Justia California Court of Appeals Opinion Summaries

Plaintiff sued Farmers New World Life Insurance Company (Defendant or Farmers) for breach of contract, breach of the covenant of good faith and fair dealing, and punitive damages in connection with a policy insuring the life of her ex-husband. The trial court granted summary judgment for Defendant on those claims, concluding it was undisputed that the ex-husband remained the owner of the policy until he died, and that he had changed the beneficiaries on the policy, reducing his ex-wife’s interest from 100 percent to 25 percent.   The Second Appellate District reversed, finding that the trial court failed to consider the terms of a divorce decree affecting ownership of the policy, and because Defendant’s agent repeatedly assured Plaintiff, up to and after the ex-husband’s death, that Plaintiff remained the sole beneficiary. Therefore, the court concluded disputed issues of material fact prevent summary judgment. View "Randle v. Farmers New World Life Insurance Co." on Justia Law

The Travelers Indemnity Company appeals the judgment entered after the superior court denied Travelers’ petition for a writ of administrative mandate challenging the Insurance Commissioner’s decision that certain agreements relating to workers’ compensation insurance policies issued to Adir International, LLC were unenforceable. Travelers contended that Adir’s lawsuit in the trial court, which included a request for a declaratory judgment the agreements were void, barred the Commissioner, under the doctrine of exclusive concurrent jurisdiction, from exercising jurisdiction while that lawsuit was pending. Travelers also appealed the post-judgment order granting Adir’s motion for attorney fees, contending attorney fees were not authorized.   The Second Appellate Division affirmed the order and judgment denying Travelers’s petition. The court explained that the exclusive concurrent jurisdiction doctrine does not apply in this context to proceedings pending before the trial court and an administrative agency; and, in any event, it was reasonable and consistent with the primary jurisdiction doctrine for the trial court to defer to the Commissioner’s determination of the validity of the agreement at issue. In addition, because Adir’s administrative claim fell within the agreement’s attorney fee provision, the court affirmed the post-judgment order awarding Adir attorney fees. View "The Travelers Indemnity Co. v. Lara" on Justia Law

Appellant is a self-described “watchdog association” that brings actions for injunctive relief against immigration consultants under section 22446.5, which provides a right of action against an immigration consultant to anyone who suffers damages by reason of the immigration consultant’s fraud, misrepresentation, or failure to provide services.In October 2017, Appellant brought over 90 actions against immigration consultants, two of whom had bonds issued by Appellee insurance company. After Appellant prevailed at trial against the consultants, it filed suit against Appellee to recover its attorney fees and costs against the Immigration Consultant Act bond. The trial court granted summary judgment in the insurance company's favor.On appeal, the Second Appellate District affirmed, explaining a surety issuing a statutory bond is liable only to the extent indicated in the code section under which the surety executes the bond and under the plain language of the relevant bond statutes, a non-aggrieved person who suffers no damages is not entitled to recovery from an Immigration Consultant Act bond. View "Immigrant Rights Defense etc. v. Hudson Insurance Co." on Justia Law

Amy’s employs 2,500 people to manufacture vegetarian meals. It purchased comprehensive property insurance from Fireman’s for a period ending in July 2020. The policy included coverage extensions for communicable diseases and for loss avoidance and mitigation: Fireman’s “will pay for direct physical loss or damage to Property" caused by or resulting from a "communicable disease event at a location.” The policy defines “communicable disease event” as one in which “a public health authority has ordered that a location be evacuated, decontaminated, or disinfected due to the outbreak of a communicable disease.” Amy’s incurred costs “to mitigate, contain, clean, disinfect, monitor, and test for the effects of” the coronavirus at insured locations, and to avoid or mitigate potential coronavirus-related losses, including temperature-screening equipment to test for COVID, protective shields to prevent transmission on assembly lines, masks and goggles, cleaning supplies, and “hero pay.” People with confirmed COVID-19 cases were on Amy’s premises. The complaint cited “various require[d safety measures] for all essential businesses.”Fireman’s denied Amy’s claim. The court of appeal affirmed the dismissal of the complaint. Under communicable disease extension, the need to clean or disinfect infected or potentially infected covered property constitutes “direct physical loss or damage” of the property; Amy’s has not pled a “communicable disease event” but should be given leave to amend to do so. View "Amy's Kitchen, Inc. v. Fireman's Fund Insurance Co." on Justia Law

Tarrar operated “a utility consultant business” in Contra Costa County. Associated issued Tarrar a comprehensive commercial liability and property insurance policy to “pay for direct physical loss of or damage to Covered Property,” and in particular to “pay for the actual loss of Business Income you sustain due to the necessary suspension of your operations during the period of restoration." The suspension must be caused by direct physical loss of or damage to property at the described premises. The loss or damage must be caused by or result from a Covered Cause of Loss.Based on the 2020 “shelter-in-place orders,” Tarrar made an unsuccessful claim for “business income loss.” The trial court dismissed Tarrar’s subsequent suit without leave to amend. While several California courts of appeal have resolved this issue against the insureds, one court held for the insured on the basis it had pled the element missing from earlier cases: it “adequately alleged direct physical loss or damage.” While Tarrar’s complaint did not allege the necessary “direct physical loss of or damage to property,” Tarrar should be permitted to amend. A plaintiff need not even request leave to amend an original complaint. Unless the complaint shows on its face that it is incapable of amendment, denial of leave to amend constitutes an abuse of discretion. View "Tarrar Enterprises, Inc. v. Associated Indemnity Corp." on Justia Law

Appellant Federal Insurance Company (Federal) was the prevailing party in a lawsuit Cell-Crete Corporation (Cell-Crete) brought seeking to recover against Federal on a payment bond. After dismissal, the trial judge denied Federal’s request for attorney fees and taxed its costs on the ground that Federal did not incur any fees or costs because a third party, Granite Construction Company (Granite), paid the fees and costs of Federal’s defense under an indemnity agreement between Federal and Granite. On appeal, Federal argued it was entitled, as the prevailing party, to recover their reasonable attorney fees and costs anyway: a party represented by counsel in an attorney-client relationship was entitled to an award of fees and costs even if they had been or would be borne by a third party. To this the Court of Appeal agreed and reversed the order denying Federal’s motion for attorney fees and granting Cell-Crete’s motion to tax costs, and remanded for further proceedings. View "Cell-Crete Corp. v. Federal Ins. Co." on Justia Law

Apple Annie operated restaurants in Marin, San Francisco, and Santa Barbara counties and had comprehensive commercial liability and property insurance through Oregon Mutual for “for direct physical loss of or damage to Covered Property at the [insured] premises,” and to “pay for the actual loss of Business Income you sustain due to the necessary suspension of your ‘operations’ during the ‘period of restoration. The suspension must be caused by direct physical loss of or damage to property at the described premises. The loss or damage must be caused by or result from a Covered Cause of Loss.” The policy did not define “direct physical loss of or damage.”Apple Annie filed claims for losses resulting from the COVID pandemic and ensuing lockdown. The court of appeal affirmed summary judgment in favor of Oregon Mutual. The policy language,“direct physical loss or damage to,” despite its disjunctive phrasing, is unambiguous. A loss of use simply is not the same as a physical loss. Although the COVID virus has a physical presence, and thus Apple Annie may have suffered economic loss from the physical presence of the COVID virus, it has not suffered “direct physical loss of or damage to [its] property.” View "Apple Annie, LLC v. Oregon Mutual Insurance Co." on Justia Law

Northfield issued a policy to insure an apartment complex. The coverage excludes liability for violations of the insured’s duty to maintain habitable premises; this exclusion also encompasses coverage for “any claim or ‘suit’ ” that also alleges habitability claims. Tenants sued the insured, alleging multiple habitability claims and other causes of action that were arguably not based on habitability. Northfield declined to defend the tenants’ lawsuit. After settling the underlying action, the insured sued Northfield for breach of its duty to defend. The trial court concluded the case presented a “mixed” action containing both potentially covered and uncovered claims, and that Northfield was obliged to provide a defense.The court of appeal reversed. The policy exclusion is plain and clear. The court rejected arguments that claims for retaliation, conversion, and trespass to chattels did not arise from the duty to provide habitable premises. The retaliation concerned complaints about habitable conditions and the claims are alleged in a suit that also alleges habitability claims. View "24th & Hoffman Investors, LLC v. Northfield Insurance Co." on Justia Law

The Thompsons own property in Sonoma County that is subject to a conservation easement (Civ. Code 815) in favor of SLT, which prohibits any impairment of the land’s conservation values. SLT sued, alleging that the Thompsons had done work on the parcel that caused damage in violation of the conservation easement. The Thompsons tendered defense of the action to Burlington Insurance, which declined the tender on the ground that the action did not arise from an “occurrence,” defined as an “accident.” The Ninth Circuit upheld the denial of coverage.While that appeal was pending, the Thompsons tendered defense of the action to Crestbrook and Nationwide, under policies identical in relevant part to the Burlington policy. The insurers declined the tender. The trial court ultimately upheld the denial of coverage. The California court of appeal affirmed. The federal court judgment precludes relitigation of whether the SLT action arose from an “accident” within the meaning of the two insurers’ policies. The issue here is identical to the issue in the Burlington litigation. No material change in the law since the Burlington judgment diminishes its preclusive effect and there is no unfairness in affording the Burlington judgment preclusive effect. View "Thompson v. Crestbrook Insurance Co." on Justia Law

The owners of Hotel Erwin and Larry’s (a restaurant adjacent to the hotel) in Venice Beach—Marina Pacific Hotel & Suites, LLC; Venice Windward, LLC; Larry’s Venice, L.P.; and Erwin H. Sokol, as trustee of the Frances Sokol Trust (collectively insureds)—sued Fireman’s Fund Insurance Company alleging the COVID-19 virus was present on and had physically transformed, portions of the insured properties—“direct physical loss or damage” within the meaning of Fireman’s Fund’s first party commercial property insurance policy—but Fireman’s Fund refused to pay policy benefits for covered losses incurred as a result. The trial court sustained Fireman’s Fund’s demurrer to the insureds’ first amended complaint without leave to amend and dismissed the lawsuit, ruling the COVID-19 virus cannot cause direct physical loss or damage to property for purposes of insurance coverage.   The Second Appellate District reversed the trial court’s judgment sustaining Defendant’s demurrer to the insureds’ first amended complaint without leave to amend and dismissed the lawsuit, ruling the COVID-19 virus cannot cause direct physical loss or damage to property for purposes of insurance coverage. The court held it was an error at the nascent phase of the case. The court explained that because the insureds adequately alleged losses covered by Fireman’s Fund’s policy, they are entitled to an opportunity to present their case, at trial or in opposition to a motion for summary judgment. The judgment of dismissal based on the trial court’s disbelief of those allegations, whether ultimately reasonable or not, must be reversed. View "Marina Pacific Hotel and Suites, LLC v. Fireman's Fund Ins. Co." on Justia Law