Justia Insurance Law Opinion Summaries

The case involves plaintiffs Martin Tait, Jane Tait, and Bry-Mart, LLC (collectively, the Taits) who sued Commonwealth Land Title Insurance Company (Commonwealth) for breach of a title insurance policy. The Taits alleged that Commonwealth failed to pay the full amount by which their property’s value was diminished due to an undisclosed easement. The Taits had purchased a residential property in Danville for $1.25 million and had plans to subdivide the property into two lots. However, they discovered a separate 1988 maintenance easement that they believed would impact the marketability and value of the property and interfere with its potential development.The trial court granted Commonwealth’s motion for summary judgment, ruling that the policy required Commonwealth to compensate the Taits only for the value of their actual use of the property as a vacant residential lot suitable for only one home rather than its highest and best use as a subdividable lot. The court reasoned that the legal standard for title insurance losses did not permit consideration of a property’s highest and best use, only its actual use as vacant residential land.The Court of Appeal of the State of California First Appellate District Division Four disagreed with the trial court's interpretation. The appellate court held that the Taits’ policy entitles them to reimbursement for the diminution in value of their property based on its highest and best use. The court found that the Taits’ evidence of the likelihood of subdivision and the value of a subdividable lot created a triable issue of fact regarding the amount of the Taits’ loss under the policy, thereby precluding summary judgment. Therefore, the court reversed the trial court's decision. View "Tait v. Commonwealth Land Title Insurance Co." on Justia Law

The case revolves around a dispute between Southern California Edison Company (SCE) and 21st Century Insurance Company and other insurance companies (plaintiffs). The plaintiffs, who paid policyholders for losses resulting from a fire known as the Creek Fire, sued SCE under a subrogation theory to recover their payments. They alleged that an arc from SCE's electric powerlines caused the fire. During discovery, SCE withheld certain documents, asserting they were generated during an attorney-led internal investigation into the cause of the fire and were protected by attorney-client privilege and the attorney work product doctrine. The plaintiffs moved to compel the production of these documents, arguing that SCE's primary reason for conducting the investigation was to comply with state law requiring it to publicly report any involvement it had in causing the fire. The trial court agreed with the plaintiffs and compelled the production of the documents.The Court of Appeal of the State of California Second Appellate District Division One reviewed the case. The court concluded that the trial court's order improperly invaded the protection afforded by the attorney work product doctrine. Even where the dominant purpose of an attorney-directed internal investigation is to comply with a client's public reporting requirement, attorney work product generated in connection with gathering facts to assist counsel in advising the client on how to comply with that statutory or regulatory reporting requirement remains protected. As the plaintiffs did not show grounds for the production of their adversary's work product, the trial court erred in compelling its production. The court did not address whether the order also violated the attorney-client privilege. The court granted SCE's petition and directed the trial court to vacate its order and issue a new order denying the plaintiffs' motion to compel. View "Southern California Edison Co. v. Superior Court" on Justia Law

The case involves a dispute over workers' compensation coverage for an employee, Braden Nanez, who was injured in a car accident while off work and away from his job at a remote fire base camp. The employer, Stonedeggs, Inc., expected employees not to leave the job site and to notify a manager if they did. Nanez did not notify a manager he was leaving camp. The Workers’ Compensation Appeals Board (the Board) found that Nanez’s use of his own car while off work to drive approximately 70 miles away from camp purportedly to obtain cellular service was conduct reasonably expected by his employer to be incident to its requirement that Nanez spend time away from home where cellular service was not adequately provided at the camp. The Board concluded that Nanez’s travel was for comfort and leisure and was not a distinct departure from his employment.The employer, Stonedeggs, Inc., and its insurer, Technology Insurance Company, Inc., administered by Amtrust North America, appealed the Board's decision, arguing that the Board acted in excess of its authority and that substantial evidence does not support the Board’s findings. They argued that Nanez was injured during a material deviation from his employment; he left the camp without employer approval on a personal activity that, under the unique circumstances of working at this remote fire camp, was not contemplated by the employer.The Court of Appeal of the State of California Third Appellate District affirmed the decision of the Workers’ Compensation Appeals Board. The court found that substantial evidence supported the Board’s findings that Nanez was a commercial traveler and that his departure from camp was a leisure activity that the employer may reasonably have expected to be incident to its requirement that Nanez spend time away from home. The court denied the petition for writ of review filed by Stonedeggs, Inc. and Technology Insurance Company, Inc. View "3 Stonedeggs, Inc. v. Workers' Comp. Appeals Bd." on Justia Law

This case revolves around a dispute between California Specialty Insulation, Inc. (CSI) and Allied World Surplus Lines Insurance Company (Allied World) over a commercial general liability insurance policy. The policy was issued by Allied World to CSI. The dispute arose when Allied World refused to defend and indemnify CSI against a negligence claim following a construction site accident. The parties disagreed on whether one of the policy’s exclusions for bodily injury liability applied in this situation. The policy excluded coverage for bodily injury to the employees of any “contractor,” but the term “contractor” was not defined in the policy. Allied World argued that the term was unambiguous and the exclusion precluded coverage for the negligence claim, while CSI argued that the term was ambiguous and the exclusion did not apply to the negligence claim.The trial court ruled in favor of CSI, granting its motion for summary judgment and denying Allied World’s. The court found that the term “contractor” in the disputed exclusion was ambiguous and interpreted the term in favor of CSI.The Court of Appeal of the State of California Second Appellate District Division Seven affirmed the trial court's decision. The appellate court agreed with the trial court that the term “contractor” in the disputed exclusion was ambiguous. The court interpreted the term based on CSI’s objectively reasonable expectations and concluded that the exclusion did not apply to the negligence claim in question. Therefore, Allied World was obligated to defend and indemnify CSI against the negligence claim. View "California Specialty Insulation, Inc. v. Allied World Surplus Lines Insurance Co." on Justia Law

The case involves an employee, Braden Nanez, who was injured in an auto accident while off work and away from his job at a remote fire base camp. His employer, 3 Stonedeggs, Inc., expected employees not to leave the job site and to notify a manager if they did. Nanez did not notify a manager he was leaving camp. The Workers’ Compensation Appeals Board (the Board) determined that under the commercial traveler rule, workers’ compensation coverage applied to Nanez's injuries. The Board found that Nanez’s use of his own car while off work to drive approximately 70 miles away from camp purportedly to obtain cellular service was conduct reasonably expected by his employer to be incident to its requirement that Nanez spend time away from home where cellular service was not adequately provided at the camp.The employer, 3 Stonedeggs, Inc., and its insurer, Technology Insurance Company, Inc., administered by Amtrust North America, petitioned for a writ of review, arguing that the Board acted in excess of its authority and that substantial evidence does not support the Board’s findings. They argued that Nanez was injured during a material deviation from his employment; he left the camp without employer approval on a personal activity that, under the unique circumstances of working at this remote fire camp, was not contemplated by the employer.The Court of Appeal of the State of California Third Appellate District denied the petition, finding that substantial evidence supports the Board’s findings. The court concluded that under the circumstances of Nanez’s age, his having his personal vehicle with him, the structure of his shifts, the remoteness of the camp, and his not being prohibited from using his vehicle during his off hours, it was reasonable for the employer to expect that Nanez would leave camp in his car during his off time as incident to being employed away from home. View "3 Stonedeggs, Inc. v. Workers' Compensation Appeals Board" on Justia Law

The case involves George and Sheila Byers, who filed a lawsuit against their homeowners' insurance provider, USAA General Indemnity Company (USAA), and other defendants. The Byerses alleged that USAA breached their contract and the covenant of good faith and fair dealing in relation to the installation of hardwood flooring at their home. They sought attorneys' fees as damages under the Brandt v. Superior Court (1985) principle, which allows for the recovery of attorney fees when an insurer's tortious conduct compels the insured to hire an attorney to obtain policy benefits.USAA sought to compel the Byerses to produce documents related to their attorney fees, arguing that by seeking Brandt fees, the Byerses had waived their attorney-client privilege regarding these documents. The Byerses objected, arguing that the requests were ambiguous, overbroad, and violated attorney-client privilege. The trial court granted USAA's motion to compel, allowing the Byerses to redact any references they believed reflected attorney work product.The Byerses then petitioned the Court of Appeal of the State of California, First Appellate District, Division Five, challenging the trial court's order. They argued that the trial court had forced them to waive their attorney-client privilege and had abused its discretion by ordering the production of all invoices, fee agreements, and payment history.The appellate court denied the Byerses' petition. It found that by seeking Brandt fees, the Byerses had impliedly waived their attorney-client privilege regarding the attorney fees documents. The court also found no abuse of discretion in the trial court's order allowing the Byerses to redact references they believed reflected attorney work product. The court concluded that USAA had a right to learn about the attorney fees aspect of the Byerses' alleged damages during discovery. View "Byers v. Super. Ct." on Justia Law

The case involves Christine Matlock Dougherty, who sued U.S. Behavioral Health Plan, California (USB) for claims related to her son's healthcare. Dougherty's son, Ryan, was enrolled in a UnitedHealthcare HMO health plan, which Dougherty had access to through her employer. Ryan admitted himself into a residential treatment facility for severe drug addiction, but USB denied coverage for his stay after three days, arguing that he could be treated at home. Ryan fatally overdosed shortly after his discharge from the facility. Dougherty then sued USB, claiming that its wrongful denial of coverage for Ryan's treatment caused his death. USB petitioned to compel arbitration of her claims, but the trial court denied the petition, stating that USB's arbitration agreement was not enforceable because it did not comply with the disclosure requirements imposed by Health & Safety Code section 1363.1.The trial court denied USB's petition to compel arbitration on the grounds that the arbitration agreement did not comply with the disclosure requirements of Health & Safety Code section 1363.1. The court found that there were two separate contracts, one between Dougherty and UnitedHealthcare, and another between Dougherty and USB. The court ruled that the arbitration agreement in the supplement, which governed Dougherty's claims against USB, did not comply with section 1363.1's disclosure requirements.The Court of Appeal of the State of California Fourth Appellate District Division Two reversed the trial court's decision. The appellate court concluded that USB forfeited its argument that the issue of whether the arbitration agreement was valid under the disclosure requirements of section 1363.1 was delegated to the arbitrator. However, the court agreed with USB that the trial court erroneously denied USB’s petition because USB complied with section 1363.1. The court found that the only "health care service plan" at issue that "includes terms that require binding arbitration" is Dougherty’s plan with UnitedHealthcare, which includes both the EOC and the supplement as components of the plan. Therefore, the court concluded that there was no section 1363.1 violation and reversed the trial court's order denying the petition to compel arbitration. View "Dougherty v. U.S. Behavioral Health Plan" on Justia Law

Apex Solutions, Inc., a cannabis business, filed a lawsuit against Falls Lake Insurance Management Company, Inc., after the insurance company refused to pay the full amount of a claim Apex filed following a burglary at its facility. The burglars stole a large portion of Apex's cannabis inventory from two separate vaults. Apex claimed that the thefts constituted two separate occurrences, each subject to a $600,000 per occurrence limit under its insurance policy. Falls Lake, however, contended that the thefts constituted a single occurrence, subject to a single $600,000 limit.The Superior Court of California, County of Alameda, granted summary judgment in favor of Falls Lake, ruling that a single per occurrence limit applied. The court also rejected Apex's claim for additional payments under its business interruption coverage.On appeal, the Court of Appeal of the State of California, First Appellate District, Division Four, affirmed the lower court's ruling on the per occurrence limit, agreeing that the thefts constituted a single occurrence. However, the appellate court found that Apex had raised a triable issue of fact regarding the calculation of its lost business income. The court therefore reversed the judgment in part and remanded the case for further proceedings on that issue. View "Apex Solutions v. Falls Lake Insurance Management Co., Inc." on Justia Law

In this case, the Court of Appeal of the State of California was asked to determine a dispute over an insurance claim between Apex Solutions, Inc. (Apex), a cannabis business, and Falls Lake National Insurance Company (Falls Lake). In June 2020, burglars broke into Apex's facility and stole the contents of two vaults containing cannabis inventory, leading to property and business income losses. Apex claimed over $2.5 million for the loss from Falls Lake. The disagreement between the parties centered on whether the theft constituted one or two occurrences under the insurance policy, which would determine the payout limit.The court held that the theft was a single occurrence, based on the evidence that it was a coordinated raid. However, it also concluded that there was a disputed issue concerning the proper calculation of Apex’s claim of lost business income. This issue was remanded for further proceedings in the lower court.In reaching its decision, the court applied existing principles of contractual and insurance law, with a focus on the interpretation of the term "occurrence" in the insurance policy. The court emphasized the importance of considering the cause of the loss and the coordination of the activities leading to the loss in determining whether it was a single occurrence.In conclusion, the court partially reversed the judgment, affirming the single occurrence ruling but remanding the case for further proceedings on the lost business income claim. View "Apex Solutions, Inc. v. Falls Lake Ins. Management Co., Inc." on Justia Law

The case concerns Brooklyn Restaurants, Inc., a company that operates a local diner in California. The company filed a lawsuit against its insurer, Sentinel Insurance Company, Limited, after the insurer declined a claim under a commercial property insurance policy following a partial shutdown of the diner during the COVID-19 pandemic. The lower court granted Sentinel’s motion for judgment on the pleadings, ruling there was no coverage under the policy for Brooklyn’s claimed business loss. However, Brooklyn appealed, asserting that its case was unique from other COVID-19 related insurance cases filed in the state, as it had alleged a direct physical loss which should trigger coverage under the policy.Brooklyn also pointed out that their insurance policy contained a unique provision specifically covering losses attributable to a virus. Therefore, they argued, physical loss should include the cleaning of an area infected by the coronavirus. The Court of Appeal, Fourth Appellate District Division One State of California, agreed that the policy was reasonably susceptible to that interpretation. They also determined that Brooklyn had adequately alleged a direct physical loss or damage under the policy, which raised the possibility of coverage.However, the policy also included certain exclusions and conditions applicable to coverage for a loss or damage resulting from a virus. Brooklyn argued that these exclusions and conditions rendered the policy illusory. The court agreed that at the pleading stage, Brooklyn had done enough to raise the issue that its policy might be illusory, which in turn raised factual questions that required further discovery and evidence collection. Therefore, the court reversed the judgment and remanded the case back to the lower court with instructions to enter an order denying Sentinel’s motion for judgment on the pleadings. View "Brooklyn Restaurants, Inc. v. Sentinel Insurance Co., Ltd." on Justia Law