Justia Insurance Law Opinion Summaries

Karpinski sued, alleging that Smitty’s Sausalito bar negligently allowed two intoxicated men to enter and remain in the bar, and that the men punched Karpinski in the head, causing serious injuries. After court-ordered mediation, Karpinski agreed to dismiss Smitty’s in exchange for $40,000. Karpinski moved for entry of judgment under Code of Civil Procedure 664.6. Smitty’s opposed the motion because liens had been imposed by the federal government, based on Medicare payments to Karpinski, and by the state, based on crime victim compensation payments. The court entered a default judgment against the individuals ($1,430,968.84) and granted enforcement of the settlement, reasoning that the agreement requires that Karpinski "negotiate, satisfy, and dispose of all liens," but does not state that he must do so before receiving payment, and requires Karpinski to hold Smitty’s, its attorneys, and insurer harmless with respect to lien claims. Regardless of concern over whether Karpinski will honor that obligation, there is a remedy if he does not. The court awarded Karpinski $2,200 in attorney fees. The court of appeal affirmed. That there are no guarantees does not alter the fact that Smitty’s agreed to pay Karpinski $40,000 in exchange for his release and promises to satisfy all liens. View "Karpinski v. Smitty's Bar, Inc." on Justia Law

Two insurers shared indemnification costs to settle claims made against mutual insureds in a construction defect litigation brought by third parties. One insurer, defendant Arch Specialty Insurance Company (Arch), refused to share the costs to defend the insureds in the underlying litigation. The other insurer, plaintiff Certain Underwriters at Lloyds, London (Underwriters), paid all defense costs and then sought equitable contribution from Arch. In ruling on cross-motions for summary judgment/adjudication, the trial court concluded Arch had no duty to defend the insureds in the underlying litigation, because Arch's insurance policy expressly stated it had a duty to defend provided no "other insurance" afforded a defense, and Underwriters' policy did afford a defense. Underwriters appealed summary judgment entered in favor of Arch and also challenged the trial court's denial of Underwriters' motion for summary adjudication of Arch's responsibility to contribute to defense costs. After review, the Court of Appeal concluded Arch's "other insurance" clause could not be enforced in this equitable contribution action between successive primary insurers, "[e]nforcement of such a clause in a primary CGL policy would violate public policy." The Court also concluded Arch did not successfully circumvent this result by including the clause in the "coverage" section of the insurance policy as well as the "limitations" section. Accordingly, the trial court's judgment was reversed and the trial court directed to enter an order denying summary judgment to Arch and granting Underwriters' cross-motion for summary adjudication that Underwriters was entitled to equitable contribution. View "Certain Underwriters at Lloyds, London v. Arch Specialty Ins. Co." on Justia Law

Care West and Ullico, two insurers, were jointly and severally liable for claims arising from an employee’s workplace injury. In a compromise and release agreement, they settled the employee’s claims and apportioned between themselves roughly 50/50 liability for any remaining third party charges. When Ullico became insolvent and was liquidated, responsibility for third party claims against it was assumed by CIGA. The Appeals Board subsequently denied CIGA's motion to dismiss on the ground that the Care West/Ullico agreement limited Care West’s liability to roughly half of any third party claims, thereby rendering Care West’s insurance unavailable as to the remaining half. CIGA petitioned for a writ of review. The court denied the petition, but the Supreme Court granted review and remanded back to the court with directions to hear the matter on the merits. The court now concludes that the Care West/Ullico compromise and release agreement did not relieve Care West of its several liability for third party claims. Accordingly, the court annulled the Appeals Board's decision. View "CA Ins. Guarantee Assoc. v. Workers' Comp. Appeals Bd." on Justia Law

Plaintiff Tenet Healthsystem Desert, Inc. (Hospital) appealed a judgment entered in favor of defendants Blue Cross of California, doing business as Anthem Blue Cross (Blue Cross), Anthem Blue Cross Life and Health Insurance Company (BC Life), and Anthem UM Services, Inc. (Anthem UM). Hospital sued Anthem, as well as Eisenhower Medical Center (Eisenhower) and Keenan & Associates (Keenan), when the defendants refused to pay approximately $1.9 million the cost of medical services that Hospital provided to an insured patient following extensive communications with Anthem over a period of approximately 50 days regarding "authorization" for the services. The defendants ultimately denied coverage for the medical services based on an exclusion in the patient's policy for injuries sustained as a result of having a blood alcohol level over the legal limit. Hospital alleged that Anthem's continuing to "authorize" medical services during the patient's stay at Hospital, even after Anthem was made aware that the patient was admitted with a blood alcohol level far exceeding the legal limit, constituted a misrepresentation as to coverage, on which Hospital relied in providing care to the patient. The trial court determined that the Hospital's third amended complaint (TAC) lacked the necessary specificity to survive a demurrer, and entered judgment for Anthem. The Court of Appeal, however, reversed, concluding the TAC alleged facts with sufficient particularity to overcome a demurrer. The Court therefore reversed and remanded the matter to the trial court for further proceedings. View "Tenet Healthsystem Desert v. Blue Cross of Cal." on Justia Law

The City appealed the trial court's issuance of a writ of mandate authorizing the Board to exercise its discretion, previously delegated to it by the City in an ordinance, to set the maximum subsidy contributed by the City to police and firefighter retirees‟ insurance premiums without regard to later City ordinances “freezing” the subsidy until review and increase by the City Council and requiring payment of a voluntary contribution to join an opt-in program. The court agreed with the City's contention that the trial court's grant of a writ of mandate was in error because the City Charter grants the City Council the authority to set the amount of the subsidy and, as a consequence, the Delegation Ordinance can neither restrict the Council's authority nor create a vested right to a Board-determined subsidy as such would conflict with the Charter. Accordingly, the court reversed and remanded. View "Fry v. City of L.A." on Justia Law

Government Employees Insurance Company, GEICO General Insurance Company, GEICO Casualty Company, and GEICO Indemnity Company (collectively, GEICO), as relator, brought a qui tam action asserting statutory and common law claims for damages and civil penalties against Dr. Janice Cruz (and others) arising from her alleged involvement in an insurance fraud conspiracy. The trial court granted Cruz's motion to bind GEICO to certain interrogatory responses, then granted her summary judgment motion on the basis those responses established GEICO was unable to prove its case against Cruz. On appeal, GEICO argued the trial court erred by: (1) binding GEICO to its earlier interrogatory responses; (2) excluding additional evidence offered in opposition to the summary judgment motion; and (3) granting summary judgment on its statutory claim. The Court of Appeal concluded the trial court erred in binding GEICO to its interrogatory responses, and further, found multiple instances of issues of triable facts that should not have been disposed of through summary judgment. The Court accordingly reversed the trial court and remanded the case for further proceedings. View "California ex rel. Gov. Employees Ins. Co. v. Cruz" on Justia Law

This appeal involves an insurance broker that allegedly failed to obtain insurance requested by its client, who subsequently sustained uninsured liability when he negligently caused a fire that spread to neighboring buildings. The client settled that uninsured liability by assigning to plaintiffs his causes of action against the insurance broker. Plaintiffs, neighboring business owners and an insurance company that paid for damages to a neighboring building, pursued the assigned causes of action by filing a lawsuit against the insurance broker. The trial court granted summary judgment for the insurance broker. The court concluded that California, like the majority of jurisdictions in the United States, recognizes the assignability of a client’s causes of action against an insurance broker or agent for failing to obtain insurance. The court also concluded that, in the insurance context, the rule from California’s equitable subrogation doctrine applies to a contractual assignment only if the assignee is an insurance company and the assignor was that insurance company’s policyholder. In this case, the assignees (plaintiffs) did not issue an insurance policy to the assignor (i.e., the insurance broker’s client) and thus were never potential equitable subrogees of the assignor. Therefore, the court concluded that their contractual assignments are not subject to the rule of superior equities. Further, there is a triable issue of material fact about whether the client requested the insurance broker to obtain insurance coverage before the fire. Accordingly, the court reversed the judgment. View "AMCO Ins. Co. v. All Solutions Ins. Agency" on Justia Law

Plaintiff filed suit asserting causes of action against Topa for breach of contract, breach of the covenant of good faith and fair dealing, and declaratory relief. At issue on appeal is whether an excess liability insurance policy that “follows form” to an underlying primary policy that provides uninsured motorist/underinsured motorist (UM/UIM) coverage must also provide such coverage after the underlying policy limit has been exhausted. The court held that the excess policy does not provide coverage for first party UM/UIM claims because the policy’s insuring agreement unambiguously limits the insurer’s indemnity obligation to third party liability claims. In this case, the plain language of the Topa insuring agreement unambiguously provides coverage for third party liability claims only. Accordingly, the court affirmed the judgment entered in favor of the excess insurer. View "Haering v. Topa Ins." on Justia Law

In this suit alleging breach of an insurance contract, plaintiff appealed the trial court's grant of defendant's motion for directed verdict. Plaintiff contended that the trial court’s intended jury instruction violated the efficient proximate cause doctrine and there was sufficient evidence to permit the jury to determine whether plaintiff met his burden of proving his claim for punitive damages. The court concluded that plaintiff’s interpretation of the Other Coverage 9 provision is the correct interpretation, consistent with the efficient proximate cause doctrine. A policy cannot extend coverage for a specified peril, then exclude coverage for a loss caused by a combination of the covered peril and an excluded peril, without regard to whether the covered peril was the predominant or efficient proximate cause of the loss. Because the trial court granted the motion for a directed verdict based on the effect the erroneous proposed jury instruction would have had on plaintiff’s case, the court reversed and remanded as to this issue. Because defendant's special instruction No. 12 improperly shifted the burden of proof, the trial court erred in its decision to instruct the jury with defendant’s proposed special instruction and in granting defendant’s motion for directed verdict based on the decision to give that instruction. The court reversed and remanded as to this issue. Finally, the court found no error in the trial court's punitive damages claim. View "Vardanyan v. Amco Ins. Co." on Justia Law

Samuel Heckart brought this action against A-1 Self Storage, Inc., Caster Properties, Inc., Caster Family Enterprises, Inc., Caster Group LP, and Deans & Homer (together, Defendants) for violations of the Unfair Competition Law, violations of the Consumers Legal Remedies Act, negligent misrepresentation, and civil conspiracy. Heckart alleged A-1's sale of a Customer Goods Protection Plan (the Protection Plan) in connection with its rental of storage space constituted unlicensed sale of insurance. The form Protection Plan required the tenant to either initial to accept or decline participation in the plan. Heckart declined participation by initialing that option, which provided: "No, I decline participation in the . . . Protection Plan. I am currently covered by an insurance plan that covers my belongings in the storage facility. I understand that I need to provide the policy information in writing to the facility Owner within 30 days or I will automatically be enrolled in the . . . Protection Plan until I do provide such information to the Owner." Heckart "inadvertently" purchased the Protection Plan and was enrolled in it, presumably because he failed to provide proof of insurance within 30 days. In April 2013, Heckart, on behalf of himself and other similarly situated California residents, sued A-1 and Caster Group. The trial court sustained Defendants' demurrer to Heckart's first amended complaint without leave to amend, concluding the Protection Plan was not insurance. Heckart appealed, contending his allegations were sufficient to state the asserted causes of action because the Protection Plan was insurance that must comply with the Insurance Code. The Court of Appeal found his arguments unavailing and affirmed. View "Heckart v. A-1 Self Storage" on Justia Law