Business
Courts rejects bid to beef up policies issued by California’s home insurer of last resort
Retired nurse Nancy Reed has been through the ringer trying to get insurance for her home next to a San Diego County nature preserve.
First, she was dropped by her longtime carrier and forced onto the state’s insurer of last resort, the California FAIR Plan, which offers basic fire policies — something thousands of residents have experienced at the hands of fire-leery insurance companies.
But what she didn’t expect was how hard it would be to find the extra coverage she needed to augment her FAIR Plan policy, which doesn’t cover common perils such as water damage or liability if someone is injured on a property.
She secured the “difference-in-conditions” policies from two insurers, only to be dropped by both before finally finding another for her Escondido home.
“I’ve lived in this house for 25 years, and I went from a very fair price to ‘we’re not insuring you anymore’ — and I’ve had three different difference-in-conditions policies,” said Reed, 71, who is paying about $2,000 for 12 months of the extra coverage. “And I’m holding my breath to see if I will be renewed next year.”
Now, a Department of Insurance regulation that would have required the FAIR plan to offer that additional coverage has been blocked by a state appeals court — leaving the plan’s customers to find that insurance in a market widely considered dysfunctional.
The court ruled earlier this month that the order would have forced the plan to offer liability insurance, which was not the intent of the Legislature when it established the plan in 1968 to offer essential insurance for those who couldn’t get it.
“We appreciate that the court confirmed the California FAIR Plan is designed and intended to operate as California’s insurer of last resort, providing basic property coverage when it cannot be obtained in the voluntary market,” said spokesperson Hilary McLean.
Insurance Commissioner Ricardo Lara said he is “looking at all available options” following the decision. “I’ve been fighting so people can have access to all of the coverage the FAIR Plan is required by law to provide,” he said in a statement.
Lara has faced criticism from consumer advocates who’ve called for his resignation over his response to the state’s ongoing property insurance crisis.
A FAIR Plan policy covers fires, lightning, smoke damage and internal explosions, as well as vandalism and some other hazards at an additional cost. But in addition to water damage and liability protection, it doesn’t cover such common perils as theft and the damage caused by trees falling on a house.
The demand for the additional coverage — commonly referred to as a “wrap-around” policy — has become even greater than in 2021 when Lara issued the order overturned on appeal.
The FAIR Plan at the time had about 160,000 active dwelling policies following a series of catastrophic wildfires, including the 2018 fire that nearly destroyed the mountain town of Paradise. By September, that number had grown to 646,000.
The insurance department lists less than two dozen companies that offer wrap-around policies, including major California home insurers such as Mercury and Farmers and a a number of smaller carriers.
Broker Dina Smith said that to find the coverage for her home insurance clients she needs to place about 90% of them with carriers not regulated by the state — with the combined coverage typically costing at least twice as much as a regular policy.
“The [market] is very limited,” said Smith, a managing director at Gallagher.
Safeco has not written California wrap-around coverage since the beginning of the year and will begin non-renewing existing policies next month. Smith also said carriers are being selective, with the ones that offer the coverage often demanding exclusions, such as for certain types of water damage.
“If I’ve got a newer home with no prior claims … for liability losses, it’s going to be easy to write. If I get a home that is built in the 1950s that might still have galvanized pipes … that’s going to be a tough one,” she said.
Attorney Amy Bach, executive director of United Policyholders, a San Francisco consumer group, said the difference-in-conditions, or DIC, market is getting just as problematic for homeowners as the overall market.
“The market is not as strong as it needs to be … given how many people are in the FAIR Plan, and there aren’t as many DIC options — with the DIC companies being just as picky as the primary insurers,” she said.
There is also confusion about the policies, she said. Her group is considering pushing for a law next year that would clearly label the coverage so consumers better understand what they are buying.
Business
The robot puppeteers of Silicon Valley teaching humanoids how to make your morning coffee
Fernando Flores can spend eight hours a day pouring the same cup of coffee.
He is not a barista. He’s a robot puppeteer, trying to train humanoids.
He manipulates mechanical arms remotely, using hand and arm sensors to make them pick up a pot of coffee, pour it into a mug and put the pot back in the coffee maker. Flores checks for spills, then empties the mug back into the pot by hand and does it again — hundreds of times.
“The repetitiveness, it can cause some discomfort,” said Flores, who has the title of senior robotic pilot at San Francisco startup Encord. “It becomes second nature after a while.”
This Sisyphus of Silicon Valley is on the front lines of a rapidly expanding industry of robot trainers, preparing to teach and operate the army of humanoid robots scheduled to march out of nearby factories in the coming year. Encord practices, records and sells data about movement to the companies racing to bring humanoids to homes, offices and factories.
If tech companies’ optimistic plans are to be believed, a swarm of American-built robots is about to hit the market.
Tesla’s Fremont factory stopped car production this year to make way for production lines for its Optimus robots, with unbelievable plans to ramp up capacity to 1 million units a year. Palo Alto-based 1X Technologies is already manufacturing its 66-pound, 5-foot-6 humanoid named Neo at its factory in Hayward. The company received 10,000 preorders, and its first shipment is expected later this year. Figure AI’s humanoid factory in San Jose has increased its manufacturing capacity to produce one Figure 03 robot an hour, with the goal of producing 12,000 a year.
Fernando Flores demonstrates the articulation of a robot performing a whisking motion at Encord on May 21.
(Paul Kuroda / For The Times)
Goldman Sachs projects the global market for humanoids could reach $38 billion by 2035.
The AI of these humanoid robots needs an immense amount of data on human movement. How humans write, speak, code and compose was easily scraped off the internet, but the bots need more information to master how to stand, step, lift, squeeze, pour and perform other physical movements. That is where companies like Encord come in.
The $10 billion invested in robotics in 2026, according to CB Insights, has spawned an industry focused on training robots. Initially, that meant humans strapping iPhones to their foreheads, recording actions like cooking, cleaning and performing household chores. That, however, doesn’t capture the exact torque, force and grip required for a robot hand to work flawlessly.
Now, humans are directly guiding robots through expensive rigs that let them control the robots’ movements. Data collected using robot arms offer richer insights into motor skills and object manipulation. Encord charges clients up to $1,000 per hour for training data.
The information gathered from trainers controlling robots is “super important to bridge the next level of learning,” where robots will learn to correct mistakes and do the chores on their own, said Vineeth Velmurugan, head of robotics learning at Encord.
The company is already working with some of the top companies in robotics, but said it couldn’t share most names. Among the clients it could mention were Toyota Research Institute and Weave, which already has laundry-folding robots in a few homes.
Brian Gonzalez pulls an ethernet cable using a robotic arm at startup Encord on May 20.
(Paul Kuroda / For The Times)
Many of the new robotic data companies are focusing on industrial use cases. Robots can perform better in a structured, predictable environment, like a factory or warehouse.
Home tasks are tougher, as layouts and tasks are more varied and messy. While many bots have mastered walking, they still struggle to open doors, fridges and washing machines smoothly. They don’t know where or how to grasp a doorknob, handle or door edge or how much pulling, pushing or twisting force to apply.
Flores has mastered making the robot arms pour coffee, but he still often spills. When that happens, he deletes records of the attempt.
“Typically, we don’t want any mistakes,” he said. “If we have more than three consecutive mistakes within a 15‑second window, that’s not going to be good data.”
Inside Encord’s test facility in Hayward, it has replicated a standard American home with a fully furnished living room, kitchen and bathroom.
In the living room, a pilot rearranges an untidy study desk. She first scatters AA-size batteries, pens and scissors on the table, and walks back to the nearby control rig to make the robot arms place each one inside the tray of a desk organizer.
Depending on the day’s training, the pilots could be opening and closing refrigerator doors, whisking liquids in a bowl, sorting silverware or turning a water faucet on and off over and over until the robot arms get it right.
Cortney Weintz, left, and Tony Schiller record data with cameras at Encord.
(Paul Kuroda / For The Times)
In another corner of the facility, people wearing smart glasses place and pick up playing cards and sort plastic plates by hand, collecting first-person videos.
One key skill for the coming bot invasion: plugging in cables.
Companies want robots that can crawl into duct spaces, identify ports and plug cables to help build the massive data centers needed for AI. Encord replicated a real data center server rack, where an operator inserts blue cables into penny-sized sockets all day.
Many companies have entered this business. Meta-backed Scale AI and Palo Alto-based Micro1 are major players in the space. China has more than 40 state-owned robot data-collection facilities where hundreds of on-site humans mimic train bots how to move in the real world.
In Watertown, Mass., Tutor Intelligence has set up a 100-robot facility dedicated to harvesting movement data. Its robot arms, which are being trained to do factory work, are controlled by a human team split across Mexico, the Philippines and Boston. This is in part to train its robot, Sonny, which will hit the market later this year.
Elaine Batchlor sorts screws and bolts with a robot in a mockup at Encord.
(Paul Kuroda / For The Times)
“We built the Data Factory to bootstrap the initial intelligence for the Sonny robot, so that we can begin to deploy Sonny into the field,” said Josh Gruenstein, co-founder of Tutor. Ten of its remote operators are based in Boston, and the rest are international.
Remote operation is emerging as an integral part of the humanoid robot business. Employing teleoperators in countries where wages are much lower than in the U.S. could, in theory, mean a robot controlled by a human in another country could do a task at a fraction of the cost of having an American do it.
This month, a humanoid robot cleaning service in San Francisco called Gatsby completed a robot cleaning of a U.S. home using a teleoperator in Mexico.
The technology is still evolving, said Aron Frishberg, co-founder of Gatsby, but being a first mover means Gatsby is getting more training.
“There’s obviously stuff that goes wrong,” he said. “It’s really hard to get precise hand movements or arm movements and grab something.”
Encord co-founder Ulrik Hansen said it will be setting up a teleoperations center in its Hayward facility in the next three months. Even as more robots are deployed and master increasingly sophisticated tasks, they will still need humans to occasionally take control remotely.
“They will need some exception handling when they get things wrong,” he said.
Hundreds of teleoperators will learn where the system succeeds, where it breaks and step in when needed. Once those patterns emerge, Hansen said, they can move teleoperations to cheaper locations abroad or to the Midwest.
Back in Hayward, Flores created new coffee-pouring challenges for his robot arms. He changed what was on the counter around the coffee maker and moved the mug to different spots. It takes a lot of know-how to puppet and train a robot, he said.
“A lot of people would (guess) this might be easy, this is dumb,” Flores said. “There actually is thought here. There actually is critical thinking.”
Business
Struggling Carls Jr. franchisee plans to close 10 and sell 49 California locations
A Carl’s Jr. franchisee is trying to close and sell his 59 locations in California after filing for bankruptcy protection in April.
The franchisee, Harshad Dharod, who has branches mostly in Southern California, intends to close 10 of the branches he controls and find a buyer for the remainder, according to a broker helping find buyers.
In earlier bankruptcy filings, Dharod had blamed California and Carl’s Jr. for his stores’ struggles. Dharod said a lack of support and innovation from Carl’s Jr. and an increase in labor costs from a $20 minimum wage left him unable to cover his expenses.
Dharod couldn’t be reached for comment.
A spokesperson for Carl’s Jr. and its parent company CKE Restaurants, said they are aware of Dharod’s decision to sell.
“This situation is specific to this individual franchisee’s financial and business circumstances,” said the spokesperson. “This has no impact on the operations of any other Carl’s Jr. locations.”
National Franchise Sales will oversee the sale, which spans Southern and Northern California.
A spokesperson for the broker said it already has interest from prospective buyers. The spokesperson said that when a franchise changes owners, employees and managers usually keep their jobs.
Carl’s Jr. began in 1941 as a hot dog cart on the corner of Florence and Central in Los Angeles and grew into one of the region’s best-known burger chains. It opened its first sit-down restaurants with expanded menus in Anaheim in 1946. Its smiling yellow star was born in the 1950s and rapidly spread across California throughout the 1970s.
Although it moved its headquarters from Carpinteria to Tennessee in the last 10 years, its menu still reflects its California origins, with items such as the Cali XL, a double cheeseburger. The chain was among the first to spot the meat-free trend and introduced plant-based burgers and the charbroiled turkey burger. In the early 2000s, it made a splash with commercials pointing to its California origins.
It has had a tough time this year remaining relevant amid new competitors and fast-food consumers who are becoming more picky about what they will pay for and eat, analysts say.
Like most restaurants, Carl’s Jr. has been struggling to attract customers at a time when many are increasingly concerned about inflation and the health of the economy. Some chains are slashing prices. Smaller chains can’t compete well in the price wars. Those without a strong brand identity and fan base have been suffering.
Dharod told the bankruptcy court that business had become particularly bad in the last two years, leaving him without sufficient access to cash to cover wages, rent, supplies and insurance. Although his outlets have generated more than $6 million in monthly revenue, they have been losing more than $600,000 per month this year.
He had to ask for special permission to use his daily cash flow to fund expenses, or risk running out of money and being forced to close his outlets.
A small group of the close to 1,000 employees working for the franchisee say the efforts to cut costs to the bone have left them overworked, understaffed and exposed to violence.
Some say they are getting injured as they have to do the work of multiple people. Some detailed violent interactions with customers, including robberies and physical assaults, and said the company didn’t provide safety training. Some have staged multiple walkouts in recent months to bring attention to their concerns.
Business
Vince McMahon and others are sanctioned for destroying evidence in WWE shareholder lawsuit
A Delaware Court of Chancery judge delivered a blow to wrestling impresario Vince McMahon and other World Wrestling Entertainment officials earlier this week.
Judge J. Travis Laster, vice chancellor of the Delaware Court of Chancery, issued sanctions for “spoliation of evidence” in the shareholder lawsuit over the 2023 merger between Ultimate Fighting Championship and WWE.
Laster ruled on Tuesday that WWE executives destroyed evidence by using the auto-delete setting on the messaging app Signal, enabling potentially relevant communications to be deleted.
The ruling means the court will operate under the assumption that five potentially damaging statements are true while allowing the defendants to rebut them.
The statements, according to the ruling, include that McMahon’s decision on the merger was “influenced” by Endeavor Executive Chairman Ari Emanuel’s “promise” to provide him with a continued role at the company and to indemnify him and provide legal support as federal investigators were looking into claims of alleged sexual misconduct.
McMahon pursued a deal with Endeavor in 2022 before WWE initiated its strategic review process, and both McMahon and then-WWE President Nick Khan worked with The Raine Group, a strategic financial advisor, “to steer the process to Endeavor and away from other potential bidders,” the ruling states.
In September 2023, entertainment giant Endeavor, the parent company of UFC, acquired WWE and merged the two sports entities to form a new, publicly traded company, TKO Group Holdings, in a deal worth $21.4 billion.
A month later, a group of shareholders filed suit against McMahon and other company officials in Delaware Chancery Court, claiming McMahon orchestrated a “sham sale process.”
Representatives for McMahon, WWE and TKO were not immediately available for comment.
According to the suit, McMahon, WWE’s controlling shareholder, turned down higher offers and excluded other bidders who would have ousted him and instead chose a deal that favored Endeavor’s Emanuel, a “close friend and longtime ally,” enabling McMahon to continue running WWE and shielding him from federal investigations related to a raft of sexual misconduct claims.
The complaint also alleges that the $21.4-billion deal undervalued the company and was “far below the offers” WWE’s board could have received from other interested parties had they “made any effort to negotiate in good faith.”
The litigation is related to the 2022 investigation by WWE’s board that found that McMahon made at least $14.6 million in payments between 2006 and 2022 for “alleged misconduct.” McMahon has denied claims of misconduct.
The settlements were made to women, including WWE employees, who alleged that McMahon initiated unwanted sexual contact and coerced women into performing sexual acts on him. In one case, first reported by the Wall Street Journal, a woman claimed that McMahon sent her unsolicited nude photos of himself.
McMahon’s alleged misconduct became the subject of ongoing investigations by the Securities and Exchange Commission and the U.S. Department of Justice.
“I am confident that the government’s investigation will be resolved without any findings of wrongdoing,” McMahon said in a statement to The Times in 2023.
Last January, the SEC announced it had settled charges against McMahon alleging he had violated federal securities laws by failing to disclose a pair of settlement agreements to WWE worth $10.5 million.
McMahon agreed to pay more than $1.7 million in a civil penalty and in reimbursement to WWE, without admitting or denying the agency’s findings. Federal prosecutors also have dropped their criminal investigation.
In January 2024, McMahon resigned as executive chairman of the board of TKO Group, one day after a former WWE employee, Janel Grant, sued the company, McMahon and former head of talent relations John Laurinaitis, alleging sexual assault, trafficking and emotional abuse.
Grant claimed that McMahon agreed to pay her $3 million in exchange for her silence.
The shareholder trial is set to begin on June 8. McMahon, Emanuel, Khan, TKO President Mark Shapiro, and WWE Chief Content Officer Paul “Triple H” Levesque are expected to testify.
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