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Mealey's California Insurance

  • July 6, 2018

    9th Circuit Panel Refuses To Rehear Arguments In Disability Benefits Suit

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on July 3 denied a petition for rehearing, refusing to reconsider a June 15 remand of a disability benefits dispute to a district court to determine whether the claimant is entitled to equitable relief based on the disability plan’s failure to properly offset the claimant’s disability benefits (Petar Mrkonjic v. Delta Family-Care and Survivorship Plan, et al., Nos. 16-56335 and 16-56487, 9th Cir., 2018 U.S. App. LEXIS 18228).

  • July 3, 2018

    Reinsurer Seeks Direct Payment From Registry For $3.2M Judgment

    SAN DIEGO — In a dispute over breached reinsurance agreements from fraudulent transfers, a reinsurer argues in a June 29 reply brief that a California federal court has “no legitimate reason” not to release direct payment of $734,702.68 currently held in a registry to it as well as assigning it the right to collect directly from a trust $370,714.13, in partial satisfaction of its $3.2 million judgment (Odyssey Reinsurance Co. v. Richard Keith Nagby, et al., No. 16-3038, S.D. Calif.).

  • June 29, 2018

    9th Circuit Refuses To Rehear Coverage Dispute Over False Claims Lawsuit

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on June 25 denied an insurer’s petition asking it to reconsider its earlier ruling that a lower federal court erred in holding that an insurer has no duty to defend or indemnify Office Depot Inc. in an underlying qui tam lawsuit (Office Depot Inc. v. AIG Specialty Insurance Company, No. 17-55125, 9th Cir.).

  • June 29, 2018

    Panel Reverses, Remands Order Disqualifying Entire Law Firm From Case

    SANTA ANA, Calif. — The Fourth District California Court of Appeal on June 26 reversed and remanded a trial court’s order disqualifying an entire law firm from representing an insurer in a coverage dispute over the insured’s manufacture of defective flexible toilet connectors after determining that the decision must be reconsidered in light of the fact that the attorney, who had previously done work for the insured, left the law firm following the trial court’s order of disqualification (Fluidmaster Inc. v. Fireman’s Fund Insurance Co., No. G055469, Calif. App., 4th Dist., Div. 3, 2018 Cal. App. Unpub. LEXIS 4396). 

  • June 28, 2018

    Panel: Insurer Has No Duty To Pay Legal Fees For Insured’s General Counsel

    SAN DIEGO — A California appeals panel on June 26 affirmed 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 4319).

  • June 28, 2018

    9th Circuit: 3 Deductibles Apply To Insured’s Construction Defects Claims

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on June 25 that only three deductibles and not 636 deductibles applied to an insured for claims arising out of three construction defects lawsuits (ProBuilders Specialty Insurance Company, RRG v. Yarbrough Plastering Inc., et al., Nos. 16-16952 & 16-17141, 9th Cir., 2018 U.S. App. LEXIS 17226).

  • June 27, 2018

    Used-Car Seller, Shell Reinsurer Alleged To Be Involved In Fraud Scheme

    FRESNO, Calif. — A used-vehicle seller and its affiliates, including an illegal shell reinsurance company, are accused of being involved in three fraudulent schemes in the sale of used vehicles and violating California Business and Professions Code Section 17200, according to a June 18 complaint filed in a California court (Carlos Alvarenga v. Paul Blanco’s Good Car Company Fresno Inc., et al., No. 18CECG02193, Calif. Super., Fresno Co.).

  • June 27, 2018

    Reinsurer’s Request For Direct Payment From Registry For $3.2M Judgment Opposed

    SAN DIEGO — In a dispute over breached reinsurance agreements from fraudulent transfers, a defendant on June 22 opposed a motion filed in a California federal court directing payment of $734,702.68 currently held in a registry to a reinsurer as well as assigning the reinsurer the right to collect directly from a trust $370,714.13, in partial satisfaction of its $3.2 million judgment (Odyssey Reinsurance Co. v. Richard Keith Nagby, et al., No. 16-3038, S.D. Calif.).

  • June 27, 2018

    Federal Judge Confirms Arbitration Award In Favor Of Reinsurer

    LOS ANGELES — A California federal judge on June 25 confirmed a reinsurer’s $82,130.44 arbitration award against a landscape company (Applied Underwriters Captive Risk Assurance Company Inc. v. O’Connell Landscape Maintenance Inc., No. 18-00683, C.D. Calif.).

  • June 26, 2018

    Insurers Dispute Coverage For Workers’ Compensation Claim In California Court

    LOS ANGELES — Two insurers recently submitted arguments to a California appeals court as to whether a jury’s verdict should be vacated, which held that one of the insurers should be fully reimbursed for benefits paid to an employee of a successor company that was not listed on workers’ compensation policy (Zenith Insurance Company v. Liberty Mutual Fire Insurance Company, No. B284295, Calif. App., 2nd Dist., Div. 2).

  • June 26, 2018

    Majority: Surgery Not Covered Under Plan, Falls Under ‘Investigational’ Exclusion

    PORTLAND, Ore. — A majority of the Ninth Circuit U.S. Court of Appeals on June 22 found that artificial disc replacement surgery fell under the "investigational" exclusion of an Employee Retirement Income Security Act medical benefits plan, affirming a lower court’s ruling in favor of the plan's sponsor, administrator, insurer and claims administrator (Carla Sammons v. Regence BlueCross BlueShield of Oregon, et al., No. 16-35288, 9th Cir., 2018 U.S. App. LEXIS 17005).

  • June 25, 2018

    Health Insurance Bad Faith Dispute Removable Under ERISA, Judge Rules

    LOS ANGELES — A federal judge in California on June 19 ruled that an insured’s breach of contract and bad faith lawsuit against his insurer for failure to pay for coverage under a health insurance plan was properly removed to federal court because the insured’s breach of contract claim is preempted by the Employee Retirement Income Security Act of 1974 (ERISA) (Stephen M. Kernan v. Health Care Services Corp., No. 18-2491, C.D. Calif., 2018 U.S. Dist. LEXIS 102572).

  • June 22, 2018

    Disability Claimant Owed Own-Occupation Benefits; Attorney Fee Award Remanded

    SAN FRANCSICO — The Ninth Circuit U.S. Court of Appeals on June 21 affirmed a district court’s award of own-occupation long-term disability (LTD) benefits in favor of a disability claimant but vacated and remanded the lower court’s award of attorney fees in favor of the claimant for recalculation (Dave Nagy v. Group Long Term Disability Plan for Employees of Oracle America Inc., et al., Nos. 16-16160, 17-15491, 9th Cir., 2018 U.S. App. LEXIS 16883).

  • June 20, 2018

    Insurer Appeals Ruling On Duty To Indemnify Default Judgment For Defects

    LOS ANGELES — In a dispute between two insurers over the duty to indemnify a default judgment in a construction defects case against an insured, one insurer argues to a California appeals court in a May 25 brief that the other cannot prevail against it in a direct action because the default judgment is void and not covered (The Insurance Company of the State of Pennsylvania v. American Safety Indemnity Co., No. B283684, Calif. App., 2nd Dist., Div. 8).

  • June 20, 2018

    Insurers Allege Equitable Contribution Claim For 7 Construction Defects Cases

    LOS ANGELES — Four insurers filed an equitable contribution complaint on June 13 in a California federal court against another insurer for coverage of seven underlying construction defects cases (Travelers Property Casualty Company of America, et al. v. Lexington Insurance Co., No. 18-05232, C.D. Calif.).

  • June 20, 2018

    Shifting Of Criminal Conduct To Insurer Violates Public Policy, Insurer Argues

    SANTA ANA, Calif. — A commercial general liability insurer on May 30 asked the Fourth District California Court of Appeal to reverse a lower court’s finding that penalties for the crime of secretly recording confidential communications under California Penal Code Section 632 can be shifted onto an insurer, arguing that the lower court’s ruling violates public policy (Nautilus Insurance Company v. Monique Mingione, No. G055914, Calif. App., 4th Dist., Div. 3).

  • June 19, 2018

    California Federal Judge Overturns Insurer’s Denial Of LTD Benefits

    SAN FRANCISCO — A disability claimant is entitled to long-term disability (LTD) benefits because the evidence from the claimant’s treating physicians and evidence obtained from the disability insurer’s medical reviewers support a finding that the claimant is disabled under the plan’s any-occupation standard, a California federal judge said June 18 (Sarabjit Sangha v. Cigna Life Insurance Company of New York, No. 17-5158, N.D. Calif., 2018 U.S. Dist. LEXIS 101725).

  • June 19, 2018

    9th Circuit Rejects Excess Insurer’s Appeal Seeking $1M From Primary Insurer

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on June 18 affirmed a lower court’s ruling that a primary insurer does not owe an additional $1 million under a Parking Operations Errors and Omissions Endorsement for injuries allegedly incurred at a parking garage (Scottsdale Insurance Company v. Hudson Specialty Insurance Company, No. 17-15785, 9th Cir., 2018 U.S. App. LEXIS 16348).

  • June 19, 2018

    Insurer’s Lead Coverage Suit Permitted To Proceed; Motion To Stay Denied

    SAN FRANCISCO — A stay of an insurer’s suit seeking a declaration regarding its duty to defend an insured in an underlying lead exposure suit is not warranted because the insurer’s coverage suit does not present the same issues as the underlying lead exposure suit and the insured will not be prejudiced if the insurer’s suit proceeds, a California federal judge said June 18 in denying the insured’s motion to stay (James River Insurance Co. v. W.A. Rose Construction, et al., No. 18-2030, N.D. Calif., 2018 U.S. Dist. LEXIS 101698).

  • June 18, 2018

    Disability Benefits Suit Remanded For Determination On Equitable Remedy

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on June 15 remanded a disability benefits dispute to the district court to determine whether the claimant is entitled to equitable relief based on the disability plan’s failure to properly offset the claimant’s disability benefits (Petar Mrkonjic v. Delta Family-Care and Survivorship Plan, et al., Nos. 16-56335, No. 16-56487, 9th Cir., 2018 U.S. App. LEXIS 16162).