Say What You Mean and Mean What You Say, Says California Federal District Court

A California federal district court determined a standard Breach of Contract Exclusion under Coverage B of a CGL policy did not preclude the duty to defend for alleged disparagement. In MedeAnalytics, Inc. v. Federal Insurance Co., the United States District Court for the Northern District of California interpreted the exclusion very narrowly, finding it applied only to actual — and not alleged — breaches of contract and found a duty to defend. As background, the claimant alleged the policyholder made
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Another Nail in the Junk Fax Coffin: Wisconsin Joins Illinois, California, Michigan, and Oklahoma in Finding No Coverage for TCPA Suits

The Wisconsin Court of Appeals held in a recent decision that a standard TCPA exclusion precludes coverage for all causes of action brought by the plaintiff that emanated from the unauthorized sending of faxes. This includes a common law conversion cause of action, as well as a cause of action for violations of the Telephone Consumer Protection Act (TCPA). As background, in State Farm Fire & Casualty Co. v. Easy PC Solutions, LLC, No. 2014AP2657, 2015 Wisc. App. LEXIS 855
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The Insurer Is In Control: California District Court Upholds Insurer’s Right To Control Settlement and Conduct Its Due Diligence with Respect To a Coverage Investigation

In Travelers Property Casualty Co. of America v. Kaufman & Broad Monterey Bay, Inc., 2015 WL 581528 (N.D. Cal. Feb. 11, 2015), Travelers had issued commercial general liability insurance policies to Norcraft. The defendants were named as additional insureds on the policies. The defendants were sued for claims arising out of a residential development project. The defendants tendered their defense of the claims to Travelers, which accepted the tender and appointed counsel for the defendants. Travelers and the defendants asserted
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How Is a Dress Trade Dress? California Federal District Court Deems Clothing Design Infringement Suit as Alleging Trade Dress Infringement

In West Trend, Inc. v. AMCO Insurance Co., No. CV 14-06872-RGK (PLAx), 2015 U.S. Dist. LEXIS 6807 (C.D. Cal. Jan. 9, 2015), the Central District of California granted summary judgment in favor of West Trend, Inc. (“West Trend”) against AMCO Insurance Company (“AMCO”), finding that AMCO had a duty to defend West Trend against a lawsuit filed by Spirit Clothing Company (“Spirit”). The underlying lawsuit involved a long sleeve shirt marketed and sold by West Trend that contained stitching allegedly
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Midland Life Insurance Company Pays $1.3 Million to California Department of Insurance for Improper Annuity Sales

The recent $1.3 million dollar settlement between Midland National Life Insurance Company (“Midland”) and the California Insurance Department – based upon Midland’s inappropriate sales practices in marketing annuities to seniors – is a strong indication that life insurance companies may need to re-examine the various regulations that were issued over the last several years related to annuity suitability. The Midland settlement came after a market conduct examination revealed that the company’s agents had engaged in improper sales and replacement transactions,
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California Issues Emergency Regulation on Access to Healthcare Providers

During his second inauguration, California Insurance Commissioner Dave Jones, announced a new emergency regulation relating to access to healthcare providers.  According to an accompanying press release, The emergency regulation . . .  addresses the problems identified with access to doctors, hospitals, and other medical providers in 2014, as many health insurers reduced their medical provider networks and/or shifted to offering Exclusive Provider Organization (EPO) health insurance products with no out-of-network benefits. Consumers complained of having trouble getting appointments with doctors,
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Californians – “Insurance on My Mind”

California voters had insurance on their minds during the mid-term elections with at least two insurance-related questions on the ballot. The first was Proposition 45, entitled the “Healthcare Insurance. Rate Changes. Initiative Statute.”  If approved, this initiative would have required the state’s Insurance Commissioner to approve any rate increases for individual and small group health insurance plans before those rate hikes took effect.  If the state’s Insurance Commissioner determined that a rate hike was unreasonable or excessive, the commissioner could
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California Court of Appeals says Insurers Do Not Have a Duty to Initiate Settlement

The issue involved in this case was the duty of an insurer to settle a third party claim within the policy limits when liability was clear and there was a substantial likelihood of a recovery in excess of the policy limits. Specifically, the question decided was whether an insurer must initiate settlement negotiations or offer its policy limits where the third party claimant has not made a demand or settlement offer. The trial court found that the insurer was not
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New York Court Predicts California’s Future: Allows Bad Faith Exception in Reinsurance Late Notice Defense

Ins. Co. of the State of Penn. v. Argonaut Ins. Co. U.S. Dist. Ct., S.D.N.Y. (August 6, 2013) In this case, the cedent sued its reinsurer when it denied coverage because of late notice of its claim.  Both parties filed a motion for summary judgment arguing the applicability of the late notice defense.  The court granted the reinsurer’s motion. From 1980-2009, a series of disputes and negotiations arose regarding asbestos claims against the underlying insured.  It was not until 2009,
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California Supreme Court Authorizes UCL Lawsuits Against Insurers

Yanting Zhang v. California Capital Insurance Company In a decision by the state’s highest court, the California Supreme Court harmonized years of split opinions among California courts regarding the inability to bring a private action under the Unfair Insurance Practices Act (UIPA).  The inability to do so arose out of a 1988 decision by the same court, which stated that UIPA never intended to create a private cause of action for commission of the unfair practices listed therein. Moradi-Shalal v.
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