Justia California Court of Appeals Opinion Summaries

The Wongs stored some embryos at a facility that kept them in a cryogenic tank that failed to maintain the temperature necessary to store the embryos. The Wongs’ fertility doctor told them they should consider the embryos “compromised” and “no longer viable, and lost.” The Wongs had a homeowners insurance policy with Stillwater, a specified perils policy providing that “We insure for direct physical loss to the property described in Coverage C caused by any of the following perils,” listing 16 specified perils. Stillwater denied their claim for property damage.The trial court granted Stillwater summary judgment. The court of appeal affirmed. The mere possibility that the embryos had suffered physical damage was insufficient to create a triable issue of fact to trigger coverage. The Wongs did not meet their burden of submitting evidence of actual physical alteration of the embryos. The insured also has “the threshold burden of proving the loss was caused by a specifically-enumerated peril.” The Wongs failed to prove their claim of “explosion.” View "Wong v. Stillwater Insurance Co." on Justia Law

Bennett, an oral and maxillofacial surgeon, purchased three disability income insurance policies from National in 1984, 1991, and 1995. Under the policies, monthly benefits were payable for life if he was totally disabled due to injury; if due to sickness, benefits would only be paid until the age of 65. National initially approved Bennett’s 2014 claim that he was totally disabled due to an injury sustained when thrown from his horse. In June 2015, National notified him of its determination that his disability was due to sickness, not an injury. National continued to pay disability benefits until September 2018, the policy year Bennett turned 65 years old.Bennett sued. The trial court granted National summary judgment, concluding his claims were barred by the statutes of limitation — four years for breach of contract and two years for breach of the implied covenant of good faith and fair dealing–both of which accrued when National issued an unconditional denial of liability in June 2015. The court of appeal reversed, agreeing with Bennett that his causes of action did not accrue until all elements — including actual damages — were complete. Bennett suffered no harm as of June 2015, because National continued to pay disability benefits. Only in September 2018 — when National began withholding benefits, and Bennett thereby incurred damages — did his causes of action accrue. View "Bennett v. Ohio National Life Assurance Corp." on Justia Law

After defendants Frayba and William Tipton pled guilty to committing insurance fraud, they were ordered to pay victim restitution to Nationwide Insurance Company of America (Nationwide). Later, Nationwide petitioned the trial court to convert the criminal restitution orders to civil judgments against both defendants. Defendants opposed. Relying on Penal Code1 section 1214, the trial court granted Nationwide’s petition and entered civil judgments against the defendants. On appeal, defendants argued the trial court erred because (1) Nationwide “failed to provide citation to any . . . authority supporting” conversion of the victim restitution orders to civil judgment; and (2) Nationwide’s petition lacked supporting evidence. The Court of Appeal found no reversible error and affirmed the trial court's judgment. View "Nationwide Ins. Co. of Am. v. Tipton" on Justia Law

The Plan is a nonprofit health care service plan subject to Health & Safety Code 1340, including the Parity Act, under which: “Every health care service plan contract . . . that provides hospital, medical, or surgical coverage shall provide coverage for the diagnosis and medically necessary treatment of severe mental illness of a person of any age, and of serious emotional disturbances of a child . . . under the same terms and conditions applied to other medical conditions.”Plaintiffs alleged that the Plan violates the Parity Act by “deterring members from obtaining one-on-one mental health therapy without making individualized determinations … encouraging ‘group’ therapy, without making individualized determinations" where similar practices are not followed in the treatment of physical health conditions. An Unruh Civil Rights Act claim alleged that the Plan intentionally discriminated against persons with mental disabilities or conditions. The court granted the Plan summary judgment.The court of appeal affirmed the rejection of one plaintiff’s individual claims; the Plan is not liable for the acts of its subsidiary by whom the plaintiff’s coverage was issued. The court otherwise reversed. On an Unfair Competition Law claim, the court failed to consider how the Plan’s conduct undermines its contractual promises of covered treatment in violation of the Parity Act. On the Unruh claim, triable issues of fact exist as to whether the plaintiffs were denied medically necessary treatment as a result of intentional discrimination. View "Futterman v. Kaiser Foundation Health Plan, Inc." on Justia Law

Maria chose her family’s benefits during her 2014 orientation, using Coppola laptops. Coppola’s HR team was available to answer questions. The authorization agreement notifies enrollees that "clicking the SAVE button below ... will serve as my electronic signature of agreement to the ... Arbitration Agreement (above)," and “If you do not wish to accept the arbitration agreement above you must click on the CANCEL button below.”Andrea (Maria’s daughter) sued Kaiser, for its failure to timely diagnose her aggressive cancer. Kaiser petitioned to compel arbitration. Andrea argued Kaiser failed to comply with Health and Safety Code 1363.1’s specific requirements for disclosing arbitration agreements with healthcare service plans. Maria declared she was unaware of signing an arbitration agreement. Although Maria had a good understanding of English, she was not a native speaker and declared she could not read English well enough to understand she was agreeing to arbitration. Maria also stated she did not know how to operate the computer. The court granted Kaiser’s motion. The parties selected an arbitrator from a list. A disclosure statement listed the arbitrator’s prior and pending cases involving Kaiser. The arbitrator later sent notices informing the parties he had agreed to arbitrate additional Kaiser cases. The arbitrator concluded Kaiser was not liable for Andrea’s death.The court of appeal affirmed the denial of a motion to vacate. The arbitrator had an initial obligation to disclose he had pending cases involving Kaiser and was not obligated to disclose their outcome; the fact the arbitrator decided cases in Kaiser’s favor during the pendency of the Perezes’ arbitration would not raise doubt the arbitrator would be impartial. View "Perez v. Kaiser Foundation Health Plan, Inc." on Justia Law

In this insurance coverage action, Defendant Stillwater Insurance Company (Stillwater) contends that an animal liability exclusion in the insured’s homeowner’s insurance policy (the policy) precludes any duty to defend because the third parties sued the insured for injuries they and their dogs sustained when their dogs were bitten by two pit bulls on a public street. The insurer determined that the exclusion applied because the underlying complaint alleged that the pit bulls lived at the insured’s home and, therefore, it had no obligation to indemnify an excluded claim. The insured denied any ownership or control of the pit bulls, which were owned by her boyfriend, who did not live at her home. The insurer did not conduct any further investigation. Plaintiff argued that the trial court erred in granting summary judgment in favor of Stillwater on her claims based on Stillwater’s refusal to defend Plaintiff in the third-party lawsuit.   The Second Circuit reversed. The court concluded that the trial court erred in granting summary judgment to Stillwater because there is evidence that Stillwater breached its duty to defend. The court also reversed the trial court’s grant of summary judgment in favor of Stillwater on Plaintiff’s claim for breach of the duty of good faith and fair dealing. The court explained that even if the insured was correct and the pit bulls were not under her ownership, the third party still might have raised a claim potentially covered by the policy. An insurer can be excused from the duty to defend only if the third-party complaint can by no conceivable theory raise an issue within the policy’s coverage. View "Dua v. Stillwater Insurance Company" on Justia Law

Starlight Cinemas, Inc., Akarakian Theaters, Inc. (collectively, Starlight) appealed from a judgment entered in favor of Defendant Massachusetts Bay Insurance Company (MBIC) after the trial court granted MBIC’s motion for judgment on the pleadings without leave to amend. Starlight, which owns and operates movie theaters in Southern California, sued MBIC for breach of an insurance contract and bad faith denial of coverage after MBIC denied Starlight’s claim for losses sustained when it was compelled by government orders to suspend operations during the COVID-19 pandemic. Starlight contends a policy term providing coverage for lost business income due to a suspension of operations “caused by direct physical loss of or damage to property” can be reasonably construed to include loss of use of its theaters without any physical alteration to the property.   The Second Appellate District affirmed. The court concluded Starlight has not alleged a covered loss because the policy language requires a physical alteration of the covered property, which was not alleged. The court explained that Starlight did not allege that the COVID-19 virus was present in its theaters or that there was any physical alteration of its property as a result of either the virus or the government orders. As discussed, most California appellate courts have held the allegation of temporary loss of use of property resulting from pandemic-related government closure orders—without any physical loss of the property—is not sufficient to support a claim against an insurer for business income coverage under a policy that requires the suspension be caused by “direct physical loss of or damage to” insured property. View "Starlight Cinemas, Inc. v. Massachusetts Bay Insurance Company" on Justia Law

Glassman prevailed in an uninsured motorist (UIM) arbitration against Safeco. The arbitration agreement was contained in a Safeco umbrella policy that provided excess UIM benefits, above those afforded by Glassman’s concurrent Safeco auto-liability policy. Glassman had sustained bystander emotional distress damages after witnessing her mother’s fatal injuries when an underinsured driver hit them both while they were in a crosswalk. The arbitrator’s award determined that Glassman’s compensable damages exceeded the required threshold to entitle her to the umbrella-policy excess UIM limits of $1 million.Before the arbitration, Glassman had issued to Safeco a Code of Civil Procedure section 998 offer of $999,999.99. Safeco did not accept the offer. Glassman sought prejudgment interest under section 3287(a) from the date of her section 998 offer. Under section 3287(a), a liquidated damage claim triggers entitlement to prejudgment interest as a form of additional compensatory damages if the defendant knew or was able to calculate from reasonably available information the amount of the plaintiff’s liquidated claim owed as of a particular day. The trial court denied Glassman’s request, concluding that the amount of her claim was not certain or capable of being made certain.The court of appeal affirmed. An insured’s prevailing section 998 offer in a UIM proceeding does not effectively liquidate the insured’s claim in the amount and as of the date of the offer under section 3287(a). The court noted the lack of evidence of Safeco’s knowledge that Glassman’s economic losses or special damages resulting from the accident already exceeded the umbrella-policy limits when her section 998 offer was made. View "Glassman v. Safeco Insurance Co. of America" on Justia Law

The Santa Ynez Band of Chumash Mission Indians of the Santa Ynez Reservation California (Chumash) appealed a judgment following the granting of a motion for summary judgment in favor of Lexington Insurance Company (Lexington) in Chumash’s lawsuit against Lexington for denial of insurance coverage.   The Second Appellate District affirmed. The court concluded that, among other things, Chumash did not present sufficient evidence to show that the COVID-19 virus caused physical property damage to its casino and resort so as to fall within the property damage coverage provisions of the Lexington insurance policy. The court explained that had the Chumash Casino and Resort sustained property damage, it was required to specify what property was damaged and to submit a claim for the dollar amount of that loss. The absence of such information supports Lexington’s decision to deny coverage. View "Santa Ynez Band of Chumash etc. v. Lexington Ins. Co." on Justia Law

Coast Restaurant Group appealed the dismissal of its case. The trial court sustained respondent AmGUARD Insurance Company’s demurrer to the operative complaint without leave to amend. Appellant contended the court erred in sustaining the demurrer because it showed business income losses resulting from governmental orders prohibiting on-site dining at its restaurant due to the COVID-19 virus were covered under the relevant insurance policy. The Court of Appeal concluded appellant did show there was potential coverage under the policy, but respondent showed that an exclusion in the policy applied to preclude coverage as a matter of law. View "Coast Restaurant Group, Inc. v. AmGUARD Insurance Company" on Justia Law