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

Mealey's California Insurance

February 03, 2023
Calif. Panel Majority Says Personal Jurisdiction Does Not Exist Over Auto Insurer

LOS ANGELES —The majority of the Second District California Court of Appeal agreed with a trial court that personal jurisdiction does not exist over an auto insurer named as a defendant in a breach of contract and bad faith suit because the plaintiff, who was involved in a car accident in California and was named as a covered driver on her parents’ Indiana auto policy, failed to show that the auto insurer engaged in any significant activities in California that would allow a California court to exercise jurisdiction over the insurer.
February 01, 2023
9th Circuit Sets Submission On Briefs In Appeal Of Class RESPA Suit Ruling

SAN FRANCISCO — In a Jan. 31 order reporting the court’s “unanimous opinion that the facts and legal arguments are adequately presented in the briefs and record,” the Ninth Circuit U.S. Court of Appeals called off oral argument in an appeal of a ruling in a long-running Real Estate Settlement Procedures Act (RESPA) class action involving captive reinsurance agreements.
January 31, 2023
District Court Properly Found LTD Benefits, Attorney Fees Owed, 9th Circuit Says

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed a district court’s rulings that a disability claimant is owed long-term disability (LTD) benefits as an eligible employee under the disability plan and is entitled to an award of attorney fees based on her success on the merits.
January 30, 2023
Pollution Exclusion Does Not Apply Because There Was No Release, Insured Argues

SAN FRANCISCO — A district court erred in entering judgment for an insurer in a dispute over coverage for an underlying toxic exposure lawsuit filed against an insured arising from the cleanup of a fire that destroyed a city in California because there was no release of a pollutant, as required by the policy’s pollution exclusion, and because the policy’s pollution exclusion is ambiguous, the insured maintains in its appellant brief filed in the Ninth Circuit U.S. Court of Appeals.
January 30, 2023
Judge Dismisses Man’s UCL Claim Against Insurer For Handling Of Water Damage Claim

LOS ANGELES — A California federal judge granted an insurer’s motion to dismiss a rental property owner’s claim against it for violating California’s unfair competition law (UCL) through its handling of his water damage claim, which has not yet been granted or denied, finding that the plaintiff has not pleaded a violation of the UCL with requisite specificity.
January 30, 2023
Provider Derides Insurer’s ‘Hide The Ball Scheme’ As Breach Of Contract

SAN DIEGO — A substance abuse treatment provider tells a California appeals court it provided life-saving treatments on an insurer’s promise of compensation, only to be told after the treatments that the insurer believed that it had no contractual obligation to make payments, a “hide the ball scheme” that would be unacceptable in any other setting and permits breach of contract and California unfair competition law (UCL) claims.
January 30, 2023
Loss Exclusion Bars D&O Coverage For Shareholder Suit, California Judge Rules

SAN MATEO, Calif. — A California judge held that a Loss Exclusion in a directors and officers liability insurance policy excludes coverage for Onyx Pharmaceuticals Inc.’s $26 million payment to settle an underlying shareholders’ class action, noting that exclusion “was not a provision slipped into a policy unexpectedly” but “was a part of the primary D&O policy for several years prior to the subject Claim.”
January 27, 2023
Policy Language Required Subcontractor’s Work To Be Done During Policy Period

LOS ANGELES — An insurer had no duty to defend a subcontractor in a construction defects action because the products-completed operations hazard language in a wrap policy the insurer provided to a developer required work to be completed during the policy period, which the subcontractor did not do, a federal judge in California ruled in denying a motion for summary judgment filed by an assignee of the subcontractor and granting a summary judgment motion filed by the insurer.
January 24, 2023
Insurer Initially Owed Duty To Defend Against Contamination Lawsuit

LOS ANGELES — An insurer had a duty to defend an insured against an underlying environmental contamination lawsuit because there was a potential for coverage under the policy; however, the insurer no longer has a duty to defend the insured for the underlying lawsuit because the insured failed to show that there was an occurrence during the policy period, a California federal judge concluded after a bench trial.
January 23, 2023
High Court Won’t Review Prior Exclusive Jurisdiction Ruling In Conservatorship Row

WASHINGTON, D.C. — The U.S. Supreme Court on Jan. 23 denied a certiorari petition in which the petitioners argued that the challenged ruling regarding an insurance conservatorship dispute “conflicts with longstanding precedent of this Court and various circuit courts as to the scope of two judge-made rules governing when federal courts must abstain from adjudicating constitutional claims against state officials under” 42 U.S. Code Section 1983.
January 23, 2023
Insurer’s Denial Of Defense To Developer In Defects Suit Was Not In Bad Faith

SAN DIEGO — A California appellate court panel ruled that a trial court did not err in granting summary adjudication in favor of an insurer on a bad faith claim in a coverage dispute stemming from the insurer’s failure to defend a developer and contractor in a construction defects lawsuit because a genuine dispute existed between the parties at the time the developer and contractor made their request to the insurer to contribute to their defense costs.
January 19, 2023
Panel Reverses Ruling For Insurer In Movie Theater Owner’s COVID-19 Coverage Suit

SAN DIEGO — A California appeals panel held that although a movie theater owner insured’s coronavirus coverage complaint fails to allege a scenario triggering coverage under its commercial business insurance policy’s business income losses and business access prevention by civil authority provisions, the policy contains other provisions for which the lower court should have granted the insured leave to amend.
January 17, 2023
9th Circuit Refuses To Disturb Ruling Against Insurer In Forgery Coverage Dispute

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Jan. 13 refused to rehear its reversal of a federal court’s summary judgment ruling in favor of an insurer in a bank insured’s lawsuit seeking coverage for its losses resulting from a forgery, standing by its decision that the lower court erred in finding that the insured failed to satisfy the policy’s first coverage element.
January 13, 2023
California Panel Affirms Ruling In Favor Of Manufacturers In Insurer’s Defects Suit

LOS ANGELES — A California appeals panel affirmed a lower court’s ruling in favor of manufacturers in an insurer’s lawsuit alleging strict liability manufacturing defect and strict liability design defect claims, rejecting the insurer’s argument that the lower court erred in finding that it failed to establish a prima facie case of liability under the risk/benefit test and in declining to assess the insurer’s design defect claim under the consumer expectations test.
January 11, 2023
Lens Manufacturer, Calif. Insurance Department Settle Whistleblower Case For $23.8M

SACRAMENTO, Calif. — A company that manufactures and markets ophthalmic lenses and its subsidiaries have agreed to pay $23.8 million to resolve allegations that they violated the California Insurance Frauds Prevention Act (IFPA) by providing kickbacks and other unlawful incentives to eye care providers, driving consumers to more expensive services and submitting false claims to insurance companies, health care savings plans and vision benefit organizations.
January 11, 2023
California Panel Affirms Judgment For Defendants In Fraudulent Billing Action

LOS ANGELES — A state court did not err in finding that a relator and the California Department of Insurance (CDI) failed to present sufficient evidence that a hospital and others violated the Insurance Fraud Prevention Act (IFPA) by billing insurers for services performed at a medical detoxification center that was not properly licensed and using a referral agency to steer patients to the center, a California appellate panel has ruled.
January 11, 2023
Insured Appeals Ruling In California Coverage Suit Over Postponed Metallica Shows

LOS ANGELES — An insured filed a notice of appeal challenging a California judge’s summary judgment ruling in favor of an insurer in the insured’s breach of contract and bad faith lawsuit seeking coverage under a “Cancellation, Abandonment and Non-Appearance Insurance” policy for the postponement of the last six shows of Metallica’s South American tour in 2020.
January 10, 2023
Panel Publishes Reversal Of Dismissal Of UCL Claim For Denied COVID-19 Coverage

LOS ANGELES — A California appellate panel granted an amicus curiae’s request to publish its earlier ruling reversing a trial court’s grant of an insurer’s demurrer to claims that it violated California’s unfair competition law (UCL) by denying an Italian restaurant’s claim for physical damage from the COVID-19 virus based on the restaurant’s forced closure, writing that the claims were “sufficient to withstand demurrer.”
January 10, 2023
Parties Stipulate To Dismissal Of Suit Over Fee Calculation, Payment, Indemnity

LOS ANGELES — Stipulating to dismissal with prejudice of a breach of contract action including alleged violation of California’s unfair competition law (UCL), the parties in a suit over allegations that an administrative service provider mistakenly underpaid itself by approximately $40 million provided little detail to a California federal court.
January 09, 2023
Federal Judge Dismisses Legionnaire’s Disease Coverage Suit Following Settlement

RIVERSIDE, Calif. — A California federal judge dismissed an insurer’s suit seeking a declaration that no coverage is owed for suits arising out of exposure to Legionnaire’s disease after the parties notified the court they had reached a settlement.
January 05, 2023
United Policyholders Files Brief In Support Of Insured In Suit Arising From Opioid Epidemic

SAN FRANCISCO — United Policyholders filed an amicus curiae brief in support of a prescription drug distributor insured’s appeal of a lower federal court’s ruling that underlying lawsuits prompted by the opioid epidemic fail to allege an “accident” under California law, arguing to the Ninth Circuit U.S. Court of Appeals that the lower court’s “conclusion is contrary to the very purpose of insurance as it has developed over the course of many centuries.”
January 05, 2023
9th Circuit Certifies Question To California High Court In COVID-19 Coverage Suit

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals certified to the California Supreme Court the question of 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 the insured’s commercial property insurance policy.
January 03, 2023
Panel Affirms Finding That No Coverage Owed For Judgment In Contamination Suit

SAN FRANCISCO — A district court properly found that an insurer has no duty to indemnify a city on behalf of its insured for a judgment entered against the insured in an underlying environmental contamination dispute because the releases of contaminants into the groundwater are excluded by the policies’ pollution exclusion as the releases were expected and intended by the insured, the Ninth Circuit U.S. Court of Appeals said.
January 03, 2023
Insurer Must Pay Insureds’ Defense Costs Incurred In Environmental Suits

SANTA ANA, Calif. — A California federal judge said that an insurer must pay defense costs incurred by its insureds in underlying environmental contamination lawsuits because the insurer has a duty to defend the insureds and the insurer’s intent to appeal the court’s ruling on the duty-to-defend issue does not provide a basis for the insurer’s refusal to pay the defense costs.
December 29, 2022
Dismissal Stipulation Ends Force-Placed Insurance, Mortgage Loan Dispute

SACRAMENTO, Calif. — Less than a month after reporting reaching an unspecified settlement with the remaining defendant in the putative class suit over home mortgage loan servicing and a reinsurance program, the plaintiff filed a notice of voluntary dismissal with prejudice in a California federal court.