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

Mealey's California Insurance

June 17, 2024
Lakers, Insurer Dismiss Coronavirus Coverage Dispute In California Federal Court

LOS ANGELES —The Los Angeles Lakers and its commercial property insurer filed a stipulation asking a California federal court to dismiss with prejudice the insured’s lawsuit arising from its property damage and business interruption claims for losses related to the COVID-19 pandemic.
June 13, 2024
Judge Sustains Insurer’s Demurrer As To Bad Faith Claim In Suit Over Netflix Show

LOS ANGELES — A California judge sustained an insurer’s demurrer without leave to amend as to a breach of the implied covenant of good faith and fair dealing brought by the producers of the Netflix show “House of Cards” and overruled the insurer’s remaining demurrers in a coverage dispute arising from the insureds’ claims that the revised final season of House of Cards was not as successful as was anticipated before Kevin Spacey's departure from the show.
June 07, 2024
9th Circuit Gives Agencies Win In Crop Insurance ‘Farming Activity’ Fight

SAN FRANCISCO — Ruling that the challenged interpretation of “farming activity” survives scrutiny under Auer v. Robbins and the Administrative Procedure Act (APA), a Ninth Circuit U.S. Court of Appeals panel affirmed a decision for government agencies in a crop insurance dispute involving federal reinsurance and the structure of a farming operation.
June 07, 2024
Disability Claimant Says Any-Occupation Benefits Are Owed By Disability Insurer

SAN DIEGO — A disability insurer abused its discretion in determining that a disability claimant is not disabled from performing the duties of any occupation based on symptoms related to the claimant’s diagnoses of fibromyalgia and ankylosing spondylosis because the medical evidence submitted by the claimant supports a finding that the claimant is disabled from performing the duties of any occupation, the claimant maintains in a June 6 complaint filed in California federal court.
June 05, 2024
U.S. High Court Extends Response Deadline In Review Of 9th Circuit FCA Suit Ruling

WASHINGTON, D.C. — The U.S. Supreme Court on June 3 granted a 30-day extension for the qui tam plaintiff in a district court decision to respond to pharmaceutical companies’ petition seeking review of the Ninth Circuit U.S. Court of Appeals’ reversal of a district court’s dismissal of a suit accusing them violating the False Claims Act (FCA) by artificially inflating drug prices, arguing in part that the Ninth Circuit “created a circuit split by holding that a relator can avoid the public disclosure bar by ‘stitching together’ public disclosures.”
June 05, 2024
Federal Judge: Insurance Dispute Still Stayed As Underlying State Claims Continue

OAKLAND, Calif. — A California federal judge denied a request from two insurers to lift a stay of proceedings in a coverage dispute over the insurers’ duty to defend and indemnify a contractor and subcontractor for claims that they caused cracks to a California hospital’s floor, finding that the hospital’s settlement with the construction companies in an underlying state action did not bring about the full resolution of that case.
June 04, 2024
No Cybersecurity Coverage Owed For Phishing Scam Losses, California Panel Affirms

SANTA ANA, Calif. — A California appeals panel on June 3 affirmed a lower court’s ruling that an insurer owes no coverage for an insured’s losses arising from a phishing scam, determining that the insured failed to assert a “direct financial loss” to trigger coverage under the cybersecurity insurance policy.
May 31, 2024
Judge Dismisses Coverage Dispute Between Contractor, Insurer After Settlement

LOS ANGELES — A federal judge in California granted a contractor and a commercial general liability insurer’s joint stipulation of dismissal filed after the parties agreed to a settlement, dismissing with prejudice allegations stemming from claims that the contractor failed to secure a building before a hurricane.
May 30, 2024
Insurers Owe No Coverage For Underlying Judgments In Asbestos Exposure Suits

SAN FRANCISCO — A trial court properly found that two insurers owe no coverage for underlying judgments totaling $41 million entered against their insured in underlying lawsuits arising out of a claimant’s exposure to asbestos in the insured’s products because the policies’ auto exclusions apply as a bar to coverage based on the fact that the claimant was exposed to the asbestos while unloading the insured’s product from the insured’s delivery van, the First District California Court of Appeal said.
May 28, 2024
Contractor, Insurer Seek Dismissal Of Coverage Claims After Settlement

LOS ANGELES — A contractor and an insurer filed a joint stipulation of dismissal on May 24, seeking to bring an end to their dispute in a California federal court stemming from the contractor’s alleged failure to properly secure a building under construction in advance of a hurricane after they agreed to a settlement.
May 24, 2024
California High Court: Presence Of COVID-19 Does Not Constitute Direct Physical Loss

SAN FRANCISCO — Answering “no” to a certified question from the Ninth Circuit U.S. Court of Appeals, the California Supreme Court held May 23 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.”
May 24, 2024
California Jury Awards Sisters $18M In Bad Faith Suit Over Flood Damage

SAN BERNARDINO, Calif. — A California jury awarded two sisters $6 million in past noneconomic losses and $12 million in punitive damages after finding that insurers committed breach of contract and acted in bad faith in their handling of the insureds’ property damage claim arising from a 2019 flood.
May 22, 2024
Insured’s Suit Remanded For Failure To Show Adjuster Was Fraudulently Joined

OAKLAND, Calif. — Remand of an insured’s breach of contract and bad faith suit is warranted because the homeowners insurer and its adjuster failed to meet their burden of showing that the insured’s negligent misrepresentation claim against the adjuster is frivolous, a California federal judge said in granting the insured’s motion to remand.
May 17, 2024
Burden Of Proof In Gas Leak Coverage Suit Will Not Be Shifted To Insurer

LOS ANGELES — A California federal judge rejected an attempt by insureds to shift the burden of proof to an insurer in a dispute over coverage for underlying personal injury claims stemming from a gas leak at an insured facility because the insurer did not breach its duty to defend and because California public policy does not support insureds’ proposed burden-shifting principle.
May 16, 2024
California Says Insurers, Valuation Companies Conspire To ‘Lowball’ Vehicle Claims

OAKLAND, Calif. — A California district attorney on behalf of the state filed an amended complaint in state court against a group of insurance and valuation companies for allegedly violating California’s unfair competition law (UCL) and other laws for engaging in a criminal and civil conspiracy to “systematically and pervasively underpay claims” for totaled cars.
May 15, 2024
Judge Overrules Abbott’s Objections To Discovery Order In FCA Suit Over Kickbacks

SAN DIEGO — A California federal judge on May 14 overruled Abbott Laboratories’ objections and affirmed a magistrate judge’s discovery order that denied Abbott’s motion to compel production of certain documents in a suit alleging violations of the False Claims Act (FCA) and state false claims laws regarding Abbott’s alleged kickback scheme to induce hospitals and physicians to use an Abbott cardiac medical device, finding that Abbott is not entitled to discover certain documents, which are considered privileged work product.
May 15, 2024
Additional Insured Failed To Show Specific Jurisdiction Exists Over Insurer

SAN FRANCISCO — A California federal judge on May 14 granted, with leave to amend, an insurer’s motion to dismiss an additional insured’s bad faith complaint arising out of the insurer’s appointment of counsel to represent the additional insured and the insured in an arbitration proceeding in Texas because the additional insured failed to show that specific jurisdiction exists in California over the insurer.
May 14, 2024
Life Insurance Benefit Not Available Based On Failure To Prove Total Disability

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on May 13 affirmed a district court’s finding that a life insurance waiver-of-premium benefit was properly terminated because the claimant failed to show that he was totally disabled from working in any occupation as required by the life insurance plan to retain the waiver-of-premium benefit.
May 14, 2024
9th Circuit Partly Affirms, Partly Vacates Ruling In Coverage Suit Over Lost Rent

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s ruling that unpaid rent, late fees and government fines did not trigger “property damage” coverage under a commercial general liability insurance policy but vacated the lower court’s application of the policy’s leased property exclusion and remanded for consideration of the appellant’s new evidence.
May 09, 2024
Magistrate Denies Motion For Indicative Relief In FCA Suit Alleging Overcharging

SAN FRANCISCO — A California federal magistrate judge denied a relator’s motion for an indicative ruling that pursuant to the Ninth Circuit U.S. Court of Appeals’ decision in United States ex rel. Silbersher v. Valeant Pharms. Int’l, Inc., a similar False Claims Act (FCA) suit brought by the same relator, the magistrate judge should grant the relator “relief” from the judgment on appeal to the Ninth Circuit after dismissing his claims that pharmaceutical companies overcharged the federal government and states under Medicare and Medicaid.
May 08, 2024
Spinal Conditions Continued To Render Claimant Disabled, Calif. Federal Judge Says

LOS ANGELES — Following remand from the Ninth Circuit U.S. Court of Appeals, a California federal judge found that additional long-term disability (LTD) benefits are owed to a disability claimant because the medical evidence shows that the claimant’s degenerative spinal conditions continued to render him disabled following the claimant’s recovery from a cardiac procedure.
May 03, 2024
Federal Judge Finds No Jurisdiction In Construction Insurance Dispute, Remands

SAN FRANCISCO — A federal judge in California remanded to state court a construction insurance dispute brought by a contractor alleging that its insurer acted in bad faith when it refused to pay for most of an arbitration award related to a faulty roof, finding that the insurer failed to join necessary parties when removing the case to federal court.
May 03, 2024
Disability Claimant Seeks Rehearing Of Preexisting Condition Exclusion Ruling

PASADENA, Calif. — A disability claimant filed a petition for panel rehearing and rehearing en banc in the Ninth Circuit U.S. Court of Appeals, contending that rehearing is warranted because the Ninth Circuit panel’s decision that a long-term disability (LTD) policy’s preexisting condition exclusion bars coverage creates an intracircuit conflict with a prior ruling of the Ninth Circuit.
May 03, 2024
Disability Insurer Awarded More Than $11,000 In Costs In Bad Faith Benefits Suit

FRESNO, Calif. — A California federal magistrate judge awarded a disability insurer more than $11,000 in costs that the insurer incurred in successfully defending a breach of contract and bad faith suit lodged against it by an oral surgeon who stopped working to reduce the risk of contracting COVID-19 and suffering complications from the virus based on his comorbid conditions of asthma and hypertension.
May 02, 2024
Disability Insurer, Claimant Settle Dispute Over Policy’s Monthly Benefit Rider

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals entered an order staying a disability claimant’s appeal and directing the parties to file a joint status report following the disability insurer’s filing of a notice of a settlement between the parties.