In a win for Wiley's client, a California superior court,
applying California law, held that California Insurance Code
Section 533 ("Section 533") barred all indemnity coverage
for a retaliation claim against a county and certain county
employees.
San Bernardino Cnty. v. Everest Nat'l Ins. Co., No.
23STCV02336 (Cal. Super. Ct. Sept. 12, 2025). Although the
court determined that part of the underlying settlement fell within
an exception to Section 533, it declined to apply the larger
settlement rule.
The insured California county became involved in a dispute over
flood control casements on land owned by a local developer. The
developer sued the county and became increasingly involved in local
politics. The county settled the lawsuit with the developer after a
divided vote by its Board of Supervisors. Following the settlement
with the developer, the county began investigating the developer
and his political activity. The county filed criminal charges
against the
