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Recent California Court of Appeal decision suggests insured should consider answering and cross-complaining before moving to stay insurer’s declaratory relief action

1/14/2010 Articles

When a liability insurer wishes to avoid all coverage obligations with respect to a claim against its insured, it may seek an adjudication that it has no duty to defend or indemnify the policyholder.  If the insurer files for such declaratory relief while the underlying litigation is still pending, California insureds will frequently move to stay the coverage action, pursuant to Montrose Chemical Corp. v. Superior Court, 6 Cal. 4th 287 (1993) ("Montrose I").  The purpose of such a Montrose stay is to avoid the risk of prejudice to the insured in the underlying action, if it is simultaneously forced to litigate an insurance coverage dispute.

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California Supreme Court Ruling Clarifies That the Notice-Prejudice Rule Is a Fundamental Public Policy That May Override Choice of Law Provisions

In  Pitzer College v. Indian Harbor Insurance Company , the California Supreme Court resolved two previously open questions in insurance law: (1) it concluded that the notice-prejudice rule [1]  is a fundamental public policy...

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Damages for Permit Revocation Constitute Covered “Loss of Use”

Insurers often claim “economic damages” are not covered under a standard commercial general liability (CGL) policy.  The Fourth District Court of Appeal’s decision in Thee Sombrero, Inc. v. Scottsdale Ins. Co., 28 Cal. App...

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3 Lessons For Calif. Insureds From Late-Notice Rule Decision

In Pitzer College v. Indian Harbor Insurance Company ,[1] the California Supreme Court resolved two previously open questions in insurance law: (1) it concluded that the notice-prejudice rule[2] is a fundamental public policy of...

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Event

WSJ Pro Cybersecurity Symposium

Tyler Gerking will be speaking at the WSJ Pro Cybersecurity Symposium session, "The Role of Cyber-Insurance." Details: How much should you buy, what does it cover and how does it fit with an overall...

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Farella Braun + Martel Attorneys Recognized in The Best Lawyers in America© 2020

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EPLI Policies in Employment Litigation

Shanti Eagle is the moderator for this BASF Labor and Employment Section program, "EPLI Policies in Employment Litigation." This program will provide an overview of using Employment Practices Liability Insurance (EPLI) policies in employment...

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Insurance for the Cannabis Industry Program Takeaways

I recently moderated a Bar Association of San Francisco Insurance Section program co-sponsored with the Cannabis Law Section. The program highlighted recent changes to local insurance requirements and market availability of coverage for cannabis...

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Farella Adds Technology Industry Group Depth

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“That Particular Part” – Yet More

Massachusetts Appeals Court Gets It Right – Mostly Hot on the heels of the Federal Tenth Circuit Court of Appeals’ decision in MTI, Inc. v. Employers Insurance Company of Wausau , __ F.3d __...

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Reimbursement of Employment-Related Expenses Is Not a “Wage and Hour” Claim Within the Meaning of EPLI Exclusion

A recent California appellate court decision found that a wage and hour exclusion in an Employment Practices Liability Insurance (“EPLI”) policy did not bar coverage for claims under California Labor Code sections 2800 and...

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