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Mealey's California Insurance

  • August 15, 2025

    No Coverage Owed For Elder Abuse Suit, Insurer Argues In Federal Court

    SACRAMENTO, Calif. — An insurer filed suit in a California federal court seeking a declaratory judgment that it owes no coverage for an underlying sexual battery, negligence and elder abuse lawsuit brought against its insured and its subsidiaries, arguing that the policy’s exclusions for criminal acts and assault, battery, abuse and molestation bar commercial general liability coverage and that the policy’s professional liability coverage was not triggered because the alleged abuser was not providing health care professional services at the time of the assault.

  • August 15, 2025

    Insured: 9th Circuit Wrong In Finding No Coverage For Substandard Work Claims

    PASADENA, Calif. — An electrical contractor filed a petition for panel rehearing with the Ninth Circuit U.S. Court of Appeals, arguing that the panel was wrong to find that a commercial general liability insurer owed no coverage for an underlying action alleging that the contractor’s substandard work led to flooding damage to switchgear.

  • August 13, 2025

    Preliminary Approval Of Class Settlement, Certification Granted In RESPA Suit

    FRESNO, Calif. — A federal judge in California preliminarily granted approval of a class action settlement and conditional class certification in a long-running Real Estate Settlement Procedures Act (RESPA) case, authorizing class members to receive $875 in cash compensation per affected loan with an estimated gross settlement award totaling $30.5 million.

  • August 07, 2025

    Insured’s Bad Faith Suit Against Auto Insurer Will Proceed, Federal Judge Says

    LOS ANGELES — A California federal judge denied an auto insurer’s motion to dismiss or stay an insured’s bad faith suit after determining that the bad faith claim alleged by the insured is not subject to arbitration and that a stay of the insured’s suit pending completion of the arbitration proceeding is not warranted.

  • August 06, 2025

    Magistrate Stays CGL Coverage Dispute Over Negligence Claims Against Mutual Insured

    FRESNO, Calif. — A federal magistrate judge in California granted plaintiff and defendant commercial general liability insurers’ request to stay proceedings in a coverage dispute over underlying allegations that their mutual insured negligently conducted cyclic steaming operations to extract and harvest oil.

  • August 05, 2025

    Professional Liability Insurer: No Coverage Owed For RICO Suit Against Law Firms

    LOS ANGELES — A lawyers’ professional liability insurer filed suit in a federal court in California, seeking a declaratory judgment that it has no duty to defend or indemnify its law firm insureds against an underlying Racketeer Influenced and Corrupt Organizations Act lawsuit brought by Ford Motor Co., arguing that the underlying action fails to allege an act or omission in the insureds’ performance of legal services.

  • August 05, 2025

    9th Circuit Uses Effective Vindication Doctrine In ERISA Tobacco Surcharge Case

    PASADENA, Calif. — Calling the holding in the tobacco surcharge case “consistent with” decisions that five sister circuits issued in a variety of Employee Retirement Income Security Act disputes in the past few years, the Ninth Circuit U.S. Court of Appeals on Aug. 4 ruled in part that a health plan arbitration provision’s “representative action waiver violates the effective vindication doctrine and is unenforceable.”

  • August 05, 2025

    Magistrate Recommends Denying Bid For $10.88M In Insurer RICO Row With Former CEO

    FRESNO, Calif. — A California federal magistrate judge issued findings and recommendations advising the court to deny an insurer’s motion for default judgment and an award of $10,884,566.25 against its former CEO in the insurer’s fraud and Racketeering Influenced and Corrupt Organizations Act (RICO) suit against the former CEO, finding that while the insurer has provided a declaration related to the amounts of the alleged fraud, it failed to include documentary evidence to support that declaration.

  • August 05, 2025

    Insured’s Breach Of Contract, Bad Faith Suit Will Remain In Federal Court

    LOS ANGELES — An insured’s breach of contract and bad faith suit stemming from a dispute over coverage for the failure of a sump pump will remain in federal court because the insurer timely removed the suit within 30 days of recognizing that the amount in controversy met the federal jurisdictional minimum requirement, a California federal judge said.

  • August 04, 2025

    Majority: Restitutionary Award Not Insurable Under California Law

    SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals majority on Aug. 4 affirmed a lower federal court’s grant of a business and management indemnity insurer’s motion to dismiss a venture capital firm’s breach of contract lawsuit, agreeing with the lower court that a restitutionary award made by arbitrators is not insurable under California law.

  • August 01, 2025

    General Contractor’s Insurer Appeals Amended Judgment In Row Over Damages Coverage

    SANTA ANA, Calif. — A commercial general liability insurer for a construction company filed a notice of appeal of a federal court in California’s judgment finding that another of the company’s insurers had no duty to defend the company as an additional insured in a dispute over damages to a Hard Rock Hotel location because the terms of the original contract included no requirements to maintain insurance beyond the final payment date for the project.

  • July 28, 2025

    On Remand From 9th Circuit, Judge Dismisses FCA Suit Against Drugmakers

    SAN FRANCISCO — On remand from the Ninth Circuit U.S. Court of Appeals and after the U.S. Supreme Court denied certiorari, a California federal judge dismissed without prejudice a qui tam suit accusing pharmaceutical companies of violating the False Claims Act (FCA) and related state laws by artificially inflating drug prices, finding that dismissal “is warranted” because the second amended complaint “lumps” the companies “together in an undifferentiated mass” regarding the alleged fraud.

  • July 25, 2025

    Calif. Judge Grants Commissioner’s Demurrer As To 2 Claims In Pass-Through Row

    LOS ANGELES — Holding that California Insurance Commissioner Ricardo Lara acted within his authority to issue property insurance pass-throughs but determining that exhausting administrative remedies was not necessary for judicial review, a California judge partially sustained and partially overruled Lara’s demurrer in response to a consumer research and advocacy organization’s complaint that accused Lara of issuing two unlawful insurance bulletins that authorize member insurers of the California FAIR Plan to recoup assessments from policyholders.

  • July 25, 2025

    In Advisory Opinion, DOL Tackles ERISA Question Regarding LTD Plan

    WASHINGTON, D.C. — In one of its first advisory opinions issued under President Donald J. Trump, the U.S. Department of Labor (DOL) took the view that the self-funded long-term disability (LTD) plan of a mutual benefit corporation for California firefighters “does not constitute an employee welfare benefit plan within the meaning of” part of the Employee Retirement Income Security Act — with a caveat. 

  • July 24, 2025

    California Court OKs Publishing Ruling Re Rehab Plan For Workers’ Comp Insurer

    SAN FRANCISCO — The First District California Court of Appeal on July 23 granted a request for publication of an initially unpublished opinion upholding a nonconsensual rehabilitation plan for a workers’ compensation insurance carrier; the plan was approved as part of conservation proceedings brought by California’s insurance regulator and includes options to resolve dozens of reinsurance participation agreement (RPA) lawsuits.

  • July 24, 2025

    9th Circuit Finds Insurer Owed No Coverage For Substandard Work Claims

    PASADENA, Calif. — A Ninth Circuit U.S. Court of Appeals panel affirmed a lower court’s finding that a commercial general liability insurer owed no coverage for an underlying action alleging that an electrical contractor’s substandard work led to flooding damage to switchgear, holding that the claim was excluded under the policy.

  • July 22, 2025

    Insurer Appeals Ruling In D&O Coverage Dispute Over Unfair Dilution Claims

    SAN DIEGO — A business and management indemnity insurer on July 21 filed a notice of appeal of a California federal court’s holding that it has a duty to defend and indemnify its insured against an underlying unfair dilution lawsuit because the “dilution claims exception” to the “insured vs. insured” exclusion restores directors and officers liability coverage.

  • July 17, 2025

    Judge Certifies Class In Suit Challenging Homeowners Insurer’s ACV Calculation

    SAN FRANCISCO — A federal judge in California granted plaintiffs’ motion for class certification in their breach of contract, bad faith and unfair competition lawsuit alleging that their homeowners insurer has a common practice of depreciating sales tax when calculating actual cash value (ACV) benefits to insureds.

  • July 17, 2025

    Judge Finds Indemnity Claim For Coverage Of Underlying Flood Claim Must Continue

    OAKLAND, Calif. — A federal judge in California denied a railway company’s motion to dismiss or stay an insurer’s claim for declaratory relief that it did not have a duty to indemnify the railway company in an underlying complaint against it for negligence after the construction of the railway caused property to flood, finding that the railway company provided no reason that the claim regarding the duty to indemnify should be dismissed or stayed, while the insurer’s claim for declaratory relief that it did not have a duty to defend continues.

  • July 15, 2025

    Benefits To Be Reinstated For Claimant In Migraine Disability Lawsuit

    SAN FRANCISCO — On de novo review of the termination of long-term disability (LTD) benefits for an employment law firm partner diagnosed with vestibular migraine and tinnitus, a California federal judge found in favor of the claimant and directed that the benefits be retroactively reinstated.

  • July 15, 2025

    9th Circuit Revives Breach Claim In Disability Row Involving COVID Risk

    SAN FRANCISCO — In an unpublished July 14 memorandum disposition, the Ninth Circuit U.S. Court of Appeals revived a breach of contract claim, but not a bad faith claim, in a suit an oral surgeon filed after unsuccessfully seeking disability benefits on the grounds that his comorbid conditions and inability to access recommended personal protective equipment (PPE) made it necessary to close his practice early in the COVID-19 pandemic.

  • July 15, 2025

    ‘Sheer Number’ Of AI-Faked Cites Noted In Defense Fee Declaration In Disability Case

    SANTA ANA, Calif. — In a July 14 defense fee declaration submitted at the direction of a California federal judge who imposed sanctions on a plaintiffs’ attorney for faked citations attributed to artificial intelligence, a disability insurer’s attorney said, “The sheer number of non-existent cases . . . was exponentially more than we have identified in any other cases discussing AI-generated and/or hallucinated cases.”

  • July 14, 2025

    Judge: Roof Work Excluded From Insurance Policy, Leaving No Duty Defend

    SANTA ANA, Calif. — A California state court judge granted summary judgment to an insurer in a roof construction defect case, agreeing that the work at issue is excluded under terms of the insurance agreement and that the insurer has no duty to defend or indemnify the general contractor.

  • July 14, 2025

    9th Circuit Affirms Dismissal Of Driver’s Claim For Larger COVID-19 Refunds

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed the dismissal of a driver’s class action against her insurer, GEICO, for violating California’s unfair competition law (UCL) by providing drivers an insufficient rebate on premiums after the COVID-19 pandemic, finding that the insurer was protected by the “‘safe harbor’” doctrine as the state insurance commissioner approved its rebate amounts.

  • July 11, 2025

    Contractor’s Insurer Must Defend Developers For Water, Other Damages

    LOS ANGELES — A contractor’s commercial general liability insurer agreed to defend the developers of a residential development as additional insureds, and the homeowners’ subsequent filing of an action alleging that the contractor’s improper installation of concrete flatwork and foundation systems caused water intrusion and other damage to their homes triggered the insurer’s duty to defend, a federal judge in California ruled.