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 statuteContinue Reading New Time-Limited Settlement Demand Laws Need Testing in Court
New California Law Impacts “Time-Limited Demands” in the Insurance Industry
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. …
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Keeping the Cap On the Policy: Unreasonable Conduct Is a Necessary Element of a “Bad Faith Failure to Settle” Claim
Pinto v. Farmers Ins. Exch., ___ Cal. App. 5th ___ (2021)
Over the past several years, the insurance industry in California has been plagued by waves of “bad faith failure to settle” claims. These claims arise out of a variety of circumstances and can take many forms, but at their core involve the following: an insured injures a third party; that third party then offers to settle his/her claim for the policy limits; but the insurer, for one reason or another, fails to accept that settlement demand. Once that happens, the third party claimant then takes the position that the “cap is off” the policy such that the insurer should be responsible for paying the full amount of any judgment the claimant obtains against the insured, even if it exceeds the policy limits. …
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Continuous and Progressive Damage Raised Factual Question as to the Timing of “Occurrence”
Thomas Guastello v. AIG Specialty Insurance Company, — Cal.Rptr.3d –, 2021 WL 650878 (Cal. Ct. App., Feb. 19, 2021), Fourth Appellate District Court of Appeal, Case No. G057714.
Various stakeholders in the Pointe Monarch housing development in Dana Point, California, accused subcontractor C.W. Poss Inc. (“Poss”) of negligently designing and constructing retaining walls. One such party, Thomas Guastello, sued Poss for damage to a perimeter wall in the backyard of Guastello’s property. According to Guastello, in January 2010, a retaining wall close to his property designed and constructed by Poss failed and caused soil to collapse and damage a perimeter wall on Guastello’s property.
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Anti-Slapp Statute Does Not Apply To Allegations That Insurer Improperly Refused To Provide Cumis Counsel
Miller Marital Deduction Trust v. Zurich American Insurance Company, — P.3d –, 2019 WL 5304862; First Appellate District Court of Appeal, Division Three, Case No. A155398 (October 21, 2019).
In Miller Marital Deduction Trust v. Zurich American Insurance Company, the California Court of Appeal held that allegations that an insurance company improperly failed to provide independent, “Cumis” counsel did not arise from protected speech and thus were not subject to California’s anti-SLAPP statute.
Seeking to avoid liability for environmental contamination on a property they owned, the Millers sued several prior owners of the property, including the Miller Estate. Zurich retained panel counsel to defend the Miller Estate against this lawsuit.
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Court Finds That “Care, Custody Or Control” Exclusion Did Not Negate Coverage For General Contractor Who Shared Jobsite Supervision
McMillin Homes Constr., Inc. v. National Fire & Marine Ins. Co., 35 Cal.App.5th 1042 (2019); Fourth Appellate District Court of Appeal, Division One, Case No. D074219 (June 5, 2019).
Continue Reading Court Finds That “Care, Custody Or Control” Exclusion Did Not Negate Coverage For General Contractor Who Shared Jobsite Supervision
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.
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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.)…
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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 Court Finds Ambiguity in Additional Insured Endorsement to Trigger Defense Duty Under Completed Operations Coverage
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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