Mealey's California Insurance
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July 15, 2025
Benefits To Be Reinstated For Claimant In Migraine Disability Lawsuit
SAN FRANCISCO — On de novo review of the termination of long-term disability (LTD) benefits for an employment law firm partner diagnosed with vestibular migraine and tinnitus, a California federal judge found in favor of the claimant and directed that the benefits be retroactively reinstated.
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July 15, 2025
9th Circuit Revives Breach Claim In Disability Row Involving COVID Risk
SAN FRANCISCO — In an unpublished July 14 memorandum disposition, the Ninth Circuit U.S. Court of Appeals revived a breach of contract claim, but not a bad faith claim, in a suit an oral surgeon filed after unsuccessfully seeking disability benefits on the grounds that his comorbid conditions and inability to access recommended personal protective equipment (PPE) made it necessary to close his practice early in the COVID-19 pandemic.
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July 15, 2025
‘Sheer Number’ Of AI-Faked Cites Noted In Defense Fee Declaration In Disability Case
SANTA ANA, Calif. — In a July 14 defense fee declaration submitted at the direction of a California federal judge who imposed sanctions on a plaintiffs’ attorney for faked citations attributed to artificial intelligence, a disability insurer’s attorney said, “The sheer number of non-existent cases . . . was exponentially more than we have identified in any other cases discussing AI-generated and/or hallucinated cases.”
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July 14, 2025
Judge: Roof Work Excluded From Insurance Policy, Leaving No Duty Defend
SANTA ANA, Calif. — A California state court judge granted summary judgment to an insurer in a roof construction defect case, agreeing that the work at issue is excluded under terms of the insurance agreement and that the insurer has no duty to defend or indemnify the general contractor.
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July 14, 2025
9th Circuit Affirms Dismissal Of Driver’s Claim For Larger COVID-19 Refunds
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed the dismissal of a driver’s class action against her insurer, GEICO, for violating California’s unfair competition law (UCL) by providing drivers an insufficient rebate on premiums after the COVID-19 pandemic, finding that the insurer was protected by the “‘safe harbor’” doctrine as the state insurance commissioner approved its rebate amounts.
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July 11, 2025
Contractor’s Insurer Must Defend Developers For Water, Other Damages
LOS ANGELES — A contractor’s commercial general liability insurer agreed to defend the developers of a residential development as additional insureds, and the homeowners’ subsequent filing of an action alleging that the contractor’s improper installation of concrete flatwork and foundation systems caused water intrusion and other damage to their homes triggered the insurer’s duty to defend, a federal judge in California ruled.
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July 10, 2025
Order Vacated, Case Dismissed In LTD Benefits Row Involving COVID Risk
SAN FRANCISCO — After vacating an August 2024 order and judgment that were in favor of a pediatrician who sought long-term disability (LTD) benefits based on her high risk of exposure to COVID-19, a California federal judge dismissed the case with prejudice pursuant to the parties’ stipulation.
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July 09, 2025
California Federal Magistrate Rules Claimant Eligible For 2 Years Of LTD Benefits
SAN FRANCISCO — In a decision that involved weighing the opinions of numerous doctors, a California federal magistrate judge ruled that a claimant who held a “demanding managerial” role before saying that anxiety, depression and atypical autism made her unable to work is entitled to long-term disability (LTD) benefits “for the two-year mental disorder benefit period” and is eligible to seek attorney fees.
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July 09, 2025
Claims Against Long-Term Care Insurer Fail But Insured Permitted To Amend Complaint
FRESNO, Calif. — A California federal judge granted a long-term care insurer’s motion to dismiss breach of contract, bad faith and financial elder abuse claims without prejudice after determining that the insured failed to specifically show how the long-term care insurer breached its contract when it denied the insured’s claim for benefits under the policy.
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July 09, 2025
Auto Insurer Failed To Show Handling Of UIM Claim Was Reasonable, Judge Says
SAN DIEGO — A California federal judge refused to dismiss an insured’s bad faith claim against an auto insurer after determining that the insurer failed to show that it acted reasonably in handling the insured’s claim for underinsured motorist (UIM) benefits.
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July 08, 2025
California Panel Affirms Exclusions Bar Coverage For Subcontractor’s Faulty Work
LOS ANGELES — Rejecting arguments by a developer and general contractor that a trial court erred by denying them a jury trial and by construing two faulty workmanship exclusions in a subcontractor’s businessowners insurance policy too narrowly, a California appellate court panel affirmed the trial court’s judgment in favor of the insurer in the developer and contractor’s suit to recover more than $1 million in damages and delay costs.
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July 07, 2025
Judge Grants Contractors’ Demurrer As To 2 Claims In Hurricane Hilary Coverage Suit
LOS ANGELES — A California judge granted contractors’ demurrer as to insureds’ negligent and concealment claims in a coverage dispute arising from Hurricane Hilary damage, agreeing with the contractors that because the contractors were hired by the insurer to inspect the insureds’ roof, neither of them owed a duty to the insureds.
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July 03, 2025
Judge: Reinsurer Failed To Meet Burden Of Proof In Motion For Partial Judgment
FORT WORTH, Texas — A Texas federal judge denied a reinsurer’s motion for partial judgment on the pleadings for claims brought by National Transportation Associates Inc. (NTA) concerning a dispute over whether contractual mandates issued by California and other states render a commission payment structure unenforceable; the case is part of broader consolidated litigation among reinsurers and NTA that centers on the reinsurers’ claims of inflated provisional commissions and breach of various agreements.
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July 03, 2025
California Federal Judge Sanctions Lawyer For AI-Faked Cites In Disability Case
SANTA ANA, Calif. — A California federal judge imposed sanctions including a $500 payment on a plaintiff’s attorney who told the court that he “failed to scrutinize and oversee the preparation of” memoranda “filed with erroneous case citations that were invented by AI”; the breach of contract suit over termination of total disability benefits is headed toward a jury trial after the judge last month granted summary judgment for the insurer on a bad faith claim.
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July 01, 2025
California Appellate Court Lets Rehab Plan For Workers’ Comp Insurer Stand
SAN FRANCISCO — In an unpublished opinion, the First District California Court of Appeal upheld a nonconsensual rehabilitation plan for a workers’ compensation insurance carrier; the plan was approved as part of conservation proceedings brought by California’s insurance regulator and includes options to resolve dozens of reinsurance participation agreement (RPA) lawsuits.
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July 01, 2025
Insurer Says It Owed No Duty To Defend Water Contamination Suits
LOS ANGELES — An insurer maintains in opposition to an insured’s motion for judgment on the pleadings that it owed no duty to defend the insured against two water contamination complaints filed by the Los Angeles Regional Water Quality Control Board because the complaints only sought to impose penalties against the insured and did not seek damages as required by the policy.
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June 30, 2025
California Insureds Allege Insurers Underinsured Homes Destroyed In Wildfires
LOS ANGELES — In two separate complaints filed in Los Angeles County Superior Court, insureds whose homes were destroyed in the January wildfires allege that their homeowners insurers underinsured their homes, leaving the homeowners unable to rebuild their destroyed homes.
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June 27, 2025
California Judge Denies Insured’s Motion For Summary Adjudication As To UCL Claim
LOS ANGELES — A California judge granted an insured’s motion for summary adjudication as to his declaratory relief claim in a lawsuit alleging that the California Fair Plan Association (CFP) issued property insurance policies with fire coverage that is unlawfully restrictive as to smoke damage claims but denied the insured’s motion as to his unfair competition law (UCL) claim, finding that he failed to satisfy his burden to establish standing to bring the UCL claim.
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June 27, 2025
Breach Of Contract, Bad Faith Claims To Proceed Against Life Insurer, Judge Says
FRESNO, Calif. — A life insurer’s filing of a third-party interpleader complaint does not absolve it of liability for a beneficiary’s breach of contract and bad faith claims based on the life insurer’s delay in handling the beneficiary’s claim after the insured’s death, a California federal judge said in partially denying the life insurer’s motion for summary judgment.
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June 26, 2025
California Federal Judge Gives Disability Insurers Win In Breach, Bad Faith Row
LOS ANGELES — Granting summary judgment for insurers in an individual disability insurance (IDI) dispute, a California federal judge ruled in part that insurers were prejudiced by late notice of the claim.
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June 26, 2025
Insurer Was Not Contractually Bound To Provide COVID-19 Premium Relief, Judge Says
SAN DIEGO — A California federal judge on June 25 granted an auto insurer’s motion for summary judgment on a claim alleging that the insurer breached the implied covenant of good faith and fair dealing by not sufficiently refunding policyholders a percentage of premium payments made during the COVID-19 pandemic because the insurer was not contractually bound to refund any premiums under its auto policies.
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June 25, 2025
In ‘Close Call’ Case, Judge Rules For LTD Claimant In Any-Occupation Dispute
SACRAMENTO, Calif. — In a decision he described as “a very close call,” a California federal judge ruled on de novo review that a claimant was disabled from any occupation under the terms of a long-term disability (LTD) plan; among other things, the judge resolved opposed requests for judicial notice and explained his findings that the opinions of several doctors should be given little to no weight but the claimant’s “reports of pain are entitled to some weight.”
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June 25, 2025
Judge: Housing Developer Didn’t Prove Insurer Waived Consent To Claims Procedures
SAN FRANCISCO — A federal judge in California denied a housing developer’s motion for partial summary judgment in its case against its excess insurer for breach of contract after homeowners reported construction defects, finding that the developer didn’t provide sufficient evidence that the insurer waived its right to consent to mediation proceedings the developer conducted with the homeowners.
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June 24, 2025
Judge: D&O Coverage Restored By Dilution Claims Exception To Policy Exclusion
SAN DIEGO — A federal judge in California on June 23 held that a business and management indemnity insurer has a duty to defend and indemnify its insured against an underlying unfair dilution lawsuit because the “dilution claims exception” to the “insured vs. insured” exclusion restores directors and officers liability coverage, granting the insured’s motion for summary judgment and denying the insurer’s motion for judgment on the pleadings.
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June 19, 2025
Insureds’ Breach Of Contract, Bad Faith Suit Remanded To California State Court
FRESNO, Calif. — A breach of contract and bad faith suit filed against a homeowners insurer must be remanded to state court because the insurer failed to meet its burden of proving by a preponderance of the evidence that the amount in controversy exceeds the federal jurisdictional minimum, a California federal judge said, noting that the insurer specifically failed to provide a reasonable estimate of the amount of attorney fees that could potentially be awarded to the insureds.