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(California Insurance Code Section 5335(b) Bars Defense
of Insured for Action Brought by the Attorney General s Office
for Violation of California s Unfair Competition Law and False
advertising Law)
(July 2021) - In
Adir International,
LLC
v. Starr Indem. and Liability Co., 994 F.3d 1032
(April 15, 2021) ( AG lawsuit ), the United States Ninth
Circuit Court of Appeals affirmed the district court s
dismissal of a declaratory relief action filed by Adir
International, LLC ( Adir ) against Starr Indemnity and
Liability Company ( Starr ) arguing that a duty to defend
was owed under Starr s directors and officers policy for an
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The Ninth Circuit ruled on Thursday that a California retailer must pay its own legal fees in a state consumer protection lawsuit brought against it by the California Attorney General, despite its insurer’s agreement to cover defense fees for false advertising or unfair competition claims in the insured’s policy. The retailer was also forced to pay its insurer Two Million Dollars as reimbursement for fees already expended by the insurer as the case was pending.
The three-judge panel in Adir International, LLC v. Starr Indemnity and Liability Co. (9th Cir. Apr. 15, 2021), based their decision on California Insurance Code § 533.5, which provides that insurance policies may not cover any fines or fees arising from criminal actions or lawsuits brought by state or local authorities pursuant to California’s False Advertising Law and Unfair Competition Law. The law also prohibits insurers from defending or indemnifyin
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Calif. Stores Not Owed Defense Of Fraud Suit, 9th Circ. Says
Law360 (April 15, 2021, 6:43 PM EDT) The Ninth Circuit affirmed Thursday that a California law barring insurance for unfair competition actions relieved a Starr Insurance Cos. unit from having to defend the operator of the Curacao retail chain against the state s claims that it engaged in predatory business tactics, spurning the retailer s argument that the law is unconstitutional.
A unanimous three-judge panel of the appellate court left intact a California federal court s ruling that Starr Indemnity and Liability Co. does not have to defend Curacao operator Adir International LLC and its CEO, Ron Azarkman, in the underlying action filed in 2017 by then-California Attorney General Xavier Becerra..
By City News Service
Mar 10, 2021
LOS ANGELES (CNS) - California Attorney General Xavier Becerra today announced a $10.5 million partial settlement with Southland retailer Curacao, resolving multiple allegations that the chain deceived and unlawfully profited from its largely Latino customer base.
Curacao owns and operates nine department stores in Southern California and actively markets to low-income, immigrant Latino consumers. The settlement includes $10 million in debt relief for consumers who were harmed by Curacao s alleged conduct. It also includes additional debt forgiveness for customers who are still paying Curacao for unlawful small claims judgments, plus $500,000 in civil penalties.
The settlement includes injunctive terms requiring Curacao to comply with California law and treat its customers fairly and ethically.
The Curacao retail chain has agreed to pay $10.5 million to partially settle a lawsuit brought by the California attorney general’s office alleging that the company exploited its customer base largely Spanish-speaking immigrants through misleading advertising, unlawful fees, illegal debt collection and abuses of the small-claims court system.
State lawyers filed suit in 2017 against Curacao’s parent company, Adir International, and its chief executive, Ron Azarkman, charging that the stores had for years targeted low-income Latinos who lacked access to traditional sources of credit.
Curacao swindled these customers, state lawyers alleged, by refusing to sell goods at advertised prices and tacking on warranties, accessories, installation services, often without the customer’s knowledge or consent.