Entertainment Industry Development Corp. v. United States Liability Insurance

Since the facts of this case are known to the parties, we do not recite them here.

*587 Entertainment Industry Development Corporation of Southern California (EIDC) argues that the district court’s dismissal of the Complaint with prejudice under Federal Rule of Civil Procedure 12(b)(6) was improper because: (1) EIDC’s insurance policy obligated United States Liability Insurance Company (USLIC) to defend EIDC against a criminal investigation initiated by the District Attorney of Los Angeles County; and (2) California Insurance Code § 533.5(b) permits insurance coverage for the cost of defending against a pre-charge criminal investigation.

USLIC was not obligated to defend EIDC under the terms of the insurance policy. Here, there was no potential under the parties’ insurance policy that USL-IC would be obligated to indemnify EIDC against any penalties that might follow from the District Attorney’s criminal investigation. Scottsdale Ins. Co. v. MV Transp., 36 Cal.4th 643 , 31 Cal.Rptr.3d 147 , 115 P.3d 460, 466 (2005); Jaffe v. Cranford Ins. Co., 168 Cal.App.3d 930 , 214 Cal.Rptr. 567, 570 (1985). Because EIDC’s claim arose in California, the policy language providing that “Loss”…