The plaintiffs appealed, alleging that the employee was not an “insured” and therefore the automobile accident exclusion did not apply and Fireman’s Fund had a defense duty in any event because there was a potential for coverage due to the possibility that the employee was not an “insured” under the policy definition.  The Court of Appeal affirmed the trial court, finding that the employee was an insured, rendering the automobile exclusion in the policy applicable, and determining that Fireman’s Fund had no defense duty.  The Court held that the employee was  clearly covered under that policy while using the vehicle in question, as he was,  to visit various job sites.  This was a fundamental part of his job.  Such coverage as an insured precluded any automobile accident exposure under a policy exclusion.  The case was governed by the “required vehicle” exception to the “going and coming” rule.   The employee’s use of the vehicle was  clearly related to the conduct of the business covered under the CGL policy.  Plaintiffs argued that driving the vehicle to work precedes engaging in the conduct of the business.  This analysis, the Court held, ignores the fact that if an employee’s activity is not purely personal, it is necessarily related to the conduct of the business under the “required vehicle” doctrine and therefore falls within the scope of the policy language.

The Senate, meanwhile, rejected AB 2578 (Jones-Sacramento), which would impose a Proposition 103-style regulatory scheme Rosenfield favors over health care insurers and  providers.  The bill stalled on a 17-17 vote in the Senate, where it needed 21 votes for passage.

This settlement with Corinthian includes a $100,000 monetary penalty, plus a $10,000 reimbursement of legal fees and costs to the Department of Insurance. The settlement also includes an agreement by Corinthian Title to cease and desist from failing to file rates and to cease and desist from failing to conform to filed rates. Additionally, the company agreed to cease and desist from engaging in illegal rebate conduct.

Division Four of the First Appellate District, in an unpublished decision, reversed the trial court judgment.  The case was governed by Fire Insurance Exchange v. Superior Court (2010) 181 Cal. App. 4th 388, 392.  That case, as this one, involved an encroachment — in this case, a wall — built on the property of a third party.  There the Court held that such an event was not an accident even if the owners acted in the good faith, but mistaken, belief they were legally entitled to build where they did.  An insured’s mistaken belief about fact or law does not transform a knowingly and purposefully inflicted harm into accidental injury.  The case was therefore remanded with the trial court ordered to enter a new judgment in Mercury’s favor.

Pennsylvania law contains an optional “good cause” exception to the statutory time bar for filing a claim.  Appellants argued therefrom that Insurance Code Section 1063.1 (c) incorporates that exception.  The Court of Appeal rejected the argument, finding that appellants could cite no authority for overriding the clear terms of California statutory law.  Appellants cited two California cases which the Court in this case distinguished on the basis they involved failures of the liquidator to give proper notice.  Here, in contrast to those cases, the record was clear that notice had been properly mailed in October, 2003.  Furthermore, the Court went on, case law from other jurisdictions is also clear that the willingness of a domiciliary liquidator to extend time for filing a claim is not binding on an ancillary liquidator such as CIGA.  In addition, the Court held, California has a strong interest in assuring predictability in what is a statutory rather than contractual relief scheme, and directed appellants to the legislature for any abrogation of that policy imperative.  The Court did not find it necessary to address CIGA’s alternative argument that the availability of “other insurance” (See Section 1063.1 (c) (9)  (A). ) also precluded relief here.

The Court distinguished the cases on which the Court of Appeal relied by finding that the additional $1.5 million State Farm paid to Village Northridge in exchange for the settlement and release of all claims was not wholly independent of the release itself.  The release was not included in a contract that had another purpose: it was the sole purpose of the settlement.  The settlement was clearly aimed at resolving the entire dispute over the damage asserted to be earthquake related.  The Court therefore reaffirmed Garcia v. California Truck Company (1920) 183 Cal. 767, which holds that a plaintiff cannot avoid an allegedly fraudulently induced contract of release unless it rescinds the contract and restores the money its received as consideration.  The Court noted that one of the cases upon which Village Northridge relied, Bagdasarian v. Gragnon (1948) 31 Cal. 2nd 744, 750, allows a party to affirm the settlement agreement and recover fraud damages, but also makes clear the affirming party must comply with the terms of the contract.  Here, Village Northridge sought to affirm the parts of the contract that benefit it while invalidating the major party of the agreement that benefits State Farm.  The Court also noted that the legislature had declined opportunities to authorize a different approach and that its desire to extend flexibility in rescission did cover an inability to restore consideration at the time of rescission (Civil Code Section 1693), but did not adopt the still broader approach of the Court of Appeal.  The Court also reaffirmed existing law that State Farm did not have a fiduciary duty to Village Homeowners in this case.  Finally, the Court cited the public policy in favor of binding settlements.

The Court found there was no evidence Crusader was on actual notice of the prior public citations against its insured on which it based its defense to the claim.  Recognizing that fact, Colony purported to rely on Crusader’s internal underwriting guidelines requiring a public records examination.  The Court found no authority for the proposition that Colony was granted any rights from Crusader’s internal guidelines and even found there was no evidence “that Crusader intended its internal Guidelines to be acted upon…”  In fact, the policy clearly stated that the the insured agreed the policy contained the entire agreement between the parties.  Furthermore, there was no evidence of any actual reliance by the controller of the property on any of Crusader’s underwriting guidelines.  The underwriting guidelines, in contrast to an administrative regulation, for example, also created no duty on the part of Crusader.  Nor was there any knowing waiver by Crusader of its rights under the actual language of the policy.  The Court also rejected the notion that Crusader had engaged in improper post-claims underwriting.  Here the Court distinguished Hailey v. California Physicians’ Service (2007) 158 Cal. App. 4th 452 (health care contract and different statutory scheme with specific post-claims underwriting preclusion) and Barrera v. State Farm Mutual Automobile Insurance Company (1969) 71 Cal. 2nd 659 (automobile liability insurance case where public policy favoring coverage to third-party injured claimant prevailed).

The Court of Appeal construed the exception broadly in that it did not limit its scope to a particular neighbor/claimant, legal theory, or allegation of how it was created.  It found, however, the trial court had ignored vital information from the subdivision map specifically cited in the exception as well as the surrounding circumstances.  First American repeated the trial court’s approach on appeal, arguing that Exception Five is not limited because it says nothing about the manner of the easements’ creation or the dominant tenements benefited by the easement.  But Exception Five did specify an easement as shown on the subdivision map.  The map was filed several years after another easement by implication and necessity was found in favor of the Archbishop.  Notwithstanding the fact that there was no subsequent public dedication, the map was recorded with the second easement displayed and intact.  Furthermore, the only possible dominant tenement to which the easement on the map could attach is to a lot within the subdivision.  It therefore could not include the Archbishop.  The Archbishop has no rights at all based on the map.  The trial court had improperly confused the location of the Archbishop’s easement with its incorporeal aspects.  The Archbishop’s rights were lesser than those founded upon the map.  Despite the exception, coverage applied as to the kind of unrecorded right the Archbishop asserted; the exclusion in fact applied only to known encumbrances such as would appear on the map.

Division Five of the Second Appellate District affirmed.  The Court set aside the issue of whether the arbitration agreement applied to facts arising after it was signed.  Even assuming TSP was correct in its argument, the Court found that Allianz and its insureds agreed to submit both the issues of coverage and the valuation of certain claims to binding arbitration.  TSP was effectively attempting to overturn its own agreement.  Furthermore, TSP’s substantive allegations that Allianz favored the interest of any claimant over TSP’s were unsupported.  The fact that Allianz entered into a settlement agreement with another claimant did not demonstrate it had treated TSP improperly.

The Des Plaines, Ill.-based National Insurance Crime Bureau (NICB) said yesterday that an analysis of questionable slip and fall claims submitted by NICB member companies showed a 57 percent increase in the number of referrals over the past two and a half years.

New York, Los Angeles, Philadelphia, Las Vegas and Chicago were the five cities with the most questionable claims for slips and falls, and California, Florida, New York, Illinois and Texas were the top five states.

More than 4,600 questionable claims were received in 2008, 2009 and the first half of 2010, according to the NICB, and most were tied to commercial policies.

Rolla’s substantive claim was that Cheldin had schemed to use substandard vehicles for valuation that are not comparable to the actual damaged vehicle.  The Court of Appeal found that his attorney had been “forthright” in threatening to involve Crusader and Cheldin in litigation, and that Crusader’s response was protected as prelitigation discussion.  See GeneThera, Inc. v. Troy & Gould Professional Corp. (2009) 171 Cal. App. 4th 901, 908.  The trial court did not err in ruling on the anti-SLAPP motion in the face of Rolla’s attempt to amend his complaint because the allegations in his amended pleading  were already before the court in the form of declarations.  His attack on Moradi-Shalal, furthermore, did not present evidence of a probability of prevailing on the merits in any event.  And the mailing and fraud violations alleged could not overcome the litigation privilege.

The Thing test holds that a plaintiff may recover for damages for emotional distress caused by observing a negligent infliction of injury if he or she is (1) closely related to the victim; (2) is present at the scene of the injury at the time it occurs and is then aware that it is causing injury to the victim; and (3) as a result suffers serious emotional distress — a reaction beyond that which would be anticipated in a disinterested witness and which is not an abnormal response to what has taken place.  The second test is what was not satisfied here.  Although a plaintiff might satisfy this test if he/she observed the mistaken amputation of a sound leg in lieu of a damaged one, in general it is hard to meet this standard.  In general, a layperson knows when his or her child is in need of medical attention, but does not, in the eyes of the law, know of the injury-causing effects of the treatment.  In this case, furthermore, the plaintiffs never went beyond bare-bones allegations of their alleged medical expertise and did not accept opportunities to amend their allegations to say more.  The law, the Court held, does not contemplate a negligent infliction claim when a close relative observes suffering, is able to research the medical nuance which led to it, and then brings an action against medical professionals.  Permitting a claim to go forward under any analogous circumstances is proscribed by Thing.

The Court cited a number of reasons for its holding.  First, it is impractical to get all potential heirs to sign an arbitration agreement.  Requiring them to do so would also give them an inappropriate veto power over a patient’s treatment.  Second, doing so would violate the patient’s right to privacy with respect to his or her medical treatment.  Third, the legislature clearly intended that patients would have the option of entering into binding arbitration agreements, and that intent would be compromised if all wrongful death heirs had the ability to withhold their approval of such agreements. Further, it is already well-established that wrongful death claimants may be bound by agreements — such as releases with respect to engagement in dangerous activities — made by their decedent.  Waiving another party’s ostensible right to a jury is not that far off from waivers created by wills or other testamentary dispositions.

The federal class action case filed by numerous businesses, municipalities and others claims the plaintiffs paid unfairly high premiums for commercial and employee benefits policies between 1994 and 2005.

The plaintiffs in the case — which derived from the 2004 investigations of Marsh and other brokers and insurers, led by, among others, New York’s then-Attorney General Eliot Spitzer — allege a  conspiracy through which brokers and insurers conspired to steer accounts to individual carriers, which in turn rewarded the brokers participating in the scheme with excessive contingent commissions.

A New Jersey federal judge dismissed those same  charges three years ago, and  the plaintiffs appealed. In a 200-page opinion issued earlier this week, the Third Circuit vacated some of the dismissals by the district court while affirming most others.

Marsh settled with the plaintiffs last year for $88 million, and is no longer a party to the case.

The decision — which remands the case to the federal district court in New Jersey — allows the plaintiffs to continue pursuing claims against the other insurers and brokers they originally attacked  based on antitrust and anti-racketeering laws.

The firms tied to the case include brokers Aon, Willis, HRH, large insurers including Liberty Mutual, Travelers, The Hartford, Chubb and dozens of others.

The decision also allows plaintiffs to pursue racketeering claims against the Washington D.C.-based Council of Insurance Agents and Brokers (CIAB). The plaintiffs allege the members of the group used the CIAB as an intermediary for brokers linked to Marsh to trade information about insurance markets.

The appellate court concluded that the language of Section 4660 permits reliance on the entire Guides, including the instructions on the use of clinical judgment, in deriving an impairment rating.  Section 4660 (b) (1) specifically mandates application of the Guides.   The Court found that the issue before it was whether Section 4660, as so amended in 2004, permits deviation from a strict application of the descriptions, measurements, and percentages contained in the Guides for purposes of determining impairment.  The Court concluded that it does.  Section 4660 (b) (1), it found, “recognizes the variety and unpredictability of medical situations by requiring incorporation of the descriptions, measurements, and corresponding percentages in the Guides…not their mechanical application without regard to how accurately they reflect the actual impairment sustained by the patient.”  “Incorporate,” the Court went on, does not mean “to apply exclusively.” The Guides themselves recognize the importance of taking into account clinical judgment, and doing so therefore is not inconsistent with the legislature’s intent.