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Mealey's California Insurance

  • September 24, 2018

    No Valid Exception To No-Voluntary Payments Provision Applies To Coverage Dispute

    PASADENA, Calif.— The Ninth Circuit U.S. Court of Appeals on Sept. 20 affirmed a lower court’s ruling that insureds breached an insurance policy’s  “no-voluntary payments” provision by executing an underlying settlement with a former employee without the insurer’s knowledge or consent and that no exception to the provision applies (AMCO Insurance Company v. Jennifer Morfe, No. 17-55383 9th Cir., 2018 U.S. App. LEXIS 26923).

  • September 24, 2018

    Panel Reverses Order Enjoining Insurance Commissioner From Enforcing 3 Regulations

    SANTA ANA, Calif. — A California appeals panel on Sept. 20 reversed a lower court’s order that imposed a preliminary injunction that prohibited the Insurance commissioner’s enforcement of California Code of Regulations, Titles 2695.1(a), 2695.2(l) and 2695.2(y), remanding for the lower court to also reverse its order granting the insurer’s motion for judgment on the pleadings as to its claim for declaratory relief (PacifiCare Life And Health Insurance Company v. Dave Jones, as Insurance Commissioner, etc., No. G053914, Calif. App., 4th Dist., Div. 3, 2018 Cal. App. LEXIS 836).

  • September 21, 2018

    Suit Alleging Auto Insurer Undervalued Total Loss Vehicles Will Move Forward

    SAN FRANCISCO — An insureds’ claims for breach of contract, bad faith, misrepresentation and fraud against an auto insurer accused of undervaluing vehicles that were rendered a total loss will move forward against the insurer because the insured offered sufficient facts to support the claims, a California federal judge said Sept. 19 (Bobby Jones, et al. v. Progressive Casualty Insurance Co., et al., No. 16-6941, N.D. Calif., 2018 U.S. Dist. LEXIS 160313).

  • September 21, 2018

    Panel Stands By Ruling In Dispute Over Legal Fees Arising From Sexual Abuse Claim

    SAN DIEGO — On a motion for rehearing, a California appeals panel on Sept. 20 reaffirmed 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 6432).

  • September 21, 2018

    Judge Affirms $3.5 Million Award To Asbestos Trust Against Fire Brick Insurer

    OAKLAND, Calif. — A California federal bankruptcy judge properly entered a more than $3.5 million judgment against an insurance company in a long-running dispute over the amount of coverage owed to a company’s liquidating trust for asbestos personal injury claims, a federal judge held Sept. 17 in affirming the award, plus a $60,000 penalty for the insurer’s “vexatious and unreasonable conduct” (Continental Casualty Company v. Barry A. Chatz, Nos. 17-cv-05281, 17-cv-06989, N.D. Calif., 2018 U.S. Dist. LEXIS 158352).

  • September 18, 2018

    Insurance Broker’s Former Owners Oppose Reinsurer’s Summary Judgment Motion

    SAN DIEGO — Arguing that there are triable issues of fact, the former owners of an insurance brokerage company in separate Sept. 14 briefs oppose a reinsurer’s request for summary judgment against them for payment of a $3.2 million judgment in a California federal court dispute over breached reinsurance agreements from fraudulent transfers (Odyssey Reinsurance Co. v. Richard Keith Nagby, et al., No. 16-3038, S.D. Calif.).

  • September 18, 2018

    Health Insurer Says ERISA Preempts, Pleading Deficiencies Defeat UCL Claim

    LOS ANGELES — An out-of-network substance abuse services provider’s claims are preempted by the Employee Retirement Income Security Act, and the provider fails to adequately plead its California unfair competition law (UCL) claim, an insurer tells a California federal judge in a reply Sept. 14 (Miriam Hamideh Ph.D., et al. v. Anthem Blue Cross Life and Health Insurance Co., et al., No. 18-3044, C.D. Calif.).

  • September 18, 2018

    Panel Affirms Verdict In Insurer’s Favor In Water Damage Coverage Dispute

    SAN DIEGO — The Fourth District California Court of Appeal on Sept. 17 affirmed a jury verdict entered in an insurer’s favor in a water damage dispute after determining that the trial court did not abuse its discretion in excluding testimony from the insured’s expert regarding whether the water damage occurred suddenly or over a period of time (Robert Dorfman v. State Farm General Insurance Co., No. D072214, Calif. App., 4th Dist., Div. 1, 2018 Cal. App. Unpub. LEXIS 6329).

  • September 12, 2018

    Insurer Did Not Act In Bad Faith By Accepting Lower Repair Cost Estimate

    SACRAMENTO, Calif. — A California federal judge on Sept. 7 granted an insurer’s motion on a bad faith claim arising out of the insurer’s payment of repair costs for an insured home damaged by a fire after determining that the insurer did not act unreasonably in accepting a lower estimate for the repair costs (Donald Durben, et al. v. State Farm General Insurance Co., et al., No. 16-754, E.D. Calif., 2018 U.S. Dist. LEXIS 153166).

  • September 12, 2018

    Insurer Owes No Coverage For Faulty Laminate Suit, 7th Circuit Affirms

    CHICAGO — The Seventh Circuit U.S. Court of Appeals on Sept. 10 affirmed a lower federal court’s finding that an insurer has no duty to provide coverage for an underlying lawsuit alleging that its plastics company insured manufactured a faulty laminate (Berry Plastics Corp. v. Illinois National Insurance Co., No. 17-1815, 7th Cir., 2018 U.S. App. LEXIS 25576).

  • September 7, 2018

    No Coverage Owed For Damages Caused By Sewer Line Failure, Judge Says

    SAN FRANCISCO — An insurer has no duty to provide coverage for damages incurred as a result of a sewer line failure to a building that housed an insured restaurant because the policy at issue did not provide coverage for buildings and clearly excluded coverage for damages caused by subsurface water, a California federal judge said Sept. 5 in entering summary judgment in favor of the insurer (Ken Tu, et al. v. Dongbu Insurance Co. Ltd., No. 17-3495, N.D. Calif., 2018 U.S. Dist. LEXIS 151322).

  • September 4, 2018

    Judge Issues New Case Schedule In Dispute Over Reinsurance Agreement

    SACRAMENTO, Calif. — In two putative class actions regarding a reinsurance participation agreement (RPA), a California federal judge approved a new scheduling order on Aug. 31 (Shasta Linen Supply Inc. v. Applied Underwriters Inc., et al., Nos. 16-00158 & 16-01211, E.D. Calif.).

  • 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).

  • 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).

  • 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.).

  • 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).

  • 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).

  • 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).

  • 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).

  • 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