Archive for May, 2009

CIGA’s Isaacson Immunity From Tort Claims Upheld

In the unpublished portion of its opinion, Division Five of the Second Appellate District has upheld and restated the California Insurance Guarantee Association (CIGA)’s immunity from tort claims in Bi-Coastal Payroll Services, Inc, et al v. CIGA, No. B205969 (May 29). However, it reversed the trial court’s dismissal of the entire case with instructions to [...]

May 29, 2009 Posted in: Blog Comments Closed

Plaintiffs Capitulate in Flagship Knox-Keene Act Misrepresentation Case

Hailey v. California Physicians’ Service (2007) 198 Cal. App. 4th 452 is the flagship appellate case relying on Health & Safety Code Section 1389.3 (factual misstatements must be “willful” in the absence of “complete” underwriting in order to support a rescission) for the current round of challenges to Knox-Keene Act health plans’ rescission decisions. Yesterday, [...]

May 29, 2009 Posted in: Blog Comments Closed

Civil Code Section 3345 Enhanced Remedies Apply To Private UCL Actions

Civil Code Section 3345 authorizes enhanced remedies — up to three times an underlying fine or civil penalty — to “punish or deter” in an action brought on behalf of senior citizens or the disabled to “redress unfair or deceptive practices or unfair methods of competition.” In Clark v. Superior Court (National Western Life Insurance [...]

May 22, 2009 Posted in: Blog Comments Closed

Insurer Entitled to Defense Costs Plus Interest When Notice of Suit Predates Coverage

Perhaps the clearest cases where courts routinely uphold insurers’ lack of a defense obligation are claims made or occurrences taking place outside an insurer’s policy period. Evanston Insurance Co. v. OEA, Inc., No. 07-15316 (May 21), a decision by the Ninth Circuit, is the latest such decision. OEA manufactured booster caps. In 1994, it transferred [...]

May 22, 2009 Posted in: Blog Comments Closed

CA Supreme Court Hands Down Landmark Interpretation of UCL Standing and Causation Requirements

In what will almost certainly be the decision with the most impact on the insurance industry this year, the California Supreme Court, in In Re Tobacco Cases II, No. S1473345 (May 18), has handed down a 4-3 decision that is more plaintiff-oriented than expected holding that Proposition 64′s standing requirements are applicable only to the [...]

May 20, 2009 Posted in: Blog Comments Closed

How Scofflaws Are Subsidized By Their Fellow Auto Insureds

A few years ago, Californians were surprised to learn that Michelle Delgadillo, wife of Los Angeles’ city attorney, had avoided any personal responsibility for traffic infractions dating back as far as 1998. What they didn’t learn is the inequity in California’s haphazard enforcement of its Vehicle Code spills over into insurance ratemaking. Because our traffic [...]

May 20, 2009 Posted in: Blog Comments Closed

Surety Not Entitled To Allocate Claim To Obligee’s Separate Bond

First National Insurance Co. v. Cam Painting, Inc., No. B200830 (May 15), involves a reversal by Division 5 of the Second Appellate District of two decisions in favor of First National by the trial court. Cam was a contractor for the Los Angeles Unified School District. Sabco Electrique, Inc. served as a subcontractor. Sabco provided [...]

May 19, 2009 Posted in: Blog Comments Closed

Out of State Insurer Lacks Sufficient Contacts With California For General Or Specific Jurisdiction

In Elkman v. National States Insurance Co., No. B205919 (May 14), Division 3 of the Second Appellate District considered California’s right to assert general or specific jurisdiction over a long-term care insurer with 389 of its 115,415 insureds residing in California. Esther Elkman, like the other California insureds, had purchased her policy in another state [...]

May 14, 2009 Posted in: Blog Comments Closed

Ninth Circuit Revives Credit-Scoring Class Action Against Farmers

In Ojo v. Farmers Group, Inc., No. 06-55522 (May 12), a divided panel of the Ninth Circuit held that District Judge John Walter’s dismissal of a class action asserting Farmers violated the federal Fair Housing Act by allegedly charging minorities more than whites for homeowners insurance was incorrect. The prospective class representative, Patrick Ojo, a [...]

May 13, 2009 Posted in: Blog Comments Closed

No ERISA Preemption for Hospital’s Claims Against Blue Cross

In Coast Plaza Doctors Hospital v. Blue Cross of California, No. B205892 (May 11), Division 1 of the Second Appellate District reversed a dismissal by the trial court of a hospital’s state law claims against Blue Cross on the grounds of ERISA preemption. Health & Safety Code Section 1371.4 requires Knox-Keene health care plans, with [...]

May 11, 2009 Posted in: Blog Comments Closed

State Farm Loses “Underinsurance” HO Claim Suit

At the start of last year’s fire season, insurers breathed a heavy sigh of relief when the Fourth District Court of Appeal handed down its decision in Everett v. State Farm General Insur. Co. (2008) 162 Cal. App. 4th 649 upholding policy limits as to a first party homeowners’ claim and opining that the homeowner, [...]

May 8, 2009 Posted in: Blog Comments Closed

Second Appellate District Applies Julian Analysis To Uphold Summary Judgment on Efficient Proximate Causation Issue

In Freedman v. State Farm Insurance Co., No. B202617 (May 5), Division 1 of the Second Appellate District, one of that court’s more liberal panels, upheld a trial court’s grant of a summary judgment in favor of State Farm in a dispute over a homeowners’ insurance water damage claim. The facts were stipulated below between [...]

May 5, 2009 Posted in: Blog Comments Closed

Commissioner Poizner Names Jesse Huff As New Chief Deputy

Chief Deputy Insurance Commissioner Jim Richardson has resigned to become president of The Dentists’ Insurance Company. Commissioner Poizner today appointed Deputy Commissioner Jesse Huff as his replacement. Huff is a long-time state civil servant who served most prominently as state Director of Finance under Governor George Deukmejian.

May 4, 2009 Posted in: Blog Comments Closed

CA Supreme Court Rules On Former Insurance Code Section 11580.9 Priority Question Certified From Ninth Circuit

In Sentry Select Insurance Co. v. Fidelity & Guaranty Insurance Co., No. S145087 (May 4), the California Supreme Court was asked by the Ninth Circuit to rule on the appropriate test for determining whether an insured is “engaged in the business of renting or leasing motor vehicles without operators” within the meaning of that former [...]