Lesser Law Group

San Rafael California Insurance Law Firm

Court dismisses complaint due to late reporting

Insurance policies are notoriously dull to talk about but crucial to the operation, and even the survival, of a business. Every business needs to effectively communicate with insurance companies to protect their employees and their company. A recent decision by the U.S. District Court in Los Angeles, PAMC, Ltd. v. National Union Fire Ins. Co., Case No. 2:18-cv-06001-SVW-AS (C.D. Cal. Feb. 12, 2019), serves as the perfect example of how ignoring this "dull task" can turn into a potentially devastating liability.

PAMC, LTD, an insured hospital, recently learned this lesson after it settled a $42 million whistleblower lawsuit without consulting its insurance company first. Now, the hospital will pay a hefty price tag due to "late reporting."

Former California insurance agent facing fraud charges

Prosecutors in California say that a former licensed insurance agent stole more than $100,000 from small business owners and general contractors by selling them bogus workers' compensation policies. The 31-year-old man faces a raft of felony counts, including insurance fraud, forgery and grand theft. Prosecutors say the man used the money to cover gambling debts and buy luxury items such as designer clothing and sporting equipment. He was released from custody after posting bail in the amount of $100,000.

The man allegedly told small business owners that their workers' compensation policies would be backed by major insurance providers. However, prosecutors from the Orange County District Attorney's Office claim he pocketed the money instead and provided his clients with no coverage whatsoever. Prosecutors say that he was able to avoid suspicion by issuing his clients with fake certificates of insurance.

Google and Oracle take dispute to high court

One of California's largest tech companies is asking the Supreme Court to intervene in a copyright dispute. Google and Oracle have been locked for years in a battle over 37 APIs, or application programming interfaces, for the Java language. These APIs are used by software programmers to allow different pieces of code to communicate with one another. It is fairly common for programmers to copy other developers' APIs when writing new software, something that Google did with Java APIs when developing code for its Android mobile operating system.

After Oracle acquired Sun Microsystems, the developer of the Java APIs, it filed a copyright complaint against Google, asserting that the APIs were copyrighted and that their usage was unauthorized infringement. On the other hand, Google argues that its use of the APIs are fair use and that snippets of code of this type cannot be subject to copyright. While a district court agreed with Google, an appellate court on the Federal Circuit sided with Oracle in a controversial opinion that has been widely debated in the tech industry.

Patent dispute between clashing tech giants

A patent dispute is moving forward in the Southern District of California between two major technology corporations. The litigation between Apple and Qualcomm hinges on whether the latter's alleged monopoly on chipset technologies for mobile phones led to overpayments by Apple and other equipment manufacturers. Qualcomm has previously faced investigations by the European Union and Korean regulators as well as the Federal Trade Commission, paying billions of dollars in antitrust fines over its licensing process for its patents for mobile chipsets.

Qualcomm said that its patent license complies with government regulations that require it to be "fair, reasonable and non-discriminatory," or FRAND. While the chipset company said its licenses were FRAND, Apple lawyers argued that the federal judge overseeing the case should not declare that Qualcomm's licenses meet the standard. They also accused Qualcomm of using the litigation as a tool in potential future negotiations with Apple over including the chipsets in its iPhones and other mobile devices. Apple attorneys argued that the company refuses licenses to companies that manufacture their own chipsets as well as charging exorbitant fees for its licenses that far exceed the competition. As a result, Apple argued that Qualcomm's licenses do not meet the FRAND standard.

Former lawyer jailed in fraud case

A former California lawyer was sentenced on Jan. 11 to four years in prison after being convicted of insurance fraud and felony elder fiscal abuse. The 83-year-old man's conviction came over three years after allegations were first raised regarding his failure to pay for long-term care for a 92-year-old mother and her disabled dependent 63-year-old son. The man had served as mother and son's fiscal and medical power of attorney.

The judge who issued the sentence noted the poor situation of the son, in his 60s and living in the Burlingame Long Term Care Center, after the offender squandered the assets his mother had saved to provide for his care. The mother is living with dementia at a retirement center in Millbrae. According to testimony, the man embezzled almost $460,000 from the woman's accounts between 2010 and 2014. The lawyer was supposed to assist the son, but he instead duped the son into signing over his assets. The man then used the money to fund personal trips to Canada and the Philippines and pay off credit card bills.

What California policyholders need to know about 'bad faith' laws

Insurance companies in California typically have several advantages over policyholders because of their significant resources and negotiating strength. This is why many states have laws requiring insurance providers to act in good faith when dealing with their customers and handling claims. If an insurer acted in "bad faith," a policyholder might be able to pursue legal action. There are several elements that constitute what's termed bad faith insurance.

This type of insurance law can vary from one state to another, with some states broadly defining bad faith as being any actions considered unreasonable or without proper cause. Also, some states consider questionable claim-related behavior a breach of contract while others consider it a wrongful civil act (tort). In order to pursue a common law bad faith claim, a policyholder typically has to prove benefits for a valid claim were withheld and that the reason for doing so was unreasonable.

California takes over insurance company after wildfires

Regulators in California have taken over an insurance company that was unable to pay claims resulting from massive wildfires that destroyed more than 13,000 homes throughout the state. As a result, homeowner claims will now be paid by the California Insurance Guarantee Association. The largest fire in the state, which started on Nov. 8, almost completely destroyed the city of Paradise and many of the surrounding areas. There were also many losses in Ventura and Los Angeles County.

The insurance company is not expected to fight the takeover from the state. No other insurance companies who provided coverage for homeowners affected by the fire have reported insolvency as of the beginning of December. Not all damage has been assessed by insurers by this point, so it's not clear whether this will change in the future. Regulators aim to ease the suffering of impacted residents whenever needed.

What to do when accountants engage in negligent behavior

Business owners in California and throughout the country may hire accountants to keep track of their finances. Individuals who have large estates or many assets to manage may do the same. Ideally, an accountant will make sure that an individual pays taxes on time and generally follows accepted rules and accounting methods. However, there is a chance that an accountant will make a mistake or willfully disregard existing laws or other best practices.

If an accountant is preparing a statement on a person's behalf, he or she will follow Generally Accepted Accounting Principles. When an accountant is auditing records, he or she will follow Generally Accepted Auditing Standards. In the event that these guidelines aren't followed, an individual may take legal action against an accountant. The type of action a person takes depends on whether a mistake was intentional or was merely negligent in nature.

Denial of an insurance claim may be bad faith

Many people are great believers in insurance and purchase a variety of policies to help ensure total protection. Others begrudgingly take on only the bare minimum as required by law or for some specific contractual agreement. In any case, when a claim needs to be filed, the insured fully expects the company to stand up and pay on the claim. However, many California residents have been dismayed to find out that insurance claims are often denied.

It's important to realize that an insurance policy is in essence a contract that is interpreted according to the written terms but which also must adhere to some general rules of all contracts. One such general provision legal experts point out is the requirement to act in good faith. This is particularly important in insurance claims because it is the insurer that first determines its own liability to pay on a claim. When a repeated pattern of denials is observed within a particular insurer, a red flag is raised.

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