Recent Cases -

January 2010

Nieto v. Blue Shield of California Life & Health Insurance Company, B214669 (Cal. App. 1/19/2010) (Cal. App., 2010)

Insurer was entitled to rescission as a matter of law where insured failed to disclose material information about her medical condition and treatment on her application; evidence showing that insured lacked any intent to defraud failed to create a triable issue of fact.
Insurer had no statutory duty to show that insured’s application had been physically attached to insurance policy or to conduct further inquiries during underwriting process to ascertain truthfulness of insured’s representations before issuing policy.

December 2009

Mahnke v. Superior Court of Los Angeles County, No. B216110 (Cal. App. 12/21/2009) (Cal. App., 2009)
Disclosure and disqualification standards for neutral arbitrators set forth in California Arbitration Act do not apply to party-selected appraisers in fire insurance disputes under Insurance Code Sec. 2071, but such appraisers may--under common law conflict-of-interest rules--be disqualified based on the existence of a substantial business relationship between appraiser and a party.

October 2009

Zhang v. Superior Court of San Bernardino County, E047207 (Cal. App. 10/29/2009) (Cal. App., 2009)
Fraudulent conduct by an insurer, connected with conduct that would violate Insurance Code Sec. 790.03 et seq. can also give rise to a private civil cause of action under the Unfair Competition Law.

August 2009

Hinton v. Beck, C056911 (Cal. App. 8/11/2009) (Cal. App., 2009)

An insurer who denied coverage and a defense to policyholder when policyholder was sued by an injured plaintiff could not intervene in the action between the plaintiff and policyholder as insurer did not have a direct interest in that litigation.

July 2009

Maystruk v. Infinity Insurance Company, B209404 (Cal. App. 7/9/2009) (Cal. App., 2009)

Insurance Code Sec. 758.5 does not require 100 percent coverage for reasonable costs of vehicle repair irrespective of where the vehicle is taken for such repairs.

June 2009

Onebeacon America Insurance Company v. Fireman's Fund Insurance Company, B209526 (Cal. App. 6/24/2009) (Cal. App., 2009)

An insurer's obligation of equitable contribution for defense costs arises where, after notice of litigation, a diligent inquiry by the insurer would reveal the potential exposure to a claim for equitable contribution, thus providing that insurer with an opportunity for investigation and participation in the defense in the underlying litigation. The right of equitable contribution between insurers is not controlled by the contract between the insured and the insurer but by equitable principles, the application of which do not run afoul of the policy provision prohibiting voluntary payments.

May 2009

Coast Plaza Doctors Hospital v. Blue Cross of California, B205892 (Cal. App. 5/11/2009) (Cal. App., 2009)
Knox-Keene Health Care Service Plan Act regulates insurance because it imposes conditions on the right of insurers to conduct their business in California and thus falls under the purview of the Employee Retirement Income Security Act’s savings clause.

First National Insurance Company v. Cam Painting, Inc., B200830 (Cal. App. 5/15/2009) (Cal. App., 2009)
A surety that issued a payment and performance bond to a contractor and subcontractor on the same construction project could not allocate the loss from the subcontractor’s failure to pay a materials supplier between the bonds. As a surety’s liability is commensurate with that of a principal, trial court erred in granting contractual award of attorney fees to obligee against principal only; surety and principal were jointly and severally liable for such an award.

March 2009

Sentry Select Ins. v. Fidelity & Guar. Ins., 205 P.3d 1084, 92 Cal.Rptr.3d 639, 46 Cal. 4th 204 (Cal., 2009)
Where insured lessor routinely leased nearly three quarters of its commercial fleet of trailers to independent truckers with whom it contracted for hauling jobs, and leased two trailers to independent trucker who in turn made a profit from their use but was involved in multiple-vehicle accident, activity was not "merely incidental" to lessor’s business and qualified under former Insurance Code Sec. 11580.9(b) for conclusive presumption that policy was excess to other insurance covering the loss.

Broberg v. Guardian Life Insurance Company of America, B199461 (Cal. App. 3/2/2009) (Cal. App., 2009)
Consumers Legal Remedies Act does not apply to sale of insurance products.

Troyk v. Farmers Group, Inc., D049983 (Cal. App. 3/10/2009) (Cal. App., 2009)
A "premium," as used in Insurance Code Sec. 381(f)--which sets forth specific disclosures that must be included in an insurance policy--includes the service charge imposed for payment of the stated premium for a policy’s one-month term. Assuming that Sec. 381(f) may be complied with by reference in policy to other documents setting forth the premium, references in declarations page did not suffice where they were ambiguous or uncertain regarding incorporation of such documents.
Insurance Code Sec. 381(f)'s disclosure requirement is mandatory and not merely directory; inclusion of premium information in other documents does not constitute substantial compliance with requirement of an express statement in an insurance policy of the premium charged. Insurer was properly held liable under Unfair Competition Law for restitution of service charges not properly disclosed where insurer was the ultimate beneficiary of such charges paid directly to its subsidiary.

February 2009

Executive Risk Indemnity, Inc. v. Jones, A119005 (Cal. App. 2/20/2009) (Cal. App., 2009)

Indemnity-only policy that did not impose a duty to defend upon insurer but obligated insurer to pay for any loss occasioned by a wrongful act which insured became legally obligated to pay.
Insurer was bound by results of arbitration proceeding and could not contest validity of insured's liability or amount of damages because issues were conclusively established by arbitration award.