Category archive: California

Ninth Circuit Finds California’s Genuine Dispute Doctrine Does Not Bar Bad Faith Judgment Against Excess

Summary: LMA North America, Inc. (LMA) sued National Union for breach of contract and bad faith after defendant refused to either contribute $3.75 million towards the settlement of counter-claims asserted by LMA’S competitor, Ambu, or take over the defense of the trade disparagement and false advertising claims. After settling the underlying claims above the $1M…

As Luck Would Have It: Evidence Insured Would Reject a Settlement Offer Excused Insurer from Notifying Insured of Such Offer

Summary: If a tree falls in the woods, and no one is around to hear it, does it still make a sound? If a claimant offers a settlement, and the insured would have rejected it had she known of the offer, is it bad faith? The Ninth Circuit said no. Rejecting a settlement without contacting…

No Excess Judgment, No Problem: Excess Insurer Has Claim Against Primary Insurer

Summary: An employer’s excess insurer brought an action for bad faith against the primary insurer, which had defended the employer against a worker’s personal injury action that resulted in a settlement in excess of the primary insurer’s limits. The excess insurer alleged the primary insurer should have settled the case within the primary carrier’s policy’s…

Release Inflexibility Leads to Multi-Million Dollar Stipulated Judgment and Bad Faith Liability

Summary: Mercury Casualty provided auto liability insurance coverage with limits of $15,000/$30,000 to insured driver McDaniel who, while intoxicated, ran into and seriously injured two pedestrians. Mercury investigated, offered its policy limits, and allowed the claimants’ attorney to investigate McDaniel’s assets, but balked at language plaintiffs’ attorney added to the release to account for “court-ordered…

UPDATE: Proper Brandt Fees Usage to Calculate Punitive Damages in California Bad Faith Cases

Our post regarding the Supreme Court of California’s June 2016 ruling appeared in September. The Supreme Court reversed and remanded to the Court of Appeal which ruled on November 3, 2016. Nickerson v. Stonebridge Life Insurance Co. The Court of Appeal, consistent with the Supreme Court’s ruling, included the stipulated $12,500 Brandt fees in the…

Insurer Required to Defend California Unfair Business Practices Suit

Summary: Landy Insurance Agency is a broker selling insurance to real estate professionals. Landy purchased a professional liability insurance policy from Utica Mutual Insurance Company. Utica Mut. Ins. Co. v. Herbert H. Landy Ins. Agency, Inc. Landy’s  targeted market included California. In California Landy sold policies from surplus insurers. One of Landy’s competitors in the…

Proper Brandt Fees Usage to Calculate Punitive Damages in California Bad Faith Cases

Summary: Stonebridge Life provided hospital indemnity coverage to Nickerson who was hospitalized for 109 days after a severe leg fracture. The trial court directed a verdict for Nickerson on the breach of contract claim, entered judgment on the jury verdict for breach of the implied covenant of good faith and fair dealing, and imposed a…

Ninth Circuit Affirms Zero-Dollar Verdict in Favor of Insured

Summary: After its insured, Lawrence Saks, wrongfully obtained disability benefits under his insurance policy, National Life Insurance Company sued Saks for fraud. Saks counterclaimed with a claim for breach of good faith and fair dealing. At trial, the jury returned a verdict in favor of National Life on its fraud claim and a zero-dollar verdict…

Bad Faith Claims in Indiana May be Dismissed when the Facts Alleged Clearly Exclude Coverage

Summary: The Seventh Circuit Court of Appeals, applying Indiana law, considered an insurer’s duty to defend under a commercial general liability policy. The insured sued its insurer in the Southern District of Indiana for breach of contract and bad faith and sought a declaratory judgment that the insurer had a duty to defend. Since the…

Triable Fact Issues on Washington Bad Faith Claims

Summary: Great American insured Bayley, a general contractor on a $12.3 million renovation project in Orange County, California. After its air conditioning subcontractor was found to have violated California’s prevailing wage law, the Community College District served Bayley with a “Notice of Withholding Contract Payments” as well as the procedural right to dispute the withholding….

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