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

Mealey's California Insurance

November 30, 2023
Panel Says Request For Examination Under Oath Was Not Made In Bad Faith

SAN FRANCISCO — The First District California Court of Appeal affirmed a trial court’s ruling in favor of an insurer on an insured’s breach of contract and bad faith claims in a water damage coverage suit after determining that the insurer’s request for an examination under oath (EUO) from the insured is not evidence of bad faith conduct.
November 29, 2023
On Remand, Parties Dispute Expert Exclusion Bids In RESPA Class Lawsuit

FRESNO, Calif. — Parties in a long-running Real Estate Settlement Procedures Act (RESPA) class action involving captive reinsurance agreements are sparring in California federal court over expert testimony regarding whether the plaintiffs have standing under an economic harm theory.
November 27, 2023
Lloyd’s And U.S. Subsidiary File Trademark Infringement, Defamation Lawsuit

HOUSTON — Two entities connected with “an insurance and reinsurance market that is the most famous brand in the insurance underwriting field” have filed a suit in Texas federal court asserting claims including defamation and trademark infringement against an individual and a corporation and LLC they say he registered in Texas and California.
November 21, 2023
Suit Claiming Skilled Nursing Facilities Violated FCA Tossed After Parties Settle

LOS ANGELES — A California federal judge dismissed the government’s claims against six skilled nursing facilities (SNFs), their owner and their management company two days after the U.S. Department of Justice announced that it entered into a $45.6 million consent judgment with the SNFs and related parties in a suit alleging that they violated the federal False Claims Act (FCA) and California False Claims Act in submitting false claims to Medicare by paying kickbacks to physicians in exchange for the physicians referring patients to the SNFs.
November 20, 2023
9th Circuit Finds No Error In Judgment Entered In Favor Of Disability Insurer

SAN JOSE, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a district court’s judgment in favor of a disability insurer, rejecting the disability claimant’s argument that the lower court adopted new rationales that were not included in the administrative record in finding that the insurer’s termination of benefits was reasonable based on the evidence.
November 20, 2023
Insurer’s Environmental Coverage Suit Stayed Until Underlying Suit Is Resolved

SANTA ANA, Calif. — A California state judge denied a demurrer to an insurer’s complaint but granted a motion to stay the insurer’s declaratory judgment suit until after an underlying environmental contamination suit against the successor company to an insured is resolved because resolution of the underlying suit will aid the court in determining whether the insurer’s pollution exclusion applies as a bar to coverage for the underlying suit.
November 17, 2023
No Coverage Owed For Foundation Damage; Bad Faith, Breach Of Contract Claims Fail

LOS ANGELES — An insured’s claims for breach of contract, bad faith and unfair business practices alleged in a complaint seeking coverage for foundation damage arising out of a burst water pipe cannot proceed because the insurer properly denied coverage under the policy’s foundation damage exclusion, the Second District California Court of Appeal said in affirming a trial court’s decision.
November 16, 2023
DOJ Announces $45.6M Judgment In FCA Suit Against Skilled Nursing Facilities

WASHINGTON, D.C. — The U.S. Department of Justice (DOJ) on Nov. 15 announced that six skilled nursing facilities (SNFs), their owner and their management company have entered into a $45.6 million consent judgment to resolve allegations that they violated the federal False Claims Act (FCA) and California False Claims Act in submitting false claims to Medicare by paying kickbacks to physicians in exchange for the physicians referring patients to the SNFs.
November 16, 2023
Policy’s Virus Exclusion Bars Coverage For Coronavirus Losses, 9th Circuit Affirms

PHOENIX — The Ninth Circuit U.S. Court of Appeals on Nov. 15 held that an insured failed to plausibly allege that anything other than the COVID-19 pandemic is the efficient proximate cause of its losses, affirming a federal court’s dismissal of the insured’s commercial insurance coverage lawsuit.
November 16, 2023
Suit Against Homeowners Insurer Dismissed Following Parties’ Agreement

SAN FRANCISCO — A California federal judge dismissed a fire damage coverage suit filed by insureds against their homeowners insurer after the parties filed a joint stipulation to dismiss the claim for breach of contract without prejudice and the claims for bad faith and unfair insurance practices with prejudice.
November 15, 2023
Insured’s Breach Of Contract, Bad Faith Suit Dismissed For Failure To Prosecute

SAN FRANCISCO — A California federal magistrate judge on Nov. 14 dismissed an insured’s breach of contract and bad faith suit against his homeowners insurer based on the insured’s failure to respond to the insurer’s motion for judgment on the pleadings and the insured’s failure to respond to the court’s order to show cause as to why the suit should not be dismissed for failure to prosecute.
November 15, 2023
Amber Heard Asks 9th Circuit To Review Dismissal Of Counterclaims In Coverage Suit

LOS ANGELES — Amber Heard notified a California federal court that she is asking the Ninth Circuit U.S. Court of Appeals to review the court’s dismissal of her breach of contract and bad faith counterclaims in the insurer’s declaratory judgment lawsuit alleging that it has no duty to defend or indemnify her for a defamation judgment awarded to Johnny Depp.
November 14, 2023
Panel Partly Vacates Ruling In Coverage Suit Arising From Slander Of Title Claims

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Nov. 13 ruled that a lower federal court erred in finding that a claim for slander of title against an insured was not covered under the insurance policy, partly vacating and remanding the lower court’s ruling in a coverage dispute over an underling lawsuit alleging cancellation of deed and quiet title, slander of title and conversion against the insured.
November 14, 2023
New Trial Date Set In Groundwater Contamination Coverage Suit

RIVERSIDE, Calif. — A California federal judge set an April 2024 trial date in a groundwater contamination coverage suit following the parties’ request to move the trial date, originally scheduled to begin this month.
November 13, 2023
Insured Files Supplemental Authority On Applicability Of Pollution Exclusion

SAN FRANCISCO — A few days before oral arguments were held in the Ninth Circuit U.S. Court of Appeals in a dispute over the applicability of the pollution exclusion, the insured, seeking coverage for an underlying toxic exposure suit stemming from the cleanup of wildfire debris, filed a notice of supplemental authority, urging the Ninth Circuit to consider a ruling by the Second District California Court of Appeal in support of its argument that the pollution exclusion does not bar coverage for the underlying suit.
November 13, 2023
Reserve Information In COVID-19 Coverage Suit Not Relevant To Bad Faith Claim

SANTA ANA, Calif. — A California federal magistrate judge denied an insured’s motion to compel documents related to the reserve set by an insurer in response to the insured’s claim for business losses sustained in the wake of the COVID-19 pandemic after determining that the reserve information is not relevant to the insured’s bad faith claim because only a nominal reserve was set by the insurer and no changes were made to the reserve since the coverage claim was filed.
November 09, 2023
Bad Faith Claim In Disability Suit Cannot Proceed, Judge Says

SAN DIEGO — A bad faith claim alleged against a disability insurer cannot proceed because the insured failed to show that the insurer acted unreasonably and because the insurer showed that a genuine issue of fact existed on the cause of the insured’s disability, a California federal judge said in partly granting the disability insurer’s motion for summary judgment.
November 08, 2023
Judge Modifies Class In Driver’s Suit Against GEICO For Unfair COVID Premiums

SAN FRANCISCO — A California federal judge on Nov. 7 granted an insured’s motion to modify a previously certified class of automotive policy holders in the insured’s suit claiming that GEICO violated California’s unfair competition law (UCL) by profiting from a premium giveback program initiated during the COVID-19 pandemic, with the judge agreeing based on evidence produced to change the class time period.
November 08, 2023
California Panel Affirms Ruling In Equitable Contribution Suit Between Insurers

FRESNO, Calif. — A California appeals panel held that the undisputed evidence establishes that insureds knew that “bodily injury” and “property damage” asserted in an underlying complaint occurred before the inception of a defendant commercial general liability insurer’s policy period, affirming a lower court’s judgment in favor of the defendant CGL insurer in an equitable contribution lawsuit brought by another CGL insurer.
November 07, 2023
Judge Allows Law Firm To Intervene To Enforce Lien Against D&O Policy Proceeds

SAN JOSE, Calif. — A federal judge in California granted a law firm’s motion to intervene in an insurer’s lawsuit seeking a declaration that a directors and officers employment practices liability and fiduciary liability policy is rescinded because of the insureds’ material misrepresentations, permitting the firm to enforce a charging lien against the proceeds of the policy.
November 02, 2023
9th Circuit Affirms Dismissal Of Vizio’s 4th Amended Complaint On Other Grounds

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s dismissal of Vizio Inc.’s fourth amended complaint seeking coverage for an underlying $17 million settlement and defense costs arising from class claims alleging unauthorized collections of consumers’ television viewing data, finding that Vizio breached the insurance policy by not soliciting the excess insurer’s consent before settling the underlying lawsuit.
November 02, 2023
California Supreme Court To Review Time Limitation On UCL Insurance Suit

SAN FRANCISCO — The California Supreme Court granted a petition for review filed by an insured challenging the dismissal as time-barred of her property insurance claim for replacement of a decayed staircase without investigation, writing that it will address whether an insured’s claim for injunctive relief under California’s unfair competition law (UCL) falls under the statute of limitations set forth in the UCL or the state’s insurance code.
November 01, 2023
Stay Granted In Insurance Rescission Suit Due To Overlap With Underlying Case

SAN FRANCISCO — A California federal judge granted a stay in an insurer’s suit against its insured and a lessee contracting with the insured for a remodeling project, seeking rescission of policies and a declaratory judgment that there is no duty to defend and indemnify the insured in an underlying negligence suit regarding the remodeling project, finding that factors weigh in favor of a stay, including the overlapping facts in the underlying action and the declaratory judgment suit.
October 30, 2023
Federal Judge Dismisses Coverage Suit Over Tenants’ Claims Against Mutual Insured

OAKLAND, Calif. — Three days after a plaintiff insurer and a defendant commercial general liability insurer filed a stipulation for dismissal of a declaratory judgment lawsuit arising from an underlying action alleging that their mutual insured attempted to drive tenants out of their units, a federal judge in California dismissed the lawsuit with prejudice.
October 30, 2023
California Appeals Panel Affirms Ruling For Insurer In Water Damage Suit

LOS ANGELES — The Second District California Court of Appeal affirmed a trial court’s summary judgment ruling in favor of an insurer in a bad faith coverage dispute over water damage caused by a sewer line backup after determining that the insured forfeited its argument that coverage is provided for the water damage by not raising the issue in the trial court.