California Insurance Litigation Blog

California Insurance Litigation Blog

Category Archives: Case Updates

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Recent Federal Court Decisions Give Teeth to California’s Ban on Discretionary Clauses in ERISA Plans

Posted in Case Updates, Disability Insurance, ERISA
A virtually insurmountable concrete wall was once an apt analogy for the effect of discretionary clauses in ERISA Plans on claimants attempting to challenge a plan administrator’s unreasonable interpretation of policy terms.  A valid discretionary clause gave insurance companies power to construe the terms of ERISA- governed group insurance policies based on their own interpretation, … Continue Reading

Can an Insurer Escape Bad Faith Liability When it Unreasonably Forces an Insured to Arbitrate an Uninsured Motorist Claim? No Way!

Posted in Auto Insurance, Bad Faith, Case Updates
In a very good ruling for policyholders, the California Court of Appeal ruled that an insurance company cannot escape insurance bad faith liability by forcing a claimant to arbitrate his claim without first fairly investigating, evaluating and attempting to resolve the claim.  In Maslo v Ameriprise Auto & Home Insurance, 2014 Cal. App. LEXIS 564, … Continue Reading

Echague v. Met Life: Equitable Surcharge is an Available Remedy Against Unresponsive Plan Administrators Under ERISA

Posted in Case Updates, Equitable Relief, ERISA, Life Insurance
The Employee Retirement Income Security Act of 1974 (“ERISA”) seeks to protect participants in employer-sponsored plans, but lack of adequate communication and transparency is an often an unfortunate byproduct of the insurance industry.  The California district court shed light on this issue in Echague v. Metro. Life Ins. Co., 2014 U.S. Dist. LEXIS 68642 (N.D. … Continue Reading

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

A Pro-Insurer Decision Provides Guidance for Insureds on the Application of Estoppel and Waiver to Statute of Limitations Defenses in Disability Insurance ERISA Cases

Posted in Case Updates, Disability Insurance, ERISA, Statute of Limitations
At times, decisions that appear favorable to insurers can also have unexpectedly positive take-aways for policy holders.  Gordon v. Deloitte & Touche, __ F.3d ___, 2014 U.S. App. LEXIS 6688 (9th Cir. April 11, 2014) is just such a case.  Although, the Ninth Circuit in Gordon ruled in favor of the insurer in finding that … Continue Reading

New liability for claims adjusters the right move. Daily Journal Publishes McKennon Law Group PC Article.

Posted in Case Updates, Negligence, Property & Casualty Insurance
The April 21, 2014 edition of the Los Angeles Daily Journal featured Robert McKennon’s article entitled:  “New Liability for claim adjusters the right move.”  In it, Mr. McKennon discusses a new case which exposes insurance adjustors to negligent misrepresentation and intentional infliction of emotional distress claims by policyholders.  The article is posted below with the … Continue Reading

ERISA Administrator Must Show That a Theoretical Job Actually Exists in Order to Serve as Justification for Claim Denial

Posted in Case Updates, Disability Insurance, ERISA
A common justification for denying a claim for long-term disability insurance benefits or short-term disability insurance benefits is that the claimant is capable of returning to work in another job.  However, insurers / ERISA administrators are not allowed to deny a claim just because an insured might be capable of returning to any job, rather … Continue Reading

Helpful Tips to Policyholders: Pay Close Attention to Plan’s Limitations Provisions

Posted in Case Updates, Disability Insurance, ERISA, Insurance Questions and Concepts, Policy Interpretation, Statute of Limitations
Do you have a disability insurance policy, health insurance policy or life insurance policy through your work?  If you do, you should read this article as you may miss some important deadlines if you do not. The Supreme Court’s recent  holding that the limitations periods in employer-sponsored plans are enforceable, even where such limitations periods … Continue Reading

California District Court Rules That a Treating Physician’s Observations are “More Persuasive” Than a Paper Reviewer’s Contrary Opinions

Posted in Case Updates, Disability Insurance, ERISA, Standard of Review
When reviewing a claim for disability insurance, insurers and other claim administrators often rely on the opinions of paid physicians to support their improper denial decisions.  For example, a disability insurance company will hire a doctor to conduct a “paper review” – that is, reviewing an insured’s medical records, without actually examining the insured – … 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

The Reasonable Expectations of the Covered Party, Even an Additional Insured, Determines the Interpretation of Ambiguous Policy Language

Posted in Case Updates, Duty to Defend, General Liablity, Policy Interpretation
In California, courts have long held that where a policy provision is ambiguous because it is susceptible to multiple interpretations, the reasonable expectation of the covered party governs.  But which parties’ objectively reasonable expectations should govern where there are both a named insured and an additional named insured claiming coverage?  In its significant decision in … Continue Reading

Supreme Court Looks at ERISA Plan Terms to Govern Limitation Periods to File Lawsuits

Posted in Case Updates, Disability Insurance, ERISA, Policy Interpretation, Statute of Limitations
In a highly anticipated decision, a unanimous United States Supreme Court held that insureds with employer-sponsored plans are contractually bound by the limitations periods set forth in their plan documents.  These limitations periods, which specify when insureds must file any legal actions under the Employee Retirement Income Security Act of 1974 (“ERISA”), are enforceable so … Continue Reading

Rochow v. LINA: A Game-Changer in ERISA Disability Benefits Litigation

Posted in Case Updates, Equitable Relief, ERISA, Fiduciary Duty
While this blog often discusses disability, life and health insurance/employee benefit decisions under the Employee Retirement Income Security Act of 1974 (“ERISA “), we rarely discuss federal circuit court of appeal decisions from outside the Ninth Circuit Court of Appeals (which governs California).  We are making an exception here, as a recent case from the … Continue Reading

Insurers Have a Duty to Defend at the Outset of Litigation Even If a SIR Has Not Been Exhausted

Posted in Case Updates, Commercial General Liability Insurance, Duty to Defend, General Liablity, Policy Interpretation
Insurers providing general liability insurance cannot shirk their duty to defend insureds at the outset of litigation by relying on self-insured retention (SIR) provisions in those policies unless the policies expressly and unambiguously make the insurer’s duty to defend contingent upon the SIR.  So held the Fourth District Court of Appeals in American Safety Indemnity … 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

Supreme Court Reaches Favorable Decision for Insureds in Zhang v. Superior Court of San Bernardino; Daily Journal Publishes McKennon Law Group PC Article on Zhang

Posted in Case Updates, Insurance Bad Faith, Unfair Business Practices/Unfair Competition
The Wednesday August 7, 2013 edition of the Los Angeles Daily Journal featured Robert McKennon’s article entitled:  “Clear win for insureds, though scope uncertain.”  In it, Mr. McKennon discusses how a highly anticipated decision by the California Supreme Court in Zhang v. Superior Court of San Bernardino (California Capital Insurance), 2012 DJDAR 10174, expands the … Continue Reading

Insurers Forfeit Their Protections Under Civil Code Section 2860 (Cumis Statute) When They Fail to Meet Their Duty to Defend Obligations

Posted in Attorneys' Fees, Case Updates, Duty to Defend, General Liablity
If you want to read an important case on Cumis counsel and the consequences to insurers who fail to fulfill their obligations relating thereto, we have one for you.  J.R. Marketing LLC v. The Hartford Cas. Insurance Co., __ Cal.App.4th __ (May 17, 2013).  This case has a lot to offer: Cumis counsel, attorneys’ fees, … Continue Reading

California Court Holds That Third-Party Plaintiffs Can Bring Claims Against Defendant’s Insurer for Breach of Contract and Bad Faith After a Settlement

Posted in Case Updates, General Liablity, Insurance Bad Faith
In a case of first impression, the California Court of Appeal for the Sixth District held that a plaintiff who sued a defendant and settled the case can later sue the defendant’s insurer directly for breach of contract and bad faith concerning a medical expense provision.  This unprecedented decision potentially opens a new avenue for … Continue Reading

California Court Limits the Enforceability of Contractual Limitation Periods Because the Insurer Failed to Properly Provide ERISA Plan Documents

Posted in Case Updates, Disability Insurance, ERISA, Fiduciary Duty
In an interesting opinion concerning a dispute over long-term disability (“LTD”) insurance benefits due under an ERISA plan, a District Court held that an ERISA administrator cannot rely on a contractual limitation period to defeat an insured’s claim where it failed to provide the insured with sufficient documentation and/or notice of the existence of the … Continue Reading

Insured May Not File Suit Against Insurers Under Unfair Competition Law Based on Allegedly Wrongful Denial of Benefits to Other Policyholders

Posted in Case Updates
In its recent decision in Schwartz v. Provident Life and Accident Insurance Co., __ Cal.App.4th __ (May 21, 2013) the California Court of Appeals held that, in order to have standing to pursue a claim under California’s “Unfair Competition Law” (Bus. & Prof. Code, section 17200 or “UCL”), an insured plaintiff must have suffered injury … Continue Reading

The Important Potential Implications of Zhang v. California Capital Insurance Co. For Insurance Litigation in California

Posted in Case Updates, Insurance Bad Faith, Unfair Business Practices/Unfair Competition
After much anticipation, last week the Supreme Court of California heard oral arguments in the pivotal case of Yanting Zhang v. California Insurance Co., S178542 on May 8, 2013.  This case looks to have a substantial impact on insurance litigation in California and could open up another significant avenue for insureds to pursue claims against … Continue Reading

United States Supreme Court to Decide When the Statute of Limitations Period Begins in an ERISA Disability Case

Posted in Case Updates, Disability Insurance, ERISA, Statute of Limitations
By granting certiorari in Heimeshoff v. Hartford Life and Accident Insurance Co., 496 Fed. Appx. 129, 2012 U.S. App. LEXIS 19269, 2012 WL 4017133 (2d Cir. September 13, 2012), the United States Supreme Court is poised to address an issue that has left countless ERISA claimants without a remedy to challenge a wrongful denial of … Continue Reading