JUDGE PURI Ins Cov Edition
September 2026
IN THE NEWS
The Daily Journal Profiles Retired Judge Puri’s Mediation Style PA G E 1
INSURANCE COVERAGE
M E D I AT I O N S E R V I C E S
Judge Puri’s Record Settling Cases Shines Through Her Client Reviews PA G E 7
New Coverage Ruling from the CA Supreme Court Explained PA G E 4
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Interested in mediating with Judge Puri? Reach out to the Kathleen Emma Case Management Team at ADR Services, Inc.
(415) 772-0900 kathleenteam@adrservices.com
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Neutral
BIOGRAPHY
J u d g e Ve d i c a P u r i ( R e t . ) b r i n g s d i s t i n c t e n e r g y, r i g o r , a n d clarity to complex civil disputes. Over the course of a legal career spanning more than three decades, she has served as a trial lawyer, a partner in private practice, and a San Francisco Superior Court judge—experience that places her among the few neutrals who have sat in every seat that matters when cases are evaluated, tried, and resolved. Before her judicial appointment , Judge Puri built a formidable litigation and trial practice representing both plaintiffs and defendants in highstakes matters, with particular depth in insurance coverage and bad faith disputes. She tried dozens of jury and bench trials across a wide range of civil disciplines, gaining first-hand insight into how cases actually unfold in the courtroom—and how juries truly r e s p o n d t o e v i d e n c e , c r e d i b i l i t y, a n d risk. That trial grounding continues to define her work as a neutral. In 2019, Governor Jerry Brown appointed Judge Puri to the San Francisco Superior Court , where she presided over civil trials, mandatory settlement conferences, law and motion, and probate matters. She was a l so a m e m b e r o f t h e c o u r t ’s C i v i l Settlement Panel, an assignment she regarded as one of the most meaningful of her judicial career. Known for her preparation, decisiveness, and ability to connect with litigants and counsel alike, Judge Puri developed a reputation for moving entrenched disputes toward resolution. She frequently stayed beyond court hours to continue working w i t h p a r t i e s , d r i ve n by t h e b e l i e f t h a t e f f e c t i ve settlement requires persistence, candor, and a clear understanding of both legal and human dynamics. 3
BREAKING NEWS: New CA Supreme Court Coverage Case Insurance coverage litigation is known to move at a glacial pace. So, when the California Supreme Court issues a unanimous coverage opinion that presents a paradigm shift on when to sue an excess carrier for breach of contract and bad faith -- we all pay attention. (Ok, well, maybe not all, but certainly my fellow coverage nerds). The story began with wildly successful investment bank partners, Saul Fox and Dexter Paine. They created Fox Paine Company LLC, based in the Bay Area, which managed funds worth over $1B. The beginning of the end came in 2007 when Paine created a third fund and launched his own company, with Fox as a minority participant. The partnership fell apart shortly thereafter. Fox sued Paine for breach of contract and breach of fiduciary duty. Ensuing bitter litigation between the two partners and the company’s insurance carriers will soon span two decades and many different states. The former partners tendered a myriad of lawsuits against one another to their carriers under a $50M tower of Private Equity Professional Liability policies. The policy chart covering FPC LLC is as follows:
Primary Policy Houston Cas. Co.
Policy Amount $10 million
Excess Policies
Policy Amount
Attachment Point
Twin City
First layer $10 million
$10 million
St. Paul
Second layer $10 million
$20 million
Twin City
Third layer $10 million
$30 million
Liberty Mutual
Fourth layer $10 million
$40 million
The San Francisco Litigation. The San Francisco litigation (stayed for many years while the New York litigation proceeded) generated a very recent California Supreme Court decision which changes how and when insureds can plead in excess carriers. The Fox parties sued their primary and excess carriers for declaratory relief, breach of contract and bad faith alleging the carriers had made secret and massive payouts to the
Fox Paine & Company, LLC v. Twin City Fire Insurance Company 2026 WL 2148053
B y H o n . Ve d i c a P u r i ( Re t . )
Paine parties related to the underlying litigation, while leaving the Fox parties high and dry. The Fox parties pled they had tendered defense costs to the carriers, the carriers failed to reimburse them and that the Fox parties had incurred losses (plus interest) “exceeding $43M, not subject to offset.” The carriers filed demurrers to all causes of action in San Francisco Superior Court alleging that the Fox parties had improperly sued the excess carriers without alleging exhaustion of the primary and first excess layers of insurance. The trial court granted the demurrers in general, without leave to amend.
The Trial Court Ruling. It is a basic tenet that excess insurance coverage is not triggered until exhaustion of an underlying policy. It is a rule, which California coverage practitioners have come to know and rely on for decades. “An excess insurer's coverage obligation begins once a certain level of loss or liability is reached; that level is generally referred to as the ‘attachment point' of the excess policy. [Citations.]" (Croskey, et al., Cal. Practice Guide: Insurance Litigation (The Rutter Group 2023) ¶ 8:177.)” The trial court sustained demurrers without leave to amend on the declaratory relief and breach of contract claims holding that because Twin City only paid $6 million out of the $10M limit on its first excess policy, exhaustion has not yet occurred for any of the upper excess layers to be triggered. 4
it must be practically or reasonably 108 Cal.Rptr. 480, 510 P.2d likely that the insured's potential 1032 [recognizing a claim for liability will reach into the excess bad faith in circumstances coverage; absolute proof that the where the insured's failure to The COA decision affirmed the trial policies will be triggered is not satisfy a condition of coverage court in all respects. First, the COA required.” Id @ *12 (emphasis was allegedly brought about found that there was no actual added). Applying the new rule, the by the insurers’ bad-faith controversy over whether excess Court found the demurrer should conduct]), it becomes clear layers had been reached, as required not have been sustained as to the that it would ask too much, to obtain declaratory relief, because declaratory relief/breach of contract too soon, from insureds to the Court would not assume as true actions because (1) the dispute is require them to plead the prior plaintiff’s allegation that it had sufficiently concrete (defense bills exhaustion of all underlying incurred $43M in losses (which tendered and not paid) and (2) the would have naturally pierced all the insureds would suffer hardship if insurance before they may layers). Second, the COA held there lack of exhaustion defeated their pursue a bad faith claim. was no breach of contract because claims and required them to sue The proper focus at the the relevant excess policies had not different carriers in different pleading stage is not on yet attached upon the exhaustion of jurisdictions at different times whether coverage under a the underlying policies. And finally, possibly enabling inconsistent particular excess policy has the COA held the plaintiffs could not opinions. already attached and payments state a bad faith claim because there under that policy are already was coverage had no attached from The Court also offered the following due. Rather, at that phase of the excess layers and coverage was a guidance in how to apply the new the proceedings an insured in prerequisite to claiming bad faith. rule, including that an insured can plaintiffs’ position needs only plead “the ‘worst case or highest to allege facts that, taken as The opinion went so far as to explain estimate of damages.” Id. The Court that the trial court could have also cautioned trial courts, in performing true, are sufficient to show that found that declaratory relief was not the reasonable likelihood inquiry at coverage under a defendant “necessary or proper.” The general the pleading stage “not give undue insurer's excess policy will rule in California is that even if an weight to what are at that juncture attach — or that it would “actual controversy” has been shown only potential defenses to coverage attach, if not for the excess (Code Civ. Proc., § 1060-1), a trial that may prove successful in future insurer's bad-faith conduct — court has latitude not to entertain a proceedings and ultimately prevent and that the insurer's claim for declaratory relief if it was exhaustion.” Id. misconduct has impaired the not necessary or proper. insured's recovery of benefits As to bad faith: the CA Supreme owed to it under the policy. Id The CA Supreme Court Rejects a Court held that a bad faith claim @ *21. Strict Rule when Pleading against an excess carrier can survive Exhaustion demurrer even if the excess policies are not exhausted. After pointing While this case applies specifically As to Decl. Relief Claim: The CA out at that the COA’s reliance on and only to the pleading stage, it is a Supreme Court reversed the COA Waller v. Truck Ins. Exchange (1995) sea change in how an insured may holding “that an insured may state a 11 Cal.4th 1, 36 (which generally plead its case against excess carriers. viable cause of action for declaratory stated that bad faith cannot occur relief regarding coverage and liability unless policy benefits were due) was Written September 2026 under an excess insurance policy even misplaced, the CA Supreme Court if all of the underlying insurance went on to state: coverage has not yet been When it is understood that a exhausted.” Id @ *1. “While insureds in this position must adequately breach of the implied plead their covered losses, the covenant of good faith and relevant principles governing the fair dealing can occur before availability of declaratory relief do coverage is due and prior to not support a strict rule that would the breach of any obligation to withhold this relief whenever pay benefits under a policy, exhaustion has not also been and that in some instances it alleged.” Id. The Court of Appeal (“COA”) Decision Went to Great Lengths to Affirm the Trial Court.
Instead, the Court adopted a new rule – at the pleading stage – related to exhaustion of policies: “for a declaratory judgment coverage action involving an excess policy to be ripe,
may be the insurer's bad faith itself that prevents an insured from fulfilling all of the conditions of coverage (see Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566, 574–575,
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Testimonials F E AT U R E D
“ I c o u l d n ot h a ve b e e n m o r e p l e a s e d w i t h J u d ge P u r i . S h e w a s p r o a c t i ve i n a d va n c e o f t h e s e s s i o n a n d s e t t h e st a ge fo r a s u c c e s s f u l r e s o l u t i o n . During the session, she helped the parties quickly ge t p a st va r i o u s t a n ge n t i a l i s s u e s t h a t w o u l d h a ve b e e n d e a l b r e a ke r s i f t h e p a r t i e s h a d a t t e m pt e d t o n e got i a t e d i r e c t l y. S h e a l s o c l e a r l y c r e a t e d t r u st w i t h t h e ot h e r side that helped the case s e t t l e . G r e a t e m ot i o n a l i n t e l l i ge n c e . T h i s w a s a ve r y st r e s s f u l m a t t e r fo r m y c l i e n t (a n d d e r i va t i ve l y fo r m e o n h i s b e h a l f ) , s o I w a s ve r y grateful to bring a painful s i t u a t i o n fo r m y c l i e n t t o a s fa vo r a b l e a r e s o l u t i o n a s c o u l d r e a s o n a b l y h a ve b e e n a c h i eve d . ”
Have feedback for Judge Puri? Email your testimonial to kathleen@adrservices.com
“She is the best mediator I have had to date. Her follow up is amazing. Even though we did not settle during the 1st day of mediation, it was her consistent follow up that nudged the parties to agree to a second session.”
“The clients that I represented had been through a lot, so there was an emotional component for them. She was very supportive of hearing their story, and you can tell she has a lot of compassion in life with the way she works.”
“She was wonderful and extremely effective. We would definitely hire her again.”
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CASE SUMMARIES
Types of cases
M E D I AT E D B Y JUDGE PURI
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California Law firm sued for legal malpractice alleging the firm missed an important deadline. When the firm tendered the claim to i t s i n s u r a n c e c o m p a n y, the insurer not only refused to defend but a l s o re s c i n d e d t h e f i r m ’s E&O policy on the grounds that the managing partner lied on the policy a p p l i c at i o n . Af te r ye a r s of litigation, the insurer re i n st ate d t h e l aw f i r m ’s coverage and contributed to settling the underlying malpractice claim.
Insurance Coverage & Bad Faith Insurance Appraisal (Umpire) Employment + Class Action/PAGA TBI (Mild to Catastrophic)
Premises Liability Personal Injury Legal Malpractice Business/Breach of Contract Probate, Estates & Trusts Real Property Product Liability, Mass Torts & Pharmaceuticals
Ins Coverage Summaries Summaries of insurance coverage cases handled personally by Judge Puri as a trial lawyer and on the bench
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A family in the Bay Area made a claim for a massive water leak that damaged their entire home. The fa m i l y ’s h o m e ow n e r ’s i n s u re r d e n i e d coverage. The home fell into disrepair, consumed by mold damage from the water leak and the fa m i l y i nvo ke d t h e p o l i c y ’s appraisal provision. The appraisal p a n e l rev i ewe d t h e i n s u re r ’s b i d to re p a i r t h e h o m e (o f $ 8 0 0 K ) a n d t h e fa m i l y ’s b i d to re b u i l d t h e h o m e a n d determined it would take $2.1M to repair the home. The carrier still r e f u s e d t o p a y. T h e f a m i l y s u e d t h e carrier for bad faith and after deposition of key representatives, the case settled. 7
CASE SUMMARIES
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Software company was sued for failing to perform on a contract. The company tendered the claim to its Te c h n o l o g y E r r o r s a n d O m i s s i o n s c a r r i e r . T h e c a r r i e r agreed to defend the claim by appointing and paying for d e fe n s e c o u n s e l . Two ye a r s i n t o t h a t s u i t , t h e s o f t wa re company tried to reach a settlement and invited the carrier to at te n d t h o s e d i s c u s s i o n s . T h e c a r r i e r d e c l i n e d . At t h e settlement meeting, the software company agreed to waive its outstanding invoices and tendered the settlement for reimbursement. The carrier refused, arguing that a waiver of invoices did not equal damages. A bench trial resolved the issue of first impression holding that invoices could be c o n s i d e r e d d a m a g e s u n d e r t h e t e r m s o f t h e Te c h E & O p o l i c y a t issue. Shortly before Phase 2 of trial, the bad faith phase, was to begin, the case settled.
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A public institution bought a complex insurance policy through brokers. The institution provides health i n s u r a n c e fo r t h e i r e m p l oye e s t h ro u g h a s e l f - f u n d e d plan and also subscribes to a kind of insurance, called stop loss insurance, to protect itself against catastrophic claims. Names of patients who could possibly become highcost insureds were sent to the broker so those patients could be properly insured. The broker failed to include a key group of patients, whose insurance claims tallied over $1M in m e d i c a l c a re c o st s . T h e i n st i t u t i o n ’s c l a i m fo r re i m b u r s e m e n t was properly denied as a result. The broker refused to acknowledge the mistake and took the case to trial. The jury announced within an hour of deliberations that the broker committed negligence and awarded a majority of the medical care costs sought.
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CASE SUMMARIES
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A Renaissance reenactment group was sued in civil court for failing to protect minors from molestation. Certain group members were arrested and convicted in criminal court for molestation of six children. The group settled the civil suit for millions and tendered the settlement to its carrier for reimbursement. The insurer refused because its policy contained a molestation exclusion. The group argued the exclusion did not cover negligence claims as was t h e i n s u re d ’s i n te n t . T h e insurer moved for summary judgment requesting that the court issue an order that there was no coverage as a matter of law because of the molestation exclusion. In an opinion of first impression, the court denied the summary judgment and shortly thereafter, the parties settled.
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A n e m p l oye e o f a c a re giving company fleeced an elderly client of all her savings. The company made a claim for reimbursement under i t s e m p l oye e d i s h o n e st y p o l i c y and the claim was successfully resolved after investigation and mediation.
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A C a l i fo r n i a fa m i l y ’s severely developmentally disabled son was placed into a Level 4 group home on a part time basis. He lived with his parents on a part time basis as well. After an incident in the group home, tragedy struck and the son strangled and ended up killing his roommate. The contract for Level 4 homes requires 24-hour supervision. The son was found incompetent to stand trial and his parents were sued in civil court for wrongful death. The fa m i l y ’s h o m e ow n e r ’s i n s u r a n c e declined to defend the family against this lawsuit on the grounds that the son acted i n t e n t i o n a l l y. A f t e r l i t i g a t i o n , the insurer reversed course, provided a defense and tendered full policy limits to settle the matter. 9