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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 Panel Affirms Summary Judgment Ruling In Bad Faith Lawsuit
SAN FRANCISCO - A federal district court did not err in granting an insurer's motion for summary judgment in an insurance breach of contract and bad faith lawsuit because the repair cost estimate decided by a neutral umpire "was determinative of whether" an insured would receive a total loss payment under the terms of its aviation insurance policy for a loss sustained after an aircraft accident, a Ninth Circuit U.S. Court of Appeals panel ruled Nov. 3 in affirming the lower court's ruling (Minden Air Corp. v. Starr Indemnity & Liability Co., No. 16-15712, 9th Cir., 2017 U.S. App. LEXIS 22091).



Wine Collector Asks Panel To Reverse No Coverage Ruling For Alleged $18M Wine Fraud
SANTA ANA, Calif. - A high-end wine collector has asked a California appeals court to reverse a lower court's judgment in favor of an insurer in his lawsuit seeking coverage for an alleged multimillion-dollar loss to his wine collection due to fraud (David Doyle v. Fireman's Fund Insurance Company, No. G054197, Calif. App., 4th Dist., Div. 3).



Pollution Exclusion Does Not Bar Coverage For Carbon Monoxide Suits, Insured Argues
SAN FRANCISCO - An Oregon federal judge erred in granting summary judgment in favor of an insurer in a dispute over coverage for underlying carbon monoxide poisoning suits because the pollution exclusion in the policy at issue does not apply to carbon monoxide as it is not an irritant or contaminant, an insured argues in an Oct. 23 brief to the Ninth Circuit U.S. Court of Appeals (Colony Insurance Co. v. Victory Construction LLC, et al., No. 17-35357, 9th Cir.).



Parties Submit Arguments To 9th Circuit On Duty To Defend In Class Action
SAN FRANCISCO - An insurer and a real estate broker recently submitted their arguments in the Seventh Circuit U.S. Court of Appeals, disputing whether an exclusion in the policy precludes coverage in relation to an underlying lawsuit in which class members allege that the broker and individual agents received secret profits while acting as their real estate agents (Hanover Insurance Co. v. Paul M. Zagaris Inc. et al., 17-15477, 9th Cir.).



Insurer Seeks Reversal Of Finding That Trade Dress Claim Triggered Duty To Defend
SAN FRANCISCO - A commercial general liability insurer recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court's ruling that it has a duty to defend its garment merchant insured against an underlying lawsuit, arguing that the lower court erred in finding that the insured was potentially liable for alleged damages arising from trade dress infringement in one of its advertisements (Great Lakes Reinsurance [UK] PLC v. In and Out Fashion Inc., 16-56425, 9th Cir.).



CIGA Appeals Judgment On Reimbursement Sought Against It For Workers' Comp Claims
LOS ANGELES - The California Insurance Guarantee Association (CIGA) on Oct. 9 cross-appealed to the Ninth Circuit U.S. Court of Appeals challenging a ruling vacating and setting aside reimbursement demands made to it under workers' compensation insurance policies (California Insurance Guarantee Association v. Don J. Wright, et al., No. 15-01113, C.D. Calif.).



Federal Agency Did Not Breach Contract To Reinsured Farm, 9th Circuit Concludes
SAN FRANCISCO - A federal agency did not act in breach of contract or misrepresent itself to a reinsured agricultural business by declining to divulge information about an investigation against a federal crop insurer before the farm signed a settlement that led to criminal charges, the Ninth Circuit U.S. Court of Appeals ruled Oct. 23 (POCO LLC v. Farmer's Crop Insurance Alliance Inc., No. 16-35310, 9th Cir., 2017 U.S. App. LEXIS 20853).



Insurer, Reinsurer Seek Dismissal By Federal Court Of Injunctive Relief Claim
SAN DIEGO - An insurer and a reinsurer in a joint motion filed Oct. 25 ask a California federal court to dismiss a single claim for injunctive relief against the reinsurer in an action seeking payment of a $3.2 million judgment over alleged breach of reinsurance agreements as a result of a series of fraudulent transfers (Odyssey Reinsurance Co. v. Richard Keith Nagby, et al., No. 16-3038, S.D. Calif., 2017 U.S. Dist. LEXIS 165582).



Judge Dismisses Attempt To Invalidate Reinsurance Participation Agreement
SACRAMENTO, Calif. - Insureds failed to allege a specific intent to defraud in a workers' compensation insurance program, a California federal judge ruled Oct. 17, also denying the insureds' attempt to invalidate a reinsurance participation agreement (RPA) (Shasta Linen Supply Inc. v. Applied Underwriters Inc., et al., Nos. 16-00158 & 16-01211, E.D. Calif., 2017 U.S. Dist. LEXIS 172638).



Professional Services Exclusion Does Not Bar Coverage, Federal Magistrate Says
SAN FRANCISCO - A California federal magistrate on Oct. 24 rejected an insurer's reliance on an "architects and engineers professional services exclusion" to bar directors and officers liability coverage for an underlying lawsuit brought against its environmental engineering company insured, finding that the insurer has a duty to defend (RMC Water and Environment v. Travelers Casualty and Surety Company of America, No. 17-00379, N.D. Calif., 2017 U.S. Dist. LEXIS 176107).



California Federal Judge Allows Disability Claimant's Amended Complaint On ERISA Claim
SAN FRANCISCO - A disability claimant is permitted to amend a complaint against a disability plan but only as it pertains a wrongful denial of benefits claim alleged under the Employee Retirement Income Security Act, a California federal judge said Oct. 19 (Vanmark Strickland v. AT&T West Disability Benefits Program, No. 17-1393, N.D. Calif., 2017 U.S. Dist. LEXIS 174357).



Denial Of Appellate Attorney Fees In Disability Dispute Was An Abuse Of Discretion
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on Oct. 31 reversed a district court's denial of attorney fees to a disability plan acting on behalf the plan participant after determining that the plan is entitled to collect the attorney fees it incurred as result of the disability insurer's appeal and that the district court's denial of attorney fees was an abuse of discretion (John Paul Micha M.D., v. Sun Life Assurance Of Canada, Inc., No. 16-55053, 9th Cir., 2017 U.S. App. LEXIS 21800).



Disney Insurer Responds To Arbitration Request In Suit Arising From 'Pink Slime'
LOS ANGELES - A Walt Disney Co. insurer on Oct. 26 filed an opposition to the insured's motion to compel arbitration in a coverage dispute stemming from "pink slime" defamation claims against Disney's subsidiary, arguing that the motion is too late and in clear violation of the unambiguous policy language (The Walt Disney Company v. AIG Specialty Insurance Co., No. 17-07598, C.D. Calif.).



California Panel: No Coverage Owed For Suits Alleging Liability For Opioid Epidemic
SANTA ANA, Calif. - A California appeals panel on Nov. 6 affirmed a lower court's finding that commercial general liability insurers have no duty to defend pharmaceutical manufacturers and distributors against two underling lawsuits alleging that they engaged in a fraudulent scheme to promote the use of opioids for long-term pain to increase corporate profits, finding that the underlying actions can be read only as being based on the insureds' deliberate and intentional conduct that produced injuries that were neither unexpected nor unforeseen (The Traveler's Property Casualty Company of America, et al. v. Actavis Inc., et al., No. G053749, Calif. App., 4th Dist., Div. 3, 2017 Cal. App. LEXIS 976).



Insurer Owes Trustee $3.5M In Policy Limits, Attorney Fees For Coverage Dispute
OAKLAND, Calif. - A California federal bankruptcy judge on Nov. 16 entered a judgment of more than $3.5 million against an insurance company in a dispute over the amount of coverage owed to a company's liquidating trust for asbestos personal injury claims, including attorney fees and a $60,000 penalty for the insurer's "vexatious and unreasonable conduct" in the case (In re CFB Liquidating Corporation, f/k/a Chicago Fire Brick Co., et al., No. 01-45483, [Barry A. Chatz, as Trustee for the CFB/WFB Liquidating Trust v. Continental Casualty Company, No. 15-4136] N.D. Calif. Bkcy., 2017 Bankr. LEXIS 3938).



City Of Phoenix Seeks Ruling That Insurers Are Obliged To Reimburse Expenses
SAN FRANCISCO - The city of Phoenix is asking the Ninth Circuit U.S. Court of Appeals to reverse a district court decision that determined that first-layer policies did not obligate insurers to reimburse the city's defense expenses and the costs of a settlement payment. The city argues that the insurers' nonpayment constituted bad faith (City of Phoenix v. First Place Insurance Company, et al., No. 16-16767, 9th Cir.).



Judge Refuses To Reinstate ACA Cost-Sharing Payments To Insurers
SAN FRANCISCO - The Trump administration has the better legal argument in a case challenging the elimination of the Patient Protection and Affordable Care Act (ACA) cost-sharing reduction (CSR) payments, and the relief sought by the plaintiff states would counterproductively harm their own residents, a federal judge in California said Oct. 25 in denying a preliminary injunction (The State of California, et al. v. Donald J. Trump, et al., No. 17-5895, N.D. Calif.).



Federal Judge Allows UCL Claim Against Liberty Mutual To Proceed
SAN DIEGO - After finding that development firms sufficiently pleaded the elements of a claim for violation of California's unfair competition law (UCL) in relation to the alleged overcharging of deductible fees, a California federal judge on Oct. 26 denied an insurer's motion to dismiss the claim (Bosa Development California Inc., et al. v. Liberty Mutual Fire Insurance Co., No. 3:17-cv-00945, S.D. Calif., 2017 U.S. Dist. LEXIS 177870).



9th Circuit Affirms Treble Damages Awarded To Builder For Denied Claim
SEATTLE - A Ninth Circuit U.S. Court of Appeals panel on Sept. 20 overruled an insurance company's appeal of rulings denying its motions for post-trial relief, finding that a federal judge in Washington did not err when denying the company's request for an 11-page special verdict form and allowing a jury to determine the amount of treble damages the insurer should pay pursuant to Washington's Insurance Fair Conduct Act (IFCA) (MKB Constructors v. American Zurich Insurance Company, No. 15-35291, 9th Cir., 2017 U.S. App. LEXIS 18226).



California Appeals Panel: Insurer Owes For Water Damage To Modular Units
RIVERSIDE, Calif. - An insurer must pay for damage to modular units that were delivered without completed roofs and sustained water damage over several months, and that amount is not to be offset by a prior settlement between the general contractor for the project and the insured that was responsible for building and delivering the units, a California appellate panel ruled Sept. 8 (Global Modular, Inc. v. Kadena Pacific, Inc., North American Capacity Insurance Co. v. Kadena Pacific, Inc., No. E063551, Calif. App., 4th Dist., Div. 2, 2017 Cal. App. LEXIS 778).



Judge Finds No Evidence Of Policy Exhaustion, Dismisses Complaint
OAKLAND, Calif. - After finding that a construction company and glass and aluminum company that were sued in an underlying defects case failed to show that they had exhausted primary coverage policies, a California federal judge on Sept. 28 granted an insurer's motion to dismiss their claims against it for coverage (Webcor Construction, LP, et al. v. Zurich American Insurance Co., et al., No. 17-cv-02220, 2017 U.S. Dist. LEXIS 160267).



Policies Bar Coverage For Additional Insured's Defects, California Federal Judge Says
SAN DIEGO - Commercial general liability insurance policies' business risk exclusions preclude coverage for construction defects alleged by homeowners against an additional insured contractor, a California federal judge ruled Sept. 13 (Pulte Home Corp. v. American Safety Indemnity Co., No. 16-02567, S.D. Calif., 2017 U.S. Dist. LEXIS 148653).



California Panel Reverses $471,313 Attorney Fees Award In Construction Defects Suit
SAN DIEGO - A California appeals panel on Aug. 30 reversed a lower court's $471,313.52 award of attorney fees and resultant $500,000 punitive damages awards against a commercial general liability insurer in a construction defects insurance dispute, finding that the attorney fees award is inconsistent with the damages principles and policies established in Brandt v. Superior Court (1985) 37 Cal.3d 813 (Pulte Home Corp. v. American Safety Indemnity Co., No. D070478, Calif., App., 4th Dist., Div. 1, 2017 Cal. App. LEXIS 748).



Complex Owners' Insurer Seeks Partial Coverage For Injury From Manager's Insurer
SAN FRANCISCO - An apartment complex property manager's insurer is partially liable for an injury settlement that exceeded the one-year liability limits paid to a former tenant, the owners' insurer argues in a reply brief filed Sept. 1 in the Ninth Circuit U.S. Court of Appeals, because the manager's insurer's other-insurance clause is not enforceable and California' anti-stacking provision must be enforced (Atain Specialty Ins. Co. v. California Capital Ins. Co., No. 16-17221, 9th Cir.).



Home Developer Seeks Independent Counsel From Subcontractor's Insurer
SACRAMENTO, Calif. - A subcontractor's insurer must provide a home developer with independent counsel in an action brought by homeowners suing for defects because the insurer is defending two sides in the action, the home developer argues in a reply brief filed Aug. 9 in the Third District California Court of Appeal (Centex Homes, et al. v. St. Paul Fire and Marine Insurance Company, No. C081266, Calif. App., 3rd Dist.).



Insurer: Court Erred In Abdicating Its Duty To Exercise And Retain Jurisdiction
SAN FRANCISCO - An insurer recently argued to the Ninth Circuit U.S. Court of Appeals that none of the factors considered by a lower federal court, independently or even collectively, is sufficient to warrant its decision to stay the insurer's declaratory judgment lawsuit challenging coverage for a data breach that resulted in a $4.12 million class action settlement (Columbia Casualty Co. v. Cottage Health System, No. 16-56872, 9th Cir.).



California Panel Affirms $14M In Prejudgment Interest In Stringfellow Dispute
RIVERSIDE, Calif. - A California state court did not err in awarding the state of California almost $14 million in prejudgment interest in an environmental contamination suit arising out of cleanup costs at the Stringfellow Acid Pits Superfund site, the Fourth District California Court of Appeal said Sept. 29 after finding no error in the lower court's application of vertical exhaustion and no error in its designated start date for the accrual of prejudgment interest (California v. Underwriter's at Lloyds, et al., No. E064518, Calif. App., 4th Dist., Div. 2, 2017 Cal. App. LEXIS 846).



9th Circuit Affirms Finding Of No Coverage For Environmental Claims
SAN FRANCISCO - No coverage is owed for underlying environmental contamination claims alleged against an insured because the policies at issue clearly preclude coverage for releases of pollutants that occur on the insured's premises and for releases of pollutants that are caused by third parties, the Ninth Circuit U.S. Court of Appeals said Oct. 19 in affirming a district court's ruling (Southern Nevada TBA Supply Co. d/b/a Ted Wiens Tire and Auto Centers v. Universal Underwriters Insurance Co., No. 15-16828, 9th Cir., 2017 U.S. App. LEXIS 20561).



Insured Argues California's Notice-Prejudice Rule Must Be Applied In Environmental Suit
SAN FRANCISCO - An insured argues in an Aug. 11 reply brief that the California Supreme Court should find that California's common-law notice-prejudice rule is a fundamental public policy and applies both to a policy's notice provision and consent provision in an environmental contamination coverage suit (Pitzer College v. Indian Harbor Insurance Co., No. S23950, Calif. Sup.).



Breach Of Contract, Bad Faith Claims Survive In Coverage Suit Over Contaminated Feed
FRESNO, Calif. - A California federal judge on Sept. 27 denied an insurer's motion for summary judgment on the insured's breach of contract and bad faith counterclaims in a dispute over coverage for damages arising from contaminated feed manufactured by the insured but granted the insurer's motion as to the punitive damages claim (Praetorian Insurance Co. v. Western Milling, LLC, No. 15-00557, E.D. Calif., 2017 U.S. Dist. LEXIS 159181).



California Federal Judge Allows Disability Claimant To Remain Anonymous
SACRAMENTO, Calif. - A California federal judge on Sept. 12 granted a disability claimant's motion for leave to proceed anonymously after determining that the private facts at issue and the absence of a compelling interest in exposing the claimant's identity warrant anonymity (Jane Doe v. Hartford Fire Insurance Company Employee Income Protection Plan, No. 17-1714, E.D. Calif., 2017 U.S. Dist. LEXIS 147786).



9th Circuit Panel Says Denial Of Disability Benefits Was Reasonable Decision
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on Sept. 18 affirmed a district court's finding that a disability insurer's denial of benefits was reasonable, noting that the medical evidence supports the insurer's determination (Nannette Fawn Anderson v. Life Insurance Company of North America, No. 16-15522, 9th Cir., 2017 U.S. App. LEXIS 18055).



Award Of Attorney Fees Warranted As Disability Claimant Achieved Some Success
SAN FRANCISCO - A California federal judge on Sept. 14 awarded a disability claimant more than $100,000 in attorney fees after determining that the award was warranted because the claimant achieved "some degree" of success on the merits (Robert Bosley v. Metropolitan Life Insurance Co., No. 16-00139, N.D. Calif., 2017 U.S. Dist. LEXIS 149453).



Termination Of Disability Benefits Based On Plan's Limitation Was Reasonable
SAN FRANCISCO - A disability insurer's termination of benefits based on the plan's self-reported symptoms limitation was reasonable because the claimant did not provide any additional evidence supporting her disability, the Ninth Circuit U.S. Court of Appeals said Sept. 22 (Robin Curran v. United of Omaha Life Insurance Co., and United of Omaha Life Insurance Co. v. Robin Curran, Nos. 15-56599, 15-56668, 9th Cir., 2017 U.S. App. LEXIS 18443).



Claimant Failed To Prove Her Disability Had A Physical Component, 9th Circuit Holds
SAN FRANCISCO - A district court correctly concluded that a disability claimant is not entitled to long-term disability benefits because the claimant failed to prove that her disability had a physical component that would not be excluded under the plan's mental-health limitation, the Ninth Circuit U.S. Court of Appeals ruled Sept. 11 (Leah A. Bilyeu v. Morgan Stanley Long Term Disability Plan, et al., No. 16-15254 No. 16-15314, 9th Cir., 2017 U.S. App. LEXIS 17510).



Disability Insurer Considered All Medical Records Before Denying LTD Claims
SAN JOSE, Calif. - A California federal judge on Sept. 7 granted a disability insurer's motion for summary judgment after determining that the insurer thoroughly considered all of the medical records before finding that the claimant was not entitled to long-term disability benefits (Robert Gordon v. Metropolitan Insurance Co., No. 10-5399, N.D. Calif., 2017 U.S. Dist. LEXIS 145200).



No Disparagement Alleged To Trigger Insurer's Duty To Defend, 9th Circuit Affirms
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Oct. 11 affirmed a lower federal court's finding that there was no potential for coverage that could trigger a general liability insurer's duty to defend against an underlying lawsuit alleging the insured interfered with prospective economic relations and committed unfair competition (Crisp Enterprises Inc. v. Golden Eagle Insurance Co., No. 16-55657, 9th Cir., 2017 U.S. App. LEXIS 19900).



Judge: War Exclusions Bar Coverage For Postponement, Relocation Of Television Show
LOS ANGELES - A California federal judge on Oct. 6 held that war exclusions in a motion picture/television producers portfolio insurance policy bar coverage for the expenses a production company incurred in postponing and subsequently relocating the production of the television show "Dig" from Israel because of conflict in summer 2014 (Universal Cable Productions LLC, et al. v. Atlantic Specialty Insurance Co., No. 16-4435, C.D. Calif., 2017 U.S. Dist. LEXIS 167463).



Judge Issues $3.2M Default Judgment In Favor Of Reinsurer In Fraudulent Transfer Dispute
SAN DIEGO - A California federal judge on Oct. 4 granted a reinsurer's request for a $3.2 million default judgment in a dispute over alleged breach of reinsurance agreements as a result of a series of fraudulent transfers (Odyssey Reinsurance Co. v. Richard Keith Nagby, et al., No. 16-3038, S.D. Calif., 2017 U.S. Dist. LEXIS 165582).



Magistrate Judge Denies Reinsurer's Bid On Discovery For Distribution Of Funds
SAN DIEGO - A California federal magistrate judge on Sept. 22 denied a reinsurer's request for expedited discovery to locate unlawfully distributed funds (Odyssey Reinsurance Co. v. Richard Keith Nagby, et al., No. 16-3038, S.D. Calif., 2017 U.S. Dist. LEXIS 155546).



Judge: No Coverage For Third-Party Claims Arising From Patent Infringement Dispute
SAN DIEGO - Granting a business owners liability insurer's motion for summary judgment in a breach of contract and bad faith lawsuit, a California federal judge on Sept. 29 found that a third-party complaint against an insured arising from a patent infringement lawsuit failed to trigger coverage (WAWGD, Inc., doing business as Foresight Sports v. Sentinel Insurance Company, No. 16-2917, S.D. Calif., 2017 U.S. Dist. LEXIS 161361).



Judge: Fact Issues Preclude Summary Judgment In Coverage Suit Over Embezzled Funds
SAN JOSE, Calif. - On remand, a California federal judge on Sept. 29 found that there are fact issues that preclude summary judgment in a lawsuit seeking recovery under a fidelity bond for embezzled client funds (Thomas Dillon v. Continental Casualty Co., No. 10-05238, N.D. Calif., 2017 U.S. Dist. LEXIS 162972).



9th Circuit Rules Against L.A. Lakers In Coverage Dispute Over TCPA Claim
PASADENA, Calif. - Determining that a claim brought under the Telephone Consumer Protection Act (TCPA) "is inherently an invasion of privacy claim," a Ninth Circuit U.S. Court of Appeals panel majority on Aug. 23 affirmed a trial court's finding that the Los Angeles Lakers were not entitled to coverage for an underlying TCPA suit because the team's insurance policy contained an exclusion for invasion of privacy suits (Los Angeles Lakers Inc. v. Federal Insurance Co., No. 15-55777, 9th Cir., 2017 U.S. App. LEXIS 16109).



Health Insurer Wants Immediate Review Of Lactation Coverage Ruling
SAN FRANCISCO - The significant disagreement over the scope and mandate of the Patient Protection and Affordable Care Act (ACA)'s rules governing insurance coverage for lactation services and the impact immediate appellate review would have on the case warrant granting interlocutory appeal, an insurer argues in an Oct. 5 reply brief in a California federal court (Rachel Condry, et al. v. UnitedHealth Group Inc., et al., No. 17-183, N.D. Calif.).



Life Insurer Waived Plan's Evidence Of Insurability Requirement, Panel Says
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on Sept. 20 reversed a district court's ruling in a life insurance benefits suit after determining that the plan participant is entitled to $250,000 in unpaid benefits because the life insurer waived the plan's evidence of insurability requirement (Susan Salyers v. Metropolitan Life Insurance Co., No. 15-56371, 9th Cir., 2017 U.S. App. LEXIS 18231).



U.S. High Court Denies Rehearing In Dispute Over Employment-Related Practices
WASHINGTON, D.C. - The U.S. Supreme Court on Aug. 25 refused to reconsider its denial of a petition for a writ of certiorari seeking to reverse a California appellate court's finding that a commercial general liability insurance policy's employment-related practices (ERP) exclusion bars coverage for all claims alleged against an insured and its employee arising from alleged sexual harassment and assault (Alana Munoz v. Golden Eagle Insurance Corp., No. 16-1245, U.S. Sup.).



9th Circuit Reverses Ruling In Water Damage Suit, Says Questions Of Fact Exist
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on Aug. 22 reversed and remanded a district court's ruling that no coverage is afforded for water damage to a California couple's home after determining that the lower court abused its discretion in excluding relevant evidence that, if properly considered, raises genuine issues of material fact on the breach of contract and bad faith claims alleged against the insurer (Neda Raschkovsky, et al. v. Allstate Insurance Co., No. 16-55093, 9th Cir., 2017 U.S. App. LEXIS 16006).



Disability Plan Failed To Consider Reliable Evidence, 9th Circuit Panel Says
SAN FRANCISCO - A district court erred in finding that a disability plan administrator did not abuse its discretion in terminating a claimant's benefits because the plan failed to consider reliable evidence in support of the plan participant's claim, the Ninth Circuit U.S. Court of Appeals said Sept. 6 in reversing and remanding the lower court's ruling in favor of the plan (Sonia Cruz-Baca v. Edison International Long Term Disability Plan, No. 15-56921, 9th Cir., 2017 U.S. App. LEXIS 17214).



Appeals Panel Says ERISA Preempts California Law Barring Discretionary Clauses
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on Aug. 15 vacated and remanded a district court's ruling that a de novo standard of review rather than an abuse of discretion standard of review should be applied in a disability benefits dispute because the Employee Retirement Income Security Act preempts the application of California's insurance law, which prohibits the use of discretionary clauses (Yvette Williby v. Aetna Life Insurance Co., No. 15-56394, 9th Cir., 2017 U.S. App. LEXIS 15213).



County Plan Is Preempted Under ERISA Governmental Plan Exemption, Judge Says
SAN JOSE, Calif. - A California federal judge on Aug. 9 determined that the governmental plan exemption to the Employee Retirement Income Security Act applies to preempt a county disability plan from ERISA because the county "maintained" the long-term disability plan (Roxy Hariri v. Reliance Standard Life Insurance Co., No. 15-3054, N.D. Calif., 2017 U.S. Dist. LEXIS 126491).



9th Circuit: Insurer Owes Insured Attorney Fees Incurred In Antitrust Suit
SEATTLE - The Ninth Circuit U.S. Court of Appeals on Aug. 30 affirmed a lower federal court's ruling that an insurance policy exclusion does not unambiguously preclude coverage for an antitrust claim alleging that the insured's acquisition of a medical group gave it an unlawful advantage in bargaining over health care services prices (St. Luke's Health System, LTD, et al. v. Allied World National Assurance, et al., No. 15-35767, 9th Cir., 2017 U.S. App. LEXIS 16655).



Appeals Court: Insurance Fraud Defendant Should Be Allowed To Represent Herself
VENTURA, Calif. - A woman facing four counts of insurance fraud should be allowed to represent herself for her upcoming trial, a California appeals panel ruled Aug. 23, finding that her request was timely and that she acknowledged that she knows her case "inside and out" (People v. Linda Michelle Boggess, No. B277790, Calif. App., 2nd Dist., 6th Div., 2017 Calif. App. Unpub. LEXIS 5795).



Woman Should Not Be Released Pending Appeal Of Fraud Conviction, Judge Says
SACRAMENTO, Calif. - A woman who was convicted on one count of making false statements to a grand jury as part of its investigation of a scheme involving fraudulent employment insurance benefits and disability claims should not be released on bail pending her appeal, a federal judge in California ruled Aug. 23, finding that the appeal does not raise substantial questions (United States of America v. Harjit Kaur Johal, No. 14-cr-00169-GEB, E.D. Calif., 2017 U.S. Dist. LEXIS 135345).



Judge Refuses To Strike Class Allegations, Finds UCL Claims Are Representative
SAN FRANCISCO - Since a construction company seeks to assert claims for violation of California's unfair competition law (UCL) as representative claims under state law, rather than as class claims under federal law, a California federal judge on Sept. 12 denied an insurer's motion to strike parts of the company's complaint filed against it in relation to its issuance of general liability insurance policies (Albert D. Seeno Construction Company, et al. v. Aspen Insurance UK Limited, No. 17-cv-03765, N.D. Calif., 2017 U.S. Dist. LEXIS 147646).



Judge: Insured Vs. Insured Exclusion Bars Directors, Officers Liability Coverage
LOS ANGELES - A California federal judge on Sept. 11 found that an insured vs. insured policy exclusion bars directors and officers liability insurance coverage for an underlying cross-complaint, rejecting the plaintiffs' argument that the indemnity exception to the exclusion applies to the underlying contractual indemnity claim brought against them (David Czerwinski, et al. v. Scottsdale Insurance Co., et al., No. 17-4408, C.D. Calif., 2017 U.S. Dist. LEXIS 147727).



Federal Magistrate: Claims That Insured Failed To Pay Wages Do Not Trigger Coverage
SAN JOSE, Calif. - A California federal magistrate judge on Aug. 31 held that a professional liability insurer owes no coverage for underlying class action claims alleging that its staffing services company insured failed to pay wages (W.G. Hall, LLC v. Zurich American Insurance Co., No. 17-00646, N.D. Calif., 2017 U.S. Dist. LEXIS 141389).



Federal Judge Refuses To Reconsider Ruling In Equitable Indemnification Dispute
SACRAMENTO, Calif. - A California federal judge on Aug. 21 denied an insurer's motion to reconsider the court's denial of its summary judgment motion in an equitable indemnification dispute between it and another insurer (Public Service Mutual Insurance Co. v. Liberty Surplus Insurance Corp., No. 14-00226, E.D. Calif., 2017 U.S. Dist. LEXIS 134339).



California High Court Declines To Review Ruling On Policy Exhaustion In Silica Dispute
LOS ANGELES - The California Supreme Court on Aug. 9 denied petitions for review filed by insurers and an insured seeking review of an appellate court's' ruling regarding the exhaustion of a primary policy in a silica coverage dispute (Truck Insurance Exchange v. Moldex Metric Inc., et al., No. S242845, Calif. Sup., 2017 Cal. LEXIS 6325).



Horizontal Exhaustion May Not Apply To All Policies In Environmental Coverage Suit
LOS ANGELES - The Second District California Court of Appeal on Aug. 31 determined that an insured cannot electively stack its excess insurance policies in an environmental coverage dispute and said that each of the more than 115 policies at issue must be individually analyzed to determine whether a horizontal exhaustion method should be applied (Montrose Chemical Corporation of California v. Superior Court of the State of California, et al., No. B272387, Calif. App., 2nd Dist., Div. 3, 2017 Cal. App. LEXIS 759).



Insured Seeks Coverage For $12.9M Asbestos Liability Verdict, Says Coverage Owed
LOS ANGELES - An insured claims in an Aug. 18 complaint filed in California state court that its insurers are required to indemnify it for an underlying $12.9 million jury verdict entered against it in an asbestos bodily injury and wrongful death suit (The Hillshire Brands Co., et al. v. Continental Casualty Co., et al., No. BC672967, Calif. Super., Los Angeles Co.).



Judge Finds Contractor Did Not Consent To Trying Vinyl Siding Negligence Theory
SAN FRANCISCO - A California federal judge on Aug. 24 denied an insurer's motion to add a new negligence theory of liability related to coverage for an apartment complex fire, finding that a contractor did not give its implied consent to trying the theory and that amendment to the pleadings would prejudice the contractor (Philadelphia Indemnity Insurance Co. v. Danco Builders, et al., No. 15-cv-03945, N.D. Calif., 2017 U.S. Dist. LEXIS 136338).



Judge Enters Judgment On Reimbursement Sought Against CIGA For Workers' Comp Claims
LOS ANGELES - A California federal judge entered judgment on Aug. 9 vacating and setting aside three reimbursement demands made to the California Insurance Guarantee Association (CIGA) under workers' compensation insurance policies (California Insurance Guarantee Association v. Thomas E. Price, et al., No. 15-01113, C.D. Calif.).



Company Urges 9th Circuit To Reverse, Says Insurance Policy Should Cover Gas Leak
SAN FRANCISCO - A company that takes raw landfill gas and purifies it into pipeline quality natural gas is asking the Ninth Circuit U.S. Court of Appeals to reverse a ruling by a district court judge that high velocity landfill gas was not an "external cause" of damage at the company's plant, and therefore coverage under the company's insurance policy was not available (Ingenco Holdings LLC, et al. v. Ace American Insurance Company, No. 16-35792, 9th Cir.).



Driver's Insurer Seeks Reimbursement For Accident From Vehicle's Excess Policy
SANTA ANA, Calif. - The provider of an excess policy for a vehicle involved in a fatal auto accident is next in line after the primary policy to provide coverage for the accident, the insurer of the driver argues in its appellant reply brief filed July 6 in the Fourth District California Court of Appeal (Mercury Insurance Company v. Chartis Property Casualty Company, No. G054369, Calif. App., 4th Dist.).