- Volume 17, Issue #11
- Disability Claimant Does Not Have Standing To File Suit Against Insurer
OAKLAND, Calif. - A California federal judge on May 7 granted a disability insurer's motion for summary judgment after determining that the claimant does not have standing to bring suit against the insurer because she was actually not a participant in the long-term disability plan (Brenda Spies v. Life Insurance Company of North America, No. 17-2012, N.D. Calif., 2018 U.S. Dist. LEXIS 76987).
- 9th Circuit Panel Denies Disability Plan's Motion For Attorney Fees
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeal on April 27 denied a motion for attorney fees filed by a disability plan and its insurer following the appeals panel's recent finding that a work incentive benefit in a disability policy's summary plan description does not violate the disclosure requirements of the Employee Retirement Income Security Act (Howard Lyle Abrams v. Life Insurance Company of North America, et al., No. 16-55858, 9th Cir., 2018 U.S. App. LEXIS 10919).
- Claimant Met Burden Of Proving Radiculopathy Is Cause Of Disability
OAKLAND, Calif. - A California federal judge on May 1 determined that a disability claimant is entitled to long-term disability benefits because the claimant provided ample evidence that he suffers from radiculopathy, an exception to the plan's two-year limitation for disabilities caused by neuromuscular, musculoskeletal or soft tissue disorder (David Do v. Metropolitan Life Insurance Co., No. 16-5097, N.D. Calif., 2018 U.S. Dist. LEXIS 73712).
- California Panel Affirms No Coverage For Suit Over Alleged Tax Avoidance Scheme
RIVERSIDE, Calif. - A California appeals panel on May 8 found that an underlying complaint failed to allege a claim against an insured arising from a wrongful act in its rendering of professional services that are "solely related" to a covered product, affirming a lower court's ruling that an errors and omissions insurer has no duty to defend or indemnify against the underlying suit (Lindsey Financial, Inc. et al. v. American Automobile Insurance Company, No. E067037, Calif., App., 4th Dist., Div. 2, 2018 Cal. App. Unpub. LEXIS 3164).
- California Panel Vacates Ruling Finding Officer's Wife Guilty Of Insurance Fraud
SAN DIEGO - A California appeals panel on May 8 vacated a woman's conviction for her alleged role in her husband's filing of a fraudulent insurance claim for the theft of his car, finding that the evidence did not sufficiently establish that she aided or abetted the scheme (California v. Robert Patrick Mejia, et al., No. D073113, Calif. App., 4th Dist., 1st Div., 2018 Cal. App. Unpub. LEXIS 3121).
- California Panel Affirms Employment Restrictions For Insurance Fraud Defendant
RIVERSIDE, Calif. - A California appeals court panel on May 10 found that a trial court judge did not err when finding that a man convicted of insurance fraud should not be allowed to hold a job in which he is required to use or control a bank account, finding that the probation restriction is intended to deter the defendant from future criminality (California v. Mario Tedoro Rios, No. D072430, Calif. App., 4th Dist., 1st Div., 2018 Calif. App. Unpub. LEXIS 3180).
- Panel: Ambiguous Policy Language Requires Reversal Of Professional Liability Suit
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on May 10 reversed a lower federal court's ruling that coverage for an underlying qui tam action is limited to a professional liability insurance policy's $25,000 billing errors endorsement sublimit, finding that the ambiguous policy language should have been resolved in the insureds' favor (My Left Foot Children's Therapy, et al. v. Certain Underwriters at Lloyd's London subscribing to policy No. HAH15-0632, No. 17-15748, 9th Cir., 2018 U.S. App. LEXIS 12269).
- Man Alleges Used-Car Seller, Shell Reinsurer Involved In Fraud Scheme
FRESNO, Calif. - A California man alleges in an April 17 complaint filed in a California trial court that a used-vehicle seller and its affiliates, including an illegal shell reinsurance company, are involved in three fraudulent schemes in the sale of used vehicles and violated California Business and Professions Code Section 17200 (Alejandra Ochoa-Gonzalez v. Paul Blanco's Good Car Company Fresno Inc., et al., No. 18CECG01311, Calif. Super., Fresno Co.).
- Federal Magistrate Judge Orders Subpoena Compliance In Reinsurance Case
SAN DIEGO - A California federal magistrate judge on April 26 ordered a certified public accountant and a bank to comply with subpoenas in a dispute over a reinsurer's alleged breach of reinsurance agreements because of a series of fraudulent transfers (Odyssey Reinsurance Co. v. Richard Keith Nagby, et al., No. 16-3038, S.D. Calif., 2018 U.S. Dist. LEXIS 70641).
- Reinsurer Seeks Federal Court Confirmation Of $82,130.44 Arbitration Award
LOS ANGELES - A reinsurer on April 23 petitioned a California federal court for confirmation of an $82,130.44 arbitration award issued in its favor regarding a bad faith claim made against a reinsurance participation agreement (RPA) (Applied Underwriters Captive Risk Assurance Company Inc. v. O'Connell Landscape Maintenance Inc., No. 18-00683, C.D. Calif.).
- Panel: Expert Testimony In Coverage Dispute Ignored Reinsurance Agreements
LOS ANGELES - In a coverage dispute over artwork damage, insureds failed to show an insurer's inability to pay an eventual judgment, a California appeals panel ruled May 1, finding that they offered expert testimony ignoring reinsurance agreements (Gail Hollander, et al. v. XL Capital Ltd., et al., No. B276621, Calif. App., 2nd Dist., Div. 1, 2018 Cal. App. Unpub. LEXIS 2978).
- 9th Circuit: Seafood Firm Not Insured For Losses From Spoofed Emails
SAN FRANCISCO - Even though an employee was tricked into transferring funds to a criminal because of fraudulent, spoofed emails, a Ninth Circuit U.S. Court of Appeals panel on April 17 found that the direct cause of a seafood company's loss was the authorized employee's action, thus precluding coverage for the loss under the computer fraud provision of a commercial crime insurance policy (Aqua Star [USA] Corp. v. Travelers Casualty and Surety Company of America, No. 16-35614, 9th Cir., 2018 U.S. App. LEXIS 9660).
- Other Business Entities Exclusion Bars Professional Liability Coverage, Panel Says
LOS ANGELES - A California appeals panel on April 26 affirmed a court's ruling that an accountant's professional liability insurance policy's "Other Business Entities" exclusion unambiguously bars coverage for underlying claims arising from a real estate venture (Martin Leffler v. Camico Mutual Insurance Company, Inc., No. B269275, Calif App., 2nd Dist., Div. 5, 2018 Cal. App. Unpub. LEXIS 2889).
- Federal Judge Stays Breach Of Contract Suit Against Insolvent Insurer
LOS ANGELES - A California federal judge on March 22 stayed insureds' breach of contract case against an insolvent insurer pending resolution of the insurer's liquidation (Yancy Alvarez, et al. v. Access General Insurance Co., No. 18-336, C.D. Calif., 2018 U.S. Dist. LEXIS 47741).
- Federal Judge Dismisses Personal Injury Case Between Injured Driver, Auto Insurer
SAN FRANCISCO - Noting that the parties resolved the case, a California federal judge on April 3 dismissed a coverage dispute between an injured driver and her auto insurer for personal injuries from an accident, a week after the parties wrote to him on whether an at-fault driver's insurer was insolvent within a timeframe for the injured to qualify as an underinsured motorist (Monique Arreola v. MAPFRE Insurance Co., No. 17-05642, N.D. Calif.).
- Bank Seeks Reimbursement From Insolvent Insurer For $2.5M Posted Collateral
LOS ANGELES - A bank sued the liquidator of an insolvent medical professional liability insurer on April 4 in a California federal court, seeking reimbursement under a letter of credit issued to the insurer to stay enforcement of an underlying $2.5 million medical malpractice judgment (MUFG Union Bank, N.A. v. Steven C. Taylor, No. 18-02772, C.D. Calif.).
- No Coverage Owed To Trustee For Underlying Contamination Claims
LOS ANGELES - The Second District California Court of Appeal on April 24 affirmed a trial court's ruling that no coverage is owed to a trustee for underlying environmental contamination claims because the trustee was not an additional insured under the insurance policy (Michael Sullivan, et al. v. Fireman's Fund Insurance Co., No. B281479, Calif. App., 2nd Dist., Div. 5, 2018 Cal. App. Unpub. LEXIS 2836).
- Panel: Carrier, Broker Not Liable To Insurer For $84,511 In Damaged Batteries
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on April 17 affirmed a lower federal court's summary judgment ruling that rejected an insurer's lawsuit seeking to recover the $84,511.23 that it paid to its insured after a cargo of batteries that were owned by the insured's customer allegedly incurred damage during transport (New York Marine and General Insurance Co. v. Estes Express Lines, Inc., et al., No. 16-56748, 9th Cir., 2018 U.S. App. LEXIS 9667).
- Insurer Does Not Have To Indemnify Punitive Damages Award, Panel Affirms
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on April 25 affirmed a federal court's finding that an insurer has no duty to indemnify its insured for underlying punitive damages awarded against three of the insured's employees for willfully defaming a competitor (Paul Evert's RV Country, Inc., et al. v. Universal Underwriters Insurance Co., No. 17-15730, 9th Cir., 2018 U.S. App. LEXIS 10458).
- Fact Issues Exists As To Whether Insurer 'Knowingly' Waived Right To Seek Redress
SAN FRANCISCO - A California appeals panel on April 18 found that there are triable issues of fact regarding whether an insurer "knowingly" waived its legal right to seek redress for misrepresentations on an insurance application, reversing and remanding a lower court's ruling against the insurer (Monterey Insurance Company v. 1725 Fulton Street, LLC, et al., No. A149722, Calif. App., 1st Dist., Div. 1, 2018 Cal. App. Unpub. LEXIS 2678).
- California Panel Affirms Rulings In Coverage Suit Arising From Train Crash
LOS ANGELES - A California appeals panel on April 19 affirmed a lower court's summary judgment rulings in a dispute arising from a Sept. 12, 2008, head-on collision between a commuter train and a freight train that killed 25 people (Those Certain Underwriters at Lloyd's, London, et al. v. Connex Railroad LLC, et al., No. B276373, Calif. App., 2nd Dist., Div. 5, 2018 Cal. App. Unpub. LEXIS 2695).