For years, plaintiff’s attorney Montie S. Day has sued California auto insurers, arguing that the policy exclusion precluding coverage for first-party diminution of value damages claims is unenforceable. On November 30, 2023, the Ninth Circuit Court of Appeals in Uyanik v. Wawanesa (an unpublished decision) affirmed the Northern District of California Court’s dismissal of Ali Uyanik’s (Day’s client) first amended complaint and sanctioned Mr. Day $5,000 for pursuing a frivolous appeal. The Court held that Uyanik’s breach of contract claim was “grounded in the plainly incorrect assertion that California law requires insurance providers to coverer all losses, including diminution of vehicle value and loss of vehicle use, because policy exclusions are ‘void and unenforceable under California law as against public policy and contradict the statutes passed by the California Legislature.’” The Court of Appeal also held that Uyanik’s fraud claim failed because bald allegations that Wawanesa sold insurance policies but didn’t intend to indemnify insureds for all loss did not meet Rule 9(b)’s heightened pleading standards and Uyanik’s CLRA claim failed because “the CLRA does not apply to insurance.” Continue Reading Attorney Challenging First-Party Diminution of Value Claims Sanctioned by Ninth Circuit
In the wake of the Covid-19 pandemic lockdown orders, policyholders were driving less and insurance company severities and loss ratios were reduced. This resulted in a temporary increase in insurance company profits. Beginning in April 2020, the California Department of Insurance (“DOI”) issued a series of Bulletins, ordering insurers to provide premium refunds to policyholders. Initially, many insurers complied, providing partial refunds during the early months of the pandemic.Continue Reading The Tide Shifts in California Covid Premium Refund Cases
The concept of fortuity is fundamental to insurance law. That is because insurance protects against the risk of contingent or unknown events or losses – not certainties of loss. Cal. Ins. Code § 22. Thus, in the context of third-party liability insurance, most policies condition coverage on an “occurrence,” meaning an “accident,” that causes bodily injury, property damage or personal injury.Continue Reading Can an Insured’s Mental Incapacity or Insanity Convert Non-Accidental Conduct into an Accident?
In Bennett v. Ohio Nat’l Life Assur. Corp., 92 Cal. App. 5th 723, the California Court of Appeal addressed when the statute of limitations runs for a disability insurance claim. The Court held that the statute of limitations for a disability claim did not accrue until every element of the cause of action – including damages – was complete. Therefore, in Bennett, the statute of limitations did not begin to run at the time of the denial, but years later when Ohio National stopped making disability payments.Continue Reading A Primer on When a Cause of Action Accrues for Statute of Limitations Purposes
Auto insurers are often asked by their insureds and third-party claimants to pay for what are known as “diminished value” damages in connection with car accidents. Generally speaking, “diminished value” is the loss of market value of the damaged vehicle caused by the accident. Cars that have been involved in accidents are generally worth less than cars that have not. That is one of the reasons Carfax reports exist, identifying whether a particular vehicle has been involved in a significant accident.Continue Reading Are Third-Party Diminished Value Damages Claims Covered in California?
In an issue of first impression, the Ninth Circuit Court of Appeals affirmed summary judgment for Allstate and held that the two-year statute of limitations for bad faith claims arising out of an uninsured/underinsured motorist claim begins to run when the claimant should have known about the insurer’s alleged bad faith acts, rather than when the claim is resolved. In Marinelarena v. Allstate Northbrook Indem. Co., 2023 WL 3033498 (9th Cir. 2023), the plaintiff alleged that she suffered injuries in a 2016 car accident with a hit and run driver. Two years later, in January 2018, Marinelarena made a policy limit demand for uninsured motorist benefits. Allstate declined the demand and insisted on taking steps to further investigate the claim. Eventually, because the parties could not agree on the value of the claim, they proceeded to uninsured motorist or UM arbitration, after which the arbitrator issued an award in Marinelarena’s favor. Allstate immediately paid the award.Continue Reading Ninth Circuit Confirms that the Two-Year Statute of Limitations in a Bad Faith UM/UIM Claim Begins when the Insured Should Have Known About the Insurer’s Alleged Bad Faith Acts
Voyager Indemnity Insurance Company (“Voyager) issued a commercial liability insurance policy to MRB Construction, Inc. (“MRB Construction”), a framing subcontractor. As is common with such policies, MRB Construction’s policy contained a “blanket” additional insured endorsement for its ongoing operations. Specifically, the policy not only covered MRB Construction as the named insured, but extended “additional insured” status to those persons or organizations “for whom you are performing operations.” Continue Reading Failure to Timely Produce in Discovery Underlying Written Contract with Insured Prevented General Contractor from Establishing Status as an Additional Insured
One of the most powerful weapons an insurance company can use to defeat a bad faith claim is the “genuine dispute” doctrine. Under this doctrine, as long as there was a genuine dispute regarding coverage or the amount owed, the insurer cannot be held liable for having withheld the disputed policy benefits even if it later turned out they were owed. Chateau Chamberay Homeowners Ass’n v. Associated Int’l Ins. Co., 90 Cal.App.4th 335 (2001). Historically, this defense has been applied most commonly in published cases involving disputes over unsettled legal issues or where the insurer’s position was supported by a qualified expert. See e.g., Fraley v. Allstate Ins. Co., 81 Cal.App.4th 1282 (2000); Guebara v. Allstate Ins. Co., 237 F.3d 987 (9th Cir. 2001); Opsal v. USAA, 2 Cal.App.4th 1197 (1991).Continue Reading New Insurance Law: The Extension of California’s “Genuine Dispute” Doctrine to Disputes Over the Value of General Damages In UM/UIM Claims Handling
On January 1, 2023, California enacted SB1155, a law setting parameters for reasonable time-limited settlement demands. In a prior blog post, Jordan Derringer and Michael Bean discussed the statute…Continue Reading New Time-Limited Settlement Demand Laws Need Testing in Court
This article was originally published in Daily Journal on January 4, 2023.
On January 1, 2023, a new California law, Code of Civ. P. § 999, et seq., took effect. This law sets forth various requirements that a policy “time-limited demand” must meet to justify a “bad faith refusal to settle” claim in the event the liability insurer does not accept it. Continue Reading New California Law Impacts “Time-Limited Demands” in the Insurance Industry
In Yahoo Inc. v. National Union Fire Ins. Co. of Pittsburgh, — Cal. Rptr. 3d —;2022 Cal. LEXIS 6887; 2022 WL 16985647 (Nov. 17, 2022), the California Supreme Court applied established rules of policy interpretation and found that the definition of “personal injury” in Yahoo’s policy was ambiguous. The Court also determined that the rule of contra proferentem applied to a manuscript endorsement negotiated by two sophisticated parties, because the disputed language was standard insurance language. While the holding appears to be case specific, future questions may arise regarding the application of the rule of contra proferentem. Continue Reading Yahoo Inc. v. National Union Fire Ins. Co. of Pitts.: Revisiting the Rules of Policy Interpretation