Justia California Court of Appeals Opinion Summaries

Pursuant to federal law, California’s Medi-Cal program requires beneficiaries to use other health coverage (OHC) they may have before accessing Medi-Cal benefits. The state Department of Health Care Services (DHCS) maintains a database with codes that indicate whether a Medi-Cal beneficiary has OHC and, to some extent, the scope of that coverage. The codes are available to providers when a beneficiary seeks services. Medi-Cal beneficiaries filed suit. Because DHCS allegedly permits Medi-Cal providers to refuse nonemergency services to beneficiaries with OHC, and because the codes are not always correct and the information is limited, beneficiaries may be improperly denied service and referred to other providers even when there is no OHC available for the requested service; beneficiaries may experience delays in receiving nonemergency care and may be subject to a higher copayment than permitted under Medi-Cal. Plaintiffs argued that the assignment of an OHC code should trigger notice and a hearing. The trial and appeals courts rejected their arguments. Neither Welfare and Institutions Code 10950 nor regulation 50951 nor the California Constitution requires DHCS to provide a hearing or notice when it assigns an OHC code. Plaintiffs did not establish any violation of a ministerial duty subject to enforcement by a writ of mandate. View "Marquez v. Dept. of Health Care Servs." on Justia Law

Sequeira did not work on January 1, 2010, because it was a paid holiday. He was hospitalized the next day with a sudden illness and died on January 6 without returning to work. Sequeira’s widow sought benefits under a supplemental life insurance policy that was issued to Sequeira’s employer on January 1, 2010. The trial court ruled that she was not entitled to benefits because the policy required her husband to be “on the job, at his employer’s place of employment, performing his customary duties” between January 1 and his death. The court of appeal reversed. The policy is ambiguous regarding whether Sequeira needed to perform his work responsibilities on New Year’s Day or anytime after that in order for his wife to receive benefits. The court should, therefore, interpret the policy in favor of Sequeira’s reasonable expectations, which are that he should not have to work on New Year’s Day or when he is sick in order to receive coverage that he has paid for. View "Sequeira v. Lincoln National Life Ins. Co." on Justia Law

In 1994, defendant Felicia Alford, then a minor, settled a personal injury claim against certain insureds of defendant State Farm Fire. Under the settlement, State Farm Life was to deliver an annuity providing for guaranteed payments. In July 2012, Alford entered into a contract with RSL Funding, LLC under which she received $30,000 in exchange for a $50,000 portion of the payment due on August 11, 2016. RSL assigned its payment to Extended Holdings, Ltd. (EHL). The trial court approved the transfer, and State Farm did not contest the transfer. A year later, Alford entered into a second contract with RSL in which Alford agreed to assign to RSL $25,000 of the $100,000 payment due on August 11, 2016, and $25,000 of the payment of $151,558.80 due on August 11, 2021, in exchange for a current payment of $22,500. RSL filed a petition for approval of the transfer. State Farm filed an opposition to the petition, asserting, among other grounds, that: (1) the proposed transfer would violate a California Ins. Code, sec. 10139.5, subd. (e)(3)), which provided that an annuity issuer and settlement obligor may not be required to divide payments; and (2) the proposed transfer would materially increase State Farm’s burdens and risks. The trial court approved the transfer petition, and State Farm appealed. After review, the Court of Appeal concluded that the trial court’s order indeed violated section 10139.5(e), and State Farm did not forfeit its right to oppose that order. The Court reversed the trial court and remanded for further proceedings. View "RSL Funding v. Alford" on Justia Law

Jeffrey Epp suffered severe injuries after diving into a swimming pool at the St. Regis Resort, Monarch Beach. Epp and his wife sued the owner of the St. Regis and the entities involved in the design and construction of the swimming pool. The defendants included Valley Crest Landscape Development, Inc. (the general contractor for exterior improvements at the St. Regis), and Mission Pools of Escondido, Inc. (the subcontractor that built the swimming pool). Summary judgment motions and settlements reduced the litigation to a cross-complaint by Valley Crest and its insurer, National Union Fire Insurance Company of Pittsburgh, PA, against Mission Pools. Valley Crest sought to recover the amount it spent in the litigation based on a claim of express indemnity under the terms of the subcontract with Mission Pools. National Union sought to recover attorney fees and costs it had spent for Valley Crest’s defense and settlement of the Epps’ claims pursuant to the policy of general liability insurance that National Union had issued to Valley Crest. National Union proceeded on a claim it was equitably subrogated to Valley Crest’s claims against Mission Pools. The trial court conducted a two-part bench trial on the cross-complaint, found in favor of both Valley Crest and National Union on their respective claims, and awarded them the full amount of recovery sought. In this appeal, Mission Pools argued: (1) the cross-complaint was time-barred under Code of Civil Procedure, section 337.1, subdivision (a); (2) the trial court erred by finding National Union could recover on its claim for equitable subrogation because, under the element of balancing the equities, National Union should have borne the loss; and (3) the trial court erred by denying Mission Pools a jury trial on Valley Crest’s claim for express indemnity. As to the first contention, the Court of Appeal concluded section 337.1(a) did not apply to claims for express indemnity, and, therefore, the first amended cross-complaint was timely. As to the second contention, the Court concluded the trial court did not abuse its discretion by finding that National Union was entitled to recover based on equitable subrogation. The trial court erred, however, by denying Mission Pools a jury trial on Valley Crest’s claim for express indemnity. The Court therefore reversed on that claim and remanded for further proceedings. The Court affirmed in all other respects. View "Valley Crest Landscape v. Mission Pools" on Justia Law

A fire damaged a 12-apartment Oakland building owned by Lee. The fire started in a ground floor unit. Lee’s insurer, California Capital, claimed that flames did not extend beyond that unit. Lee claims the fire damaged six apartments with fire or smoke. Capital prepared an estimate of damage to unit 3 of $69,255.34. Lee retained a licensed public adjuster, who submitted a claim for $800,000. After Capital completed re-inspection, it issued an additional payment of $109,367.41. The court granted a petition to compel an insurance appraisal (Insurance Code 2071), directing the panel to “value three categories of items” without making causation or coverage determinations, or valuing the loss of income. Capital argued that Lee’s estimate sought an award for items that did not exist at the property, including extra windows. The panel declined an inspection request by Capital and issued an award setting forth replacement cost loss and actual cash value for each claimed item. Exhibit A consisted of items in the insurer’s scope of loss. Exhibit B consisted of items in the insured’s scope of loss. The trial court confirmed the award. The court of appeal reversed. The award neither complies with the statute nor accomplishes the objectives of an appraisal. It was error to compel the appraisal panel to assign loss values to items simply because they were listed in the insured’s scope of loss, regardless of whether inspection revealed they were undamaged or never existed. View "Lee v. Cal. Capital Ins. Co." on Justia Law

Plaintiff filed suit against Mid-Century for breach of the insurance policy and insurance bad faith after Mid-Century denied her tender of the defense of a lawsuit brought by nonparty Henri Baccouche. On appeal, plaintiff challenged the trial court's grant of Mid-Century's motion for summary judgment and denial of her cross-motion for summary adjudication. Baccouche filed a verified complaint alleging causes of action for trespass to real property and trees, abatement of private nuisance, declaratory relief, and for quiet title. The court concluded that Baccouche's claims against plaintiff arose from nonaccidental conduct, which was outside the policy. Accordingly, the court affirmed the judgment. View "Albert v. Mid-Century Ins." on Justia Law

Plaintiffs, former police officers and firefighters employed by local public agencies, filed suit alleging that CalPERS's failure to pay enhanced retirement benefits under the Public Employees' Retirement Law (PERL), Gov. Code section 20000 et seq., gave rise to a variety of causes of action. In these consolidated appeals, the court affirmed in part and concluded that neither the PERL nor plaintiffs' contracts entitle plaintiffs to the additional retirement benefits they seek and therefore, their causes of action for breach of statutory duty and breach of contract fail as a matter of law. Further, plaintiffs' causes of action for constitutional torts also fail because, as a matter of law, CalPERS's interpretation of the applicable statutory provisions does not deny plaintiffs due process or equal protection of law and does not effect an unconstitutional impairment of contract. The court reversed, however, as to the causes of action for rescission and breach of fiduciary duty where plaintiffs' pleading was sufficient to survive demurrer and therefore demurrer should have been overruled as to these causes of action. In this case, plaintiffs alleged that CalPERS failed to disclose the potential loss of the value of purchased service credit if plaintiffs suffered disability - a disclosure that CalPERS, as a fiduciary, is alleged to have been required to make. View "Marzec v. CalPERS" on Justia Law

In 2010, Debra Hackett was seriously injured in an accident in Sacramento County in which a tractor and trailer owned by Silva Trucking, Inc. and driven by Elaine McDonold jackknifed and collided with the vehicle being driven by Hackett. In 2012, the Hacketts filed a personal injury action in Sacramento County against Silva Trucking and McDonold. The jury awarded the Hacketts $34.9 million in damages. Silva Trucking was insured by Carolina Casualty Insurance Company (CCIC), who retained the law firm Cholakian & Associates to provide a defense. Silva Trucking had an excess liability insurance policy with Lexington Insurance Company (LIC), who retained the law firm Lewis, Brisbois, Bisgaard & Smith, LLP (Lewis Brisbois) as counsel. In 2014, Silva Trucking and McDonold brought suit in Sacramento County against LIC, CCIC, Cholakian & Associates and individual attorneys Kevin Cholakian and Jennifer Kung (collectively Cholakian), and Lewis Brisbois and individual attorney Ralph Zappala (collectively Lewis Brisbois). As to LIC and CCIC, the complaint alleged bad faith and breach of contract. As to the law firms and attorneys, the complaint alleged legal malpractice. The gravamen of the complaint was that the insurers unreasonably refused to accept the policy limit demand when the insured’s liability was clear and damages were known to be in excess of the policy limit. The attorneys failed to advise their insurer clients to accept the demand and the consequences of failing to do so, and failed to advise Silva Trucking and McDonold of their need for personal counsel. LIC and CCIC responded with demurrers. Lewis Brisbois answered with a general denial and asserted 22 affirmative defenses. Under Code of Civil Procedure section 396b, subdivision (a), where an action has been filed in the “wrong venue,” a defendant may move to transfer the case to the “proper court for the trial thereof.” In such a case, “if an answer is filed,” the court may consider opposition to the motion to transfer and may retain the action in the county where filed to promote the convenience of witnesses or the ends of justice. The question this case presented for the Court of Appeal's review was whether, in a multi-defendant case, an answer must be filed by all defendants before the court may consider opposition to the motion to transfer venue. The Court concluded the answer was yes. In this case, the trial court considered opposition to the motion before all defendants had answered the complaint. Accordingly, the Court issued a preemptory writ of mandate directing the trial court to vacate its order denying the motion to transfer and to issue a new order granting the motion. View "Cholakian & Assoc. v. Super. Ct." on Justia Law

Customers of a securities firm made claims against that firm based on real estate investments the firm’s broker-dealers recommended. An entity that had an interest in and operated each of the real estate investments filed for bankruptcy, and at least some of the real estate investments became debtors in that bankruptcy proceeding. The appointed examiner in the bankruptcy proceeding found that the entity was engaged in a fraudulent “Ponzi scheme.” When the securities firm applied for professional liability insurance, it disclosed one of the customer claims but not the facts that would support other potential customer claims arising out of investments through the same entity as that involved in the disclosed claim. The insurer refused to defend against undisclosed claims because the policy’s application included an exclusion for nondisclosure of facts that might lead to a claim. The court of appeal affirmed judgment in favor of the insurer: There was no insurance coverage because all of the undisclosed claims arose out of the same events as the disclosed claim. The securities firm was aware of facts and circumstances that might result in a claim or claims being made against it, which awareness it was required to disclose. View "Crown Capital Secs., L.P. v. Endurance Am. Specialty Ins. Co." on Justia Law

Code of Regulations, title 10, section 2695.183 was promulgated in 2010 following complaints by homeowners who lost their residences in wildfires that they did not have enough insurance to cover the full cost of repairing or rebuilding their homes because, when they bought their insurance, the estimates of replacement value were too low. The Regulation prohibits a “licensee” from “communicat[ing] an estimate of replacement cost to an applicant or insured in connection with an application for renewal of a homeowners’ insurance policy that provides coverage on a replacement cost basis” that does not satisfy specific content and format provisions. Noncompliance “constitutes making a statement with respect to the business of insurance which is misleading and which by the exercise of reasonable care should be known to be misleading, pursuant to Insurance Code section 790.03.” Insurance Associations argued that the Insurance Commissioner lacked authority to define new unfair business practices; questioned whether the record established a high volume of complaints and whether the problem was caused by lack of knowledge; and complained that the expense of compliance would discourage carriers from providing insurance. They obtained a declaration that the Regulation was invalid. The court of appeal affirmed, finding that the Commissioner lacked authority under the Unfair Insurance Practices Act. View "Ass'n of Cal. Ins. Cos. v. Jones" on Justia Law