Mealey's California Insurance

  • March 16, 2018

    Real Estate Property Managed Endorsement Rendered Policy Excess, 9th Circuit Affirms

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on March 13 affirmed a lower federal court’s finding that a real estate property managed endorsement rendered an insurer's policies excess with respect to an underlying personal injury claim and, therefore, the insurer has no duty to defend or indemnity its property manager insured (Atain Specialty Insurance Co. v. Sierra Pacific Management Co., et al., No. 16-17221, 9th Cir., 2018 U.S. App. LEXIS 6232).

  • March 15, 2018

    Federal Judge Remands NFL Player’s Disability Claim For Re-Evaluation Of Benefits

    SAN FRANCISCO — A California federal judge on March 12 remanded a former National Football League player’s claim for disability benefits after determining that the plan failed to provide support for its denial of the player’s claim (Charles Dimry v. The Bert Bell/Pete Rozelle NFL Player Retirement Plan, et al., No. 16-1413, N.D. Calif., 2018 U.S. Dist. LEXIS 41359).

  • March 8, 2018

    9th Circuit Affirms Ruling In Insurer’s Favor In Suit Over Federal Investigation

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on March 7 affirmed a lower federal court’s ruling in favor of a directors and officers liability insurer in a coverage dispute arising from an underlying investigation brought by the U.S. Department of Justice against its health care organization insured (Millennium Laboratories, Inc. v. Allied World Assurance Company [U.S.] Inc., No. 16-55432, 9th Cir., 2018 U.S. App. LEXIS 5782).

  • March 8, 2018

    Supreme Court Opens Abortion Disclosure Arguments To Solicitor General

    WASHINGTON, D.C. — The U.S. Supreme Court on March 5 divided oral arguments and granted the solicitor general permission to participate in a case questioning whether California law governing disclosures regarding the availability of abortions infringes on First Amendment rights of crisis pregnancy centers (NIFLA, et al. v. Xavier Becerra, et al., No. 16-1140, U.S. Sup.).

  • March 8, 2018

    Panel Upholds Denial Of Bid To Rescind Quota-Share Reinsurance Agreement

    SAN FRANCISCO — In a ruling affirming and reversing in part several lower court orders, the Ninth Circuit U.S. Court of Appeals on March 7 denied a judgment creditor’s challenge to the denial of its request to rescind its intercompany quota-share reinsurance agreement (QSA) with an insurance company (PSM Holding Corp. v. National Farm Financial Corp., et al., Nos. 15-55026 & 15-55941, 9th Cir., 2018 U.S. App. LEXIS 5771).

  • March 6, 2018

    Insurer, Out-Of-Network Hospital Wage Battle Over Payments To Insureds

    LOS ANGELES — An insurer paid its insureds when they visited out-of-network providers without regard for whether a valid assignment of benefits was in place, allowing insureds to seek legally mandate care from the provider, and then keeping the reimbursement check, a hospital tells a federal judge in California in a March 5 opposition to summary judgment. But in its own opposition filed the same day, the insurer tells the judge that a “rash of meritless arguments” doesn’t change the fact that the plan precluded the assignment of benefits (Martin Luther King Jr. Community Hospital v. Community Insurance Co., d/b/a Anthem Blue Cross and Blue Shield, et al., No. 16-3722, C.D. Calif.).

  • March 6, 2018

    Federal Judge Certifies $3.2M Default Judgment As Final Against Reinsurer

    SAN DIEGO — A California federal judge on March 5 granted an insurer’s request to certify as final a $3.2 million default judgment against a reinsurer over its 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.).

  • March 5, 2018

    Panel: Exclusion For Claims Arising Out Of ‘Unfair Business Practices’ Does Not Apply

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on March 2 affirmed a lower federal court’s finding that a professional liability policy exclusion does not bar coverage for an underlying class action lawsuit alleging that a real estate broker insured and individual agents received secret profits while acting as real estate agents (Hanover Insurance Co. v. Paul M. Zagaris, Inc., No. 17-15477, 9th Cir., 2018 U.S. App. LEXIS 5429).

  • March 1, 2018

    Question Of Fact Exists On Whether Insurer Properly Handled Insured’s Claim

    OAKLAND, Calif. — A California federal judge on Feb. 26 denied an insurer’s motion for summary judgment on an insured’s bad faith and punitive damages allegations after determining that a question of fact exists as to whether the insurer’s handling of the insured’s coverage claim was reasonable (Virginia Colwell v. State Farm General Insurance Co., No. 16-5485, N.D. Calif., 2018 U.S. Dist. LEXIS 30690).

  • February 28, 2018

    Panel Finds Potential For Coverage Exists For $2.6M In Damages Caused By Battery

    RIVERSIDE, Calif. — A California appeals panel on Feb. 14 reversed and remanded a lower court’s ruling in favor of a commercial general liability insurer on an insured’s claims for breach of contract, bad faith and declaratory relief, finding that there is at least a potential for coverage under the policy’s definition of “coverage territory" for $2.6 million in fire damages caused by a lithium battery in a handheld electronic gaming device that was designed by the insured (Planet Bingo, LLC v. The Burlington Insurance Company, No. E066690, Calif. App., 4th Dist., Div. 2, 2018 Cal. App. Unpub. LEXIS 1056).

  • February 27, 2018

    Prejudicial Errors Require Reversal Of Verdict In Product Liability Coverage Suit

    SAN FRANCISCO — A California appeals panel on Feb. 26 found that a lower court’s prejudicial errors during a jury trial on the issue of insurance bad faith in a product liability coverage dispute requires the reversal of a jury award in favor of the pipe manufacturer insured for $1,073,868.80 for breach of contract damages, $8,259,712.31 in attorney fee damages for bad faith and $46 million in punitive damages (Victaulic Co. v. American Home Assurance Co., et al., No. A146617, Calif. App., 1st Dist., Div. 2).

  • February 23, 2018

    Long-Term Disability Claim Was Properly Denied As Time-Barred, Judge Rules

    SAN DIEGO — Dismissal of an insured’s insurance breach of contract and bad faith lawsuit is necessary because her claims were not brought within the applicable statute of limitations and she has failed to show that the limitations period was tolled by the discovery rule, a federal judge in California ruled Feb. 20 in granting an insurer’s motion to dismiss (Laurel Davis v. Liberty Life Assurance Company of Boston, No. 17-0738, S.D. Calif., 2018 U.S. Dist. LEXIS 27045).

  • February 23, 2018

    High Court Rejects Appeal Of California Commissioner’s Denial Of Rate Increase

    WASHINGTON, D.C. — The U.S. Supreme Court on Feb. 20 denied an insurer’s petition for writ of certiorari seeking review of the California Insurance commissioner’s decision to deny its application to increase its homeowners insurance rates (Mercury Casualty Co., et al. v. Dave Jones, California Insurance Commissioner, et al., No 17-537, U.S. Sup., 2018 U.S. LEXIS 1242).

  • February 20, 2018

    Aetna Says California Investigation Based On ‘Out Of Context’ Comments

    SACRAMENTO, Calif. — Lawyers took deposition comments from a medical claims reviewer out of context to create trial and media leverage, Aetna Inc. says in a Feb. 14 response to an announcement that California would investigate the insurer’s claims processing.

  • February 20, 2018

    U.S. High Court Refuses To Review Arbitration Dispute Over Sexual Abuse Claims

    WASHINGTON, D.C. — The U.S. Supreme Court on Feb. 20 denied an excess insurer’s petition for writ of certiorari challenging a California appeals court’s denial of its motion to compel arbitration of a coverage dispute with a school district over sexual abuse claims (Safety National Casualty Corp. v. Los Angeles Unified School District, No. 17-921, U.S. Sup.)

  • February 16, 2018

    Judge Declines To Apply ‘Fraudulent Misjoinder’ Standard In Bad Faith Suit

    SAN FRANCISCO — Remand of an insurance breach of contract and bad faith lawsuit to state court is necessary because the Ninth Circuit U.S. Courts of Appeals has yet to adopt the “fraudulent misjoinder” standard established by the 11th Circuit, which an insurer argues is the basis for the action’s removal to federal court in the first place, a federal judge in California ruled Feb. 13 in remanding the action to state court (Maria I. Delgado v. Primerica Life Insurance Co., et al., No. 17-3744, N.D. Calif., 2017 U.S. Dist. LEXIS 23615).

  • February 14, 2018

    Reviewer’s Deposition Testimony Sparks California Investigation Into Aetna Claims Process

    SACRAMENTO, Calif. — California launched an investigation into Aetna Inc.’s health insurance claims approval and prior authorization process after learning that one of the company’s medical reviewers testified in a deposition that he was trained not to review medical records but instead rely on what was provided to him by the company’s nurses, the state’s insurance commissioner announced in a Feb. 12 statement.

  • February 14, 2018

    Judge Extends Deadlines In Cases Over Reinsurance Participation Agreement

    SACRAMENTO, Calif. — In two putative class actions over a reinsurance participation agreement (RPA), a California federal judge on Feb. 6 issued extensions on deadlines for expert disclosures, completion of discovery and discovery motions (Shasta Linen Supply Inc. v. Applied Underwriters Inc., et al., Nos. 16-00158 & 16-01211, E.D. Calif., 2018 U.S. Dist. LEXIS 6079).

  • February 14, 2018

    No-Voluntary-Payment Provision Barred Coverage For Defective Oil, Panel Affirms

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Feb. 8 affirmed a lower federal court’s summary judgment ruling in favor of an insurer in an insured’s breach of contract and bad faith lawsuit seeking coverage for an underlying settlement arising from its defective product (Piveg, Inc. v. General Star Indemnity Co., No. 16-56003, 9th Cir., 2018 U.S. App. LEXIS 3057).

  • February 13, 2018

    Judge Remands UCL, Other Claims Against Insurer To California Court

    LOS ANGELES — After finding that an insurance broker was not improperly joined in an action in which a moving company asserts claims for violation of California’s unfair competition law (UCL) and other causes of action in relation to an insurer’s refusal to defend it in an underlying lawsuit, a California federal judge on Feb. 8 remanded the case to state court and declined to consider dismissal of the action (Earl Wayne Pullen, dba Carole & Jan’s Moving & Storage, v. TransGuard Insurance Company of America Inc., et al., No. 17-08631, C.D. Calif., 2018 U.S. Dist. LEXIS 21177).