For the cause of action for breach of contract, Woodliff sought reimbursement for the attorney fees and costs he had expended to defend against the federal lawsuits. Inadequate proof and no evidence of any such damages over and above what would have been incurred had defendant [LMI] provided a defense under a reservation of rights. Here, the insured incurred the “loss adjustment expense” LMI would have incurred had it not refused tender of the defense. At this point we were referring to section 1063.2, subdivision (g), which provides, in pertinent part: “[N]or shall any default judgment or stipulated judgment against the insolvent insurer, or against the insured of the insolvent insurer, be binding against [CIGA].” The purpose of this restriction “is to protect CIGA against collusion and to require simply that the validity of any claim be determined in an adversary setting before being reduced to a judgment which CIGA must honor.” (Biggs v. Insofar as is relevant, Labor Code section 5814 provides: “When payment of compensation has been unreasonably delayed or refused, either prior to or subsequent to the issuance of an award, the full amount of the order, decision, or award shall be increased by 10 percent․ The question of delay and the reasonableness of the cause therefor shall be determined by the appeals board in accordance with the facts.”15. For the causes of action for breach of the covenant of good faith and fair dealing and negligent infliction of emotional distress, Woodliff sought damages “according to proof.”In 1999, a court trial was conducted on Woodliff's action against LMI. The court's judgment provides: “No breach of covenant of good faith and fair dealing. Plaintiff Archie Woodliff is entitled to judgment against [LMI] for breach of contract.” (Italics added.) The court awarded Woodliff ,386 plus interest, representing the attorney fees and costs Woodliff had incurred as a result of LMI's failure to defend him in the federal actions. The parties filed cross-motions for summary judgment based upon stipulated facts. Except for the authorities cited for the general proposition of what that phrase references, the majority cites no authority to support the distinction drawn between expenses incurred by the carrier and expenses incurred by the insured when the carrier refuses a tender of defense. Rptr.2d 295.) “CIGA is authorized only to ‘pay and discharge covered claims.’ (Ins. (a).) It is only ‘in connection therewith’ that CIGA is to ‘pay for or furnish loss adjustment services and defenses of claimants when required by policy provisions․' (Ibid., italics added.)” (Saylin v. Law360 (October 17, 2018, PM EDT) -- The Cayman Island-based liquidators of a pair of failed Platinum Partners hedge funds have asked a New York bankruptcy court to compel Schulte Roth & Zabel LLP, the funds’ former attorneys, to hand over documents stemming from before the funds went into bankruptcy.The representatives of Platinum Partners Value Arbitrage Fund and Arbitrage Intermediate Fund Ltd.That provision provides: “ ‘Covered claims' [for which CIGA is liable] shall not include any loss adjustment expenses, including adjustment fees and expenses, attorney fees and expenses, court costs, interest, and bond premiums, incurred prior to the appointment of a liquidator [for the insolvent insurer].” In a nutshell, CIGA's position and that of our dissenting colleague is that because the insured's judgment is to compensate him for attorney fees he incurred before the insurer became insolvent, the judgment and therefore the claim presented to CIGA is the functional equivalent of a claim for loss adjustment expenses for which CIGA is not liable. The insured's judgment against the insurer is not a loss adjustment expense. Further, they are in a position to protect themselves from the serious consequences of an insurance company's insolvency by negotiating appropriate provisions in their contracts regarding the frequency of billing and payment.” (Metry, Metry, Sanom & Ashare v. Second, the definition of loss adjustment expenses was expanded. For one thing, nothing in the legislative history of this amendment supports such a conclusion. “Under the familiar rule of construction, expressio unius est exclusio alterius, where exceptions to a general rule are specified by statute, other exceptions are not to be implied or presumed. As noted earlier, CIGA properly concedes Woodliff's claim meets that statutory definition. It held: “We do not find the fixed percentage assessed by Labor Code section 5814 to be analogous to tort damages in the civil field. omitted.) By a parity of reasoning, Woodliff's judgment against LMI is likewise a covered claim not within any statutory exclusion.In the insurance industry, the phrase “loss adjustment expenses” generally means the expense incurred by the insurer to investigate and settle a claim. omitted.) Particularly relevant to this appeal is the principle that “[s]tandard comprehensive or commercial general liability policies ․ provide that the insurer has a duty to defend the insured in any action brought against the insured seeking damages for any covered claim. omitted.) That is, “[a]n insured buys liability insurance in large part to secure a defense against all claims potentially within policy coverage, even frivolous claims unjustly brought.” (Horace Mann Ins. As counsel for amici curiae noted at oral argument, there is a more pragmatic explanation for the amendment: the elimination of a redundancy since, as explained earlier at pages 7-8, loss adjustment expenses are generally interpreted to mean expenses incurred by the insurer, not the insured. The next step is to determine whether there is any statutory exception to exempt CIGA from liability. We conclude that it is more in the nature of a built-in statutory method of ensuring the timely return to work of injured workers by providing an economic incentive to employers to make the payments due for prompt necessary treatment under the Labor Code. The judgment was based solely on breach of contract; the trial court, in fact, rejected the tort claim.
Elliott, Los Angeles; Benedon & Serlin and Gerald M. Schulz, Newport Beach; Paul, Hastings, Janofsky & Walker and Ronald M. Brown, Jr., Simi Valley; Prenovost, Normandin, Bergh & Dawe and Michael G. Ford, III, Los Angeles, for Amici Curiae in support of Plaintiff and Appellant. Hall, Los Angeles, and Daniel Eli for Defendant and Respondent. Subdivision (h) to section 1063.2 had been amended to include the word “not” so it then read: “ ‘Covered claims' shall not include adjustment expense and attorney's fees incurred by the insolvent insurer prior to the appointment of a liquidator.” (Italics added.)This legislative decision to reject the proposal CIGA pay preliquidation loss adjustment expenses does not support CIGA's present position that it has no obligation to Woodliff's judgment against LMI.
The Insurance Code defines ‘covered claims' and specifically excludes certain obligations for which the insolvent insurer would otherwise be liable. Code 1063.2(h) excludes loss adjustment expenses, including attorneys' fees. I agree with appellant that section 1063.2 is the authority that controls the outcome of this case.
In 1981, the statutory language was amended, deleting the words ‘adjustment expense and attorneys' fees incurred by the insolvent insurer’ and inserting the language ‘any loss adjustment expense, court costs, interest and bond premiums incurred.’“Covered claims are not co-extensive with an insolvent insurer's obligations under its policies. I must admit I am at a loss to understand why the majority concludes that section 1063.2 has no application to the case.
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You have to know what’s happening with clients, competitors, practice areas, and industries.[Citation.] For example, CIGA's duty to defend is more limited than an insurer's duty. The obligations of CIGA are limited to those legislatively mandated under sections 1063..2.