Mealey's California Insurance
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January 14, 2021
Insurer, Reinsurer Update Court On Arbitration In Breach Of Contract Dispute
RIVERSIDE, Calif. — An insurer and a reinsurer continue to arbitrate their breach of contract case over $8.6 million in equipment breakdown claims with a final hearing scheduled, according to a Jan. 11 status report given to a California federal judge.
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January 14, 2021
Federal Judge Stays Insurer’s Coverage Suit Arising From Altercation At Concert
SACRAMENTO, Calif. — A federal judge in California on Jan. 11 granted an insured’s motion to stay a commercial general liability insurer’s lawsuit disputing coverage for an underlying action arising from an altercation at a punk rock concert, finding that a stay is mandatory because “the same factual disputes are at the foundation of both the state court litigation and the federal coverage action.”
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January 12, 2021
Judge Dismisses ERISA Third-Party Claim In Self-Insured Employee Benefit Plan Case
SANTA ANA, Calif. — A payroll services company was not a fiduciary that had a role in any alleged negligent failure to obtain reinsurance coverage for a self-insured employee benefit plan, a California federal judge ruled Jan. 7, dismissing a third-party claim filed by the plan’s third-party administrators for relief under Employee Retirement Income Security Act.
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January 11, 2021
Insurers: Settlement Possible In Dispute Over Rights Under Reinsurance Agreements
SAN FRANCISCO — Following a Jan. 6 status report from ceding insurers to a California federal court on a pending notice of settlement, the initial case management conference was pushed back a month for the insurers’ case over whether a loss portfolio transfer canceled or impacted their rights under various reinsurance agreements.
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January 11, 2021
Contractor’s Counterclaims Dismissed In Condo Suit By California Magistrate Judge
OAKLAND, Calif. — A California federal magistrate judge on Jan. 4 dismissed with leave to amend most of a general contractor’s counterclaims against an insurer in a coverage dispute over a condominium project. Dismissed without leave to amend were the counterclaims for breach of contract based on failure to indemnify and for violation of state insurance regulations.
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January 11, 2021
Retailer Asks To Certify Question In COVID-19 Coverage Suit To California High Court
SAN FRANCISCO — A retailer insured on Jan. 7 asked the Ninth Circuit U.S. Court of Appeals to certify a question to the California Supreme Court in its lawsuit seeking coverage under a comprehensive business insurance policy for its claimed losses following the state’s “Stay at Home” order in response to the novel coronavirus pandemic, arguing that “profound legal, economic, and practical consequences will follow from the determination of whether the phrase ‘physical loss of or damage to’ in business interruption insurance policies reasonably includes government-imposed shutdown orders issued amid COVID-19.”
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January 08, 2021
Breach Of Contract, Bad Faith Claims Against Homeowners Insurer Dismissed
SAN FRANCISCO — A California federal judge on Dec. 23 dismissed breach of contract and bad faith claims alleged against a homeowners insurer accused of improperly calculating the square footage of California homes because the insured failed to show how the insurer breached any provisions of the policy and because any alleged bad faith conduct related to the calculation of a home’s square footage occurred prior to the inception of the policy.
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January 08, 2021
Insured Fails To Plead ‘Physical Change’ To Properties’ Condition, Judge Rules
LOS ANGELES — A federal judge in California on Dec. 30 granted a commercial general liability insurer’s motion to dismiss a hand and orthopedic surgery practice insured’s breach of contract and bad faith lawsuit, finding that the insurance policy’s “loss of or damage to” language does not allow coverage for the interruption of the insured’s business as a result of the novel coronavirus pandemic.
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January 08, 2021
9th Circuit Denies Rehearing In Disability Income Suit, Allows Opinion To Stand
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Dec. 30 denied a petition for rehearing and rehearing en banc, allowing its ruling that an insured’s claims based on an alleged missed disability income payment by a disability income insurer are barred by statutes of limitations to stand.
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January 07, 2021
Claimant Proved She Is Disabled Under Own-, Any-Occupation Standards
LOS ANGELES — A California federal judge on Dec. 10 granted judgment in favor of a disability claimant after determining that the claimant met her burden of proving by a preponderance of the evidence that she is disabled under a plan’s own-occupation and any-occupation standards.
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January 07, 2021
Disability Benefits Suit Dismissed With Prejudice Per Parties’ Stipulation
LOS ANGELES — Following a ruling to modify a ruling entered in favor of a disability claimant to account for the disability plan’s 60-day waiting period in the calculation of the end date on which long-term disability (LTD) benefits must be paid, a California federal judge on Dec. 17 granted the parties’ stipulation to dismiss the suit with prejudice.
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January 07, 2021
Judge Dismisses Disability Benefits Suit Following Settlement Between Parties
RIVERSIDE, Calif. — A California federal judge on Jan. 4 granted a stipulation to dismiss a disability benefits suit following a settlement reached by the parties as a result of their participation in mediation.
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January 07, 2021
Disability Claimant Ordered To Show Cause As To Why Appeal Should Proceed
SAN DIEGO — The Ninth Circuit U.S. Court of Appeals on Jan. 5 ordered a disability claimant to show cause as to why an appeal of a district court’s ruling entered against the claimant should not be dismissed for lack of jurisdiction as the claimant did not file the appeal within 30 days of the district court’s judgment.
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January 06, 2021
Termination Of LTD Benefits Is Not Supported By Medical Evidence, Judge Says
SAN FRANCISCO — A disability insurer’s termination of long-term disability benefits is not supported by the medical evidence, a California federal judge said Dec. 29 after finding that the claimant met her burden of proving that she is disabled from performing the duties of her own occupation.
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January 06, 2021
Federal Judge Stays Coverage Suit Pending Resolution Of Underlying Copyright Action
SAN DIEGO — A federal judge in California on Dec. 22 stayed an insurer’s lawsuit disputing coverage for an underlying copyright infringement and trade secret appropriation action, finding that the three factors in Landis v. N. Am. Co. weigh in favor of a stay pending resolution of the underlying action.
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January 05, 2021
9th Circuit Vacates, Remands Ruling As To Exhaustion, Erosion Of Policy Limits
PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Dec. 18 vacated and remanded a lower federal court’s judgment regarding the issues of exhaustion and erosion of policy limits in a dispute over professional liability coverage for an underlying $17.5 million settlement of a malpractice lawsuit brought against one of Dickstein Shapiro’s former partners, finding that an excess insurer may contest the allocation of the settlement payment and the subsequent erosion of the policy limits.
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January 05, 2021
Judge Seeks Cause On Why Not To Dismiss Insurer’s Dispute Against Reinsurer
LOS ANGELES — A California federal judge on Dec. 16 asked an insurer and a reinsurer to give cause as to why the judge should not dismiss with prejudice their dispute concerning the reinsurer’s alleged failure to indemnify the insurer for payments made for environmental claims.
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January 04, 2021
Virus Exclusion Bars Coverage For Losses Caused By Novel Coronavirus, Judge Says
SAN JOSE, Calif. — A business insurance policy’s virus exclusion bars coverage for business income losses sustained by a dental practice as a result of the shutdown of nonessential businesses to help slow the spread of the novel coronavirus because the exclusion precludes coverage for any loss caused by a virus, a California federal judge said Dec. 30 in granting, without prejudice, the insurer’s motion to dismiss.
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December 22, 2020
California Panel: Qui Tam Suit Over Billing Practices Not Subject To Arbitration
VENTURA, Calif. — A California appeals court on Dec. 21 upheld a ruling denying a motion to compel arbitration filed by doctors and clinics accused of fraudulently billing Aetna Health of California Inc. and an affiliate, finding that the insurer’s qui tam cause of action brought under the Insurance Fraud Protection Act (IFPA) is not subject to arbitration because the state of California did not sign any of the contracts between the parties (California, ex rel. Aetna Health of California Inc. v. Pain Management Specialist Medical Group, et al., No. B299025, Calif. App., 2nd Dist., 6th Div., 2020 Cal. App. LEXIS 1208).
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December 22, 2020
California Panel Says 2007 Lawsuit Over Defective Grading Related To 2003 Action
SANTA ANA, Calif. — A California appeals court on Dec. 18 affirmed a ruling finding that an insurer that issued a policy to a soil-grading subcontractor in 2007 is not required to pay a $3.2 million judgment to a developer or provide coverage for a consolidated lawsuit brought in 2007 by homeowners who allegedly sustained property damages as a result of the subcontractor’s work because the allegations in the homeowners’ lawsuit over the work were related to an earlier lawsuit that was covered by a policy issued by a different insurer in 2003 (D.R. Horton L.A. Holding Co. Inc. v. Certain Underwriters at Lloyd’s, No. G057467, Calif. App., 4th Dist., 3rd Div., 2020 Cal. App. Unpub. LEXIS 8422).