Mealey's California Insurance

  • February 20, 2020

    Magistrate Recommends Default To Insurer In Lead Exposure Coverage Dispute

    SACRAMENTO, Calif. — A California federal magistrate judge on Feb. 18 recommended that an insurer be granted a default judgment declaring that it has no duty to defend or indemnify cases against an insured alleging lead exposure (Philadelphia Indemnity Insurance Co. v. United Revolver Club of Sacramento, Inc., No. 18-2960, E.D. Calif., 2020 U.S. Dist. LEXIS 27406).

  • February 20, 2020

    Substance Abuse Treatment Provider Names Insurers In Bad Faith Lawsuit

    LOS ANGELES — A provider of mental health and alcoholism and substance abuse treatment services sued several insurers in California federal court on Feb. 19, alleging that the insureds breached their contracts with their insureds and acted in bad faith in failing to pay necessary assigned benefits to the provider for covered services rendered (12 South LLC v. UnitedHealth Group Inc., et al., No. 20-1634, C.D. Calif.).

  • February 20, 2020

    GEICO Sues Windshield Replacement Company, Owners Over False Bills

    LOS ANGELES — The Government Employees Insurance Co. (GEICO) and three of its affiliates on Feb. 12 filed a lawsuit in California federal court accusing a windshield repair company and its owners of engaging in a fraudulent scheme to bill the insurer for expensive replacement windshields they never purchased and that they performed the work without a license to do so (Government Employees Insurance Co., et al. v. Winaffix Auto Glass Inc., et al., No. 20-cv-01401, C.D. Calif.).

  • February 11, 2020

    Appellant: Insured’s Negligence Caused Damage ‘Well Within’ Effective Policy Dates

    SANTA ANA, Calif. — An appellant recently asked a California appeals court to reverse a lower court’s grant of summary judgment in favor of a general liability insurer in his direct action lawsuit asserting that the insurer wrongfully denied coverage for property damage caused by a retaining wall that was constructed by the insured, arguing that, at minimum, there are triable issues of material fact regarding whether his losses are covered under the policies (Thomas Guastello v. AIG Specialty Insurance Co., No. G057714, Calif. App., 4th Dist., Div. 3).

  • February 11, 2020

    Insureds Ask 9th Circuit To Reverse No Coverage Ruling Of Adult Film Actors’ Suit

    SAN FRANCISCO — A commercial landlord insured recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling that coverage is barred for actors’ underlying lawsuit alleging that they contracted the human immunodeficiency virus (HIV) in the course of filming sexual activity at the insured’s premises, arguing that commercial tenants are absent from the list of persons whose conduct causing sexual acts are excluded under the policy (Atain Specialty Insurance Company Inc. v. Armory Studios LLC, et al., Nos. 19-15745 and 19-15820, 9th Cir.).

  • February 10, 2020

    Summary Judgment Ruling In Bad Faith Suit Upheld On Appeal

    LOS ANGELES — Plaintiffs in an insurance breach of contract and bad faith lawsuit forfeited their right to benefits under the terms of a homeowners insurance policy because they were required, but declined to submit to evaluations under oath (EUOs) as part of an investigation into a claim for benefits under the policy after a home fire, a California appeals panel ruled Jan. 29 (Luis Estrada, et al. v. State Farm General Insurance Co., No. B293962, Calif. App., 2nd Dist., Div. 2, 2020 Cal. App. Unpub. LEXIS 648).

  • February 10, 2020

    Objection To Summary Judgment Ruling In Bad Faith Suit Overruled

    SAN DIEGO — A federal judge in California on Feb. 3 ruled that a beneficiary is not entitled to conduct discovery to determine whether an insurer acted in bad faith when it decided not to apply statutes under the California Insurance Code to a pair of life insurance policies it deemed had lapsed (Sarah Aislinn Flynn Thomas v. State Farm Insurance Co., No. 18-728, S.D. Calif., 2020 U.S. Dist. LEXIS 17147).

  • February 07, 2020

    Panel Rejects Appellant’s Reliance On Employee Status To Claim He Was Insured

    LOS ANGELES — A California appeals panel on Feb. 6 rejected an unmarried couple’s argument that a lower court erred when it ruled that an insurer did not breach its contract to the insureds by refusing to cover one member of the couple when they were both sued for malicious prosecution related to an underlying lawsuit, finding that the appellants have failed to raise triable issues of material fact that one of the appellants was an employee for purposes of coverage and that the insurer was required to treat the other appellant as a spouse (Gilbert Purcell, et al. v. Farmers Insurance Exchange, et al., No. B292698, Calif. App., 2nd Dist., Div. 1, 2020 Cal. App. Unpub. LEXIS 886).

  • February 04, 2020

    Panel Affirms Stay Of Suit Seeking Validity Of Insurer’s Subrogation Claim

    SAN FRANCISCO — A California appeals panel on Jan. 31 affirmed a lower court’s ruling that stayed an appellant’s declaratory judgment lawsuit disputing the validity of a professional liability insurer’s subrogation claim against his family trust, finding that the lower court’s determination that an ongoing lawsuit in Maryland “presented a more suitable forum” was within the court’s discretion (John Berman v. Minnesota Lawyers Mutual Insurance Company, No. A155394, Calif. App., 1st Dist., Div. 3).

  • February 04, 2020

    Consultant Was Not Fraudulently Joined To Defeat Jurisdiction In Water Damage Suit

    LOS ANGELES — A California federal judge on Jan. 27 remanded a suit filed by insured homeowners seeking coverage for water damages after determining that complete diversity jurisdiction does not exist because the insureds did not fraudulently join a consultant hired by the insurer as a defendant to defeat diversity jurisdiction (Ramin Javaherian, et al. v. AMCO Insurance Co., et al., No. 19-10317, C.D. Calif., 2020 U.S. Dist. LEXIS 14793).

  • February 04, 2020

    Pollution Liability Insurer Was Entitled To Rescind Policy, Appeals Panel Says

    LOS ANGELES — The Second District California Court of Appeal on Jan. 31 affirmed a trial court’s ruling that an insurer was entitled to rescind a pollution liability policy issued to an insured seeking coverage for contamination of oil in a storage tank caused by an insured’s work because the insured made misrepresentations in its insurance application (Endurance American Specialty Insurance Co. v. Bennington Group LLC, et al., No. B285909, Calif. App., 2nd Dist., Div. 5, 2020 Cal. App. Unpub. LEXIS 726).

  • February 03, 2020

    Panel: Insurers Have Right To Appeal Small Claims Default Against Insured

    SANTA ANA, Calif. — Calling it a case of first impression, a California appeals court on Jan.  30 held that insurers have the right to appeal a small claims default judgment that was entered against their insureds and directed a lower court to reinstate an automobile insurer’s notice of appeal of a $10,000 default judgment entered against its insured over liability for an automobile accident (Pacific Pioneer Insurance Company v. Superior Court of Orange County, et al., No. G057326, Calif. App., 4th Dist., Div. 3).

  • January 28, 2020

    Loss Caused Solely By Faulty Workmanship, Construction, Insurer Says To 9th Circuit

    SAN FRANCISCO — A builders risk insurer recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s finding that a faulty workmanship exclusion does not preclude coverage for an insured’s repair costs, arguing that the claimed loss was caused solely by the insured’s and its subcontractor’s faulty workmanship and construction (Engineered Structures, Inc. v. Travelers Property Casualty Company, No. 18-35588, 9th Cir.).

  • January 27, 2020

    Insurer Sues 5 Insurers For Indemnity, Contribution In Defense Of Defects Claims

    SAN FRANCISCO — An insurer on Jan. 22 sued five other insurers in a California federal court seeking a declaration of their coverage obligations in the defense of a consolidated underlying construction defects case arising out of a Hampton Inn hotel project (ACE American Insurance Co. v. Old Republic General Insurance Corp., et al., No. 20-cv-00482, N.D. Calif.).

  • January 21, 2020

    Insurer, Reinsurer Update On Arbitrator Selection In Breach Of Contract Dispute

    RIVERSIDE, Calif. — An insurer and a reinsurer tell a California federal judge in Jan. 16 joint status report that they have selected individual arbitrators and are choosing an umpire for arbitration of a breach of contract case over $8.6 million in equipment breakdown claims (Nationwide Agribusiness Insurance Co. v. The Hartford Steam Boiler Inspection and Insurance Co., No. 19-00531, C.D. Calif.).

  • January 21, 2020

    No Coverage For Claims Patent Was Fraudulently Procured, Used To Monopolize Market

    SAN JOSE, Calif. — A California appeals panel on Jan. 16 affirmed a lower court’s ruling that a commercial liability insurer has no duty to defend or indemnify its insured against underlying claims that it fraudulently procured a patent from the U.S. Patent and Trademark Office (PTO) and used that particular patent to attempt to monopolize the active dopant metrology market, rejecting the argument that it was objectively reasonable for the insured to expect that the policy’s “malicious prosecution” coverage extended to this claim (Travelers Property Casualty Company of America v. KLA Tencor Corp., No. H044890, Calif. App., 6th Dist.).

  • January 17, 2020

    California Judge Approves Final $80M Distribution, Closes Insurer’s Estate

    LOS ANGELES — A California judge on Dec. 4 approved the state’s insurance commissioner’s application for a final distribution of approximately $80 million to occur by July 1 and to close the estate of Executive Life Insurance Co. (ELIC) (Insurance Commissioner of the State of California v. Executive Life Insurance Co., No.BS 006912,Calif. Super., Los Angeles Co.).

  • January 14, 2020

    Insured: Coverage Owed For Underlying Lawsuit About Labor Code Violations

    SAN FRANCISCO — An insured recently filed a brief in the Ninth Circuit U.S. Court of Appeals contending that a district court erred when it held that an insurer did not owe coverage for underlying litigation pertaining to violations of several provisions of the California Labor Code (U.S. Telepacific Corp. v. U.S. Specialty Insurance Company, No. 19-55828, 9th Cir.).

  • January 10, 2020

    California Winery Operator Seeks Coverage For ‘Smoke Taint’ Caused By Wildfires

    OAKLAND, Calif. — An operator of vineyards and winemaking operations in California on Jan. 3 sued London insurers for breach of contract and bad faith in a California federal court, alleging that they wrongfully refused to pay for smoke exposure damage to its finished wines caused by the October 2017 wildfires in Sonoma and Napa County, Calif., and seeking $12 million for its loss (Vintage Wine Estates, Inc. v. Royal & Sun Alliance Insurance PLC, et al., No. 20-00101, N.D. Calif.).

  • January 09, 2020

    Panel Says Opinions Of Disability Claimant’s Treating Physicians Must Be Considered

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Jan. 7 vacated and remanded a disability claimant’s suit seeking long-term disability benefits after determining that a district court erred in failing to consider letters from the claimant’s treating physicians who were not provided with the opportunity to rebut the opinion of one of the insurer’s examining physicians (Lea Wagenstein v. Cigna Life Insurance Co., et al., No. 18-55955, 9th Cir., 2020 U.S. App. LEXIS 482).