Justia Insurance Law Opinion Summaries

After Blue Shield Life and Blue Shield California refused to pay or agreed to pay only a fraction of the medical bills at issue, plaintiff filed suit alleging breach of contract and quantum meruit. The trial court granted defendants' motion for summary judgment. The court concluded that plaintiff's quantum meruit claims are time-barred and affirmed the judgment. In this case, plaintiff had knowledge of the facts giving rise to its claim of quantum meruit when it received the Explanation of Benefits (EOBs) letters, with their unequivocal denial of its bills, more than two years prior to filing this lawsuit. Furthermore, plaintiff engaged in a voluntary appeals process with Blue Shield Life and Blue Shield California, which did not change or undercut the EOBs’ denials of plaintiff's claims View "Vishva Dev, M.D., Inc. v. Blue Shield of Cal." on Justia Law

Plaintiffs filed suit against Mercury for breach of contract and breach of the implied covenant of good faith and fair dealing. Judgment was entered in favor of plaintiffs for $3 million plus interest from the date of judgment in the underlying personal injury action. The court concluded that substantial evidence supports the finding that Mercury unreasonably refused to accept the modified release where the offering of the policy limits was not sufficient in and of itself to defeat a bad faith claim as a matter of law, and substantial evidence supports the referee’s finding that Mercury unreasonably rejected the policy limits settlement proposed by counsel for plaintiffs. Accordingly, the court affirmed the judgment. View "Barickman v. Mercury Cas. Co." on Justia Law

After a film industry worker was seriously injured on a film set, he filed suit. His employer had two primary insurance policies with Fireman’s Fund, and an excess insurance policy with Ace American. Ace American subsequently filed suit against Fireman's Fund for equitable subrogation, alleging the injured worker initially offered to settle his case within the limits of the Fireman’s Fund policies, and that Fireman’s Fund unreasonably rejected those settlement offers. Ace American alleged that as a result, it was required to contribute to the eventual settlement, which exceeded the limits of the Fireman’s Fund policies. The court found that because Ace American, the excess insurer, alleged it was required to contribute to the settlement of the underlying case due to the primary insurer’s failure to reasonably settle the case within policy limits, the lack of an excess judgment against the insured in the underlying case does not bar an action for equitable subrogation and breach of the duty of good faith and fair dealing. Accordingly, the court reversed the judgment sustaining Fireman’s Fund’s demurrer and remanded for further proceedings. View "Ace American Ins. Co. v. Fireman's Fund Ins. Co." on Justia Law

Plaintiff filed a class action against United Healthcare, alleging claims of unfair competition, unjust enrichment, and financial elder abuse. Plaintiff had enrolled in a private health plan offering benefits to persons 65 and over as well as disabled persons under the federally funded Medicare Advantage program, 42 U.S.C. 1395w-21 et seq. After he went to an urgent care center outside of the plan's network, he was forced to pay a $50 copayment instead of the $30 copayment for in-network centers. Plaintiff alleged that the plan’s marketing materials misled him (and other enrollees) as to the availability of in-network urgent care centers (and their smaller copayments) and that the absence of any in-network urgent care centers in California rendered the plan’s network inadequate. The court concluded that plaintiff’s misrepresentation and adequacy-of-network based claims was expressly preempted by the preemption clause applicable to Medicare Advantage plans, 42 U.S.C. 1395w-26(b)(3). The court also concluded that plaintiff’s claims, to the extent they challenge a denial of benefits, are subject to dismissal because plaintiff did not first exhaust his administrative remedies under the Medicare Act, 42 U.S.C. 405(g), (h) and 1395ii. Accordingly, the court affirmed the trial court's dismissal of the complaint. View "Roberts v. United Healthcare" on Justia Law

Plaintiff's almost-new Toyota Tundra Pickup sustained structural damage, while parked, as a result of a collision between the vehicles of Hollandsworth and Sebastian. Plaintiff had an insurance policy through AAA covering collision-related damages.Hollandsworth also had an AAA insurance policy, covering property damage that he caused through negligence. AAA refused to consider the pickup a “total loss,” had the vehicle repaired at a reported cost of $8,196.06, and provided a rental car during the interim. As a result of the collision and the repairs, the pickup’s future resale value was decreased by more than $17,100. Plaintiff sued Hollandsworth and Sebastian for negligence and sued AAA for breach of contract and bad faith. The trial court dismissed the claims against AAA, finding that plaintiff essentially was seeking reimbursement for the lost market value of his pickup, a loss that specifically was excluded under his insurance policy. The court of appeal affirmed, rejecting an argument that the resale value exclusion violated public policy and was void. The court stated that, in the insurance context, courts are not at liberty to imply a covenant (of good faith) directly at odds with a contract’s express grant of discretionary power, View "Baldwin v. AAA N. Cal." on Justia Law

After plaintiffs' home was damaged by heavy rain, their insurer, State Farm, arranged for them to live in a rented residence while their house was being repaired. State Farm eventually made payments under the policy exceeding $248,000, but denied coverage for certain items. Plaintiffs asserted claims for breach of insurance contract, bad faith, and elder abuse against State Farm and requested an award of punitive damages. The trial court granted summary adjudication in State Farm's favor on each claim and on the request for punitive damages. The court concluded that there are triable issues of fact regarding the claim for breach of insurance contract, but none regarding the other claims and the request for punitive damages. In the published portion of the opinion, the court concluded that the bad faith claim fails under the genuine dispute doctrine, and that the evidence supporting the application of that doctrine precludes the existence of triable issues regarding the elder abuse claim. Accordingly, the court reversed as to the breach of insurance contract issue and affirmed as to the trial court's remaining rulings, remanding for further proceedings. View "Paslay v. State Farm Gen. Ins. Co." on Justia Law

After Siasmorn Gopal was admitted to the emergency room at Kaiser Foundation Hospitals and died after she was transferred to another hospital, Gopal's husband and the trustee of her estate filed suit alleging that defendants violated California law. Plaintiffs alleged that Kaiser Hospitals, SCPMG, and Health Plan treated Gopal differently than they would have treated a member and that the different treatment caused her death. The court affirmed the trial court's rejection of plaintiffs' enterprise theory of liability. The court concluded that there is nothing inequitable in requiring plaintiffs to look to Kaiser Hospitals and SCPMG - the providers at issue - for compensation for their claims. Thus, plaintiffs are not without recourse or remedy. The court noted that the fact that health care providers, and not health plans, are subject to the Medical Injury Compensation Reform Act of 1975 (MICRA), Civ. Code, 3333.2, is not an inequitable result, but a public policy determination made by the Legislature. Accordingly, the court affirmed the judgment. View "Gopal v. Kaiser Found. Health Plan" on Justia Law

Plaintiffs filed suit against the Archdiocese for damages after plaintiffs were molested as two teenage boys by a monsignor in the Catholic church. Insurance Code section 11583 tolls the statute of limitations period once a “person” makes an “advance payment or partial payment of damages” unless he notifies the recipient of the applicable statute of limitations period or until the recipient hires a lawyer. The court concluded that the monsignor's contemporaneous gifts did not amount to such an “advance payment or partial payment of damages” to the extent those gifts were not solely to compensate for past sexual abuse but were also to facilitate criminal conduct such as “grooming” the boys for further sexual abuse or encouraging the boys not to report the past abuse they suffered. Because the victims’ civil complaint alleges that the monsignor’s contemporaneous gifts were for criminal as well as compensatory purposes, the trial court properly sustained the demurrer. Nevertheless, the court remanded to give plaintiffs the opportunity to amend their complaint to allege whether there were any solely compensatory payments made while the statute of limitations period had yet to expire. View "Doe v. Roman Catholic Archbishop etc." on Justia Law

In 2007, the Sonoma County project’s owner sued Hearn, the general contractor, Second Generation, the roofer, and other subcontractors for design and construction defects. Hearn cross-complained against Second Generation and others. In 2009, Hearn assigned its interests under its subcontracts to two insurers, North American and RSUI. Hearn then settled with the owner and all but two subcontractors, one of which was Second Generation. Hearn filed an amended cross-complaint, purportedly in the name of the insurers, against those subcontractors, adding breach of a contractual obligation to obtain insurance and seeking equitable contribution for Hearn’s defense costs premised on a breach of that duty. In 2013, the court dismissed the cross-complaint against Second Generation on procedural grounds, awarded $30,256.79 in costs and granted prevailing party attorney fees of $179,119. Second Generation moved to amend the orders to name North American as a judgment debtor owing the amounts awarded against Hearn. The trial court denied the motion, stating: Hearn remains the only proper party and that the subcontractor’s exclusive remedy was to pursue a separate action against Hearn’s insurers. The court of appeal reversed, finding that, after the assignment, Hearn was “out of this case.” View "Hearn Pac. Corp. v. Second Generation Roofing, Inc." on Justia Law

Cummins installed asbestos containing products in California and had received hundreds of asbestos bodily injury claims, including many lawsuits, based on exposure to its asbestos containing materials. Cummins purchased 19 U.S. Fidelity insurance policies 1969-1987, and purchased four U.S. Fire policies, 1988-1992, for “primary, umbrella, and or excess insurance policies,” some of which “may be missing or only partially documented.” Cummins and its parent company (Holding, formed in 2014) sought a “declaratory judgment that defendants are obligated to defend and/or indemnify Cummins [Corp.], in full, including, without limitation, payment of the cost of investigation, defense, settlement and judgment . . . , for past, present and future Asbestos Suits under each of the Policies triggered by the Asbestos Suits.” The trial court dismissed without leave to amend, finding that Holding lacked standing. The court of appeal affirmed. Holding, the controlling shareholder of Cummins, does not have a contractual relationship with the insurers and is not otherwise interested in the insurance contracts. View "D. Cummins Corp. v. U.S. Fid. & Guar. Co." on Justia Law