Mealey's California Insurance

  • October 17, 2019

    Disability Claimant Says Termination Of Benefits Was Breach Of Contract

    FRESNO, Calif. — A disability insurer acted in bad faith and breached its contract in terminating a claimant’s long-term disability (LTD) benefits because the insurer’s termination was not reasonable and not based on reliable medical evidence, the claimant alleges in an Oct. 15 complaint filed in California federal court (Jennifer Sims v. Life Insurance Company of North America, No. 19-1460, E.D. Calif.).

  • October 16, 2019

    Insured Objects To Costs After Finding It Failed To Show Economic Loss

    SACRAMENTO, Calif. — An insured filed objections on Oct. 3 to $10,978.46 as part of the costs issued by a California federal judge following his ruling that the insured failed to demonstrate any economic loss from entering into a reinsurance participation agreement (RPA) and, thus, lacks standing to sue under California unfair competition law (UCL) (Pet Food Express Ltd. v. Applied Underwriters Inc., et al., No. 16- 01211, E.D. Calif.).

  • October 15, 2019

    Federal Magistrate Largely Denies Insured’s Discovery Request In Crime Coverage Suit

    FRESNO, Calif. — A federal magistrate judge in California on Oct. 3 denied in part and granted in part a recycling company insured’s motion to compel in its breach of contract, bad faith and fraud lawsuit seeking crime insurance coverage for its alleged $5 million in losses caused by employee theft (rePlanet Holdings, Inc. v. Federal Insurance Company, No. 19-00133, E.D. Calif., 2019 U.S. Dist. LEXIS 173206).

  • October 15, 2019

    Suit Against Auto Insurer Remanded For Failure To Timely File Removal Notice

    SACRAMENTO, Calif. — A California federal judge on Oct. 8 remanded an insured’s breach of contract and bad faith suit after determining that the auto insurer’s notice of removal was not filed within 30 days after learning that the amount in controversy exceeded the federal jurisdictional minimum of $75,000 (Selwyn Vos v. USAA General Indemnity Co., et al., No. 19-1186, E.D. Calif., 2019 U.S. Dist. LEXIS 175833).

  • October 15, 2019

    Trial Court’s Judgment On Breach Of Contract, Bad Faith Claims Affirmed

    LOS ANGELES — A trial court did not err in entering judgment for an auto insurer following a bench trial because the insureds failed to prove that the insurer breached its contract or acted in bad faith in handling their claim following an auto accident, the Second District California Court of Appeal said Oct. 8 (Dionne Cooper, et al. v. Farmers Insurance Exchange, No. B292019, Calif. App., 2nd Dist., Div. 7, 2019 Cal. App. Unpub. LEXIS 6787).

  • October 11, 2019

    9th Circuit: CIGA Is Not A Primary Plan, Has No Duty To Repay For Medicare Payments

    SAN FRANCISCO — Because California Insurance Guarantee Association (CIGA) is not a primary plan under the Medicare Act’s secondary payer provisions, the Ninth Circuit U.S. Court of Appeals ruled Oct. 10 that CIGA has no obligation to reimburse the Centers for Medicare and Medicaid Services (CMS) for conditional payments made on behalf of insureds under workers’ compensation plans that become insolvent (California Insurance Guarantee Association v. Alex Azar II, et al., Nos. 17-56526 & 17-56528, 9th Cir., 2019 U.S. App. LEXIS 30339).

  • October 11, 2019

    Judgment In Favor Of Life Insurer Affirmed; Statutes Do Not Apply Retroactively

    SAN DIEGO — The Fourth District California Court of Appeal on Oct. 9 affirmed a judgment in favor of a life insurer on claims of breach of contract and bad faith after determining that two California statutes that require insurers to provide a 60-day grace period before terminating a policy for nonpayment of premium cannot be retroactively applied to policies that were issued prior to the enactment of the statutes (Blakely McHugh, et al. v. Protective Life Insurance, No. D072863, Calif. App., 4th Dist., Div. 1, 2019 Cal. App. LEXIS 998).

  • October 09, 2019

    Federal Judge Tosses UCL, Other Claims In Suit Against Insurer, Insurance Agent

    SAN FRANCISCO — A federal judge in California on Sept. 24 held that a plaintiff relies on “vague allegations” to support his claim that an automobile insurer and a broker engaged in unfair and fraudulent business practices, dismissing with leave to amend the plaintiff’s complaint asserting that his automobile insurance policy for his 1966 Ford Fairlane was inadequate (Terry Guy Overfelt v. Hagerty Insurance Agency, LLC, et al., No. 19-04297, N.D. Calif., 2019 U.S. Dist. LEXIS 165787).

  • October 07, 2019

    Policy Is Void As Insureds Failed To Pay Per-Claim Deductibles, Judge Finds

    FRESNO, Calif. — A per-claim deductible provision applies on a per-claimant/per-home basis regarding 200 individual homeowners in five separate underlying construction defects cases, a federal judge in California ruled Oct. 3, finding that the insureds failed to pay the deductibles and, thus, the insurance policy is void (ProBuilders Specialty Insurance Company, RRG v. JKB Homes Norcal, Inc., et al., No. 15-01381, E.D. Calif., 2019 U.S. Dist. LEXIS 172322).

  • October 01, 2019

    Insured Failed To Prove Any Damages Caused By Alleged Bad Faith Conduct

    SAN JOSE, Calif. — A California federal judge on Sept. 16 granted an auto insurer’s motion for summary judgment on a bad faith claim after determining that the insured failed to prove that he is entitled to recover any damages for any alleged bad faith conduct by the insurer (Fred Sahadi v. Liberty Mutual Insurance Co., et al., No. 18-4061, N.D. Calif., 2019 U.S. Dist. LEXIS 162262).

  • September 30, 2019

    Fact Issue Exists As To Whether Insurer’s Handling Of Auto Claim Was Reasonable

    SAN DIEGO — An insured’s claim for bad faith alleged against an auto insurer can stand because a question of fact exists as to whether the insurer’s handling of its insured’s claim was reasonable, a California federal judge said Sept. 25 in denying the insurer’s motion for partial summary judgment on the bad faith claim (Russell Kane v. United Services Automobile Association, et al., No. 17-2581, S.D. Calif., 2019 U.S. Dist. LEXIS 165985).

  • September 30, 2019

    Insurer’s Breach Of Contract Claim Against Broker In Disability Suit To Proceed

    SAN FRANCISCO —  A California federal judge on Sept. 27 denied a wholesale insurance broker’s motion to dismiss a cross-complaint filed a by an insurer in a breach of contract and bad faith disability coverage dispute after determining that the insurer sufficiently alleged facts in support of its breach of contract claim (Andre Ward v. Certain Underwriters at Lloyd’s of London, et al., No. 18-7551, N.D. Calif., 2019 U.S. Dist. LEXIS 167284).

  • September 27, 2019

    Coverage Barred By Business Pursuits, Rental Exclusion, California Panel Affirms

    SAN FRANCISCO — A California appeals panel on Sept. 26 affirmed a lower court’s ruling that a homeowners insurance policy’s business pursuits/rental exclusion precludes coverage for an underlying lawsuit arising from a porch collapse injury, rejecting the insureds’ argument that the exclusion’s ordinarily incident exception applies (Paul Terrell, et al. v. State Farm General Insurance Company, No. A152541, Calif. App., 1st Dist. Div. 1, 2019 Cal. App. LEXIS 931).

  • September 27, 2019

    Insurer Seeks Reimbursement For Insured’s Defense In Construction Defects Case

    SAN DIEGO — A primary insurer in a Sept. 25 complaint filed in a California federal court asserts a reimbursement claim against an insured for its defense in a construction defects case and asserts an equitable indemnity claim against an excess insurer (Liberty Mutual Fire Insurance Co. v. Bosa Development California II, Inc., et al., No. 19-1847, S.D. Calif.).

  • September 24, 2019

    Builders: Insolvent Surety Failed To Show It Had No Duty To Inform Under Agreement

    SAN FRANCISCO — An insolvent surety “offers little authority” to show that a continuing agreement of indemnification (CAI) did not imply a duty to inform homebuilders of claims made against surety bonds, the homebuilders argue in a June 28 reply brief in the Ninth Circuit U.S. Court of Appeals, asking that entry of summary judgment to the surety be reversed (Western Insurance Co. in liquidation v. Frontier Homes LLC, et al., No. 19-55101, 9th Cir.).

  • September 23, 2019

    Insured’s Claims Related To Disability Payment Are Barred By Statute Of Limitations

    SAN DIEGO — A California federal judge on Sept. 17 granted an insurer’s motion for judgment on the pleadings after determining that an insured’s claims related to an alleged missed disability income payment are barred by the applicable statute of limitations (Renato Openiano v.  Hartford Life and Annuity Insurance  Co., et al., No. 18-943, S.D. Calif., 2019 U.S. Dist. LEXIS 160005).

  • September 20, 2019

    Disability Claimant Provided Final Opportunity To File Summary Judgment Response

    SACRAMENTO, Calif. — A California federal magistrate judge on Sept. 17 denied a disability insurer’s motion to grant summary judgment on a disability claimant’s remaining claims based on the claimant’s failure to file a response to the insurer’s motion and allowed the claimant one final opportunity to file a response after determining that an extension is warranted based on the claimant’s pro se status (Jerome Clay v. AT&T Umbrella Benefit Plan No. 3, No. 17-749, E.D. Calif., 2019 U.S. Dist. LEXIS 159246).

  • September 20, 2019

    Insurer Seeks Reimbursement Of Costs To Defend Claims Of Damages In High School

    SACRAMENTO, Calif. — A commercial general liability insurer filed a complaint on Sept. 18 in a California federal court for declaratory relief and reimbursement of its defense for an underlying action over damages to the construction of a high school (Travelers Property Casualty Company of America v. Greg Opinski Construction Inc., et al., No. 19-01308, E.D. Calif.).

  • September 19, 2019

    Panel:  CIGA Is Liable For Special Employee’s Workers’ Comp Claim

    LOS ANGELES — The California Insurance Guarantee Association (CIGA) is liable for a workers’ compensation claim as a covered claim, the Second District California Court of Appeal, Division I, held Sept. 18, annulling a Workers’ Compensation Appeals Board’s decision and remanding with directions to find that a special employer had a valid endorsement in its workers’ compensation insurance policy excluding coverage for special employees (Travelers Property Casualty Company of America  v. Workers’ Compensation Appeals Board, et al., No. B292915, Calif. App., 2nd Dist., Div. 1, 2019 Cal. App. Unpub. LEXIS 6216).

  • September 17, 2019

    Insureds Say Insufficient Evidence For Reinsurer, Entities’ Damages Claim

    SAN FRANCISCO — Insureds argue in their Aug. 15 brief before a California appeals court that a lower court never reached a joint and several liability issue because the lower court properly found insufficient evidence to support a damages claim by a reinsurer and its related entities for amounts owed under a reinsurance participation agreement (RPA) (Warwick California Corp., et al. v. Applied Underwriters Inc., et al., No. A155523, Calif. App., 1st Dist., Div. 4).