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

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

Court Finds Ambiguity in Additional Insured Endorsement to Trigger Defense Duty Under Completed Operations Coverage

Pulte Home Corporation v. American Safety Indemnity Company, — Cal.Rptr.3d — , 2017 WL 3725045 (Aug. 30, 2017); California Court of Appeal, Fourth District, Division 1, Case No. D070478.

In two construction defect lawsuits, homeowners sued the general contractor and developer, Pulte Home Corporation, for alleged foundation, electrical and waterproofing defects.

Pulte required that its subcontractors purchase general liability insurance with completed operations coverage naming Pulte as an additional insured. American Safety Indemnity Company had issued such liability insurance policies to several subcontractors implicated in the defect claims. Those policies included “products – completed operations” coverage for property damage occurring away from the named insured’s premises, “arising out of ‘your work.’” “Your work” included “work or operations performed by you or on your behalf” and warranties as to fitness and quality. Continue Reading

Professional Services Exclusion Negates Coverage for Liability Arising Out of Insured’s Failure to Mark Oil Pipeline

Energy Insurance Mutual Limited v. Ace American Insurance Company, 14 Cal.App.5th 281 (2017); First Appellate District Court of Appeal, Division Four, Case No. A140656 (July 11, 2017). In Energy Insurance Mutual Limited v. Ace American Insurance Company, the California Court of Appeal held that a “professional services” exclusion applied to bar coverage for claims made against an oil pipeline owner, Kinder Morgan, and its temporary staffing agency, Comforce, following an explosion at a construction site. Kinder Morgan had hired two temporary employees from Comforce to work as construction inspectors on a water supply line project. As a result of Kinder Morgan’s alleged failure to properly mark the oil pipeline, an excavator punctured a high-pressured petroleum line and caused the explosion.

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