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In an issue of first impression, the Ninth Circuit Court of Appeals affirmed summary judgment for Allstate and held that the two-year statute of limitations for bad faith claims arising out of an uninsured/underinsured motorist claim begins to run when the claimant should have known about the insurer’s alleged bad faith acts, rather than when the claim is resolved. In Marinelarena v. Allstate Northbrook Indem. Co., 2023 WL 3033498 (9th Cir. 2023), the plaintiff alleged that she suffered injuries in a 2016 car accident with a hit and run driver. Two years later, in January 2018, Marinelarena made a policy limit…
Continue Reading Ninth Circuit Confirms that the Two-Year Statute of Limitations in a Bad Faith UM/UIM Claim Begins when the Insured Should Have Known About the Insurer’s Alleged Bad Faith Acts

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Voyager Indemnity Insurance Company (“Voyager) issued a commercial liability insurance policy to MRB Construction, Inc. (“MRB Construction”), a framing subcontractor. As is common with such policies, MRB Construction’s policy contained a “blanket” additional insured endorsement for its ongoing operations. Specifically, the policy not only covered MRB Construction as the named insured, but extended “additional insured” status to those persons or organizations “for whom you are performing operations.” …
Continue Reading Failure to Timely Produce in Discovery Underlying Written Contract with Insured Prevented General Contractor from Establishing Status as an Additional Insured

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On February 22, 2023, the U.S. Department of Justice (DOJ) announced a new nation-wide policy to incentivize companies to self-report criminal activity. Among the cited benefits of self-reporting are discounts on fines and non-prosecution agreements. This new policy arrives on the heels of the “Monaco Memo,” issued in September 2022 by Deputy Attorney General Lisa Monaco, which directed each prosecutorial DOJ component to review its policies on corporate voluntary self-disclosures and update to reflect the guidance’s core principles. The policy also is in addition to guidance from Attorney General Merrick Garland, who in December 2022 emphasized prosecutorial leniency…
Continue Reading Corporate Voluntary Self-Disclosure of Criminal Activity: More of the Same or a Real Sea Change?

One of the most powerful weapons an insurance company can use to defeat a bad faith claim is the “genuine dispute” doctrine. Under this doctrine, as long as there was a genuine dispute regarding coverage or the amount owed, the insurer cannot be held liable for having withheld the disputed policy benefits even if it later turned out they were owed. Chateau Chamberay Homeowners Ass’n v. Associated Int’l Ins. Co., 90 Cal.App.4th 335 (2001). Historically, this defense has been applied most commonly in published cases involving disputes over unsettled legal issues or where the insurer’s position was supported by a…
Continue Reading New Insurance Law: The Extension of California’s “Genuine Dispute” Doctrine to Disputes Over the Value of General Damages In UM/UIM Claims Handling

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One of the most powerful weapons an insurance company can use to defeat a bad faith claim is the “genuine dispute” doctrine. Under this doctrine, as long as there was a genuine dispute regarding coverage or the amount owed, the insurer cannot be held liable for having withheld the disputed policy benefits even if it later turned out they were owed. Chateau Chamberay Homeowners Ass’n v. Associated Int’l Ins. Co., 90 Cal.App.4th 335 (2001). Historically, this defense has been applied most commonly in published cases involving disputes over unsettled legal issues or where the insurer’s position was supported by a…
Continue Reading New Insurance Law: The Extension of California’s “Genuine Dispute” Doctrine to Disputes Over the Value of General Damages In UM/UIM Claims Handling

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Over the past few months, the OIG shorts series focused on structuring and implementing a comprehensive and effective ethics and compliance program. Many times, this requires a mindset shift from a checking-the-box mentality to a wholistic approach in which everyone feels they have an important role to play. Nowhere is this more apropos than in the area of cybersecurity including developing a data security strategy and maintaining an effective incident response plan.
Continue Reading Ethics & Compliance: Let’s Talk About Cybersecurity

On January 1, 2023, California enacted SB1155, a law setting parameters for reasonable time-limited settlement demands. In a prior blog post, Jordan Derringer and Michael Bean discussed the statute and its potential impact on California law. In this post (originally published in Bloomberg Law), Jordan and Michael have expanded their discussion on the issue of time-limited settlement demands outside of California. They explore similar statutes enacted in Georgia and Missouri, their similarities with SB1155, and how these statutes may be interpreted by the courts.

Click here to read more.
Continue Reading New Time-Limited Settlement Demand Laws Need Testing in Court

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On January 1, 2023, California enacted SB1155, a law setting parameters for reasonable time-limited settlement demands. In a prior blog post, Jordan Derringer and Michael Bean discussed the statute and its potential impact on California law. In this post (originally published in Bloomberg Law), Jordan and Michael have expanded their discussion on the issue of time-limited settlement demands outside of California. They explore similar statutes enacted in Georgia and Missouri, their similarities with SB1155, and how these statutes may be interpreted by the courts.

Click here to read more.
Continue Reading New Time-Limited Settlement Demand Laws Need Testing in Court

This article was originally published in Daily Journal on January 4, 2023.

On January 1, 2023, a new California law, Code of Civ. P. § 999, et seq., took effect. This law sets forth various requirements that a policy “time-limited demand” must meet to justify a “bad faith refusal to settle” claim in the event the liability insurer does not accept it. …
Continue Reading New California Law Impacts “Time-Limited Demands” in the Insurance Industry

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This article was originally published in Daily Journal on January 4, 2023.

On January 1, 2023, a new California law, Code of Civ. P. § 999, et seq., took effect. This law sets forth various requirements that a policy “time-limited demand” must meet to justify a “bad faith refusal to settle” claim in the event the liability insurer does not accept it. …
Continue Reading New California Law Impacts “Time-Limited Demands” in the Insurance Industry

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This blog was originally published in Law360.

On November 18, 2022, U.S. District Court Judge Edward Davila sentenced Theranos founder and CEO Elizabeth Holmes to over 11 years in prison for fraud. Judge Davila, of the U.S. District Court for the Northern District of California, said the harsh sentence was justified because investors in Silicon Valley startup companies should be able to expect to take “risks free from fraud.” In explaining his sentence, Judge Davila painted a vivid picture of a culture of fraud inside Theranos, driven by Ms. Holmes’s “hubris” and “loss of a moral compass.”[1] From…
Continue Reading When Organizational Culture Goes Wrong: A Federal Judge’s Vivid Description of Cultural Decay Inside Theranos

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There is a compliance obligation that is sometimes honored in the breach: regular compliance self‐assessments. In this edition of OIG Shorts, the Sheppard Mullin Richter & Hampton LLP Organizational Integrity Group explains why such self-assessments are valuable and the reasons to make a timely self-assessment part of your organization’s New Year’s resolutions.

Click here to read more.
Continue Reading Organizational Integrity Shorts: Compliance Self-Assessments

In Yahoo Inc. v. National Union Fire Ins. Co. of Pittsburgh, — Cal. Rptr. 3d —;2022 Cal. LEXIS 6887; 2022 WL 16985647 (Nov. 17, 2022), the California Supreme Court applied established rules of policy interpretation and found that the definition of “personal injury” in Yahoo’s policy was ambiguous. The Court also determined that the rule of contra proferentem applied to a manuscript endorsement negotiated by two sophisticated parties, because the disputed language was standard insurance language. While the holding appears to be case specific, future questions may arise regarding the application of the rule of contra proferentem. …
Continue Reading Yahoo Inc. v. National Union Fire Ins. Co. of Pitts.: Revisiting the Rules of Policy Interpretation 

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In Yahoo Inc. v. National Union Fire Ins. Co. of Pittsburgh, — Cal. Rptr. 3d —;2022 Cal. LEXIS 6887; 2022 WL 16985647 (Nov. 17, 2022), the California Supreme Court applied established rules of policy interpretation and found that the definition of “personal injury” in Yahoo’s policy was ambiguous. The Court also determined that the rule of contra proferentem applied to a manuscript endorsement negotiated by two sophisticated parties, because the disputed language was standard insurance language. While the holding appears to be case specific, future questions may arise regarding the application of the rule of contra proferentem. …
Continue Reading Yahoo Inc. v. National Union Fire Ins. Co. of Pitts.: Revisiting the Rules of Policy Interpretation 

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Many business leaders still view Ethics & Compliance as a cost center rather than a cost reducer. This thinking can create quite the hurdle for CECOs looking to secure a meaningful E&C budget. In this edition of OIG Shorts, the Sheppard Mullin Richter & Hampton LLP Organizational Integrity Group offers up some ammo to CECOs for their internal budgeting discussions.

Click here to read more.
Continue Reading Organizational Integrity Shorts: Ethics & Compliance Program Funding

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