Justia California Court of Appeals Opinion Summaries

A fire destroyed a house. The homeowner’s insurer agreed to pay for the damages resulting from the fire, then sued the contractor who installed the fireplace several years earlier, claiming negligence. The contractor tendered defense of the action to its liability insurer, asserting that even though the fire occurred after the relevant policy periods ended, there was a possibility of coverage because the fire may have been the result of ongoing damage to the wood in the chimney during one or more policy periods due to the exposure of that wood to excessive heat from the chimney every time a fire was burned in the fireplace. The issue this case presented for the Court of Appeal’s review was whether, under the standard language of the commercial general liability policy at issue here, did the liability insurer have a duty to defend the contractor? After review of that policy, the Court answered “yes” and reversed the trial court’s judgment that concluded otherwise. View "Tidwell Enterprises v. Financial Pacific Ins. Co." on Justia Law

Plaintiff filed suit against Stonebridge, challenging the insurer’s partial denial of his claim for hospitalization benefits. The trial court ruled that a policy provision was unenforceable, entitling plaintiff to $31,500 in additional benefits under the policy. A jury then found that Stonebridge acted with fraud and fixed the punitive damage award at $19 million. At issue is the trial court's remittitur of that award from $19 million to $350,000 based on a ratio of punitive to compensatory damages of 10:1. The Supreme Court held on review that the Brandt v. Superior Court fees should be included as compensatory damages in the ratio calculation irrespective of whether such fees were awarded by the trial court or the jury. On remand from the Supreme Court, the court held that the Brandt fees should be included in the compensatory damages, modified the judgment and, as modified, affirmed it. View "Nickerson v. Stonebridge Life Insurance Co." on Justia Law

A person who pays for a trip to the emergency room out-of-pocket can be charged significantly more for care than a person who has insurance. This case centered on whether a person could maintain an action challenging this variable pricing practice under the Unfair Competition Law, the Consumer Legal Remedies Act or and action for declaratory relief. The Court of Appeals concluded after review of this case that most of the claims asserted by plaintiff Gene Moran lacked merit. However, he sufficiently alleged facts supporting a conclusion that he had standing to claim the amount of the charges defendants' hospital bills self-pay patients was unconscionable. Therefore, the Court reversed the trial court's dismissal of Moran's case, and remanded for further proceedings. View "Moran v. Prime Healthcare" on Justia Law

Defendant insurance company denied uninsured motorist coverage to a third party beneficiary injured in an automobile accident because it had cancelled the policy before the accident occurred. The third party sued, and the insurer sought summary judgment. The third party opposed, contending the cancellation was invalid because a written notice seeking information sent by the insurer to the insureds prior to cancellation was unreasonable as a matter of law, and disputed facts existed as to whether the insurer had mailed the notice of cancellation and actually cancelled the policy. The trial court granted summary judgment, and finding no error, the Court of Appeal affirmed. View "Mills v. AAA Northern CA, NV and Utah Ins. Exch." on Justia Law

Allstate filed a qui tam action on behalf of itself and the State against defendants under the California Insurance Frauds Prevention Act, Insurance Code 1871.7. Following entry of the qui tam judgment, Allstate began efforts to collect it. During its investigation, Allstate learned of a series of real estate transactions conducted by defendants designed to transfer away their assets. Allstate, on behalf of the State, filed an action to set aside the fraudulent transfers of real and personal property. Allstate subsequently obtained a stay of the fraudulent conveyance action and returned to the qui tam court where it filed a motion for an order allocating the qui tam judgment proceeds. The motion was based on a stipulation entered into between the People and Allstate allocating to Allstate 50 percent of the civil penalties and assessments, plus reasonable attorney fees and costs. The trial court granted Allstate's allocation motion and entered the stipulation as judgment. Defendants appealed. The court held that judgment-debtor defendants in qui tam insurance fraud actions are not aggrieved by such allocation orders under section 1871.7, subdivision (g)(2)(A), with the result that they do not have standing to appeal. Accordingly, the court dismissed the appeal. View "People ex rel. Allstate Ins. Co. v. Dahan" on Justia Law

After Blue Shield Life and Blue Shield California refused to pay or agreed to pay only a fraction of the medical bills at issue, plaintiff filed suit alleging breach of contract and quantum meruit. The trial court granted defendants' motion for summary judgment. The court concluded that plaintiff's quantum meruit claims are time-barred and affirmed the judgment. In this case, plaintiff had knowledge of the facts giving rise to its claim of quantum meruit when it received the Explanation of Benefits (EOBs) letters, with their unequivocal denial of its bills, more than two years prior to filing this lawsuit. Furthermore, plaintiff engaged in a voluntary appeals process with Blue Shield Life and Blue Shield California, which did not change or undercut the EOBs’ denials of plaintiff's claims View "Vishva Dev, M.D., Inc. v. Blue Shield of Cal." on Justia Law

Plaintiffs filed suit against Mercury for breach of contract and breach of the implied covenant of good faith and fair dealing. Judgment was entered in favor of plaintiffs for $3 million plus interest from the date of judgment in the underlying personal injury action. The court concluded that substantial evidence supports the finding that Mercury unreasonably refused to accept the modified release where the offering of the policy limits was not sufficient in and of itself to defeat a bad faith claim as a matter of law, and substantial evidence supports the referee’s finding that Mercury unreasonably rejected the policy limits settlement proposed by counsel for plaintiffs. Accordingly, the court affirmed the judgment. View "Barickman v. Mercury Cas. Co." on Justia Law

After a film industry worker was seriously injured on a film set, he filed suit. His employer had two primary insurance policies with Fireman’s Fund, and an excess insurance policy with Ace American. Ace American subsequently filed suit against Fireman's Fund for equitable subrogation, alleging the injured worker initially offered to settle his case within the limits of the Fireman’s Fund policies, and that Fireman’s Fund unreasonably rejected those settlement offers. Ace American alleged that as a result, it was required to contribute to the eventual settlement, which exceeded the limits of the Fireman’s Fund policies. The court found that because Ace American, the excess insurer, alleged it was required to contribute to the settlement of the underlying case due to the primary insurer’s failure to reasonably settle the case within policy limits, the lack of an excess judgment against the insured in the underlying case does not bar an action for equitable subrogation and breach of the duty of good faith and fair dealing. Accordingly, the court reversed the judgment sustaining Fireman’s Fund’s demurrer and remanded for further proceedings. View "Ace American Ins. Co. v. Fireman's Fund Ins. Co." on Justia Law

Plaintiff filed a class action against United Healthcare, alleging claims of unfair competition, unjust enrichment, and financial elder abuse. Plaintiff had enrolled in a private health plan offering benefits to persons 65 and over as well as disabled persons under the federally funded Medicare Advantage program, 42 U.S.C. 1395w-21 et seq. After he went to an urgent care center outside of the plan's network, he was forced to pay a $50 copayment instead of the $30 copayment for in-network centers. Plaintiff alleged that the plan’s marketing materials misled him (and other enrollees) as to the availability of in-network urgent care centers (and their smaller copayments) and that the absence of any in-network urgent care centers in California rendered the plan’s network inadequate. The court concluded that plaintiff’s misrepresentation and adequacy-of-network based claims was expressly preempted by the preemption clause applicable to Medicare Advantage plans, 42 U.S.C. 1395w-26(b)(3). The court also concluded that plaintiff’s claims, to the extent they challenge a denial of benefits, are subject to dismissal because plaintiff did not first exhaust his administrative remedies under the Medicare Act, 42 U.S.C. 405(g), (h) and 1395ii. Accordingly, the court affirmed the trial court's dismissal of the complaint. View "Roberts v. United Healthcare" on Justia Law

Plaintiff's almost-new Toyota Tundra Pickup sustained structural damage, while parked, as a result of a collision between the vehicles of Hollandsworth and Sebastian. Plaintiff had an insurance policy through AAA covering collision-related damages.Hollandsworth also had an AAA insurance policy, covering property damage that he caused through negligence. AAA refused to consider the pickup a “total loss,” had the vehicle repaired at a reported cost of $8,196.06, and provided a rental car during the interim. As a result of the collision and the repairs, the pickup’s future resale value was decreased by more than $17,100. Plaintiff sued Hollandsworth and Sebastian for negligence and sued AAA for breach of contract and bad faith. The trial court dismissed the claims against AAA, finding that plaintiff essentially was seeking reimbursement for the lost market value of his pickup, a loss that specifically was excluded under his insurance policy. The court of appeal affirmed, rejecting an argument that the resale value exclusion violated public policy and was void. The court stated that, in the insurance context, courts are not at liberty to imply a covenant (of good faith) directly at odds with a contract’s express grant of discretionary power, View "Baldwin v. AAA N. Cal." on Justia Law