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Mealey's California Insurance

  • July 25, 2024

    Insurer Says Other Insurer Owes Coverage To Insured For Hot Tub Injury Suit

    SAN JOSE, Calif. — An insurer filed suit in California federal court against another insurer, seeking a declaration that a pollution exclusion and fungi or bacteria exclusion in the other insurer’s policies do not bar coverage to a mutual insured for an underlying suit alleging that the insured’s failure to maintain a hot tub caused an individual to sustain bodily injuries.

  • July 24, 2024

    Panel Affirms Ruling In Insurer’s Favor In Suit Arising From Public Works Projects

    SAN DIEGO — A California appeals panel affirmed a lower court’s grant of summary judgment in favor of a commercial general liability insurer in a contractor’s breach of contract and bad faith lawsuit seeking coverage for two underlying actions brought by the San Diego Housing Commission, finding that the insured failed to demonstrate that it suffered damages.

  • July 23, 2024

    California High Court Denies Request To Publish Opinion In Wildfire Coverage Suit

    SAN FRANCISCO — The California Supreme Court denied a homeowners insurer’s petition to publish an appeals court’s opinion that ruled that it did not breach the policy or the implied covenant of good faith and fair dealing and did not commit financial elder abuse because it paid the proper insureds “all (if not more than)” it had a duty to pay under the policy coverages for dwelling repairs, personal property damage and temporary additional living expenses for their property damage caused by the Woolsey Fire.

  • July 23, 2024

    9th Circuit: California High Court’s Answer Resolves Appeal In Insurer’s Favor

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on July 22 affirmed a lower federal court’s ruling in favor of an insurer after the California Supreme Court answer “no” to the panel’s certified question and found that the “actual or potential presence of the COVID-19 virus on an insured's premises generally does not constitute ‘direct physical loss or damage to property’ for purposes of coverage under a commercial property insurance policy.”

  • July 22, 2024

    Decades-Old MOU Is Focus Of Lawsuit Over Reinsurance Billings Dispute

    LOS ANGELES — Suing two English reinsurers in a California court in a dispute over “millions” in reinsurance billings arising from asbestos bodily injury claims, an insurer alleges that an incorrect interpretation of a 1984 memorandum of understanding (MOU) is at the root of their refusal to pay.

  • July 19, 2024

    California Supreme Court Says UCL Suit Against Insurer Not Time-Barred

    SAN FRANCISCO — The California Supreme Court on July 18 reversed an appellate panel’s affirmance of the dismissal as time-barred of an insured’s lawsuit against her property insurer for failure to properly investigate a claim, finding that the panel should have applied the four-year statute of limitations under California’s unfair competition law (UCL) to her UCL claim for injunctive relief.

  • July 18, 2024

    Reinsurer Communication, ‘Apex Doctrine’ Discovery Disputes Decided In Coverage Row

    SAN FRANCISCO — In separate orders resolving two discovery disputes in a breach of contract and bad faith suit over coverage for property damages wineries sustained during California wildfires, a California federal magistrate judge granted a motion to compel production of the insurer’s communications with reinsurers regarding the claims and denied an “apex doctrine” request to bar one of insurer’s employees from deposition.

  • July 17, 2024

    Fact Issues Remain On Whether Pollution Exclusion Applies To Coronavirus Losses

    SANTA ANA, Calif. — A California federal judge denied an insurer’s motion for summary judgment on the issue of the applicability of a pollution and contamination exclusion after determining that questions of fact exist as to whether the exclusion bars coverage for business losses sustained by an insured in the wake of the COVID-19 pandemic; however, the judge granted the insurer’s motion on a bad faith claim after determining that the claim cannot survive because a legitimate coverage dispute exists.

  • July 16, 2024

    Judge Grants Dismissal In FCA Violations Suit Against Calif. Specialty Laboratory

    LOS ANGELES — Without providing explanation, a California federal judge on July 15 granted parties’ joint stipulation of dismissal in a relator’s qui tam suit against a California special laboratory, alleging violations of the federal False Claims Act and similar California statutory provisions for the lab’s role in inducing physicians and offering remuneration to them to refer government-insured patients to the lab.

  • July 16, 2024

    Judge Allows Insurer To Seal Portions Of Complaint Disputing Coverage For Diocese

    SANTA ANA, Calif. — A federal judge in California on July 15 granted an insurer’s administrative motion to seal references to confidential information and documents in its declaratory judgment lawsuit disputing coverage for underlying sexual abuse lawsuits brought under the California Child Victims Act against The Roman Catholic Bishop of Orange.

  • July 15, 2024

    California High Court Dismisses Tribe’s Appeal In Coronavirus Coverage Dispute

    SAN FRANCISCO — The California Supreme Court dismissed an Indian tribe insured’s appeal of 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.

  • July 12, 2024

    Panel Affirms No Coverage Ruling In Television Producer’s Coronavirus Coverage Suit

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on July 11 affirmed a lower federal court’s grant of an insurer’s motion for judgment on the pleadings in a television series producer insured’s breach of contract lawsuit seeking coverage for its losses incurred from coronavirus-related disruptions and delays in the production of its show, rejecting the insured’s contention that the lower court should have permitted it to present extrinsic evidence before it granted the insurer’s motion.

  • July 12, 2024

    Federal Judge Refuses To Dismiss Coverage Dispute Over False Advertising Claims

    LOS ANGELES — A federal judge in California denied a professional liability insurer’s motion to dismiss insureds’ breach of contract and bad faith lawsuit seeking coverage for an underlying putative class action alleging that they falsely advertised a penis enlargement device, finding that the court is unable to determine as a matter of law that the insureds’ alleged statements and omissions fail to arise out of work performed by the insureds that involves “specialized training, knowledge and skill in the pursuit of urology, including surgery.”

  • July 11, 2024

    Insurer Seeks To Void Policy, Deny Fire Damage Coverage For Code Violation Fraud

    LOS ANGELES — A commercial insurer sued its insured limited liability company in a California federal court, seeking rescission of the insured’s policy and a declaration that the insurer is not obligated to pay for fire damage to the property due to the insured’s material misrepresentations in the policy application regarding the absence of safety code violations and liens on the property when an investigation revealed otherwise.

  • July 10, 2024

    9th Circuit Affirms Judgment For Insurer In Dispute Over Misrepresentation

    SAN FRANCISCO  — A split Ninth Circuit U.S. Court of Appeals panel on July 9 affirmed a district court’s grant of partial summary judgment to an insurer seeking a determination that a medical professions liability policy issued to its insured behavioral health provider provides no coverage for an underlying Oregon state court suit, finding that summary judgment was proper because the insured “made a material misrepresentation in its renewal application.”

  • July 09, 2024

    Panel Affirms District Court’s Bad Faith Ruling, Judgment In Water Damage Suit

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeal affirmed a district court’s $125,000 judgment in favor of an insured in a water damage dispute after determining that the lower court did not abuse its discretion in denying the insured’s request for appraisal or in entering partial summary judgment on the insured’s bad faith claim because there is no evidence that the parties agreed to arbitrate the dispute and no evidence that the insurer acted in bad faith in handling the insured’s claim.

  • July 09, 2024

    Judge: Insureds Failed To Show Their Damage Was Not Caused By Defect, Deterioration

    LOS ANGELES — A federal judge in California held that damages to insureds’ property “were caused by a defect, weakness, inadequacy, fault, or unsoundness in design, repair, construction, or materials — which in turn caused wear, tear, . . . deterioration, and wet or dry rot” and that, as a result, their loss is excluded from coverage under their homeowners insurance policy.

  • July 08, 2024

    Insureds Say 9th Circuit Should Affirm Coverage Opinion In Pollution Suit

    SAN FRANCISCO — A district court correctly found that an insurer owes coverage for an underlying environmental contamination lawsuit because the insureds met their burden of proving that the underlying lawsuit alleges a potential for coverage under the policies at issue, the insureds maintain in an appellee brief filed in the Ninth Circuit U.S. Court of Appeals.

  • July 02, 2024

    Judge: CGL Insurer Has No Duty To Defend Suit Alleging Substandard Work By Insured

    SANTA ANA, Calif. — A federal judge in California granted a commercial general liability insurer’s motion for judgment on the pleadings in its declaratory judgment lawsuit disputing coverage for an underlying action alleging that its insured did substandard work on a Los Angeles luxury apartment project before being fired and it was liable for flooding damage to switchgear, finding that the insurer has no duty to defend or indemnify because the insured’s alleged “shoddy work” fails to constitute “property damage” to trigger coverage.

  • June 28, 2024

    Beneficiary’s Claims Fail Based On Proper Rescission Of Policy, Judge Says

    SACRAMENTO, Calif. — A beneficiary’s breach of contract and bad faith claims cannot proceed against a life insurer because the beneficiary’s wife made a material misrepresentation on the policy application that justified the insurer’s rescission of the policy, a California federal judge said in granting the insurer’s motion for summary judgment.

  • June 28, 2024

    Judgment Entered In CGL Coverage Suit After Insurer, Contractor Seek Dismissal

    OAKLAND, Calif. — A judgment was entered declaring that a commercial general liability insurer has no duty to defend or indemnify a contracting company insured and its owner against an underlying lawsuit alleging defective work on a home renovation project the same day a California federal judge signed the parties’ stipulation and proposed order for entry of final judgment.

  • June 24, 2024

    High Court Again Extends Response Deadline In Review Of 9th Circuit FCA Reversal

    WASHINGTON, D.C. — The U.S. Supreme Court on June 21 granted a district court qui tam plaintiff’s second request for additional time to respond to pharmaceutical companies’ petition that seeks review of the Ninth Circuit U.S. Court of Appeals’ ruling reversing the district court’s dismissal of a suit accusing the companies of violating the False Claims Act (FCA) by artificially inflating drug prices.

  • June 24, 2024

    Panel: Professional Services Exclusion Bars D&O Coverage For Anti-Kickback Settlement

    SAN FRANCISCO — A California appeals panel on June 21 held that an insured’s loss resulting from its settlement with the United States of claims that it violated the federal Anti-Kickback Statute is barred by its primary and excess directors and officers liability insurance policies’ professional services exclusion, affirming a lower court’s ruling in favor of the insurers in the insured’s breach of contract lawsuit.

  • June 21, 2024

    Revised $195,000 Class Deal Gets Initial OK In Suit Alleging Fraudulent Policies

    SANTA ANA, Calif. — Ruling various revisions sufficient, a California federal judge granted preliminary approval to a $195,000 settlement in a suit over alleged fraud involving captive reinsurance, also modifying the preliminarily certified settlement class.

  • June 19, 2024

    California High Court Reverses, Says Vertical Exhaustion Applies To Policies

    SAN FRANCISCO — The California Supreme Court reversed an appeals court’s ruling in a long-running asbestos insurance coverage dispute after determining that a vertical exhaustion method, rather than a horizontal exhaustion method, must be applied to excess policies that sit over an insured’s primary policies because the language of the excess policies and the insured’s reasonable expectations support a vertical exhaustion method.