Insurance Coverage, Law And Litigation

Lynch, Gilardi & Grummer advises and represents insurance carriers on the full range of policy interpretation and other claims handling issues that confront the ever-changing insurance industry. The Insurance Practice Group has extensive experience in every facet of insurance coverage law and litigation, including primary, excess and reinsurance protection disputes in domestic and international markets, primarily for insurers but occasionally also for policyholders. Insurance issues successfully handled by the firm include all aspects of coverage controversies under liability policies in commercial, professional, corporate office and director, and personal arenas, as well as first-party property, crime and business interruption coverage. The firm's expertise extends to insurance fraud and to advising Special Investigation Units on Department of Insurance compliance. Our attorneys have successfully handled a myriad of insurance cases on both the trial and appellate levels, including claims involving bad faith, declaratory relief, rescission and misrepresentation. Our clients have remained with us for decades, because we deliver great bottom line results at efficient cost.

For recent case examples, click here.

Significant Insurance Law Cases

Insurance law cases from the:

  • United States Court of Appeals, Ninth Circuit
  • United States District Courts
  • California Appellate Courts

Shade Foods Inc. v. Innovative Products 78 Cal.App.4th 847 (2000)
Insurance coverage and bad faith concerning incorporation of potentially dangerous substance into other products. Issues also involved insurable interest, insurer's duties to defend and to settle, standard for bad faith conduct and recoverable damages.

Globe Indemnity Co. v. TOPA Ins. Co., et al. (9th Cir. No. 91-16257) (Jan. 4, 1993)
Insurer declaratory relief action between successive third-party liability insurers of a construction firm. Established under an "occurrence" policy, the policy does not provide coverage for progressive property damage that was manifest prior to the commencement of the policy although the insured construction company did not learn of the damage until after the commencement of the policy, where the injured party discovered the damage during the prior policy term.

Interstate Marketing System Inc. v. Royal Ins. Co. Case No. C921186 JPV ENE (N.D.Cal.1992)
Obtained summary judgment for Royal in insurance declaratory relief action that established no coverage under workers' compensation/employer's liability policy for claim asserting violation of Labor Code §3602(b)(1) and (b)(2), "willful physical assault" and "fraudulent concealment."

Lipson v. Jordache Enterprises Inc. 9 Cal.App.4th 151 (1992)
Court of Appeal reversed order denying insurer's motion to vacate judgment against insureds, filed by insurance carrier, where carrier was given only two days' notice of stipulated amended complaint that added causes of action potentially triggering coverage under insurer's general liability insurance policy. The court held that the insurer was entitled to relief from the judgment, since the second amended complaint presented new and unexpected claims that the insurer should not have necessarily anticipated based on the facts of which it had previously had notice. The court found that inasmuch as the trial appeared to be a substitute for a stipulated judgment, with the aim of creating policy coverage, the trial court had abused its discretion by denying the insurer's motion to vacate.

Sequoia Ins. Co. v. Royal Ins. Co. of America 971 F.2nd 1385 (9th Cir.1992)
Insurance declaratory relief, subrogation and contribution action as between a primary and excess insurer. Summary judgment for primary insurer reversed and remanded on basis that issues of fact precluding summary judgment existed concerning the claim of the primary insurer's bad faith failure to settle and the claim of the primary insurer's breach of the excess policies notice and cooperation conditions. Court held that as the insured's subrogee, the primary insurer seeking to recover an excess judgment against an excess carrier was subject to all the defenses the excess carrier could have asserted against its insured.

Walbrook Ins. Co. v. Liberty Mutual Ins. Co. 5 Cal.App.4th 1445 (1992)
Action by excess insurance carrier against primary carrier alleging bad faith in the primary carrier's rejection of an injured party settlement offer, resulting in a judgment exceeding policy limits. We represented the primary carrier at trial in obtaining a judgment that the primary carrier's rejection of the pretrial offers were not in bad faith. The Court of Appeals affirmed this judgment, finding that though the injured party ultimately received a judgment exceeding policy limits, the primary insurer's informed rejection of below policy limits settlement offers was not required to be an infallible one and that its mistake in judgment was not the equivalent of bad faith.

Nationwide Mutual Ins. Co. v. Dynasty Solar Inc. 753 F.Supp.853 (N.D.Cal.1990)
Insurer declaratory relief action established that coverage for "unfair competition" extended only to common law definition of unfair competition, of which injury to competitor was an essential element, precluding coverage for claims of fraud and unfair sales practices in connection with a door-to-door solar heating systems sales scheme.

National Union Fire Ins. v. Engineering - Science Inc. 673 F.Supp.380, affirmed 884 F.2d 1208 (9th Cir. 1989).
Represented engineering firm in subrogation action filed by its own insurer under an errors and omissions policy, for claim which insurer had paid against contractor. District Court held that insurer could not obtain indemnity from its own insured which it had insured for the very liability for which it sought recovery.

Admiral Ins. Co. v. Tom Stead, et al. Case No. CIVS-89-0174-EJG (E.D.Cal.1989)
Insurance declaratory relief action established no duty to defend nor indemnify insured under claims-made policy for claim first made against the insured after the expiration of the policy. Court upheld the validity of claims-made insurance policies under California law.

Globe Indemnity Co. v. First American State Bank 720 F.Supp.853 (W.D.Wash.1989)
Insurer declaratory relief action established that definition of "unfair competition" in CGL policy did not cover alleged misrepresentations or omissions in course of bank's advertising and therefore policy provided no coverage to bank for claims against it involving a scheme to defraud investors. Decision subsequently upheld on appeal to the United States Court of Appeals, 9th Circuit.

National Union Fire Ins. Co. v. Richard Whittington, et al. Case No. C-88-0536-WWS (N.D. Cal.1988)
Insurance declaratory relief action established no duty to defend nor indemnify insured in three civil complaints alleging sexual molestation of disabled children. Court concluded that the alleged acts of sexual molestation were, as a matter of law, outside the scope of the caregiver's employment and therefore, the caregiver/defendant failed to qualify as an insured under the terms of the policy.

Unpublished Cases

Consolidated Structural Materials v. State Compensation Ins. Fund (unpublished decision out of 6th Appellate Dist. 2002)
Insurance coverage and bad faith concerning liability coverage exclusion for an on-the-job injury to an employee of the insured employer. The court agreed that insurer had properly applied exclusions in the employer's comprehensive general liability policy, which eliminated liability coverage for bodily injuries that fall exclusively within the workers' compensation system. Insurer did not owe a duty to defend a claim that did not have the potential for indemnity payment under the liability policy.

H. Lloyd Cottrell v. Royal Ins. Co. of America (unpublished decision out of the 5th Appellate Dist.)
Insurance coverage and bad faith action involving late tender of defense that added a new claim not previously tendered to carrier. The court held that the defense was severable as to the covered and noncovered claims and found the carrier's duty to defend limited only to the new, potentially covered claim.