Mealey's California Insurance

  • March 26, 2020

    Claimant Is Entitled To LTD Benefits Under Own-Occupation Standard, Judge Says

    SAN FRANCISCO — A California federal judge on March 24 granted a disability claimant’s motion for judgment on the administrative record after determining that the medical evidence supports a finding that the claimant is entitled to long-term disability (LTD) benefits under the disability plan’s own-occupation standard (Anis Shaikh v. Aetna Life Insurance Co., No. 18-4394, N.D. Calif., 2020 U.S. Dist. LEXIS 51897).

  • March 25, 2020

    Disability Claimant Entitled To Benefits, California Federal Judge Says

    SACRAMENTO,  Calif. — A California federal judge on March 24 determined that a disability claimant is entitled to long-term disability (LTD) benefits under the plan’s own-occupation standard and remanded the claim to the plan administrator to determine if the claimant is disabled from performing the duties of any gainful occupation (Renee Johnson Monroe v. Metropolitan Life Insurance Co., No. 15-2079, E.D. Calif., 2020 U.S. Dist. LEXIS 51075).

  • March 25, 2020

    Panel Denies Review Of Board’s Workers’ Comp Award In Favor Of CIGA

    SANTA ANA, Calif. — Finding no reasonable basis for review, a California appellate panel on March 5 denied a petition for writ of review of the Workers' Compensation Appeals Board’s findings and award concerning a workers’ compensation insurance dispute between an insurer and the California Insurance Guarantee Association (CIGA) (Hartford Underwriters Insurance Co. v. Workers’ Compensation Appeals Board, et al., No. G058788, Calif. App., 4th Dist., Div. 3, 2020 CA APP. CT. BRIEFS LEXIS 530).

  • March 24, 2020

    California Federal Magistrate Judge Stays Water Damage Coverage Suit

    SAN FRANCISCO — A California federal magistrate judge on March 22 granted a homeowners insurer’s motion to stay a water damage coverage suit after determining that the parties will not be prejudiced by a stay (Lawrence Lui, et al. v. State Farm Fire and Casualty Co., No. 19-6337, N.D. Calif., 2020 U.S. Dist. LEXIS 49946).

  • March 23, 2020

    Judge Tosses Negligence, UCL, Antitrust Claims Against Insurer, Software Developers

    SAN FRANCISCO — A federal judge in California on March 4 dismissed with prejudice insureds’ claims alleging that their homeowners insurer’s undervaluation of insurance policy values was negligent, fraudulent and the product of a conspiracy with the developers of two software programs that were used to determine their initial insurance policy value and the cost to rebuild or repair their property following wildfire damage (Brian Sheahan, et al. v. State Farm General Insurance Company, et al., No. 18-cv-06186, N.D. Calif., 2020 U.S. Dist. LEXIS 37590).

  • March 18, 2020

    Reinsurer Seeks Dismissal Of Insurers’ Bad Faith Claim In California Federal Case

    LOS ANGELES — Reinsurance “is not the type of insurance that supports a bad faith remedy,” a reinsurer argues in a March 16 reply in support of its motion to dismiss or strike insurers’ bad faith claim from a California federal court lawsuit regarding reinsurance payments (California Capital Insurance Co., et al. v. Maiden Reinsurance North America, Inc., No. 20-01264, C.D. Calif.).

  • March 17, 2020

    Panel Reverses No Coverage Ruling For Suit Alleging Insured Violated Credit Card Act

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on March 16 held that an underlying lawsuit asserting that an insured violated California’s Credit Card Act alleged an invasion of privacy that is sufficient to trigger the insurer’s duty to defend, reversing a lower court’s no coverage ruling (Brighton Collectibles, LLC v. Certain Underwriters At Lloyd's London, No. 18-56403, 9th Cir., 2020 U.S. App. LEXIS 8245).

  • March 16, 2020

    Panel: LRRA Preempts Washington Anti-Arbitration Statute In Malpractice Coverage Suit

    PASADENA, Calif. — Answering a certified question from a federal district court, the Ninth Circuit U.S. Court of Appeals held March 12 that Washington’s anti-arbitration statute is preempted by the Liability Risk Retention Act (LRRA) as it applies to risk retention groups chartered in another state, affirming the lower court’s order compelling arbitration in a coverage dispute arising from an underlying malpractice claim (Allied Professionals Insurance Co. v. Michael Scott Anglesey, M.D., et al., No. 18-56513, 9th Cir., 2020 U.S. App. LEXIS 7802).

  • March 16, 2020

    Insurer Owes Equitable Contribution For Defect Coverage, 9th Circuit Says

    SAN FRANCISCO — Liberty Surplus Insurance Corp. owes equitable contribution to another insurer’s defense of their mutual insured in a construction defect case, the Ninth Circuit U.S. Court of Appeals held March 12, finding that the insured’s suspended corporate status did not modify or excuse Liberty’s duty to defend (Travelers Property Casualty Company of America v. Liberty Surplus Insurance Corp., No. 18-15956, 9th Cir., 2020 U.S. App. LEXIS 7847).

  • March 16, 2020

    Federal Judge Allows UCL Claim To Proceed, Dismisses Elder Abuse Claim Based On Fraud

    LOS ANGELES — A federal judge in California on March 11 held that at this juncture, a plaintiff can seek damages for breach of contract and remedies under California’s unfair competition law (UCL) as alternative theories of recovery in his lawsuit against his life insurer but dismissed without prejudice an elder abuse claim based on fraud and a bad faith claim to the extent that the plaintiff seeks to recover in tort (Viesturs Petersons v. Transamerica Life Insurance Company, et al., No. 20-00661, C.D. Calif., 2020 U.S. Dist. LEXIS 43304).

  • March 13, 2020

    Class Action:  Life Insurer Refuses To Comply With California Insurance Code

    SACRAMENTO, Calif. — A beneficiary of a life insurance policy filed a class action complaint on March 10 in a California federal court, alleging claims for declaratory relief, breach of contract, unfair competition and financial elder abuse against a life insurer for its purported refusal to comply with the mandatory provisions of California Insurance Code and common law that regulates the lapse and termination of life insurance policies (Sheryl Clark, et al. v. Transamerica Life Insurance Company, No. 20-00539, E.D. Calif.)

  • March 13, 2020

    Insured Failed To File Breach Of Contract, Bad Faith Suit Within Statutes Of Limitations

    LOS ANGELES — The Second District California Court of Appeal on March 10 affirmed a trial court’s summary judgment ruling in favor of an auto insurer on breach of contract and bad faith claims because the insured failed to failed suit within the applicable statutes of limitations (Robert G. Patterson Jr. v. Mid-Century Insurance Co., No. B295187, Calif. App., 2nd Dist., Div. 6, 2020 Cal. App. Unpub. LEXIS 1615).

  • March 11, 2020

    No Coverage Owed For Underlying Lead Exposure Suit, Insurer Maintains

    SACRAMENTO, Calif. — No coverage is owed for an underlying consolidated suit alleging bodily injuries as a result of exposure to lead and lead dust in a shooting range because the policies’ lead contamination exclusion and pollution exclusion bar coverage, an insurer asserts in a March 6 complaint filed in California federal court (Certain Underwriters at Lloyd’s, London v. United Revolver Club of Sacramento Inc., No. 20-237, E.D. Calif.).

  • March 11, 2020

    LTD Claim Remanded; Plan Administrator Did Not Consider Psychiatric Conditions

    SAN FRANCISCO — A California federal judge on March 6 remanded a disability plan participant’s long-term disability (LTD) claim to the plan administrator after determining that the plan administrator failed to consider the claimant’s psychiatric conditions before terminating her LTD benefits (Lisa Schwarz v. Hartford Life & Accident Insurance Co., No. 19-2370, N.D. Calif., 2020 U.S. Dist. LEXIS 39581).

  • March 10, 2020

    Insurers Owe No Duty To Company Facing $101.67M Lead Paint Payment, Judge Says

    SAN FRANCISCO — A judge in California on Feb. 26 ruled that insurers owed no duty to provide coverage to the successor of a former maker of lead-based paint in relation to a $101.67 million settlement payment the company owes. The judge said that the California Insurance Code states that “an insurer is not liable for a loss caused by the willful act of the insured” (Certain Underwriters at Lloyd’s of London, et al. v. ConAgra Grocery Products Company, et al., No. CGC-14-536731, Calif. Super., San Francisco Co.).

  • March 09, 2020

    Judge: Insurer Has Duty To Defend Suits Arising From Contaminated Groundwater Claims

    SAN DIEGO — A federal judge in California on Feb. 28 held that an insurer has a duty to defend its insureds against underlying third-party complaints seeking indemnity and contribution for a putative class action lawsuit over contaminated groundwater, finding that if he were to adopt the insurer’s reading of the pollution exclusion, he would be at risk of extending the exclusion beyond a layperson's understanding (Kingsley Management, Corp., et al. v. Occidental Fire & Casualty Company Of North Carolina, et al., No. 19-1361, S.D. Calif., 2020 U.S. Dist. LEXIS 34836).

  • March 09, 2020

    Insurer Conducted Bad Faith Adjustment Process After Fire, Insureds Allege

    SAN FRANCISCO — An insurer breached the terms of a homeowners insurance policy and conducted an adjustment process in bad faith, resulting in settlement offers that were insufficient to make the necessary repairs to a home that sustained fire damage, insureds argue in a Feb. 24 complaint filed in California state court (Jeffrey Banker, et al. v. State Farm Fire & Casualty Insurance Co., No. CGC-20-583156, Calif. Super, San Francisco Co., 2020 CA SUP. CT PLEADINGS LEXIS 192).

  • March 05, 2020

    Judge: Nonconforming Soils Constitute ‘Defective Materials’ Under Policy Exclusion

    OAKLAND, Calif. — A federal judge in California on March 3 held that nonconforming soils used by a general contractor insured to fill levees in a flood construction project constitute “defective materials” under a builders’ risk insurance policy's “cost of making good” exclusion, further finding that the definition of “professional loss” under a professional liability insurance policy excluded the insured’s claimed loss (Brosamer & Wall, Inc. v. Indian Harbor Insurance Company, No. 19-872, N.D. Calif., 2020 U.S. Dist. LEXIS 37589).

  • March 05, 2020

    NFL Player, Disability Plan Dispute Discovery Of Doctors’ Pay In Coverage Suit

    SAN FRANCISCO — In a Feb. 11 joint discovery letter brief, a former National Football League (NFL) player and an NFL benefits plan argue over whether the player is entitled to conduct discovery from physicians used by the plan to determine whether the doctors had a financial incentive to recommend denial of disability benefits (Charles Dimry v. Bert Bell/Pete Rozelle NFL Player Retirement Plan, et al., No. 3:19-cv-05360, N.D. Calif.).

  • March 04, 2020

    9th Circuit Panel Affirms Verdict For Bad Faith Disability Benefit Termination

    PHOENIX — There was sufficient evidence to support a jury’s conclusion that two defendants in a suit alleging bad faith termination of disability benefits were engaged in a joint venture and to support a separate punitive damages award against one of the defendants, a Ninth Circuit U.S. Court of Appeals panel ruled Feb. 27 in a partially divided unpublished opinion (Benjamin McClure v. Country Life Insurance Company, et al., No. 18-16661, 9th Cir., 2020 U.S. App. LEXIS 6566).