Linda Wendell Hsu Secures Dismissal for Insurance Company

Linda Wendell Hsu, the Managing Partner of the San Francisco office of Selman Breitman LLP, recently secured a dismissal for an insurance company involved in a claim for losses exceeding their insured’s self-insured amounts.

Background

Plaintiff was a public transportation entity seeking coverage for a workers’ compensation claim filed by a former employee. The employee worked as a police officer for the insured from 1979 to 2005. In 2006, he was diagnosed with a form of cancer which he alleged arose from his employment. The employee filed a workers’ compensation claim that was settled by the insured in December 2007. The employee and the insured stipulated on a date of injury as part of the settlement agreement. Based on the stipulated date of injury, the insured submitted the claim to its excess carrier for that time period. That insurer successfully argued they were not bound by the stipulated date of injury and had no obligation to cover the claim.

The insured then filed suit against Linda’s client and other insurers for losses exceeding their self-insured retention.

Result

On cross-motions for summary judgment, the federal district court ruled in favor of Linda’s client and the other insurers. Linda and the other insurers argued that the insurers were entitled to summary judgment because, among other issues, the insurance policies included clauses barring the insured from entering into a voluntary settlement without the consent of the insurers, which the insured failed to obtain when settling the employee’s claim. The court agreed that California law enforces no-voluntary-payment provisions in the absence of economic necessity, insurer breach, or other extraordinary circumstances. The court also agreed with Linda’s client that the insurers were not obligated to demonstrate they were prejudiced by the insured’s failure to comply with the no-voluntary-settlement provision.
 

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