Articles Posted in California Supreme Court

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At issue in this case was whether insurance practices that violate the Unfair Insurance Practices Act (UIPA) can support an Unfair Competition Law (UCL) action. In 1988, the Supreme Court held in Moradi-Shalal v. Fireman's Fund Insurance Companies that the Legislature did not intend to create a private cause of action under the UIPA for commission of various unfair practices listed in Cal. Ins. Code 790.03(h). In this case, Plaintiff sued Insurer for, among other causes of action, violation of California's unfair competition law (UCL) for engaging in false advertising. The trial court concluded that the UCL claim was an impermissible attempt to plead around Moradi-Shalal's bar against private actions for unfair insurance practices under section 790.03. The court of appeal reversed. The Supreme Court affirmed, holding (1) private UIPA actions are absolutely barred, and litigants may not rely on the proscriptions of section 790.03 as the basis for a UCL claim; (2) however, when insurers engage in conduct that violates both the UIPA and obligations imposed by other statutes or the common law, a UCL action may lie; and (3) here, Plaintiff alleged causes of action that provided grounds for a UCL claim independent from the UIPA. View "Zhang v. Superior Court" on Justia Law

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This case considered complex questions of insurance policy coverage interpretation in connection with a federal court-ordered cleanup of the state's Stringfellow Acid Pits waste site. The Supreme Court affirmed the court of appeal's judgment, holding (1) the "continuous injury trigger" and "all sums" rule announced in Montrose Chemical Corp. v. Admiral Ins. Co. and Aerojet-General Corp. v. Transport Indemnity Co. applied to the State's successive property or long-tail first party property loss, triggering the duty to indemnify here; and (2) the court of appeal correctly applied the "all-sums-with-stacking" allocation rule in allocating the indemnity duty among the insurers responsible for covering the property loss. View "State v. Cont'l Ins. Co." on Justia Law

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This case stemmed from a lawsuit filed in 2007 by the Retired Employees Association of Orange County, Inc. against the County of Orange contesting the validity of certain changes the county had made to health benefits for retired employees. At the request of the Ninth Circuit, the court addressed the following question: "Whether, as a matter of California law, a California county and its employees can form an implied contract that confers vested rights to health benefits on retired county employees." In response, the court concluded that, under California law, a vested right to health benefits for retired county employees could be implied under certain circumstances from a county ordinance or resolution. Whether those circumstances existed in this case was beyond the scope of the question posed to the court by the Ninth Circuit.

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This case stemmed from injuries Anthony Verdon Lujan sustained when his arm got caught on a luggage conveyor when he was inspecting the conveyor as an employee of Lloyd W. Aubry Co. (Aubrey), an independent contractor hired by US Airways to maintain and repair the conveyor. Aubry's workers' compensation insurer paid Verdon benefits based on the injury and subsequently sued US Airways seeking what it paid in benefits. Verdon intervened as plaintiff in the action, alleging causes of action for negligence and premises liability. At issue was whether the Privette v. Superior Court rule applied when the party that hired the contractor (the hirer) failed to comply with workplace requirements concerning the precise subject matter of the contract and the injury was alleged to have occurred as a consequence of that failure. The court held that the Privette rule did apply in that circumstance. The court concluded that, by hiring an independent contractor, the hirer implicitly delegated to the contractor any tort law duty it owed to the contractor's employees to ensure the safety of the specific workplace that was the subject of the contract. That implicit delegation included any tort law duty the hirer owed to the contractor's employees to comply with applicable statutory or regulatory safety requirements. Accordingly, plaintiffs here could not recover in tort from US Airways on a theory that Verdon's workplace injury resulted from defendant's breach of what plaintiffs described as a nondelegable duty under California Occupational Safety and Health Act of 1973 (OSHA), Cal. Code Regs., tit. 8, sections 3999, 4002, regulations to provide safety guards on the conveyor. Therefore, the court erred in reversing the trial court's grant of summary judgment for defendant.

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This case arose when plaintiff was seriously injured in an automobile accident negligently caused by a driver for defendant. At issue was whether an injured person could recover from the tortfeasor, as economic damages for past medical expenses, the undiscounted sum stated in the medical care provider's bill but never paid by or on behalf of the injured person. The court held that the collateral source rule, which precluded deduction of compensation the plaintiff had received from sources independent of the tortfeasor from damages the plaintiff "would otherwise collect from the tortfeasor" ensured that plaintiff here could recover in damages the amounts her insurer paid for her medical care. The rule, however, had no bearing on amounts that were included in a provider's bill but for which the plaintiff never incurred liability because the provider, by prior agreement, accepted a lesser amount as full payment. Such sums were not damages the plaintiff would otherwise have collected from the defendant and were neither paid to the providers on the plaintiff's behalf nor paid to the plaintiff in indemnity of his or her expenses. Therefore, because they did not represent an economic loss for the plaintiff, they were not recoverable in the first instance. The collateral source rule precluded certain deductions against otherwise recoverable damages, but did not expand the scope of economic damages to include expenses the plaintiff never incurred.