Justia California Court of Appeals Opinion Summaries

After plaintiffs' home was damaged by heavy rain, their insurer, State Farm, arranged for them to live in a rented residence while their house was being repaired. State Farm eventually made payments under the policy exceeding $248,000, but denied coverage for certain items. Plaintiffs asserted claims for breach of insurance contract, bad faith, and elder abuse against State Farm and requested an award of punitive damages. The trial court granted summary adjudication in State Farm's favor on each claim and on the request for punitive damages. The court concluded that there are triable issues of fact regarding the claim for breach of insurance contract, but none regarding the other claims and the request for punitive damages. In the published portion of the opinion, the court concluded that the bad faith claim fails under the genuine dispute doctrine, and that the evidence supporting the application of that doctrine precludes the existence of triable issues regarding the elder abuse claim. Accordingly, the court reversed as to the breach of insurance contract issue and affirmed as to the trial court's remaining rulings, remanding for further proceedings. View "Paslay v. State Farm Gen. Ins. Co." on Justia Law

After Siasmorn Gopal was admitted to the emergency room at Kaiser Foundation Hospitals and died after she was transferred to another hospital, Gopal's husband and the trustee of her estate filed suit alleging that defendants violated California law. Plaintiffs alleged that Kaiser Hospitals, SCPMG, and Health Plan treated Gopal differently than they would have treated a member and that the different treatment caused her death. The court affirmed the trial court's rejection of plaintiffs' enterprise theory of liability. The court concluded that there is nothing inequitable in requiring plaintiffs to look to Kaiser Hospitals and SCPMG - the providers at issue - for compensation for their claims. Thus, plaintiffs are not without recourse or remedy. The court noted that the fact that health care providers, and not health plans, are subject to the Medical Injury Compensation Reform Act of 1975 (MICRA), Civ. Code, 3333.2, is not an inequitable result, but a public policy determination made by the Legislature. Accordingly, the court affirmed the judgment. View "Gopal v. Kaiser Found. Health Plan" on Justia Law

Plaintiffs filed suit against the Archdiocese for damages after plaintiffs were molested as two teenage boys by a monsignor in the Catholic church. Insurance Code section 11583 tolls the statute of limitations period once a “person” makes an “advance payment or partial payment of damages” unless he notifies the recipient of the applicable statute of limitations period or until the recipient hires a lawyer. The court concluded that the monsignor's contemporaneous gifts did not amount to such an “advance payment or partial payment of damages” to the extent those gifts were not solely to compensate for past sexual abuse but were also to facilitate criminal conduct such as “grooming” the boys for further sexual abuse or encouraging the boys not to report the past abuse they suffered. Because the victims’ civil complaint alleges that the monsignor’s contemporaneous gifts were for criminal as well as compensatory purposes, the trial court properly sustained the demurrer. Nevertheless, the court remanded to give plaintiffs the opportunity to amend their complaint to allege whether there were any solely compensatory payments made while the statute of limitations period had yet to expire. View "Doe v. Roman Catholic Archbishop etc." on Justia Law

In 2007, the Sonoma County project’s owner sued Hearn, the general contractor, Second Generation, the roofer, and other subcontractors for design and construction defects. Hearn cross-complained against Second Generation and others. In 2009, Hearn assigned its interests under its subcontracts to two insurers, North American and RSUI. Hearn then settled with the owner and all but two subcontractors, one of which was Second Generation. Hearn filed an amended cross-complaint, purportedly in the name of the insurers, against those subcontractors, adding breach of a contractual obligation to obtain insurance and seeking equitable contribution for Hearn’s defense costs premised on a breach of that duty. In 2013, the court dismissed the cross-complaint against Second Generation on procedural grounds, awarded $30,256.79 in costs and granted prevailing party attorney fees of $179,119. Second Generation moved to amend the orders to name North American as a judgment debtor owing the amounts awarded against Hearn. The trial court denied the motion, stating: Hearn remains the only proper party and that the subcontractor’s exclusive remedy was to pursue a separate action against Hearn’s insurers. The court of appeal reversed, finding that, after the assignment, Hearn was “out of this case.” View "Hearn Pac. Corp. v. Second Generation Roofing, Inc." on Justia Law

Cummins installed asbestos containing products in California and had received hundreds of asbestos bodily injury claims, including many lawsuits, based on exposure to its asbestos containing materials. Cummins purchased 19 U.S. Fidelity insurance policies 1969-1987, and purchased four U.S. Fire policies, 1988-1992, for “primary, umbrella, and or excess insurance policies,” some of which “may be missing or only partially documented.” Cummins and its parent company (Holding, formed in 2014) sought a “declaratory judgment that defendants are obligated to defend and/or indemnify Cummins [Corp.], in full, including, without limitation, payment of the cost of investigation, defense, settlement and judgment . . . , for past, present and future Asbestos Suits under each of the Policies triggered by the Asbestos Suits.” The trial court dismissed without leave to amend, finding that Holding lacked standing. The court of appeal affirmed. Holding, the controlling shareholder of Cummins, does not have a contractual relationship with the insurers and is not otherwise interested in the insurance contracts. View "D. Cummins Corp. v. U.S. Fid. & Guar. Co." on Justia Law

Karpinski sued, alleging that Smitty’s Sausalito bar negligently allowed two intoxicated men to enter and remain in the bar, and that the men punched Karpinski in the head, causing serious injuries. After court-ordered mediation, Karpinski agreed to dismiss Smitty’s in exchange for $40,000. Karpinski moved for entry of judgment under Code of Civil Procedure 664.6. Smitty’s opposed the motion because liens had been imposed by the federal government, based on Medicare payments to Karpinski, and by the state, based on crime victim compensation payments. The court entered a default judgment against the individuals ($1,430,968.84) and granted enforcement of the settlement, reasoning that the agreement requires that Karpinski "negotiate, satisfy, and dispose of all liens," but does not state that he must do so before receiving payment, and requires Karpinski to hold Smitty’s, its attorneys, and insurer harmless with respect to lien claims. Regardless of concern over whether Karpinski will honor that obligation, there is a remedy if he does not. The court awarded Karpinski $2,200 in attorney fees. The court of appeal affirmed. That there are no guarantees does not alter the fact that Smitty’s agreed to pay Karpinski $40,000 in exchange for his release and promises to satisfy all liens. View "Karpinski v. Smitty's Bar, Inc." on Justia Law

Two insurers shared indemnification costs to settle claims made against mutual insureds in a construction defect litigation brought by third parties. One insurer, defendant Arch Specialty Insurance Company (Arch), refused to share the costs to defend the insureds in the underlying litigation. The other insurer, plaintiff Certain Underwriters at Lloyds, London (Underwriters), paid all defense costs and then sought equitable contribution from Arch. In ruling on cross-motions for summary judgment/adjudication, the trial court concluded Arch had no duty to defend the insureds in the underlying litigation, because Arch's insurance policy expressly stated it had a duty to defend provided no "other insurance" afforded a defense, and Underwriters' policy did afford a defense. Underwriters appealed summary judgment entered in favor of Arch and also challenged the trial court's denial of Underwriters' motion for summary adjudication of Arch's responsibility to contribute to defense costs. After review, the Court of Appeal concluded Arch's "other insurance" clause could not be enforced in this equitable contribution action between successive primary insurers, "[e]nforcement of such a clause in a primary CGL policy would violate public policy." The Court also concluded Arch did not successfully circumvent this result by including the clause in the "coverage" section of the insurance policy as well as the "limitations" section. Accordingly, the trial court's judgment was reversed and the trial court directed to enter an order denying summary judgment to Arch and granting Underwriters' cross-motion for summary adjudication that Underwriters was entitled to equitable contribution. View "Certain Underwriters at Lloyds, London v. Arch Specialty Ins. Co." on Justia Law

Care West and Ullico, two insurers, were jointly and severally liable for claims arising from an employee’s workplace injury. In a compromise and release agreement, they settled the employee’s claims and apportioned between themselves roughly 50/50 liability for any remaining third party charges. When Ullico became insolvent and was liquidated, responsibility for third party claims against it was assumed by CIGA. The Appeals Board subsequently denied CIGA's motion to dismiss on the ground that the Care West/Ullico agreement limited Care West’s liability to roughly half of any third party claims, thereby rendering Care West’s insurance unavailable as to the remaining half. CIGA petitioned for a writ of review. The court denied the petition, but the Supreme Court granted review and remanded back to the court with directions to hear the matter on the merits. The court now concludes that the Care West/Ullico compromise and release agreement did not relieve Care West of its several liability for third party claims. Accordingly, the court annulled the Appeals Board's decision. View "CA Ins. Guarantee Assoc. v. Workers' Comp. Appeals Bd." on Justia Law

Plaintiff Tenet Healthsystem Desert, Inc. (Hospital) appealed a judgment entered in favor of defendants Blue Cross of California, doing business as Anthem Blue Cross (Blue Cross), Anthem Blue Cross Life and Health Insurance Company (BC Life), and Anthem UM Services, Inc. (Anthem UM). Hospital sued Anthem, as well as Eisenhower Medical Center (Eisenhower) and Keenan & Associates (Keenan), when the defendants refused to pay approximately $1.9 million the cost of medical services that Hospital provided to an insured patient following extensive communications with Anthem over a period of approximately 50 days regarding "authorization" for the services. The defendants ultimately denied coverage for the medical services based on an exclusion in the patient's policy for injuries sustained as a result of having a blood alcohol level over the legal limit. Hospital alleged that Anthem's continuing to "authorize" medical services during the patient's stay at Hospital, even after Anthem was made aware that the patient was admitted with a blood alcohol level far exceeding the legal limit, constituted a misrepresentation as to coverage, on which Hospital relied in providing care to the patient. The trial court determined that the Hospital's third amended complaint (TAC) lacked the necessary specificity to survive a demurrer, and entered judgment for Anthem. The Court of Appeal, however, reversed, concluding the TAC alleged facts with sufficient particularity to overcome a demurrer. The Court therefore reversed and remanded the matter to the trial court for further proceedings. View "Tenet Healthsystem Desert v. Blue Cross of Cal." on Justia Law

The City appealed the trial court's issuance of a writ of mandate authorizing the Board to exercise its discretion, previously delegated to it by the City in an ordinance, to set the maximum subsidy contributed by the City to police and firefighter retirees‟ insurance premiums without regard to later City ordinances “freezing” the subsidy until review and increase by the City Council and requiring payment of a voluntary contribution to join an opt-in program. The court agreed with the City's contention that the trial court's grant of a writ of mandate was in error because the City Charter grants the City Council the authority to set the amount of the subsidy and, as a consequence, the Delegation Ordinance can neither restrict the Council's authority nor create a vested right to a Board-determined subsidy as such would conflict with the Charter. Accordingly, the court reversed and remanded. View "Fry v. City of L.A." on Justia Law