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Insurance Coverage Litigation Newsletter - Spring 2020

California Appellate Court Narrowly Construes EPL “Wage and Hour” Exclusion by Jason Reichlyn - In S. California Pizza Co., LLC v. Certain Underwriters at Lloyd’s, London etc., 40 Cal.App. 5th 140, 252 Cal. Rptr. 3d 635 (Ct. App. 2019), as modified on denial of reh’g(Sept. 20, 2019), review denied (Jan. 2, 2020), rev. denied (Jan. 2, 2020), SouthernCalifornia Pizza Company (“SCPC”) sought review of the trial court’s application ofa wage and hour exclusion in an employment practices liability (“EPL”) insurancepolicy, which Certain Underwriters at Lloyd’s, London (“Underwriters”) successfullyargued precluded coverage for an underlying putative class action lawsuit broughtagainst SCPC. The Court of Appeal reversed and remanded. It held that the wageand hour exclusion applied to a claim alleging failure to provide required wagestatement information because that statutory requirement is a wage law, but that theexclusion did not apply to a claim for reimbursement of business-related expensesbecause reimbursement statutes are not wage laws and do not address paymentsmade in exchange for labor or services.

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