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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®



 



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risk management company's chief financial officer in a breach of contract lawsuit about funds that were improperly withdrawn from bank accounts (Les Fields/C.C.H.I. Insurance Services v. Stuart M. Hines, et al., No. 15-03728, N.D. Calif., 2017 U.S. Dist.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.).



Fraudulent Wire Transfer Emails Did Not Trigger Coverage, 9th Circuit Rules
PASADENA, Calif. - Affirming a trial court's judgment, a Ninth Circuit U.S. Court of Appeals panel on March 9 found no coverage under a crime insurance policy for funds lost by an accounting firm's wire transfers pursuant to fraudulently sent emails, concluding that provisions for forgery, computer fraud and funds transfer fraud did not apply (Taylor & Lieberman v. Federal Insurance Co., No. 15-56102, 9th Cir., 2017 U.S. App. LEXIS 4205).



9th Circuit Set To Decide Whether Court Erred In Dismissing Bad Faith Claim
SAN FRANCISCO - A Ninth Circuit U.S. Court of Appeals panel will hear oral arguments on March 7 in an appeal of a federal district court ruling granting an insurer's motion for summary judgment on its insured's insurance bad faith claim in which the lower court held that no genuine issue of material fact existed showing that the insurer acted in bad faith in its investigation and handling of the insured's underinsured motorist claim (Chris "Wyatt" Hicks v. Progressive Casualty Insurance, No. 15-55953, 9th Cir.).



Panel: Insurer Had No Duty To Indemnify Insured Based On Coverage Exclusion
SAN FRANCISCO - A federal district court did not err in determining that an insurer did not owe its insurer a duty of indemnification because the insured's policy contained a provision exempting coverage for the claims sought and properly determined that the insurer owed its insured a duty to defend in an underlying negligence lawsuit, a Ninth Circuit U.S. Court of Appeals panel ruled Feb.15 in affirming (Foremost Insurance Company Grand Rapids v. Benjamin Evans, et al., Nos. 15-55869 and 15-55988, 9th Cir., 2017 U.S. App. LEXIS 2681).



Judge: Breach Of Contract, Bad Faith Claims Not Filed Within Limitations Period
SACRAMENTO, Calif. - An insured's claims for insurance breach of contract and bad faith against his insurer were not timely filed within the contractual limitations period and the insured failed to show that the insurer engaged in any outrageous conduct to support a claim for intentional infliction of emotional distress in failing to provide coverage under a comprehensive long-term care policy, a federal judge in California ruled Feb. 9 in granting the insurer's motion to dismiss (Donald Mann v. Mutual of Omaha, et al., No. 16-2560, E.D. Calif., 2017 U.S. Dist. LEXIS 18732).



Panel Reverses District Court's Summary Judgment Ruling In Bad Faith Suit
SAN FRANCISCO - A federal district court erred in granting a third party's motion for summary judgment on her breach of the implied duty to settle claim in an insurance bad faith and breach of contract lawsuit because no reasonable jury could conclude that the insurer "unreasonably failed to accept" the third party's offer to settle, a Ninth Circuit U.S. Court of Appeals panel ruled March 7 in reversing (Amy J. McDaniel v. Government Employees Insurance Co., No. 14-17203, 9th Cir., 2017 U.S. App. LEXIS 4029).



9th Circuit Reverses, Remands Excess Coverage Suit Over Racial Discrimination Claim
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Feb. 21 reversed and remanded a lower federal court's ruling in a dispute over excess coverage for a settlement demand in an underlying racial discrimination lawsuit against the city of Montebello, Calif. (Security National Insurance Co. v. City of Montebello, Nos. 15-56199 and 15-56263, 9th Cir., 2017 U.S. App. LEXIS 2965).



California Federal Judge OKs Settlement In Dispute Over Offset Of Veterans' Benefits
OAKLAND, Calif. - A California federal on March 1 approved a class action settlement between former U.S. veterans and Liberty Life Assurance Company of Boston after determining that the terms of the settlement, which provides compensation to class members whose disability benefits were offset or reduced by Liberty Life, are reasonable (James L. Bush v. Liberty Life Assurance Company of Boston, et al., No. 14-1507, N.D. Calif.).



9th Circuit Panel Upholds Plan's Offset Of Disability Benefits
SAN FRANCISCO - Plan language clearly allowed an insurer to offset permanent partial disability benefits by the amount of long-term disability benefits the employee received, a Ninth Circuit U.S. Court of Appeals panel held Feb. 16 (John Del Gallego v. Wells Fargo & Co. Long Term Disability Plan, et al., No. 15-15294, 9th Cir., 2017 U.S. App. LEXIS 2753).



Disability Plan Is Governed By ERISA, California Federal Judge Determines
LOS ANGELES - A California federal judge on Feb. 10 denied a plaintiff's motion to remand a disability suit to state court because the disability plan at issue is not a "church plan" and is governed by the Employee Retirement Income Security Act (Melvyn L. Durham v. The Prudential Insurance Company of America et al., No. 16-8202, C.D. Calif., 2017 U.S. Dist. LEXIS 19402).



Claimant's Suit Was Timely Filed, California Federal Judge Says
SAN FRANCISCO - A disability claimant's suit alleging wrongful termination of benefits was timely filed, a California federal judge said Feb. 13 after determining that the plan's three-year limitations period did not begin to run until after the 180-day deadline to appeal the termination of benefits ended (Nancy Hart v. UNUM Life Insurance Company of America, No. 15-5392, N.D. Calif., 2017 U.S. Dist. LEXIS 20198).



Conservator Asks Court To Convert Conservatorship To Liquidation
SAN FRANCISCO - California's insurance commissioner asked one of his state's courts on Feb. 17 to declare an insurer insolvent and order its liquidation (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.).



Insurer Has Article III Standing To Sue Insured, Assignees, Panel Says, Reversing
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Feb. 28 reversed and remanded a lower federal court's finding that an insurer has no standing to sue its doctor insured and the insured's patients for declaratory relief and rescission of insurance policies (Allied Professionals Insurance Co. v. Michael Scott Anglesey, M.D., et al., No. 15-55231, 9th Cir., 2017 U.S. App. LEXIS 3658).



Panel Partly Reverses Ruling In Directors, Officers Liability Coverage Dispute
LOS ANGELES - In reversing a lower court in part, a California appeals panel on March 8 held that although a directors and officers liability insurance policy's "Willful Misconduct Exclusion" barred coverage for losses brought about by fraud or criminal acts, the exclusion did not apply to defense expenses (Mitchell J. Stein v. Axis Insurance Company, et al., No. B265069, Calif. App., 2nd Dist., Div. 1, 2017 Cal. App. Unpub. LEXIS 1628).



Progressive Injury Exclusion Bars Coverage For Water Damage Suits, Judge Says
SAN FRANCISCO - A policy's continuous or progressive injury exclusion bars coverage for two underlying suits filed against an insured because the insured's repair work to address the water intrusion problems was completed more than four years before the inception of the policy, a California federal judge said Jan. 31 (Saarman Construction Ltd. v. Ironshore Specialty Insurance Co., No. 15-3548, N.D. Calif., 2017 U.S. Dist. LEXIS 13633).



Yahoo Sues Insurer Over Coverage Of Email Scanning Suits
SAN JOSE, Calif. - On Jan. 31, Yahoo! Inc. sued its commercial general liability (CGL) provider in California federal court, alleging breach of contract and bad faith related to the insurer's decision not to defend or indemnify the internet firm in four class actions alleging privacy violations in certain email-scanning practices (Yahoo! Inc. v. National Union Fire Insurance Company of Pittsburgh, Pa., No. 5:17-cv-00489, N.D. Calif.).



California Federal Judge Says Complete Diversity Does Not Exist, Remands Mold Suit
LOS ANGELES - Because a plaintiff can arguably state a claim against an insurance claims adjuster for intentional infliction of emotional distress, the claims adjuster is not a sham defendant and was not fraudulently joined to defeat federal jurisdiction, a California federal judge said March 17 in remanding the insureds' suit seeking additional coverage for mold damage to California state court (Health Pro Dental Corp., et al. v. Travelers Property Casualty Company of America, et al., No. 17-637, C.D. Calif., 2017 U.S. Dist. LEXIS 38944).



California Panel Upholds Rulings Requiring Man To Repay Unemployment Benefits
SAN JOSE, Calif. - A California appeals panel on Feb. 24 upheld a trial court's decision to deny a man's request for a writ of mandate that would allow him to retain unemployment benefits he received from November 2008 through March 2013, finding that he obtained the benefits through misrepresentations (Abhijit Prasad v. California Unemployment Insurance Appeals Board, No. H041590, Calif. App., 6th Dist., 2017 Calif. App. Unpub. LEXIS 1349).



Panel: Evidence Supports $3.5M Jury Verdict In Tainted Onions Coverage Dispute
VENTURA, Calif. - A California appeals panel on March 1 affirmed a jury verdict against an excess insurer in an equitable contribution dispute over $3.5 million that the primary insurer paid to settle a lawsuit arising from a deadly outbreak of hepatitis A caused by contaminated onions that were marketed by the wholesaler insured (National Fire Insurance Company of Hartford v. Great American Insurance Co., No. B264238, Calif. App., 2nd Dist., Div. 6, 2017 Cal. App. Unpub. LEXIS 1453).



9th Circuit: Insurance Policy Bars Damage Caused By 'Subsidence'
SAN FRANCISCO - Claims against a mutually insured subcontractor for damage caused by "subsidence" are excluded under an insurance policy, the Ninth Circuit U.S. Court of Appeals ruled Feb. 14, finding that an insurer had no duty to defend and thus was not responsible to share in costs incurred by a defending insurer (St. Paul Mercury Insurance Co. v. Navigators Specialty Insurance Co., No. 14-56723, 9th Cir., 2017 U.S. App. LEXIS 2586).



Insurer, Reinsurer Stipulate To Dismissal Of Asbestos Reinsurance Case
SAN FRANCISCO - An insurer and a reinsurer told a federal court in California on Feb. 22 that they want to close their asbestos personal injury related reinsurance dispute with prejudice (The American Insurance Co. v. R&Q Reinsurance Co., No. 16-3044, N.D. Calif.).



Excess Insurer's Duty To Additional Insured At Issue Before 9th Circuit
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on Feb. 9 received a reply brief in a case involving the scope of duty an excess insurer owes to an additional insured employee who used her vehicle for work purposes and was involved in an accident with a motorcycle, resulting in a $150,000 coverage gap (Judy Bamberger v. National Union Fire Insurance Co., No. 16-55252, 9th Cir.).