Justia Insurance Law Opinion SummariesArticles Posted in U.S. 9th Circuit Court of Appeals
Street Surfing v. Great Am. E&S Ins. Co.
This case arose from general liability insurance policies, including advertising injury coverage, that Great American issued to Street Surfing. At issue was whether those policies obligated Great American to defend Street Surfing in an action alleging trademark infringement, unfair competition, and unfair business practices under federal and California law (Noll action). The court accepted Great American's concession that the Noll action potentially falls within coverage for use of another's advertising idea, but rejected Street Surfing's argument that the action would also fall within the policies' coverage for slogan infringement. The court held that the prior publication exclusion relieves Great American of its duty to defend Street Surfing in the Noll action because the extrinsic evidence available to Great American at the time of tender conclusively establishes: (1) that Street Surfing published at least one advertisement using Noll's advertising idea before coverage began; and (2) that the new advertisements Street Surfing published during the coverage period were substantially similar to that pre-coverage advertisement. Accordingly, the court affirmed the district court's grant of summary judgment in favor of Great American. View "Street Surfing v. Great Am. E&S Ins. Co." on Justia Law
Pyramid Tech. v. Allied Public Adjusters
Pyramid Tech filed suit against its insurer, alleging express breach of contract and breach of the implied covenant of good faith. Without holding a Daubert hearing, the district court excluded Pyramid Tech's expert witnesses and granted summary judgment to the insurer, finding insufficient evidence that a flood caused damage to Pyramid Tech's property. The court held that, after an expert establishes admissibility to the judge's satisfaction, challenges that go to the weight of the evidence are within the province of a fact finder, not a trial court judge. A district court should not make credibility determinations that are reserved for the jury. In this instance, the district court abused its discretion in excluding the expert evidence of David Spiegel and Ken Pytlewski, but did not abuse its discretion in excluding the expert evidence of Del Mortenson. The district court erred in granting summary judgment against Pyramid Tech's claims where genuine issues of material fact existed as to whether the insurer breached its contract with Pyramid Tech and breached the implied covenant of good faith. However, to the extent such claims were premised on Pyramid Tech's business interruption theory, no material issues of fact existed and the district court did not err in granting summary judgment against that theory of liability. Accordingly, the court affirmed in part, reversed in part, and remanded for retrial. View "Pyramid Tech. v. Allied Public Adjusters" on Justia Law
Garcia v. PacifiCare of California
Plaintiff filed suit under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1132(a)(1)(B), 1132(a)(3), against PacifiCare when Pacificare denied her health care coverage. The court concluded that PacifiCare's benefit exclusion of myoelectric devices was not contrary to the plain language of California Health & Safety Code 1367.18. Accordingly, the court affirmed the district court's grant of summary judgment to PacifiCare. The court denied as moot plaintiff's motion to certify a question to the California Supreme Court. View "Garcia v. PacifiCare of California" on Justia Law
REAOC v. County of Orange
Retired Employees and their spouses filed suit against the County, alleging that the Retired Employees have an implied vested right to the pooling of their health care premiums with those of current employees ("pooled premiums"). The court affirmed the district court's order granting the County's motion for summary judgment, concluding that Retired Employees failed to raise a genuine issue of material fact where they did not show any link to Retired Employees' claim of an implied right to an ongoing pool premium; a practice or policy extended over a period of time did not translate into an implied contract without clear legislative intent to create that right - and intent that Retired Employees has not demonstrated in this case; Retired Employees' assertions that its involvement in negotiations with the County revealed an implied contract right to the pooled premium also lacked evidentiary support; and the nature of Retired Employees' evidence underscored the absence of any definitive intent or commitment on the part of the County to provide for the pooled premium. Accordingly, the court affirmed the district court's grant of the County's motion for summary judgment. View "REAOC v. County of Orange" on Justia Law
Carolina Cas. Ins. Co. v. Team Equip., Inc.
Carolina filed suit asserting federal jurisdiction based on diversity against defendants for a declaratory judgment that Carolina was not liable under Dry Cleaning's insurance policy. The district court dismissed without leave to amend and, when Carolina filed a proposed amended complaint, the district court did not accept this complaint as sufficient because Carolina still pled its jurisdictional allegations on information and belief and still failed to establish the citizenship of some defendants. The court concluded that because the district court did not conclude that any amendment would be futile, the district court should not have dismissed the initial complaint with leave for Carolina to amend it to correct, as far as possible, the defective jurisdictional allegations; the district court should not have dismissed the complaint for failure to plead allegations of citizenship affirmatively and on knowledge, rather than on information and belief, when the necessary information was not reasonably available to Carolina; and, therefore, the court reversed and remanded. View "Carolina Cas. Ins. Co. v. Team Equip., Inc." on Justia Law
Anderson Bros. v. St. Paul Fire & Marine Ins. Co.
This case arose when the EPA sent two letters to Anderson notifying Anderson of its potential liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9601 et seq., for environmental contamination of the Portland Harbor Superfund Site. Anderson's general liability insurer, St. Paul, declined to provide Anderson with a legal defense. St. Paul argued that the letters sent to Anderson were not "suits" because they were not filed in a court of law. The court held that the letters were "suits" within the meaning of the policies; the letters alleged facts sufficient to alert Anderson to its potential liability for environmental contamination under CERCLA; and, therefore, St. Paul breached its duty to defend Anderson. Accordingly, the court affirmed the judgment of the district court in favor of Anderson and also affirmed the attorney's fee award in Anderson's favor in light of the court's holding on the merits. View "Anderson Bros. v. St. Paul Fire & Marine Ins. Co." on Justia Law
City of San Buenaventura v. The Ins. Co. of PA
This appeal was consolidated from lawsuits brought by the City against two insurance companies. Both insurers rejected the City's claims for coverage for the underlying litigation between the City and condominium buyers. The insurers claimed that the City's alleged negligence and wrongful conduct in connection with the underlying litigation occurred prior to their policy periods. The district court agreed and granted summary judgment in favor of the insurers. The court rejected the City's argument for extending Montrose Chemical Corp. v. Admiral Insurance Co., which held that claims for pollutants deposited in the ground prior to the policy period, but continuing to leach into soil and groundwater during the policy period, gave rise to a duty to defend, because continuance of the property damage during the policy period gave rise to coverage. View "City of San Buenaventura v. The Ins. Co. of PA" on Justia Law
Schwab v. CIR
The Commissioner appealed the tax court's determination related to a deficiency in petitioners' federal income tax involving distributions from petitioners' variable universal life insurance policy. The Commissioner asserted that surrender charges could never be considered under I.R.C. 402(b)(2), and maintained that petitioners actually received the full stated policy values of their respective policies. The court affirmed the tax court's determination that the "amount actually distributed" when petitioners received ownership of the policies after their employer wound down their employees' benefit trust was "the fair market value of what was actually distributed." Further, the surrender charges associated with a variable universal life insurance policy could permissibly be considered as part of the general inquiry into a policy's fair market value. Accordingly, the court affirmed the decision. View "Schwab v. CIR" on Justia Law
Posted in: Insurance Law, Tax Law, U.S. 9th Circuit Court of Appeals
Parra v. Pacificare of Arizona
Plaintiffs claimed that PacifiCare was not entitled to any reimbursement payments out of the wrongful death benefits paid by an insurance policy to them. PacifiCare counterclaimed, arguing that it was entitled to reimbursement under both the terms of its contract with the deceased (Count I) and directly under the Medicare Act (Count 11), 42 U.S.C. 1395. At issue was whether a private Medicare Advantage Organization (MAO) plan could sue a plan participant's survivors, seeking reimbursement for advanced medical expenses out of the proceeds of an automobile insurance policy. Because interpretation of the federal Medicare Act presented a federal question, the district court had subject matter jurisdiction to determine whether that act created a cause of action in favor of PacifiCare against plaintiffs. The district court properly dismissed the causes of action arising under the Medicare Act for failure to state a claim where section 1395y(b)(2) did not create a federal cause of action in favor of a MAO and where, under section 1395y(b)(3)(A), the Private Cause of Action applied in the case of a primary plan which failed to provide for primary payment, which was not applicable in this instance. The court affirmed the district court's dismissal of Count II for failure to state a claim as well as its decision to decline to exercise supplemental jurisdiction over Count 1. View "Parra v. Pacificare of Arizona" on Justia Law
Alliance of Nonprofits for Ins. v. Kipper, et al
ANI, a risk retention group, filed suit seeking declaratory and injunctive relief against the Commissioner and the Division of Insurance under 42 U.S.C. 1983. ANI claimed that an order of the Commissioner violated the Liability Risk Retention Act (LRRA), 15 U.S.C. 3902(a)(1). The court held that the Commissioner's Order, which barred ANI from writing first dollar liability insurance policies in Nevada, was preempted by the LRRA. Therefore, the court affirmed the district court's entry of declaratory and injunctive relief in favor of ANI. However, the LRRA did not confer a right to be free from state law that could be enforced under 42 U.S.C. 1983, making fees under 42 U.S.C. 1988 unavailable. Thus, the court vacated the fee award. Finally, the court remanded so that the district court could enter a new summary judgment order consistent with this opinion. View "Alliance of Nonprofits for Ins. v. Kipper, et al" on Justia Law