California Supreme Court Applies Notice-Prejudice Rule to Violation of First-Party Consent Provision as a Predicate to Policy Forfeiture, but Confirms that No Prejudice is Required to Enforce a Third-Party “No Voluntary Payments” Provision

Pitzer College v. Indian Harbor Insurance Company, — P.3d –, 2019 WL 4065521 (2019); California Supreme Court, Case No. S239510 (Aug. 29, 2019).

On certified questions by the Ninth Circuit Court of Appeals, the California Supreme Court in Pitzer College v. Indian Harbor Insurance Company examined notice and consent provisions under both first-party and third-party coverage – despite the parties’ dispute as to the type of policy coverage at issue. Continue Reading

Insurer’s Mistake in Treating Non-Resident Relative as an Insured Under UM Coverage Of Umbrella Policy Did Not Create Coverage by Estoppel

Melissa Komorsky v. Farmers Insurance Exchange, et al. — Cal.Rptr.3d –, 2019 WL 1451275 (Cal. Ct. App., March 1, 2019), Second Appellate District Court of Appeal, Case No. B286443.

An uninsured motorist struck and killed Linda Liker, which led to competing claims for uninsured motorist (“UM”) benefits between Ms. Liker’s surviving husband, Alan, and her daughter from a prior marriage, Melissa Komorsky. Melissa did not reside in the Likers’ home. Continue Reading

California Fair Claims Settlement Practices Regulations Upheld Following a Near-Decade Long Legal Challenge to their Enforceability

Following nearly a decade of uncertainty as to their enforceability, the California Court of Appeal upheld key components of the California Fair Claims Settlement Practices Regulations on September 20, 2018 and affirmed that the California Insurance Commissioner has the authority to penalize insurers for engaging in improper claim settlement practices based upon even a single act of misconduct. Continue Reading

Good Fences Don’t Always Make Good Neighbors: California Court of Appeal Holds that “Invasion of the Right of Private Occupancy” May Include Non-Physical Invasion of Rights in Real Property

In Albert v. Truck Insurance Exchange, No. B278295 (Cal. Ct. App. May 15, 2018), the California Court of Appeal, Second District, considered whether an insurer owed a duty to defend an insured who was sued for erecting a fence that partially blocked an easement providing access to a neighbor’s property. The Court of Appeal concluded that the insurer owed a duty to defend because the policy provided coverage for personal injuries arising out of a wrongful “invasion of the right of private occupancy.” According to the Court, such coverage may include a non-physical invasion of rights in real property.

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Developer Had No Right to Independent Counsel Based on a Possible Conflict of Interest for Carrier-Appointed Counsel

Centex Homes, et al. v. St. Paul Fire and Marine Insurance Company, — Cal.Rptr.3d –, 2018 WL 494749 (Jan. 22, 2018), Third Appellate District Court of Appeal, Case No. C081266.

Homeowners from two residential developments sued Centex for alleged construction defects. As an additional insured under policies issued to subcontractor Ad Land Venture, Centex tendered the underlying construction defect lawsuit to St. Paul Fire and Marine Insurance Company.

St. Paul appointed a lawyer to defend Centex, but subject to a reservation of rights that its general liability policies issued to Ad Land did not cover damage to Ad Land’s work or damage caused by the work of other subcontractors that it did not insure. St. Paul also reserved its right to seek reimbursement of costs incurred in defending uncovered claims. Continue Reading

Professional Liability Policy Did Not Provide Coverage for Lawsuit that the Insured Knew or Should Have Known About

Admiral Insurance Company v. Superior Court of San Diego County, 18 Cal.App.5th 383 (2017); Fourth Appellate District Court of Appeal, Division One, Case No. D072267 (December 12, 2017).

In Admiral Insurance Company v. Superior Court of San Diego County, the California Court of Appeal held that a professional liability policy did not provide coverage for a lawsuit where, prior to the inception of the policy, the insured knew, or could have reasonably foreseen, that a claim would be made. Continue Reading

California Court of Appeal Affirms Judgment Finding No Duty to Defend Drug Manufacturer in Lawsuits Alleging Increased Opioid Usage

Update: On February 21, 2018, the California Supreme Court granted Actavis’ petition for review, but has deferred the matter pending disposition of related issues in Liberty Surplus Insurance Corp. v. Ledesma and Meyer Construction Co., Case No. S236765.”

The Traveler’s Property Casualty Company of America v. Actavis, Inc. — Cal.Rptr.3d –, 2017 WL 5119167 (Nov. 6, 2017); California Court of Appeal, Fourth District, Division 3, Case No. G053749

In two separate lawsuits, the Counties of Santa Clara and Orange (the “California Action”) and the City of Chicago (the “Chicago Action”) sued various pharmaceutical companies, including Actavis, Inc. In the California Action, plaintiffs alleged that defendants “engaged in a common, sophisticated, and highly deceptive marketing campaign designed to expand the market and increase sales of opioid products by promoting them for treating long-term chronic, nonacute, and noncancer pain—a purpose for which [defendants] allegedly knew its opioid products were not suited.” (Internal quotes omitted.) The plaintiffs in the Chicago Action made essentially the same allegations. Both sets of plaintiffs claimed that the defendants’ efforts “were wildly successful” resulting in a “nationwide opioid-induced public health epidemic.” (Internal quotes omitted.) Continue Reading

Auto Insurer Properly Denied Liability Coverage Where Insured Operated a “Non-Owned” Auto Furnished for Insured’s Regular Use

Medina v. GEICO Indemnity Company, 8 Cal.App.5th 251 (2017)

Leigh Anne Flores worked for Pacific Bell. While driving a Pacific Bell van, she hit another car driven by Javier Medina. Pacific Bell furnished the van to Flores for work, but Flores also used it for personal use without any express objection or restriction by Pacific Bell. At the time she struck Medina, Flores was on a personal errand during work hours. Continue Reading

Genuine Dispute Doctrine Did Not Support Summary Judgment Where Expert Failed To Review All Medical Records

Zubillaga v. Allstate Indemnity Company, 12 Cal.App.5th 1017 (2017)

Carmen Zubillaga sustained a back injury from a car accident. After settling with the other driver’s insurer, Zubillaga made a claim for underinsured motorist benefits to her auto insurer, Allstate Indemnity Company. Zubillaga demanded the remaining $35,000 policy limit to settle her UIM claim. Allstate rejected Zubillaga’s demand, and instead offered $10,000. Zubillaga later claimed that she had radiating back pain requiring epidural injections. Allstate increased its offer to $12,084 and retained an orthopedic surgeon to examine Zubillaga. The surgeon examined Zubillaga and concluded that she did not have radiating back pain and did not need epidural injections. Relying on the surgeon’s opinion, Allstate stood firm on its settlement offer. Continue Reading

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