Justia California Court of Appeals Opinion Summaries

Government Employees Insurance Company, GEICO General Insurance Company, GEICO Casualty Company, and GEICO Indemnity Company (collectively, GEICO), as relator, brought a qui tam action asserting statutory and common law claims for damages and civil penalties against Dr. Janice Cruz (and others) arising from her alleged involvement in an insurance fraud conspiracy. The trial court granted Cruz's motion to bind GEICO to certain interrogatory responses, then granted her summary judgment motion on the basis those responses established GEICO was unable to prove its case against Cruz. On appeal, GEICO argued the trial court erred by: (1) binding GEICO to its earlier interrogatory responses; (2) excluding additional evidence offered in opposition to the summary judgment motion; and (3) granting summary judgment on its statutory claim. The Court of Appeal concluded the trial court erred in binding GEICO to its interrogatory responses, and further, found multiple instances of issues of triable facts that should not have been disposed of through summary judgment. The Court accordingly reversed the trial court and remanded the case for further proceedings. View "California ex rel. Gov. Employees Ins. Co. v. Cruz" on Justia Law

This appeal involves an insurance broker that allegedly failed to obtain insurance requested by its client, who subsequently sustained uninsured liability when he negligently caused a fire that spread to neighboring buildings. The client settled that uninsured liability by assigning to plaintiffs his causes of action against the insurance broker. Plaintiffs, neighboring business owners and an insurance company that paid for damages to a neighboring building, pursued the assigned causes of action by filing a lawsuit against the insurance broker. The trial court granted summary judgment for the insurance broker. The court concluded that California, like the majority of jurisdictions in the United States, recognizes the assignability of a client’s causes of action against an insurance broker or agent for failing to obtain insurance. The court also concluded that, in the insurance context, the rule from California’s equitable subrogation doctrine applies to a contractual assignment only if the assignee is an insurance company and the assignor was that insurance company’s policyholder. In this case, the assignees (plaintiffs) did not issue an insurance policy to the assignor (i.e., the insurance broker’s client) and thus were never potential equitable subrogees of the assignor. Therefore, the court concluded that their contractual assignments are not subject to the rule of superior equities. Further, there is a triable issue of material fact about whether the client requested the insurance broker to obtain insurance coverage before the fire. Accordingly, the court reversed the judgment. View "AMCO Ins. Co. v. All Solutions Ins. Agency" on Justia Law

Plaintiff filed suit asserting causes of action against Topa for breach of contract, breach of the covenant of good faith and fair dealing, and declaratory relief. At issue on appeal is whether an excess liability insurance policy that “follows form” to an underlying primary policy that provides uninsured motorist/underinsured motorist (UM/UIM) coverage must also provide such coverage after the underlying policy limit has been exhausted. The court held that the excess policy does not provide coverage for first party UM/UIM claims because the policy’s insuring agreement unambiguously limits the insurer’s indemnity obligation to third party liability claims. In this case, the plain language of the Topa insuring agreement unambiguously provides coverage for third party liability claims only. Accordingly, the court affirmed the judgment entered in favor of the excess insurer. View "Haering v. Topa Ins." on Justia Law

In this suit alleging breach of an insurance contract, plaintiff appealed the trial court's grant of defendant's motion for directed verdict. Plaintiff contended that the trial court’s intended jury instruction violated the efficient proximate cause doctrine and there was sufficient evidence to permit the jury to determine whether plaintiff met his burden of proving his claim for punitive damages. The court concluded that plaintiff’s interpretation of the Other Coverage 9 provision is the correct interpretation, consistent with the efficient proximate cause doctrine. A policy cannot extend coverage for a specified peril, then exclude coverage for a loss caused by a combination of the covered peril and an excluded peril, without regard to whether the covered peril was the predominant or efficient proximate cause of the loss. Because the trial court granted the motion for a directed verdict based on the effect the erroneous proposed jury instruction would have had on plaintiff’s case, the court reversed and remanded as to this issue. Because defendant's special instruction No. 12 improperly shifted the burden of proof, the trial court erred in its decision to instruct the jury with defendant’s proposed special instruction and in granting defendant’s motion for directed verdict based on the decision to give that instruction. The court reversed and remanded as to this issue. Finally, the court found no error in the trial court's punitive damages claim. View "Vardanyan v. Amco Ins. Co." on Justia Law

Samuel Heckart brought this action against A-1 Self Storage, Inc., Caster Properties, Inc., Caster Family Enterprises, Inc., Caster Group LP, and Deans & Homer (together, Defendants) for violations of the Unfair Competition Law, violations of the Consumers Legal Remedies Act, negligent misrepresentation, and civil conspiracy. Heckart alleged A-1's sale of a Customer Goods Protection Plan (the Protection Plan) in connection with its rental of storage space constituted unlicensed sale of insurance. The form Protection Plan required the tenant to either initial to accept or decline participation in the plan. Heckart declined participation by initialing that option, which provided: "No, I decline participation in the . . . Protection Plan. I am currently covered by an insurance plan that covers my belongings in the storage facility. I understand that I need to provide the policy information in writing to the facility Owner within 30 days or I will automatically be enrolled in the . . . Protection Plan until I do provide such information to the Owner." Heckart "inadvertently" purchased the Protection Plan and was enrolled in it, presumably because he failed to provide proof of insurance within 30 days. In April 2013, Heckart, on behalf of himself and other similarly situated California residents, sued A-1 and Caster Group. The trial court sustained Defendants' demurrer to Heckart's first amended complaint without leave to amend, concluding the Protection Plan was not insurance. Heckart appealed, contending his allegations were sufficient to state the asserted causes of action because the Protection Plan was insurance that must comply with the Insurance Code. The Court of Appeal found his arguments unavailing and affirmed. View "Heckart v. A-1 Self Storage" on Justia Law

Seventeen-year-old driver Simone Lionudakis got into a motor vehicle accident, injuring defendants-appellants Aweia and Flora Shimon. Simone was driving a GMC pickup truck owned by and registered to her father Phillip Lionudakis, but he had excluded Simone from his insurance policy to save money, even though Simone was the only one who ever drove the GMC. Phillip’s ex-wife (Simone’s mother) Kristen Doornenbal, had insurance through plaintiff Nationwide Mutual Insurance Company for her own and her current husband’s vehicles, but not the GMC. The Doornenbals’s Nationwide policy provided coverage for a household family member’s use of a “non-owned” vehicle, but not if the non-owned auto was “furnished or available” for her “regular use.” The trial court entered declaratory judgment in favor of plaintiff Nationwide against the Shimons as defendants, finding the GMC was furnished or available for Simone’s regular use and therefore coverage was excluded. The Shimons appealed, arguing the vehicle was not available for Simone’s use at the time and place of the accident, because her parents did not want her driving that far from home and had told her not to drive at all for a week or two as punishment for bad grades. Finding no reversible error, the Court of Appeal affirmed. View "Nationwide Mutual Ins. v. Shimon" on Justia Law

Defendant’s vehicle collided into plaintiff’s vehicle at a busy intersection. Plaintiff sustained spinal injuries in the accident and filed suit against defendant. Eventually, plaintiff had surgery to repair a herniated lumbar disc. The jury found defendant negligent and awarded plaintiff a total of $429,773.71 in damages, including $261,773.71 in past medical expenses, which was the full amount of her medical bills. The trial court then entered judgment on the verdict. Defendant appealed. This case raised an issue regarding the calculation of reasonable medical expenses in economic damages awards. Plaintiff lacked medical insurance and contracted with her medical providers to treat her in exchange for a lien on whatever she might recover from defendant in this lawsuit. A third party assignee, MedFin Managers, LLC (MedFin), purchased the lien from the medical providers for a discounted amount. Plaintiff remained liable on the total bill. Defendant contended that the trial court erred in denying her motion to admit evidence of the amounts MedFin paid to purchase the right to recover the full amounts plaintiff’s medical providers billed plaintiff. Defendant argued that the trial court should have allowed her to introduce evidence of the amounts MedFin paid to the medical providers as evidence of the reasonable cost of treatment provided plaintiff, particularly since the court denied defendant’s motion to exclude evidence of the billed amounts. In the published portion of this opinion, the Court of Appeal concluded that because defendant proffered no evidence to show that the MedFin payments represented the reasonable value of plaintiff’s treatment, the probative value of that evidence was substantially outweighed by the probability that it would create a substantial danger of undue prejudice as well as a danger of confusing and misleading the jury. Consequently, the trial court’s ruling precluding evidence of the MedFin payments was not an abuse of discretion. View "Uspenskaya v. Meline" on Justia Law

Pacific Trades Construction & Development, Inc. was a defendant in a lawsuit that alleged, in part, that Pacific Trades was liable for damages for construction defects caused by Pacific Trades's negligent acts or omissions. Underwriters of Interest Subscribing to Policy Number A15274001 (Underwriters) undertook Pacific Trades's defense in that action under its Commercial General Liability (CGL) policy insuring Pacific Trades. ProBuilders Specialty Insurance Company, which also insured Pacific Trades, declined to participate in funding Pacific Trades's defense, claiming (among other things) that a clause in its policy relieved ProBuilders of any duty to defend Pacific Trades when another insurer was doing so. Underwriters sought equitable contribution from ProBuilders for a portion of the defense costs. The parties filed cross-motions seeking summary adjudication of ProBuilders's liability for a portion of the defense costs. The trial court agreed with ProBuilders that a clause in its policy relieved it of any duty to defend Pacific Trades when (as here) another insurer was defending Pacific Trades, and entered summary judgment in favor of ProBuilders. Underwriters appealed that determination. The Court of Appeal concluded that the trial court erred in enforcing the clause in ProBuilders's policy and, because the other arguments raised by ProBuilders in support of its summary judgment motion on Underwriters's claim for equitable contribution did not support the judgment, the Court reversed the judgment. View "Underwriters of Interest v. ProBuilders Specialty Ins. Co." on Justia Law

Plaintiffs filed suit against Mercury for breach of contract and tortious breach of insurance contract after Mercury denied reimbursement for the cost of repair to the second story of plaintiffs' house. Mercury argued that plaintiffs' claim under their homeowner’s insurance policy was not covered because the damage to their property did not constitute a “collapse” as defined by the policy. The trial court granted summary judgment to Mercury and denied plaintiffs' motion for summary adjudication. The court held that Mercury is not liable for the reimbursement costs because there was not a collapse as defined in the policy, the duty to mitigate arises only after a loss from a collapse, and Mercury had no duty, express or implied, to reimburse plaintiffs for costs to prevent imminent insurable damage. Accordingly, the court affirmed the judgment. View "Grebow v. Mercury Ins." on Justia Law

Defendant Cy Tapia, a teenager living with his aunt and grandmother, was driving a vehicle which crashed, inflicting severe and eventually fatal injuries on his passenger, Cory Driscoll. Before his death Driscoll and his mother filed an action for damages. The parties established that the vehicle driven by Tapia was owned by his grandfather and that Tapia was entitled to $100,000 in liability coverage under an auto policy issued to Melissa McGuire (Tapia’s sister), which listed the vehicle as an insured vehicle and listed Tapia as the driver of the vehicle. The policy was issued by petitioner-defendant 21st Century Insurance Company. 21st Century offered to settle the action for the policy limits of the McGuire policy ($100,000). However, plaintiff1 also believed that Tapia might be covered under policies issued to his aunt and grandmother, each offering $25,000 in coverage and also issued by 21st Century. Plaintiff communicated an offer to settle for $150,000 to Tapia’s counsel; 21st Century contended that it never received this offer (although there was certainly evidence to the contrary). Inferrably having realized the seriousness of its position, 21st Century affirmatively offered the “full” $150,000 to settle the case against Tapia. Plaintiff did not accept this offer, but a month later plaintiff’s counsel served a statutory offer to compromise seeking $3,000,000 for Cory Driscoll and $1,150,000 for his mother Jenny Driscoll. Shortly before the expiration of this offer, 21st Century sent Tapia a letter warning him that it would not agree to be bound if Tapia personally elected to accept the offer. Nonetheless, Tapia agreed to the entry of a stipulated judgment in the amounts demanded by plaintiff. 21st Century paid $150,000 plus interest to the plaintiff. Tapia then assigned any rights he had against 21st Century to plaintiff. This assignment and agreement included plaintiff’s promise not to execute on the judgment against Tapia so long as he complied with his obligations, e.g., to testify to certain facts concerning the original litigation and 21st Century’s actions. This bad faith action followed. Petitioner's unsuccessfully moved for summary judgment, and petitioned the Court of Appeal for a writ of mandate to overturn the trial court's denial. Upon review, the Court of Appeal found that plaintiff’s efforts to pursue essentially a “bad faith” action as assignee of the insured was misguided. Accordingly, petitioner was entitled to summary judgment. View "21st Century Ins. v. Super. Ct." on Justia Law