Mealey's California Insurance

  • May 24, 2024

    California High Court: Presence Of COVID-19 Does Not Constitute Direct Physical Loss

    SAN FRANCISCO — Answering “no” to a certified question from the Ninth Circuit U.S. Court of Appeals, the California Supreme Court held May 23 that the “actual or potential presence of the COVID-19 virus on an insured's premises generally does not constitute ‘direct physical loss or damage to property’ for purposes of coverage under a commercial property insurance policy.”

  • May 24, 2024

    California Jury Awards Sisters $18M In Bad Faith Suit Over Flood Damage

    SAN BERNARDINO, Calif. — A California jury awarded two sisters $6 million in past noneconomic losses and $12 million in punitive damages after finding that insurers committed breach of contract and acted in bad faith in their handling of the insureds’ property damage claim arising from a 2019 flood.

  • May 22, 2024

    Insured’s Suit Remanded For Failure To Show Adjuster Was Fraudulently Joined

    OAKLAND, Calif. — Remand of an insured’s breach of contract and bad faith suit is warranted because the homeowners insurer and its adjuster failed to meet their burden of showing that the insured’s negligent misrepresentation claim against the adjuster is frivolous, a California federal judge said in granting the insured’s motion to remand.

  • May 17, 2024

    Burden Of Proof In Gas Leak Coverage Suit Will Not Be Shifted To Insurer

    LOS ANGELES — A California federal judge rejected an attempt by insureds to shift the burden of proof to an insurer in a dispute over coverage for underlying personal injury claims stemming from a gas leak at an insured facility because the insurer did not breach its duty to defend and because California public policy does not support insureds’ proposed burden-shifting principle.

  • May 16, 2024

    California Says Insurers, Valuation Companies Conspire To ‘Lowball’ Vehicle Claims

    OAKLAND, Calif. — A California district attorney on behalf of the state filed an amended complaint in state court against a group of insurance and valuation companies for allegedly violating California’s unfair competition law (UCL) and other laws for engaging in a criminal and civil conspiracy to “systematically and pervasively underpay claims” for totaled cars.

  • May 15, 2024

    Judge Overrules Abbott’s Objections To Discovery Order In FCA Suit Over Kickbacks

    SAN DIEGO — A California federal judge on May 14 overruled Abbott Laboratories’ objections and affirmed a magistrate judge’s discovery order that denied Abbott’s motion to compel production of certain documents in a suit alleging violations of the False Claims Act (FCA) and state false claims laws regarding Abbott’s alleged kickback scheme to induce hospitals and physicians to use an Abbott cardiac medical device, finding that Abbott is not entitled to discover certain documents, which are considered privileged work product.

  • May 15, 2024

    Additional Insured Failed To Show Specific Jurisdiction Exists Over Insurer  

    SAN FRANCISCO — A California federal judge on May 14 granted, with leave to amend, an insurer’s motion to dismiss an additional insured’s bad faith complaint arising out of the insurer’s appointment of counsel to represent the additional insured and the insured in an arbitration proceeding in Texas because the additional insured failed to show that specific jurisdiction exists in California over the insurer.

  • May 14, 2024

    Life Insurance Benefit Not Available Based On Failure To Prove Total Disability

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on May 13 affirmed a district court’s finding that a life insurance waiver-of-premium benefit was properly terminated because the claimant failed to show that he was totally disabled from working in any occupation as required by the life insurance plan to retain the waiver-of-premium benefit.

  • May 14, 2024

    9th Circuit Partly Affirms, Partly Vacates Ruling In Coverage Suit Over Lost Rent

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s ruling that unpaid rent, late fees and government fines did not trigger “property damage” coverage under a commercial general liability insurance policy but vacated the lower court’s application of the policy’s leased property exclusion and remanded for consideration of the appellant’s new evidence.

  • May 09, 2024

    Magistrate Denies Motion For Indicative Relief In FCA Suit Alleging Overcharging

    SAN FRANCISCO — A California federal magistrate judge denied a relator’s motion for an indicative ruling that pursuant to the Ninth Circuit U.S. Court of Appeals’ decision in United States ex rel. Silbersher v. Valeant Pharms. Int’l, Inc., a similar False Claims Act (FCA) suit brought by the same relator, the magistrate judge should grant the relator “relief” from the judgment on appeal to the Ninth Circuit after dismissing his claims that pharmaceutical companies overcharged the federal government and states under Medicare and Medicaid.

  • May 08, 2024

    Spinal Conditions Continued To Render Claimant Disabled, Calif. Federal Judge Says

    LOS ANGELES — Following remand from the Ninth Circuit U.S. Court of Appeals, a California federal judge found that additional long-term disability (LTD) benefits are owed to a disability claimant because the medical evidence shows that the claimant’s degenerative spinal conditions continued to render him disabled following the claimant’s recovery from a cardiac procedure.

  • May 03, 2024

    Federal Judge Finds No Jurisdiction In Construction Insurance Dispute, Remands

    SAN FRANCISCO — A federal judge in California remanded to state court a construction insurance dispute brought by a contractor alleging that its insurer acted in bad faith when it refused to pay for most of an arbitration award related to a faulty roof, finding that the insurer failed to join necessary parties when removing the case to federal court.

  • May 03, 2024

    Disability Claimant Seeks Rehearing Of Preexisting Condition Exclusion Ruling

    PASADENA, Calif. — A disability claimant filed a petition for panel rehearing and rehearing en banc in the Ninth Circuit U.S. Court of Appeals, contending that rehearing is warranted because the Ninth Circuit panel’s decision that a long-term disability (LTD) policy’s preexisting condition exclusion bars coverage creates an intracircuit conflict with a prior ruling of the Ninth Circuit.

  • May 03, 2024

    Disability Insurer Awarded More Than $11,000 In Costs In Bad Faith Benefits Suit

    FRESNO, Calif. — A California federal magistrate judge awarded a disability insurer more than $11,000 in costs that the insurer incurred in successfully defending a breach of contract and bad faith suit lodged against it by an oral surgeon who stopped working to reduce the risk of contracting COVID-19 and suffering complications from the virus based on his comorbid conditions of asthma and hypertension.

  • May 02, 2024

    Disability Insurer, Claimant Settle Dispute Over Policy’s Monthly Benefit Rider

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals entered an order staying a disability claimant’s appeal and directing the parties to file a joint status report following the disability insurer’s filing of a notice of a settlement between the parties.

  • May 01, 2024

    9th Circuit Denies Homeowner’s Rehearing Bid In Fire Loss Coverage Dispute

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on April 30 denied a homeowner’s request for rehearing and rehearing en banc of its decision affirming a district court’s grants of summary judgment for insurers in two coverage disputes consolidated on appeal regarding whether the homeowner misrepresented in the insurance application that she used her property for commercial purposes or that she had prior losses.

  • May 01, 2024

    9th Circuit Denies Insureds’ Request To Remand Pollution Coverage Suit

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on April 30 denied a motion filed by insureds for a limited remand to allow a district court to rule on a post-judgment motion in an environmental contamination coverage suit, noting in its order that a review of the record shows that the district court denied the parties’ post-judgment motions without prejudice and that the parties did not file a renewed motion.

  • April 30, 2024

    Insurer, Insured Reach Settlement In Water Damage Coverage Suit

    SAN FRANCISCO — An insurer filed a notice of settlement in California federal court after reaching a settlement with its insured in a suit seeking coverage for water damages to the insured’s business.

  • April 19, 2024

    Question Of Fact Exists On Cause Of Injuries Suffered By Airline Employees

    SAN FRANCISCO — A California federal judge denied motions for summary judgment filed by a primary insurer and an excess insurer on the issue of the number of occurrences because a question of fact exists on what caused the injuries of underlying American Airlines’ employees who claim they suffered health ailments after wearing uniforms manufactured by the insured.

  • April 17, 2024

    LTD Claim Excluded By Policy’s Preexisting Condition Exclusion, 9th Circuit Says

    PASADENA, Calif. — A district court did not err in entering judgment in favor of a disability insurer because the long-term disability (LTD) policy’s preexisting condition exclusion barred coverage as the disability claimant received medical treatment for symptoms related to the claimed disability within three months prior to the effective date of coverage of the policy, the Ninth Circuit U.S. Court of Appeals said.

  • April 17, 2024

    Federal Judge Clarifies Claims Deadline For Preliminarily Approved Class Settlement

    SAN FRANCISCO — A federal judge in California issued an order clarifying the claims deadline for the submission of claims for purposes of a $23,997,500 settlement and notice plan that received preliminary approval in a putative class action alleging claims for unfair business practices, false advertising, fraud, deceit, misrepresentation and breach of the duty of good faith against travel insurers.

  • April 16, 2024

    AG Sides With Insured In UCL Time Limit Case Before California High Court

    SAN FRANCISCO — California Attorney General Rob Bonta filed an amicus curiae brief with the state’s Supreme Court supporting an insured in her challenge to the dismissal as time-barred of her lawsuit claiming that her insurer failed to properly investigate a claim, writing that the court should have applied the four-year statute of limitations based on her claim for injunctive relief under California’s unfair competition law (UCL).

  • April 16, 2024

    Rehab Plan Approved Over Workers’ Comp Insurer’s Objections In California Court

    REDWOOD CITY, Calif. — Rejecting numerous objections from California Insurance Co. (CIC), a California state judge approved a rehabilitation plan that she said the state insurance commissioner described as being “designed to . . . complete CIC's exit from the state on terms that protect the Company, policyholders, and the public.”

  • April 11, 2024

    Insurer Accused Of Using AI Software To Deny Claims ‘En Masse’ In Class Suit

    OAKLAND, Calif. — An insured filed a putative class action in California state court accusing his insurer of violating California’s insurance regulations and its unfair competition law (UCL) by using artificial intelligence (AI) software to deny claims for coverage.

  • April 10, 2024

    Pharma Companies Seek High Court Review Of Ruling Reversing FCA Suit Dismissal

    WASHINGTON, D.C. — Pharmaceutical companies accused of violating the False Claims Act (FCA) by artificially inflating drug prices filed a petition for writ of certiorari in the U.S. Supreme Court, seeking review of the Ninth Circuit U.S. Court of Appeals’ reversal of a district court’s dismissal of a qui tam suit against them, arguing, in part, that the panel “created a circuit split by holding that a relator can avoid the public disclosure bar by ‘stitching together’ public disclosures.”