Justia Insurance Law Opinion Summaries

Articles Posted in Supreme Court of California
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The Supreme Court held that Defendant, which terminated one of the life insurance policies at issue in this case because the policy owner had failed to make a payment, had no right to terminate the policies without complying with the newly codified statutory protections against termination.In 2013, protections to shield consumers from losing life insurance coverage because of a missed premium payment went into effect. The protections were codified in Cal. Ins. Code 10113.71 and 10113.72. Thereafter, Defendant terminated the subject life insurance policy. Plaintiffs brought this action arguing that Defendant had no right to terminate the policies, which predated sections 10113.71 and 10113.72, without complying with the sections. The court of appeal concluded that the newly codified statutory protections against termination did not apply because they appeared to affect only policies issued or delivered after the sections' effective date. The Supreme Court reversed, holding that sections 10113.71 and 10113.72 apply to all life insurance policies in force when these two sections went into effect, regardless of when the policies were originally issued. View "McHugh v. Protective Life Insurance Co." on Justia Law

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In this case involving the In-Home Supportive Services (IHSS) program the Supreme Court affirmed the judgment of the court of appeal concluding that sections 631 and 683 of the Unemployment Insurance Code exclude from coverage a provider who is the recipient's minor child, parent, or spouse under the state's unemployment insurance program, holding that the court of appeal did not err.The IHSS program authorized certain Californias, who were disabled or elderly, to receive in-home services from third parties or family members paid for with public funds. Under one program option, service recipients hire their own providers and the providers are paid either by a public entity or by the recipients with funds they have received from a public entity. At issue was whether such a provider qualified for unemployment benefits. The Supreme Court answered the question in the negative, holding that provider who is the recipient's minor child, parent, or spouse is not covered by the state's unemployment insurance program. View "Skidgel v. California Unemployment Insurance Appeals Board" on Justia Law

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The Supreme Court reversed the judgment of the court of appeal reversing the judgment of the trial court granting a class injunctive relief, holding that Insurer was not entitled to immunity under the Insurance Code and that the Insurance Commission did not have exclusive jurisdiction.At issue was whether, if a title insurer charges rates without filing them with the Insurance Commissioner, a consumer can challenge the charges as unlawful in court. The trial court rejected Insurer's argument that it should be held immune from Plaintiff's putative class action under Cal. Ins. Code 12414.26, but the court of appeals reversed, concluding that the class claims were barred because Insurer was in fact immune and that the trial court lacked jurisdiction. The Supreme Court reversed, holding (1) the statutory immunity for "act[s] done...pursuant to the authority conferred" by the rate-filing statutes does not shield title insurers from suit for charging unauthorized rates; and (2) the Insurance Commissioner does not have exclusive jurisdiction over unfiled-rate claims. View "Villanueva v. Fidelity National Title Co." on Justia Law

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In this case concerning the sequence in which Montrose Chemical Corporation, which was sued by causing environmental damage in the Los Angeles area, may access its excess insurance policies covering the period from 1961 to 1985, the Supreme Court held that Montrose may seek indemnification under any excess policy once it has exhausted the underlying excess policies in the same policy period.Montrose purchased primary and excess comprehensive general liability insurance to cover its operations at its Torrance facility from defendant insurers between 1961 and 1985. Montrose's primary insurance was exhausted in litigation due to environmental contamination allegedly caused by Montrose's operation of this facility. At issue was whether Montrose was required to exhaust other insurance coverage from other policy periods. The Supreme Court held (1) Montrose was entitled to access otherwise available coverage under any excess policy once it has exhausted directly underlying excess policies for the same policy period; and (2) an insurer called on to provide indemnification may seek reimbursement from other insurers that would have been liable to provide coverage under excess policies for any period in which the injury occurred. View "Montrose Chemical Corp. of California v. Superior Court" on Justia Law

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The Supreme Court considered two questions from the federal court of appeals regarding California's common-law notice-prejudice rule and held (1) the notice-prejudice rule is a fundamental public policy of the state in the insurance context, and (2) the rule generally applies to consent provisions in the context of first party liability policy coverage and not to consent provisions in third party liability policies.The insurance policy in this case contained a choice of law provision designating that New York law should govern all matters arising under the policy. Under section 187 of the Restatement Second of Conflict of Laws the parties' choice of law generally governs unless it conflicts with a state's fundamental public policy. The party opposing the application of the choice of law provision sought to establish that California's notice-prejudice rule was a fundamental public policy for the purpose of choice-of-law analysis. The federal court of appeals issued certified questions to the Supreme Court, which answered as set forth above. The Court left it to the federal court of appeals to decide whether the consent provision at issue in this case was a consent provision contemplated first party or third party coverage. View "Pitzer College v. Indian Harbor Insurance Co." on Justia Law

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A-1 Self Storage Inc.’s alternative indemnity agreement was not subject to regulation under the Insurance Code because (1) A-1 was not acting as an agent for an insurer, and (2) the indemnification agreement was incidental to the principal object and purpose of renting storage space. See Cal. Ins. Code 1758.7 et seq.In its rental agreements with tenants, A-1 required the tenant to obtain insurance for loss of or damage to a tenant’s stored property, stating that A-1 shall not be liable for such losses. A-1 also offered an alternative to the requirement that the tenant obtain insurance. In exchange for an additional amount in rent per month, A-1 provided that it would reassume the risk of such losses, up to $2,500. Plaintiff brought this putative class action arguing that the alternative constituted an insurance policy, which A-1 was not licensed to sell, and therefore, A-1’s sale of this indemnity agreement violated the Insurance Code. The trial court concluded that the alternative indemnity agreement was not insurance and entered judgment for Defendants. The court of appeal affirmed. The Supreme Court affirmed, holding that the alternative indemnity agreement did not constitute insurance subject to regulation under the Insurance Code. View "Heckart v. A-1 Self Storage, Inc." on Justia Law

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At issue in this case was the Insurance Commissioner’s 2011 regulation (the Regulation) covering replacement cost estimates for homeowners insurance. A few weeks before the Regulation was to become effective, Association of California Insurance Companies and the Personal Insurance Federation of California (collectively, the Association) filed a complaint for declaratory relief challenging the validity of the Regulation. The trial court invalidated the Regulation, concluding that the Regulation exceeded the Commissioner’s authority by attempting to define additional acts or practices by regulation rather than by the procedure set out in Cal. Ins. Code 790.06. The Court of Appeal affirmed. The Supreme Court reversed, holding that Cal. Ins. Code 790.10 explicitly vests in the Commissioner authority to issue “reasonable rules and regulations” to administer the Unfair Insurance Practices Act, and this statutory authority supported the Regulation. View "Association of California Insurance Cos. v. Jones" on Justia Law

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After Plaintiff was injured, he sought benefits from Defendant-insurer under an indemnity benefit policy. Plaintiff subsequently filed suit alleging that Defendant breached the insurance contract and the implied covenant of good faith and fair dealing. The jury awarded Plaintiff $31,500 in unpaid policy benefits, $35,000 in damages for emotional distress, and $19 million in punitive damages. The parties stipulated that the amount of attorney fees to which Plaintiff was entitled under Brandt v. Superior Court was $12,500, and the court awarded that amount. Defendant moved for a new trial seeking a reduction in the punitive damages award on the grounds that it was unconstitutionally excessive. The trial court granted the motion and reduced the jury’s award to a 10-to-1 ratio of punitive to compensatory damages. In so doing, the court considered only the $35,000 damages award but did not include the $12,500 in Brandt fees. The court of appeal affirmed. The Supreme Court reversed, holding that, in determining whether a punitive damages award is unconstitutionally excessive, Brandt fees may be included in the calculation of the ratio of punitive to compensatory damages, regardless of whether the fees are awarded by the trier of fact as part of its verdict or are determined after the verdict has been rendered. Remanded. View "Nickerson v. Stonebridge Life Ins. Co." on Justia Law