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

LexisNexis® Mealey's™ California Insurance Legal News



Headline California Insurance Legal News from LexisNexis®



 



Panel Finds Limitations Period Precludes Insured's Breach Of Contract Claim
SAN FRANCISCO - A policy's 12-month limitations period bars an insured's breach of contract claim regarding its insurer's denial of coverage for scratches on glass windows at a condominium development project, the Ninth Circuit U.S. Court of Appeals affirmed Dec. 21 (Queensridge Towers LLC v. Allianz Global Risks US Insurance Co., No. 15-15128, 9th Cir.; 2016 U.S. App. LEXIS 22927).



Federal Judge Strikes Insurer's Counterclaim Over Coverage For Defects Suits As Redundant
FRESNO, Calif. - A California federal judge on Nov. 29 struck an insurer's counterclaim as being redundant of another insurer's declaratory judgment claim seeking to resolve a dispute over primary coverage for an insured in construction defect cases (Houston Casualty Co. v. Charter Oak Fire Insurance Co., et al., No. 16-535, E.D. Calif.; 2016 U.S. Dist. LEXIS 164622).



Coverage Dispute Arising From Storm Surge Was Not Timely Filed, Federal Judge Says
LOS ANGELES - A California federal judge on Dec. 21 granted a federal flood insurer's motion to dismiss an insured's breach of contract lawsuit, finding that the action was not filed in federal court within the one-year statute of limitations required by the Standard Flood Insurance Policy (SFIP) (Judd Apatow v. American Bankers Insurance Company of Florida, et al., No. 16-198, C.D. Calif.; 2016 U.S. Dist. LEXIS 180529).



9th Circuit Certifies 2 Questions To California High Court In Environmental Suit
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on Jan. 13 certified two questions to the California Supreme Court regarding whether California's notice-prejudice rule is a fundamental public policy for the purpose of choice-of-law analysis and whether a consent provision can be interpreted as a notice provision (Pitzer College v. Indian Harbor Insurance Co., No.. 14-56017, 9th Cir.; 2017 U.S. App. LEXIS 668).



Insured Not Entitled To Defense From 3 Insurers, 9th Circuit Panel Affirms
SAN FRANCISCO - A district court did not err in determining that an insured seeking coverage from three insurers for an underlying environmental lawsuit is not entitled to coverage under the policies because the insured failed to tender the underlying suit to the insurers and received a defense for the underlying suit from another insurer, the Ninth Circuit U.S. Court of Appeals said Jan. 13 (M.B.L. Inc. v. Federal Insurance Co., et al., No. 14-56107, 9th Cir.; 2017 U.S. App. LEXIS 695).



Insurer Acted In Good Faith In Handling Of Extra Expense Claims, Judge Rules
LOS ANGELES - An insured has failed to provide any genuine issues of material fact to show that his insurer breached the terms of an insurance policy or acted in bad faith in handling a business-income claim for losses associated with commercial property that sustained fire damage, a federal judge in California ruled Jan. 9 (Richard G. Heller v. American States Insurance Co., No. 15-9771, C.D. Calif.; 2017 U.S. Dist. LEXIS 3636).



Directors, Officers Policy Does Not Cover FDIC's Claims, Majority Says, Reverses
PASADENA, Calif. - A majority of the Ninth Circuit U.S. Court of Appeals on Jan. 10 found that a directors and officers liability insurance policy unambiguously excludes from coverage the Federal Deposit Insurance Corp.'s negligence, gross negligence and breach of fiduciary duty claims against a failed bank's former directors and officers, reversing and remanding a lower court (Federal Deposit Insurance Corporation, as Receiver for Security Pacific Bank v. BancInsure, Inc., No. 14-56132, 9th Cir.; 2017 U.S. App. LEXIS 452).



Federal Investigation Is Single Claim; Exclusions Apply, Insurer Tells 9th Circuit
SAN FRANCISCO - A health care organization's directors and officers liability insurer has responded to an insured's appeal asking the Ninth Circuit U.S. Court of Appeals to reverse or "at the very least" remand a lower federal court's finding in favor of the insurer in a coverage dispute arising from an underlying investigation brought by the U.S. Department of Justice (Millennium Laboratories, Inc. v. Allied World Insurance Company [U.S.], Inc., No. 16-55432, 9th Cir.).



Liquidator Asks Court To Set Contingent Claim Update Deadline
SAN FRANCISCO - The liquidator of an insolvent insurer on Oct. 17 asked a California court to set a deadline for claimants to submit updated information regarding unliquidated and contingent claims (Insurance Commissioner of the State of California v. Western Employers Insurance Company, No. CPF-97-984281, Calif. Super., San Francisco Co., Civil Div.).



Insurer: Arguments Made By Reinsurer Regarding Jurisdiction Are Invalid
SAN FRANCISCO - An insurer argued in a federal court in California on Dec. 20 that its reinsurer's "first-to-file" argument is invalid because the reinsurer did not raise that defense in a previous motion to dismiss the insurer's breach of contract suit (The American Insurance Co. v. R&Q Reinsurance Co., No. 16-3044, N.D. Calif.).



Reinsured Says It And Reinsurer Have Reached A Settlement In Principle
SAN FRANCISCO - An insurer tells a federal court in California in a Jan. 11 letter that it and its reinsurer have reached a settlement in principle of their asbestos-related reinsurance dispute (The American Insurance Co. v. R&Q Reinsurance Co., No. 16-3044, N.D. Calif.).



Panel: Insurer Entitled To Recoupment Of Costs Defending Trade Secret Dispute
SAN FRANCISCO - A California appeals panel on Jan. 10 affirmed a lower court's grant of summary judgment in favor of an insurer seeking recoupment of the costs it incurred in defending its agents against claims it brought against the agents involving trade secrets (State Farm Fire And Casualty Co. v. Richard Pyorre, No. A147302, Calif. App., 1st Dist., Div. 1).



9th Circuit Panel Upholds Woman's 151-Month Sentence For Health Care Fraud
PASADENA, Calif. - A Ninth Circuit U.S. Court of Appeals panel on Dec. 14 affirmed a federal judge in California's decision to sentence a woman convicted of health care fraud to 151 to 188 months in prison and order her to pay $8 million in restitution, finding that the woman's crimes warranted the punishment (United States of America v. Uben Rush, No. 13-50169, 9th Cir.; 2016 U.S. App. LEXIS 22201).



Appeals Panel Says Evidence Supports Insurer's Denial Of Disability Benefits
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on Dec. 23 affirmed a district court's ruling that a disability insurer's denial of benefits was reasonable after determining that the evidence does not support the contention that the claimant was permanently disabled (Fred Arko v. Hartford Life and Accident Insurance Co., No. 14-17287, 9th Cir.; 2016 U.S. App. LEXIS 23207).



California Federal Judge Sets Bench Trial In Suit Seeking Disability Benefits
SAN FRANCISCO - A California federal judge on Dec. 9 scheduled a bench trial in a disability benefits dispute after determining that it is not clear from the available evidence whether a claimant's prior disability claims factored into the insurer's decision to deny a third disability claim (Robert Bosley v. Metropolitan Life Insurance Co., No. 16-139, N.D. Calif.; 2016 U.S. Dist. LEXIS 170872).



California Federal Judge Adopts Insurer's Interpretation Of Elimination Period
SAN FRANCISCO - A California federal judge on Dec. 19 determined that a disability claimant's brief return to part-time work does not extend the end of the plan's elimination period for benefits because the claimant's attempt to work in a part-time capacity only bolsters the conclusion that the claimant was still disabled when he returned to part-time work (Marlon Montoya v. Reliance Standard Life Insurance Co., No. 14-2740, N.D. Calif.; 2016 U.S. Dist. LEXIS 175208).



Plan Administrator Did Not Abuse Discretion In Denying Claim, 9th Circuit Says
SAN FRANCISCO - A plan administrator did not abuse its discretion in denying a claim for disability pension benefits because the denial was reasonable based on the evidence and the terms of the plan, the Ninth Circuit U.S. Court of Appeals said Dec. 23 (Eun Sug Cha v. 1199SEIU Health Care Employees Pension Fund, No. 15-55435, 9th Cir.; 2016 U.S. App. LEXIS 23235).



Plaintiff Not Owed Coverage As Additional Insured, 9th Circuit Affirms
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Jan. 11 affirmed a lower federal court's ruling in favor of an insurer in a breach of contract lawsuit seeking coverage for property and business interruption losses (Bita Trading Inc. v. Nationwide Mutual Insurance Co., et al., No. 15-55371, 9th Cir.; 2017 U.S. App. LEXIS 521).



Insurer Says No Defense Owed For Defective Mattress Class Action Complaint
SAN FRANCISCO - A California federal judge erred in finding that an insurer has a duty to defend its insured against an underlying consumer class action lawsuit alleging that the insured's mattresses were defective because the underlying suit does not allege any claims for bodily injury or property damage, the insurer argues in a Jan, 17 brief filed in the Ninth Circuit U.S. Court of Appeals (Hartford Fire Insurance Co. v. Tempur-Sealy International Inc., et al., No. 16-16056, 9th Cir.).



Policyholders: Compound Interest May Not Be Charged Without Signed Document
SAN FRANCISCO - An insurer may not charge compound interest on loans secured by life insurance policies without a signed agreement pursuant to an initiative measure passed by California voters in 1918, called the "1918 Initiative," two policyholders argue in a Sept. 15 appellant reply brief filed in the Ninth Circuit U.S. Court of Appeals (Brenda G. Martin, et al. v. Metropolitan Life Insurance Company, No. 16-15690, 9th Cir.).



Judge Rejects Insureds' Breach Of Contract Arguments In Bad Faith Suit
LOS ANGELES - Summary judgment is warranted against insureds in an insurance breach of contract and bad faith lawsuit because the insureds have failed to show that their insurer breached its contract in failing to pay their claims for benefits or denied their requests for a defense or indemnification, a federal judge in California ruled Dec. 6 (Julie Sohn, et al. v. Allstate Indemnity Co., et al., No. 15-8841, C.D. Calif.; 2016 U.S. Dist. LEXIS 168555).



Judge: Amount In Controversy Standard In Bad Faith Suit Not Met
LOS ANGELES - Remand of an insurance breach of contract and bad faith lawsuit to state court is proper, a federal judge in California ruled Dec. 1, because an insurer failed to show that the amount in controversy meets the statutory requirements for removal (Jules Kraut, et al. v. Bankers Life and Casualty Co., No. 16-6791, C.D. Calif.; 2016 U.S. Dist. LEXIS 166929).



Insurance Policy's Direct Supplier Provision Before 9th Circuit
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals is set to weigh in on whether a manufacturer of hard-disk drives provided to a set-top box company was a direct supplier of satellite television provider DirecTV. The parties completed briefing on Sept. 21 (DirecTV v. Factory Mutual Insurance Co., No. 16-55313, 9th Cir.).



Fitbit Sues Insurer For Bad Faith, Challenges Reliance On 'Prior Offense' Exclusion
SAN FRANCISCO - Fitbit Inc. on Nov. 23 sued its insurer for breach of contract and bad faith in federal court in California, seeking a declaration that the insurer has a duty to defend it against an underlying trademark dispute with a competitor (Fitbit Inc. v. Federal Insurance Co., No. 16-06791, N.D. Calif.).



Reinsurer Says Court Lacks Jurisdiction To Hear Breach Of Contract Case
SAN FRANCISCO - A reinsurer tells a federal court on California in a Nov. 15 motion that the court should dismiss a case brought by a reinsured because, among other reasons, the reinsurer filed a similar suit against the reinsured in another federal court two months before the instant suit was brought (The American Insurance Co. v. R&Q Reinsurance Co., No. 16-3044, N.D. Calif.).



Federal Judge: False Claims Suit Arose Out Of Insured's Professional Services
SAN FRANCISCO - A California federal judge on Nov. 15 held that an underlying qui tam action brought against an insured under the False Claims Act arose out of the insured's professional services and, therefore, coverage is barred by the policy's professional services exclusion, dismissing breach of contract and bad faith claims against the insurer (HotChalk Inc. v. Scottsdale Insurance Co., No. 16-3883, N.D. Calif.; 2016 U.S. Dist. LEXIS 163046).



California Panel Affirms Ruling In Favor Of Insurer, Broker In Negligence Suit
SAN FRANCISCO - A California appeals panel on Nov. 14 affirmed a lower court's ruling in favor of a life insurer and an insurance agent in a negligence lawsuit brought by the insured's beneficiaries, finding that the beneficiaries are barred from relying on negligence per se to defeat summary judgment (Pacific Coast Drilling Company, Inc., et al. v. Farmers New World Life Insurance Co., et al., Nos. A140423 and A141464, Calif. App., 1st Dist., Div. 2).



Judge Awards Surety Default Judgment Of $305,067 For Breach Of Contract Claim
LOS ANGELES - A surety is entitled to a default judgment of $305,067.65 in damages against a subcontractor for breach of contract and implied contractual indemnity claims stemming from defective work on a media arts center construction project, a California federal judge ruled Oct. 31 (Hartford Fire Insurance Co. v. Oceans-One Interior Drywall Inc., No. 16-945, C.D. Calif.; 2016 U.S. Dist. LEXIS 151509).



Homeowners, Insurer Argue To 9th Circuit Whether Water Damage Was Sudden
SAN FRANCISCO - In briefs filed in the Ninth Circuit U.S. Court of Appeals, a California couple and their homeowners insurance provider dispute whether a trial court properly determined that water damage to the couple's home was caused gradually, rather than by a "sudden and accidental" occurrence, exempting their claim from coverage (Neda Raschkovsky, et al. v. Allstate Insurance Co., No. 16-55093, 9th Cir.).



Termination Of Benefits Was Not Abuse Of Discretion, Federal Judge Says
LOS ANGELES - A California federal judge on Nov. 30 determined that a disability insurer did not abuse its discretion when it terminated a claimant's short-term disability benefits because the insurer's termination was based on reliable evidence (Greg Martin v. Aetna Life Insurance Co. et al., No. 15-7355, C.D. Calif.; 2016 U.S. Dist. LEXIS 166120).



California Panel Affirms Attorney Fees Order As Modified, Reduces Award By $9,994
LOS ANGELES - A California appeals panel on Dec. 1 affirmed a lower court's attorney fee award in favor of an insurer except as to $9,994.76 in fees that were not recoverable, reducing the total award to $73,218.29 (Wertheim LLC v. The Bar Plan Mutual Insurance Co., No. B268539, Calif. App., 2nd Dist., Div. 5; 2016 Cal. App. Unpub. LEXIS 8558).



Federal Judge Grants Management Liability Insurer's Motion For Default Judgment
SAN FRANCISCO - A California federal judge on Nov. 29 granted a management liability insurer's motion for a default judgment in its declaratory judgment lawsuit disputing coverage for underlying workplace harassment claims against its insured's directors and officers (Maxum Indemnity Co. v. Sullivan Vineyards Corporation, et al., No. 16-03611, N.D. Calif.).



Insurer Argues It Is Entitled To Reimbursement Of Defense Costs Paid Under Deductible
SAN FRANCISCO - An insurer involved in an environmental contamination coverage dispute claims in a Dec. 1 motion for partial summary judgment filed in California federal court that it is entitled to reimbursement of the deductible it paid on behalf of its insured because the policy at issue specifically states that the deductible includes claim expenses such as defense costs (American Guarantee and Liability Insurance Co., et al. v. Technichem Inc., et al., No. 15-03611, N.D. Calif.).



Insurer Loses Bid For Judgment On Liquidating Trust's Payment Claims
OAKLAND, Calif. - An asbestos personal injury liquidating trust properly submitted proposals to an insurer regarding the payment of allowed claims that triggered the insurer's policies and did not violate two debtors' plan of reorganization by allocating to the insurer 100 percent of the liquidated value of each approved unpaid claim, a California federal bankruptcy judge held Nov. 21 (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.; 2016 Bankr. LEXIS 4034).



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.).