Mealey's California Insurance

  • December 15, 2017

    Federal Judge: Fusion Surgery Preauthorization Waived Insurer’s Later Denial

    LOS ANGELES — A health insurer waived the right to deny coverage for vertebrate fusion surgery as experimental when it preauthorized the procedure, albeit with a different device, a federal judge in California held Dec. 12, entering judgment for the plaintiff on her Employee Retirement Income Security Act claims (Aubrey Cohorst v. Anthem Health Plans of Kentucky Inc., No. 16-7925, C.D. Calif., 2017 U.S. Dist. LEXIS 204362).

  • December 13, 2017

    Court To Divine If Catholic Group Intervenes In ACA Contraceptive Mandate Suit

    SAN FRANCISCO — A religious group told a federal judge in California on Dec. 11 that it should be allowed to intervene in an action challenging new rules governing exemptions to the Patient Protection and Affordable Care Act (ACA) contraceptive mandate, saying that while the states give lip service to protecting religious beliefs, the reality is much more stark (State of California, et al. v. Don J. Wright, et al., No. 17-5783, N.D. Calif.).

  • December 12, 2017

    Judge: ERISA Doesn’t Preempt Health Care Provider’s State Law Contract Claims

    SAN DIEGO — Elimination of assignee rights claims leaves only state law claims alleging that a health insurer orally promised to pay for substance abuse treatments and then failed to fully compensate the provider for that treatment, a federal judge in California held Dec. 5 in finding Employee Retirement Income Security Act preemption inapplicable (Aton Center Inc. v. Blue Cross of California, et al., No. 17-852, S.D. Calif., 2017 U.S. Dist. LEXIS 200057).

  • November 29, 2017

    Nebraska Law Preempts Reinsurance Participation Agreement Clause, Panel Says

    LOS ANGELES — Nebraska Uniform Arbitration Act (NUAA) Section 25-2602.01(f) applies to a reinsurance participation agreement (RPA) and renders an arbitration provision unenforceable, a California appeals panel held Nov. 22, finding that a trial judge did not err in refusing to compel arbitration in a breach of contract dispute (Citizens of Humanity, et al. v. Applied Underwriters Inc., et al., No. B276601, Calif. App., 2nd Dist., Div. 2, 2017 Cal. App. LEXIS 1038).

  • November 21, 2017

    Offset Was Not Abuse Of Discretion, 9th Circuit Panel Says In Affirming

    SAN FRANCISCO — A disability plan administrator did not abuse its discretion in offsetting a claimant’s long-term disability (LTD) benefits to account for Social Security disability income (SSDI) benefits that she receives for her dependents, the Ninth Circuit U.S. Court of Appeals said Nov. 17 in affirming a district court’s ruling for the plan (Susan Rene Jones v. Life Insurance Company of North America, et al., No. 16-16172, 9th Cir., 2017 U.S. App. LEXIS 23244).

  • November 21, 2017

    Insurer Owes Trustee $3.5M In Policy Limits, Attorney Fees For Coverage Dispute

    OAKLAND, Calif. — A California federal bankruptcy judge on Nov. 16 entered a judgment of more than $3.5 million against an insurance company in a dispute over the amount of coverage owed to a company’s liquidating trust for asbestos personal injury claims, including attorney fees and a $60,000 penalty for the insurer’s “vexatious and unreasonable conduct” in the case (In re CFB Liquidating Corporation, f/k/a Chicago Fire Brick Co., et al., No. 01-45483, [Barry A. Chatz, as Trustee for the CFB/WFB Liquidating Trust v. Continental Casualty Company, No. 15-4136] N.D. Calif. Bkcy., 2017 Bankr. LEXIS 3938).

  • November 21, 2017

    Claim Seeking Coverage For Air Ambulance Transport Remanded To Plan Administrator

    SACRAMENTO, Calif. — A California federal judge on Nov. 16 remanded an insured’s claim seeking  coverage for almost $500,000 incurred for the transport of her daughter from a hospital in Mexico to a hospital in Seattle by air ambulance because the plan administrator did not consider all of the available information before denying the claim on the basis that the air transport was not for an emergency (Aviation West Charters LLC, d/b/a Angel Medflight v. UnitedHealthcare Insurance Co., No. 16-436, E.D. Calif., 2017 U.S. Dist. LEXIS 190114).

  • November 17, 2017

    Known Defects Relieve Insurer Of Duty To Pay For Repairs, Panel Finds

    LOS ANGELES — A homeowner “who is aware, long before a rainstorm occurs and causes damage, of possible leakage” caused by construction defects cannot reasonably expect an insurer to pay for repairs on the theory that rainwater, and not the defects, caused the damage, a California appeals panel affirmed Nov. 14 (Simon Cohen, et al. v. Pacific Specialty Insurance Co., No. B276060, Calif. App., 2nd Dist., Div. 8, 2017 Cal. App. Unpub. LEXIS 7779).

  • November 17, 2017

    California Federal Judge Transfers Disability Suit To New Jersey Federal Court

    SAN FRANCISCO — A California federal judge on Nov. 16 granted a disability insurer’s motion to transfer a disability claimant’s suit to New Jersey federal court after determining that New Jersey is the more convenient forum for the parties and for the witnesses (Ernest Tarasovsky v. The Guardian Life Insurance Company of America, No. 17-03464, N.D. Calif., 2017 U.S. Dist. LEXIS 189926).

  • November 17, 2017

    Panel Reverses Summary Judgment On Insurer’s Duty To Defend Defect Claims

    SAN DIEGO — A California appeals panel on Nov. 14 reversed an entry of summary judgment to an insurer on its duty to defend construction defect claims under subcontractors’ policies but affirmed summary judgment to a second insurer, finding that it has no duty to defend (McMillin Management Services L.P., et al. v. Financial Pacific Insurance Co., et al., No. D069814, Calif. App., 4th Dist., Div. 1, 2017 Cal. App. LEXIS 1000).

  • November 17, 2017

    9th Circuit Panel Affirms Summary Judgment Ruling In Bad Faith Lawsuit

    SAN FRANCISCO — A federal district court did not err in granting an insurer’s motion for summary judgment in an insurance breach of contract and bad faith lawsuit because the repair cost estimate decided by a neutral umpire “was determinative of whether” an insured would receive a total loss payment under the terms of its aviation insurance policy for a loss sustained after an aircraft accident, a Ninth Circuit U.S. Court of Appeals panel ruled Nov. 3 in affirming the lower court’s ruling (Minden Air Corp. v. Starr Indemnity & Liability Co., No. 16-15712, 9th Cir., 2017 U.S. App. LEXIS 22091).

  • November 14, 2017

    Parties Submit Arguments To 9th Circuit On Duty To Defend In Class Action

    SAN FRANCISCO — An insurer and a real estate broker recently submitted their arguments in the Seventh Circuit U.S. Court of Appeals, disputing whether an exclusion in the policy precludes coverage in relation to an underlying lawsuit in which class members allege that the broker and individual agents received secret profits while acting as their real estate agents (Hanover Insurance Co. v. Paul M. Zagaris Inc. et al., 17-15477, 9th Cir.).

  • November 13, 2017

    Wine Collector Asks Panel To Reverse No Coverage Ruling For Alleged $18M Wine Fraud

    SANTA ANA, Calif. — A high-end wine collector has asked a California appeals court to reverse a lower court’s judgment in favor of an insurer in his lawsuit seeking coverage for an alleged multimillion-dollar loss to his wine collection due to fraud (David Doyle v. Fireman's Fund Insurance Company, No. G054197, Calif. App., 4th Dist., Div. 3).

  • November 10, 2017

    Pollution Exclusion Does Not Bar Coverage For Carbon Monoxide Suits, Insured Argues

    SAN FRANCISCO — An Oregon federal judge erred in granting summary judgment in favor of an insurer in a dispute over coverage for underlying carbon monoxide poisoning suits because the pollution exclusion in the policy at issue does not apply to carbon monoxide as it is not an irritant or contaminant, an insured argues in an Oct. 23 brief to the Ninth Circuit U.S. Court of Appeals (Colony Insurance Co. v. Victory Construction LLC, et al., No. 17-35357, 9th Cir.).

  • November 9, 2017

    California Panel: No Coverage Owed For Suits Alleging Liability For Opioid Epidemic

    SANTA ANA, Calif. — A California appeals panel on Nov. 6 affirmed a lower court’s finding that commercial general liability insurers have no duty to defend pharmaceutical manufacturers and distributors against two underling lawsuits alleging that they engaged in a fraudulent scheme to promote the use of opioids for long-term pain to increase corporate profits, finding that the underlying actions can be read only as being based on the insureds’ deliberate and intentional conduct that produced injuries that were neither unexpected nor unforeseen (The Traveler's Property Casualty Company of America, et al. v. Actavis Inc., et al., No. G053749, Calif. App., 4th Dist., Div. 3, 2017 Cal. App. LEXIS 976).

  • November 2, 2017

    Denial Of Appellate Attorney Fees In Disability Dispute Was An Abuse Of Discretion

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Oct. 31 reversed a district court’s denial of attorney fees to a disability plan acting on behalf the plan participant after determining that the plan is entitled to collect the attorney fees it incurred as result of the disability insurer’s appeal and that the district court’s denial of attorney fees was an abuse of discretion (John Paul Micha M.D., v. Sun Life Assurance Of Canada, Inc., No. 16-55053, 9th Cir., 2017 U.S. App. LEXIS 21800).

  • October 30, 2017

    Disney Insurer Responds To Arbitration Request In Suit Arising From ‘Pink Slime’

    LOS ANGELES — A Walt Disney Co.’insurer on Oct. 26 filed an opposition to the insured’s motion to compel arbitration in a coverage dispute stemming from “pink slime” defamation claims against Disney’s subsidiary, arguing that the motion is too late and in clear violation of the unambiguous policy language (The Walt Disney Company v. AIG Specialty Insurance Co., No. 17-07598, C.D. Calif.).

  • October 30, 2017

    Insurer Seeks Reversal Of Finding That Trade Dress Claim Triggered Duty To Defend

    SAN FRANCISCO — A commercial general liability insurer recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling that it has a duty to defend its garment merchant insured against an underlying lawsuit, arguing that the lower court erred in finding that the insured was potentially liable for alleged damages arising from trade dress infringement in one of its advertisements (Great Lakes Reinsurance [UK] PLC v. In and Out Fashion Inc., 16-56425, 9th Cir.).

  • October 30, 2017

    Insurer, Reinsurer Seek Dismissal By Federal Court Of Injunctive Relief Claim

    SAN DIEGO — An insurer and a reinsurer in a joint motion filed Oct. 25 ask a California federal court to dismiss a single claim for injunctive relief against the reinsurer in an action seeking payment of a $3.2 million judgment over alleged breach of reinsurance agreements as a result of a series of fraudulent transfers (Odyssey Reinsurance Co. v. Richard Keith Nagby, et al., No. 16-3038, S.D. Calif., 2017 U.S. Dist. LEXIS 165582).

  • October 30, 2017

    Federal Judge Allows UCL Claim Against Liberty Mutual To Proceed

    SAN DIEGO — After finding that development firms sufficiently pleaded the elements of a claim for violation of California’s unfair competition law (UCL) in relation to the alleged overcharging of deductible fees, a California federal judge on Oct. 26 denied an insurer’s motion to dismiss the claim (Bosa Development California Inc., et al. v. Liberty Mutual Fire Insurance Co., No. 3:17-cv-00945, S.D. Calif., 2017 U.S. Dist. LEXIS 177870).