told the court on Tuesday that as the funds’ liquidators, they have control over the hedge funds’ attorney-client privilege and need the documents to assess the funds’ preliquidation assets, affairs, rights, obligations and liabilities.
The funds were put into liquidation in August 2016 by the...
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.Simply stated, an insured does not incur loss adjustment expenses because the insured does not initiate or control the loss adjustment process. It has been stated that, so far as the insured is concerned, the duty to defend may be as important as the duty to indemnify.” (Buss v. In any event, the analytical flaw with CIGA's argument is that it continues to equate a judgment obtained by an insured against the insurer for refusal to defend with “preliquidation attorneys' fees and costs.” As explained earlier, the two are not the same. 609, 428 P.2d 593.) We believe it would be absurd to deny Woodliff recovery from CIGA for a benefit of his policy simply because his claim represents the amount spent on legal representation. We have already rejected CIGA's argument that the exception in subdivision (h) of section 1063.2 applies to this case. CIGA, as a creature of statute, is bound to pay all covered claims in the absence of a statutory exclusion. The judgment compensates Woodliff for a benefit due under the policy: costs of defense.The insured's reasonable expectation is that the insurer will engage in that process. In other words, this is not the situation in which the insured has presented CIGA with a bill for services rendered prior to insolvency by a third party (e.g., an attorney) in regard to a claim under the insurer's policy. For instance, if Woodliff either had to pay money to settle the two federal actions or if he had chosen not to retain counsel but instead defended himself in propria persona and a judgment was rendered against him, he could have also recovered either of those sums as damages in a breach of contract action against LMI. 16.) As set forth above, a significant portion of an insured's reasonable expectation of coverage is that the insurer will pay to provide a defense against suits within the policy's coverage. However, pertinent to this analysis is another statutory exception: subdivision (g) of section 1063.2. No tort liability was imposed on the insolvent workers' compensation carrier in the instant case, since the Board does not adjudicate tort claims. No statutory provision exempts CIGA for liability for this claim.The second was for breach of the covenant of good faith and fair dealing. Rptr.2d 295].)Section 1063.1, subdivision (c)(1) contains the general definition of a covered claim. First, I have no doubt that the term “loss adjustment expense” is generally understood to refer to attorney fees and expenses incurred by the carrier in either defending or settling claims against the insured. The majority recognizes this concession and recognizes that the claim meets the definition of “covered claim” within section 1063.1. But assuming for sake of argument that the majority is correct that the reference to “loss adjustment expenses” in section 1063.2, subdivision (h) should be interpreted to mean expenses incurred only by the carrier, the majority ignores the remaining language of subdivision (h). On April 28, 2003, Woodliff filed a motion to augment the record on appeal to include documents indicating he had filed a claim with the liquidator for LMI and that the liquidator apparently suggested he present the claim to CIGA for payment. The documents were not presented to the trial court and are not relevant to the question of law raised by this appeal.5. If the insured does not consent, one can readily envision a scenario where an attorney with an unpaid balance coerces the insured to institute a claim against CIGA, under the threat of an action for collection against the insured. the name in which the claim is brought) over substance (i.e. Rptr.2d 385, an insurer's refusal to defend can also create tort liability on the theory that an unreasonable failure to defend is a breach of the implied covenant of good faith and fair dealing.
He alleged LMI “refused without good cause to provide coverage and a defense to [him] despite the existence of facts indicating potential coverage.” The third, for negligent infliction of emotional distress, alleged Woodliff suffered foreseeable emotional distress because of LMI's failure to defend. It provides, in pertinent part: “ ‘Covered claims' means the obligations of an insolvent insurer, including [those] (i) imposed by law and within the coverage of an insurance policy of the insolvent insurer.” (See also California Ins. But I do not agree with the conclusion that the phrase can refer only to attorney fees and costs when they are incurred by the carrier. But it is section 1063.2 that delineates the duties CIGA must provide when a claim falls within section 1063.1. After the phrase “loss adjustment expenses, including adjustment fees and expenses,” subdivision (h) lists “attorney fees and expenses [and] court costs.”“We begin with the fundamental rule that a court ‘should ascertain the intent of the Legislature so as to effectuate the purpose of the law.’ [Citation.] In determining such intent ‘[t]he court turns first to the words themselves for the answer.’ [Citation.] We are required to give effect to statutes ‘according to the usual, ordinary import of the language employed in framing them.’ [Citations.] ‘If possible, significance should be given to every word, phrase, sentence and part of an act in pursuance of the legislative purpose.’ [Citations.] ‘When used in a statute [words] must be construed in context, keeping in mind the nature and obvious purpose of the statute where they appear.’ [Citations.] Moreover, the various parts of a statutory enactment must be harmonized by considering the particular clause or section in the context of the statutory framework as a whole. Subdivision (c) of section 1063.1 enumerates many separate categories of claims clearly within the coverage of an insurance policy of an insolvent insurer but which nevertheless are not “covered claims.” None of these categories is applicable to this case.6. the type of expense CIGA can or cannot pay), thereby fostering abuse, collusion, coercion, and fraud.” (Fn. Pursuant to Government Code section 68081, we requested and received supplemental letter briefs on this issue.14. On this latter theory, the insurer could be liable for tort damages not embraced in the breach of contract action such as compensation for emotional distress and punitive damages.
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.