When it comes to liability insurance, the distinction between intentional acts and negligence can have major implications for coverage—especially in cases involving violent conduct. A recent decision from the California Court of Appeal in State Farm Fire and Casualty Company v. Curtis Diblin, et al., 2025 WL 2837668, – – Cal. Rptr. 3d – –
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Published Decision Rejects Brandt Fee Claim In “Bad Faith” Suit Seeking Payment of Judgment in Excess of Policy Limits
By Peter Klee
In Brandt v. Superior Court, 37 Cal.3d 813, 817 (1985), the California Supreme Court recognized an insured’s right to seek recovery of attorneys’ fees incurred to compel the payment of policy benefits unreasonably withheld by the insurer. As the Court explained, the recovery of Brandt fees is predicated on proof of two elements: (1) the insurer’s tortious…
Umbrella Insurer’s “Business Decision” to Pick Up an Insured’s Defense Leads to a Multi-Million Dollar Fraudulent Concealment Claim
By Jared LeBeau
A primary insurer (Truck Insurance Exchange) and an umbrella insurer (Federal Insurance Company) have been involved in a series of lawsuits dating back to 2007. The California Court of Appeal recently ruled that their litigation is not done yet. Truck Ins. Exch. v. Fed. Ins. Co., No. B332397, 2025 WL 1367172, ___ Cal. Rptr. 3d ___…
The Ninth Circuit Confirms That Liability Insurers Are Entitled to Corroborating Medical Documentation Before Settling a Third-Party Bodily Injury Claim
By Jared LeBeau & Michael Bean
Liability insurers often receive policy limit demands from third-party claimants that allege serious injuries without corroborating medical records or bills. Since the enactment of California Civil Procedure Code section 999 et seq. in 2023, these demands are typically made by “unrepresented” claimants who are actually receiving guidance from attorneys behind the scenes.…
Ninth Circuit Clarifies Amount in Controversy Requirement in Declaratory Judgment Actions Between Insurers and Their Insureds
Plaintiff’s counsel often employ a range of strategic tactics to defeat diversity jurisdiction because they view federal court as an unfavorable forum. One such tactic is to challenge the amount in controversy—a key requirement for diversity jurisdiction. However, the Ninth Circuit’s recent decision in Farmers Direct Property & Casualty Ins. Co. v. Perez, — F.4th…
Appraisal of Amount of Loss is a Predicate to Article III, Injury-In-Fact Standing for a Suit Alleging Wrongful Withholding of Policy Benefits
50 Exchange Terrace LLC suffered losses from frozen burst pipes that caused water damage to its property and tendered a claim to its insurer, Mount Vernon Specialty Insurance Company. The parties disputed the cost of repairs (i.e., the amount of the loss) and Mount Vernon demanded appraisal to resolve the dispute. Rather than proceeding with appraisal, 50…
The California Court of Appeal Interprets the Meaning of “Care, Custody, or Control” in the Context of an Abuse or Molestation Exclusion
An Insurer is not Vicariously Liable for Actions by an Agent That Are Outside the Scope of the Agency Relationship and Were Performed in the Agent’s Dual Role as a Broker
In December 2020, Plaintiff Erin Hughes applied for homeowners coverage for her Malibu home with her Farmers’ insurance agent. Hughes obtained a fire policy through the California FAIR Plan and a homeowners policy through Farmers that insured the property against perils not covered by the FAIR Plan policy.…
John’s Grill, Inc. v. Hartford Financial Services, Group, Inc.: Illusory Coverage, Unambiguous Policy Language, and the Enforceability of Limited Coverage Endorsements
In its latest Covid-era coverage case, John’s Grill, Inc. v. Hartford Financial Services, Group, Inc., the California Supreme Court held that an insured cannot use the “illusory coverage doctrine to transform the policy’s limited virus-related coverage into unlimited virus-related coverage.” In so holding, the Court reiterated the long-standing rule that “explicit and unambiguous policy limitations” will…
The California Supreme Court Confirms Vertical Exhaustion Applies for First-Layer Excess Insurers
In Truck Ins. Exch. v. Kaiser Cement, 321 Cal. Rptr. 3d 761, 549 P.3d 781 (2024), the California Supreme Court answered the question left open by Montrose Chem. Corp. v. Superior Ct., 9 Cal. 5th 215 (2020) (Montrose III): for a continuous injury or damage spanning multiple policy periods, must an insured exhaust all implicated…