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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®



 



Judge Approves $17 Million Distribution From Insolvent California Insurers
LOS ANGELES - A California judge on Oct. 18 granted the liquidator of a group of insolvent insurers' application to distribute more than $17 million to certain states' insurance guaranty associations (Insurance Commissioner of the State of California v. Superior National Insurance Company, No. BS061974, Calif. Super., Los Angeles Co.).



Judge OKs Conservation And Liquidation Plan, Says OK Is Not Liquidation Order
SAN FRANCISCO - A California judge on Sept. 13 approved the conservation and liquidation plan for a property and casualty insurer presented by the state's insurance commissioner (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.).



Alleged Property Damage Falls Under Policy Exclusion, 9th Circuit Affirms
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Oct. 20 affirmed a lower federal court's finding that insurers have no duty to defend their insured against an underlying inverse condemnation lawsuit brought by homeowners (City of Fullerton, et al. v. Insurance Company of the State of Pennsylvania, et al., No. 14-56434, 9th Cir.; 2016 U.S. App. LEXIS 18928).



Continuous Injury Exclusion Bars Coverage For Insured's Defects, Judge Concludes
SACRAMENTO, Calif. - A "continuous or progressive injury" (CP) exclusion precludes coverage in most of the various underlying construction defects lawsuits filed against two insured subcontractors, a California federal judge ruled Oct. 31 (American Zurich Insurance Co., et al. v. Ironshore Specialty Insurance Co., No. 14-00060, E.D. Calif.; 2016 U.S. Dist. LEXIS 150684).



Judge Dismisses Insurers' Equitable Reimbursement Claim Against Additional Insureds
LOS ANGELES - Commercial general liability insurers failed to allege that they defended "immediately" and "in its entirety" underlying construction defects lawsuits, a California federal judge ruled Sept. 29, dismissing the insurers' equitable reimbursement claim (St. Paul Mercury Insurance Co., et al. v. Del Webb California Corp., et al., No. 16-209, C.D. Calif.; 2016 U.S. Dist. LEXIS 143072).



California Federal Judge Denies Motion To Dismiss In Sewage Spill Coverage Suit
LOS ANGELES - A California federal judge on Oct. 31 refused to dismiss an insurer's claims against its insured and two underlying plaintiffs in a dispute over coverage for a sewage spill after determining that federal jurisdiction is proper as the amount in controversy exceeds the federal jurisdictional requirement (Travelers Property Casualty Company of America v. Mountain Movers Engineering Contactors Inc., No. 16-2127, S.D. Calif.).



Insurers File Suit, Claim No Coverage Owed For Underlying Pollution Claims
LOS ANGELES - No coverage is owed for underlying pollution claims filed against an insured because the policies at issue contain pollution and lead exclusions, two insurers allege in a Nov. 8 complaint filed in California federal court (XL Insurance America Inc., et al., v. Craig R. Jalbert, et al., No. 16-8318, C.D. Calif.).



Real Estate Property Managed Endorsement Rendered Policies Excess, Judge Rules
SACRAMENTO, Calif. - A California federal judge on Nov. 2 held that a Real Estate Property Managed endorsement rendered an insurer's policies excess with respect to an underlying personal injury claim, finding that the insurer has no duty to defend or indemnity its property manager insured (Atain Specialty Insurance Co. v. Sierra Pacific Management Co., et al., No. 14-00609, E.D. Calif.; 2016 U.S. Dist. LEXIS 152874).



Parties Seek 9th Circuit Review Of Homeowners Insurance Dispute
SAN FRANCISCO - Parties in a homeowners insurance dispute have asked the Ninth Circuit U.S. Court of Appeals to determine whether an insurer properly denied coverage under the policy due to the insureds' failure to pay their premium, which led to their policy being canceled prior to the time coverage was sought (Robert Fuller, et al. v. Safeco Insurance Company of Oregon, No. 16-35289, 9th Cir.).



Fire Insurer: Claims Against Original Insurer Are Valid, Should Be Reinstated
SAN FRANCISCO - Seneca Insurance Co. has asked the Ninth Circuit U.S. Court of Appeals to reverse summary judgment for AMCO Insurance Co., saying AMCO improperly tried to cancel two apartment complex fire insurance policies under California law (Seneca Insurance Company, Inc. v. Allied Insurance Company, et al., No. 16-55079, 9th Cir.).



Judge Rules In Insurers' Favor In Coverage Suit Over Alleged Counterfeit Products
LOS ANGELES - A California federal judge on Sept. 29 granted insurers' motion for summary judgment in a dispute over coverage for claims seeking more than $1.5 million for the insured's purported sale of counterfeit products (Infinity Micro Computer, Inc., et al. Continental Casualty Company, et al., No. 15-04777, C.D. Calif.; 2016 U.S. Dist. LEXIS 134957).



9th Circuit: Earlier Ruling's Instructions Did Not Violate Ex Post Facto Clause
SAN FRANCISCO - A Ninth Circuit U.S. Court of Appeals panel on Oct. 24 affirmed a man's 120-month sentence for health care fraud and conspiracy to commit health care fraud, holding that a federal judge in California properly allowed him to present evidence on intended loss and finding that the instructions in United States v. Popov (2015 U.S. App. LEXIS 2577) did not violate the ex post facto clause (United States of America v. Ramanathan Prakash, No. 14-10517, 9th Cir.; 2016 U.S. App. LEXIS 19143).



Court Upholds Ruling Ordering Man To Pay Restitution For False Claims
SAN DIEGO - A California appeals panel on Nov. 14 upheld a trial judge's decision to require a man convicted of making false statements to physicians in connection with a workers' compensation claim to pay $30,154.02 to a risk services company, after finding that the defendant was unable to show that the amount should be limited to expenses caused by the crime for which he was convicted (The People of the State of California v. Chany Lopez, No. D069140, Calif. App., 4th Dist., Div. 1; 2016 Calif. App. Unpub. LEXIS 8197).



Judge Declines To Exercise Jurisdiction Over Insurer's Misrepresentation Suit
SAN FRANCISCO - A declaratory judgment lawsuit brought by Massachusetts Life Insurance Co. (MassMutal) claiming that a woman's long-term care policy is invalid based on misrepresentations about her medical history was dismissed Nov. 15 by a federal judge in California who ruled that a parallel lawsuit filed by the woman in state court will cover the same issues (Massachusetts Life Insurance Company v. Lisa Chang, et al., No. 16-cv-03679, N.D. Calif.; 2016 U.S. Dist. LEXIS 158915).



Panel Reverses No Coverage Ruling In Suit Over Alleged Mortgage Services Scheme
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Oct. 20 found that an underlying lawsuit alleging Lanham Act and unfair competition claims against an insured potentially sought damages that were covered under an insurance policy, reversing a lower court's no coverage ruling (First One Lending Corp., et al. v. The Hartford Casualty Insurance Co., No. 14-56492, 9th Cir.; 2016 U.S. App. LEXIS 18935).



Insured Fails To Present Evidence To Support Finding Of Liability, Insurer Argues
FRESNO, Calif. - An insurer on Oct. 26 moved for judgment on partial findings in a coverage dispute over an alleged theft that occurred at an insured business by the business owner's brother (Pacific Marine Center Inc., et al. v. Philadelphia Indemnity Insurance Co., No. 13-00992, E.D. Calif.).



Evidence Shows Claimant Not Able To Work In Sedentary Position, Panel Says
SAN FRANCISCO - A district court erred in determining that a disability claimant was capable of working in a sedentary position because the evidence shows that the claimant was able to sit for only four hours in an eight-hour workday, the Ninth Circuit U.S. Court of Appeals said Nov. 4 (Avery Armani v. Northwestern Mutual Life Insurance Co., No. 14-56866, 9th Cir.; 2016 U.S. App. LEXIS 19925).



Evidence Supports Finding That Claimant Could Perform Duties Of Usual Occupation
SAN FRANCISCO - A district court did not err in concluding that a disability claimant was not totally disabled by fibromyalgia because the evidence supports the insurer's determination that the claimant could perform the material and substantial duties of her usual occupation, the Ninth Circuit U.S. Court of Appeals said Oct. 26 (Cheryl Leslie v. United of Omaha Life Insurance Co., No. 14-56775, 9th Cir.; 2016 U.S. App. LEXIS 19348).



Termination Of Benefits Was Reasonable, Majority Of 9th Circuit Panel Determines
SAN FRANCISCO - The majority of a Ninth Circuit U.S. Court of Appeals panel on Oct. 28 denied a disability claimant's motion for rehearing and reiterated that the termination of the claimant's benefits was reasonable because the claimant did not undergo an independent medical exam as requested by the insurer and as required under the plan (Curtis F. Lee v. ING Groep, N.V., et al., No. 14-15848, 9th Cir.; 2016 U.S. App. LEXIS 19513).



Diversity Of Citizenship Does Not Exist; Suit Must Be Remanded, Federal Judge Says
LOS ANGELES - Because it is possible for a disability claimant to amend a complaint to plead claims with more particularity against a California doctor who conducted an independent medical exam for the disability insurer and the hospital that employed the doctor, a California federal judge on Oct. 11 said the suit must be remanded to state court as complete diversity of citizenship does not exist (Mayna Chau-Barlow v. Provident Life and Accident Insurance Co., et al., No. 16-1694, C.D. Calif.; 2016 U.S. Dist. LEXIS 140833).



'Unrepaid Loan Carve-Out' Does Not Bar Coverage For FDIC's Suit, 9th Circuit Rules
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Oct. 19 affirmed a federal court's finding that a bank's management liability insurance policy's "unrepaid loan carve-out" does not bar coverage for damages sought by the Federal Deposit Insurance Corp. in an underlying lawsuit alleging tortious conduct by the bank's directors and officers (St. Paul Mercury Insurance Co. v. Federal Deposit Insurance Corporation, No. 14-56830, 9th Cir.; 2016 U.S. App. LEXIS 18811).



Insurer Owes Duty To Defend Environmental Contamination Suit, Federal Judge Says
LOS ANGELES - An insurer has a duty to defend its insureds against underlying environmental contamination claims because the policy's chemical discharge exclusion does not apply to the underlying suit; however, the insureds are not entitled to independent counsel, a California federal judge said Nov. 7 (Hollyway Cleaners & Laundry Co., et al. v. Central National Insurance Company of Omaha Inc., No. 13-7497, C.D. Calif.; 2016 U.S. Dist. LEXIS 155003).



Damages Demand Shows Amount In Controversy Is Met In Bad Faith Suit, Judge Rules
SACRAMENTO, Calif. - An insured's damages demand in her statement of damages in an insurance breach of contract and bad faith lawsuit constitutes sufficient evidence that the amount in controversy has been met, a federal judge in California ruled Nov. 16 in denying the insured's motion to remand (Beth Wheeler v. United Financial Casualty Co., No. 16-1875, E.D. Calif.; 2016 U.S. Dist. LEXIS 158907).



Amount In Controversy In Bad Faith Suit Doesn't Exceed $75,000, Judge Rules
LOS ANGELES - On his own motion, a federal judge in California on Nov. 17 remanded an insurance breach of contract and bad faith lawsuit to state court, ruling that an insurer failed to show that the amount in controversy exceeded the statutory requirement (Maria L. Monroy, et al. v. Infinity Insurance Co., et al., No. 16-5296, C.D. Calif.; 2016 U.S. Dist. LEXIS 159591).



Judge: State Law Bars Insurers From Indemnifying For Punitive Damages Awards
FRESNO, Calif. - An insurer is entitled to summary judgment in an insurance breach of contract and bad faith lawsuit, a federal judge in California ruled Nov. 18, because California law bars insurers from indemnifying their insureds for punitive damages awards (Paul Evert's RV Country Inc., et al. v. Universal Underwriters Insurance Co., et al., No. 15-0124, E.D. Calif.; 2016 U.S. Dist. LEXIS 160519).



Retailer Says Insurers Had Broad Duty To Defend In Computer Spyware Suits
SAN FRANCISCO - In a Nov. 15 reply brief in the Ninth Circuit U.S. Court of Appeals, a rent-to-own (RTO) retailer argues that its insurance providers had a broad duty to defend it in underlying lawsuits over its installation of spyware on customers' computers, contending that a trial court erred in construing a recording and distribution policy exclusion in favor of the insurers and against coverage (American Economy Insurance Co., et al. v. Aspen Way Enterprises Inc., et al., No. 16-35059, 9th Cir.).



9th Circuit To Decide Policy Coverage For Teen's Sexual Assaults
SAN FRANCISCO - A Las Vegas family and an insurance company recently debated in the Ninth Circuit U.S. Court of Appeals whether an exclusion in a homeowners policy for all injuries arising from sexual contact bars coverage to the family for an underlying state court complaint alleging sexual molestation by two teens against a child (Paul Taylor, et al. v. American Family Mutual Insurance Company, No. 16-15022, 9th Cir.).



Life Insurance Company Must Face Class Claims Over Deduction Rate Increase
LOS ANGELES - A life insurance company's motion to dismiss a consolidated class complaint filed by its policy holders after it increased its monthly deduction rate (MDR) failed except as to a small portion of the plaintiffs' breach of contract claims, a California federal judge ruled Nov. 8, finding that an earlier settlement between the company and its policy holders did not bar the present suit (Gordon Feller, et al. v. Transamerica Life Insurance Company, No. 16-1378, C.D. Calif.; 2016 U.S. Dist. LEXIS 155759).



Insurer: Reinsurer Knew Performance Under Agreement Was Connected To California
SAN FRANCISCO - Following the dismissal of a suit for lack of jurisdiction, an insurer filed an amended complaint against its reinsurer in a federal court in California on Nov. 2, making a point of noting the state's connection with the underlying reinsurance agreements (The American Insurance Co. v. R&Q Reinsurance Co., No. 16-3044, N.D. Calif.).



Judge: Insured Showed She Incurred Economic Loss To Sustain Bad Faith Claim
PASADENA, Calif. - Although a California federal court did not err in its interpretation of California insurance law, it erred in determining that the insurer failed to show that the insured incurred an economic loss as required to sustain her insurance bad faith claim against a life insurance provider, a Ninth Circuit U.S. Court of Appeals panel ruled Oct. 18 (Beverly Burton v. The Prudential Insurance Company of America, No. 14-56721, 9th Cir.; 2016 U.S. App. LEXIS 18617).



Judge Dismisses Bad Faith Suit, Allows Insured To Replead ERISA Claims
FRESNO, Calif. - Dismissal of claims in an insurance breach of contract and bad faith lawsuit are proper because the claims are preempted by the Employee Retirement Income Security Act (ERISA), a federal judge in California ruled Sept. 30 (April Powell v. Unum Life Insurance Company of America, et al., No. 16-1197, E.D. Calif.; 2016 U.S. Dist. LEXIS 136311).



Policy Exclusion Bars Coverage In Underlying Suit, Judge Rules
SAN FRANCISCO - A federal judge in California on Sept. 26 granted an insurer's motion for summary judgment in an insurance bad faith lawsuit, ruling that the insurer had no duty to defend its insureds in an underlying lawsuit because the claims were barred by a policy exclusion (Sunrise Specialty Co. Inc., et al. v. Scottsdale Insurance Co., No. 16-1461, N.D. Calif.; 2016 U.S. Dist. LEXIS 131664).



Judge: Potential Conflicts In Insurance Coverage Do Not Require Independent Counsel
SAN DIEGO - Potential conflicts of interests between an insurer and an additional insured do not require the appointment of independent counsel in an underlying construction defects lawsuit, a California federal judge ruled Sept. 29, also granting summary judgment on breach of contract and bad faith claims (St. Paul Mercury Insurance Co. v. McMillin Homes Construction Inc., et al., No. 15-1548, S.D. Calif.; 2016 U.S. Dist. LEXIS 134972).



Plan Administrator Not Granted Discretionary Authority, Federal Judge Says
SAN FRANCISCO - A de novo standard of review should be applied in a disability benefits suit because the plan at issue did not confer discretionary authority to the disability plan administrator, a California federal judge said Oct. 3 (Cathleen Murphy v. California Physicians Service, et al., No. 14-2581, N.D. Calif.; 2016 U.S. Dist. LEXIS 137159).



Claimant Failed To Prove That He Suffered From Bipolar Disorder, Panel Says
SAN FRANCISCO - A district court did not err in determining that a disability insurer's termination of a claimant's benefits was reasonable based on the plan's mental illness limitation because the claimant failed to carry his burden of proving that he suffered from bipolar disorder, the Ninth Circuit U.S. Court of Appeals affirmed Sept. 26 (David Hoffmann v. Life Insurance Company of North America, et al., No. 15-55093, 9th Cir.; 2016 U.S. App. LEXIS 17491).



Judge Dismisses Foo Fighters' Breach Of Contract Suit Against Insurers, Brokers
LOS ANGELES - A California federal judge on Oct. 7 dismissed with prejudice Foo Fighters LLC's breach of contract lawsuit seeking full policy benefits for 11 shows that were canceled in the wake of the terrorist attacks in Paris and an injury singer and guitarist Dave Grohl suffered during a performance one day after the band and its insurers and brokers filed a stipulation for dismissal (Foo Fighters LLC v. Certain Underwriters at Lloyd's London, et al., No. 16-cv-04208, C.D. Calif.).



Pollution Exclusion Bars Coverage For Underlying Pesticide Suit, Insurer Says
LOS ANGELES - No coverage is owed for an underlying suit filed against an insured and seeking damages for bodily injuries sustained by a minor child as a result of his mother's exposure to pesticides while she was pregnant with the child because coverage is barred by the policies' pollution exclusion, an insurer claims in a complaint filed Oct. 4 in California federal court (Aspen Specialty Insurance Co. v. Ramco Enterprises L.P., No. 16-7422, C.D. Calif.).



California Federal Judge Allows U.S. Navy To Intervene In Contamination Dispute
SACRAMENTO, Calif. - A California federal judge on Oct. 6 granted a motion to intervene filed by the U.S. Department of the Navy in an environmental contamination coverage dispute after determining that the addition of the Navy as a party to the suit will not prejudice the insurer and will help the court in developing the facts at issue (Lennar Mare Island LLC v. Steadfast Insurance Co., et al., No. 12-2182, E.D. Calif.; 2016 U.S. Dist. LEXIS 139383).



U.S. Navy Files Complaint In Contamination Dispute, Claims Insurer Breached Contract
SACRAMENTO, Calif. - The U.S. Department of the Navy on Oct. 19 filed a complaint in intervention in a California federal court, seeking a declaration that an insurer owes coverage for environmental contamination discovered at one of the Navy's California shipyards (Lennar Mare Island LLC v. Steadfast Insurance Co., et al., No. 12-2182, E.D. Calif.).



California Federal Judge Says Court Lacks Jurisdiction Over Reinsurer
SAN FRANCISCO - A California federal judge on Oct. 12 granted a reinsurer's motion to dismiss in an asbestos coverage suit on the basis that the California federal court lacks jurisdiction over the reinsurer whose headquarters are based in the Commonwealth of Pennsylvania (The American Insurance Co. v. R&Q Reinsurance Co., No. 16-3044, N.D. Calif.; 2016 U.S. Dist. LEXIS 141467).



Federal Government Says Insurance Guarantor's Case Against It Is Moot
LOS ANGELES - The United States told a federal court in California on Sept. 12 that California's insurance guarantor's case against the government should be dismissed as moot now that the United States has withdrawn its demand for reimbursement of certain workers' compensation payments (California Insurance Guarantee Association v. Sylvia Mathews Burwell, et al., No. 15-cv-1113, C.D. Calif.).



Conservator Explains Status Of Cut-Through Reinsurance Endorsements
SAN FRANCISCO - The conservator of a property casualty insurer responded in a California court on Sept. 6 to certain objectors to his conservatorship plan and explained how cut through reinsurance endorsements would be handled in the plan (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).



California Panel Affirms Employment-Related Practices Exclusion Bars Coverage
SAN DIEGO - A California appeals panel on Sept. 23 affirmed a lower court's ruling that a commercial general liability insurance policy's employment-related practices (ERP) bars coverage for all claims alleged against an insured and its employee (Golden Eagle Insurance Corp. v. Alana Munoz, No. G052223, Calif. App., 4th Dist., Div. 3; 2016 Cal. App. Unpub. LEXIS 6998).



Extracontractual Monetary Damages Are Recoverable Under ERISA, Panel Says, Reverses
LOS ANGELES - A California appeals panel held Oct. 6 that monetary relief for extracontractual harm is legally recoverable under Section 502(a)(3) of the Employee Retirement Income Security Act, reversing a lower court's ruling that insurers have no duty to defend a managed care company against underlying lawsuits (Health Net, Inc. v. American International Specialty Lines Insurance Co., et al., No. B262716, Calif. App., 2nd Dist., Div. 3; 2016 Cal. App. Unpub. LEXIS 7296).



Judge Denies Insurer's Motion To Stay, Permission To Appeal Rescission Dispute
SAN FRANCISCO - A California federal judge on Oct. 11 rejected a products liability insurer's argument that interlocutory review of a May 27 order on the issue of rescission is warranted under 28 U.S. Code Section 1292(b) because the order involves a controlling question of law for which there is substantial ground for difference of opinion (Illinois Union Insurance Co., et al. v. Intuitive Surgical Inc., No. 13-04863, N.D. Calif.; 2016 U.S. Dist. LEXIS 140762).



Duty To Defend Was Not Triggered, Insurer Argues To 9th Circuit
SAN FRANCISCO - An employment practices liability insurer has asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court's ruling that it had a duty to defend its insured against an underlying class action lawsuit (PHP Insurance Service Inc., et al. v. Greenwich Insurance Co., No. 16-15083, 9th Cir.).



9th Circuit: Error In Admitting Testimony Does Not Warrant New Trial
PASADENA, Calif. - A Ninth Circuit U.S. Court of Appeals panel on Sept. 14 affirmed the denial of a woman's motion for a new trial, holding that even though a judge erred in allowing testimony that inculpated the defendant, there was sufficient evidence to support her conviction of mail fraud in connection with a scheme to submit fraudulent insurance bills (United States of America v. Theresa Fisher, No. 15-50306, 9th Cir.; 2016 U.S. App. LEXIS 16830).



9th Circuit Certifies Question Of 'Exceptional Importance' To California Insurers
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Aug. 22 certified a question to the California Supreme Court to determine whether an injured third party's claims against an employer for negligent hiring, retention and supervision of an employee who intentionally injured the third party constitutes an "occurrence" under the employer's commercial general liability insurance policy (Liberty Surplus Insurance Corporation, et al. v. Ledesma and Meyer Construction Co., Inc., et al., No. 14-56120, 9th Cir.; 2016 U.S. App. LEXIS 15352).



Judge: Insurer Has Alleged 2nd Insurer Has Duty To Defend Suit Against Football Team
SAN JOSE, Calif. - A California federal judge on Aug. 29 held that a commercial general liability insurer has alleged that some of the claims in an underlying lawsuit against the San Francisco Forty Niners Football Co. and others are potentially covered by a second insurance policy (First Mercury Insurance Co. v. Great Divide Insurance Co., No. 16-02114, N.D. Calif.; 2016 U.S. Dist. LEXIS 115872).



Brokers Seek To Dismiss Foo Fighters' Breach Of Contract Suit Over Canceled Shows
LOS ANGELES - Insurance brokers on Aug. 8 moved a California federal court to dismiss Foo Fighters LLC's breach of contract lawsuit seeking full policy benefits for 11 shows that were canceled in the wake of the terrorist attacks in Paris and an injury singer and guitarist Dave Grohl suffered during a performance (Foo Fighters LLC v. Certain Underwriters at Lloyd's London, et al., No. 16-cv-04208, C.D. Calif.).



Panel Majority Says District Court Failed To Consider Effect Of Medications
SAN FRANCISCO - A district court erred in entering judgment in favor of a disability plan and a disability insurer because it failed to consider how medications taken by the disability claimant would affect his ability to function in a workplace under the "any occupation" test, the majority of a Ninth Circuit U.S. Court of Appeals panel said Aug. 26 (Daniel G. Demer v. IBM Corporation LTD Plan, et al., No. 13-17196, 9th Cir.; 2016 U.S. App. LEXIS 15788).



Statute Voiding Discretionary Clauses Does Not Apply To Health Plan, Judge Says
SAN FRANCISCO - A California statute voiding discretionary clauses in disability and life insurance policies does not apply to a claim for medical expenses under a health insurance policy because New York law applies to the dispute and because health insurance is not a form of disability insurance, a California federal judge said Aug. 30 (David Bain et al., v. United Healthcare Inc., No. 15-3305, N.D. Calif.; 2016 U.S. Dist. LEXIS 116805).



9th Circuit Says Watercraft Exclusion Bars Coverage For Contaminated Fish
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on Sept. 9 affirmed a judgment entered in favor of an insured on a breach of contract claim in a petroleum contamination coverage suit, agreeing with a district court's determination that a watercraft exclusion bars coverage for the insured's fish oil that was contaminated with oil while stored on a ship (Trident Seafoods Corp., v. ACE American Insurance Co., No. 13-36035, 9th Cir.; 2016 U.S. App. LEXIS 16595).



Panel: No Commercial Crime Coverage Because Insured Made Material Misrepresentation
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Sept. 1 affirmed a lower federal court's summary judgment ruling in favor of commercial crime insurers in a Chapter 7 trustee's breach of contract and bad faith lawsuit seeking to recover stolen money (Heide Kurtz, solely in her capacity as Chapter 7th Trustee for the Estate of Namco Financial Exchange Corp. v. Liberty Mutual Insurance Co., et al., No. 14-55931, 9th Cir.; 2016 U.S. App. LEXIS 16217).



Judge OKs $110.8M Distribution Of Insurer In Conservatorship's Settlement Funds
LOS ANGELES - A California judge on July 26 approved the state's insurance commissioner's application for an order allowing him to distribute $110.8 million of a $200 million settlement (Insurance Commissioner of the State of California v. Executive Life Insurance Company, No. BS 006912, Calif. Super., Los Angeles Co.).



Judge Orders Conservatorship Of Insurer In Hazardous Financial Condition
SAN FRANCISCO - A California judge on July 28 ordered an insurer into conservatorship and named the state's insurance commissioner as conservator (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).



Magistrate Judge: California Law Allows Insurer To Rescind Policy
FRESNO, Calif. - An insurance company's motion for default judgment in a suit where it seeks to rescind a commercial insurance property policy issued to a man who claims that a warehouse he owned was robbed should be granted, a federal magistrate judge in California recommended Aug. 22, noting that state law requires insureds to provide truthful information on a policy application (United States Specialty Insurance Company v. Hussein Saleh, d/b/a 3 Hermanos Warehouses, No. 16-cv-00632-DAD-MJS, E.D. Calif.; 2016 U.S. Dist. LEXIS 111769).



Judge: Insurer Owes Defense For Covered Water Claims, Noncovered Mold Claims
SAN FRANCISCO - A commercial general liability insurer owed a defense in an underlying action for both covered water damage claims and noncovered mold damage claims, a California federal judge ruled Aug. 19, finding that neither a mold exclusion or a "continuous or progressive injury or damage" exclusion applies to bar coverage (Saarman Construction Ltd. v. Ironshore Specialty Insurance Co., No. 15-03548, N.D. Calif.; 2016 U.S. Dist. LEXIS 110921).



Federal Judge Vacates Hearing On Insurer's Motion To Stay Rescission Dispute
SAN FRANCISCO - A California federal judge on Sept. 8 vacated a Sept. 22 hearing on an insurer's motion to stay and for permission to appeal the issue of whether concealment in an insurance policy rescission lawsuit is measured under California law when the insurance policy is formed or when the policy is delivered to the insured (Illinois Union Insurance Co., et al. v. Intuitive Surgical Inc., No. 13-04863, N.D. Calif.).



Federal Judge Refuses To Allow Insureds To Add Brokers, Claims To Coverage Dispute
SAN DIEGO - A California federal judge on Sept. 1 denied insureds' motion to amend their complaint to add insurance brokers as defendants in a directors and officers liability coverage dispute (Scott G. Kelly, et al. v. Starr Indemnity & Liability Co., No. 15-2900, S.D. Calif.; 2016 U.S. Dist. LEXIS 118415).



California Federal Judge: Insurance Adjuster Must Be Dismissed From Coverage Suit
LOS ANGELES - A California federal judge on Sept. 9 denied a motion to remand and granted an insurance adjuster's motion to dismiss in a water damage coverage suit after determining that the adjuster was fraudulently joined to the suit (Farzin Michael Feizbakhsh, et. al. v. Travelers Commercial Insurance Co., et al., No. 16-02165, C.D. Calif.; 2016 U.S. Dist. LEXIS 123471).