Today's Insurance Opinions (Cal. Ct. App. - Dec. 3, 2024)

Both of these opinions -- coincidentally published on the same day -- amply demonstrate why some people rationally elect not to purchase insurance coverage. Because what you may well think that you're buying doesn't actually protect you from the losses you fear.

The first opinion involves fire coverage for a home in Malibu. Ms. Hughes bought a homeowner's policy from Farmers. You'd think that'd cover you if your house burned down, right? Nope. Her house burned down, but there's an exclusion in the policy (that her broker allegedly absolutely didn't mention) that says that the policy doesn't cover fire if you could buy a state-sponsored FAIR policy. So lawsuit dismissed.

The second opinion involves a  commercial general liability policy issued by Continental Casualty to a massage parlor owner. What's the absolute biggest risk you face when you own one of those businesses? Right. You're worried that you might get sued if you or one of your employees allegedly touches someone without their consent. Which, of course, happens here. At which point the insurer refuses to defend the lawsuit, relying on an exclusion in the policy, and a stipulated $6.8 million judgment results. The owner sues the insurance company for coverage. Lawsuit dismissed.

Both of these judgments get affirmed. Which is hardly surprising. The relevant exclusions do indeed negate coverage for the exact thing the owners probably bought the insurance for in the first place.

Which you'd think, at some point, would diminish the number of people willing to buy insurance.

Though that assumes you read the fine print of these massively long policies. Which few people do.

Which in turn is, of course, why those exclusions persist.

Schneider v. Hull (Cal. Ct. App. - Dec. 2, 2024)

It's boring, I know, but sometimes I just want to call out an opinion as being really smart and comprehensive. Like this one today by Justice Hull.

It's not the most critical opinion in the world, other than to the parties. There are two adjoining parcels by a river, and the only way to get to one of them is through an easement over the other. To minimize the intrusion on the dominant tenement (*fancy word*), the easement on behalf of the servient tenement (*ditto*) runs along the river.

But that has problems of its own. In 2002, flooding destroyed the riverbank and hence the easement, leading to litigation that was resolved in 2011, in which the trial court moved the easement a little bit inward from the riverbank. The goal, again, was to minimize the impact on the dominant tenement.

But floods will be floods. Then, in 2018, there was another flood, which made the new easement too difficult to traverse. Leading to new litigation, and a plethora of arguments about claim preclusion, issue preclusion, the nature of easements, etc. Imagine a really difficult property class combined with a really hard class on civil procedure. That's today's opinion.

Nonetheless, Justice Hull does a great job. His opinion seems sensible and entirely just -- as well as doctrinally correct. There's a new easement, this time (again) a little bit further inland. And unlike the trial court, the Court of Appeal doesn't make the owner of the servient tenement pay the million bucks or so it'd take to stabilize the riverbank so we don't see round three.

Hopefully this latest easement won't be washed away too. But if it does, well, that's life. Back to square one. Again.

For now, though: Justice.