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

Mealey's California Insurance

August 22, 2023
Rescission Row Stayed Pending Resolution Of Underlying Suit Against Contractor

SAN FRANCISCO — A California federal judge granted a painting contractor’s motion for a stay in an insurer’s suit against the contractor seeking rescission of the contractor’s insurance policy and a declaratory judgment that it is not required to provide coverage to the contractor in an underlying breach of contract case, finding that a stay pending resolution of the underlying case is warranted in part due to the overlap between the cases such that issuing a stay “increases judicial efficiency.”
August 21, 2023
California High Court Agrees To Review Tribe’s Coronavirus Coverage Dispute

SAN FRANCISCO — The California Supreme Court granted an Indian tribe insured’s petition to review a state appellate court’s finding that the insured and its experts failed to present sufficient evidence to demonstrate that the coronavirus caused property damage to the tribe’s casino and resort.
August 15, 2023
Under Stipulation, Reinsurer May Intervene In California Liquidation Proceeding

LOS ANGELES — Following a stipulation by a liquidator and a reinsurer who had a dispute playing out in two jurisdictions, a California judge has ruled that the reinsurer may intervene in the state court action.
August 15, 2023
Judge: Fact Issues Preclude Summary Judgment In Coverage Suit Over Forgery Claims

SANTA ANA, Calif. — On remand from the Ninth Circuit U.S. Court of Appeals, a federal judge in California held that fact issues preclude summary judgment in favor of a bank insured in its lawsuit seeking coverage for its losses resulting from a forgery.
August 15, 2023
Insurer’s Suit Against Amber Heard Is Clearly Moot, Judge Says In Tentative Ruling

LOS ANGELES — Ruling on motions for judgment on the pleadings in an insurer’s declaratory judgment lawsuit alleging that it has no duty to defend or indemnify Amber Heard for a defamation judgment awarded to Johnny Depp, a federal judge in California issued a tentative ruling that concluded that the lawsuit, as it has been pleaded, is now “clearly moot.”
August 10, 2023
California Panel Reverses Ruling For Insurer In Builder’s SIR Refund Action

LOS ANGELES — Finding it unclear when a homebuilder exceeded the self-insured retention (SIR) amounts in homebuilders protective policies covering homes in several states, a California appellate panel reversed the trial court’s order sustaining its insurer’s demurrer on statute of limitations grounds of the builder’s suit seeking a refund for excess amounts it paid under the policies.
August 08, 2023
Subcontractor’s Appeal Of Faulty Workmanship Coverage Ruling Dismissed By 9th Circuit

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals has granted a subcontractor’s motion to voluntarily dismiss its appeal of a lower court’s dismissal of its coverage dispute with its commercial general liability insurer stemming from the faulty installation of a foundation system for a new airport concourse and related improvements at Los Angeles International Airport (LAX).
August 04, 2023
9th Circuit Reverses FCA Dismissal, Says Public Disclosure Bar ‘Not Triggered’

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Aug. 3 reversed and remanded an order dismissing a relator’s qui tam suit alleging violations of the federal False Claims Act (FCA) against pharmaceutical companies related to their alleged fraud by artificially inflating drug prices, finding that the suit was not precluded by the public disclosure bar because none of the public disclosures “made a direct claim” that the pharmaceutical companies committed fraud.
August 03, 2023
Insurers File Class Complaint Over Policy Payments For Kia, Hyundai Thefts

SANTA ANA, Calif. — Insurance companies across the United States filed a master complaint in a multidistrict litigation in a federal court in California over the thefts of Kia and Hyundai vehicles seeking to recover damages they paid to their insureds due to the purported design flaws in the vehicles that permit thieves to steal them in less than two minutes.
July 28, 2023
California Appeals Court: Interactions Didn’t Create Provider-Insurer Contract

SAN DIEGO — There is no evidence that an insurer’s past payments or benefit discussions with a provider created a contract or promise to pay a specific level of reimbursement, a California appeals court said in affirming summary judgment on July 27.
July 27, 2023
Auto Insurer’s Denial Of Claim For Damages Was Reasonable, Panel Says

LOS ANGELES — A trial court properly granted an auto insurer’s motion for summary judgment on a bad faith claim because the insurer presented overwhelming evidence that the denial of the insured’s claim for damages was reasonable, the Second District California Court of Appeal said in affirming the trial court’s ruling.
July 25, 2023
Insurers To Attend Settlement Conference In Coverage Dispute Over Tenants’ Claims

OAKLAND, Calif. — A plaintiff insurer and a defendant commercial general liability insurer will participate in a settlement conference in a declaratory judgment lawsuit arising from an underlying action alleging that their mutual insured attempted to drive tenants out of their units.
July 24, 2023
No Coverage Owed For Gas Station’s Losses Arising From Coronavirus, Panel Affirms

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s dismissal of a gas station owner insured’s lawsuit seeking coverage for its economic losses arising from the coronavirus pandemic, concluding that the virus exclusion bars coverage because COVID-19 “is the efficient proximate cause” of the insured’s purported losses.
July 21, 2023
No EPL, D&O Coverage Owed For Arbitration Award, 9th Circuit Affirms

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s summary judgment ruling in favor of an insurer in a coverage dispute over an underlying arbitration award, finding that two policy exclusions bar employment practices and directors and officers liability coverage for the arbitration award.
July 18, 2023
California Panel Affirms Dismissal Of Homeowners Insurer, Bank From Construction Row

LOS ANGELES — A California appeals panel has affirmed the dismissal of a homeowners insurer and a mortgage lender from a construction company’s suit seeking to $128,187.34 for work it performed on the homeowners’ house that an arbitrator found was offset by the homeowners’ damages for construction defects, among other things, finding that the company’s claims against the insurer and bank are derivative of its claims against the homeowners and, therefore, barred by the doctrine of claim preclusion.
July 18, 2023
Fitness Company Seeks To Dismiss Gym Fee Dispute Stemming From COVID Lockdowns

LOS ANGELES — A fitness and health company and its wholly owned subsidiary moved to dismiss a putative class complaint brought by a gym member alleging breach of the implied duty of good faith and fair dealing, negligent representation and violations of California law in continuing to charge fees for gym memberships during COVID-19 lockdowns when the gyms could not be accessed, contending that the statute of limitations had run on most of the claims and that the claim of negligent misrepresentation was inadequately pleaded.
July 17, 2023
Panel Reverses, Says Insurers Have Duty To Defend Seller Of Contaminated Land

LOS ANGELES — A California appellate panel ruled that a trial court erred by granting summary adjudication in favor of two insurers on the duty to defend a lawsuit against an insured for violation of California’s unfair competition law (UCL) and other laws due to ongoing groundwater contamination at an industrial property it sold in 1995.
July 17, 2023
Homeowners Association Appeals Ruling For Insurer In Suit Arising From Roof Damage

LOS ANGELES — A condominium homeowners association has appealed a California judge’s grant of summary judgment to its insurer in its breach of contract and bad faith lawsuit arising from storm damage to the roof of a Studio City building that housed 31 luxury condominiums.
July 14, 2023
Breach Of Contract, Bad Faith Claims To Proceed In Wildfire Coverage Suit

SACRAMENTO, Calif. — A California federal judge denied a property insurer’s motion to dismiss insureds’ claims for breach of contract and bad faith after determining that the insureds stated sufficient facts to support both claims.
July 13, 2023
Insureds Were Not Withheld Policy Benefits; Bad Faith Claim Fails, Judge Says

LOS ANGELES — A second amended complaint filed by insureds against their homeowners insurers must be dismissed because the insureds’ bad faith claim, the only claim alleged against the insurers, cannot proceed as the insureds were not withheld benefits and the insurers did not cancel the policy despite an initial notice of cancellation.
July 12, 2023
Split Panel Affirms Dismissal Of Insured’s Suit For Unfair Claims Handling

SAN FRANCISCO — A split California appellate panel on July 11 affirmed the dismissal as time-barred of an insured’s putative class action accusing its insurer of violating California’s unfair competition law (UCL) by improperly denying her property insurance claim for replacement of a decayed staircase without investigation, although a dissenting judge said the insured’s UCL claim was not time-barred.
July 12, 2023
Insurers Seek Dismissal Of Suit For Payment Of Gym Fees During COVID-19 Lockdowns

LOS ANGELES — Two California health insurers moved to dismiss a putative class complaint brought by a gym member alleging breach of the implied duty of good faith and fair dealing, negligent representation and violations of California law in continuing to charge fees for gym memberships during COVID-19 lockdowns when the gyms could not be accessed, contending that there was no contractual relationship between the insurers and the gym members regarding their memberships.
July 12, 2023
Panel: Insured Faces ‘Solid Wall Of Precedent’ In Coronavirus Coverage Appeal

SAN FRANCISCO — A California appellate court affirmed a ruling in favor of a commercial property insurer in an Orange County restaurant owner insured’s breach of contract lawsuit arising from the coronavirus pandemic, finding that the insured “faces a solid ‘wall of precedent’ that holds that direct physical loss or damage requires physical alteration of the covered property.”
July 11, 2023
‘No Way To Know’ If Damage To Embryos Occurred Is Fatal To Insureds’ Coverage Claim

SAN FRANCISCO —A California appeals court panel held that the “mere possibility” that insureds’ embryos suffered physical damage is insufficient to create a triable issue of fact to trigger homeowners insurance coverage, affirming a summary judgment ruling in favor of the insurer in a coverage dispute arising from embryos that were deemed “no longer viable” after a cryogenic tank’s temperature failure.
July 06, 2023
Federal Judge Denies Interpleader In Coverage Dispute Over D&O Policy

SAN JOSE, Calif. — A California federal judge denied an insurer’s motion to amend a complaint to add an interpleader in its suit 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 allowing an interpleader “would be both futile and prejudicial.”