Mealey's California Insurance
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September 15, 2020
Panel: Triable Issues Of Fact Exist As To Whether Broker Undertook Special Duty
SANTA ANA, Calif. — A California appeals panel on Sept. 11 held that an insured raised triable issues of fact regarding whether an insurance broker "undertook a special duty by holding itself out as having expertise in inland marine insurance" and that the insured reasonably relied on the broker's expertise, reversing and remanding a lower court's ruling in favor of the broker in a breach of contract and negligence lawsuit (David Murray v. UPS Capital Insurance Agency, Inc., No. G058353, Calif. App., 4th Dist., Div. 3, 2020 Cal. App. LEXIS 866).
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September 15, 2020
9th Circuit Says No Authority Supports Excess Insurer's 'Improper Erosion' Theory
PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Sept. 14 reversed a lower federal court's grant of summary judgment in favor of a second excess insurer in its lawsuit alleging that a primary and first excess insurer's payment of an uncovered claim arising from the insured's settlement of alleged violations of the Employee Retirement Income Security Act (ERISA) improperly eroded their policies' liability limits and prematurely triggered its excess coverage, remanding for further proceedings (Axis Reinsurance Co. v. Northrop Grumman Corporation, No. 19-55135, 9th Cir.).
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September 15, 2020
LTD Benefits Owed To Claimant Who Suffered From Lyme Disease
RIVERSIDE, Calif. — A disability claimant met her burden of establishing that she was totally disabled from performing the duties of her occupation as a teacher as a result of complications from Lyme disease, a California federal judge said Sept. 11 in entering judgment for the claimant (Tisha Entz v. Standard Insurance Co., No. 19-402, C.D. Calif., 2020 U.S. Dist. LEXIS 166814).
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September 14, 2020
Insurers Respond To Reinsurers' Breach Of Contract Counterclaims
LOS ANGELES — Insurers on Sept. 10 asserted affirmative defenses to a reinsurer's breach of contract and declaratory relief counterclaims seeking damages of $11.5 million plus prejudgment interest from the insurers in their California federal court dispute over denied reinsurance payments for livery claims, trucking claims and habitability claims (California Capital Insurance Co., et al. v. Maiden Reinsurance North America, Inc., No. 20-1264, C.D. Calif.).
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September 11, 2020
Federal Judge Denies Remand Of Homeowners' Breach Of Contract, Bad Faith Suit
FRESNO, Calif. — A California federal judge on Sept. 8 denied an insured's motion to remand a breach of contract and bad faith suit arising out of fire damages to an insured home after determining that it was not initially clear that the insured's damages exceeded the federal jurisdictional minimum amount of $75,000 (Ramon Sanchez v. AMCO Insurance Co., et al., No. 19-1633, E.D. Calif., 2020 U.S. Dist. LEXIS 163761).
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September 09, 2020
Plaintiff Voluntarily Dismisses Class Action Seeking Coverage For Trip Cancellation
LOS ANGELES — A Los Angeles resident on Aug. 19 filed a notice of voluntary dismissal without prejudice of his class action complaint alleging in a California federal court that an insurance policy specifically covered his trip cancellation due to California’s civil authority orders in response to the novel coronavirus pandemic (Richard Robbins v. Generali Global Assistance, Inc., et al., No. 20-04904, C.D. Calif.).
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September 04, 2020
Insurers: COVID-19-Related Business Loss Claims Preempted By Policy Exclusions
LOS ANGELES — Insurers named as defendants in a breach of contract and bad faith lawsuit stemming from their denial of a lost business coverage claim filed by the operator of a nail salon that was forced to close during the novel coronavirus pandemic on Aug. 28 asked a federal judge in California to dismiss their insured's complaint, arguing that the insured failed to plead any basis for coverage under the terms of the policy he purchased (Thomas Phan v. Nationwide General Insurance Co., et al., No. 20-7616, C.D. Calif.).
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September 04, 2020
Panel Affirms Denial Of Reinsurer's Bid To Intervene In Creditor's $3.2M Dispute
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Sept. 2 upheld the denial of a reinsurer's motion to intervene as untimely in a case over a $3.2 million judgment and found that the reinsurer lacked standing to challenge another order disbursing registry funds to a judgment creditor (Odyssey Reinsurance Company v. Richard Keith Nagby, et al. v. Knight Insurance Company Ltd., Nos. 19-55346, 19-55347, 19-55423, 9th Cir., 2020 U.S. App. LEXIS 27976).
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September 04, 2020
9th Circuit: Court Erred In Ruling Intellectual Property Exclusion Bars Coverage
PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Aug. 19 held that a lower federal court erred in finding that an insurance policy's intellectual property exclusion unambiguously precluded coverage solely based on the allegations that the insured asserted in an underlying lawsuit, reversing and remanding (MyChoice Software, LLC, et al. v. Travelers Casualty Insurance Company of America, No. 19-56030, 9th Cir., 2020 U.S. App. LEXIS 26328).
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September 02, 2020
Excess Insurers Oppose Reinsurer's Declaratory Judgment Counterclaim
SAN FRANCISCO — Two excess insurers on Aug. 25 responded to a reinsurer's declaratory judgment counterclaim in a California federal court, alleging that the reinsurer is estopped and waived from seeking to inspect their claim reporting of an insured's asbestos liabilities (New Hampshire Insurance Company, et al. v. TIG Insurance Company, No. 20-04668, N.D. Calif.).
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September 02, 2020
Assignees Failed To Present Any Disputed Issues Of Fact Related To Bad Faith Claim
LOS ANGELES — A federal judge in California on Aug. 28 granted an auto insurer's motion for summary judgment on a bad faith claim after determining that the assignees to the insured's policy failed to present any disputed issues of fact related to the bad faith claim (Ricky Ray, et al. v. State Farm Mutual Automobile Insurance Co., et al., No. 19-4922, C.D. Calif., 2020 U.S. Dist. LEXIS 156487).
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September 02, 2020
Judge Decides Insurers' Duties For 6 Out Of 15 Construction Defect Cases
SACRAMENTO, Calif. — Addressing coverage for subcontractors in six out of 15 underlying construction defect cases, a California federal judge on Aug. 31 ruled that an insurer had a duty to defend four of them, a duty to indemnify only three and owed equitable contribution to another insurer for two of them (Interstate Fire & Casualty Insurance Company v. First Specialty Insurance Company, et al., No. 17-1795, E.D. Calif., 2020 U.S. Dist. LEXIS 158229).
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September 01, 2020
Judge Refuses To Remand, Grants Insurer's Motion To Dismiss COVID-19 Coverage Suit
LOS ANGELES — A federal judge in California on Aug. 28 denied a restaurant insured's motion to remand and granted an all-risk insurer's motion to dismiss the insured's lawsuit seeking coverage for its losses arising from the governmental shutdown orders prompted by the novel coronavirus, finding that the insured failed to demonstrated that it incurred "direct physical loss of or damage to property" to trigger the policy's civil authority coverage (10E, LLC v. Travelers Indemnity Co. of Connecticut, et al., No. 20-0441, C.D. Calif., 2020 U.S. Dist. LEXIS 156827).
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August 28, 2020
Reinsurer's Parent Companies Remove Breach Of Contract Case To Federal Court
LOS ANGELES — Parent companies of a reinsurance company on Aug. 26 removed to a California federal court a lawsuit brought by four insurers alleging intentional interference with and inducement of a breach of a multiple line excess of loss reinsurance agreement (California Capital Insurance Company, et al. v. Enstar Holdings [US] LLC, et al., No. 20-7806, C.D. Calif.).
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August 26, 2020
Insolvent Insurers' Trustee Seeks To Make $49.4M Distribution
LOS ANGELES — California's insurance commissioner as trustee for three insurance trusts on Aug. 10 asked a California trial court for permission to pay additional sums of $49.4 million to creditors, noting that "repayment of creditors is a key goal of any receivership" (Ricardo Lara v. Mission Insurance Company, et al., No. 572-724, Calif. Super., Los Angeles Co.).
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August 26, 2020
Judge Awards Bill Of Costs In Dispute Over Reinsurance Participation Agreement
SACRAMENTO, Calif. — Almost a year after ruling that an insured failed to demonstrate any economic loss from entering into a reinsurance participation agreement (RPA) and, thus, lacked standing to sue under the California unfair competition law (UCL), a federal judge in California on Aug. 25 awarded costs of $20,396.04 against the insured (Pet Food Express Ltd. v. Applied Underwriters Inc., et al., No. 16-1211, E.D. Calif.).
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August 25, 2020
Insured Says Pollution Exclusion Cannot Be Used To Deny Coverage
SAN DIEGO — A commercial property insurance policy's pollution exclusion and virus or bacteria exclusion do not bar coverage for business interruption and extra expense costs incurred as a result of the COVID-19 stay-at-home orders issued by the state of California, an insured restaurant owner says in an Aug. 20 complaint filed against an insurer in California federal court (JAJ Group Inc., et al. v. Liberty Mutual Insurance Co., No. 20-1620, S.D. Calif.).
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August 25, 2020
Disability Insurer Did Not Breach Contract, Act In Bad Faith In Denying Claim
ANCHORAGE, Alaska — The Ninth Circuit U.S. Court of Appeals on Aug. 24 affirmed a district court's ruling in favor of a disability insurer after determining that the insurer did not breach its contract or act in bad faith because the insurer's denial of benefits was reasonable (Cynthia Cheney v. United States Life Insurance Company in the City of New York, et al., No. 19-15649, 9th Cir., 2020 U.S. App. LEXIS 26856).
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August 25, 2020
Insured Seeks Reversal Of Rulings In Construction Defects Coverage Dispute
SANTA ANA, Calif. — An insured recently asked a California appeals court to reverse two summary judgments rulings in favor of a commercial general liability insurer and an insurance broker, arguing that the insurer failed to present compelling evidence or eliminate triable issues of material fact regarding whether rescission of the policy was warranted in a coverage dispute arising from a construction defects lawsuit (Michael Favreau v. Navigators Insurance Company, et al., Nos. G056718 and G056938, Calif. App., 4th Dist.).
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August 19, 2020
Excess Liability Insurer Says Pollution Exclusion Bars Coverage For Oil Spill
LOS ANGELES — An excess liability insurer filed suit on Aug. 14 in California federal court seeking a declaration that its policy's total pollution exclusion bars coverage for remediation costs incurred as the result of a crude oil spill (General Star Indemnity Co. v. Petrol Transport Inc., et al., No. 20-7371, C.D. Calif.).