SWH v. Select Ins.
This case presents the following issue: Does a directors and officers liability and private company indemnification insurance policy issued by Respondent Company provide coverage for amounts paid by appellant to settle a lawsuit brought by a class of current and former employees for alleged violations of California wage and hour laws?
The trial court concluded appellant’s claim for the settlement payment fell within the Policy exclusion for certain statutory violations and granted summary judgment in respondent’s favor. Reviewing de novo, court conclude (1) respondent’s claim fell within the Policy’s definition of insurable loss, which includes “settlements” of employment claims; (2) there is a triable issue of fact whether the net settlement proceeds paid by respondent constitute a form of restitution that California law makes uninsurable; (3) the exclusion relied on by the trial court either does not exclude respondent’s claim or is ambiguous; and (4) since there is a possibility of coverage, the trial court erred in summarily adjudicating respondent’s claim for breach of the implied covenant of good faith and fair dealing in favor of Select. Court therefore reversed and remanded for further proceedings.
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