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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®



 



Majority: Material Misrepresentation On Insurance Application Warrants Rescission
PASADENA, Calif. - A majority of the Ninth Circuit U.S. Court of Appeals on Jan. 2 affirmed a lower federal court's finding that an insured's material misrepresentation on an application for directors and officers liability insurance warranted rescission of the policy (Western World Insurance Company v. Professional Collection Consultants, No. 16-55470 and 15-2342, 9th Cir., 2018 U.S. App. LEXIS 73).



Exclusion's 'Derivative Claim Exception' Does Not Apply, 9th Circuit Affirms
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on Dec. 27 affirmed a lower federal court's finding that the "derivative claim exception" to an insurance policy's "insured vs. insured" exclusion does not apply, finding that there is no coverage for an underlying lawsuit that an insured's CEO breached his fiduciary obligations (Sunrise Specialty Co. Inc., et al. v. Scottsdale Insurance Co., No. 16-16856, 9th Cir., 2017 U.S. App. LEXIS 26860).



California Appeals Panel: Change To Arbitration Terms Means State Farm May Sue
LOS ANGELES - While water damage occurred at an insured's home during a time when the arbitration agreement signed by the insurer and the supply line manufacturer being accused of providing a defective product covered product liability claims, a change to the agreement after the damage and before the insurer filed suit means that the claim is not subject to arbitration, a California appeals panel ruled Nov. 30 (State Farm General Insurance Co. v. Watts Regulator Co., No. B271236, Calif. App., 2nd Dist., Div. 8, 2017 Cal. App. LEXIS 1059).



No Jurisdiction Under CAFA's 'Mass Action' Provision, Panel Says, Affirms Remand
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Dec. 14 affirmed a lower federal court's remand of a lawsuit arising from claims over defective water supply lines, finding that 26 insurers, acting as subrogees of 145 insureds, are the only plaintiffs and therefore fail to satisfy the numerosity requirement under the Class Action Fairness Act (CAFA) to retain federal jurisdiction (Liberty Mutual Fire Insurance Company, et al. v. EZ-Flo International, Inc., No. 17-56523, 9th Cir., 2017 U.S. App. LEXIS 25306).



Magistrate Judge Confirms Arbitration Award To Workers' Comp Insurer
SAN FRANCISCO - In a dispute regarding a reinsurance participation agreement (RPA), a California federal magistrate judge on Dec. 28 confirmed an arbitration award, ordering an insured to pay $539,246.88 to an insurer in remaining premium payments for the workers' compensation coverage (American ETC, Inc. v. Applied Underwriters Captive Risk Assurance Company Inc., No. 17-03660, N.D. Calif., 2017 U.S. Dist. LEXIS 212811).



Government Owed Interest For Reinsurance Payments On Promissory Notes, Judge Says
LOS ANGELES - The federal government is entitled to recover prejudgment interest and attorney fees in its lawsuit seeking to enforce three promissory notes for which the government made reinsurance payments, a California federal judge ruled Dec. 18 (United States of America v. Lorin S. Rosemond, No. 17-00854, C.D. Calif., 2017 U.S. Dist. LEXIS 207751).



Insurer Seeks To Certify $3.2M Default Judgment Final Against Reinsurer
SAN DIEGO - An insurer asks a California federal court in a Jan. 12 motion to certify as final a $3.2 million default judgment against a reinsurer over its 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.).



Magistrate Judge Denies Protection On Reinsurance Participation Agreement
SACRAMENTO, Calif. - In two putative class actions, a California federal magistrate judge ruled Jan. 12 that insurers are not entitled to a protective order regarding submission of a reinsurance participation agreement (RPA) (Shasta Linen Supply Inc. v. Applied Underwriters Inc., et al., Nos. 16-00158 & 16-01211, E.D. Calif., 2018 U.S. Dist. LEXIS 6079).



Panel Remands Dispute For Decision On Whether Clause Is Unconscionable
SAN DIEGO - A California appeals panel ruled Dec. 22 that a trial judge erred in denying a motion to compel arbitration in a workers' compensation coverage dispute arising from a reinsurance participation agreement (RPA) without deciding whether the RPA's delegation clause is unconscionable (Ramar Production Services Inc., et al. v. Applied Underwriters Inc., et al., No. D071443, Calif. App., 4th Dist., Div. 1, 2017 Cal. App. Unpub. LEXIS 8741).



Claims In Bad Faith Suit Found To Be Preempted By Federal Law
SAN FRANCISCO - Insureds' claims in an insurance breach of contract and bad faith lawsuit over coverage under a homeowners insurance and a standard flood insurance policy (SFIP) are preempted by federal law, a federal judge in California ruled Jan. 10 in granting the insurer's motion to dismiss (Alicia Martin, et al. v. CSAA Insurance Exchange, No. 17-4066, N.D. Calif., 2018 U.S. Dist. LEXIS 4675).



Panel Affirms Restitution Amount For False Workers' Compensation Claim
RIVERSIDE, Calif. - A California appeals panel on Dec. 14 affirmed the amount of restitution a woman must pay after pleading guilty to submitting a fraudulent workers' compensation claim, finding that the judge did not abuse his discretion when requiring her to pay back all wages and medical expenses paid as part of her claim (People v. Michelle Janet Lias, No. E067278, Calif. App., 4th Dist., 2nd Div., 217 Cal. App. Unpub. LEXIS 8588).



Appeals Court: Perjury, Workers' Compensation Fraud Sentences Were Authorized
LOS ANGELES - A California appeals court panel on Jan. 11 found that a man found guilty of workers' compensation fraud should serve three years because the sentence is allowed by the California Insurance Code and because the defendant did not object to the sentence to the trial court judge (People v. Luis Hernandez, No. B279922, Calif. App., 2nd Dist., 5th Div., 2018 Calif. App. Unpub. LEXIS 265).



California Appeals Court Reinstates Man's Suit Over Workers' Compensation Fraud
RIVERSIDE, Calif. - A California appeals court panel on Dec. 19 overturned a trial court judge's ruling dismissing a man's lawsuit accusing his former supervisor and employer of violating the Insurance Fraud Prevention Act (IFPA) by making false statements that resulted in the denial of his claim, finding that the suit was not barred by the litigation privilege or the workers' compensation exclusivity rule (California, ex. rel. Mahmoud Alzayat v. Gerald Hebb, et al., No. E066471, Calif. App., 4th Dist., 2nd Div., 2017 Cal. App. LEXIS 1133).



Exclusion Bars Coverage For Slander Counterclaim, Federal Judge Rules
LOS ANGELES - Granting an insurer's motion for summary judgment on Dec. 28, a California federal judge found that coverage for an underlying slander counterclaim against an insured is barred by a policy exclusion for personal and advertising injury arising out of a breach of contract (Penn-Star Insurance Company v. The Caden Companies, Inc., et al., No. 17-02369, C.D. Calif., 2017 U.S. Dist. LEXIS 213387).



9th Circuit Affirms Injuries Arose Out Of 'Assault And Battery'; Coverage Limited
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on Jan. 12 rejected appellants' argument that whether the injuries they suffered were the result of an "assault and battery" under a commercial general liability insurance policy is a question of fact for a jury, affirming a lower court's ruling in favor of the insurer (The Burlington Insurance Company v. Rosa De La Puente, et al., Nos. 16-16899 and 16-16986, 9th Cir., 2018 U.S. App. LEXIS 891).



Professional Services Exclusion Does Not Bar Coverage, Federal Judge Rules
SAN JOSE, Calif. - Ruling on dueling summary judgment motions in an insurer's lawsuit seeking equitable contribution from a second insurer, a California federal judge on Jan. 9 found that two underlying lawsuits against Narconon International and its affiliates triggered commercial general liability and improper sexual conduct coverage and, therefore, the second insurer also has a duty to defend (Western World Insurance Company v. Nonprofits Insurance Alliance of California, No. 14-04466, N.D. Calif., 2018 U.S. Dist. LEXIS 4720).



Amici Praise Pregnancy Centers' Efforts, Bemoan Abortion Disclosure Law
WASHINGTON, D.C. - Women helped by crisis pregnancy centers and 23 such centers based in Illinois sang the praises of the volunteer organizations in amicus curiae briefs filed with the U.S. Supreme Court on Jan. 11 in an effort to bolster a Jan. 8 opening brief challenging a California law requiring the centers to disclose the availability of abortions (NIFLA, et al. v. Xavier Becerra, et al., No. 16-1140, U.S. Sup.).



UnitedHealth, Insureds Battle Over Lactation Coverage Requirements In ACA
SAN FRANCISCO - Insureds create standards for lactation support services the Patient Protection and Affordable Care Act (ACA) does not impose in an attempt to save their suit, an insurance group told a California federal judge on Jan. 5 in support of its motion for summary judgment (Rachel Condry, et al. v. UnitedHealth Group Inc., et al., No. 17-183, N.D. Calif.).



California Federal Judge Halts New Contraceptive Mandate Exemptions
SAN FRANCISCO - A federal judge in California enjoined new rules expanding the Patient Protection and Affordable Care Act (ACA) contraceptive mandate, finding on Dec. 21 that the administration's sudden abandonment of previous policy and its failure to follow procedures provides strong grounds for the plaintiffs' case (State of California, et al. v. Don J. Wright, et al., No. 17-5783, N.D. Calif.).



California Federal Judge Allows Intervention Into Contraceptive Mandate Suit
SAN FRANCISCO - A religious order has sufficient interests in the outcome of a suit challenging rules broadening the exemptions to the Patient Protection and Affordable Care Act (ACA) contraceptive mandate to permit intervention into the case, a federal judge in California held Dec. 29 (California, et al. v. Don J. Wright, et al., No. 17-5783, N.D. Calif., 2017 U.S. Dist. LEXIS 213352).



Judge Finds Insurer Did Not Improperly Deny Coverage In Violation Of UCL
SACRAMENTO, Calif. - After finding that an insurer did not violate California's unfair competition law (UCL) when it denied coverage for injuries suffered by an insured in a vehicle accident that had already been paid under a medical plan, a California federal judge on Jan. 8 granted the insurer's motion to dismiss the claim against it without leave to amend (Deborah Quattrocchi v. Allstate Indemnity Company, No. 2:17-cv-01578, E.D. Calif., 2018 U.S. Dist. LEXIS 3922).



Disability Insurer Erred In Finding Claimant Could Work In Own Occupation, Judge Says
LOS ANGELES - A California federal judge on Dec. 21 determined that a disability insurer erred in denying a claim for long-term disability benefits under the plan's own-occupation standard because the description of the claimant's position as an assistant news editor in the Department of Labor's Dictionary of Occupational Titles is outdated and does not accurately describe the duties of the claimant's position (Kenneth Popovich v. Metropolitan Life Insurance Co., et al., No. 15-9791, C.D. Calif., 2017 U.S. Dist. LEXIS 210427).



Federal Judge Certifies Class In Dispute Over Monthly Deduction Rate Increase
LOS ANGELES - A California federal judge on Dec. 11 granted policy holders' motion for class certification, appointment of class representatives and appointment of class counsel in their lawsuit challenging a life insurer's increase of its monthly deduction rate (MDR) (Gordon Feller, et al. v. Transamerica Life Insurance Company, No. 16-1378, C.D. Calif., 2017 U.S. Dist. LEXIS 206822).



Federal Judge: Fusion Surgery Preauthorization Waived Insurer's Later Denial
LOS ANGELES - A health insurer waived the right to deny coverage for vertebrate fusion surgery as experimental when it preauthorized the procedure, albeit with a different device, a federal judge in California held Dec. 12, entering judgment for the plaintiff on her Employee Retirement Income Security Act claims (Aubrey Cohorst v. Anthem Health Plans of Kentucky Inc., No. 16-7925, C.D. Calif., 2017 U.S. Dist. LEXIS 204362).



Federal Judge Finds Provider's Claims Against Health Insurer Time-Barred
LOS ANGELES - Years of delayed and partial payments put a health care provider on notice that an insurer was unlikely to make full payment and allowed the statute of limitations periods to close on all three claims, a federal judge in California held Dec. 15 (IV Solutions Inc. v. Empire Healthchoice Assurance Inc., et al., No. 17-5615, C.D. Calif., 2017 U.S. Dist. LEXIS 207601).



Drug Rehab Centers' Claims Against Insurer Too Broad, Judge Says
LOS ANGELES - Three drug rehabilitation centers' cases alleging that an insurer failed to adequately reimburse them for services are too broad, a federal judge in California held Nov. 27 in dismissing the claims without prejudice (Casa Bella Recovery International Inc. v. Humana Inc., et al., Nos. 17-1801, 17-1804, 17-1807, C.D. Calif., 2017 U.S. Dist. LEXIS 207148).



Federal Judge Transfers Coverage Suit Over Damage Caused By California Forest Fire
SAN DIEGO - A California federal judge on Jan. 3 granted an insured's motion to transfer venue of an insurer's lawsuit challenging coverage for the insured's structural and smoke-related damage caused by a July 31, 2015, forest fire (Travelers Property Casualty Company of America v. Hume Lake Christian Camps, Inc., No.: 17-1600, S.D, Calif., 2018 U.S. Dist. LEXIS 1186).



Judge: City Is Not Entitled To Independent Counsel In Sewer Backup Coverage Suit
SANTA ANA, Calif. - A California federal judge on Dec. 18 denied the city of Laguna Beach's motion for partial summary judgment but granted its motion for partial stay in a coverage dispute over damages arising from an April 26, 2016, sewer backup (Tokio Marine Specialty Insurance Company v. Laguna Beach, No. 17-00277, C.D. Calif., 2017 U.S. Dist. LEXIS 212828).



Consumer Class Action Alleges Covered Disparagement Claim, Insured Argues
SAN FRANCISCO - A shampoo manufacturer insured has asked a California appeals court to find that an underlying consumer class action alleging that it falsely advertised its hair products as "organic" triggers a coverage claim for disparagement under its insurance policy (Hartford Casualty Insurance Company v. Vogue International, LLC, et al., No. A150921, Calif. App., 1st Dist.).



Office Depot: AIG Owes Duty To Defend, Indemnify In Underlying Qui Tam Case
SAN FRANCISCO - Office Depot Inc. is asking the Ninth Circuit U.S. Court of Appeals to reverse a ruling in which a district court held that AIG Specialty Insurance Co. does not have a duty to defend or indemnify the company in an underlying qui tam lawsuit (Office Depot Inc. v. v. AIG Specialty Insurance Company, No. 17-55125, 9th Cir.).



Offset Was Not Abuse Of Discretion, 9th Circuit Panel Says In Affirming
SAN FRANCISCO - A disability plan administrator did not abuse its discretion in offsetting a claimant's long-term disability (LTD) benefits to account for Social Security disability income (SSDI) benefits that she receives for her dependents, the Ninth Circuit U.S. Court of Appeals said Nov. 17 in affirming a district court's ruling for the plan (Susan Rene Jones v. Life Insurance Company of North America, et al., No. 16-16172, 9th Cir., 2017 U.S. App. LEXIS 23244).



California Federal Judge Transfers Disability Suit To New Jersey Federal Court
SAN FRANCISCO - A California federal judge on Nov. 16 granted a disability insurer's motion to transfer a disability claimant's suit to New Jersey federal court after determining that New Jersey is the more convenient forum for the parties and for the witnesses (Ernest Tarasovsky v. The Guardian Life Insurance Company of America, No. 17-03464, N.D. Calif., 2017 U.S. Dist. LEXIS 189926).



Federal Judge Dismisses Disability Benefits Suit After Parties Reach Settlement
LOS ANGELES - A California federal judge on Nov. 29 dismissed a disability claimant's suit after the parties reached a settlement following remand of the suit from the Ninth Circuit U.S. Court of Appeals (Sonia Cruz-Baca v. Edison International Long Term Disability Plan, No. 14-7887, C.D. Calif., 2017 U.S. Dist. LEXIS 197347).



Judge: No Coverage For Claims Alleging HIV Infection From Adult Film Work
OAKLAND, Calif. - A California federal judge on Nov. 27 found that the State Insurance Compensation Fund has no duty to defend against underlying claims that adult film stars became infected with the human immunodeficiency virus (HIV) while they were performing in films that were being produced by the insured, finding that the non-intentional tort claims are preempted by the exclusive remedy provision of workers' compensation and the intentional tort claims are barred under a policy exclusion (Seneca Insurance Company Inc. v. Cybernet Entertainment LLC, et al., No. 16-06554, N.D. Calif., 2017 U.S. Dist. LEXIS 194441).



Insurer Fails To Establish 3rd Party Is Subject To Personal Jurisdiction, Judge Says
OAKLAND, Calif. - A California federal judge on Nov. 3 granted a material supplier's insurer's motion to dismiss a third-party complaint brought by another insurer seeking contribution for underlying defenses costs in a construction defects lawsuit (Webcor Construction, LP, et al. vs. Zurich American Insurance Co., et al., No. 17-02220, N.D. Calif., 2017 U.S. Dist. LEXIS 182928).



Known Defects Relieve Insurer Of Duty To Pay For Repairs, Panel Finds
LOS ANGELES - A homeowner "who is aware, long before a rainstorm occurs and causes damage, of possible leakage" caused by construction defects cannot reasonably expect an insurer to pay for repairs on the theory that rainwater, and not the defects, caused the damage, a California appeals panel affirmed Nov. 14 (Simon Cohen, et al. v. Pacific Specialty Insurance Co., No. B276060, Calif. App., 2nd Dist., Div. 8, 2017 Cal. App. Unpub. LEXIS 7779).



Panel Reverses Summary Judgment On Insurer's Duty To Defend Defect Claims
SAN DIEGO - A California appeals panel on Nov. 14 reversed an entry of summary judgment to an insurer on its duty to defend construction defect claims under subcontractors' policies but affirmed summary judgment to a second insurer, finding that it has no duty to defend (McMillin Management Services L.P., et al. v. Financial Pacific Insurance Co., et al., No. D069814, Calif. App., 4th Dist., Div. 1, 2017 Cal. App. LEXIS 1000).



Specific Matter Exclusion Bars Coverage For Alleged Scheme, Federal Judge Rules
LOS ANGELES - A California federal judge on Nov. 16 held that an insurer has no duty to defend or indemnify against underlying lawsuits alleging that an insured's directors and officers participated in a scheme to transfer encumbered properties to their relatives while avoiding banks' interests in the properties (Ocean Towers Housing Corporation v. Evanston Insurance Co., No. 15-6461, C.D. Calif., 2017 U.S. Dist. LEXIS 190738).



Claim Seeking Coverage For Air Ambulance Transport Remanded To Plan Administrator
SACRAMENTO, Calif. - A California federal judge on Nov. 16 remanded an insured's claim seeking coverage for almost $500,000 incurred for the transport of her daughter from a hospital in Mexico to a hospital in Seattle by air ambulance because the plan administrator did not consider all of the available information before denying the claim on the basis that the air transport was not for an emergency (Aviation West Charters LLC, d/b/a Angel Medflight v. UnitedHealthcare Insurance Co., No. 16-436, E.D. Calif., 2017 U.S. Dist. LEXIS 190114).



Judge: ERISA Doesn't Preempt Health Care Provider's State Law Contract Claims
SAN DIEGO - Elimination of assignee rights claims leaves only state law claims alleging that a health insurer orally promised to pay for substance abuse treatments and then failed to fully compensate the provider for that treatment, a federal judge in California held Dec. 5 in finding Employee Retirement Income Security Act preemption inapplicable (Aton Center Inc. v. Blue Cross of California, et al., No. 17-852, S.D. Calif., 2017 U.S. Dist. LEXIS 200057).



Judge Finds No Facts To Support Claim That Insurer Wrongfully Terminated Policies
LOS ANGELES - A California federal judge on Dec. 4 dismissed insureds' claims for violation of California's unfair competition law (UCL) and breach of contract, finding that they failed to show that an insurer's termination of their life insurance policies was unreasonable (Arthur Avazian, et al. v. Genworth Life & Annuity Insurance Co., et al., No. 2:17-cv-06459, C.D. Calif., 2017 U.S. Dist. LEXIS 199067).



Nebraska Law Preempts Reinsurance Participation Agreement Clause, Panel Says
LOS ANGELES - Nebraska Uniform Arbitration Act (NUAA) Section 25-2602.01(f) applies to a reinsurance participation agreement (RPA) and renders an arbitration provision unenforceable, a California appeals panel held Nov. 22, finding that a trial judge did not err in refusing to compel arbitration in a breach of contract dispute (Citizens of Humanity, et al. v. Applied Underwriters Inc., et al., No. B276601, Calif. App., 2nd Dist., Div. 2, 2017 Cal. App. LEXIS 1038).



Insurers: Federal Court Has 'Unflagging Obligation' To Exercise Jurisdiction
SAN FRANCISCO - Primary and first-layer excess insurers argue in a recent brief to the Ninth Circuit U.S. Court of Appeals that because they raised a "facially non-frivolous" and "compelling" argument in favor of arbitration, a federal district court should have fully adjudicated their motion to compel arbitration instead of remanding the lawsuit to California court (SFA Group v. Certain Underwriters at Lloyds London, et al., No. 16-56467, 9th Cir.).



Court Erred When It Applied New York Law To Excess Coverage Case, Investors Say
SAN FRANCISCO - A group of investor plaintiffs have asked the Ninth Circuit U.S. Court of Appeals to reverse a district court ruling and find that the lower court erred when it applied New York law to an insurance coverage dispute regarding the limits of excess coverage (Ruth Ann Wunderman-Cooper, et al. v. Certain Underwriters at Lloyd's London, No. 15-56671, 9th Cir.).



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).