Mealey's California Insurance
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August 30, 2018
‘Damage To Your Work’ Exclusion Bars Coverage For Insured’s Stucco Work
SAN FRANCISCO — A “damage to your work” exclusion in a commercial general liability insurance policy precludes coverage for an insured’s stucco work itself but not the damage to surface paint, a California federal judge ruled Aug. 21 (First Mercury Insurance Co. v. Kinsale Insurance Co., et al., No. 18-00071, N.D. Calif., 2018 U.S. Dist. LEXIS 142073).
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August 30, 2018
Insured’s Breach Of Contract, Bad Faith Claim Untimely, California Panel Rules
LOS ANGELES — An insured’s insurance breach of contract and bad faith claims against his homeowners insurance provider were barred by the policy’s one-year limitations period to bring any action after a loss, a California appellate panel ruled Aug. 27 in affirming a state trial court’s grant of the insurer’s motion for summary judgment (David Watts v. Safeco Insurance Company of Illinois, No. B276123, Calif. App., 2nd Dist., Div. 8, 2018 Cal. App. Unpub. LEXIS 5798).
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August 30, 2018
Insolvent Insurer’s Liquidator Files Amended Answer In Reimbursement Lawsuit
LOS ANGELES — The liquidator of an insolvent medical professional liability insurer filed an amended answer on Aug. 29 in a California federal court lawsuit seeking reimbursement under a letter of credit issued to the insurer to stay enforcement of a $2.5 million medical malpractice judgment (MUFG Union Bank, N.A. v. Steven C. Taylor, No. 18-02772, C.D. Calif.).
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August 20, 2018
Shoring System Redesign Was Not Cleanup Cost Under Environmental Policy
SAN FRANCISCO — A California federal judge on Aug. 15 determined that an insurer is entitled to summary judgment because the cost of redesigning a temporary shoring system is not a cleanup cost under an environmental legal liability policy (Essex Walnut Owner L.P. v. Aspen Specialty Insurance Co., No. 17-6435, N.D. Calif., 2018 U.S. Dist. LEXIS 138276).
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August 16, 2018
Judge Denies New Trial On Contract, Bad Faith Claims Against Insurer
LOS ANGELES — A California federal judge on Aug. 1 denied a life insurer’s request for a new trial or judgment as a matter of law on breach of contract and bad faith claims and denied its motion to strike a reinsurance underwriter’s testimony (DCD Partners LLC, et al. v. Transamerica Life Insurance Co., et al., No. 15-03238, C.D. Calif., 2018 U.S. Dist. LEXIS 135792).
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August 13, 2018
Judge: Insurer Has No Duty To Indemnify Disputes Over Payment For Work
SAN FRANCISCO — An insurer has no duty to indemnify two lawsuits arising out of disputes on work performed on condominium buildings, a California federal judge ruled Aug. 10, granting in part summary judgment to the insurer but denying judgment on the duty to defend in light of triable fact issues on several exclusions (United States Liability Insurance Co. v. Contempo Homeowners Association, No. 18-02722, N.D. Calif., 2018 U.S. Dist. LEXIS 135570).
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August 13, 2018
Insured’s Complaint In Bad Faith Suit Found To Be Timely, Not Prejudicial
SACRAMENTO, Calif. — A federal judge in California on Aug. 6 ruled that insureds timely filed their breach of contract and bad faith lawsuit against their insurer and that the insurer failed to show “beyond doubt” that their claims were barred by the statute of limitations (Daniel Foster, et al. v. Liberty Mutual Fire Insurance Co., No. 18-0485, E.D. Calif., 2018 U.S. Dist. LEXIS 133897).
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August 13, 2018
Federal Judge Denies Insurer’s Motion, Says Breach Of Contract Proceeds
SAN DIEGO — Claims for breach of contract and bad faith arising out of an insurer’s denial of coverage for an underlying wrongful eviction suit will proceed, a California federal judge said July 26 after determining that the insurer failed to prove that the underlying suit is excluded by any of the applicable policy exclusions (Black Mountain Center L.P., et al., v. Fidelity and Deposit Company of Maryland, No. 17-1776, S.D. Calif., 2018 U.S. Dist. LEXIS 125496
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August 10, 2018
Summary Judgment Ruling On Bad Faith Counterclaim Upheld On Appeal
SEATTLE — A federal district court did not err in granting summary judgment in favor of an insurer on a third-party bad faith counterclaim because the third parties failed to show that any possible bad faith in the handling of their claim resulted in any harm, a Ninth Circuit U.S. Court of Appeals panel ruled July 31 in affirming the lower court’s opinion (State Farm Mutual Automobile Insurance Co. v. Shelbie Frounfelter, et al., No. 17-35313, 9th Cir., 2018 U.S. App. LEXIS 21204).
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August 9, 2018
Insurers File 3 Complaints For Equitable Contribution In Defense Of Defect Claims
LOS ANGELES — Three lawsuits were filed by insurers on Aug. 8 in a California federal court asserting equitable contribution claims over defense costs for construction defects cases (St. Paul Fire and Marine Insurance Co., et al. v. American Safety Indemnity Co., No. 18-06794; St. Paul Fire and Marine Insurance Co., et al. v. Lexington Insurance Co., No. 18-06803; St. Paul Fire and Marine Insurance Co., et al. v. Lexington Insurance Co., No. 18-06799, C.D. Calif.).
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August 8, 2018
Federal Judge Grants Parties’ Joint Motion To Dismiss Disability Benefits Suit
SACRAMENTO, Calif. — A California federal judge on Aug. 6 dismissed a disability claimant’s suit with prejudice following the parties’ filing of a joint stipulation for dismissal (Brenda Culbertson-Chavira v. Life Insurance Company of North America, No. 17-1702, E.D. Calif., 2018 U.S. Dist. LEXIS 132014).
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August 8, 2018
Former Property Owner Is Not Off The Hook For Environmental Cleanup Costs
LOS ANGELES — The Second District California Court of Appeal on Aug. 6 reversed a trial court’s ruling in favor of a former property owner after determining that the trial court erred in determining that the former property owner did not have a duty to indemnify an insured for environmental remediation costs pursuant to an indemnification agreement (Greenwich Insurance Co. v. Argonaut Group Inc., et al., No. B281218, Calif. App., 2nd Dist., Div. 5, 2018 Cal. App. Unpub. LEXIS 5352).
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August 8, 2018
Insurers Seek Reversal Of Ruling On Equitable Subrogation Claim
SACRAMENTO, Calif. — Insurers argue in a July 6 reply brief to a California appeals court that a state tax code does not preclude them from pursuing equitable and contractual subrogation claims against various subcontractors that allegedly owed a duty to defend a developer in an underlying construction defects case (Travelers Property Casualty Company of America, et al. v. Engel Insulation Inc., No. C085753, Calif. App., 3rd Dist.).
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August 7, 2018
High Court Should Review 9th Circuit’s Offset Ruling, Disability Claimant Says
WASHINGTON, D.C. — The U.S. Supreme Court should grant review of a disability claimant’s petition for writ of certiorari in a dispute over the offsetting of a claimant’s long-term disability (LTD) benefits to account for Social Security disability income (SSDI) benefits received on behalf of the claimant’s dependents because the plan administrators did not apply the language of the LTD plan as written, the claimant says in a June 22 reply brief (Susan Rene Jones v. Merck Sharpe & Dohme Corp., et al., No. 17-1478, U.S. Sup.).
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August 7, 2018
Bad Faith, Punitive Damages Claims Survive Dismissal In Contamination Coverage Suit
FRESNO, Calif. — Claims for bad faith and punitive damages alleged against an insurer in an environmental contamination coverage suit can move forward, a California federal judge said Aug. 1 after determining that the insured has sufficiently alleged facts in support of the claims (City of Fresno v. Tokio Marine Specialty Insurance Co., No. 18-504, E.D. Calif., 2018 U.S. Dist. LEXIS 129224).
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August 7, 2018
Federal Judge Stays Coverage Action Pending Resolution Of ‘Ghost Ship’ Fire Suits
SAN FRANCISCO — A California federal judge on Aug. 2 granted an insured’s motion to stay an insurer’s declaratory judgment lawsuit challenging coverage for underlying actions over a fire at a music event that killed 36 people, finding that the majority of the factors in Brillhart v. Excess Ins. Co. of Am. weigh in favor of a stay (American Bankers Insurance Company of Florida v. Russell E.L. Butler, No. 18-01973, N.D. Calif., 2018 U.S. Dist. LEXIS 130092).
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August 6, 2018
Parties Consent To Filing Of Documents Under Seal In Reinsurance Dispute
SACRAMENTO, Calif. — In two putative class actions over a reinsurance participation agreement (RPA), a California federal judge on July 25 approved a stipulation and proposed order by the parties consenting to the filing of documents under seal and the redaction of documents (Shasta Linen Supply Inc. v. Applied Underwriters Inc., et al., Nos. 16-00158 & 16-01211, E.D. Calif., 2018 U.S. Dist. LEXIS 126405).
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August 6, 2018
Reinsurer Seeks Judgment Against Broker’s Former Owners For $3.2M Judgment
SAN DIEGO — In a California federal court dispute over breached reinsurance agreements from fraudulent transfers, a reinsurer on July 27 sought summary judgment against the former owners of an insurance brokerage company for payment of a $3.2 million judgment (Odyssey Reinsurance Co. v. Richard Keith Nagby, et al., No. 16-3038, S.D. Calif.).
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August 6, 2018
Appeals Panel Upholds Woman’s Insurance Fraud Conviction, Tosses Failure To Appear
SACRAMENTO, Calif. — A California appeals panel on Aug. 1 affirmed a woman’s conviction on three counts of insurance fraud, holding that evidence presented during the trial sufficiently showed that she was not a passenger in a vehicle when it was struck by another vehicle (People of the State of California v. Deborah Carter, No. C083541, C084717, Calif. App., 3rd Dist., 2018 Cal. App. Unpub. LEXIS 5269).
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August 1, 2018
Insurers Seek Equitable Contribution For Defense Costs Of Defects Lawsuit
LOS ANGELES — Two insurers allege in a July 18 complaint filed in a California federal court that three other insurers owe equitable contribution for the defense of an underlying construction defects case against a mutual additional insured (St. Paul Mercury Insurance Co., et al. v. Everest National Insurance Co., et al., No. 18-06222, C.D. Calif.).