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Mealey's California Insurance

August 24, 2022
Bad Faith Claim Against Auto Insurer Filed By Deceased’s Parents Cannot Proceed

LOS ANGELES — A bad faith claim alleged against an auto insurer cannot proceed because the insurer’s failure to settle a bodily injury claim arising out of a fatal auto accident involved only the estate of the deceased and not the deceased’s parents, the Second District California Court of Appeal said Aug. 23 in affirming summary judgment for the insurer.
August 24, 2022
Federal Judge Grants Summary Judgment To Insurer’s General Agent In Fraud Dispute

SANTA ANA, Calif. — A federal judge in California on Aug. 15 entered judgment in favor of an insurer’s general agent in a third-party negligence and equitable indemnity complaint filed in a fraud lawsuit brought by a health insurer, finding that the undisputed material facts demonstrate that the agent did not owe the defendant a duty as a matter of law.
August 24, 2022
Administrative Record To Be Sealed In California Disability Benefits Suit

SAN FRANCISCO — A California federal magistrate judge on Aug. 22 granted a disability claimant’s motion to seal the administrative record pertaining to a disability benefits claim after determining that the claimant met the standard of providing compelling reasons to seal the record.
August 22, 2022
Breach Of Contract Claim Can Proceed, Bad Faith Claim Fails In Disability Suit

SAN FRANCISCO — A disability claimant’s breach of contract claim can proceed because a question of fact exists as to whether the claimant can perform the material duties of a general and pediatric anesthesiologist; however, the claimant’s bad faith claim cannot proceed because the claimant failed to show that the disability insurer’s investigation was unreasonable, a California federal judge said Aug. 19.
August 18, 2022
Loss Of Cryptocurrency Does Not Constitute Direct, Physical Loss, Judge Says

SAN FRANCISCO — A breach of contract and bad faith suit arising out of the loss of cryptocurrency cannot proceed because cryptocurrency, as a matter of California law, does not constitute a direct physical loss for which coverage is provided under the homeowners policy at issue, a California federal judge said Aug. 16 in granting the insurer’s motion to dismiss.
August 17, 2022
Magistrate Judge Rules Email Privilege Claim Waived In Reinsurance Billings Row

LOS ANGELES — In a June 30 ruling memorialized in a minute entry, a California federal magistrate judge ruled in favor of the plaintiffs in a dispute over privilege in a reinsurance billings suit, partly granting a sealed motion.
August 17, 2022
Settlement Reached In Vandalism Coverage Suit; Parties Stipulate To Dismissal

LOS ANGELES — An insured and a businessowners insurer on Aug. 15 filed a stipulation of dismissal with prejudice in California federal court after reaching a settlement on the insured’s claims for breach of contract and bad faith in a dispute over whether the insured misrepresented material facts regarding the extra expenses it incurred following the vandalism of its property.
August 16, 2022
Disability Claimant’s Suit Dismissed Without Prejudice; No Support For Agent Theory

SAN FRANCISCO — A California federal judge on Aug. 12 granted a disability insurer’s motion to dismiss a breach of contract and bad faith lawsuit after determining that the claimant, who sought disability benefits under a policy issued to a bone marrow donor program, failed to show that that the program was acting as an agent for the disability insurer when his claim for benefits was denied.
August 16, 2022
Judge Says Bad Faith Claim Fails; $44M Verdict Entered For Insured’s Equipment Loss

LOS ANGELES — Following a California federal judge’s July 1 summary judgment ruling in favor of a commercial property insurer on an insured’s bad faith claim in an equipment breakdown coverage dispute, a jury on July 29 entered a more than $44 million verdict in favor of the insured after finding that the insurer breached its duty to pay the insured’s claim.
August 15, 2022
Mortgagors Argue ‘Manifest Injustice’ In Appeal Over Class RESPA Suit

SAN FRANCISCO — Seeking reversal of a decision denying modification of a final pretrial order (PTO), mortgagors in a long-running Real Estate Settlement Procedures Act (RESPA) class action over captive reinsurance agreements argue in a July 25 appellant brief before the Ninth Circuit U.S. Court of Appeals that a California federal court’s ruling “resulted in manifest injustice and was tantamount to case-ending sanctions.”
August 13, 2022
NHL Insureds State Claim Based On Communicable Disease Coverage, Calif. Judge Says

SAN JOSE, Calif. — A California judge on Aug. 8 held that the National Hockey League (NHL) and 19 league clubs stated a claim based on their insurance policies’ communicable disease coverage, overruling an insurer’s demurrer to the insureds’ second amended complaint seeking coverage for their losses resulting from the coronavirus pandemic.
August 12, 2022
Parties In Reinsurance Row Note Stipulation, Seek Stay Pending Mediation Attempt

LOS ANGELES — Parties in a suit alleging breach of reinsurance contracts over billings for claims related to asbestos and other issues have negotiated a stipulation that “substantially narrows the range of disputes” and want the court to maintain its stay of all proceedings until Oct. 10 so they can attempt mediation, they told a California court on Aug. 10; after filing the stipulation, they were granted the continued stay on Aug. 17.
August 12, 2022
Vizio Seeks 9th Circuit Review Of Coverage Dispute Over Smart TV Litigation Suit

SAN FRANCISCO — Vizio Inc. on Aug. 10 filed a notice of appeal in the Ninth Circuit U.S. Court of Appeals challenging a lower federal court’s dismissal of its fourth amended complaint seeking defense and indemnity for an underlying $17 million settlement and defense costs arising from class claims over the insured’s unauthorized collections of consumers’ television viewing data.
August 11, 2022
Parties File Stipulation Of Dismissal In Long COVID, Disability Benefits Suit

SAN FRANCISCO — A disability insurer and a disability claimant suffering from symptoms of long COVID following a battle with COVID-19 have settled the claimant’s suit seeking a reinstatement of short-term disability (STD) benefits and a finding that she is entitled to long-term disability (LTD) benefits, according to an Aug. 8 stipulation of dismissal filed by the parties in California federal court.
August 05, 2022
Breach Of Contract, Bad Faith Claims Dismissed For Failure To Comply With Policy

SAN JOSE, Calif. — A California federal magistrate judge on Aug. 3 granted an auto insurer’s motion to dismiss insureds’ claims for breach of contract, bad faith, misrepresentation and fraud after determining that the insureds failed to show that they complied with the policy’s arbitration requirement and failed to allege facts in support of the misrepresentation and fraud claims.
August 03, 2022
9th Circuit Won’t Rehear Prior Exclusive Jurisdiction, Abstention Disputes

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Aug. 1 denied a July 1 petition for panel rehearing and rehearing en banc regarding a ruling that affirmed dismissal under the prior exclusive jurisdiction rule of two suits involving the same insurance conservatorship.
August 01, 2022
9th Circuit Refuses To Rehear No-Coverage Ruling In Fraud Suit Over Sale Of Facility

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on July 29 denied an insured’s petition for a panel rehearing of its July 8 ruling that affirmed a lower federal court’s dismissal of the insured’s action seeking defense for an underlying fraud lawsuit arising from its sale of a manufacturing facility in Mexico, rejecting the insured’s argument that the panel “overlooked or misapprehended” a material factual distinction between general “contract” and “breach of contract” exclusions.
August 01, 2022
Insured Appeals Ruling In Favor Of Insurers In Suit Arising From Opioid Epidemic

SAN FRANCISCO — A prescription drug distributor insured on July 27 filed a notice of appeal in a federal California court asking the Ninth Circuit U.S. Court of Appeals to review the lower court’s ruling that underlying lawsuits prompted by the opioid epidemic fail to allege an “accident” under California law.
July 26, 2022
Fact Issues Remain As To Whether Insurer Was Prejudiced By Notice Delay

LOS ANGELES — A federal judge in California on July 11 ruled that an insurer is not entitled to partial summary judgment on its claim that it is not obligated to reimburse an insured general contractor for costs incurred in underlying arbitration proceedings stemming from the contactor’s alleged failure to properly secure a building in advance of a hurricane for costs incurred before Feb. 5, 2020, because issues of fact remain as to whether the insurer was prejudiced by the contractor’s delay in notifying it of a counterclaim filed against the contractor.
July 25, 2022
Insured Seeks Rehearing Of No Coverage Ruling For Fraud Suit Over Sale Of Facility

PASADENA, Calif. — An insured on July 22 filed a petition for a panel rehearing of the Ninth Circuit U.S. Court of Appeals’ July 8 ruling that affirmed a lower federal court’s dismissal of its action seeking defense for an underlying fraud lawsuit arising from its sale of a manufacturing facility in Mexico, arguing that the panel “overlooked or misapprehended” a material factual distinction between general “contract” and “breach of contract” exclusions.
July 24, 2022
Breach Of Contract, Bad Faith Claims Fail In Vandalism, Misrepresentation Dispute

LOS ANGELES — A California federal judge on July 15 granted an insurer’s motion for summary judgment on an insured’s claims for breach of contract and bad faith after determining that the breach of contract claim cannot proceed because the insured misrepresented material facts regarding the extra expenses it incurred following the vandalism of its property and that the bad faith claim cannot proceed because no reasonable jury could find that the insurer acted in bad faith in handling the claim.
July 20, 2022
Vizio Fails To Plead Coverage Suit After 5 Opportunities, Judge Says In Dismissal

LOS ANGELES — A federal judge in California on July 19 granted an excess insurer’s motion to dismiss Vizio Inc.’s fourth amended complaint seeking defense and indemnity for an underlying $17 million settlement and defense costs arising from class claims over the insured’s unauthorized collections of consumers’ television viewing data, dismissing the claims this time with prejudice after finding that the insured “again fails to state a claim after having had five opportunities to properly plead its case.”
July 19, 2022
California Panel Affirms Court’s Refusal To Dismiss Insurer’s Subrogation Suit

LOS ANGELES — A California appeals panel on July 18 affirmed a lower court’s denial of a defendant’s special motion to strike an insurer’s subrogation lawsuit alleging carrier liability under the Carmack Amendment to the Interstate Commerce Act, finding that the defendant failed to carry its threshold burden under the state’s anti-SLAPP statute.
July 18, 2022
Prior Damage Exclusion Precludes Coverage In Underlying Defects Suit

LOS ANGELES — An insurer is entitled to summary judgment on claims brought by another insurer seeking a declaration that the defendant owes a duty to defend a subcontractor in an underlying construction defects lawsuit alleging that faulty workmanship provided by the subcontractor led to water intrusion damage to a home because a prior damage exclusion contained in the defendants’ commercial liability policy precludes coverage for the alleged damage, a federal judge in California ruled July 14 in granting the defendants’ summary judgment motion and denying the plaintiff insurer’s motion for summary judgment.
July 14, 2022
Panel Reverses Dismissal Of Business’s UCL Claim For Denied Coronavirus Coverage

LOS ANGELES — A California appellate panel July 13 reversed a trial court’s grant of an insurer’s demurrer to claims that it violated California’s unfair competition law (UCL) and breached an insurance policy by denying a claim for physical damage from the COVID-19 virus brought by a business forced to shut down during the pandemic, finding that the court improperly ruled based on its “disbelief” of the plaintiffs’ allegations.