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Insurance Services - Representative Experience

  • Issues
  • Venue
  • Client Type
  • Lawyers
  • Full Description
  • Result
  • Conversion; Unfair Business Practices; Bad Faith; Negligence
  • San Francisco County Superior Court
  • Defendant Insurer
  • Jennifer E. Acheson, Michael J. Brady
  • Represented an insurance company who was named as a co-defendant in a lawsuit stemming from an auto collision. The plaintiff sued our client for the loss of his vehicle and unfair business practices when a driver fell asleep at the wheel and struck the plaintiff’s vehicle causing total damage to the vehicle’s front end.

  • The matter proceeded to a jury trial in San Francisco Superior Court and our client prevailed. The plaintiff was then unsuccessful in his attempt to appeal the verdict.

  • Breach of Contract; Bad Faith Claims
  • Colusa County Superior Court
  • Defendant Insurer
  • Jennifer E. Acheson, Michael J. Brady
  • Represented an insurer against claims for breach of contract and bad faith claims handling. The plaintiff, a regional medical center, hired a construction company insured by our client to install a new roof on the plaintiff’s hospital. A subsequent rainstorm caused damage to the property after the construction company failed to take precautions to cover a section of the roof. Our client denied coverage based on policy exclusions based on faulty, inadequate and defective workmanship.

  • Damages claimed by the plaintiff were in excess of $1.3 million. The dispute settled before trial for less than half of the damages claimed, a favorable result for our client.

  • Appeal; Arson
  • Sacramento County Superior Court
  • Defendant Insurance Provider
  • The firm was retained to appeal a $3.2 million judgment against a homeowner's insurer in a bad faith case. The insured alleged that the insurer had instigated a criminal prosecution for arson against him in relation to a fire that destroyed his home.

  • The court of appeal completely reversed the judgment.

  • Breach of Contract; Bad Faith; Misrepresentation; Discrimination
  • United States District Court, Eastern District of California
  • Defendant; Insurance Company
  • Stacy Monahan Tucker
  • The plaintiffs claimed over a quarter of a million dollars in goods were stolen from their home in a two hour period and filed a claim for reimbursement on their homeowners insurance. During the investigation a number of discrepancies arose between the plaintiffs' various statements and the evidence available. The claim was denied for failure to cooperate with the investigation and the plaintiffs subsequently filed suit.  The plaintiffs alleged breach of contract, bad faith and racial discrimination.


     

  • During the course of discovery, we obtained significant evidence of the plaintiffs' misrepresentations, and confirmed their failure to cooperate with the investigation under the terms of the policy. Confronted with the evidence against them, the plaintiffs chose to voluntarily dismiss the case on the eve of our filing for summary judgment. No settlement was paid.  

     

  • Dry Cleaner, TCE, Groundwater Contamination
  • California Superior Court, County of San Mateo
  • Defendant Cleaning Equipment Manufacturer
  • Kathleen Strickland
  • A private water provider filed suit against numerous companies involved in the dry cleaning industry, such as equipment manufacturers, chemical manufacturers and retail dry cleaning companies, alleging its groundwater supply in Southern California was contaminated with TCE from the defendants' business operations. The plaintiff sought millions of dollars in remediation costs, as well as punitive damages.

  • By examining our client's records and public records, we were able to determine that our client did not supply dry cleaning equipment to any company doing business over the aquifer from which the plaintiff obtained its water. We were thereby able to obtain a dismissal of our client prior to responding to the complaint.

  • Insurance Coverage
  • Insurance Provider
  • Dean A. Pappas
  • Represented an insurance provider who was the defendant in an action for specific performance, declaratory relief, and damages for breach of contract and promissory fraud. The insured argued that the use of the words “wrongful detention” or “wrongfully detained” used in case law in connection with interference with rights in personal and real property supported a conclusion that “personal injury” liability coverage applied to a detention of property. The damages alleged to have been caused the insured’s breach of a promise to convey title to a 36-acre parcel of real property included anxiety, worry, and aggravation of the plaintiff’s pre-existing health afflictions. The insured tendered his defense to the insurer seeking coverage under personal liability coverage including coverage for damages due to the commission of “personal injury” offenses. When the insurer refused to provide a defense, the insured requested reconsideration of his tender and asked the insurer to consult coverage counsel in the matter. The insurer referred the question to Mr. Pappas for a coverage opinion. Following review of the facts, the policy, and applicable law, Mr.  Pappas advised the insurer that the complaint did not seek damages due to “wrongful detention” as defined in the policy. That term,  Mr. Pappas explained, was likely to be interpreted to refer to the wrongful detention of a person, not the wrongful detainer of property. Mr. Pappas also noted that the policy limited its applicability to damages resulting from an accident and that the underlying lawsuit did not involve property damage or loss caused by an “accident.”

  • Relying on Mr. Pappas’s analysis, the insurer reaffirmed its denial of coverage and its refusal to defend the insured in the underlying action. The insured filed an action to obtain declaratory relief and policy benefits in addition to extra-contractual damages. The trial court and the Court of Appeal agreed with the analysis and conclusion provided by Pappas.

  • Life Insurance; Agent; Estate Planning
  • Los Angeles County Superior Court
  • Defendant Insurance Agent
  • Michael T. Ohira
  • Defended an insurance agent in an action alleging fraud arising from the sale of a flexible premium life insurance policy with a $60 million death benefit. The policy was purchased as part of a sophisticated tax shelter program known as a family “split dollar” arrangement. Our client was accused of “back dating” the life insurance policy, misrepresenting the policy “illustrations”, selling insurance in Alaska without a license and altering an insurance application. The plaintiffs were represented by a law firm from New York.


     

  • The case settled on the courtroom steps for $25,000. The settlement demand three months before trial had been $3 million.

  • Breach of Contract; Bad Faith, Insurance Coverage
  • Los Angeles County Superior Court
  • Defendant Insurance Provider
  • Michael T. Ohira
  • The plaintiffs, the insured homeowners, sued the defendant, an insurance provider, for breach of contract and bad faith arising from a first party property damage and bodily injury claim arising from water damage and mold in a residence. The insureds accused the insurer of inadequate investigation, low-balling, and delay which culminated in special damages exceeding of $400,000 and seven figure extra contractual damage claims.

     

  • The case was ultimately settled for a confidential sum.

  • Declaratory Relief Action
  • Stanislaus County Superior Court
  • Plaintiff Insurance Provider
  • Michael T. Ohira
  • Represented the plaintiff, an insurance provider, in a declaratory relief action to address whether the insurers (auto, homeowners, and umbrella) had a duty to defend and indemnify an insured for claims of bodily injury and multiple wrongful death claims arising from a van rollover accident. At issue was the business pursuits exclusion, and whether the van constituted an insured vehicle.

  • Leverage from the declaratory relief action shielded $2 million in coverage under the homeowner's and umbrella policies, and resulted in a global settlement of the underlying wrongful death and personal injury claims.

  • Declaratory Relief Action
  • Los Angeles County Superior Court
  • Plaintiff Insurance Provider
  • Michael T. Ohira
  • Represented the plaintiff, an insurance provider, in a declaratory relief action to address whether the insurer had a duty to defend and indemnify an insured for claims of bodily injury caused by molestation and false imprisonment.

  • Won motion for summary judgment wherein the court issued a judicial declaration that the insurer did not owe a defense or indemnity obligation for the underlying suit.

  • Declaratory Relief Action
  • USDC: District of Arizona
  • Plaintiff Insurance Provider
  • Michael T. Ohira
  • Represented the plaintiff, an insurance provider, in a declaratory action with regard to whether the insurer owed a duty to defend or indemnify an Arizona church, its former minister, his wife and six vestry members in two lawsuits alleging that the minister wrongfully caused two elderly church members to give him personal and real property.

  • Successfully moved for summary judgment wherein the court issued a judicial declaration that the insurer did not owe a defense or indemnity obligation for the underlying suits.

  • Life Insurance; Agent; Premium Financing
  • USDC: Central District of California; Los Angeles County Superior Court
  • Defendant Insurance Agent
  • Michael T. Ohira
  • Represented the defendant, an insurance agent, in an action alleging fraud, rescission and unfair business practices. The litigation arose out of the sale of 8 life insurance policies, with death benefits totaling $50 million, to a number of former professional basketball players. The agent was accused of misrepresenting the amount required in premiums needed to allow sufficient cash value to pay off within 10 years the interest-only loans taken out by the insureds to finance the policies. The agent coined the program “Capital Maximization Strategy.” The case was litigated for over a year. After a successful motion to dismiss, the case was re-filed pursuant to 28 USC §1367(a), in Los Angeles Superior Court.

  • The plaintiffs’ demand dropped from $20 million, to $6 million, and to $1 million before being settled for $700,000 as to our client (a 96% reduction of the original demand).

  • Breach of Contract; Bad Faith, Insurance Coverage, Unfair Business Practices
  • Los Angeles County Superior Court
  • Defendant Insurance Provider
  • Michael T. Ohira
  • The insured, a general contractor, sued the insurer for breach of contract, breach of the implied covenant of good faith, unfair business practices and declaratory relief. An investigation revealed a potential for coverage not previously recognized by the third party administrator (“TPA”), and a failure by the TPA to fully reserve the insurer's rights.

  • The case was ultimately settled for $25,000 less than our $73,000 settlement authority.

  • Equitable Contribution
  • Los Angeles County Superior Court
  • Defendant Insurance Provider
  • Michael T. Ohira
  • Defended an insurance provider in an insurance recovery action to obtain equitable contribution from a co-insurer that declined to participate in the defense of a mutual insured.

  • Recovered in excess of $500,000 in reimbursement and defense contribution on a going-forward basis.

  • Directors and Officers; Professional Liability; Fidelity
  • Arbitration--JAMS
  • Defendant Insurance Provider
  • Andrew L. Margulis
  • Represented an insurer in a coverage matter under a blended policy providing directors/officers, professional liability and fidelity coverage issued to a leading insurance company. The insured sought coverage in connection with claims arising out of one of the largest insurance/bond frauds perpetrated by an officer of the insured's subsidiary. Holders of the bonds with values in excess of $120 million sought payment on the bonds. Coverage was denied and the parties submitted the matter to binding arbitration.

     

  • The matter was ultimately resolved after approximately five years of litigation on terms favorable to the insurer.

  • Professional Liability; Coverage; Bad Faith
  • USDC: Middle District of Pennsylvania
  • Defendant Insurance Provider
  • Andrew L. Margulis
  • Represented the defendant insurance provider in an insurance coverage and bad faith suit arising out of the denial of coverage under a professional liability life agent and securities broker/dealer policy. Insured was a securities registered representative involved in providing investment recommendations and the sale of investment products to clients. The insured opened his own business with a long time client and the client invested funds to get the business started. After a dispute between the partners, the insured's business partner filed an NASD arbitration against the insured alleging that the insured was negligent in advising the client to invest in the insured's business. The insurer denied coverage as the claim did not allege any covered professional services since the investment was in the insured's own business and not in any securities or products approved by the insured's broker/dealer. The insured brought suit to obtain coverage and to recover for the alleged bad faith denial by the insurer.


     

     

  • Obtained summary judgment dismissing the claims for coverage and bad faith. The court held that no coverage existed and that the denial of coverage was proper, and that the insurer acted reasonably in denying coverage so that no claim for bad faith was supported. The case is reported at 2008 U.S. Dist. LEXIS 45251 (N.D. Oh. 2008). The case was appealed by the insured and the dismissal was affirmed by the U.S. Court of Appeals for the Sixth Circuit, reported at 2009 U.S. App. LEXIS 16174 (6th Cir. 2009).

  • Professional Liability; Coverage; Bad Faith
  • USDC: Middle District of Florida
  • Defendant Insurance Provider
  • Andrew L. Margulis
  • Defended an insurance provider in a suit involving insurance coverage and bad faith arising out of the denial of coverage under a professional liability life agent and securities broker/dealer policy. The insured was involved in selling coverage under national group health insurance plans that were purported to be qualified ERISA plans, but were actually multiple employer welfare plans. The plans ultimately became insolvent and were unable to pay submitted claims. Three separate underlying actions were filed against the insured by clients whose medical claims were unpaid. The insurer denied coverage on the grounds that the claims were excluded by two exclusions, one that barred coverage for claims involving multiple employer welfare plans and another that barred coverage for claims arising out of the insolvency of any benefit plan or company in which the client's coverage was placed. The insured brought suit to obtain coverage and to recover for the alleged bad faith denial of the insurer.

     

  • Obtained summary judgment dismissing the claims for coverage and bad faith. The court held that no coverage existed and that the denial of coverage was proper, and that the insurer acted reasonably in denying coverage so that no claim for bad faith was supported. The case is reported at 2008 U.S. Dist. LEXIS 39171 (M.D. Fla. 2008).

  • Cost of Litigation
  • City & Insurance Company
  • Gerald G. Knapton
  • A prominent city and its insurer disputed fees incurred in a high profile matter. Rather than litigate the issues, they jointly retained our firm to prepare a report to which they agreed would be binding on them both.

  • Both parties agreed to our report's recommendations.

  • Coverage; Mediation; Initial Public Offering; Class Action
  • USDC: Southern District of New York
  • Defendant Insurance Provider
  • Geoffrey W. Heineman, Amber W. Locklear
  • In a series of class actions consolidated under the caption, In re: Initial Public Offering Securities Litigation, the plaintiff shareholders alleged that three hundred and ninety technology companies and their underwriters fraudulently inflated share prices during and after the companies' initial public offerings.  The companies conducting the offerings and their directors and officers were alleged to have profited from the scheme by taking advantage of the artificially inflated stock to raise capital, enter into stock-based transactions and sell their individual holdings at high prices.
     

     

  • The second mediation resulted in a global settlement of all claims with terms that our client found to be favorable. Court approval of the settlement was subsequently granted.

  • Insurance Coverage; Interpretation of Director and Officer Policy
  • USDC: District of Connecticut
  • Defendant Insurance Provider
  • Blaise U. Chow, Geoffrey W. Heineman
  • Analyzed insurance coverage on two primary issues: 1) whether the value of a subsidiary was substantially inflated; and 2) whether the insured's financial statements and level of operating profitability were materially misrepresented by the failure to properly record the costs associated with warrants to third parties as a cost of sales and the failure to fully reveal the contingent nature of such agreements (including the risks of significant re-pricing of warrants and the tracking of the warrants against such sales). The damages estimates far exceeded the insurance coverage available among the entire "tower" of insurance.   Through multiple rounds of mediation at which the insurers challenged whether the entity was a "subsidiary" or mere "affiliate", in which case there was no coverage, we mediated and struck a deal allowing our client to pay only a portion of its policy limits even though it appeared that this was a "policy limits" case. We achieved this result by urging various individual defendants to contribute personally towards the settlement, and demonstrating significant coverage defenses which resulted in the insured agreeing to pay amounts within the insurance tower. 
     

     

  • Negotiated various insurance coverage issues arising out of the securities class action, including whether a certain entity was insured, whether the individual defendants needed to contribute personally towards the settlement and whether the insured entity had non-insured exposure, and helped our client reduce the amount of exposure that it was responsible for during settlement. What originally was an excess of "policy limits" case turned into a case where the insurer saved a portion of its limits.

  • Insurance Services; Coverage and Monitoring Counsel to Facultative Reinsurer
  • Reinsurer
  • Blaise U. Chow, Geoffrey W. Heineman
  • Under the terms of regulatory settlements made with the SEC and a Canadian regulatory agency, the target company insured by our client's reinsured agreed to pay certain penalties and additional monies.  Specifically, a Canadian subsidiary of the target agreed to pay the agreed-upon amounts in Canada. The regulatory settlement contained no express prohibition against the target company seeking to recoup the settlement payment from insurance. 

     

  • Successfully undertook the necessary legal analysis under Canadian law which demonstrated to our client's reinsured and the target why the payments were outside the scope of our re-insured's policy to the target.

  • Defense of Insurance Agents Malpractice
  • Quenes County, New York Supreme Court
  • Defendant Insurance Provider
  • Blaise U. Chow, Geoffrey W. Heineman
  • On May 22, 2009, Queens Supreme Court Justice Satterfield granted the motion to dismiss filed on behalf of our client, an insurance agent for an insurer.  The plaintiff sued our client for failing to procure adequate umbrella coverage.  We moved to dismiss based on statute of limitations grounds.  The Court found that the time to have sued our client had lapsed before the action was first filed and therefore the plaintiff's claim was barred by the statute of limitations (three years) under New York’s CPLR.   Specifically, the Court found that under the controlling law in the Second Department, the negligence claims asserted accrued when the allegedly inadequate umbrella policy was procured and issued.  The Court went on to observe that, even if the date of the accident for which coverage was sought was deemed to be the date of the injury, the result would be the same because the action was not commenced within three years.
     

  • The trial court granted our client's motion to dismiss, and opposing counsel has filed a notice of appeal.

  • Coverage
  • New Castle County, Deleware Superior Court
  • Defendant Insurance Company
  • Geoffrey W. Heineman, Jung H. Park
  • Represented an insurance carrier in a $600 million lawsuit  involving a complex coverage action involving the plaintiff, a telecommunication provider, and eight insurance carrier defendants. The plaintiff had sought insurance coverage from the insurers on five different insurance towers for multiple shareholder lawsuits. The multiple lawsuits could be divided into three categories. The first category of lawsuits arose out of the plaintiff's efforts to transform the company from a low growth long distance carrier into a rapidly growing telecommunications giant capable of delivering “bundled services.” The allegations were based on assertions that the plaintiff and its individual officers and directors artificially inflated stock price by painting an unrealistically positive portrait of the company’s financial condition in an effort to ensure the success of the spin-off of its wireless operation. The second category of lawsuits arose out of the IPO of the telecommunication  providers tracking stock. These lawsuits alleged that the plaintiff and certain of its directors and officer misrepresented and/or omitted material facts in connection with the IPO in violation of the federal securities acts. The third category of lawsuits concerned allegations that the plaintiff and certain directors and officers improperly acquired majority ownership control over a now defunct internet service provider and thereafter, misappropriated the provider's technology to the benefit of the plaintiff and to the detriment of the provider, eventually driving the provider into bankruptcy.
     

  • Approximately a month before jury selection was to begin, our client and the one other remaining insurer entered into extensive settlement negotiations which resulted in a resolution our client viewed as a very favorable result.

  • Punitive Damages
  • San Francisco, First District Court of Appeal
  • Defendant Insurance Company
  • Susan H. Handelman
  • Represented the defendant, and insurance company, in an appeal concerning, among other issues, imposition of millions of dollars in punitive damages.

  • Successfully obtained a reversal of the punitive damages decision.

  • Negligence; Misrepresentation
  • Alameda County Superior Court
  • Plaintiff Private Client/ Homeowner
  • Gregory M. Gentile
  • Successfully represented homeowners in prosecuting their claims for construction defects against a general contractor and failure to disclose by the seller.  The clients alleged that the general contractor failed to properly build exterior decks on a custom home, and the seller failed to disclose to the clients' known defects about those decks, including water leaks into the home.  The seller and the general contractor aggressively sought to have the clients’ case dismissed, and brought several dispositive motions just prior to trial. 

  • Successfully defeated both motions and obtained a large settlement for our clients.

  • Duty to Indemnify, Coverage, Property Damage, Insurable Interest, Commercial, Landlord, Tenant
  • Sonoma County Superior Court
  • Defendant Insurance Company
  • Robert M. Forni
  • A rain storm damaged part of a strip mall and the improvements that had been made to it that several tenants had leased.  When these damages occurred, the owner of the building was an insured under a policy issued by our client, Insurer No. 1. Additionally, the tenants were insured under a policy that a second insurance company, Insurer No. 2, issued to them.  Insurer No. 2 paid the tenants for the damages to their improvements.  The tenants then vacated the building and sued the owner. Insurer No. 1 defended the owner in this lawsuit until Insurer No. 2 assumed its defense. In response, the owner sued Insurer No. 2 alleging claims for breach of contract and bad faith for withdrawing from its defense in the tenants’ lawsuit.  While this action was pending, the tenants, the owner, Insurer No. 1 and Insurer No. 2 reached a global settlement of “any and all claims and causes of action” arising out of the events giving rise to the tenants’ lawsuit in exchange for Insurer No. 1's contribution to the settlement. 

     

  • The trial court granted our client's motion for summary adjudication concerning the owner's causes of action for breach of contract and bad faith based on its claim for indemnity for the damaged tenant improvements. The court held the owner had no insurable interest in this property at the time of loss for the same reasons the insurer denied the claim (i.e., the owner did not use, own, or control this property, and did not suffer any direct pecuniary loss when it was damaged.)

  • Insurance Coverage; Landlord Tenant Claims
  • Sonoma County Superior Court
  • Defendant Insurance Company
  • Stephen J. Erigero
  • Retained as coverage counsel by an insurer to evaluate a landlord tenant litigation. The rental property was in the rural Russian River area. The allegations included mold, retaliatory eviction, failure to repair, damage to personal property, relocation costs and attorney fees. The policy only covered third party property damage, excluded mold and did not cover rent rebate claims.

  • Successfully evaluated the case and assisted in settling the case at an MSC, convincing the insured to contribute to the settlement and dismiss rent claims. We were able to convince the settlement judge and the plaintiff's counsel of coverage issues which would impact the collection of any potential judgment.

  • Duty to Defend; Judgment Creditor Suit; Personal Injury defense
  • Los Angeles Superior Court
  • Defendant Insurance Company
  • Stephen J. Erigero
  • Represented the insurer of a salon in a case in which a party was injured as a result of pedicure, and obtained a judgment and assignment of the defendant's right to obtain insurance benefits. The plaintiff sued as a judgment creditor and as an assignee of the insured.

  • The case settled for a confidential amount after discovery showed medical specials and wage loss did not support the total amount of the judgment, and after our analysis of coverage issues indicated the insurer ran a risk of not prevailing on the showing that the policy did not apply to the loss.

  • Insurance; Mold
  • USDC: Central District of California
  • Defendant Insurer
  • Stephen J. Erigero
  • Represented an insurer in an action for breach of contract and bad faith arising out of a denial of a first party claim for mold personal injury and property damage. The plaintiff policyholder contended that significant items of personal property sustained damage as a result of mold in an apartment complex. The insurer denied coverage contending it was the landlord's responsibility. The plaintiff tenant sued under a renter's policy. We successfully argued application of the mold exclusion, argued the statute of limitations for the items potentially covered and achieved a favorable confidential settlement.

  •  The case settled for a confidential amount within the contractual limits, applying the mold exclusion.

  • Property Damage
  • US Court of Appeals for the Fourth Circuit
  • Defendant Window Manufacturer
  • Stephen J. Erigero
  • Addressed class action allegations against a window manufacturer in an action for property damage in a multi-home subdivision arising out of an alleged product defect. The plaintiffs sought to expand the litigation into a state wide class action for all homes with the same manufactured window assembly.

  • The court denied class certification. The plaintiffs have yet to appeal. If an appeal is forthcoming we will assist in preparation of appellate briefs.

  • Construction Defects
  • Washoe County, Nevada
  • Defendant Insurer
  • Stephen J. Erigero
  • Acted as coverage counsel in a litigation involving construction defects at a 58 home subdivision in Reno, Nevada.

  • The litigation settled in stages. Forty-five homes settled in September 2006, and the remaining thirteen homes settled between September 2006 and September 2008.

  • Environmental Insurance Coverage; Judgment Debtor Collection Action; Insurance Code Section 11580.
  • Orange County Superior Court
  • Defendant Insurance Carrier
  • Stephen J. Erigero
  • Our client, an insurance company, insured a metal plating facility for several years. The insured was sued by its neighbors for contribution as a prp for groundwater contamination at a Superfund site. The insurer settled with the insured and obtained a policy release. The third party neighboring property owner proceeded to trial against the insured and obtained a large judgment. The insurer failed to satisfy the judgment, having disbursed the settlement proceeds from our client's settlement. The third party judgment creditor brought suit under Ins. Code section 11580 against the insurer.

  • Negotiated a stay and tolling agreement pending the insured's litigation with a non-settling co carrier. The third party judgment creditor may bring suit in the future if the judgment remains unsatisfied.

  • Insurance Agents Errors and Omissions
  • Los Angeles County Superior Court
  • Defendant Insurance Agent
  • Stephen J. Erigero
  • The plaintiffs, individual doctors and members of a medical group, brought suit against their insurance carrier and their insurance broker alleging that the broker failed to timely procure medical malpractice coverage causing the medical group to shut down causing the medical group to enter into a merger on unfavorable terms in order to continue in practice and meet the requirements of HMO contracts.

  • We settled the litigation for a confidential amount.

  • Property Damage; Fire Loss; Construction Defect
  • Los Angeles County Superior Court
  • Defendant Insurance Carrier
  • Stephen J. Erigero
  • Represented a first party insurer in a dispute involving the adjustment of a fire loss at a high end Beverly Hills restaurant. The insured alleged that the carrier recommended a contractor who improperly performed the construction, resulting a delayed reopening of the restaurant, and resulting loss of return patrons. The insured also contended the insurer failed to pay the advertising expense necessary to the reopen. The insurer contended that the payments were timely, the contractor was an independent contractor of the insured and that the construction delays were due to the City and the permit process.

  • The case settled for a confidential amount.

  • Bad Faith
  • Alameda County Superior Court
  • Defendant Insurance Company
  • Pamela E. Cogan (Retired)
  • Defended an insurance company in a bad faith action arising from a denial of disability insurance benefits to a woman employed as a web developer whose alleged disability was due to a back injury following a fall from a horse.

  • After five week jury trial, the  jury found in favor of the plaintiff, but awarded contract benefits only, which was substantially less than offered before trial. The jury awarded zero emotional distress damages and no punitive damages. Brandt fees (attorneys' fees) were limited on a motion in limine ruling to $14,000.

  • Bad Faith
  • USDC: Northern District of California
  • Defendant Insurance Company
  • Pamela E. Cogan (Retired)
  • Defended an insurance company in a claim in which the plaintiff was a company that ran tours nationally and internationally. The tour guides filed a class action wage and hours claim, including claims that the tour guides were improperly excluded from participating in the company’s 401K plan. The tour company tendered its defense under the employee benefit liability coverage of its business insurance policy. The defense fee incurred exceeded one million dollars. The insurer refused to defend or indemnify and the insured filed suit for breach of contract and bad faith. The defense fees claimed were over $1 million.

  • Proved that there was no duty to defend or indemnify the insured, and the court granted summary judgment for the insurer, which the Ninth Circuit affirmed on appeal.

  • Bad Faith
  • USDC: Northern District of California
  • Defendant Insurance Company
  • Pamela E. Cogan (Retired)
  • Defended an insurance company in a bad faith action which was filed by the insured under a personal auto policy for an alleged failure to pay the value of a car recovered after auto theft.  Fraud investigation took place during the claim due to its suspicious nature.

  • The case settled for minimal gain at the close of evidence,  and the plaintiff was referred by the trial judge to the US attorney for perjury charges based on its trial testimony.

  • Bad Faith
  • USDC: Central District of California
  • Defendant Insurance Company
  • Michael J. Brady
  • Defended an insurance company in a bad faith for failure to pay the fidelity claim brought by one of Italy's largest banks. The underlying claim arose out of the activities of the famous sports entrepreneur Bruce McNall, who allegedly swindled various Southern California banks out of millions. We arranged for the insurance company to do an extensive investigation of countless witnesses, including experts and built a strong case for the validity of the denial.

  • A federal judge ultimately granted summary judgment based upon the "thoroughness" of the investigation, even though mistakes may have been made by the company. The matter was completely dismissed, and the dismissal was affirmed by the Ninth Circuit.

  • Professional Liability; Coverage; Bad Faith
  • USDC: Northern District of Ohio; US Court of Appeals, Sixth Circuit
  • Defendant Insurance Provider
  • Andrew L. Margulis
  • Represented the defendant insurance provider in an insurance coverage and bad faith suit arising out of the denial of coverage under a professional life agent and securities broker/dealer policy. The insured was a securities registered representative involved in providing investment recommendations and the sale of investment products to clients. The insured was sued by a client whose investment in an offshore asset protection trust was lost when funds were invested in an investment management business which ultimately filed for bankruptcy. The insurer denied coverage on the grounds that the policy only provided coverage for specified professional services, which services did not include investment activities in connection with unregistered offshore investments or products that were not approved by the broker/dealer. Coverage was also denied pursuant to an exclusion that barred coverage for claims arising out of insolvency of any company in which the client's funds were placed. The plaintiff insured brought suit to obtain coverage and to recover for the alleged bad faith denial of the insurer.

     

  • Obtained summary judgment dismissing the claims for coverage and bad faith. The court held that no coverage existed and that the denial of coverage was proper, and that the insurer acted reasonably in denying coverage so that no claim for bad faith was supported. The case is reported at 2008 U.S. Dist. LEXIS 76818 (M.D. Pa. 2008). The case is currently on appeal to the U.S. Court of Appeals for the Third Circuit, and decision is pending.
     

  • Enron; Initial Public Offering
  • Circuit Court for Baltimore City, Maryland
  • Defendant Insurance Company
  • Andrew L. Margulis, Eric C. Weissman
  • In 2008, an international investment bank filed suit against numerous insurance companies in the Circuit Court of Baltimore City, Maryland , including our client, seeking a declaration that it was entitled to over $500 million of insurance coverage for defense costs and settlement proceeds incurred in connection with numerous underlying litigations in the following claims: (1) Exchange Fund claims; (2) Enron claims; (3) Tax claims; (4) Boston Chicken claims; and (5) Initial Public Offering claims. In connection with each “group” of claims, the bank asserted the following three causes of action against the insurer defendants: (1) breach of fiduciary duty to pay defense costs; (2) breach of duty to pay settlements; and (3) declaratory relief regarding defendants’ duty to pay losses. Our client subscribed to an excess layer multi-line blended Financial Institution Professional Indemnity insurance policy issued to an insured that was later acquired by the investment bank.

  • After several years of litigation, the parties agreed to mediate the dispute two weeks before trial was scheduled to begin. During that mediation, the parties agreed to a negotiated confidential settlement that resulted in our client saving over 90% of its available limits of liability.

  • Breach of Fiduciary Duty
  • Kings County, New York Supreme Court
  • Defendant Property Management Company
  • Geoffrey W. Heineman, Eric C. Weissman
  • In April 2007, a shareholder and tenant of a residential cooperative apartment in Brooklyn, New York, filed suit against the Board of Directors (the “Board”) of the cooperative management association. The plaintiff alleged that the defendants breached their fiduciary duties to her and to the cooperative by engaging in self-dealing and failing to treat all shareholders in a uniform manner. Specifically, the plaintiff alleged that the defendants’ breaches of fiduciary duty occurred in the following ways: (i) the president of the management association receives compensation for his services as a board member; (ii) the garage spaces in the building are not assigned pursuant to proper “rules”; and (iii) the defendants engaged in “improper” billing practices. The plaintiff sought monetary damages and injunctive relief.
     

     

  • After more than two years of protracted and contentious litigation, Justice David Schmidt granted the defendants’ motion for summary judgment finding that the plaintiff was unable to support her allegations with any evidence. In fact, during oral argument on the motion for summary judgment, Justice Schmidt allowed the plaintiff's counsel to supplement its written filings by presenting evidence to support each instance of an alleged breach of fiduciary duty. Counsel, however, was unable to convince the court that any breach had occurred. Accordingly, Justice Schmidt found that the plaintiff was unable to prove her allegations as a matter of law and granted judgment for our clients.

  • Duty to Defend; Bad Faith; Director & Officer
  • U.S. District Court, Central District, Los Angeles
  • Defendant Insurer
  • Stephen J. Erigero
  • Defended a former officer of corporate insured under a D&O policy. The insurer originally defended then withdrew coverage during the litigation. The officer sued the carrier for defense, indemnity, a settlement and bad faith.

  • Successfully settled for a confidential amount during trial.

  • Disability Insurance; Agent
  • Los Angeles County Superior Court
  • Defendant Insurance Agent
  • Michael T. Ohira
  • The plaintiff purchased two disability policies from two different insurance providers. She later stopped working and became a housewife. The disability insurance agent told her that the policies still provided her with coverage and urged her to continue paying premiums. The plaintiff later became ill and was unable to function as a homemaker. She made two insurance claims and both were denied by the insurers because the policies did not cover homemakers. The plaintiff sued the agent and the insurers alleging negligence, breach of oral contract and fraud. The agent acknowledged making the incorrect representations. The damage exposure was estimated to be as high as $800,000.

     

  • The claims against the agent were resolved for $20,000, considerably less than the projected damages for the case.

  • Coverage
  • Superior Court of Arizona, Maricopa County
  • Non-Party Insurance Syndicate
  • Andrew L. Margulis, Eric C. Weissman
  • Frank Selna, an employee of the insured, devised a Ponzi scheme to defraud over 25 investors out of millions of dollars by recommending that they invest in fictitious investment vehicles. These investors filed suit against a number of defendants, including the insured, alleging various causes of action including fraud, conversion and negligent misrepresentation. Based on our review of the allegations in the complaint, we recommended that the client issue a comprehensive reservation of rights letter to the insured noting that Insuring Agreement A - Fidelity, of the applicable policy, was potentially implicated. The reservation of rights letter also stated that certain exclusions were applicable that would limit the amount of Loss subject to coverage.

  • On behalf of the insurer and in a coordinated effort with the insured, we participated in a mediation in which a "global" settlement between the parties was effectuated and also successfully saved the client over 80% of the available limits of liability.

  • Breach of Contract; Fraud; Unfair Business Practices
  • San Francisco County Superior Court
  • Plaintiff
  • Jennifer E. Acheson, Michael J. Brady
  • Represented a plaintiff in an action for breach of contract, fraud, and unfair business practices against the owner of a consignment piano shop. The defendant sold the plaintiff’s piano without permission and did not turn over the proceeds from the sale.

  • A default judgment was entered against the defendant for money damages and the return of the piano to our client. Following the defendant’s declaration of bankruptcy, the matter resulted in the criminal prosecution of the defendants by The San Francisco District Attorney for felony counts of grand theft, embezzlement, and restitution.

  • ERISA; insurance; bad faith; breach of contract; employee welfare plan; disability; employee benefits; claim determination
  • Ninth Circuit Court of Appeal; U.S. District Court for the Central District of California
  • Defendants employee welfare benefit plan, and insurance company
  • Robert M. Forni
  • This ERISA action arose from the termination of long term disability benefits.  The employee welfare benefit plan was insured under a group disability policy issued by Continental Casualty Company.   Hartford Life and Accident Insurance Company (“Hartford”) later acquired the policy, and thereafter assumed responsibility for administering claims under the plan.  Following a bench trial, the trial court entered judgment for the plan, concluding that Hartford did not abuse its discretion under the plan in terminating the plaintiff’s benefits even though Hartford had a “structural conflict” in that it both funded and decided claims under the plan.  

  • The trial court entered judgment for the defendants, which is on appeal.

  • ERISA; insurance; bad faith; breach of contract; employee welfare plan; disability; employee benefits; claim determination
  • Ninth Circuit Court of Appeal; U.S. District Court for the Central District of California
  • Defendants employee welfare benefit plan, and insurance company
  • Robert M. Forni
  • This ERISA action arose from the termination of long term disability benefits.  The employee welfare benefit plan was insured under a group disability policy issued by Liberty Life Assurance Company of Boston.  Following a bench trial, the trial court entered judgment for the plan, concluding that Liberty did not abuse its discretion under the plan in terminating the plaintiff’s benefits even though Liberty had a “structural conflict” in that it both funded and decided claims under the plan.  

  • The Ninth Circuit Court of Appeal affirmed judgment for the defendant.

  • Insurance Coverage
  • USDC: Northern District of California
  • Insurance Company
  • Dean A. Pappas
  • Defended our client, an insurance company, in a case in which the court found that the incorporation of a defective product does not result in physical injury to the host product. A manufacturer of disk drive storage devices for personal computers and small business machines was insured under excess umbrella liability policies including commercial general liability coverage. A United Kingdom corporation purchased the insured’s disk drives for its product’s personal computers. As sales began of the UK corporation’s personal computers into which the insured’s drives had been incorporated, the UK corporation experienced a high level of customer complaints and returns arising out of hard disk drive failure. The UK corporation incurred substantial expenses as a result of the efforts to correct problems with the disk drives. Revenue was also lost due to the effect on sales and the price at which the computers could be marketed after lengthy delays. Litigation was initiated by the UK corporation  against the insured disk drive device manufacturer first, in the United States and, second, in the United Kingdom. A judgment of in excess of $100 million was ultimately entered against the insured manufacturer in the foreign action. Their tenders of defense of the lawsuits were denied by the insurer and the manufacturer sued the insurer seeking payment for its defense and indemnification of damages assessed against it.

     

  • The court granted the insurer's motion for summary judgment agreeing that the incorporation must result in actual damage to other parts of the host product for “property damage” liability coverage to apply.

  • Defendant, Insurance Company, Insurance Plan
  • Pamela E. Cogan (Retired), Stacy Monahan Tucker
  • Plaintiff sued for ERISA benefits valued at over $3 million.  Investigation proved that while seeking benefits, Plaintiff had accepted a severance package from her employer and signed a release without informing her insurance company.  Plaintiff claimed she was told the release would not affect her ability to receive benefits.

  • The court concluded that the severance agreement released all ERISA claims against the employer, its insurance plan and the insurer if Plaintiff signed the release knowingly and voluntarily.  The court conducted a bench trial on the issue of knowing and voluntary release and ruled that Plaintiff was not credible and she had knowingly and voluntarily her rights to her ERISA benefits. The court entered judgment in favor of defendants.

  • Breach of Contract; Bad Faith
  • United States District Court; Northern District of California
  • Defendant; Insurance Company
  • Pamela E. Cogan (Retired), Stacy Monahan Tucker
  • A limited partnership created for real estate development was sued for construction defects after the sale of a property they developed.  The partnership sought a defense from their insurance company both for the partnership and the individual partners sued.  Because the partnership had rented out the property as apartments prior to selling the property, the insurer maintained that the claim was excluded due to an exclusion in the policy for damage to “property you own, rent or occupy.”  The insured’s argued that they rented out individual units but not the entire building, and that the “you” applied only to the partnership, not the individual partners.

  • The parties filed cross motions for summary judgment. The court upheld the insurer’s interpretation of the contract and dismissed the complaint with prejudice.

  • Claim for Disability Benefits Governed by ERISA
  • United States District Court, Northern District of California
  • Defendant; Insurance Company
  • Pamela E. Cogan (Retired), Stacy Monahan Tucker
  • Insured sought reinstatement of disability benefits despite admissions that she could work in her family store.  Plaintiff argued that such work did not meet her status in life.

  • The parties filed cross motions for judgment.  The court determined that the “status in life” standard was a state law standard which was preempted by ERISA, and the insurance contract provided no obligation to maintain an insured’s status in life.  As plaintiff was able to work in an occupation, she was not disabled and not entitled to benefits under the policy.  Plaintiff’s complaint was dismissed with prejudice.

  • Defendant, Insurance Company. Practice Areas, Business and Commercial Litigation, Insurance Services, Arbitration
  • Pamela E. Cogan (Retired), Stacy Monahan Tucker
  •  Plaintiff insured filed an uninsured motorist claim.  After rejecting a series of settlement offers from the insurer, the case went to mandatory arbitration where plaintiff was awarded less than the insurer’s final settlement offer.  Plaintiff sued the insurer for bad faith for its alleged conduct in the investigation of her claim and in the arbitration.

  • Defendant demurred twice to plaintiff’s complaints. The court sustained each demurrer.  It granted plaintiff leave to amend after the first demurrer but sustained the second demurrer without leave to amend, finding that plaintiff was not able to allege a cognizable cause of action based on the allegations in the complaints filed in the litigation.

  • Bad Faith
  • Alameda County Superior Court
  • Defendant Insurance Company
  • Pamela E. Cogan (Retired)
  • Defended an insurance company in a bad faith case involving insurance agent malpractice which arose from a property and business interruption claim following a fire at a glass business. The plaintiff alleged that he had asked the agent to increase his business interruption coverage shortly before fire. The plaintiff claimed the coverage was not increased, resulting in inefficient funds to cover the damage.

  • Following five week trial, a defense verdict was obtained for our client and 75% of the fault for the case was attributed to the plaintiff. Net judgment against the agent was only $12,000.

  • ERISA
  • USDC: Central District of California; US Court of Appeals for the Ninth Circut
  • Defendant Insurance Company
  • Pamela E. Cogan (Retired)
  • Defended an insurance company against an ERISA action brought by the former in-house counsel in a large corporation against the company's ERISA plan. The plaintiff stopped working due to emotional stress and depression. The claim was paid and then closed at the end of the two year limitation period for disability due to mental illness. The plaintiff did not challenge the termination of benefits at that time. Years later, the plaintiff demanded that the insurer reopen her claim as a “late appeal” or as a “new claim” based on alleged newly discovered information that she suffered from chronic fatigue syndrome all along,  requiring benefits to be paid on the basis of physical disability until age 65.

  • Our client prevailed on two grounds: (1) the plaintiff’s right to challenge the original decision to apply the two year mental illness limitation was barred by failure to exhaust administrative remedies and (2) the insurer’s denial of her alleged “new claim” on the basis she was no longer an active employee was upheld. The Ninth Circuit affirmed the judgment for the defendant.

  • insurance; excess; trigger; exhaustion; gap
  • US Court of Appeals for the Fifth Circuit
  • Geoffrey W. Heineman, Amber W. Locklear, Eric C. Weissman
  • An oil and gas company sought coverage under its directors and officers liability policies for the defense costs and settlement of an underlying shareholder action brought by a former minority shareholder against the company and its directors and officers.  The D&O insurers denied coverage on numerous grounds, and the company filed suit in United States District Court for the Eastern District of Texas.  After the company settled with its primary insurer for less than the full $10 million limits of liability of the primary policy, the first excess insurer, AXIS Insurance Company, moved for summary judgment on the grounds that as a result of the below-limits settlement, the primary policy was not fully exhausted and the AXIS Policy could never be triggered.  In May 2014, the District Court granted summary judgment in favor of AXIS, and the Insureds appealed to the United States Court of Appeals for the Fifth Circuit.  

  • The Fifth Circuit affirmed the District Court’s decision and order granting summary judgment to AXIS.  Applying Texas law, the Fifth Circuit held that the AXIS Policy unambiguously precludes below-limits settlements by detailing precisely what must be paid and by whom before the AXIS Policy can be triggered.  Specifically, the Fifth Circuit held that the phrase “actual payment of all applicable Underlying Insurance” requires that only the primary insurer can make payment and that the insurer must pay “all” of its limits in order to exhaust the primary policy.   Because the primary insurer only paid a portion of its full underlying limits, the Fifth Circuit held that the AXIS Policy has not and can never be triggered.  

  • Disability insurance
  • US Court of Appeals for the Ninth Circuit
  • Susan H. Handelman, Stacy Monahan Tucker
  • Plaintiff sued insurer Liberty Life for wrongful termination of her disability insurance benefits under ERISA.  Liberty Life prevailed at trial at the district court level.  Plaintiff appealed, alleging that the district court incorrectly decided the case.

  • The Ninth Circuit upheld Liberty Life's victory at the district court level and confirmed that the matter had been decided correctly.

  • Insurance coverage; trademark infringement; slogan infringement
  • USDC: Eastern District of California
  • Stacy Monahan Tucker
  • 3D International was sued by plaintiff for trademark infringement for use of a similar product name and mark.  3D tendered the suit to Peerless Insurance Company under its business liability insurance policy.  That policy excluded coverage for claims of trademark infringement, so the claim was denied.  3D alleged that the "trademark infringement" was properly "slogan infringement," which was covered under the policy.  3D then counter-sued Peerless as a third party defendant in the existing action.  

  • The court granted our motion for judgment on the pleadings, holding that our analysis was correct and the issues in the Boler complaint related to trademark infringement and not slogan infringement as 3D argued.  Peerless was dismissed from the litigation with prejudice.

  • Disability insurance; judicial estoppel, fraud, discrimination, retaliation
  • USDC: Central District of California
  • insurance company
  • Pamela E. Cogan (Retired), Stacy Monahan Tucker
  • Plaintiff was a bank associate  at Wells Fargo who made a claim for disability benefits almost a year after being terminated from her position.  She refused to state the basis for her termination and simply stated that she began treatment for depression two weeks prior to her termination, and was disabled from that time forward.  Liberty Life investigated the claim and determined plaintiff was not disabled from her own job or any other job, and upheld its decision on appeal.  Plaintiff then sued under ERISA for denial of insurance benefits.

  • The court granted Liberty Life’s motion for summary judgment on the basis of judicial estoppel and dismissed the case with prejudice.  Where plaintiff had previously alleged in another court action against her employer that she was discriminated against for her national origin and terminated from her job pretextually after complaining, she was judicially estopped from later alleging that she was disabled from her job at the time of her termination.  The court dismissed the action with prejudice.

  • Insurance, severance agreement
  • Ninth Circuit Court of Appeals
  • Defendant - Insurance Company
  • Pamela E. Cogan (Retired), Stacy Monahan Tucker
  • Plaintiff sued Liberty Life and the Plan under ERISA for termination of her disability benefits. During litigation Liberty Life learned that Plaintiff had gone back to work, terminated her employment during her claim and entered into a severance agreement waiving her rights under ERISA .  Instead of informing Liberty Life of this fact, Plaintiff had claimed that she tried to return to work, was unable to manage it, and reopened her disability claim though she was actually no longer employed.  

  • The trial court held that the severance agreement was admissible though it was not in the administrative record and that it waived her ability to bring suit.  The Ninth Circuit affirmed this decision, holding that plaintiff had terminated her employment when she signed the severance agreement and therefore had no claim to pursue under ERISA.

  • Insurance, Government Tort Claims Act
  • Alameda County Superior Court
  • Defendant - Insurance Company
  • Pamela E. Cogan (Retired), Stacy Monahan Tucker
  • Plaintiff sued both her disability insurer and her employer, The Regents of the University of California, for the termination of her disability benefits.  She brought allegations against the The Regents of the University of California for fraud and intentional infliction of emotional distress for alleged misstatements in the Plan Booklet distributed by The Regents to all employees describing the insurance offered.

  • Plaintiff argued that an exception to the Gov't Tort Claims Act applied because The Regents should be held directly liable for violations of Cal. Ins. Code. Section 790.03, which imposes a duty on an entity "engaged in the business of insurance".  We successfully explained that The Regents is not "engaged in the business of insurance" simply by offering an insurance plan to its employees and forwarding premiums for that plan to the insurer, and the court dismissed The Regents from the action with prejudice.

  • ERISA; Insurance; Bad Faith; Breach of Contract; Employee Welfare Plan; Disability; Employee Benefits; Claim Determination
  • US Court of Appeals for the Ninth Circuit Court; USDC: Northern District of California
  • Defendants Employee Welfare Benefit Plan; Insurance Carrier
  • Pamela E. Cogan (Retired), Robert M. Forni
  • Defended an insurance carrier and an employee welfare benefits plan in an ERISA action which arose from the termination of long term disability benefits. The employee welfare benefit plan was insured under a group disability policy issued by an insurance carrier. Following a bench trial, the trial court remanded the case to the claim administrator for further investigation. On remand, the claim demand was again upheld and the plaintiff filed suit again.

  • The trial court entered judgment for our client concluding that the insurer did not abuse its discretion under the plan in terminating the plaintiff’s benefits even though they had a “structural conflict” in that it both funded and decided claims under the plan. The ninth circuit affirmed on appeal.

  • Rescission; Professional Liability; Bad Faith
  • USDC: Northern District of California
  • Defendant Insurance Provider
  • Andrew L. Margulis, Enrique Marinez
  • Defended an insurance provider in a case involving claims for coverage under a Professional Liability General Partnership issued to a real estate development company. Three separate claims were brought against the insured. One claim was brought by a former partner arising out of certain lost partnership opportunities. The second claim was brought by the founder of the company for breach of fiduciary duty and fraud arising out of a prior settlement between the parties. The third claim arose out of the insured's development of an apartment complex and involved the parties' interests in the property as well as claims that the project was negligently built. The insurer denied coverage for all three claims on various grounds, including as to the first two claims that they were brought by "insureds" and were excluded by the insured v. insured exclusion, and as to the third claim based on the property damage exclusion. During discovery, it was learned that the insured were aware of the potential claim by the former partner before the policy was issued, and the insurer brought a counterclaim for rescission of the policy based on material misrepresentations.

     

  • Obtained summary judgment granting the insurer's claim for rescission based on material misrepresentation and breach of warranty in the application based on the insured's failure to disclose the dispute with the former partner. The court also granted our motion for summary judgment on the coverage issues, holding that even if the policy were enforced, no coverage existed and the denial was proper. The bad faith claim was dismissed as well. The case is reported at 2005 U.S. Dist. LEXIS 20562 (N.D. Cal. 2005).
     

  • Fee Dispute, Litigation Management
  • USDC: Central District of California
  • Telecom Company
  • Gerald G. Knapton
  • An insured disputed its carrier's contention that only a very small part of very substantial fees were payable due to defamation. We prepared a comprehensive report and testified in support of the fee request that the underlying facts were inextricably intertwined in a manner to support most but not all of the fees. Furthermore, that the fees were within a range of reasonable fees given the complexity and relentless pace of the litigation with the multiple attempts to obtain a TRO during a public offering of the client.

  • The court accepted our recommendation.

  • Insurance, Cancellation & Premiums; Underwriting: Insurance Agents
  • Ventura County Superior Court
  • Defendant Insurer
  • Stephen J. Erigero
  • Defended an insurer in an action in which the insured brought suit for a premium refund and bad faith based on the carrier's prior suit for a premium refund. The insurer contended that no premium was due,  the policy had been properly cancelled and the insured had in fact failed to make premium payments leading to its cancellation.

  • The insured dismissed suit for a waiver of costs.

  • Insurance Coverage
  • USDC: Eastern District of California
  • Insurance Provider
  • Dean A. Pappas
  • Represented an insurer in a declaratory relief action seeking a determination of their obligations. The United States District Court concluded that a commercial general liability policy does not require an insurer to defend an insured in a “citizen suit” based on violations of the Clean Water Act. A protection alliance that advocates for California's fisheries sued a lumber manufacturer based on their alleged ongoing violations of section 505 of the Clean Water Act (33 U.S.C. section 1365) at a lumber mill in Northern California. The mill operator was insured in a policy providing commercial general liability coverage. The insurer provided a defense to the mill operator subject to a reservation of rights. 

  • The public advocates sought dismissal of the insurer’s action on the grounds that it was a “strategic lawsuit against public participation” (“SLAPP”) suit; i.e., a lawsuit brought primarily to chill a person’s valid exercise of the right to petition or exercise freedom of speech. (Calif. Code of Civ. Pro. §425.16.) We opposed this motion and the court agreed that the declaratory relief action was not a SLAPP suit. Judgment was ultimately entered in favor of the insurance company following a motion for summary judgment. The federal trial court agreed that a defense was not owed to the insured in the underlying lawsuit.