June 19, 2020
On June 19, 2020 our California Managing Partner Rick Endres and associate Patrick Bolig won an appeal in an insurance coverage/bad faith law suit before the Ninth Circuit Court of Appeals. The appeal involved the declination of coverage in a case where the insured argued there was at least the potential for a defamation claim triggering the insurer’s duty to defend. While the operative pleading alleged that the claimant sustained reputation damage as a result of the insured’s conduct, the trial court and Court of Appeals focused on the absence of critical factual allegations that a false statement was made by the insured about the claimant that subjected the claimant to damages. While there were numerous allegations of false statements made by the insured, they were to not about the claimant, his employer. The courts also focused on the fact that where the complaint did not alleged the essential elements of a defamation claim, there was no duty to further investigate. The courts were satisfied that the insurer twice asked the insured if it had any information to provide and twice received no response. A copy of the Order on Summary judgment in the District Court and the appellate decision from the Ninth Circuit are attached.
Please feel free to reach out to Mr. Endres or Mr. Bolig with any questions you may have.