SANTA CLARA, Jan. 14 – An intermediate state appeals court in California has affirmed dismissal of coverage, negligence, and bad faith claims by a geranium grower against excess insurer Great American Insurance Co., finding the trial court acted properly in granting rescission ab initio of the policy because the insured omitted material facts from a loss history on the policy application.
The court ruled that the grower omitted from the policy application’s loss runs and loss histories prior pathogenic outbreak issues experienced by the grower, and that such failure to disclose was material to Great American’s agreement to issue a policy insuring against such losses. The appeals panel further held that under California law, including the statutory scheme for rescission of insurance policies, the trial court acted properly within its “broad equitable discretion to fashion appropriate remedies so as to establish equity between the parties.”
The Court also found that the grower “substantially contributed” to the delay in the investigation of the contaminant outbreak claims, dismissing all contract, bad faith, and negligent claims and affirming judgment in favor of the insurer.
Goldsmith Seeds v. Great Am. Ins. Co., (Jan. 14, 2016, Cal. Sixth App. Dist)
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