Alpha Therapeutic Corp. v. Federal Insurance

*834 MEMORANDUM *

Alpha Therapeutic Corporation and Welfide International Corporation (“Alpha”) bring breach of contract and bad faith claims against their liability insurer, Federal Insurance Company (“Federal”), for Federal’s refusal to defend Alpha in two underlying lawsuits filed by former employees after determining that the underlying lawsuits fell within the Employment Related Practices (“ERP”) exclusion in the insurance contracts. 1 This exclusion denies coverage for:

There was no error in the District Court’s finding that Federal had no duty to defend or indemnify Alpha. See Low v. Golden Eagle Ins. Co., 104 Cal.App.4th 306 , 128 Cal.Rptr.2d 423, 428-29 (2002) (articulating a test for whether defamation claims fall within ERP exclusions under California law). The allegedly defamatory statements described in the underlying complaints were “part and parcel of [the] allegedly wrongful termination of the plaintiffs’ employment,” Loyola Marymount Univ. v. Hartford Accident & Indem. Co., 219 Cal.App.3d 1217 , 271 Cal.Rptr. 528, 531 (1990), and were made “in the context of [the former employee’s] employment.” Frank and Freedus v. Allstate Ins. Co., 45 Cal.App.4th 461 , 52 Cal.…