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

Mealey's California Insurance

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.
April 05, 2023
Professional Services Exclusion Bars Coverage; Insurer Owed $2M Reimbursement

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals held 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.
April 05, 2023
California High Court Accepts Certified Question In Coronavirus Coverage Suit

SAN FRANCISCO — The California Supreme Court accepted a certified question from the Ninth Circuit U.S. Court of Appeals asking whether an insurance policy’s virus exclusion is unenforceable in a coverage lawsuit brought by owners, operators and managers of two Napa Valley, Calif., restaurants in the wake of the coronavirus pandemic.
April 03, 2023
Judge Denies Summary Judgment Motions In D&O Coverage Suit Over Embezzlement

SAN DIEGO — A federal judge in California denied a directors and officers liability insurer’s motion for summary judgment and a homeowners association insured’s motion for partial summary judgment and to amend in a coverage lawsuit over an underlying $688,931 judgment arising from employee embezzlement.
March 27, 2023
Burger Chain Asks 9th Circuit To Rehear No Coverage Ruling For Coronavirus Losses

PASADENA, Calif. — In-N-Out Burgers filed a petition for panel rehearing and rehearing en banc challenging the Ninth Circuit U.S. Court of Appeals’ March 10 ruling that affirmed a lower court’s dismissal of its breach of contract lawsuit against its commercial property insurer, arguing that the Ninth Circuit should correct or withdraw its ruling and stay the appeal pending the California Supreme Court’s answer to the Ninth Circuit’s certified question in Another Planet Entertainment, LLC v. Vigilant Ins. Co. to determine whether “the actual or potential presence of the COVID-19 virus on an insured's premises” constitutes “direct physical loss or damage to property” to trigger coverage under an insured’s commercial property insurance policy.
March 24, 2023
Air Transport Company Says School District Isn’t Immune From Compensation Suit

FRESNO, Calif. — A school district operating a self-insured health plan is not entitled to immunity as a public entity from claims that it undercompensated for emergency air transport, a company tells a California appeals court.
March 24, 2023
Substance Abuse Providers See ERISA, UCL, Contract Claims Largely Fail

SANTA ANA, Calif. — A dozen substance abuse providers’ reimbursement claims lack any evidence that relevant Employee Retirement Income Security Act plans require payment at the levels they suggest, and the California unfair competition law (UCL) claim lacks any tie to a statutory basis on which the claims could be brought, leaving only oral contract claims remaining, a federal judge in California said in granting a motion to dismiss.
March 23, 2023
Judge: Defective IGUs Caused No Injuries, Property Damage To Condo Project

SAN DIEGO — An insurer is entitled to summary judgment on claims brought by a subcontractor stemming from defective window-wall systems furnished by the subcontractor and installed in a condominium tower project because the issues with defective insulated-glass units (IGUs) in the window-wall system did not involve any injury or property damage to anything other than the IGUs, a federal judge in California ruled.
March 22, 2023
Assignee Says Bristol Provides Standing To Sue Insurers Under ERISA

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals should ignore insurers’ “novella about the history of standing” and instead follow the clear precedent giving an assignee the power to pursue them under the Employee Retirement Income Security Act, a debt collector tells the Ninth Circuit U.S. Court of Appeals in a reply brief.
March 22, 2023
9th Circuit Will Not Rehear RESPA Class Decertification Denial Appeal

SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel declined to rehear its ruling reversing and remanding to federal district court a district court’s ruling denying a motion for class decertification in a long-running Real Estate Settlement Procedures Act (RESPA) class action involving captive reinsurance agreements to federal district court.
March 21, 2023
Judge Issues Final Order Dismissing Amber Heard’s Counterclaims In Coverage Suit

LOS ANGELES — Adopting a March 9 tentative ruling as a final ruling, a federal judge in California granted an insurer’s motion to dismiss Amber Heard’s breach of contract and bad faith counterclaims in the insurer’s declaratory judgment lawsuit alleging that it has no duty to defend or indemnify Heard for a defamation judgment awarded to Johnny Depp.
March 17, 2023
Judge Grants Judgment For Homeowners Insurer In Coverage Dispute Over Fire Loss

LOS ANGELES — A California federal judge granted a homeowners insurer’s motion for summary judgment in a suit filed against it by a homeowner alleging breach of contract after the insurer denied coverage for a fire loss, finding that the insurer is entitled to rescind the policy based upon the homeowner’s material misrepresentations.