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Preview: LexisNexis® Mealey's™ California Insurance Legal News

LexisNexis® Mealey's™ California Insurance Legal News



Headline California Insurance Legal News from LexisNexis®



 



Panel: Joint Reinsurance Association Is Required To Pay Costs To Repair Home
SAN FRANCISCO - An insurance industry placement facility and joint reinsurance association is obligated by California Insurance Code Section 2051 to pay the costs to repair an insured's home, less depreciation, even if the amount exceeds the fair market value of her home, a California appeals panel ruled May 26 (California Fair Plan Association v. Marlene Garnes, No. A143190, Calif. App., 1st Dist., Div. 2, 2017 Cal. App. LEXIS 479).



9th Circuit Says Disability Claimant Failed To Provide Objective Medical Findings
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeal on May 11 affirmed a district court's ruling after determining that a long-term disability (LTD) claim was properly denied because the claimant failed to provide any objective medical findings in support of the claim for benefits (Tricia Z. Cooper v. Intel Corporation Long Term Disability Plan, No. 14-35745, 9th Cir., 2017 U.S. App. LEXIS 8380).



California Federal Judge Orders Parties To File Joint Proposed Judgment On Attorney Fees
SAN FRANCISCO - A California federal judge on May 15 ordered a disability claimant and a disability insurer to submit a joint proposed judgment on the claimant's motion for attorney fees after finding that the claimant is not entitled to collect attorney fees for all the tasks completed by the claimant's attorney (Marlon Montoya v. Reliance Standard Life Insurance Co., No. 14-2740, N.D. Calif.; 2017 U.S. Dist. LEXIS 73781).



9th Circuit Panel Says Wrong Standard Of Review Applied In Disability Suit
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on May 11 reversed a district court's ruling in favor of a disability insurer after determining that the district court applied the wrong standard of review pursuant to California law (Talana Orzechowski v. The Boeing Company Non-Union Long-Term Disability Plan, et al., No. 14-55919, 9th Cir., 2017 U.S. App. LEXIS 8348).



California Federal Judge: Disability Insurer Failed To Properly Weigh All Evidence
SAN JOSE, Calif. - A California federal judge on June 5 reversed a disability insurer's termination of long-term disability (LTD) benefits after determining that the insurer failed to properly consider the reports of the claimant's treating physicians when it found that the claimant was not disabled from the duties of her regular occupation (Lisa Gallegos v. The Prudential Insurance Company of America, No. 16-1268, N.D. Calif., 2017 U.S. Dist. LEXIS 86123).



9th Circuit Affirms Ruling That Disability Claimant Waived Right To Contest Denial
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on May 22 affirmed a district court's finding that a disability claimant waived his rights to contest the termination of his disability benefits because the claimant signed a waiver of all rights, including his rights to contest the termination of his disability claim, as part of a settlement with his former employer for wrongful termination claims (Thomas A. Gonda v. The Permanente Medical Group Inc., et al., No. 15-16484, 9th Cir., 2017 U.S. App. LEXIS 8888).



California Federal Judge Says Evidence Supports Finding That Claimant Is Disabled
SAN FRANCISCO - A California federal judge on May 24 granted a disability claimant's motion for judgment on the administrative record after determining that the evidence does not support the disability insurer's termination of benefits after paying the claimant benefits for almost eight years (Nancy Hart v. Unum Life Insurance Company of America, No. 15-5392, N.D. Calif., 2017 U.S. Dist. LEXIS 79970).



Judge Rejects 2 Equitable Apportionment Methods In Dispute Over 'Moonlight Fire'
SACRAMENTO, Calif. - A California federal judge on May 22 found that neither the "policy limits" approach nor the "relative fault" analysis is an appropriate equitable apportionment method in a coverage dispute arising from damage caused by the September 2007 "Moonlight Fire" in California (American States Insurance Co. v. Insurance Company of the State of Pennsylvania, No. 12-01489, E.D. Calif., 2017 U.S. Dist. LEXIS 79103).



Appeals Court Says Evidentiary Hearing Needed In Insurance Fraud Suit
LOS ANGELES - An evidentiary hearing should have been held to determine whether a California Highway Patrol (CHP) officer had sufficient information in 2010 to begin an investigation into whether a man committed insurance fraud by further damaging a tow truck, a California appeals panel ruled June 12 (Mark Jeffrey Tornow v. Superior Court of Los Angeles County, et al., No. B271895, Calif. App., 2nd Dist., 7th Div., 2017 Cal. App. Unpub LEXIS 4020).



Judge Refuses To Dismiss Insurers' Class Claims For Damages After Subrogation
LOS ANGELES - A California federal judge on May 24 denied a motion filed by the makers of a defective dehumidifier that caused fires to dismiss class action claims for violation of California's unfair competition law (UCL) and negligence and other claims and ordered them to show cause as to why they should not be sanctioned for misrepresenting the law as it pertains to insurer's rights to subrogate the rights of insureds (Homesite Insurance Company of the Midwest, et al. v. Gree USA Inc., et al., No. 2:16-cv-06769, C.D. Calif., 2017 U.S. Dist. LEXIS 79809).



Federal Magistrate Judge Recommends Default Judgment Be Entered Against Insured
SAN JOSE, Calif. - A California federal magistrate judge on May 3 recommended that a default judgment be entered against an insured because the insured failed to response to its insurers' complaint seeking a declaration that no coverage is owed for an underlying construction defects suit and because no coverage exists for the underlying suit based on the insured's misrepresentation in a policy application (Associated Industries Insurance Co. Inc., et al. v. Detail Construction & Waterproofing, Inc., No. 16-6042, N.D. Calif., 2017 U.S. Dist. LEXIS 67722).



No Jurisdiction Under CAFA's 'Mass Action' Provision, Judge Rules In Remanding
RIVERSIDE, Calif. - A California federal judge on May 3 granted insurers' motion to remand a lawsuit arising from claims over defective water supply lines, finding that the 26 insurers, acting as subrogees of 145 insureds, are the only plaintiffs and therefore fail to satisfy the "mass action" provision under the Class Action Fairness Act (CAFA) to retain jurisdiction (Liberty Mutual Fire Insurance Co. v. EZ-Flo International Inc., No. 17-228, C.D. Calif., 2017 U.S. Dist. LEXIS 67761).



Abuse Exclusion Bars Coverage For Wrongful Death Verdict, 9th Circuit Affirms
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on May 17 rejected a doctor and his wife's argument that they were entitled to coverage for an adverse verdict in a wrongful death suit because their homeowners insurance policy's abuse exclusion was not applicable, affirming a lower federal court's summary judgment ruling in favor of the insurer (American Family Mutual Insurance Co. v. Carlos F. Verdugo, M.D., et al., Nos. 16-15687 and 16-15717, 9th Cir., 2017 U.S. App. LEXIS 8828).



Production Company Owed No Further Defense For Suits Over Fatal Train Accident
LOS ANGELES - A California federal judge on May 23 granted an insurer's motion for summary judgment on the remaining claims in a production company insured's lawsuit seeking coverage for damages caused by a train accident that killed a camera technician and injured the film's director and several crew members (Film Allman LLC v. New York Marine and General Insurance Co., Inc., No 14-7069, C.D. Calif., 2017 U.S. Dist. LEXIS 79139).



Judge Vacates 3 Demands Of Reimbursement Against CIGA For Workers' Claims
LOS ANGELES - California Insurance Guarantee Association (CIGA) is entitled to an order vacating and setting aside three reimbursement demands of $119,122 made under workers' compensation insurance policies, a California federal judge ruled May 3 (California Insurance Guarantee Association v. Thomas E. Price, Secretary of Health and Human Services, et al., No. 15-cv-01113, C.D. Calif., 2017 U.S. Dist. LEXIS 67589).



9th Circuit: Court Properly Dismissed Complaint Without Leave To Amend
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on June 13 affirmed a lower federal court's dismissal of an insured's lawsuit against its partners management liability reimbursement insurer, finding that the lower court did not abuse its discretion in denying the insured leave to amend its complaint (Cove Partners, LLC v. XL Specialty Insurance Company, No. 16-55315, 9th Cir., 2017 U.S. App. LEXIS 10504).



Insurer Was Not Entitled To Rescind Policy, California Panel Says In Reversal
SAN FRANCISCO - A California appeals panel on June 12 reversed a lower court's finding that an insurer was entitled to rescind an "Owners, Landlords & Tenants Liability Coverage" insurance policy, finding that the insurer failed to satisfy its burden of showing that the insured made material misrepresentations on the insurance application (Victor Duarte v. Pacific Specialty Insurance Co., No. A143828, Calif. App., 1st Dist., Div. 2).



California Panel Reverses Ruling In Lawsuit Alleging Claim Under Elder Abuse Act
SAN FRANCISCO - A California appeals panel held June 2 that a first amended complaint sufficiently alleges "deprivation" of "the property of an elder" pursuant to the Elder Abuse and Dependent Adult Civil Protection Act, 42 U.S. Code Section 3058(i), 42 U.S.C. 3058i, reversing and remanding a lower court (Frederick Mahan, et al. v. Charles W. Chan Insurance Agency, Inc., et al., No. A147236. Calif. App., 1st Dist., 2017 Cal. App. LEXIS 507).



Magistrate Dismisses Yahoo's Suit Seeking Coverage For TCPA Class Action Claims
SAN JOSE, Calif. - A California federal magistrate on June 2 granted a commercial general liability insurer's motion to dismiss Yahoo! Inc.'s breach of contract lawsuit seeking coverage for underlying class action allegations that it violated the Telephone Consumer Protection Act (TCPA) by transmitting unsolicited text messages (Yahoo! Inc. v. National Union Fire Insurance Company of Pittsburgh, Pa., No. 17-00447, N.D. Calif., 2017 U.S. Dist. LEXIS 85200).



9th Circuit Majority Vacates Ruling In Suit Seeking Coverage Under Surety Bond
PASADENA, Calif. - A majority of the Ninth Circuit U.S. Court of Appeals on June 2 vacated and remanded a lower federal court's ruling in favor of an insurer in a suit seeking to recover $305,000 under a surety bond (Nacimiento Water Company, Inc. v. International Fidelity Insurance Co., Nos. 15-56323 and No. 16-55311, 9th Cir., 2017 U.S. App. LEXIS 9810).



Investors: District Court's Ruling On Insurance Policy Limit Was In Error
SAN FRANCISCO - A company that contends that a federal judge in Montana wrongly dismissed its case against an insurance company recently filed an appeal brief in the Ninth Circuit U.S. Court of Appeals, arguing that the judge erred in determining that interrelated claims constituted a legal issue rather than a factual one (Sauerbier Ranches Inc., et al. v. Catlin Specialty Insurance Company, No. 16-35280, 9th Cir.).



California High Court Is Set To Rule On Coverage For Molestation Suit
SAN FRANCISCO - An employer in an April 10 reply brief urges the California Supreme Court to find that claims against an employer for negligent hiring, retention and supervision of its employee qualify as an "occurrence" under the employer's commercial general liability (CGL) policy and that an "accident" can include unintended consequences of the employer's intentional acts (Liberty Surplus Insurance Corporation, et al. v. Ledesma and Meyer Construction Company, Inc., et al., No. S236765, Calif. Sup.).



9th Circuit Says Damage Is Not Continuation Of Assignee's Original Damage
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on April 20 determined that a district court erred in granting summary judgment in favor of two insurers because it was reasonable for the assignees of the insured to assume that the damage sustained as the result of an insured's negligent repair is not a continuation of the assignee's original damage (Adrianus Alkemade and Rachelle Alkemade v. Quanta Indemnity Co. and General Fidelity Insurance Co., No. 14-35605, 9th Cir., 2017 U.S. App. LEXIS 6896).



Federal Judge Stays Defects Coverage Suit Until Underlying Suits Are Resolved
SAN FRANCISCO - A California federal judge on April 26 denied an insurer's motion for summary judgment and stayed the insurer's suit until two underlying suits alleging claims related to the insured's alleged negligent workmanship are resolved because there are multiple issues of material dispute that need to be resolved before a coverage decision can be made (Tokio Marine Specialty Insurance Co. v. Thompson Brooks Inc., et al., No. 17-514, N.D. Calif., 2017 U.S. Dist. LEXIS 63542).



Removal Of Construction Defects Suit Not Proper, California Federal Judge Says
LOS ANGELES - A California federal judge on April 21 granted an insurer's motion to remand after determining that removal was improper because complete diversity of citizenship may not exist as there is a possibility that several defendants in the construction defects suit, originally filed in California state court, are citizens of California (Ironshore Specialty Insurance Co. v. Maison Reeves Homeowners Association, et al., No. 17-1704, C.D. Calif., 2017 U.S. Dist. LEXIS 61241).



Judge Bars Testimony In Reinsurance Risk Company's Breach Of Contract Case
SAN FRANCISCO - A California federal judge excluded on May 10 lay opinion testimony by a reinsurance risk management company's chief financial officer in a breach of contract lawsuit about funds that were improperly withdrawn from bank accounts (Les Fields/C.C.H.I. Insurance Services v. Stuart M. Hines, et al., No. 15-03728, N.D. Calif., 2017 U.S. Dist. LEXIS 71620).



Federal Judge Remands Claim To Consider If Claimant Was Disabled From Any Occupation
LOS ANGELES - A California federal judge on April 12 remanded a disability claim to the plan administrator to determine whether the disability claimant was disabled under the plan's "any occupation" standard (Bertha Campos v. Reliance Standard Life Insurance Co., No. 15-8304, C.D. Calif., 2017 U.S. Dist. LEXIS 56185).



Disability Claimant Owed Benefits Under Own-Occupation Standard, Federal Judge Says
SAN FRANCISCO - Because a disability claimant submitted substantial evidence proving that she was disabled from her own occupation, the claimant is owed retroactive disability benefits for the 24-month period of disability under the own-occupation standard, a California federal judge said April 11 (Cathleen Murphy v. California Physicians Service, et al., No. 14-2581, N.D. Calif., 2017 U.S. Dist. LEXIS 55431).



Procedural Violation Does Not Justify Award Of Disability Benefits, 9th Circuit Says
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on April 4 vacated and remanded a district court's ruling in a disability benefits suit after determining that the disability insurer's failure to comply with procedural requirements does not, on its own, justify an award of benefits in favor of the claimant (Gregory Smith v. Reliance Standard Life Insurance Co., Nos. 16-15319, No. 16-15413, 9th Cir., 2017 U.S. App. LEXIS 5835).



California Appeals Panel Affirms Insurer's Restitution Award In Fraud Suit
SAN DIEGO - An insurer is entitled to $37,000 in restitution from a man who pleaded guilty to misrepresenting to the company that nurses he sent to work at skilled-nursing facilities were computer programmers to obtain a lower workers' compensation policy premium, a California appeals panel ruled March 22 in affirming the man's conviction (People v. John Paul Riddles, No. D069419, Calif. App., 4th Dist., 1st Div., 2017 Calif. App. LEXIS 259).



Prior Knowledge, Prior Litigation Exclusions Bar Coverage, 9th Circuit Affirms
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on April 28 affirmed a lower federal court's finding that a business and management insurance policy's prior knowledge and prior litigation exclusions bars coverage for an underlying lawsuit against management insureds (Douglas Woo, et al. v. Scottsdale Insurance Co., No. 14-56992, 9th Cir., 2017 U.S. App. LEXIS 7616).



Judge Says Conservatorship Of Insolvent Insurer Is Futile, Orders Liquidation
SAN FRANCISCO - A California judge on March 30 ordered the end of the conservatorship of an insolvent insurer and the beginning of a liquidation proceeding (Dave Jones, Insurance Commissioner of the State of California v. CastlePoint National Insurance Company, and DOES 1-50, No. CPF-16-515183, Calif. Super., San Francisco Co.).



Judge Approves Early Access Distributions To Insurance Guarantors
LOS ANGELES - A California judge on April 5 authorized the liquidator of an insolvent insurer to pay $5 million in early access distributions to states' insurance guaranty associations that have been paying claims brought by the insolvent insurer's policyholders (Insurance Commissioner of the State of California v. SeeChange Health Insurance Company, No. BS152302, Calif. Super., Los Angeles Co.).



Insurer Owes Insured For Prejudgment Interest, Some Attorney Fees, 9th Circuit Says
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on April 27 ruled that a business liability insurer has a duty to indemnify its insured for prejudgment interest on underlying damages for breach of contract and underlying attorney fees and costs attributable to California Labor Code claims brought by a former employee, reversing and vacating in part and remanding for further proceedings (Michael Feiz Medical Corp. v. Scottsdale Insurance Co., No. 15-56652, 9th Cir., 2017 U.S. App. LEXIS 7495).



Investment Solicitation Falls Outside Policy's Definition Of 'Professional Services'
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on April 25 found that an investment solicitation by an insured fell outside a professional liability insurance policy's definition of covered "professional services," affirming a lower court's summary judgment ruling in favor of the insurer (Continental Casualty Co. v. Kool Radiators Inc., No. 15-16023, 9th Cir.).



9th Circuit Asked To Decide Whether Summary Judgment Was Proper In Bad Faith Suit
SAN FRANCISCO - Parties in an insurance dispute asked the Ninth Circuit U.S. Court of Appeals recently to determine whether a federal district court erred in granting an insurer's motion for summary judgment on claims that it breached its duty to defend and acted in bad faith in denying coverage under an indemnity insurance policy (Sunrise Specialty Co. Inc., et al. v. Scottsdale Insurance Co., No. 16-16856, 9th Cir.).



California Appellate Panel Affirms Dismissal Of Bad Faith Suit As Time-Barred
LOS ANGELES - A state trial court's dismissal of an insured's breach of contract and bad faith claims in a homeowners insurance dispute was proper because the insured's claims were filed after the claims' one-year statute of limitations had run, a California appellate panel ruled in affirming on May 12 (Heather A. Smillie v. State Farm General Insurance Co., No. B268353, Calif. App., 2nd Dist., Div. 8, 2017 Calif. App. Unpub. LEXIS 3252).



Insured Waived Appeal Of Dismissal Of Unfair Competition Claim, 9th Circuit Says
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on April 25 affirmed a lower federal court's ruling in favor of a homeowners insurer in its insured's lawsuit alleging violations under the Fair Credit Reporting Act (FCRA) and California's unfair competition law (UCL) (Kamlesh Banga v. Allstate Insurance Co., No. 14-17147, 9th Cir., 2017 U.S. App. LEXIS 7284).



Business Pursuits Exclusion Bars Coverage For Injury, 9th Circuit Affirms
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on April 20 affirmed a lower federal court's ruling in favor of an insurer in a coverage dispute arising from an underlying injury claim by a day laborer (Barbara Kellerer v. Allied Property and Casualty Insurance Co., No. 15-56653, 9th Cir., 2017 U.S. App. LEXIS 6903).



California Federal Judge Allows Counterclaims In Sewage Spill Coverage Suit
LOS ANGELES - A California federal judge on May 4 partially granted a motion to assert breach of contract and bad faith counterclaims against an insurer in a coverage dispute arising out of a sewage spill after determining that the insurer would not be prejudiced if the counterclaims were asserted by the defendants (Travelers Property Casualty Company of America v. Mountain Movers Engineering Contactors Inc., No. 16-2127, S.D. Calif.; 2017 U.S. Dist. LEXIS 68575).



Judge Grants Insureds' Motion To Stay Professional Liability Coverage Dispute
SAN DIEGO - A California federal judge on May 5 granted insureds' motion to stay a professional liability coverage dispute pending resolution of an underlying lawsuit alleging that they committed fraudulent conduct in managing a 40-unit mixed-use condominium complex in San Diego (Admiral Insurance Co. v. Urban Housing Partners, Inc., et al., No.: 16-2720, S.D. Calif., 2017 U.S. Dist. LEXIS 69303).



9th Circuit Partly Reverses Ruling In Coverage Dispute Over Intellectual Property
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on May 9 affirmed in part, reversed in part and remanded a coverage dispute arising from an underlying lawsuit alleging that insureds breached an intellectual property agreement and committed trade libel and tortious inducement to breach of contract (The Burlington Insurance Co. v. Minadora Holdings, LLC, et al., Nos. 15-55702 and 15-56657, 9th Cir., 2017 U.S. App. LEXIS 8232).



Insurer Says No Defense Owed For Suit Alleging Mattresses Emitted Chemical Odor
SAN FRANCISCO - An insurer has no duty to defend an underlying consumer class action lawsuit alleging that an insured's mattresses were defective because the underlying suit alleges only intentional conduct on the part of the insured and does not allege an accident as required by the policy at issue, the insurer maintains in an April 14 reply brief filed in the Ninth Circuit U.S. Court of Appeals (Hartford Fire Insurance Co. v. Tempur-Sealy International Inc., et al., No. 16-16056, 9th Cir.).



California Federal Judge Tosses Intentional Infliction Of Emotional Distress Claims
SACRAMENTO, Calif. - A California federal judge on April 20 dismissed with prejudice an elderly man's claims of intentional infliction of emotional distress (IIED) against Mutual of Omaha because the man has not identified "any extreme and outrageous conduct" by the defendant (Donald Mann v. Mutual of Omaha, et al., No. 16-2560, E.D. Calif., 2017 U.S. Dist. LEXIS 60579).



Appeals Panel Says Policy Limits Were Exhausted, No Further Duty To Defend Exists
LOS ANGELES - The Second District California Court of Appeal on May 18 reversed a trial court's judgment in favor of an insured in a silica coverage case after determining that the insured released its right to assert any bad faith claims against the insurer and after finding that the insurer has no further duty to defend the insured because the insurer's policy limits were exhausted in 2013 (Truck Insurance Exchange v. Moldex Metric Inc., et al., No. B272378, Calif. App., 2nd Dist., 2017 Cal. App. Unpub. LEXIS 3485).



9th Circuit: False Patent Marking Claim Did Not Trigger Advertising Injury Coverage
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on March 31 affirmed that an insurance policy's advertising injury provision did not cover a false patent marking claim that contributed to a $2,951,024 judgment against an insured (Sei Y. Kim v. Truck Insurance Exchange, et al., No. 15-56486, 9th Cir., 2017 U.S. App. LEXIS 5631).



9th Circuit Affirms $6.1M Judgment In Favor Of Insured In Dispute With Excess Insurer
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on March 21 affirmed a lower federal court's $6,080,568 judgment in favor of an insured in a breach of contract and bad faith lawsuit against its excess general liability insurer arising from an underlying patent infringement dispute (Teleflex Medical Incorporated v. National Union Fire Insurance Company of Pittsburgh, Pa., No. 14-56366, 9th Cir., 2017 U.S. App. LEXIS 4996).



9th Circuit Dismisses Appeal In Coverage Dispute Over Trademark Claims
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on March 21 dismissed an insured's appeal in an advertising injury coverage dispute after a lower federal court determined on remand that it lacked subject matter jurisdiction over the case (Vogue International, LLC, d.b.a. Vogue International v. Hartford Casualty Insurance Co., No. 14-56394, 9th Cir., 2017 U.S. App. LEXIS 5011).



Judge: Coverage For Negligence In Performing Insurance Services Was Not Triggered
LOS ANGELES - A California federal judge on March 17 dismissed without prejudice a breach of contract and bad faith lawsuit against a professional liability insurer in a coverage dispute arising from the insured's alleged breach of a loan agreement (GemCap Lending, LLC v. Scottsdale Indemnity Co., et al., No. 15-09942, C.D. Calif., 2017 U.S. Dist. LEXIS 38931).



California Federal Judge: Policies Cannot Be Stacked; Insured Cannot Recover $27M
RIVERSIDE, Calif. - A noncumulation clause included in three umbrella policies operates as an anti-stacking provision, preventing the insured from stacking the three policies' $9 million limits to cover costs for a landfill cleanup, a California federal judge said March 8 (The Insurance Company of the State of Pennsylvania v. County of San Bernardino, No. 16-0128, C.D. Calif., 2017 U.S. Dist. LEXIS 45031).



Federal Judge Says Insurer Is Entitled To Reimbursement Of Costs Paid Under Deductible
SAN FRANCISCO - An insurer involved in an environmental contamination coverage dispute is entitled to reimbursement of the deductible it paid on behalf of its insured because the policy at issue specifically states that the deductible includes claim expenses such as defense costs, a California federal judge said March 29 in granting the insurer's motion for partial summary judgment (American Guarantee and Liability Insurance Co., et al. v. Technichem Inc., et al., No. 15-03611, N.D. Calif., 2017 U.S. Dist. LEXIS 47103).



Judge: Intellectual Property Exclusion Relieves Insurer Of Its Duty To Defend
RIVERSIDE, Calif. - A California federal judge on April 3 entered final judgment in favor of a commercial general liability insurer after finding that it has no duty to defend its insured against an underlying trademark and trade dress infringement lawsuit because the insurance policy's intellectual property exclusion bars coverage for all claims (Secard Pools, Inc., et al. v. Kinsale Insurance Co., No. 16-02404, C.D. Calif., 2017 U.S. Dist. LEXIS 47871).



Panel Affirms Insurer Has No Duty To Defend Suit Alleging On-The-Job Injury
SAN FRANCISCO - A California appeals panel on March 29 affirmed a lower court's ruling that a business owners insurer did not breach its contract when it refused to defend its insureds against a lawsuit alleging injuries and California Labor Code violations by the insured's employee (Elena Delgadillo, et al. v. United States Liability Insurance Co., et al., No. A143452, Calif. App., 1st Dist., Div. 4, 2017 Cal. App. Unpub. LEXIS 2273).



Plan Did Not Wrongfully Deny Benefits To Claimant, California Federal Judge Says
LOS ANGELES - The decision to deny disability benefits to a claimant who was rendered quadriplegic was not an abuse of discretion because the claimant failed to timely file his claim for benefits, a California federal judge said March 20 (Gregory Clark v. Provident Life and Accident Ins. Co., et al., No. 15-6458, C.D. Calif., 2017 U.S. Dist. LEXIS 39825).



Disability Claimant Permitted To Supplement Record With Treating Physician's Letter
SAN DIEGO - A California federal judge on March 23 permitted a disability claimant to supplement the administrative record to add a letter from his treating physician, noting that the letter will help to clarify the ambiguity of the physician's response to a question posed by the disability insurer (Thomas Reddick v. Metropolitan Life Insurance Co., et al., No. 15-2326, S.D. Calif., 2017 U.S. Dist. LEXIS 42649).



Disability Insurer's Reliance On Mental Health Limitation Was In Error, Judge Says
LOS ANGELES - Because a disability claimant established that his disability was caused by brain damage and not depression and anxiety, a disability insurer's reliance on the plan's mental illness limitation to terminate his benefits was in error, a California federal judge said March 27 (John Doe v. Prudential Insurance Company of America, et al., No. 15-04089, C.D. Calif.. 2017 U.S. Dist. LEXIS 45774).



Disability Plan's Provision Is Not Barred By Calif. Statute, Federal Judge Says
RIVERSIDE, Calif. - Because a short-term disability plan is a self-funded plan, the Employee Retirement Income Security Act preempts a California statute that bars the plan's discretionary authority provision, a California federal judge said March 28 in determining that the plan's denial of benefits was supported by substantial evidence (Daniel Johnson v. Aetna Life Insurance Co., et al., No. 15-1940, C.D. Calif., 2017 U.S. Dist. LEXIS 45858).



Disability Plan's Provision Granting Discretionary Authority Is Void
SAN FRANCISCO - A de novo standard of review must be applied in a claimant's suit seeking long-term disability benefits because the plan's discretionary authority provision is void under California state law, a California federal judge said March 27 (Peter Englert v. The Prudential Insurance Company of America, No. 15-4814, N.D. Calif.; 2017 U.S. Dist. LEXIS 44833).



Breach Of Contract Claim Completely Preempted By ERISA, Federal Judge Says
SAN DIEGO - A California federal judge on March 13 denied a disability claimant's motion to remand and granted a disability insurer's motion to dismiss after determining that a breach of contract claim is completely preempted by the Employee Retirement Income Security Act and fails to state a claim upon which relief can be granted (James Heldt v. Guardian Life Insurance Company of America, No. 16-885, S.D. Calif.; 2017 U.S. Dist. LEXIS 36490).



Federal Judge Orders Forty Niners' Insurer To Equally Contribute To Defense
SAN JOSE, Calif. - A California federal judge on March 14 found that San Francisco Forty Niners Football Co.'s primary commercial general liability insurer has a duty to contribute by equal shares with another insurer to defense costs in an underlying lawsuit against the football team and others (First Mercury Insurance Co. v. Great Divide Insurance Co., No. 16-02114, N.D. Calif., 2017 U.S. Dist. LEXIS 36501).



Forty Niners' Insurer Appeals Ruling Ordering It To Equally Contribute To Defense
PASADENA, Calif. - The San Francisco Forty Niners Football Co.'s primary commercial general liability insurer on April 12 filed a notice of appeal in the Ninth Circuit U.S. Court of Appeals challenging a lower federal court's finding that it has duty to contribute by equal shares with another insurer to defense costs in an underlying lawsuit against the football team and others (First Mercury Insurance Co. v. Great Divide Insurance Co., No. 17-1511, 9th Cir.).



California Jury Rules In Favor Of Alliant On Cross-Claims Brought By Competitor
FRESNO, Calif. - A California jury on March 22 ruled in favor of Alliant Insurance Services and 10 of its insurance producers on a competing insurance brokerage firm's cross-claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, breach of the duty of loyalty, interference with contract and misappropriation of trade secrets (Peter Baldwin, et al. v. Aon Risk Services Companies Inc., et al., No. 14-00572, Calif. Super.).



Financial Services Exclusion Bars Coverage, Federal Judge Rules Following Remand
SANTA ANA, Calif. - A California federal judge on March 13 held that an insurance policy's financial services exclusion precludes coverage for an underlying lawsuit alleging Lanham Act and unfair competition claims against an insured, further finding that the underlying claims asserting that the insured illegally charged up-front fees to homeowners seeking mortgage advice are uninsurable under California law (First One Lending Corporation, et al. v. The Hartford Casualty Insurance Co., et al., No. 13-01500, C.D. Calif., 2017 U.S. Dist. LEXIS 36548).



Loss Of Boats Was Not Theft, Judge Finds In Ruling For Insurer
FRESNO, Calif. - An insurer did not breach a boat business' all-risk policy in bad faith by denying coverage for a theft claim because the evidence at trial showed that the loss of the business' boat inventory was not the result of theft but rather a family's asset transfer scheme gone awry, a California federal judge held March 31 (Pacific Marine Center, Inc. v. Philadelphia Indemnity Insurance Company, No. 1:13-cv-00992, E.D. Calif., 2017 U.S. Dist. LEXIS 49637).



Federal Judge Decides Motions In Construction Defects Insurance Dispute
SAN JOSE, Calif. - In a coverage dispute between various insurers over their responsibility toward an underlying construction defects settlement, a California federal judge on March 7 addressed four summary judgment motions on multiple key issues from the duty to defend to the number of occurrences (St. Paul Fire and Marine Insurance Co. v. Insurance Company of the State of Pennsylvania, et al., No. 15-02744, N.D. Calif.; 2017 U.S. Dist. LEXIS 32551).



'Continuous, Progressive Injury' Exclusion Relieves Insurer Of Duty To Defend, Indemnify
SACRAMENTO, Calif. - In recommending that default judgment be granted for an insurer, a federal magistrate judge in California on March 9 found that the insurer has no duty to defend or indemnify an underlying construction defects case against an insured because the "continuous or progressive injury and damage" exclusion precludes coverage (Mt. Hawley Insurance Co. v. Crane Development Corp., et al., No. 16-0892, E.D. Calif.; 2017 U.S. Dist. LEXIS 34175).



9th Circuit: Business Risk Exclusions Bar Coverage For Construction Defects Suit
SAN FRANCISCO - Two business risk exclusions found in a commercial general liability (CGL) insurance policy bar coverage for a construction defects lawsuit, the Ninth Circuit U.S. Court of Appeals held March 2, affirming summary judgment to an insurer on breach of contract and bad faith claims (Archer Western Contractors Ltd. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 15-55648, 9th Cir.; 2017 U.S. App. LEXIS 3796).



Judge Finds In Insured's Favor In Coverage Dispute Over Its Employee's Claims
SANTA ANA, Calif. - A California federal judge on April 10 granted an insured's motion for summary judgment in a declaratory judgment lawsuit arising from underlying claims for malicious prosecution and defamation brought by the insured's employee (KPC Healthcare, Inc. v. Hudson Specialty Ins. Co., No. 16-01483, C.D. Calif., 2017 U.S. Dist. LEXIS 55443).



Judge: Insurer Must Contribute $2.6M To Settlement Arising From Molestation Claims
SAN FRANCISCO - A California federal judge on April 7 held that an insurer must contribute $2.6 million to the $15.8 million that another insurer paid to settle underlying negligent supervision claims against a California school district and three of its administrators arising from allegations that a teacher sexually molested three students (Westport Insurance Corp. v. California Casualty Management Co., No. 16-01246, N.D. Calif., 2017 U.S. Dist. LEXIS 53903).



Judge Won't Grant Judgment To Insurer In Health Insurance Rescission Case
SAN DIEGO - Sufficient questions exist regarding how much a couple knew about a man's alcohol and disc diseases to deny an insurer's motion for summary judgment in a policy rescission case, a federal judge in California held March 22 (HCC Life Insurance Co., et al. v. Kevin Conroy and Linda Conroy, No. 15-2897, S.D. Calif., 2017 U.S. Dist. LEXIS 41794).



Jury Enters Almost $8M Verdict Against Supplier Of Contaminated Seeds
SANTA ANA, Calif. - A California federal jury on April 14 entered an almost $8 million verdict against a company that supplied pomegranate seeds contaminated with hepatitis A after determining that the plaintiffs proved that the company was the source of the contaminated seeds (Townsend Farms Inc. v. Goknur Gida Maddeleri Enerji Imalat Ithalat Ihracat Ticaret ve Sanayi A.S. et al., No. 15-837, C.D. Calif.).



9th Circuit To Hear Oral Arguments On Decision To Abstain From Insurer's Suit
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on March 17 will hear oral arguments regarding whether a Nevada federal court correctly abstained from an insurer's suit in favor a lawsuit filed in Nevada state court by a third party against the insurer (Seneca Insurance Co. Inc. v. Strange Land Inc., et al., No. 15-16011, 9th Cir.).



Law Firm, Insurer Argue In 9th Circuit Whether 7 Suits Constitute 1 Claim
SAN FRANCISCO - In briefs filed before the Ninth Circuit U.S. Court of Appeals, a law firm and its former insurer dispute whether seven real estate investment fraud lawsuits brought against the firm should be considered one claim for coverage purposes under professional liability policies (Liberty Insurance Underwriters Inc. v. Davies Lemmis Raphaely Law Corp., et al., No. 16-55711, 9th Cir.).