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August 27, 2013 Reinsurance

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, through an “initial loss advice,” …

August 6, 2013 Emerging Issues

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. Fireman’s Fund Ins. Co., …

July 15, 2013 Life, Health, Disability & ERISA

California Cuts To Rural Healthcare Services Violate Medicaid Act

California Ass’n of Rural Health Clinica; Avenal Community Health Center v. Douglas et al.
United States Court of Appeals for the Ninth Circuit, July 5, 2013

California recently enacted legislation that eliminates coverage for certain healthcare services in under-served rural areas to help curb the State’s budgetary woes. Specifically, the legislation cut coverage for adult dental, podiatry, optometry and chiropractic services in rural areas. The court ruled that eliminating coverage for such programs would be in conflict with the Medicaid Act and that the legislation …

June 3, 2013 Policy Conditions, Considerations, Construction, and Formation

Insurers’ Goal Line Stand: California Coverage Action Stayed While New York Case Marches On

National Football League v. Fireman’s Fund Ins. Co.
(Cal. App. Ct. May 28, 2013)
A California appellate court recently affirmed a stay of California litigation commenced by the NFL against multiple insurers seeking coverage for traumatic brain injury cases. The court held that the NFL was not a California resident for purposes of a forum non conveniens analysis even though it has three teams in California.

The NFL administration and its intellectual property marketing arm were sued in multiple states by dozens of former players …

October 30, 2012 Life, Health, Disability & ERISA

Blue Shield California Seeks Supreme Court Review on ERISA Waiver

Blue Shield of California v. Harlick
Petition for Writ of Cert from U.S. Ct. Apps. 9th Cir., (filed Oct. 10, 2012)

The Petition for Cert comes after the Ninth Circuits ruling that barred Blue Shield from considering on remand whether the plaintiff’s services were medically necessary. The court held that the ERISA plan had waived its right to conduct an investigation and to potentially make the medically necessary determination because it did not identify those specific grounds in its initial denial. Under this ruling, the …

August 13, 2012 Excess Insurance

California Supreme Court Adopts All-Sums-With-Stacking Approach in Major Policyholder Victory

State of California v. Continental Ins. Co. (Cal. Aug. 9, 2012)
In a much-anticipated decision, the Supreme Court of California ruled last week that several excess insurers were obligated to indemnify the State of California for all sums relating to the clean-up of the Stringfellow Acid Pits waste site, regardless of whether the damage occurred during the insurers’ policy periods. The court also held that the State could stack its policies from multiple years to maximize recovery.

The State sought indemnity from several insurers that …

July 19, 2011 Emerging Issues

California Appeals Court Rules Against Coverage for Proposition 65 Claims

Ulta Salon, Cosmetics & Fragrance, Inc. v. Travelers Prop. & Cas. Co. of Am.(Cal. Ct. App. July 11, 2011)

A California appeals court recently held that an insurer was not obligated to defend or indemnify its insured against a claim that the insured violated Proposition 65, the California Safe Drinking Water and Toxic Enforcement Act of 1986. The court based its ruling on the complaint’s failure to allege “bodily injury” and rejected the notion that an insurer’s duty to defend can be triggered …

June 13, 2011 Uncategorized

California Appellate Court Reverses Lower Court on Asbestos Coverage Dispute Involving “Single Occurrence” Issues

Kaiser Cement & Gypsum Corp. v. Ins. Co. of the State of Pennsylvania (Cal. App. 2d Dist. June 3, 2011)

Plaintiff manufactured a variety of asbestos-containing materials, including joint compound, finishing compounds, fiberboard, and plastic cements, from 1944 through the 1970s.. By 2004, the company faced more than 24,000 claims from people alleging they suffered bodily injuries as a result of their exposure to asbestos contained in the company’s products.

In 2007, the court considered whether thousands of asbestos bodily injury claims brought against the …

October 19, 2009 Life, Health, Disability & ERISA

California Passes Critical Life Insurance Bill

California became the 34^th state to regulate life settlements when Gov. Arnold Schwarzenegger of California signed Bill S.B. 98. The bill preserves a policyholder’s right to sell the life insurance policy for value prior to lapse or surrender. Additionally, individuals can obtain life settlements through an agent, an prohibit insurance companies from restricting life insurance agents from informing policyholders about such settlements. The law provides stronger consumer-orientated provisions, including licensing mandates for brokers and settlement companies, requiring disclosures regarding offers, business relationships and compensation, …

September 15, 2009 Uncategorized

California Court Affirms Judgment Against Insurance Agent HRH

Williams v. Hilb, Rogal & Hobbs Ins. Services of California, Inc.

(Cal. App. September 9, 2009)

Following a bench trial, an insurance agency was found liable for negligence in advising on, procuring and maintaining an insurance package for a new business venture that did not include worker’s compensation insurance. The court held that although an insurance agent does not have a duty to volunteer to an insured that the latter should procure specific insurance coverage, the rule changes under certain circumstances. An agent …