policies were contracted, negotiated, and managed in California" and covered insured directors and officers who worked primarily from the insured's corporate headquarters in California (RSUI Indemnity Company v. David H. Murdock, et al., No. 154,2020, Delaware Sup.).

  • September 22, 2020

    District Court Failed To Allow Insured To Respond In Bad Faith Suit, Panel Says

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Sept. 18 vacated two summary judgment orders entered in an insurer's favor after determining that the district court erred in failing to provide the insured with an opportunity to respond to the bases for entering summary judgment for the insurer on breach of contract and bad faith claims (YS Garments, et al. v. Continental Casualty Co., Nos. 18-56614, 18-56667, 9th Cir., 2020 U.S. App. LEXIS 29833).

  • September 18, 2020

    Travelers: No Insurance For California Apartment Complex's Alleged Defects

    SAN FRANCISCO — Travelers Casualty Insurance Company of America alleges in a Sept. 16 complaint in a California federal court that it has no duty to defend or indemnify two insureds against allegations of construction defects in an apartment complex (Travelers Casualty Insurance Company of America v. 2541 California Street, LLC, et al., No. 20-6509, N.D. Calif.).

  • September 17, 2020

    Relator's Allegations Of Kickback Schemes For Blood Tests Survive Dismissal

    SAN FRANCISCO — A federal magistrate judge in California on Aug. 19 held that a relator sufficiently stated claims under the False Claims Act (FCA) and California False Claims Act (CFCA) concerning a laboratory company's alleged operation of schemes that involved the payment of illegal referral fees and the capping of patient deductibles but dismissed without prejudice the relator's causes of action under the California Insurance Frauds Prevention Act (IFPA) because it did not sufficiently allege that it was an interested party (United States, ex rel. STF LLC v. Vibrant America LLC, No. 16-2487, N.D. Calif., 2020 U.S. Dist. LEXIS 150345).

  • September 17, 2020

    Final Judgment Denied In Excess Insurer's Case With Reinsurer, Municipality Insurer

    LOS ANGELES — Noting that an appeal of a prior ruling may still occur, a California federal judge on Sept. 4 denied a final judgment ruling in an excess insurer's coverage dispute with a joint powers authority for municipalities and a reinsurer over a $16.8 million settlement of an accident between two California cities' fire departments (StarStone National Insurance Company v. Independent Cities Risk Management Authority, et al., No. 19-1130, C.D. Calif.).

  • September 16, 2020

    NFL Player's Disability Claim Remanded For Full And Fair Review

    SAN FRANCISCO — A California federal magistrate judge on Sept. 15 remanded a former National Football League player's disability claim to the plan administrator after determining that the plan abused its discretion and did not provide the NFL player with a full and fair review as required (Charles Dimry v. Bert Bell/Pete Rozelle NFL Player Retirement Plan, et al., No. 19-5360, N.D. Calif., 2020 U.S. Dist. LEXIS 168952).

  • September 16, 2020

    Judge Dismisses All Claims In Retailer's Suit Seeking Coverage For COVID-19 Losses

    SAN FRANCISCO — A federal judge in California on Sept. 14 dismissed without prejudice all claims in a retailer insured's class complaint against its insurer, finding that the insured is not entitled to business income, extra expense or civil authority coverage as a matter of law for its claimed losses following the state's "Stay at Home" order in response to the novel coronavirus pandemic, granting the insured leave to amend because the law regarding "business interruption coverage linked to the COVID-19 pandemic is very much in development" (Mudpie, Inc. v. Travelers Casualty Insurance Company of America, No. 20-03213, N.D. Calif.).

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