USA – CALIFORNIA Trends and Developments Contributed by: Cecilia Miller and Ryan Caplan, Buchalter LLP
Finally, the court disregarded Diblin’s argument that coverage should be afforded under a concurrent inde- pendent causation doctrine; specifically, the violent conduct and Diblin’s mismanagement of his medica- tions. The court found the proffered bases were not independent of each other, such that the doctrine was inapplicable. On these facts, the court affirmed. Takeaways The mere fact that an insured is found liable under an unintentional theory may be insufficient to trigger coverage where the liability is premised solely on adju- dicated intentional conduct. It is also worth noting that the definition of “occurrence” in the policy in question included only an “accident” and did not also include an “event”, unlike many other commercial general liability (CGL) polices. It is unclear whether the same result would have been reached if the “occurrence” definition included both an “accident or event”. The Immediate and Lasting Impacts of the 2025 Los Angeles Wildfires on the Insurance Landscape The significance of these court decisions to the Cali- fornia insurance landscape, however, was overshad- owed by the devastating wildfires that erupted in the greater Los Angeles area in the first few days of 2025. The fires destroyed thousands of structures, scorched more than 57,000 acres and took over 30 lives. Within less than a month of the fires, policyholders filed the first lawsuits seeking recovery for these heart- breaking losses from public utilities, public agencies and insurance companies. The wave of wildfire litiga- tion presents unique challenges to the California judi- cial system due to the number of claimants, the size of the claims and the complex legal issues raised. With these challenges comes the prospect of new precedential decisions in 2026 addressing significant insurance coverage issues. By way of example, it is anticipated that the courts will be required to exam- ine key policy terms and principles in the context of wildfires such as: • the scope of “property damage” for loss arising from ash and debris; • the concurrent causation doctrine; and
• the reasonableness of an insurer’s investigation and claim adjustment of physical property damage claims. On a practical level, this wildfire litigation will con- tinue – for the next several years – to test the ability of California courts, judicial staff and judicial officers to co-ordinate and manage tens of thousands of claim- ants and hundreds of thousands of filings. The litigations filed to date can be grouped into approximately four categories: • litigation by Altadena property owners against Southern California Edison alleging that the utility caused the fire, including the state court-consoli- dated litigation captioned Jeremy Gursey v South - ern California Edison, et al , Los Angeles Superior Court, Case No 25STCV00731; • subrogation litigation by insurance carriers against Southern California Edison for claims paid out due to the Altadena Fire, including the state court case- captioned American Modern Home Insurance Co., et al v Southern California Edison Co., et al , Los Angeles Superior Court, Case No 25STCV09753; • litigation by Palisades property owners against var- ious public entities, including the City of Los Ange- les and the Los Angeles Department of Water and Power, alleging those entities caused the Palisades fire by, inter alia, failing to fully extinguish a fire occurring on 1 January, including the state court case-captioned Grigsby, et al v City of Los Angeles acting by and through Los Angeles Department of Water and Power, et al, Los Angeles Superior Court, Case No 25STCV00832 (“ Grigsby ”); and • insurance litigation by policyholders against the California FAIR Plan, the state’s insurer of last resort, alleging systematic underinsurance, such as by illegally denying smoke damage coverage, including the state court case-captioned Ron - ald Barak, et al v California FAIR Plan Associa - tion, et al , Los Angeles Superior Court, Case No 25STCV10670. Not surprisingly, the cases are proceeding slowly. For example, demurrer hearings are scheduled in the Gris - gby matter in February. As a result, substantive deci- sions on insurance coverage issues are not imminent.
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