California Insurance Litigation Blog

California Insurance Litigation Blog

Category Archives: Breach of Contract

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Insurers Have a Duty to Defend Where a Complaint Could Be Fairly Amended to State a Covered Liability; California Supreme Court Clarifies Duty to Defend Disparagement Claims Under Advertising Injury Coverage

Posted in Breach of Contract, Case Updates, Commercial General Liability Insurance, Insurance Bad Faith
An insurer has a duty to defend even if the causes of action in a lawsuit are not expressly covered by a liability policy if the factual allegations may support a potentially covered claim.  This was expansive interpretation of the duty to defend adopted by the United States District Court Southern District of California in … Continue Reading

Expert Testimony Can Help Policyholders Establish Property Damage and Survive Summary Judgment

Posted in Breach of Contract, Case Updates, Commercial General Liability Insurance, Expert Testimony, Insurance Bad Faith
Policyholders often face a formidable challenge proving causation on property damage claims, particularly when insurance companies insist on deferring to their own experts and adjustors.  Of course, insurance companies must conduct reasonable investigations and review and evaluate all of the evidence before making a claim decision.  The Ninth Circuit Court of Appeals held in an … Continue Reading

Policyholder Wins Handed Down in Insurance Decisions. Daily Journal Publishes McKennon Law Group PC Article.

Posted in Breach of Contract, Case Updates, Disability Insurance, Duty to Defend, Duty to Settle, ERISA, Insurance Bad Faith, News, Unfair Business Practices/Unfair Competition
The February 10, 2014 edition of the Los Angeles Daily Journal featured Robert McKennon’s article entitled:  “Policyholder Wins Handed Down in Insurance Decisions.”  In it, Mr. McKennon discusses six insurance decisions handed down in California and federal courts in 2013 that were favorable to policyholders.  … Continue Reading

Clearing Up Murky Waters: Insurer’s Duty to Settle. Daily Journal Publishes McKennon Law Group PC Article.

Posted in Breach of Contract, Duty to Settle, Insurance Bad Faith
The October 29, 2013 edition of the Los Angeles Daily Journal featured Robert McKennon’s article entitled:  “Clearing Up Murky Waters: Insurer’s Duty to Settle.”  In it, Mr. McKennon discusses the  California Court of Appeal’s decision in Reid v. Mercury Insurance Company, 2013 DJDAR 13436 (Cal. App. 2nd Dist. Oct. 7, 2013).  The Reid case followed … Continue Reading

Want to Open Up the Policy Limits on a Policy? Try Making a Section 998 Offer Above Policy Limits and You Just May Be Able to Do It

Posted in Auto Insurance, Breach of Contract, Duty to Settle, Insurance Bad Faith
Can a pretrial California Code of Civil Procedure section 998 offer to settle above an insurer’s policy limits result in opening up a policy’s liability limits?  Interestingly, a California Court of Appeal has said “yes” to this question under certain limited circumstances if the offer is reasonable and made in good faith.  In Aguilar v. … Continue Reading

Alas, A Very Hot Issue in California Insurance Law is Decided (At Least for Now): Insurers Have No Affirmative Duty to Settle as Long as They Do Not Foreclose the Possibility of Settlement and/or Absent a Within-Policy-Limits Settlement Demand

Posted in Auto Insurance, Breach of Contract, Duty to Settle, Insurance Bad Faith
One of the hottest issues in California insurance law has been whether a breach of the good faith duty to settle can be found in the absence of a within-policy-limits settlement demand, thus giving rise to an insurer’s liability for an excess judgment… Continue Reading

Property Insurers May Be Liable to Owners for Loss of Rents Resulting from Damaged Property

Posted in Breach of Contract, Case Updates, Insurance Bad Faith, Policy Interpretation, Property & Casualty Insurance
Commercial property owners may recover lost rental income from their insurer if they are unable to rent out damaged property, absent clear policy exclusions.  The California Court of Appeal recently held the owner of commercial property has a reasonable expectation of coverage for loss of rent, even if the property was not leased out at … Continue Reading

California Court of Appeal Finds That a 10:1 Ratio Between Punitive Damages and Compensatory Damages Awards Satisfies Due Process

Posted in Breach of Contract, Case Updates, Insurance Bad Faith, Punitive Damages
A 10-to-1 ratio of punitive damages to compensatory damages awards in an insurance bad faith case passes Constitutional muster.  So says the California Court of Appeal in its decision in Nickerson v. Stonebridge Life Insurance Company, __ Cal. App. 4th ___, 2013 Cal. App. LEXIS 583 (2013).  The decision is significant in that it affirms … Continue Reading

California Courts Give Effect to the Intent of the Parties to an Insurance Contract

Posted in Breach of Contract, Case Updates, General Liablity, Property & Casualty Insurance
A recent California Court of Appeals decision served as a reminder of the long-standing rule in California that the mutual intent of the parties will always control the interpretation of potentially conflicting provisions in an insurance contract.  In its recent decision in Gemini Ins. Co. v. Delos Ins. Co. (Dec. 5, 2012, B239533) __ Cal.App.4th … Continue Reading

Insurance Companies Must Show “Substantial Prejudice” to Deny Claims for a Failure to Comply With the Proof of Loss Requirement

Posted in Breach of Contract, Case Updates, Fire Insurance, Homeowners Insurance, Insurance Bad Faith, Unfair Business Practices/Unfair Competition
Following the August 2009 Station Fire, the lawsuits of over 1,440 policyholders filed against Fire Insurance Exchange (“FIE”) and related insurers were consolidated into one case – Henderson v. Farmers Group, Inc., __ Cal.App.4th __, 2012 Cal. App. LEXIS 1108 (October 24, 2012).  In this case, the California Court of Appeal, Second Appellate District, issued … Continue Reading

An Insurance Company Cannot Shield Itself from Negligence Liability by Filing an Interpleader

Posted in Breach of Contract, Case Updates, Insurance Bad Faith, Interpleader, Negligence
In Lee v. West Coast Life Insurance Company, 2012 U.S. App. LEXIS 15768 (9th Cir. July 31, 2012), the Ninth Circuit Court of Appeals ruled that a stakeholder insurance company cannot use an interpleader filing to shield itself from tort liability for its negligent actions.  With this holding, the Court of Appeals confirmed that “where … Continue Reading