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Recent Cases of Interest

By October 25, 2013October 25th, 2018Insurance Blog, Larry Arnold

Larry Arnold

A couple of recent cases have come down that I thought were worthy of note.

The first case, Alexander v. Farmers Insurance Company, decided by the Second Appellate District in California, deals with whether a court can stay an appraisal proceeding pending resolution of a declaratory relief case.  In this case, the question was how to calculate allowable depreciation in the event of a partial loss to a structure pursuant to California Insurance Code, Section 2051.  It was alleged in the case that Farmers calculated depreciation based solely upon the age of the item and did not take into consideration its actual condition.  The Appellate Court determined that it was appropriate for the trial court to stay the appraisal pending its decision on how to apply depreciation.  Essentially the Appellate Court determined the trial court did not abuse its discretion in deciding that a determination should be made in the declaratory relief case as to how to apply depreciation prior to the appraisal proceeding forward.

The second case of Ventura Kester, LLC v. Folksamerica Reinsurance Co., another California Appellate Court case, dealt with whether an insured could recover for loss of rents even though the building was not actually rented at the time of loss.  The case was decided on summary judgment, and the court determined that there was a triable issue of fact as to whether the insured would have secured a tenant but for vandalism damage to the structure.  To the extent the insured could prove that it would have secured a tenant, then loss of rents coverage may be available.