Breach of Contract
Federal Court Finds Insurer was Not in Breach of Contract for Relying on Trial Court Judgment Finding Insurer Had No Duty to Defend Once Judgment Was Overturned on Appeal PDF Print
Breach of Contract
Written by CBM   
Friday, 15 February 2013 14:00

A California federal judge recently found that National Union Fire Insurance of Pennsylvania (NIU) was not in breach of contract when it both decided to stop defending its insured, Seagate Technology Inc. based on a declaratory judgment holding it had no duty to defend and the judgment was overturned on appeal.  The court held that NIU was entitled to rely on a final judgment in its favor while the appeal was pending, and the subsequent reinstatement of NIU's duty to defend by the appellate court did not require an additional finding of wrongful breach of contract.

Attachments:
 National Union Fire Opinion[ ]393 Kb
 
JP Morgan defeats Class Certification on American Security's Lender-Placed Flood Insurance PDF Print
Breach of Contract
Written by CBM   
Thursday, 07 February 2013 16:17

JP Morgan Chase Bank, N.A. defeated policyholders' motion for class certification on Tuesday in a case challenging the bank's placement of flood insurance with American Security Insurance Co. on homeowners who had failed to secure their own insurance. District Court Judge Virginia M. Hernandez Covington of the Middle District of Florida rejected the certification bid, citing material differences in individual mortgages' insurance requirements and an absence of common contract.

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California Court of Appeals Affirms an Insured's Reasonable Expectations Can Only Be Used to Interpret an Ambiguous Policy Term PDF Print
Breach of Contract
Written by CBM   
Monday, 18 July 2011 00:00

In California Traditions, Inc. v. Claremont Liability Insurance Company (Case No. D057154, filed 6/21/11, certified for publication 7/11/11) the California Court of Appeal held that an exclusion for work done on a condominium in a commercial general liability policy was unambiguous and excluded coverage for work done on buildings that were developed, sold, and marketed as condominiums even though they had the outward appearance of noncondominium detached single family homes.

Attachments:
 California Traditions Case[ ]75 Kb
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California Supreme Court Holds Intentional Act Exclusion in Homeowners Policy Void PDF Print
Breach of Contract
Written by CBM   
Friday, 25 February 2011 16:20

In Century-National Insurance Co. v. Garcia, S179252 (Cal. Feb. 17, 2011), the California Supreme Court held that a provision in a homeowner's policy that excluded intentional acts by any insured was void in light of sections of the California Insurance Code that require all policies to provide coverage that is "substantially equivalent to or more favorable to the insured" than a form policy. 

Attachments:
 Century Insurance[ ]113 Kb
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California Court of Appeal affirms dismissal of "preemptive" declaratory relief action but carves out exception for coverage actions PDF Print
Breach of Contract
Written by CBM   
Friday, 31 December 2010 17:39

In Osseous Technologies of America v. DiscoveryOrtho Partners, LLC (Case No. G042747, December 28, 2010), the California Court of Appeal,affirmed a demurrer to an "offensive" declaratory relief action by a company that expected to be sued for breach of contract, and shortly thereafter was sued, in federal court.  In the opinion, the court surveyed the case law on the scope of a trial court's discretion to entertain or dismiss declaratory relief actions that consist mainly or totally of a completed breach of contract.    

At page *13, the court expressly added forum shopping to the list of considerations for cases that present the trial court with a discretionary choice whether to entertain declaratory relief: "Finally, though California courts have not focused on this factor, one aspect of the “necessary or proper” section 1061 analysis by trial courts should be whether a potential defendant is seeking to preempt a breach of contract plaintiff by filing suit in a preferred venue.  Several federal district courts have exercised discretion under the federal Declaratory Judgment Act (28 U.S.C. § 2201(a)), to dismiss preemptive declaratory relief actions filed by plaintiffs faced with imminent breach of contract actions... California trial courts may consider in their section 1061 analysis whether the timing of the declaratory relief action suggests litigation strategy motivated the filing rather than a concern that judicial guidance was needed and would not be forthcoming absent the filing of a declaratory relief action."

However, the court seemed to regard coverage actions as a different situation.  On page *10, the court noted with approval that "[i]nsurers often bring declaratory actions to determine coverage obligations despite the right of insured parties to bring actions for breach of contract."   The court then cautioned against the use of precedents approving such actions in "a commercial breach of contract context."

Attachments:
 Osseous Technologies[ ]64 Kb
 


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