Cumbre, Inc. v. State Compensation Ins. Fund
Plaintiffs Cumbre, Inc. and its wholly owned subsidiary, Coachella Valley Insurance Service, Inc., (collectively Cumbre) were preferred brokers for defendant State Compensation Insurance Fund (State Fund). In 2003, State Fund unilaterally terminated its preferred broker agreements with certain brokers, including Cumbre, who had a loss ratio above 80 percent for the years 1999, 2000, and 2001. Cumbre sued State Fund for various causes of action, including a breach of contract, a violation of the Unfair Competition Law (UCL) (Bus. & Prof. Code, 17200 et seq.), and a violation of the common law doctrine of fair procedure. In 2004, State Fund offered to reinstate the brokers on condition that the brokers were not engaged in litigation with State Fund. Cumbre declined the offer and amended its complaint by adding a claim under section 1983 of title 42 of the United States Code (section 1983) for encumbering its access to the courts. In response to the parties pretrial motions, the trial court largely ruled in State Funds favor, sustaining its successive demurrers and granting its motion for summary judgment. Court reverse the trial courts decision granting State Funds motion for summary judgment or summary adjudication as to Cumbres causes of action under the doctrine of fair procedure and under the UCL. Court affirm the trial courts judgment in all other respects.
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