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

Mealey's California Insurance

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.
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.
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.
June 18, 2025
Auto Insurer Did Not Act In Bad Faith, Judge Says In Granting Summary Judgment

FRESNO, Calif. — A bad faith suit filed against an auto insurer cannot proceed because there is no evidence from which a jury could conclude that the insurer acted in bad faith in failing to settle an assignee’s claim for injuries, a California federal judge said in granting the auto insurer’s motion for summary judgment.
June 18, 2025
Stay Granted, Trial Vacated In Captive Insurance Dispute After Settlement Offer

LOS ANGELES — A California federal judge stayed litigation and vacated a forthcoming trial date to allow time for the United States to respond to and prepare acceptance of a written offer submitted by the executive of a purported captive insurance company that the United States says would resolve all claims and counterclaims brought forth in the litigation.
June 16, 2025
Insurer Says Pollution Exclusion Bars Coverage For Silica Dust Exposure Suits

LOS ANGELES — No coverage is owed for underlying bodily injury suits filed against an insured stemming from silica dust exposure from the insured’s products because the suits are barred by the pollution exclusion contained in primary and excess policies issued to the insured, an insurer maintains in its motion for summary judgment filed in California federal court.
June 13, 2025
Calif. Panel Affirms $200K Judgment Against Life Policy Beneficiary In Fraud Row

LOS ANGELES — A California appellate court on June 12 affirmed a lower court judgment awarding a decedent’s son $35,000 for elder abuse and the decedent’s estate $165,000 for unjust enrichment against the woman the son sued alleging fraud in her making herself a beneficiary under the decedent’s $200,000 life insurance policy, finding no need for the jury to consider whether the beneficiary change was related to fraud because the damages finding in a jury question addressed the fraud presumption.
June 13, 2025
Claimant With Long COVID To Challenge LTD Benefit Denial In 9th Circuit

SAN DIEGO — A claimant who unsuccessfully sought long-term disability (LTD) benefits due to symptoms he attributed to long COVID and cardiac issues is taking his case to the Ninth Circuit U.S. Court of Appeals after a California federal judge upheld denial of his claim on de novo review.
June 12, 2025
Judge Grants Motion To Close Receivership In Dispute With Insurer In Liquidation

LOS ANGELES — A California state judge issued a minute order granting a motion filed by a rehabilitation facility’s receiver to approve a final accounting and close the facility’s receivership in a suit against the facility and related parties by a now-insolvent insurer for the facility’s alleged default on its debt to the insurer, finding the receiver’s requests “reasonable.”
June 11, 2025
Judge Adopts Recommendation To Dismiss Insureds’ Breach Of Contract, Bad Faith Suit

FRESNO, Calif. — A California federal judge granted a homeowners insurer’s motion to dismiss breach of contract and bad faith claims alleged by insureds, agreeing with a magistrate judge’s finding that the claims fail because no coverage is afforded for an underlying suit filed against the insureds stemming from the insureds’ sale of their home.
June 10, 2025
9th Circuit Sets Argument In Oral Surgeon’s Bid To Revive Disability Benefits Case

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals has scheduled oral argument for July 7 in an appeal seeking revival of an oral surgeon’s breach of contract and bad faith suit filed after he unsuccessfully sought 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.
June 06, 2025
Claimant Who Sought LTD Benefits After Termination Wins Reversal

RIVERSIDE, Calif. — In minute findings of fact and conclusions of law reversing denial of long-term disability (LTD) benefits for a claimant who has a genetic musculoskeletal disorder, received a kidney transplant and asserted that he “pushed himself to work far beyond his ability to effectively do so,” a California federal judge ruled in part that “[a] plaintiff could be disabled under the Plan without experiencing a loss of earnings and while still working continuously.”
June 06, 2025
Insurer Says Lower Court Properly Found Policies Include Aggregate Limit

SAN FRANCISCO — A district court did not err in finding that an umbrella liability insurer’s policies include an aggregate limit and cap the insured’s recovery for environmental contamination remediation costs, the insurer tells the Ninth Circuit U.S. Court of Appeals in its appellee brief.
June 05, 2025
Insurer Appeals Judgment For CGL Insurer In Suit Arising From Hotel Damages

SANTA ANA, Calif. — An insurer that issued an owner controlled consolidated insurance policy to a general contractor hired to construct a Hard Rock Hotel notified a federal court in California on June 4 that it is appealing to the Ninth Circuit U.S. Court of Appeals the lower court’s rulings in favor of a subcontractor’s commercial general liability insurer in the CGL insurer’s equitable contribution and equitable indemnification suit arising from construction defect-related damages to the hotel.
June 04, 2025
Judge Denies CEO Dismissal Bid In FCA Suit Against Lab Alleging Illegal Kickbacks

SHERMAN, Texas — A Texas federal judge denied a dismissal motion filed by the CEO of a former laboratory accused, along with other individuals and entities, of violating the federal False Claims Act (FCA) and Anti-Kickback Statute (AKS) through payment of illegal kickbacks to doctors and medical practices and fraud against government insurers by billing them for medically unnecessary tests, finding that “dismissal is not warranted.”
June 03, 2025
9th Circuit Fixes Ruling Mostly Affirming Claimant’s Victory In ERISA Row

PASADENA, Calif. — Correcting what the appellant called “an apparent typographical error” in the original May 16 unpublished memorandum disposition, the Ninth Circuit U.S. Court of Appeals on June 2 issued an order and amended ruling mostly affirming judgment against a multiemployer health plan in a coverage denial case; the change did not affect the key holding that the appellee hadn’t been given sufficient notice that meeting the plan’s “definition of ‘medical necessity’ required attempting lower levels of care . . . before residential treatment.”
June 03, 2025
Car Wash’s Breach Of Contract Suit Against Insurer Is Untimely, 9th Circuit Affirms

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower court’s grant of summary judgment in favor of a businessowners insurer in a car wash operator insured’s breach of contract and bad faith lawsuit seeking coverage for two theft claims, agreeing with the lower court that the lawsuit was untimely as a matter of law.
June 03, 2025
No Coverage Owed To Insured For Contamination Cleanup Costs, Insurer Says

OAKLAND, Calif. — An insured is not entitled to coverage for environmental contamination cleanup costs under a premises environmental policy because the insured voluntarily incurred the cleanup costs rather than being ordered by a government agency to clean up the contamination as required by the policy, an insurer says in a complaint filed in California federal court.
May 30, 2025
Issues Of Fact Exist In Life Insurance Dispute, California Federal Judge Says

SAN JOSE, Calif. — A California federal judge denied a life insurer and a beneficiary’s motions for summary judgment after determining that genuine issues of material fact exist as to whether a misrepresentation regarding the insured’s use of tobacco was made on the policy application and whether the life insurer acted in good faith in handling the beneficiary’s claim.
May 30, 2025
Judge Grants Dismissal Motion In Coverage Row Related To Social Media Addiction MDL

OAKLAND, Calif. — A California federal judge granted insurers’ motion to dismiss a breach of contract suit filed against them by Meta Platforms Inc. and Instagram LLC over the insurers’ purported duty to defend and indemnify the insureds in a product liability multidistrict ligation regarding the alleged addictive qualities for adolescents of several of the largest social media platforms, finding that dismissal in favor of a suit in Delaware is appropriate under the first-to-file rule.
May 21, 2025
5th Case Added To Consolidated Litigation Over Fronting Deal Agreements, Commissions

FORT WORTH, Texas — A fifth case has been added to consolidated litigation between reinsurers and National Transportation Associates Inc. (NTA) that centers on the reinsurers’ claims of inflated provisional commissions and breach of various agreements, with the latest allegations involving a dispute over whether contractual mandates issued by California and other states render the commission structure unenforceable.
May 20, 2025
9th Circuit Mostly Affirms Claimant’s Victory In ERISA Coverage Lawsuit

PASADENA, Calif. — In an unpublished memorandum disposition mostly affirming judgment against a multiemployer health plan in a coverage denial case, the Ninth Circuit U.S. Court of Appeals said in part that the appellee had been given “inadequate notice” that didn’t sufficiently explain that meeting the plan’s “definition of ‘medical necessity’ required attempting lower levels of care . . . before residential treatment.”
May 20, 2025
Insured Files Amended Complaint In Silica Dust Exposure Coverage Suit

LOS ANGELES — An insured filed an amended complaint in California federal court to provide an updated list of the underlying bodily injury suits filed against it stemming from silica dust exposure from the insured’s products and reiterating its claims for breach of contract, bad faith and declaratory judgment against its insurer.
May 20, 2025
Supreme Court Rejects Insurer’s Challenge To Ruling In Favor Of Tribal Court Judges

WASHINGTON, D.C. — The U.S. Supreme Court on May 19 declined an insurer’s invitation to review a Ninth Circuit U.S. Court of Appeals’ holding that a tribal court has subject matter jurisdiction over it in a dispute over the tribe’s claims for business interruption losses at its casino caused by the COVID-19 pandemic, refusing to review the appeals court’s ruling that affirmed a lower federal court’s summary judgment ruling in favor of two tribal court judges on the alternative ground that the insurance policy at issue satisfies Montana v. United States’ consensual-relationship exception.
May 15, 2025
Panel Reverses Bad Faith Ruling, Says Title Insurer Failed To Act In Good Faith

SAN JOSE, Calif. — The California Sixth District Court of Appeal reversed a trial court’s ruling in favor of a title insurer on an insured’s bad faith claim after determining that the insurer breached its implied covenant of good faith and fair dealing when it refused to defend the insured because the insurer failed to consider all of the available facts related to the insured’s claim before denying a defense.