The legal skirmish took a turn in July when the court granted Continental’s motion to dismiss the bad faith and punitive damage claims. Nevertheless, the power companies were given an opportunity to rectify the issues in their first amended complaint, which they promptly did by filing a second amended complaint in August. The insurer, not backing down, once again sought to dismiss the claims in September.
In response to Continental’s motion, Sempra and SoCalGas reminded the court of its prior ruling in July 2020, which upheld Continental’s duty to defend them.
“Under California law, the settlement of a claim that is potentially covered shifts the burden to the insurer to establish that the settlement is not covered,” the companies argued. “Continental has not done so here.”
No comments were provided by counsel for Associated Electric, while representatives of the other parties remained silent in response to requests for comments.
