Mealey's California Insurance : Mealey's : Legal News & Analysis

Mealey's California Insurance

April 28, 2023
Claims Fail In Water Damage, Asbestos Contamination Coverage Suit, 9th Circuit Panel Says

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed a district court’s entry of summary judgment in favor of a property insurer, agreeing with the district court’s finding that the insured failed to meet her burden of proving that the insurer breached its contract or acted in bad faith in its handling of her claim for water damage and asbestos contamination.
April 27, 2023
D&O Insurer Asks Court To Reconsider Ruling In Employee Embezzlement Coverage Suit

SAN DIEGO — A directors and officers liability insurer on April 26 moved for reconsideration or clarification of a California federal judge’s March 29 order that denied its motion for summary judgment and a homeowners association insured’s motion for partial summary judgment in a coverage lawsuit over a $688,931 judgment arising from employee embezzlement.
April 27, 2023
Genuine Coverage Dispute Exists In Foundation Damage Suit; Bad Faith Claim Fails

SACRAMENTO, Calif. — A bad faith claim alleged against a homeowners insurer in a dispute over coverage for the shifting of the foundation of the insureds’ home cannot proceed because there is a genuine dispute over whether coverage is afforded under the policy and the insurer met its burden of showing that it acted in good faith in handling the insureds’ claim, a California federal judge said.
April 26, 2023
Insured’s Bad Faith Claim Barred By 2-Year Statute Of Limitations, Panel Says

PASADENA, Calif. — A district court properly dismissed an insured’s complaint alleging that her auto insurer acted in bad faith in handling her claim for bodily injury damages following her involvement in an auto accident because the insured failed to file suit within the applicable two year statute of limitations for bad faith claims, the Ninth Circuit U.S. Court of Appeals said.
April 26, 2023
California Court Revives UCL Mental Health Coverage Claims Against Kaiser

SAN FRANCISCO — Allegations that individuals paid for mental health insurance coverage they couldn’t access as a result of Kaiser Foundation Health Plan Inc.’s policy of underfunding its integrated providers successfully establishes a nontrivial injury sufficient for standing under the California unfair competition law (UCL), a state appellate court said in also reversing summary judgment on April 25 on Parity Act and Unruh Act claims.
April 25, 2023
Judge Grants Stay In Insurer’s Bid For No Duty To Indemnify Over Rescinded Policy

SAN JOSE, Calif.— A California federal judge granted insureds’ request for a stay in an insurer’s lawsuit seeking a declaration that a directors and officers (D&O) insurance policy is rescinded because of the insureds’ material misrepresentations or a declaration that it has no duty to indemnify or defend in an underlying action, finding that discovery should be stayed until resolution of the underlying proceedings due to “the potential overlap in this rescission claim.”
April 25, 2023
9th Circuit Stands By Reversal Of Dismissal Of Insurer’s Complaint Against Law Firm

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 24 denied a law firm insured’s petition to rehear its reversal of a lower federal court’s dismissal of a professional liability insurer’s lawsuit seeking a declaration that it has no duty to indemnify the insured against underlying malicious prosecution claims and reimbursement of amounts that it paid for the insured’s underlying defense, standing by its ruling that the lower court erred in finding that California Insurance Code Section 533 did not apply to bar coverage.
April 24, 2023
Restaurant Owner Says Coverage Owed For Sewage Line Backup Damages

LOS ANGELES — An insured restaurant owner argues in a brief filed in the Second District California Court of Appeal that a trial court incorrectly granted summary judgment in favor of its insurer in a coverage dispute over water damages caused by a sewer line backup because issues of fact exist as to the cause of the backup and whether coverage was afforded for some of the damage.
April 24, 2023
Insurer: ERISA Rehearing Arguments ‘Overblown,’ Reprocessing Ruling Proper

SAN FRANCISCO — An insurer told a Ninth Circuit U.S. Court of Appeals panel that the plan required only that any covered procedure qualify as a generally accepted level of medical care and did not require coverage of all such procedures and that the court’s rejection of reprocessing of claims as futile recognized existing law and did not eliminate reprocessing as a remedy under the Employee Retirement Income Security Act.
April 20, 2023
Federal Judge Handles Partial Summary Judgment Bids In Reinsurance Billings Suit

LOS ANGELES — Partly granting each side’s motion in a reinsurance billings suit involving dozens of claims, a California federal judge ruled in part that a defendant is entitled to declaratory judgment on just one of four disputed interpretations.
April 19, 2023
9th Circuit Denies Burger Chain’s Petition For Rehearing In COVID-19 Coverage Suit

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 18 unanimously denied In-N-Out Burgers’ petition for panel rehearing and rehearing en banc challenging its March 10 ruling that affirmed a lower court’s dismissal of its breach of contract lawsuit against its commercial property insurer seeking business interruption coverage for its coronavirus losses.
April 19, 2023
Magistrate Upholds Adverse Decision In Crop Insurance Policy Interpretation Row

SAN JOSE, Calif. — Upholding government agencies’ decision in a crop insurance dispute involving federal reinsurance, the term “farming activities” and the structure of a farming operation, a federal magistrate judge in California ruled that interpretation of an ambiguous term was reasonable and the agencies’ decision was not arbitrary or capricious.
April 18, 2023
Exhaustion Of Administrative Remedies Was Not Required Under Disability Plan

SAN FRANCISCO — A disability claimant’s wrongful denial of benefits suit can proceed because the disability plan defendants failed to show that the exhaustion of administrative remedies was required under the plan’s terms before the claimant could file suit, a California federal judge said in denying the plan defendants’ motion for summary judgment.
April 17, 2023
9th Circuit Affirms Dismissal Of Restaurant’s Coronavirus Coverage Dispute

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 14 affirmed a lower federal court’s grant of an insurer’s motion to dismiss a restaurant and banquet hall insured’s lawsuit seeking coverage for its losses arising from the coronavirus pandemic, finding that the virus exclusion bars coverage.
April 17, 2023
Insured Fails To Assert Efficient Cause Of Its Losses Is Anything But Coronavirus

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 14 affirmed a lower federal court’s dismissal of a commercial real estate investment company’s breach of contract and bad faith lawsuit seeking coverage for its economic losses arising from the coronavirus pandemic, finding that the policy’s virus exclusion bars all coverage because the insured fails to plausibly assert that the efficient cause of its losses is anything but the coronavirus.
April 14, 2023
Additional Discovery On Social Security Disability Income Benefits Not Warranted

SACRAMENTO, Calif. — A disability insurer is not entitled to additional discovery regarding a dependent’s monthly Social Security disability payments because the disability claimant provided the insurer with documentation that she has only one dependent who is receiving Social Security benefits based on the claimant’s disability, a California federal judge said.
April 14, 2023
Disability Claimant Appeals Ruling On Reduction Of Disability Income Benefits

SAN FRANCISCO — A disability claimant filed a notice of appeal to the Ninth Circuit U.S. Court of Appeal, seeking review of a California federal judge’s decision to grant a disability income insurer’s motion for judgment on the pleadings based on a finding that the insurer correctly reduced the claimant’s disability income benefits according to the terms of the disability income policy.
April 13, 2023
Judge: Insured Businesses ‘Fatally Undermined’ Their COVID-19 Interruption Suit

LOS ANGELES — A California federal judge dismissed without leave to amend two businesses’ lawsuits accusing their insurer of violating California’s unfair competition law (UCL) by denying them coverage for damages caused by the suspension of their operations during government-ordered shutdowns, finding that they “fatally undermined” their argument opposing application of a virus exclusion in the policies by acknowledging that the shutdowns were caused by COVID-19.
April 12, 2023
Airline Accuses Insurer Of Unfairly Denying Coverage In Passenger’s Coma Lawsuit

SAN FRANCISCO — An airline in a complaint filed in California federal court accuses its insurer of bad faith claims handling and violation of California’s unfair competition law (UCL) for improperly denying coverage for certain causes of action the airline faces in connection with a separate lawsuit brought by the family of a quadriplegic man who was left comatose after an incident while traveling.
April 11, 2023
Exclusions Bar Coverage For Restaurant’s COVID-19 Losses, California Panel Affirms

SANTA ANA, Calif. — A California appeals panel on April 10 held that although a restaurant operator insured has demonstrated that there is potential for coverage for its business income losses resulting from the governmental orders in response to the coronavirus pandemic, the insurer has established that the policy’s “ordinance or law” and virus exclusions precluded coverage as a matter of law.
April 09, 2023
Insured Failed To Show Triable Issue Exists Regarding Additional Damage, Panel Says

LOS ANGELES — The Second District California Court of Appeal affirmed a grant of summary judgment in favor of a homeowners insurer on breach of contract and bad faith claims after determining that the trial court properly found that the insured failed to show that there were any triable issues of fact regarding whether a fallen tree caused an additional $800,000 in damages to her home.
April 07, 2023
California Insurance Commissioner Approves Stipulation In Premium Overcharge Dispute

LOS ANGELES — California Insurance Commissioner Ricardo Lara approved the terms of a stipulation between the California Department of Insurance (CDI) and Kemper Independence Insurance Co. settling the CDI’s allegation that the insurer violated California Insurance Code and California Code of Regulations when it failed to seek the commissioner’s prior approval of a change to its wildfire surcharge.
April 06, 2023
Plaintiffs Drop Negligence, UCL Suit Against Marketer Over Alleged Scheme

SAN DIEGO — Saying the defendant didn’t file an answer or a motion for summary judgment, the plaintiffs in a putative class suit alleging that they were sold counterfeited and nonexistent PregnancyCare insurance policies under “supposed captive reinsurance programs” filed a notice of voluntary dismissal without prejudice in California federal court.
April 05, 2023
Class Settlement Of Up To $117.7M Proposed In Life Insurance Cost Increase Suits

PHILADELPHIA — Plaintiffs challenging cost of insurance (COI) increases on universal life insurance policies have asked a Pennsylvania federal court to consolidate two cases for settlement, preliminarily certify a settlement class and preliminarily approve a settlement that includes a fund of up to $117.75 million and a five-year COI rate increase freeze.
April 05, 2023
Bad Faith, Fraudulent Misrepresentation Claims Preempted By ERISA

SAN FRANCISCO — Bad faith and fraudulent misrepresentation claims alleged against a disability insurer are preempted by the Employee Retirement Income Security Act because the claims relate to an ERISA plan and the claimant can seek relief for the denial of her long-term disability (LTD) benefits claim under ERISA, a California federal judge said in granting the disability insurer’s motion to dismiss.