Representative Cases

Landmark case regarding whether coverage was excluded for entity which conveyed the property after insurance policies were issued and after construction was completed, and insurance industry’s own interpretation that the broad form endorsement contained in the policies prevented application of the work performed exclusion and similar industry interpretations of the products exclusion prevented its application as a matter of law.

A third-grade teacher sexually abused one of his pupils. In an underlying proceeding, a six-figure judgment was entered against him. At the time of the abuse, the teacher was covered by an "Educators Employment Liability Policy." The policy covers events which occur in the course of activities performed by the teacher pursuant to the express or implied terms of his employment. Case addressing whether sexual abuse is unrelated to a teacher’s employment and hence not within the coverage provided in the policy.

Plaintiff is the owner of a landscape maintenance business. One morning, two of his employees were working at one of Plaintiff's job site. Earlier in the day, one of the employees had driven a truck owned by Plaintiff to another one of his job sites. At lunchtime, the employees picked up the keys to the truck and started driving to lunch, and subsequently collided with a motorcycle. The motorcycle driver filed a personal injury action against the employees. In deposition for the personal injury action, Plaintiff stated that before the accident, he told the employees never to drive any of his vehicles. Coverage issue pertaining to whether permission is implied within the meaning of Ins. Code section 11580.1(b)(4) only when the third-party use was or should have been within the owner’s contemplation.

Between 1983 and 1988, Plaintiff and appellant obtained an annual series of "Comprehensive General Liability" (CGL) insurance policies from defendant and respondent insurance company. In addition, Plaintiff obtained a "Commercial Umbrella Liability Policy." Plaintiff was named as a defendant in a complaint and the case was settled for $1 million. Following execution of the settlement agreement, Plaintiff sent a demand to the insurer demanding reimbursement of his attorney fees and the settlement amount he had paid. Insurer rejected Plaintiff's demand based on its determination that Plaintiff had not made a claim for property damage or bodily injury within the meaning of the policies and that Plaintiff had not shown that any occurrence as defined by the policies gave rise to the underlying claim. Plaintiff filed a complaint against insurer, alleging that in failing to provide a defense to the action, insurer was guilty of breach of contract and breach of the covenant of good faith and fair dealing. Summary judgment was granted to insurance carrier where general liability did not cover “events”, but rather, “accidents”.

Plaintiffs and appellants purchased a house and subsequently obtained fire insurance on the property from defendant and respondent insurance company. The following year, the house was damaged by fire. Although the house could have been repaired, Plaintiffs decided not to make any repairs because they believed it made more economic sense to develop the parcel in conjunction with development of an adjacent parcel. Instead of repairing the damage on the house, within three months of the fire, Plaintiffs purchased another nearby single-family home. Following the fire, the amount of the fire loss was submitted to a panel of appraisers. The insurer paid Plaintiffs based on the appraiser's cash value of the property, which was less than the replacement cost. Plaintiffs filed a declaratory relief action and alleged that insurer was obligated to pay the replacement value of the loss, rather than the actual cash value. Insurer argued that because the house could have been repaired, Plaintiff was not entitled to the replacement cost of the loss.

Plaintiffs contend that at the time they purchased "vanishing premium" policies, insurer was paying a discretionary dividend rate which it had no intention of maintaining. The plaintiffs believe they have evidence which shows insurer in fact developed plans to "ratchet down" its dividend over time. Plaintiffs alleged violations of California's Unfair Competition Law (Bus. Prof. Code, § 17200 et seq. (UCL) and Consumer Legal Remedies Act (Civ. Code, § 1750 et seq.) (CLRA). Defendant insurer claimed plaintiffs' claims were not suitable for class treatment because each plaintiff will be required to make an individual showing of the representation he or she received.