Sheppard Mullin Enjoys Successful Insurance Litigation Year
Sheppard Mullin’s insurance practise group excelled in all stages of litigation in 2022, continuing to be trusted by Liberty Mutual, GEICO, Allstate, Mercury, Travellers, Allianz, Safeco, Unum/Provident, Fireman’s Fund, and Lloyd’s. The group won many jury, bench, summary judgement, and motions to dismiss cases. These victories led to published insurance industry-friendly judgements. The insurance group also won appeals. These accomplishments won the Sheppard Mullin insurance practise group honours, press coverage, and industry thought leadership.
Palma v. Mercury Insurance Company, 2022 WL 3592722 (Cal. Ct. App. August 23, 2022)
The California Court of Appeal, Second Appellate District, upheld Mercury’s summary judgement decision that it had no extra-contractual liability for not settling claims that resulted in a $3 million excess judgement against its insured. The court of appeal ruled that insurer or agency negligence did not constitute ill faith.
Kerrigan v. Allstate Insurance Company, 2022 WL 14476372 (9th Cir. October 25, 2022)
The Ninth Circuit Court of Appeals upheld Allstate’s summary judgement victory in an uninsured motorist claim alleging unreasonable delay in paying the plaintiff the full insurance limits. Allstate did not unduly delay examining the claim, a real question of fact existed, and Allstate did not engage in bad faith, the appeal court ruled.
Schwartz, v. Kemper Independence Insurance Company, 2022 WL 17175063 (9th Cir. November 23, 2022)
The Ninth Circuit Court of Appeals upheld Kemper’s summary judgement in a coverage challenge over the policy’s “owned property” exclusion. The court ruled that the owned property exclusion barred liability coverage for home damage while the plaintiffs owned it. The court rejected the plaintiffs’ claim that a liability policy covers all subsequent liability if a continuous occurrence begins or runs through part of its lifespan.
Kelpe v. Unum Group; Provident Life & Accident Insurance Company; TBG West Insurance Services LLC., Superior Court of Santa Clara
Unum won a unanimous defence verdict against former Ernst & Young partner Nicolas Kelpe. Kelpe claimed for breach of contract, bad faith, and punitive damages for his disability claim denial. Kelpe rejected seven-figure settlement offers before trial and sought $4.5 million in compensatory damages and $66 million in punitive damages. The jury rejected his claims that the defendants failed to investigate and denied his claim owing to company-wide claim denial goals. Daily Journal’s 2022 Top Verdicts included this victory.
Clark v. GEICO Insurance Company, Kern County Superior Court, Case No. BCV-20-102262-JEB
GEICO won a defence judgement in Clark’s case charging bad faith by failing to settle his claim against GEICO’s insured. GEICO proved that Clark’s demand was not “reasonable” under the policy and that it did not unfairly reject it.
PUBLISHED SUMMARY JUDGMENT WINS
Tellone Pro. Ctr., LLC v. Allstate Ins. Co., 562 F. Supp. 3d 757 (C.D. Cal. 2022)
In a complex commercial property case, the Central District of California granted Allstate’s summary judgement request. Allstate’s expert testimony established multiple exclusions, the court ruled. Thus, Tellone’s claim was denied without violation of contract. Allstate was not liable for ill faith since it did not breach the contract.
Hovsepyan v. GEICO General Insurance Company, ___ F.Supp.3d ____, 2022 WL 2873059 (C.D. Cal. July 21, 2022)
The Central District of California approved GEICO’s move for summary judgement in a bad faith allegation alleging undue delay and “lowballing” in addressing an uninsured motorist claim. The court found that (1) the genuine dispute doctrine barred the plaintiff’s bad faith claim because the parties’ dispute was over general damages, and (2) the two-year statute of limitations, which began to run after the plaintiff’s attorney’s first accusation of bad faith, barred the claim.
UNPUBLISHED SUMMARY JUDGMENT WINS
Stivi v. GEICO Indem. Ins., 2022 WL 320058 (C.D. Cal. January 4, 2022)
GEICO won summary judgement for improperly handling the plaintiff’s uninsured motorist case in the Central District of California. The plaintiff delayed the claim by repeatedly neglecting to furnish GEICO with the information it required to examine it, the court ruled. The court found that the plaintiff’s injuries and claim value were in dispute.
Vargas v. Infinity Insurance Company, Los Angeles County Superior Court, Case No. 20STCV41542 (January 6, 2022)
Infinity won summary judgement for relying on the policy’s “crime exclusion” in the Los Angeles County Superior Court. The court found that Infinity did not waive the exclusion by not mentioning it in the denial letter when the insured was driving under the influence of alcohol.
Marinelarena v. Allstate Northbrook Indemnity Company, 2022 WL 423398 (C.D. Cal. January 12, 2022)
The US District Court for the Central District of California granted Allstate’s petition for summary judgement in a bad faith claim alleging unreasonable handling of her uninsured motorist claim. The statute of limitations and the plaintiff’s failure to comply with an insurance code section that requires an insured to provide their insurer, within 30 days, a sworn statement attesting that they have a cause of action against an unascertained driver were the reasons the court granted the motion.
Tucker v. Allstate Northbrook Indemnity Company, 2022 WL 1585746 (C.D. Cal. March 4, 2022)
Allstate received summary judgement for handling the plaintiff’s underinsured motorist claim improperly in the Central District of California. Allstate established that the plaintiff misrepresented his claim. The fraud and concealment clause and California law allowed Allstate to cancel the insurance contract.
Laing v. Wawanesa General Insurance Company, Los Angeles County Superior Court, Case No. 19STCV26385 (May 31, 2022)
After paying its insured all the property damage benefits owed under his policy, Wawanesa committed bad faith by refusing to waive its subrogation claim against the at-fault driver’s insurer based on the plaintiff’s allegation that he had not been made whole due to alleged diminished value and loss of use damages not covered under his policy. The Los Angeles County Superior Court granted summary judgement for Wawanesa. The court just granted Wawanesa’s motion.
Doan v. Allstate Northbrook Indemnity Company, 2022 WL 4596572 (C.D. Cal. June 27, 2022)
The Southern District of California approved Allstate’s petition for summary judgement in a bad faith lawsuit alleging undue delay in reviewing an uninsured motorist claim. The court found that the plaintiff’s injuries and general damages were in question. The plaintiff also caused delay by neglecting to provide signed medical authorizations needed by Allstate, the court concluded.
Homeland Ins. Co. of NY v. Health Care Service Corporation, 2022 WL 2828752 (N.D. Illinois July 19, 2022)
In a multi-billion dollar multi-district litigation challenging Blue Cross Blue Shield, the Northern District of Illinois issued summary judgement in one track. The policy’s “related claim” exclusion allowed the court to link the current complaint to an earlier RICO lawsuit against the Blues. Homeland had no obligation to cover the policy. Homeland proved the “related claim” exception again, following a Pennsylvania lawsuit a year earlier.
Morales v. Allstate Northbrook Indemnity Company, 2022 WL 3684583 (C.D. Cal. August 25, 2022)
Allstate received summary judgement for handling the plaintiff’s underinsured motorist claim improperly in the Central District of California. Allstate proved the plaintiff’s claim’s value was in question, the court ruled. The court also ruled that any claim processing delay was negligence, not bad faith in California.
Infanzon v. Allstate Insurance Company, 2022 WL 17885681 (C.D. Cal. September 7, 2022)
The US District Court for the Central District of California granted Allstate’s petition for summary judgement in a bad faith claim alleging unreasonable handling of an uninsured motorist claim. The court dismissed all of the plaintiff’s claims and considered Allstate’s claim handling acceptable.
Mercado v. Allstate Northbrook Indemnity Company, Los Angeles County Superior Court, Case No. 20CHCV00305 (September 21, 2022)
Allstate won summary judgement in a case alleging that Allstate and its representatives negligently underfunded her townhome in Los Angeles County Superior Court. The court rejected the plaintiff’s claims that Allstate misrepresented the scope of coverage being offered, that she requested any specific type of coverage, and that Allstate agents held themselves out as experts to trigger a heightened duty to advise her on the sufficiency of her selected insurance coverage.
Gharibian v. Wawanesa General Insurance Company, Los Angeles County Superior Court, Case No. 20STCV43967 (October 14, 2022)
The Los Angeles County Superior Court granted summary judgment for Wawanesa in a case alleging that Wawanesa unreasonably handled their property damage claim caused by wildfires. The court held a homeowner does not suffer a covered loss for wildfire debris if the structure itself is not physically damaged and normal cleaning can remove the wildfire debris.
DEMURRERS/MOTIONS TO DISMISS/OTHER
Mendez v. Interinsurance Exchange of the Automobile Club, Los Angeles County Superior Court, Case No. 20STCV24752 (January 1, 2022)
After plaintiff sued the Auto Club and its insured, the Los Angeles County Superior Court granted Auto Club’s anti-SLAPP motion. The court found Auto Club’s pre-litigation settlement negotiations speech protected.
Alashahab v. Alliance United Insurance Company, Orange County Superior Court, Case No. 30-2021-00186148-CU-BC-CXC (February 24, 2022)
The Orange County Superior Court upheld Alliance’s demurrer to plaintiff’s state-wide class action complaint challenging the policy’s automatic coverage obligation for newly acquired automobiles. The court ruled that the notice provision was valid and enforceable and that collision coverage is optional, allowing insurance companies to impose limitations and conditions that would be invalid under other policy coverages.
Jackson v. GEICO, San Diego County Superior Court, Case No. 37-2022-00008373-CU-IC-CTL (November 18, 2022)
The San Diego County Superior Court granted GEICO’s demurrer to plaintiff’s breach of contract and fraud complaint against GEICO and several of its employees, including its CEO. The plaintiff never submitted an amended complaint after the demurrer was upheld with leave to amend. GEICO’s ex parte application under Code of Civil Procedure section 581(f)(2) and California Rule of Court 3.1320(h) was granted, dismissing the plaintiff’s lawsuit with prejudice.
Leutmixay v. GEICO Advantage Ins. Co., Siskiyou County Superior Court, Case No. CVCV 22-29 (November 17, 2022)
The Siskiyou County Superior Court granted GEICO’s request for judgement on the pleadings in an insurance coverage dispute resulting from the plaintiff’s settlement with GEICO. After the plaintiff’s Medi-Cal lien was addressed, GEICO issued the settlement cheque, the Court ruled.
Miletak v. Kemper Corporation, San Diego County Superior Court, Case No. 22CV400815 (October 7, 2022)
Kemper was sued for falsely reporting automobile damage to Carfax and neglecting to pay damages for diminished value. Kemper filed a vexatious litigant motion after learning that the plaintiff had filed many lawsuits. The plaintiff dismissed his action with prejudice to avoid being deemed a vexatious litigant and barred from initiating future frivolous lawsuits.
Uyanik v. Wawanesa, 22 WL 16625828 (N.D. Cal. September 26, 2022)
The Northern District of California allowed Wawanesa’s petition to dismiss plaintiff’s first amended lawsuit alleging that Wawanesa failed to pay for automotive decrease of value damages. The court found that the plaintiffs failed to adequately plead any of their causes of action, including fraud, violation of the Consumer Legal Remedies Act, violation of California’s Unfair Competition Law, and violation of the federal RICO statute, because all of them were based on the false claims that the policies covered diminution of value and/or weren’t insurance policies.
For More Information, Please Contact:
Peter H. Klee, Partner
John T. Brooks, Partner
Frank Falzetta, Partner
Sheppard Mullin’s insurance team solicitors spoke at industry conferences and panels in 2022.
“Recent Developments In Bad Faith Failure To Settle Law,” Western Regional General Counsel Conference, July 2022, Las Vegas
“Exotic Car Investigations—Detecting False Claims/Uncovered Losses,” IASIU Southern Chapter, Ontario, California, October 2022
Nationally Recognized Leaders
For detailed information, as well as the picture copyright, please see the law firm’s original article here: Sheppard Mullin Celebrates Stellar Year in Insurance Litigation.