Seneca Ins. Co. v. Strange Land, Inc.

A district court may abstain under the Colorado River doctrine only in extraordinary circumstances, not in an ordinary diversity action seeking damages and rescission under settled principles of state law.  The district court erred in granting a motion for Colorado River abstention in this case which an insurer had filed in federal court seeking rescission…

Tustin Field Gas & Food, Inc. v. Mid-Century Ins. Co.

Gas station’s insurance policy, which insured against collapse but not settling, cracking, shrinkage or expansion, did not cover needed repairs after the outer shell of the insured’s underground gas storage tank split open but inner steel lining remained intact.  If a property insurance policy covers “collapse” without specially defining the word, but also excludes coverage…

Duarte v. Pacific Specialty Ins. Co.

An insurer was not entitled to summary judgment on its rescission defense based on false answers to its insurance application questions, since the questions were ambiguously worded and the answers were arguably accurate under one reasonable interpretation of the questions; also, a defendant gives sufficient notice of its intent to rescind a contract on which…

Zubillaga v. Allstate Indemnity Co.

Summary judgment for insurer on bad faith claim is reversed due to a triable issue as to whether insurer’s dispute about the claim amount was genuine since the insurer had not updated its medical expert’s opinion based on new evidence of the extent of the insured’s injuries.  Allstate was not entitled to summary judgment on…

Pacific Bay Recovery, Inc. v. California Physicians’ Services, Inc.

Under the Knox-Keene Health Care Services Act, an out-of-network provider who gave substance abuse treatment to PPO subscribers was entitled to be paid by the PPO only the amount shown on its explanation of benefits form, since the treatment was not an emergency medical service and the provider had no contract with the PPO.  Under…

California Fair Plan Assn. v. Garnes

Under a homeowner’s policy providing “open actual cash value coverage,” the insurer must pay, on a partial loss claim, the lesser of (a) the policy limits or (b) the actual cost of repair, even if the repair cost exceeds the property’s pre-loss market value.  Under Ins. Code 2051, a homeowner’s policy providing open (meaning the…

Southern Ins. Co. v. Workers Compensation Appeals Bd.

Insured company misrepresented in its worker’s compensation insurance application that its workers traveled only within a 200 mile radius of its headquarters in California, so appeals board needed to determine whether insurer’s resulting rescission was effective.  Like other insurers, a worker’s compensation insurer may rescind its policy for misrepresentations in the insurance application.  On remand,…

Friedman v. AARP, Inc.

Plaintiff stated a viable unfair competition law claim by alleging that the insurer paid almost 5% of his Medicare gap insurance premiums to the American Association of Retired People as a disguised commission even though it was not a licensed California insurance agent.  A plaintiff who bought Medicare gap insurance through the AARP Insurance Plan,…

Stein v. Axis Ins. Co.

At least when a directors and officers liability policy provides a defense on appeal, its provision requiring reimbursement of defense costs upon a “final determination” the insured was guilty of willful misconduct applies only after completion of the appeal.  When a D&O policy provided for the insurer to pay for the directors’ and officers’ defense…

Teleflex Medical, Inc. v. National Union Fire Ins. Co.

If an excess insurer rejects a settlement proposed by the primary insurer and insured and does not assume the insured’s defense, it cannot avoid liability for paying its share of the settlement (if a court later finds the settlement reasonable) by relying on the excess policy’s no-action clause.  This decision follows Diamond Heights Homeowners Assn….

Mercury Casualty Co. v. Jones

It was not an abuse of discretion to deny plaintiff’s request to raise its auto insurance rates, since its advertising expenses were properly excluded from rate calculation.  The Insurance Commissioner did not abuse his discretion in denying Mercury’s request to raise its auto insurance rates.  Mercury’s advertising expenses were properly excluded from the rate calculation…

Medina v. GEICO Indemnity Co.

A van the driver’s employer gave her for business and personal use was a non-owned vehicle furnished for the driver’s regular use and thus was excluded from coverage under the driver’s personal auto policy.  An auto insurer was properly found not liable for injuries its insured caused while driving a van that her employer had…