Northern California Judges Rule in ERISA and Insurance Cases

Here are some of the recent orders on summary judgment motions in ERISA and insurance cases in the U.S. District Court for the Northern District of California.

Burrows v. AT&T is typical ERISA case where the plaintiff claims that the defendant denied her short-term disability benefits in violation of the plan's terms.  Like other ERISA cases, this one rises and falls on the standard of review.  Magistrate Bernard Zimmerman explains:

While plaintiff agrees that the abuse of discretion standard applies, she urges the Court to conduct a heightened review under Metropolitan Life Insurance Co. v. Glenn, (U.S. 2008), and Abatie v. Alta Health & Life Insurance Co., (9th Cir. 200[6]) (en banc), because there is a conflict of interest between defendant and Sedgwick. According to plaintiff, Sedgwick [the plan administrator] cannot be neutral and independent in its evaluations of claims because it is employed by defendant and its continued employment depends on satisfying defendant with its services.

Sadly for Ms. Burrows, that train left the station in 2009 where another claimant made the same claim in Edwards v. AT&T Disability Income Plan (N.D. Cal. 2009) (Hamilton, J.).

The rationale behind plaintiff's argument has previouslybeen rejected. In Edwards, the court faced an almost identical situation as the ERISA benefit plan at issue involved defendant acting as the Plan Administrator and delegating its authority to evaluate disability claims to Sedgwick[.] Edwards held that the relationship between defendant and Sedgwick did not present aconflict of interest because Sedgwick was "solely responsible" for administering claims while the Plan Administrator was "solely responsible" for paying claims.

Judge Zimmerman found that Sedgwick did not abuse its discretion and granted summary judgment for the defendant.

District Counsel 16 Northern California Health and Welfare Trust Fund v. Creteguard is another ERISA case, this one is of the labor union complaining of a lack of contribution to a pension fund variety.  The parties are disputing as to who is a qualified employee under the plan.  Creteguard claims that only employees in forty selected counties are included and the Fund claims that Creteguard failed to keep accurate records, so all employees are in.  Judge Charles R. Breyer found that the Fund had the better of the argument.

Plaintiffs have presented evidence to support all of the needed facts to prove thatDefendant is liable. First, Defendant was a signatory to the CBA. See Stafford Decl., Ex. B. This is not disputed by Defendant. Second, the CBA required that Defendant make payments into the employee benefit plan for work done outside of Northern California if that work was done by employees from Northern California. Stafford Decl., Ex. C-1. The audit excludes Southern California workers who performed work in Southern California, leaving only those covered by the CBA. Stafford Decl. ¶ 17. Plaintiffs have met their burden, and Defendant has failed to show any dispute of material fact.

Judge Breyer had a nice compliment for the Fund's attorneys:

Applying the lodestar method, the rates are imminently reasonable, as are the hours devoted to the lawsuit. Spending less than $13,000 on a case worth more than $1 million is a model of efficiency.

He granted summary judgment for the Fund and awarded the plaintiff's fees and costs.

New Hampshire Insurance Co. v. McNab asks the perennial question: When is a $1 million policy worth less than $1 million?

Bill McNab was injured in a accident at work when an underinsured motorist (UM) crashed into his truck.  NHIC issued an insurance policy to Mr. McNab's employer which had a maximum UM coverage of $1,000,000.  He obtained worker's compensation (WC) payments for his medical expenses along with an $8,000 job training voucher, social security disability insurance (SSDI) for his inability to work and a $100,000 settlement from at-fault driver's liability insurer.  From this settlement he reimbursed the State Compensation Insurance Fun $33,145.85.  NHIC wants to set-off Mr. McNab's recovery by all of the above, and he does not want that which is the subject of the current summary judgment motion before Judge Claudia Wilken.

With regard to SSDI, it cannot be an offset, because California law does not allow it to be one.

NHIC's citation to California Insurance Code § 11580.2(a)(1) does not support an offset based on McNab's social security payments. The provision authorizes an insured and insurer toagree to limit uninsured motorist coverage for bodily injury to an amount less than $30,000, as long as it is more than $15,000, the minimum required by California Vehicle Code § 16056. However, this provision does not mean that any and all agreements to reducecoverage are enforceable.

The amount from the State Fund already paid can be offset, but future payments cannot be off-set, similarly, the voucher is unlikely to be used and cannot be offset.

In contrast to Waggaman [v. Northwestern Security Ins. Co (Cal. App. 1971)], McNab has been deemed permanently disabled, and the State Fund's Award on Stipulation provides: "Further medical treatment to [McNab's] upper back, chest, ribs,left shoulder and left elbow." McNab intends to seek further payment from the State Fund for future medical costs, although the precise amount is unknown. Thus, an offset for medical expenses covered by the State Fund is warranted. On the other hand, it appears unlikely that McNab will be able to use the job training voucher due his ongoing disability and his age. Since McNab will not likely receive this benefit, an offset for its value is unwarranted.

The settlement can be used as a set-off to the extent it was not used to reimburse the state fund.  Judge Wilken granted summary judgment for the off-sets as noted here.

Northern California Daily Digest

Here are some of the other cases in the U.S. District Court for the Northern District of California.

Rodriguez v. Astrue is an appeal of the denial of SSDI benefits.  In this somewhat unusual case, there is no dispute that Mr. Rodriguez has schizophrenia which prohibits him from working.  Rather, the commissioner stated that Mr. Rodriguez is ineligible for benefits because he was not receiving benefits since August 22, 1996 and "permanently residing in the United States under color of law ('PRUCOL')." The ALJ found that Mr. Rodriguez was not PRUCOL because he was a deportee, but as Judge Maxine M. Chesney noted, it isn't that simple.

Further, the ALJ did not address the applicability of [20 C.F.R.] § 416.1618(b)(17), which provides that an alien is PRUCOL if he is "living in the United States with the knowledge and permission of the Immigration and NaturalizationService and whose departure that agency does not contemplate enforcing." 

[T]he repeated findings by the Attorney General that Rodriguez is entitled to a work authorization card suggest the United States does not contemplate enforcing Rodriguez’s departure, due to a refusal by Cuba and all other relevant countries to receive him.

She granted Mr. Rodriguez's motion for summary judgment and remanded the matter to the SSA.

Scott v. Unum Life Insurance Company is suit for denial of disability insurance benefits under a breach of contract theory.  At issue is whether putting someone through the rigmarole of repeatedly asking for a claim payment can make an insurance company liable for punitive damages by producing a quantum of evidence as to oppression, fraud or malice.  Judge Saundra Brown Armstrong ruled that it did not in this particular circumstance,

As noted by Defendant, the evidence shows that, in reaching its claim determination, Defendant considered, over a six year period: six independent medical evaluations by four doctors; several Claimant Statements and Attending Physician Statements; two field interviews; and numerous internal clinical consultant review. [M]oreover, Defendant engaged in correspondence with Plaintiff and his treating physician, Dr. Levin, throughout the process.  Also Defendant paid Plaintiff benefits totaling $388,604.07 from December 2001 to March 2008, while it reviewed plaintiffs claim.

Judge Armstrong granted partial summary judgment to the insurance company on the punitive damages issue.

Pham v. Bank of America is a mortgage fraud action arising out of $600,000 home loan in 2004.  Mr. Pham made two pro se complaints before retaining counsel.  Bank of America moved to dismiss the first amended complaint.  Mr. Pham's new attorney stated the complaint should be dismissed, but with leave to amend.  Magistrate Harold Lloyd granted both the motion to dismiss and the request to amend.  The interesting issue related to judicial notice.

The Adjustable Rate Note is not in the public record, though, and may not be judicially noticed. Defendants cite to the Ninth Circuit case Branch v. Tunnell for the rule that while a court generally may not consider matters beyond the pleadings on a Rule 12(b)(6) motion, "a document is not ‘outside’ the complaint if the complaint specifically refers to the document and if its authenticity is not questioned.” [] (9th Cir.1994), overruled on other grounds by Galbraith v. County of Santa Clara, (9th Cir. 2002). But while Branch is good law on this point, it does not provide an independent basis for judicial notice. Thus, because the authenticity of this document is not questioned, the Court will consider it for purposes of Defendants’ motion to dismiss but will deny Defendants’ request for the Court to take judicial notice of it. See Curcio v. Wachovia Mortg. Corp., (S.D. Cal. July 19, 2010) (denying defendants’ request to take judicial notice of documents under Branch but considering the documents for purposes of a motion to dismiss).

Northern District of California Blog Previews Upcoming Trials

In a new feature on this blog, here is a preview of some upcoming trials:

Del Campo v. American Corrective Counseling Services Inc, is a massive class action headed to trial soon, so this blog wants to pregame the trial a bit by reflecting on the June motion for summary judgment. Elena Del Campo and others claim that ACCS implemented the Santa Clara County Bad Check Restitution Program (“Bad Check Program”) by sending demand letters purporting to be from a California District Attorney’s office attempting to collect a dishonored check in violation of the Fair Debt Collection Practices Act (FDCPA). In that motion, Judge Jeffery White found that Mealing and Hansey as officers for ACCS were liable as debt collectors under FDCPA, though it noted, that the Ninth Circuit has yet to rule on the issue. The defendants are liable under California’s Unfair Competition Law for that reason. However, the liability of Inc. Company, who had a restitution partnership arrangement with ACCS, remains and issue for trial. Similarly, one of the largest unresolved issues is damages. The plaintiffs claim damages of $47,497,386.50, however the defendants claim they were entitled to those fees by statute and they cannot be recovered. It should be an interesting trial.

First National Insurance Co. v. Geo Grout is an insurance indemnity matter. Geo Grout entered in a series of private and public works contracts, which required it to furnish the respective project owners with a performance bond, and a labor and materials bond. First National issued the bonds on behalf of Geo Grout, and Geo Grout failed to meet various contract obligations resulting in claims against the bonds. Geo Grout failed to indemnify, exonerate and hold First National harmless from the damage incurred because of the bonds under an indemnity agreement between the parties which gives rise to the current suit. This case has an added complication.

Geo Grout is currently working as a subcontractor on the Sukut Construction, Inc. on the San Pablo Dam Seismic Upgrade project. For the East Bay Municipal Water District. For a variety of reasons, Sukut has not paid Geo Grout $1.37 million. Sukut’s payment bond surety is Safeco Insurance Company. First National is a wholly owned subsidiary of Safeco (which is itself a wholly owned subsidiary of Liberty Mutual). Geo Grout is suing Sukut for that amount in Contra Costa County Superior Court. As a result of this, First National owes Geo Grout more than Geo Grout owns First National. Magistrate James Larson noted there was too much to sort out at this point:

The Court finds too many disputed issues of fact, including the amounts owed and by whom to whom, the relationship between First National and Safeco, the contractual obligations between the parties and non-parties, and the rights of the other creditors and sureties, to conclude that First National has established a likelihood of prevailing on its motion for summary judgment.

He denied summary judgment and a writ of attachment for that reason.

This blog has dubbed Oracle v. Santa Cruz County Planning Department, “The Hedge Case” because it is a million dollar lawsuit over administrative bungling over a permit to build a fence because of a hedge in Aptos, California.  Judge Jeremy Fogel has recently ruled on a motion in limine which forms some of the contentious issues in this rapidly approaching trial.

The Oracles plan to introduce evidence about the Santa Cruz County Code regulating the height of fences and hedges, not to show that it is determinative, but to show the parties motivations. The Oracles (perhaps strategically) have not yet identified a property they plan to compare with their own to show that similarly situated properties were subject to different treatment. However, Judge Fogel plans to allow evidence of this on a case-by-case basis. The Oracles want to call Laughlin, a former code supervisor as an expert witness, but have not, a of yet, explained why he is an expert. Lyng is expected to testify that people would have purchased the property had their not been a NOV on it, though at her deposition she could not identify who that could be. The Orcacles plan to introduce an email chain where different employees at the County said nasty things about them.

The order also notes that the defendants recently made a settlement offer to the Oracles., but contains no details on what that arrangement was.

Northern California Judges Rule in Mortgage and Insurance Cases

Several Northern California Judges have recently released opinions in mortgage and insurance cases among them:

Rivera v. BAC Home Loans involves a couple who obtained a Home Equity Line of Credit (HELOC) on their property in Alameda California on August 18, 2006.  They defaulted and now claim violations of the Truth in Lending Act (TILA) by not being informed they could rescind the loan after three days.  They also claim common law fraud against their mortgage provider for exaggerating their income (and ability to pay the loan).  They filed their original complaint on June 2, 2010 which effectively doomed their efforts for recovery.  Every cause of action alleged had a statute of limitations of between one and three years.  The Riveras were at least ten months late and provided no basis for equitable tolling.  Judge Richard Seeborg dismissed the complaint without leave to amend.

Carnero v. Washington Mutual is similar to Rivera above except the property was located in San Jose.  Gabriella Carnero complained that a banker duped her and her brother into getting a mortgage and refinancing it in 2001, 2003 and 2007.  Judge Jeremy Fogel explained:

The SAC omits all of the previously pled state law claims – it sets forth only two claims,the first asserted under TILA, HOEPA, and the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2607, and the second asserted under TILA. Both claims suffer fromnumerous deficiencies.

Those deficiencies included the one-year statute of limitations in TILA, HOEPA and RESPA and a failure to make a tender offer in the TILA claim.  He granted the motion to dismiss without leave to amend.

State Farm Life Insurance v. Cai is an interpleader action with an insurance company who wants to pay out a $250,000 life insurance policy.  Ying Deng obtained a $250,000 life insurance policy from State Farm listing Jason Cai as the only beneficiary.  On May 28, 2003, Ms. Deng died... because Mr. Cai killed her, an act which has lead to Mr. Cai's current incarceration.  California has what is commonly known as a "slasher statute" as Judge Lucy H. Koh explains:

The Estate [of Ms. Deng] claims that Cai feloniously and intentionally killed his wife, Ying Deng, and that California Probate Code § 252 therefore mandates that the insurance proceeds pass to the Estate as though Cai predeceased Ying Deng.

State Farm wants to drop the money off at the Courthouse, take a share for its attorneys fees and costs and be done with the matter.  Judge Koh stated that it needed to follow federal interpleader procedure in order to do that:

Accordingly, any motion for entry of judgment in interpleader must be made pursuant to either Federal Rule of Civil Procedure 22 or the federal interpleader statute, 28 U.S.C. § 1335. Here, State Farm asks the Court to enter judgment under California’s interpleader statute, something this Court cannot do.

She denied the motion for judgment.

Wahl v. American Security Insurance Co. is a putative class action regarding "forced placed insurance" policies on real property.  Ms. Wahl contends that the holder of a deed of trust has insurance on the real property either by the homeowner's purchase or by an agreement in the loan.  When the homeowner cancels her policy, ASIC charges premiums for insurance that is already provided by terms of the loan (a Lender's Loss Payable Endorsement clause, "LLPE") which provides no significant value.    In a previous order, Judge Richard Seeborg explained the claim in this manner:

The FAC [first amended complaint] alleges that, upon the expiration of Wahl's Farmers Policy, ASIC, in cooperation with EMC [Mortgage Company], cancelled the Farmers Policy's LLPE and substituted its own FPI-a practice which, although within the bounds of the Deed of Trust, was singularly disadvantageous to Wahl and unsupported by any apparent reason other than the fact that ASIC and EMC both stood to benefit financially from the immediate placement of FPI. Moreover, according to the FAC, these business practices were the direct result of a pre-existing contract between ASIC and EMC, to which Wahl was not a party and of which she presumably had no knowledge.

Judge Seeborg found this allegation presented a genuine issue of material fact as to whether ASIC violated California's Unfair Competition Law (UCL).  Having tried and failed to vanquish this claim on four previous dispositive motions Judge Seeborg required the defendants to seek leave of the court before filing future dispositive motions.

In light of defendants’ history of filing seriatim motions, and in the interest of efficientcase management, this Court required ASIC to request permission from the Court before filing anyfurther dispositive motions.

In the present motion, ASIC claims that Ms. Wahl's UCL claim is really a challenge of an insurance rate and she failed to exhaust her administrative remedies before bringing the claim.  Judge Seeborg saw things differently.

The fair reading of Wahl’s UCL claim as alleged and as defended in her many opposition motions supports her argument that the claim is directed at ASIC’s allegedly unfair conduct and not at the Commissioner’s rate.

He declined the request to file another motion for summary judgment.

Northern California Judges Rule in Mortgage and Insurance Cases

Several Northern California Judges have released orders in mortgage and insurance cases, among them:

Lake v. First National Insurance Co. is an insurance dispute.  James "Bryan" Lake and Terry Hall purchased some property "in pretty bad shape" in Hayward, California which was filled with valuable civil war era antiques previously owned by the home's previous resident Bob Ryan.  Before they could get the antiques appraised burglars stole them and Ms. Hall submitted a personal property insurance claim for $162,736, the policy limit with an itemized list of each piece of property and a statement of what it was worth. After some back and forth the insurance company paid out $25,126.29. The plaintiffs sued for breach of contract stating that it provided adequate information to First National to obtain a larger payout. First National disagreed.

Judge Saundra Brown Armstrong weighed the evidentiary submissions. The plaintiffs submitted the testimony of an appraiser who based his value of the civil war materials on the testimony of Mr. Ryan and his experience in the field. Judge Armstrong cited Triton Energy Corp. v. Square D Co. (9th Cir. 1995) for the proposition that an expert's conclusory testimony cannot defeat a motion for summary judgment. There,

Trinton’s entire case rests precariously on the opinion of its expert, Douglas Bennett, who never examined the allegedly defective circuit breaker. This substantially impaired his ability to express a reliable expert opinion based upon specific facts. Therefore, we find that Bennett’s expert opinion and the inferences Trinton seeks to draw from it are not of sufficient quantum or quality to create genuine issues of material fact.

She granted summary judgment for the insurance company.


First Financial Insurance Co. v. Butler Chamberlain-Nielsen Ranch is an insurance defense case where First Financial (and a dozen others) provided representation for Butler in a construction defect case.  Now First Financial seeks reimbursement of its defense costs and is suing Butler for covering it outside of the scope of the policy. Butler moved to dismiss the case for failure to join every other insurance company involved in the underlying action.  Judge Saundra Brown Armstrong stated that this misses the point:

"An insurance company's right to seek reimbursement for certain defense costs already expended in underlying litigation, such as [First Financial] seeks here, was declared by the California Supreme Court in Buss v. Superior Court, (Cal. 1997)." United Nat. Ins. Co. v. R&D Latex Corp., (9th Cir. 2001).

She denied the motion to dismiss.

Columbia Casualty Insurance Co. v. Gordon Trucking is another Buss claim.  Here, Columbia insured Gordon trucking when one of Gordon's drivers struck another car causing personal injury to Drew Bianchi.  At trial American International defended Gordon Trucking and Mr. Bianchi received an award of $18M.  Gordon claimed Columbia owed it $5M for the settlement and Columbia denied that and sued both Gordon and American International.  Now Columbia seeks to dismiss its claims against American International.  Gordon Trucking opposes the motion. Judge Lucy H. Koh stated that Burnette v. Godshall (N.D. Cal. 1993) has explained the form for determining whether and what kind of dismissal to grant.

In exercising its discretion, the Court must make three separate determinations: (1) whether to allow the dismissal at all; (2) whether the dismissal should be with or without prejudice; and (3) what terms and conditions, if any, should be imposed. 

Judge Koh found that dismissal should be granted with prejudice and without condition because Gordon could not adequately explain why it would be prejudiced by dismissing American International.

In Re Wells Fargo Residential Mortgage Discrimination Litigation is a class action alleging discriminatory impact in Wells Fargo's loaning practices in violation of the Equal Credit Opportunity Act (ECOA).  Wells Fargo moves for summary judgment on the ECOA claim by arguing that statistical evidence that would support a finding that minority borrowers as a class paid more than non-minority borrowers would not be sufficient to establish that any particular minority borrower paid more than a similarly situated non-minority borrower. Judge Maxine M. Chesney disagreed.

"Proof of disparate impact is based not on an examination of individual claims, but on a statistical analysis of the class as a whole." Ramirez v. Greenpoint Mortgage Funding, Inc., (N.D. Cal. 2010).

Judge Chesney denied the motion to dismiss.

Das v. WMC Mortgage is a foreclosure action where Mr. Das and others claimed they were duped into taking a $975k loan they could not possibly repay and that the Mortgage Electronic Registration Systems, Inc. (MERS) failed to issue a proper foreclosure notice under California Civil Code Section 2923.5. That section provides: "a mortgagee, trustee, beneficiary or authorized agent may not file a notice of default [...] until 30 days after initial contact is made [...] or 30 days after satisfying the due diligence requirements."
MERS argues that this section does not provide a private right of action. California Courts disagree on this point. As best I can tell here is the lay of the land:

It doesn't:

Pantoja v. Countrywide Home Loans, Inc., (N.D. Cal. 2009) (Ware, J.); Aguilera v. Hilltop Lending Corp., (N.D.Cal. Aug. 25, 2010) (Armstrong, J.); Sarbaz v. Wachovia Bank (N.D. Cal. Nov. 10 2010)(Breyer, J.); Figueiredo v. Loan (N.D. Cal. Mar. 15 2010) (Zimmerman, J.); Glover v. Fremont Inv. and Loan (N.D. Cal. Dec. 18 2009)(Spero, J.);

It does:

Roberts v. JP Morgan Chase Bank, N.A. (N.D. Cal. Sept. 13 2010) (Trumball, J.); Kariguddaiah v. Wells Fargo Bank, N.A. (N.D. Cal. July 1, 2010) (Patel, J.) (it does); Davenport v. Litton Loan Servicing, LP (N.D. Cal. July 26, 2010) (Seeborg, J.) (finding the remedy to be stopping the foreclosure sale).

It's an open question and I don't want to dismiss claims on this ground:

Atkins v. Litton Loan Servicing, LLP (N.D. Cal. Aug 11, 2010) (Seeborg, J.); Pham v. Bank of America, N.A. (N.D. Cal. Aug. 11 2010) (Lloyd, J.); Odinma v. Aurora Loan Services (N.D. Cal. March 23, 2010) (Laporte, J.).

I think Judge Samuel Conti has the best approach, he has found that it's not a claim in itself, but it can be the basis for a claim under UCL.  Of course, he was the only judge given the question in this manner.  Reynoso v. Paul Financial, LLC (N.D. Cal. Nov. 16 2009) (Conti, J.) (it doesn't); Zivanic v. Washington Mut. Bank, F.A. (N.D. Cal. June 9, 2010) (Conti, J.) (it can be the basis for a claim under California's Unfair Competition Law).

Judge Patricia Trumball stuck with her decision in Roberts v. JP Morgan Chase Bank, N.A. that it does grant a private right of action and allowed the claim to go into discovery.

Northern District of California Judges rule in mortgage and insurnace cases

This blog noted yesterday that Judge Lucy Koh was working the day after Veterans Day, so were Judges Jeremy Fogel and Richard Seeborg who ruled in the following cases.

George v. New Century Mortgage is a case this blog previously covered here.  As noted earlier:

[Here,] a homeowner proceeding pro se [] claims she was a victim of predatory lending in violation of the Truth in Lending Act (TILA) and related California state law claims. Upon receiving service, New Country Mortgage moved to dismiss the action stating that Ms. George never made a tender offer and an allegation of one is necessary to plead a claim to rescind the loan. Further, it asked for the lis pendens upon the property to be lifted. Magistrate Harold R. Lloyd recommended that the case be dismissed.

Hearing no objection, Judge Jeremy Fogel agreed and dismissed the case.

Ray v. Prudential Life Insurance Company of America is a dispute over denial of a long-term benefits claim.  While these claims are frequently ERISA actions, Ms. Ray is pursuing the matter as a common law contract dispute.  From 1979 to 1992, Ms. Ray worked for the university of California where she received long term disability (LTD) and life insurance benefits from Prudential.  In 1992, she claimed short-term and later long term disability benefits for an anxiety disorder.  Prudential paid benefits and waived the life insurance premiums pursuant to the policy.  The LTD policy only paid benefits for two years for a mental disorder.  In November 1994, Ms. Ray submitted medical records stating that that she was disabled for reasons other than her anxiety disorder.  Prudential disagreed and stopped paying benefits on January 21, 1995. In 2008 she changed her status from disabled to retired and asked how that affected her LTD benefits.  Prudential informed her that it terminated benefits in 1995 and, upon further review, denied her waiver of life insurance premiums as well.  On October 19, 2009 Ms. Ray initiated the current suit for breach of contract.  Prudential moved for summary judgment stating that the two year statute of limitations expired in July 1997 and Ms. Ray did not file her claim until twelve years after that point.  Ms. Ray argues that the statute should be equitably tolled.

In her complaint, Ray raised an argument that she “did not notice that Prudential ceased making disability benefits to her until November, 2008.” [] Prudential acknowledges that the SOL was equitably tolled during the period where it stopped paying benefits but before it issued its final rejection in July 1995. See, e.g., Prudential-LMI [Com. Insurance v. Superior Court (Cal. 1990)] (holding that statutory limitation was tolled from the time insured gave notice of loss until coverage was denied). Ray cites no authority for the proposition that the SOL commences only after the claimant “notices” something is wrong. Accordingly, there is no material dispute regarding the accrual time on Ray’s claims.

 Judge Richard Seeborg granted Prudential's motion for summary judgment.

Northern California Daily Digest

Here are some other cases in the U.S. District Court for the Northern District of California:

Wang v. Asset Acceptance, LLC is a consumer class action lawsuit predicated on a phone bill dispute.  Mr. Wang disputed his phone bill with Pacific Bells which went into collection.  Asset Acceptance reported his lack of payment to three Credit Reporting Agencies (CRAs), Mr. Wang argues that this violates the California Consumer Credit Report Agencies Act ("CCRAA").

In February 2010, Judge Samuel Conti held Mr. Wang's claim under California Civil Code Section 1785.25(a), which is part of CCRAA, actually arose under Section 1785.25(c) of that Act, and that the claim was preempted by the Fair Credit Reporting Act. FCRA preempts most state laws relating to the duties of persons who furnish information to CRAs, but expressly exempts from preemption claims under California Civil Code Section 1785.25(a). Judge Conti then recused himself from the case, turning it over to Judge Susan Illson. Mr. Wang alleges this is because Judge Conti owns stock in AT&T which has acquired Pacific Bell. Section 1785.25(a) forbids providing a CRA with innacurate or incomplete information. Section 1785.25(c) creates an obligation to notify CRAs of disputed debts.

Mr. Wang's current claim is identical to the one he raised in February - that Judge Conti's interpretation of Section 1785.25(a) is erroneous and that the California legislature intended to include the kind of conduct enumerated in Section 1785.25(c).  Judge Susan Illston explained that reading the requirements of Section 1785.25(c) into Section 1785.25(a) would render the statute superfluous and contrary to the intent of the legislature.  She denied Mr. Wang's motion for relief from judgment and did not allow an interlocutory appeal.

Sanchez v. Crescent City Housing Authority is a qui tam action arising under the False Claims Act.  Essentially, Ms. Sanchez is arguing that CCHA made false statements to the Department of Housing and Urban Development (HUD) so that it could obtain reserves of Section 8 housing voucher funds in excess of HUD regulations and spend that money on other city projects.  CCHA claims that the court lacks jurisdiction in the matter because it publicly disclosed the information of the excess reserves in a budget meeting in December 2006 and Ms. Sanchez did not become aware of the behavior until March 2007. Magistrate Maria-Elena James agreed and stated that a false claim cannot be based by information in the public domain unless it is filed by the source who released the information. She dismissed the claim with prejudice.

Nelson v. Ev3, Inc. is a shareholder derivative lawsuit.  Mr. Nelson was a shareholder of  Kerberos Proximal Solutions, Inc.  Kerberos merged with FoxHollow Technologies, Inc in an earnout agreement for $33M plus some proportion of the sale of certain medical devices based on components from Kereros and FoxHollow. Judge William H. alsup noted that "[t]he merger agreement obligated the surviving entity to 'use commercially reasonable efforts to market, promote, sell and distribute' Rinspirator." Mr. Nelson's claim is that Ev3, who bought the new entity, did not do so.  Judge Alsup found that this was enough for claims for breach of the implied covenant of good faith and fair dealing and breach of fiduciary duty to go into discovery.  He denied the motion to dismiss.

AIU Insurance v. Acceptance Insurance Co. is (perhaps unsurprisingly) an insurance coverage dispute.  AIU seeks a declaration that American Safety Indemnity Co. (and not it) is the primary insurer for the now defunct Rylock Company, Ltd.  Rylock is the defendant in 19 underlying suits for construction defects in windows it has manufactured. Judge Phyllis J. Hamilton stated she could not paint all of the 19 lawsuits with such a broad brush.

Nevertheless, the court agrees with American Safety that any determination of
coverage under either of the American Safety policies will require application of the policy terms to the specific facts of each Underlying Action, including the timing of Rylock’s work in connection with each construction project, the timing of any resulting “property damage” alleged, and the amounts incurred by AIU (if any) in defending the parties’ mutual insured, Rylock. Thus, the relief that AIU is seeking in this motion (re “duty to defend in the Underlying Actions”) is broader than is justified by the evidentiary showing.

She denied the motion for summary judgment.

Northern California Daily Digest

In Burlington Insurance Company v. Devdhara, the insurance company insured the defendant's hotel which was sued in another case for which was a class action for deplorable hotel conditions including violations of the implied warrant of habitability.  In California, the insurance must defend the insured for all claims against it (unless none could possibly be covered) and then seek contribution from the insured for uncovered torts.  Here, the insurance company requested contribution for the portion of the settlement attributable to the habitability torts which Judge Saundra Brown Armstrong found uncovered by the terms of the policy.  She sent the case to a magistrate judge for a determination of the amount owed.

Radford v. St. Regis Hotel is a case that relates back to Charles Dicken's Bleak House (which you can read here).  Mr. Radford wanted to file a Title VII complaint against his employer and another complaint against his Union for failing to adequately represent him.  He brought both claims to court, his Union complaint was filed and no one is sure what happened to the Title VII complaint.  When he sought legal assistance for both issues the attorney stated that his complaint had not been filed and the statute of limitations had run.  The employer filed a motion to dismiss stating the statute of limitations had passed.  Judge Elizabeth D. Laporte stated that Mr. Radford had pursued his claimed diligently and equitably tolled the statute by trying to file his complaint even though it never made it into PACER.  His actions equitably tolled the statute of limitations and he will get his day in court.

Daily Non-dispositive digest

In Allstate Insurance Company v. Barrett, the plaintiff insures the defendant and is currently defending him for injuries a third party suffered after Mr. Barrett shot at him with a handgun.  Allstate seeks a declaration that it is not required to defend those accused of intentional torts (here assault).  Mr. Barrett responds that he never intended to shoot anyone, and that his firearm discharge was accidental.  Judge Edward M. Chen denied summary judgment stating that evidence existed that could show Mr. Barrett did or did not intend to shoot at the third party.  He ordered Allstate to continue to defend Mr. Barrett in state court while the action proceeded.

In Elder-Evins v. Casey, the plaintiff pro se appears to be suing a plethora of defendants over a property tax bill which she says violated a number of her constitutional rights (presumably by way of 42 U.S.C. Section 1983, though the Court notes that she never mentions that statute).  Judge Saundra Brown Armstrong dismissed the complaint stating that claims against local officials are more properly exhausted under the California Tort Claims Act, and that the constitutional claims are unclear.

In Parker v. Ayers, a pro se prisoner filed a position for habeas corpus, then to his delight, was paroled.  The warden moved to dismiss for mootness, which the judge said could be overcome if the petitioner wanted to challenge his conviction.  He did not respond and Judge Saundra Brown Armstrong dismissed the petition.

In Vertkin v. Wells Fargo Home Mortgage, the pro se plaintiff is upset that her house was sold at foreclosure and she claimed this was done so illegally.  Wells Fargo argued that she had declared bankruptcy and that the bankruptcy trustee was the appropriate plaintiff.  Judge Richard Seeborg agreed and dismissed the case for lack of personal jurisdiction.