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

Mealey's California Insurance

May 12, 2023
California Panel: Insurer Did Not Act In Bad Faith In Windstorm Coverage Dispute

SANTA ANA, Calif. — A California appeals court on May 11 held that an insurer did not act in bad faith in its handling of an insured’s windstorm damage claim, rejecting the insured’s arguments on appeal that the insurer failed to thoroughly investigate his property damage and misrepresented his rental coverage.
May 11, 2023
Parties Dispute Coverage Issues In Groundwater Contamination Suit

RIVERSIDE, Calif. — In reply briefs filed in support of competing motions for summary judgment in a groundwater contamination coverage suit, an insured and its excess insurer seek a ruling from a California federal court on whether judgment should be entered on the insured’s breach of contract claim arising out of the insurer’s termination of coverage based on the insurer’s position that coverage is owed for only one occurrence under the applicable policies.
May 11, 2023
Calif. High Court Declines Review Of Relator Appeal In IFPA Suit Against Hospital

SAN FRANCISCO — The California Supreme Court denied review of an appellate court decision affirming a lower court’s judgment for a hospital in the state of California’s qui tam lawsuit alleging that the hospital participated in kickbacks, patient steering and billing fraud schemes.
May 09, 2023
California Jury Returns Verdict In Insurer’s Favor In COVID-19 Coverage Suit

LOS ANGELES — A California jury returned a special verdict in favor of a commercial property insurer in insureds’ breach of contract coverage lawsuit arising from the coronavirus pandemic, finding that SARS-CoV-2 did not cause any direct physical loss or damage to the insureds’ hotel on or before June 1, 2020.
May 09, 2023
Federal Magistrate Signs Protective Order In Bobcat Wildfire Coverage Dispute

LOS ANGELES — A federal magistrate judge in California signed a stipulated protective order in a coverage dispute over underlying lawsuits arising from the Bobcat Wildfire after the parties announced that they did not resolve their dispute following court-ordered mediation.
May 09, 2023
Homeowners Insurer May Owe Coverage For Dog Attack Suit, Panel Says In Reversing

LOS ANGELES — The Second District California Court of Appeal reversed and remanded a ruling in favor of a homeowners insurer after determining that an insured’s breach of contract and bad faith claims can proceed because an animal care exclusion may not apply as a bar to coverage for an underlying bodily injury suit arising out of a dog attack as the dogs responsible for the attack were not under the care or control of the insured.
May 08, 2023
Panel Refuses To Disturb Finding That Professional Services Exclusion Bars Coverage

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on May 5 refused to disturb its holding 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.
May 03, 2023
Panel: Insureds Fail To Allege Physical Alteration To California Movie Theaters

LOS ANGELES — A California appeals panel held that movie theater owner insureds have failed to allege a covered loss under their “‘all risk’” commercial property and general liability insurance policy because they have not demonstrated a physical alteration of their insured property, affirming a lower court’s grant of the insurer’s motion for judgment on the pleadings in the insured’s breach of contract and bad faith lawsuit arising from the coronavirus pandemic.
April 28, 2023
Insured Says Judgment For Insurer On Bad Faith Claims In Water Damage Suit Was Error

SAN FRANCISCO — An insured claims in an appellant brief filed in the First District California Court of Appeal that a trial court erred in granting an insurer’s motion for summary judgment on her bad faith claims in a water damage coverage suit because the insurer waived its right to assert the policy’s provision requiring the insured to participate in an examination under oath before filing suit.
April 28, 2023
Panel: Tribe Fails To Show COVID-19 Caused Physical Property Damage To Casino

VENTURA, Calif. — A California appeals court panel on April 27 found that an insured Indian tribe and its experts failed to present sufficient evidence to demonstrate that the COVID-19 virus caused property damage to the tribe’s casino and resort, affirming a summary judgment ruling in favor of the insurer in the tribe’s breach of contract and bad faith lawsuit seeking coverage for its losses arising from the pandemic.
April 28, 2023
Claims Fail In Water Damage, Asbestos Contamination Coverage Suit, 9th Circuit Panel Says

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed a district court’s entry of summary judgment in favor of a property insurer, agreeing with the district court’s finding that the insured failed to meet her burden of proving that the insurer breached its contract or acted in bad faith in its handling of her claim for water damage and asbestos contamination.
April 27, 2023
D&O Insurer Asks Court To Reconsider Ruling In Employee Embezzlement Coverage Suit

SAN DIEGO — A directors and officers liability insurer on April 26 moved for reconsideration or clarification of a California federal judge’s March 29 order that denied its motion for summary judgment and a homeowners association insured’s motion for partial summary judgment in a coverage lawsuit over a $688,931 judgment arising from employee embezzlement.
April 27, 2023
Genuine Coverage Dispute Exists In Foundation Damage Suit; Bad Faith Claim Fails

SACRAMENTO, Calif. — A bad faith claim alleged against a homeowners insurer in a dispute over coverage for the shifting of the foundation of the insureds’ home cannot proceed because there is a genuine dispute over whether coverage is afforded under the policy and the insurer met its burden of showing that it acted in good faith in handling the insureds’ claim, a California federal judge said.
April 26, 2023
Insured’s Bad Faith Claim Barred By 2-Year Statute Of Limitations, Panel Says

PASADENA, Calif. — A district court properly dismissed an insured’s complaint alleging that her auto insurer acted in bad faith in handling her claim for bodily injury damages following her involvement in an auto accident because the insured failed to file suit within the applicable two year statute of limitations for bad faith claims, the Ninth Circuit U.S. Court of Appeals said.
April 26, 2023
California Court Revives UCL Mental Health Coverage Claims Against Kaiser

SAN FRANCISCO — Allegations that individuals paid for mental health insurance coverage they couldn’t access as a result of Kaiser Foundation Health Plan Inc.’s policy of underfunding its integrated providers successfully establishes a nontrivial injury sufficient for standing under the California unfair competition law (UCL), a state appellate court said in also reversing summary judgment on April 25 on Parity Act and Unruh Act claims.
April 25, 2023
Judge Grants Stay In Insurer’s Bid For No Duty To Indemnify Over Rescinded Policy

SAN JOSE, Calif.— A California federal judge granted insureds’ request for a stay in an insurer’s lawsuit seeking a declaration that a directors and officers (D&O) insurance policy is rescinded because of the insureds’ material misrepresentations or a declaration that it has no duty to indemnify or defend in an underlying action, finding that discovery should be stayed until resolution of the underlying proceedings due to “the potential overlap in this rescission claim.”
April 25, 2023
9th Circuit Stands By Reversal Of Dismissal Of Insurer’s Complaint Against Law Firm

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 24 denied a law firm insured’s petition to rehear its reversal of a lower federal court’s dismissal of a professional liability insurer’s lawsuit seeking a declaration that it has no duty to indemnify the insured against underlying malicious prosecution claims and reimbursement of amounts that it paid for the insured’s underlying defense, standing by its ruling that the lower court erred in finding that California Insurance Code Section 533 did not apply to bar coverage.
April 24, 2023
Restaurant Owner Says Coverage Owed For Sewage Line Backup Damages

LOS ANGELES — An insured restaurant owner argues in a brief filed in the Second District California Court of Appeal that a trial court incorrectly granted summary judgment in favor of its insurer in a coverage dispute over water damages caused by a sewer line backup because issues of fact exist as to the cause of the backup and whether coverage was afforded for some of the damage.
April 24, 2023
Insurer: ERISA Rehearing Arguments ‘Overblown,’ Reprocessing Ruling Proper

SAN FRANCISCO — An insurer told a Ninth Circuit U.S. Court of Appeals panel that the plan required only that any covered procedure qualify as a generally accepted level of medical care and did not require coverage of all such procedures and that the court’s rejection of reprocessing of claims as futile recognized existing law and did not eliminate reprocessing as a remedy under the Employee Retirement Income Security Act.
April 20, 2023
Federal Judge Handles Partial Summary Judgment Bids In Reinsurance Billings Suit

LOS ANGELES — Partly granting each side’s motion in a reinsurance billings suit involving dozens of claims, a California federal judge ruled in part that a defendant is entitled to declaratory judgment on just one of four disputed interpretations.
April 19, 2023
9th Circuit Denies Burger Chain’s Petition For Rehearing In COVID-19 Coverage Suit

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 18 unanimously denied In-N-Out Burgers’ petition for panel rehearing and rehearing en banc challenging its March 10 ruling that affirmed a lower court’s dismissal of its breach of contract lawsuit against its commercial property insurer seeking business interruption coverage for its coronavirus losses.
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.