Health Net, Inc. v. Rli Insurance

In this insurance coverage dispute, Health Net, Inc. (HN-INC), brought suit against four of its insurers (one primary and three excess carriers) seeking a declaratory judgment that the insurers had a duty to defend and indemnify it in over 20 underlying actions. The parties, however, directed their attention to two specific underlying actions, as the amount of indemnity sought in those actions would far exceed the combined policy limits of the defendant insurers. Relying on a policy exclusion for dishonest acts, the trial court granted summary adjudication to the insurers with respect to HN-INC’s claim for reimbursement of its defense costs and the costs of settling the specified underlying actions. The parties subsequently *238 settled their dispute regarding the remaining underlying actions, and summary judgment was granted in favor of the carriers. HN-INC appeals.

On appeal, we first address whether the two underlying actions at issue sought damages covered by HN-INC’s insurance policies; we conclude that the great bulk of the claims asserted in the underlying actions were not covered, but there was a potential for coverage for some of them. Second, we turn to the…