A Recent California Supreme Court Decision Clarifies when an Intentional Act with Unforeseen Results is an Accident under a Liability Policy

Posted in: Duty to Defend, General Liablity, Insurance Litigation Blog, Negligence June 29, 2018

Generally, an insured will not receive coverage under a liability policy when they intentionally cause the loss or injury for which they are seeking coverage.  As expected, insurers regularly deny claims when they are able to characterize an insured’s conduct as intentional, even when the damage or injury caused was accidental or not intended by the insured.  In recent years, insurers in California have been able to successfully defend their denial of insurance claims involving an intentional act before California courts. The success experienced by these insurers has largely been the result of a California Supreme Court decision in 2009 holding that “an injury-producing event is not an ‘accident’ within the policy’s coverage language when all of the acts, the

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High Court Changes Cumis Landscape

Posted in: Attorneys Fees, Attorneys' Fees, Case Updates, Duty to Defend, General Liablity August 24, 2017

We all know the maxim that “bad facts make bad law.”  Two years after J.R. Marketing, LLC prevailed in the Court of Appeal concerning its dispute with its commercial general liability insurer, Hartford, it ran out of luck before the California Supreme Court in its fight over important Cumis counsel issues.  Hartford Cas. Ins. Co. v. J.R. Marketing, LLC, 190 Cal. Rptr. 3d 599, 2015 DJDAR 9111 (Cal. Aug. 10, 2015).  This is a must read for every lawyer in California that acts as Cumis counsel.

The High Court held an insurance company can sue independent counsel (i.e., Cumis counsel) directly for reimbursement of unreasonable or unnecessary legal charges counsel billed it to defend its insured.  This …

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High Court Changes Cumis Landscape

Posted in: Attorneys Fees, Attorneys' Fees, Case Updates, Duty to Defend, General Liablity August 26, 2015

We all know the maxim that “bad facts make bad law.”  Two years after J.R. Marketing, LLC prevailed in the Court of Appeal concerning its dispute with its commercial general liability insurer, Hartford, it ran out of luck before the California Supreme Court in its fight over important Cumis counsel issues.  Hartford Cas. Ins. Co. v. J.R. Marketing, LLC, 190 Cal. Rptr. 3d 599, 2015 DJDAR 9111 (Cal. Aug. 10, 2015).  This is a must read for every lawyer in California that acts as Cumis counsel.…

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The Reasonable Expectations of the Covered Party, Even an Additional Insured, Determines the Interpretation of Ambiguous Policy Language

Posted in: Case Updates, Duty to Defend, General Liablity, Policy Interpretation January 27, 2014

In California, courts have long held that where a policy provision is ambiguous because it is susceptible to multiple interpretations, the reasonable expectation of the covered party governs.  But which parties’ objectively reasonable expectations should govern where there are both a named insured and an additional named insured claiming coverage?  In its significant decision in Transport Insurance Company v. Superior Court of Los Angeles County, __ Cal. App. 4th __, 2014 Cal. App. LEXIS 28 (Jan. 13, 2014), the Court of Appeal of California held that it is the objectively reasonable expectation of each party seeking coverage that is applied in determining the meaning of language within an insurance contract as it applies to that party, even where it …

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Insurers Have a Duty to Defend at the Outset of Litigation Even If a SIR Has Not Been Exhausted

Posted in: Case Updates, Commercial General Liability Insurance, Duty to Defend, General Liablity, Policy Interpretation October 16, 2013

Insurers providing general liability insurance cannot shirk their duty to defend insureds at the outset of litigation by relying on self-insured retention (SIR) provisions in those policies unless the policies expressly and unambiguously make the insurer’s duty to defend contingent upon the SIR.  So held the Fourth District Court of Appeals in American Safety Indemnity Company v. Admiral Insurance Company, __ Cal. App. 4th ___, 2013 Cal. App. LEXIS 779 (2013).  The court’s decision in American Safety is highly favorable to insureds because it substantially limits the ability of insurers to circumvent their obligation to pay first-dollar for the defense of their insured by arguing that the SIR has not been exhausted.…

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Insurers Forfeit Their Protections Under Civil Code Section 2860 (Cumis Statute) When They Fail to Meet Their Duty to Defend Obligations

Posted in: Attorneys' Fees, Case Updates, Duty to Defend, General Liablity June 27, 2013

If you want to read an important case on Cumis counsel and the consequences to insurers who fail to fulfill their obligations relating thereto, we have one for you.  J.R. Marketing LLC v. The Hartford Cas. Insurance Co., __ Cal.App.4th __ (May 17, 2013).  This case has a lot to offer: Cumis counsel, attorneys’ fees, Buss allocations, duty to defend, and insurance bad faith issues.  In this case, the California Court of Appeal for the First District handed down a very important decision that is highly beneficial to insureds and their independent counsel (i.e., Cumis counsel).  Significantly, the court expanded upon the limitations on the ability of insurers to impose upon their insureds’ choice of defense counsel when they …

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California Court Holds That Third-Party Plaintiffs Can Bring Claims Against Defendant's Insurer for Breach of Contract and Bad Faith After a Settlement

Posted in: Case Updates, General Liablity, Insurance Bad Faith June 21, 2013

In a case of first impression, the California Court of Appeal for the Sixth District held that a plaintiff who sued a defendant and settled the case can later sue the defendant’s insurer directly for breach of contract and bad faith concerning a medical expense provision.  This unprecedented decision potentially opens a new avenue for injured plaintiffs to pursue redress directly from insurers for injuries caused by their insureds.

Barnes v. Western Heritage Insurance Co., __ Cal.App.4th __, 2013 Cal. App. LEXIS 480 (June 18, 2013) involves a Plaintiff who was injured in 2001 when a table fell on his back during a recreational program co-sponsored by the Defendant.  Plaintiff made a claim against the Defendant.  But when Plaintiff subsequently …

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California Courts Give Effect to the Intent of the Parties to an Insurance Contract

Posted in: Breach of Contract, Case Updates, General Liablity, Property & Casualty Insurance December 28, 2012

A recent California Court of Appeals decision served as a reminder of the long-standing rule in California that the mutual intent of the parties will always control the interpretation of potentially conflicting provisions in an insurance contract.  In its recent decision in Gemini Ins. Co. v. Delos Ins. Co. (Dec. 5, 2012, B239533) __ Cal.App.4th __ [2012 WL 6050774] [Second Dist., Div. Five], the Court of Appeals was faced with the task of interpreting the inter-insured exclusion (i.e., an exclusion for claims between two insureds) in a liability policy as it applied to an additional insured named in the policy when the additional insured’s property has been damaged.

The Facts:  A restaurant owner, and tenant to the property, negligently caused …

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The Ninth Circuit Amends Opinion in Du v. Allstate removing policyholder friendly language

Posted in: Auto Insurance, Case Updates, General Liablity, Insurance Bad Faith October 15, 2012

We recently wrote about a policyholder friendly opinion by the Ninth Circuit Court of Appeals that seemingly held that an insurer’s duty of good faith and fair dealing, which is implied in every contract of insurance, may be violated by the insurer’s failure to attempt to effectuate a settlement within policy limits after liability of its insured has become reasonably clear, even without a policy limits settlement demand.  In other words, the court held that a demand within policy limits was not an element of a bad faith failure to settle claim.  The Ninth Circuit, on October 5, 2012, issued an amended opinion deleting this language and leaving open the questions: 1) whether the duty to settle can be breached …

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Bad Faith Liability May Be Premised on an Insurer's Failure to Effectuate Settlement When Insured's Liability Was Reasonably Clear

Posted in: Assignment of Claim, Auto Insurance, Case Updates, General Liablity, Insurance Bad Faith June 20, 2012

The Ninth Circuit Court of Appeals in a recent decision held that an insurer’s duty of good faith and fair dealing, which is implied in every contract of insurance, may be violated by the insurer’s failure to attempt to effectuate a settlement within policy limits after liability of its insured has become reasonably clear.  In essence, the Court found that an insurer’s unreasonable refusal to attempt to effectuate settlement after the evidence reasonably indicates that the insured’s liability will be in excess of the policy limits constitutes bad faith.…

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