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?
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
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
Mostafavi Law Group, APC v. Larry Rabineau, APC, et al., 2021 WL 803685 (March 3, 2021); Second Appellate District Court of Appeal, Division Four, Case No. B302344 (March 3, 2021).
California Code of Civil Procedure section 998 Offers to Compromise are an effective and widely-used settlement tool in litigation. The main objective of a Section 998 Offer “is to encourage settlement by providing a strong financial disincentive to a party – whether it be a plaintiff or a defendant – who fails to achieve a better result than the party could have achieved by accepting his or her opponent’s settlement offer.” Bank of San Pedro v. Sup. Ct., 3 Cal.4th 797, 804 (1992). In the event an offeree rejects a Section 998 Offer and fails to achieve a better result at trial, Section 998 shifts certain costs to the offeree, including the offeror’s reasonable expert costs. This case answers whether acceptance of a Section 998 Offer, served without a required acceptance provision, gives rise to a valid judgment. It does not.
Continue Reading Statutory Offer To Compromise Void Without Express Acceptance 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 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
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.
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
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 Developer Had No Right to Independent Counsel Based on a Possible Conflict of Interest for Carrier-Appointed Counsel
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 Professional Liability Policy Did Not Provide Coverage for Lawsuit that the Insured Knew or Should Have Known About
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 California Court of Appeal Affirms Judgment Finding No Duty to Defend Drug Manufacturer in Lawsuits Alleging Increased Opioid Usage
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 Auto Insurer Properly Denied Liability Coverage Where Insured Operated a “Non-Owned” Auto Furnished for Insured’s Regular Use