Insurance Coverage

Representative Cases

  • Plaintiff insurance company issued commercial general liability insurance policies to defendant licensed general contractor. Plaintiff sought a declaration of its right and duties under the policies. This lawsuit was a corollary to construction defect litigation arising out of the construction of a building in central California where defendant was the general contractor. Several years after completion of construction, the owner of the building sued the general contractor for breach of the construction contract and negligence based on claims that the flooring had failed. Evidence showed that the most likely cause of the flooring failure were that flooring tiles had been installed on top of a concrete slab that emitted moisture vapor in excess of specifications. Evidence also showed that defendant general contractor knew of the excessive moisture vapor emission, yet had directed the flooring subcontractor to install the flooring anyway. Plaintiff filed this action seeking a declaration that it had no duty under the policies to defend or indemnify defendant in-as-much as the flooring failure was not a compared occurrence because it was not the result of an accident.​

  • Plaintiffs attempted a remodel of a newly-purchased house. Before construction was finished, city building inspectors discovered the project did not conform to city floodplain regulations and ordered the property demolished. Plaintiffs made a claim on their homeowners insurance policy. Defendant insurance company denied the claim, asserting that the demolition was not an accidental loss, and in any event, the loss was excluded by a provision in their policy stating there is no coverage for loss caused by the enforcement of any law or ordinance.

  • ​Plaintiffs’ father enrolled as member of a health plan for seniors, which agreed to provide him with all of the services to which he was entitled under Medicare. Defendant contracted with physicians to secure their services and, in turn, contracted with the health plan to provide all physician services to enrollees plus “utilization review” in with requests for authorization for medical services of any kind are reviewed to determine medical appropriateness. After father underwent surgery to repair a broken leg, he went to a nursing facility operated by a co-defendant. Plaintiffs alleged that the nursing facility failed to provide adequate care to father, causing him to suffer from starvation, dehydration and infections, as well as emotional distress ultimately resulting in his death. Plaintiffs alleged that defendant’s receipt of a fixed or periodic fee for services and its participation in a risk sharing agreement that gave it a portion of any savings resulting from the denial of reasonably necessary medical care affected its decisions concerning fathers’s health care. Defendant alleged pre-emption under the Medicare Act, specifically 42 USC section 1395w-26(b)(3).

  • Water flooded into the crawlspace under plaintiff’s house after a water pipe beneath her house burst. Homeowner’s insurance policy did not provide coverage for damages due to general deterioration of the house (i.e., wear and tear) and did not cover damages from soil subsidence or erosion. Defendant insurance company determined that the water pipe broke due to general deterioration and was therefore not covered, but most of the structural damage was covered by her policy. Over the course of two years, insurance company paid plaintiff over $225k on her claims relating to the water loss. Plaintiff paid for initial emergency work, but never paid for any other work and failed to contract to remediate subsidence issues that were not covered under the terms of the policy. Despite taking the insurance company payments, plaintiff argued that the insurance company was obligated to hire and pay for all remediation work, and she alleged causes of action for breach of contract and insurance bad faith.

  • Five years after plaintiffs noticed deterioration in their expensive custom windows, they discovered that the damage might be insured under their homeowner’s policy. Plaintiffs’ claim was denied as untimely. Plaintiffs sued for breach of contract and for bad faith.

  • Equitable indemnity action in which three insurance carriers sued a fourth insurer after settling a construction defect action on behalf of a mutual insured. Issues regarding fourth insurer’s “other insurance” clause as to whether the fourth insurer was liable to share the loss on a pro rate basis.

  • Plaintiff HOA sued defendant insurance company for allegedly failing to promptly investigate and respond to a request that it provide a defense in a pending lawsuit and by eventually denying coverage existed for the claim. In light of coverage by a second insurer, the issue was whether plaintiff had supportable damages for breach of contract or breach of the covenant of GFFD.

  • An injured employee obtained a 10% increase in her workers’ compensation award under Labor Code section 5814 because her self-insured employer unreasonably delayed or refused payment of benefits. The employer’s excess insurance carrier sought a judgment declaring it was not required to reimburse the employer for the 10% increase because the policy excluded indemnification for payments made in excess of “benefits regularly required by the Workers compensation Law” if such benefits were required because “the Insured violated or failed to comply with any Workers Compensation Law.” The employer contended the exclusion did not apply to section 5814 benefits and the exclusion was too ambiguous and overlord to be enforceable.

Hon. David R. Chaffee (Ret.)
Mediator • Arbitrator • Discovery Referee