This decision holds that losses due to COVID closures are not covered by the business income and extra expense coverage of a business insurance policy since to trigger coverage the loss must be due to an impairment of operations caused by direct physical loss or damage to property. For there to be coverage under this policy language, some external force… Read More
Following Mudpie, Inc. v. Travelers Casualty Ins. Co. (9th Cir. 2021) 15 F.4th 885 and Inns-by-the-Sea v. California Mutual Ins. Co. (2021) 71 Cal.App.5th 688, this decision holds that business interruption insurance providing coverage for interruption due to physical loss or damage to property does not cover losses caused by the COVID pandemic or associated government-ordered shut downs of business… Read More
This decision affirms a judgment holding that Ins. Code 533 bars insurance coverage for a judgment against Conagra for the public nuisance caused by Fuller Paint's pre-1950 advertising promoting the use of lead-based paint for interior paint on residential units. In the liability trial, the trial court found that Fuller had kwown at the time it made the advertisements that… Read More
The Court of Appeal initially reversed a judgment in the plaintiff's favor, finding that the insurance agent who fraudulently induced plaintiff to enter into unsuitable annuities rather than the life insurance he had requested was an insurance broker, not a true agent, and that the insurer defendant therefore was not liable for the agent's fraud. The Supreme Court granted review… Read More
Hill's umbrella insurance did not provide coverage for bodily injuries Gardineer sustained in a car accident caused by Hill's niece while she was driving Hill's car with his permission. The umbrella policy extended coverage only to "insureds" a term it defined to include only the named insured, his wife and other relative who resided in the named insured's house. The… Read More
A hospital cannot recover more for its emergency care of patients injured in car accidents than the amounts it has agreed with the patients' medical insurers to charge for those services. Here, the hospital tried to collect more by requiring the patients to sign conditions of admissions that contained assignments of the patients' underinsured motorist coverage and medical benefits coverage… Read More
Tricked by a hacker's sending emails purportedly from her boss, Ernst's accounts payable clerk wire transferred $200,000 to banks from which the money was swiftly withdrawn. Ernst sued its insurer to recoup its losses. This decision holds that the loss fell within the computer fraud coverage of loss “resulting directly from the use of any computer to fraudulently cause a… Read More
Under former Ins. Code 2051.5, an insurer's liability under a replacement cost policy was the lesser of (a) the amount it would cost to replace the damaged structure at the insured location (without regard to depreciation), or (b) the policy's limits. If the insurer requires the insured to repair the structure before claiming replacement cost, the insurer must first pay… Read More
Mountain Lakes church affiliated itself with the Church of God, a hierarchical church. Mountain Lakes was a separately incorporated religious corporation and a separate entity from the national Church of God corporation. However, the Mountain Lakes church held its church property as the national body's agent. Mountain Lakes obtained a fire insurance policy from GuideOne on the church property, but… Read More
The Insurance Fraud Prevention Act (IFPA; Ins. Code 1871, et seq.) allows qui tam plaintiffs to file lawsuits on the government’s behalf and seek monetary penalties against perpetrators of insurance fraud. To prevent duplicative lawsuits, the IFPA contains a “first-to-file rule” (Ins. Code 1871.7(e)(5)) that bars parties from filing subsequent actions related to an already pending lawsuit. This decision holds… Read More
Plaintiff insured's losses due to COVID-19-related restrictions on its business were not covered by the business interruption insurance policy defendant had issued to it. To be covered, the business interruption had to result from physical loss of or damage to property at the insured location. Instead, the business interruption resulted from county closure orders that were issued due to the… Read More
In this attorney malpractice case, the trial court properly ruled against plaintiff on the case-within-a-case, establishing that the underlying insurance claim had no merit, so the attorney's negligence in not filing suit in a timely manner did not cause plaintiff's loss. The insurance claim arose under a contractor's CGL policy, and the policy's own work exclusion clearly barred insurance coverage… Read More
Under the prior approval of rates scheme enacted by Prop. 103 (Ins. Code 1861.05; Cal. Code Regs., titl 10, 2644.20), the Insurance Commissioner must consider the insurer's investment income as against losses, costs and reserves in determining whether the rate is reasonable. This decision holds that the Commissioner must use only the investment income earned by the insurance company seeking… Read More
To have standing to move to disqualify another party's attorney, the movant must generally be a present or former client of the challenged attorney, or at least a person who shared confidential information with that attorney in the course of a confidential or fiduciary relationship. Otherwise, the movant is generally not affected by any breach of the attorney's duties of… Read More
The plaintiff insurer did not void its claim for equitable contribution by other insurers allegedly covering the loss by alleging that after paying for the insured's defense, it discovered facts that it claimed showed it owed the insured no coverage. The duty to defend attaches immediately and is not undermined by later discovery of facts that show coverage was not… Read More
The trial court correctly refused to take judicial notice of insurance policies that were not matters of public record. The existence of a contract between private parties cannot be established by judicial notice under Evidence Code section 452(h). (Gould v. Maryland Sound Industries, Inc. (1995) 31 Cal.App.4th 1137, 1145.) Read More
The insurer did not breach its policy or the duty of good faith in settling plaintiff's claim which arose from destruction of her house by a wildfire. Under the policy, she was entitled to the least of (a) the policy limit, (b) the cost to rebuild the same house, or (c) the actual cost paid for reconstruction. Here, the insurer… Read More
Neither an insurance agent nor an insurance company owes an insured or prospective insured a duty to tell the insured he needs other or additional insurance coverage unless (1) the agent misrepresents the nature, extent or scope of the coverage being offered or provided; (2) there is a request or inquiry by the insured for a particular type or extent… Read More
The insureds were not entitled to Cumis counsel in the underlying personal injury case. The insurer settled the case within policy limits and had reserved its rights only with respect to damages in excess of policy limits and punitive damages, both of which were clearly not covered--and nothing in the underlying action concerning those damages placed insurance defense counsel in… Read More
While the presumption against retroactive application of new statutes is strong, figuring out what constitutes retroactive application may be difficult. Here, the statute required a grace period and notice before terminating a life insurance policy for nonpayment of the premium. Though it changed the terms of the policy, it governed only the insurer's actions after the effective date of the… Read More
