Mealey's California Insurance
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June 06, 2023
Dismissal Granted In Row Over Medicare Payments Suspended Due To Alleged Fraud
SAN DIEGO — A California federal judge dismissed without prejudice a suit filed against employees of a Medicare contractor accused of violations of the California Insurance Frauds Prevention Act and California unfair competition law after the employees suspended Medicare payments to a pain management clinic for allegations of fraud, finding that dismissal is proper because the clinic failed to exhaust its administrative remedies pursuant to the Medicare Act.
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June 06, 2023
Breach Of Fiduciary Duty Claim Against Disability Insurer Not Foreclosed
PASADENA, Calif. — A district court erred in entering judgment in favor of a disability insurer on a breach of fiduciary duty claim because the insurer was acting in a fiduciary function when it miscalculated the claimant’s long-term disability benefits, resulting in a more than $56,000 overpayment to the claimant, the Ninth Circuit U.S. Court of Appeals said in reversing the district court’s judgment.
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May 31, 2023
California Panel: Insured’s Direct Physical Loss Claims Are ‘Mere Legal Conclusions’
SAN DIEGO — A California appeals panel on May 30 affirmed a lower court’s grant of a commercial property insurer’s motion for judgment on the pleadings in a coverage dispute arising from the coronavirus pandemic, finding that it is clear that the causes of the insured’s business losses are not attributable to the presence of the coronavirus on its premises but are the purported result of “certain government orders, community infection, and assumption that the virus is ubiquitous.”
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May 30, 2023
Panel Affirms Conversion To Judgment In ‘The Starry Night’ Insurance Fraud Case
SACRAMENTO, Calif. — A California appellate court on May 26 affirmed a decision converting criminal restitution orders to civil judgments after homeowners pleaded guilty to insurance fraud in overstating their fire-related losses to include an original Vincent van Gogh “The Starry Night” painting, finding that the trial court correctly determined that it had statutory authority to convert restitution orders to civil money judgments.
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May 26, 2023
Federal Judge Grants In Part Judgment For Insurer In Medical Coverage Dispute
SANTA ANA, Calif. — A California federal judge granted in part summary judgment to an insurer seeking a determination that a medical professions liability policy issued to its insured behavioral health provider provides no coverage in an underlying Oregon state court suit, finding that the provider breached the insurance contract by misrepresenting in a renewal application lack of awareness of a possible lawsuit following a former employee’s criminal conviction.
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May 25, 2023
Judgment Denied In FCA Suit Against Pharmacy Accused Of Overcharging Medicare
SACRAMENTO, Calif. — A California federal judge denied summary judgment in a whistleblower’s suit against a pharmacy, alleging that it violated the federal False Claims Act (FCA) and the California False Claims Act (CFCA) by overcharging the state of California and federal government for Medi-Cal and Medicare Part D nursing home patients, finding that fact disputes remain as to the actual reason for firing the whistleblower.
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May 22, 2023
Insurers Resolve Equitable Indemnity, Subrogation Action Over Sinking High-Rise
SAN FRANCISCO — An excess insurer and two insurers it had sued for equitable indemnity and/or equitable subrogation related to damages they paid to settle lawsuits stemming from the sinking of a residential high-rise stipulated to the dismissal with prejudice of all claims in the suit after notifying the court in March that they had reached a confidential settlement.
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May 22, 2023
Magistrate: Suit Against HOA Insured Fails To Allege ‘Loss’ To Trigger Coverage
SACRAMENTO, Calif. — A federal magistrate judge in California on May 18 granted a professional liability insurer’s motion to dismiss a homeowners’ association insured’s breach of contract and bad faith lawsuit, finding that an underlying lawsuit against the HOA did not seek a “loss” to trigger coverage under the policy.
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May 19, 2023
Excess Insurer’s Policies Provide Only Duty To Indemnify, Not Defend, Judge Says
RIVERSIDE, Calif. — An excess insurer’s policies only require the insurer to indemnify its insured for covered claims and does not require the insurer to defend against claims, a California federal judge said in partly granting the excess insurer’s motion for summary judgment in a groundwater contamination coverage suit.
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May 19, 2023
Judge: Triable Issues Exist As To When Subcontractor Knew Property Damage Occurred
LOS ANGELES — A California judge denied an insurer’s motion for summary judgment in a building owner and general contractor’s lawsuit seeking payments of an underlying $1.1 million default judgment entered against a subcontractor insured, finding that there are triable issues as to when the subcontractor “knew” that the property damage occurred and whether the subcontractor’s conduct qualifies as an “occurrence” under the business owners insurance policy.
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May 18, 2023
California Panel Affirms JNOV For Auto Parts Retailer In Indemnification Dispute
RIVERSIDE, Calif. — A California appeals panel on May 17 affirmed a lower court’s ruling granting an auto parts retailer’s judgment notwithstanding the verdict in an indemnification dispute over an underlying $29.9 million negligence and product liability settlement, finding that neither a cross-complainant nor its insurer was entitled to recover half of the underlying settlement.
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May 16, 2023
Judgment Properly Entered For Disability Plan, 9th Circuit Panel Determines
SAN FRANCISCO — A district court did not err in granting judgment in favor of a disability plan and against a disability claimant because the claimant failed to show that he is unable to perform the duties of any occupation and the plan identified at least one sedentary occupation that the claimant could become qualified to perform even with his current physical restrictions, the Ninth Circuit U.S. Court of Appeals said.
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May 15, 2023
Parties Propose Trial Dates On Remaining Claims In Reinsurance Billings Suit
LOS ANGELES — In a May 12 joint statement in California federal court, parties in a reinsurance billings suit involving dozens of claims outline the remaining claims and disputes to be tried, estimating that a jury trial will take 10 days.
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May 15, 2023
Parties Reach Settlement In Coverage Dispute Over Wildfire Damage To Napa Wineries
SAN FRANCISCO — An insured and its insurer filed a notice in a California federal court indicating that they have settled the insured’s lawsuit seeking coverage for property damage to its Napa County wineries caused by two wildfires.
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May 15, 2023
Insurer Dismisses Coverage Suit Arising From Cyberstalking Claims Against EBay
SAN JOSE, Calif. — A commercial umbrella liability insurer voluntarily dismissed without prejudice its suit in a California federal court disputing coverage for allegations that eBay and its directors and officers “engaged in a coordinated effort to intimidate, threaten to kill, torture, terrorize, stalk and silence” the underlying plaintiffs “to stifle their reporting on eBay.”
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May 12, 2023
California Panel: Insurer Did Not Act In Bad Faith In Windstorm Coverage Dispute
SANTA ANA, Calif. — A California appeals court on May 11 held that an insurer did not act in bad faith in its handling of an insured’s windstorm damage claim, rejecting the insured’s arguments on appeal that the insurer failed to thoroughly investigate his property damage and misrepresented his rental coverage.
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May 11, 2023
Parties Dispute Coverage Issues In Groundwater Contamination Suit
RIVERSIDE, Calif. — In reply briefs filed in support of competing motions for summary judgment in a groundwater contamination coverage suit, an insured and its excess insurer seek a ruling from a California federal court on whether judgment should be entered on the insured’s breach of contract claim arising out of the insurer’s termination of coverage based on the insurer’s position that coverage is owed for only one occurrence under the applicable policies.
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May 11, 2023
Calif. High Court Declines Review Of Relator Appeal In IFPA Suit Against Hospital
SAN FRANCISCO — The California Supreme Court denied review of an appellate court decision affirming a lower court’s judgment for a hospital in the state of California’s qui tam lawsuit alleging that the hospital participated in kickbacks, patient steering and billing fraud schemes.
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May 09, 2023
California Jury Returns Verdict In Insurer’s Favor In COVID-19 Coverage Suit
LOS ANGELES — A California jury returned a special verdict in favor of a commercial property insurer in insureds’ breach of contract coverage lawsuit arising from the coronavirus pandemic, finding that SARS-CoV-2 did not cause any direct physical loss or damage to the insureds’ hotel on or before June 1, 2020.
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May 09, 2023
Federal Magistrate Signs Protective Order In Bobcat Wildfire Coverage Dispute
LOS ANGELES — A federal magistrate judge in California signed a stipulated protective order in a coverage dispute over underlying lawsuits arising from the Bobcat Wildfire after the parties announced that they did not resolve their dispute following court-ordered mediation.
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May 09, 2023
Homeowners Insurer May Owe Coverage For Dog Attack Suit, Panel Says In Reversing
LOS ANGELES — The Second District California Court of Appeal reversed and remanded a ruling in favor of a homeowners insurer after determining that an insured’s breach of contract and bad faith claims can proceed because an animal care exclusion may not apply as a bar to coverage for an underlying bodily injury suit arising out of a dog attack as the dogs responsible for the attack were not under the care or control of the insured.
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May 08, 2023
Panel Refuses To Disturb Finding That Professional Services Exclusion Bars Coverage
PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on May 5 refused to disturb its holding that a commercial general liability insurance policy’s professional services exclusion bars coverage for the insured’s liability in an underlying lawsuit alleging negligence, loss of consortium, financial elder abuse and fraud and that the insurer is entitled to the reimbursement of the $2 million it paid to settle the underlying lawsuit.
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May 03, 2023
Panel: Insureds Fail To Allege Physical Alteration To California Movie Theaters
LOS ANGELES — A California appeals panel held that movie theater owner insureds have failed to allege a covered loss under their “‘all risk’” commercial property and general liability insurance policy because they have not demonstrated a physical alteration of their insured property, affirming a lower court’s grant of the insurer’s motion for judgment on the pleadings in the insured’s breach of contract and bad faith lawsuit arising from the coronavirus pandemic.
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April 28, 2023
Insured Says Judgment For Insurer On Bad Faith Claims In Water Damage Suit Was Error
SAN FRANCISCO — An insured claims in an appellant brief filed in the First District California Court of Appeal that a trial court erred in granting an insurer’s motion for summary judgment on her bad faith claims in a water damage coverage suit because the insurer waived its right to assert the policy’s provision requiring the insured to participate in an examination under oath before filing suit.
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April 28, 2023
Panel: Tribe Fails To Show COVID-19 Caused Physical Property Damage To Casino
VENTURA, Calif. — A California appeals court panel on April 27 found that an insured Indian tribe and its experts failed to present sufficient evidence to demonstrate that the COVID-19 virus caused property damage to the tribe’s casino and resort, affirming a summary judgment ruling in favor of the insurer in the tribe’s breach of contract and bad faith lawsuit seeking coverage for its losses arising from the pandemic.