Lozano v. Harles CA5 ( 2014 )

Filed 11/17/14 Lozano v. Harles CA5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT
DONALD LOZANO et al.,
F067638
Plaintiffs and Appellants,
(Super. Ct. No. 648437)
v.
JAKE HARLESS et al., OPINION
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Stanislaus County. Timothy
W. Salter, Judge.
Law Offices of Mark S. Nelson, Mark S. Nelson and Angelica Anguiano for
Plaintiffs and Appellants.
McCormick, Barstow, Sheppard, Wayte & Carruth, Todd W. Baxter and Dana B.
Denno for Defendants and Respondents.
-ooOoo-
Plaintiffs sued their insurer and their insurance agent for negligence in failing to
advise them of the availability of higher limits on their uninsured and underinsured
motorist coverage, and failing to increase the limits of that coverage at the time and to the
extent the agent increased the limits on their automobile liability coverage. The jury
rendered a verdict in favor of plaintiffs, but the trial court granted defendants’ motion for
judgment notwithstanding the verdict on the ground an insurance agent does not owe a
duty to the insured to advise of the availability of other or greater coverage or to procure
any particular coverage in the absence of special circumstances not demonstrated by the
evidence at trial. No basis for imposition of such a duty was presented at trial, and we
affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND1
In May 2004, after being trained by State Farm, defendant Jacob Harless took over
a State Farm insurance agency and began selling insurance. Plaintiffs were existing
clients of the agency. Harless’s office began calling existing policyholders and bringing
them in for an insurance and financial review. Harless conducted the reviews to get to
know the policyholders, review their policies, and determine their insurance needs. On
June 28, 2004, plaintiffs met with Harless in his office and discussed their automobile
and other insurance. Harless could not recall specific details of that conversation, but he
testified his usual practice with automobile insurance was to show the customer the
computer screen, which showed the various coverage limits available for different types
of coverage, discuss the coverages, and allow the customer to choose the appropriate
limits. Plaintiff Esther Lozano2 testified Harless did not show them information on the
computer screen and she did not recall any discussion of uninsured and underinsured
motorist (UM/UIM) coverage. Plaintiff Donald Lozano initially testified he recalled very
1 Our statement of facts reflects the facts appearing in the record. Our review in this case
was hampered by the appellants’ briefs, which included factual statements not supported by any
reference to the record, not supported by the portion of the record cited, or not supported by the
record at all, in violation of rule 8.204 of the California Rules of Court. (See Cal. Rules of
Court, rule 8.204(a)(1)(C) & (a)(2)(C) [requiring the statement of facts in an appellate brief to be
“limited to matters in the record” and requiring any reference to matter in the record to be
supported “by a citation to the volume and page number of the record where the matter
appears”].)
2 Some of the individuals are referred to by their first names because they share a last name
with others involved. This is done for clarity and convenience. No disrespect is intended.
2
little about the meeting, and did not recall any computer screens or discussion of different
coverages; he later admitted he did not recall the meeting or any of the discussion at all.
As a result of the meeting, plaintiffs increased the bodily injury liability limits on their
automobile insurance policies to $250,000 per person and $500,000 per accident.3 The
UM/UIM coverage remained at $30,000 per person and $60,000 per accident.
Harless testified plaintiffs came in to meet with him as part of his general review
of policyholders’ policies and needs. Esther, however, testified she did not recall Harless
calling her to set up an appointment; she recalled plaintiffs met with him because she and
Donald had recently married and they wanted to combine their policies and make sure
they had sufficient insurance to protect their home. She stated plaintiffs chose the
$250,000/$500,000 limits for bodily injury liability coverage because that was what they
thought their house was worth; they did not discuss with Harless the value of the house or
how much insurance would be needed to protect it. She knew she had $30,000/$60,000
limits on the UM/UIM coverage, but she was not aware she could obtain higher limits.
Every six months thereafter, plaintiffs received a declaration sheet reflecting their
coverage limits.
On December 7, 2008, plaintiffs were injured in an automobile accident caused by
another driver. They recovered $30,000 each from the other driver’s insurance, which
represented the limits of that driver’s liability policy. The costs of their medical care
exceeded that amount. Because the other driver’s bodily injury liability limits equaled
plaintiffs’ UM/UIM limits ($30,000/$60,000), plaintiffs had no claim against their own
policy’s UM/UIM coverage.
Plaintiffs sued State Farm and Harless alleging three causes of action: intentional
or negligent misrepresentation, breach of contract, and negligence. During the trial,
plaintiffs withdrew or dismissed the misrepresentation cause of action and the breach of
3 Plaintiffs owned multiple vehicles, each with its own policy.
3
contract cause of action. Only the negligence cause of action went to the jury. It was
premised on Harless’s failure to inform plaintiffs of the availability of higher limits of
UM/UIM coverage, to offer them options for the limits on that coverage, and to procure
or advise them to procure UM/UIM coverage with limits equal to the limits on their
bodily injury liability coverage. The jury found Harless was negligent and his negligence
was a substantial factor in causing plaintiffs’ damage; it awarded plaintiffs damages in
the amount of their medical bills and Esther’s lost wages.
Defendants moved for judgment notwithstanding the verdict. They argued, as
they had in a motion for summary judgment and a motion for directed verdict that an
insurance agent owes no duty to inform the insured of the availability of, procure, or
recommend any particular coverage or level of coverage, in the absence of a specific
request from the insured. They also challenged the causation finding, asserting there was
no evidence adduced that, had Harless advised plaintiffs of the availability of higher
limits for their UM/UIM coverage, plaintiffs would have chosen to purchase coverage
with higher limits. Because plaintiffs did not request any specific amount of UM/UIM
coverage, and the amount provided satisfied statutory requirements, defendants asserted
they owed no duty to advise plaintiffs that they could obtain UM/UIM coverage with
limits higher than $30,000/$60,000. The trial court granted the motion and entered
judgment in favor of defendants. Plaintiffs appeal.
DISCUSSION
I. Standard of Review
“‘A motion for judgment notwithstanding the verdict may be granted only if it
appears from the evidence, viewed in the light most favorable to the party securing the
verdict, that there is no substantial evidence in support. [Citation.] [¶] … As in the trial
court, the standard of review [on appeal] is whether any substantial evidence—
contradicted or uncontradicted—supports the jury’s conclusion.’ [Citation.]” (Cabral v.
4
Ralphs Grocery Co. (2011) 51 Cal.4th 764, 770.) Before we can determine whether
substantial evidence supports the jury’s conclusion that defendants were negligent, that
is, that they breached a duty of due care to plaintiffs, we must first determine whether
defendants owed a duty of care to plaintiffs. (Ibid.) “Duty is a question of law for the
court, to be reviewed de novo on appeal. [Citations.]” (Id. at pp. 770-771.)
II. Duty of Insurance Agent
The only cause of action presented at trial was a cause of action for negligence.
Plaintiffs’ expert testified the applicable standard of care was what a prudent licensed
insurance agent would do in similar circumstances. He opined that, in similar
circumstances, an insurance agent would provide all the usual automobile insurance
coverages, including UM/UIM. To meet his standard of care, an agent would have to
determine what the clients’ needs were, and educate the clients about their options.
Plaintiffs’ expert testified it was the custom and practice in the automobile insurance
industry to match UM/UIM limits to bodily injury liability limits. He opined that it was
illogical and inconsistent with the needs of the insureds to provide more coverage to the
public than to the insureds themselves and the occupants of their vehicle, which was what
occurred if the liability limits exceeded the UM/UIM limits.
After the jury rendered its verdict in favor of plaintiffs, defendants moved for
judgment notwithstanding the verdict, arguing, among other things, that Harless owed no
duty to plaintiffs to recommend to them that their UM/UIM limits be higher or match
their liability limits, or to educate them about the availability of higher limits on their
UM/UIM coverage. In their papers in support of and opposition to the motion for
judgment notwithstanding the verdict, both parties relied, at least in part, on Fitzpatrick v.
Hayes (1997) 57 Cal.App.4th 916 (Fitzpatrick). Feeling bound by Fitzpatrick, the trial
court granted the motion.
5
In Fitzpatrick, Judith Fitzpatrick was severely injured when she was struck by an
automobile; she suffered over $1 million in damages. (Fitzpatrick, supra, 57 Cal.App.4th
at p. 918.) Her husband witnessed the accident and suffered emotional distress and loss
of consortium. The driver had policy limits of $15,000/$30,000, and his insurer paid
$15,000 to each plaintiff. The plaintiffs’ UM/UIM coverage had a $100,000 limit; the
insurer paid Judith the $85,000 difference. The plaintiffs sued their insurer and its agent
for negligence for failing to advise of the availability of personal umbrella coverage
which would have resulted in greater compensation for Judith’s injuries. The trial court
granted the defendants’ motion for summary judgment, concluding they did not owe the
plaintiffs a duty to advise them of the availability of, or to procure, such coverage. (Ibid.)
The only issue before the court was whether the insurance agent “had a legal duty
to [the plaintiffs] to advise them as to the availability of personal umbrella coverage.”
(Fitzpatrick, supra, 57 Cal.App.4th at p. 920.) The court first reviewed the four cases
relied on by the defendants. Gibson v. Government Employees Ins. Co. (1984) 162
Cal.App.3d 441 held that an “insurer had no fiduciary duty to advise its insured of the
availability of additional or extended coverage.” (Fitzpatrick, at p. 921.) Pabitzky v.
Frager (1985) 164 Cal.App.3d 401 rejected the plaintiffs’ contention their insurer and its
agent had a duty “to advise the plaintiff ‘to carry uninsured motorist insurance in an
amount greater than the statutory minimum.’ [Citation.]” (Fitzpatrick, at pp. 921-922.)
The Pabitzky court stated: “‘We know of no duty on the part of an insurance broker to do
more than to call the attention of his customer to the availability of the statutory provision
and, unless expressly told to omit it, to see that the policy complies with the statute.’
[Citation.]” (Fitzpatrick, at p. 922.) In Ahern v. Dillenback (1991) 1 Cal.App.4th 36(Ahern), the insureds contended their insurer and its agent breached a duty to them by not
including certain types of coverage, including UM/UIM, in their policy or advising the
insureds of their availability. The Ahern court rejected that claim; in the absence of a
6
special relation between the parties, the defendants did not owe such a duty to the
insureds. (Fitzpatrick, at p. 923.)
In Jones v. Grewe (1987) 189 Cal.App.3d 950 (Jones), the owners of an apartment
building settled their tenants’ personal injury action against them for $1.5 million, then
alleged their insurance broker was negligent in not advising them to carry more than
$300,000 in liability insurance coverage. The Jones court concluded that, “although an
insurance agent or broker has a general duty ‘to use reasonable care, diligence, and
judgment in procuring the insurance requested by an insured,’ generally this does not
entail any obligation to ‘“point out to [the insured] the advantages of additional
coverage ….”’ [Citation.]” (Fitzpatrick, supra, 57 Cal.App.4th at p. 922.) The broker
could, however, “‘assume additional duties by an express agreement or a holding out.’
[Citation.]” (Ibid.) The facts alleged by the owners—that the owners had purchased
insurance from the broker for several years and had followed his advice, and that the
broker had assured the owners they had adequate coverage—were insufficient to give rise
to a greater duty. (Ibid.) The Jones court concluded: “‘Neither an insurance agent nor
anyone else has the ability to accurately forecast the upper limit of any damage award in
a negligence action against the insured by a third party. To impose such a duty based on
the pleadings in this case would in effect make the agent a blanket insurer for his
principal. We fail to see where sound public policy would require the imposition of such
a duty upon the agent, unless the latter has by an express agreement or a holding out
undertaken that obligation.’ [Citation.]” (Fitzpatrick, at p. 923.)
The Fitzpatrick court then discussed the three cases relied on by the plaintiffs as
establishing a duty, none of which involved a claim against the insurer or insurance agent
for failing to advise the insureds of the availability of higher limits of coverage: Westrick
v. State Farm Insurance (1982) 137 Cal.App.3d 685 (Westrick); Free v. Republic Ins. Co.
7
(1992) 8 Cal.App.4th 1726 (Free); and Kurtz, Richards, Wilson & Co. v. Insurance
Communicators Marketing Corp. (1993) 12 Cal.App.4th 1249 (Kurtz).4
The Fitzpatrick court also reviewed two cases both parties relied on. In Desai v.
Farmers Ins. Exchange (1996) 47 Cal.App.4th 1110 (Desai), the court distinguished the
cases finding the insurance agent owed no duty to the insured: in those cases, “‘the
insured was suing its insurer for failing to (1) recommend additional coverage or (2)
spontaneously procure unrequested additional coverage for its insured or (3) advise that
additional coverage was available.’” (Fitzpatrick, supra, 57 Cal.App.4th at p. 926.) In
Desai, in contrast, the insured sued the insurer and agent for negligently representing his
policy provided 100 percent replacement cost coverage. It was not a case about failure to
recommend more coverage, but a case about failure to deliver the agreed upon coverage.
(Fitzpatrick, supra, at p. 926.) Likewise, Paper Savers, Inc. v. Nacsa (1996) 51
Cal.App.4th 1090 (Nacsa), was a failure to deliver agreed upon coverage case; the
insured alleged the insurance agent misrepresented that the policy he was buying
included sufficient replacement cost coverage to replace his business personal property in
case of a total loss. (Fitzpatrick, at pp. 926-927.)
The Fitzpatrick court summarized the general rule as follows: “an insurance agent
does not have a duty to volunteer to an insured that the latter should procure additional or
4 In Westrick, there was a jury issue whether conversations between the insured and the
insurer’s agents amounted to a request for insurance, which would have obligated the agents to
respond, so the court reversed the directed verdict in favor of the insurance agent. (Fitzpatrick,
supra, 57 Cal.App.4th at p. 924.) In Free, the insured homeowner had specifically asked his
insurance agent several times whether his coverage limits were adequate to rebuild his home if it
was destroyed, and the agent had repeatedly assured him they were; “‘once [the broker] elected
to respond to his inquiries, a special duty arose requiring them to use reasonable care.” The
uncertainties of a claim against a liability policy were not involved; the home could have been
insured based on the value of the building. (Fitzpatrick, at p. 925.) In Kurtz, an employer
seeking group insurance for its employees relied on brokers who held themselves out as experts
in the field. The complaint adequately alleged a duty assumed by the brokers by holding
themselves out as having special expertise. (Fitzpatrick, at pp. 925-926.)
8
different insurance coverage.… The rule changes, however, when—but only when—one
of the following three things happens: (a) the agent misrepresents the nature, extent or
scope of the coverage being offered or provided (as in Free, Desai and Nacsa), (b) there
is a request or inquiry by the insured for a particular type or extent of coverage (as in
Westrick), or (c) the agent assumes an additional duty by either express agreement or by
‘holding himself out’ as having expertise in a given field of insurance being sought by the
insured (as in Kurtz).” (Fitzpatrick, supra, 57 Cal.App.4th at p. 927, fn. omitted.)
The plaintiffs in Fitpatrick did not assert the first exception applied. As to the
second, their evidence showed only that they relied on the agent to advise them about
insurance and he led them to believe their coverage was fine. There was no evidence the
plaintiffs made any specific inquiry about additional coverage. (Fitzpatrick, supra, 57
Cal.App.4th at p. 928.) The plaintiffs admitted they never raised the question of
additional UM/UIM coverage or personal umbrella coverage with the agent, and the
agent never gave them advice about higher limits or additional UM/UIM coverage.
Regarding the third exception, the plaintiffs contended State Farm held the agent out as
having special expertise in personal insurance needs, thereby assuming an additional duty
to the plaintiffs. Their evidence was a State Farm brochure promoting the desirability of
insureds asking for a “‘Family Insurance Checkup,’” and the declaration of a former State
Farm agent that, if the plaintiffs’ agent did not alert them to the need for a personal
umbrella policy, he was not acting within the applicable standards of care. (Id. at p. 929.)
There was no evidence the plaintiffs ever saw or relied on the brochure, and it did not
“‘hold[] out’” any special expertise; “in very bland terms, it suggest[ed] that the insured
ask himself or herself—and perhaps then the agent—about additional insurance needs.”
(Ibid.) The expert declaration purported to define the duty of an insurance agent, but “the
responsibility of defining duty in a tort case reposes with the court.” (Ibid.) Accordingly,
the court affirmed the summary judgment in favor of the defendants, which was granted
9
on the grounds the defendants owed no duty to advise the plaintiffs of the availability of,
or to procure, additional UM/UIM coverage, and the defendants did not undertake such a
duty. (Id. at pp. 920, 930.)
Jones and Fitzpatrick set out the general rule and the exceptions to it: an
insurance agent has a general duty to use reasonable care, diligence, and judgment in
procuring the insurance requested by an insured, but this generally does not entail any
duty to volunteer information about the availability of additional coverage, to advise the
insured to procure additional or different coverage, or to point out to the insured the
advantages of additional coverage. An insurance agent may assume a greater duty
toward the insured, however, if “(a) the agent misrepresents the nature, extent or scope of
the coverage being offered or provided …, (b) there is a request or inquiry by the insured
for a particular type or extent of coverage …, or (c) the agent assumes an additional duty
by either express agreement or by ‘holding himself out’ as having expertise in a given
field of insurance being sought by the insured.” (Fitzpatrick, supra, 57 Cal.App.4th at
p. 927; Jones, supra, 189 Cal.App.3d at p. 954.)
Plaintiffs’ theory of liability at trial was that Harless owed them a general duty of
care to educate them about UM/UIM coverage, to advise them of the availability of
higher limits of UM/UIM coverage than their policy provided when they first met with
Harless, or to automatically match the UM/UIM limits to the increased liability limits
plaintiffs selected. In his opening argument, plaintiffs’ counsel argued it was the norm in
the insurance industry to have matching limits for UM/UIM and liability coverages, but
when plaintiffs met with Harless on June 28, 2004, he increased their liability coverage
from $30,000/$60,000 to $250,000/$500,000 without making a corresponding increase in
their UM/UIM coverage. In his closing argument, plaintiffs’ attorney argued Harless did
not offer plaintiffs the level limits of coverage he should have, and did not give them the
options and information they needed to make coverage choices to fit their needs. Based
10
in part on these arguments, a jury instruction that “[a]n insurance agent is negligent if he
fails to use the skill and care that a reasonably careful insurance agent would have used in
similar circumstances,” and the expert testimony that it is illogical and inconsistent to
have higher limits of liability coverage than UM/UIM coverage, the jury found Harless
was negligent, and his negligence was a substantial factor in causing plaintiffs’ damages.
As set out in Jones and Fitzpatrick, however, unless an exception applied, Harless
had no duty to inform plaintiffs of coverages they did not ask for, inform them of the
availability of higher limits for coverages they already had, or procure for them coverage
they did not request, such as UM/UIM coverage with increased limits. Defendants
moved for judgment notwithstanding the verdict, asserting this lack of duty. In
opposition, plaintiffs cited the three exceptions set out in Fitzpatrick to the general rule of
no liability, and argued the first two exceptions applied. They asserted the jury could
have believed Harless misrepresented the nature, extent, or scope of the coverage when
he stated it was “good” coverage. Plaintiffs also argued they “made an inquiry and
requested particular coverage to protect their home,” specifically the increased liability
limits of $250,000/$500,000. They argued, based on their expert’s testimony, that it was
a breach of the standard of care not to match the increased liability limits with an increase
in the UM/UIM limits.
On appeal, plaintiffs argue instead that the third exception set out in Fitzpatrick
applies. They argue that, by offering his insureds a comprehensive review of their
insurance coverages and finances, Harless held himself out as having specialized
knowledge of insurance matters. As a result, they conclude, he was subject to an
additional duty to plaintiffs, which he breached by failing to advise them of the
availability of increased UM/UIM limits.
The first two exceptions set out in Fitzpatrick do not apply. The first exception,
misrepresentation, was not an issue in the trial court. Plaintiffs withdrew their cause of
11
action for misrepresentation during the trial. No instructions on misrepresentation were
given and the jury made no findings regarding any misrepresentations. The
misrepresentation exception could not form the basis of a duty of care.
As to the second exception, it was undisputed plaintiffs made no request for or
inquiry about the coverage in issue. Plaintiffs’ only request was for $250,000/$500,000
limits on bodily injury liability coverage, which Harless provided. They did not request
any particular limits on UM/UIM coverage. Plaintiffs testified there was no discussion of
their UM/UIM coverage. Thus, there was no evidence that plaintiffs inquired about their
UM/UIM coverage or requested any particular limits, which could have given rise to a
duty to respond to the inquiry or provide the coverage requested.
The third exception applies when “the agent assumes an additional duty by either
express agreement or by ‘holding himself out’ as having expertise in a given field of
insurance being sought by the insured.” (Fitzpatrick, supra, 57 Cal.App.4th at p. 927.) It
involves an agent “holding himself out to be more than an ‘ordinary agent.’ [Citation.]”
(Nacsa, supra, 51 Cal.App.4th at p. 1096.) Plaintiffs assert Harless held himself out as
having specialized knowledge in insurance matters by calling them and offering them a
comprehensive review of their insurance coverages. This contention was not presented at
trial. The jury was not instructed on it and made no findings regarding whether Harless
made any representations of expertise to plaintiffs or held himself out as an expert in any
particular field of insurance. Plaintiffs did not even argue in their opposition to the
motion for judgment notwithstanding the verdict that this exception applied.
Generally, “theories not raised in the trial court may not be raised for the first time
on appeal.” (McDonald’s Corp. v. Board of Supervisors (1998) 63 Cal.App.4th 612,
618.) “However, a new theory raising a pure question of law on undisputed facts can be
raised for the first time on appeal.” (Fort Bragg Unified School Dist. v. Colonial
American Casualty & Surety Co. (2011) 194 Cal.App.4th 891, 907.) Whether Harless
12
owed a duty to plaintiffs because he held himself out to plaintiffs as having specialized
knowledge of a particular field of insurance is not a pure question of law on undisputed
facts. The facts were disputed. Harless testified in June 2004, his agency was calling in
its existing clients for an insurance and financial review; he brought in the clients, to get
to know them, see what their situation was, review their existing policies, determine their
coverages, and make sure “we are both on the same page.” He would go through all of
their existing policies, review their coverages, explain how they work, and determine
whether anything needed to be adjusted. Plaintiffs were such existing clients.
Esther, however, testified she did not receive a call from Harless or go to his office
in response to an offer to review their policies. She testified plaintiffs went to see Harless
because they had recently married and they wanted to combine their policies and increase
their liability limits. Donald did not testify that he received any call from Harless, that
Harless offered to review plaintiffs’ insurance policies with them, or that they met with
Harless as a result of any such communications. Neither plaintiff testified Harless held
himself out as more than an ordinary agent or as having specialized knowledge of any
particular field of insurance. Even if we interpret the evidence most favorably to
plaintiffs and accept Harless’s testimony that his office called its clients, including
plaintiffs, and asked them to come in to review their policies, that is not the type of
holding out of the agent as an expert in a given field of insurance that would give rise to
an additional duty of care.
In Jones, supra, 189 Cal.App.3d 950, the court rejected the plaintiffs’ holding out
theory: “The mere allegation in a complaint, as in this case, that an insured has
purchased insurance from an insurance agent for several years and followed his advice on
certain insurance matters is insufficient to imply the existence of a greater duty. Such
reliance is not at all uncommon when an insuredhas done business with an insurance
agency over a period of time.” (Id. at p. 956.)
13
In Wallman v. Suddock (2011) 200 Cal.App.4th 1288, the court concluded the
plaintiffs’ opposition to the insurance agent’s motion for summary judgment had not
raised a triable issue of material fact regarding whether the insurance agent had held
himself out as an expert in particular insurance matters. (Id. at p. 1312.) “The
Wallmans’ statements that [the agent] ‘held himself out to us as an expert in insurance
matters, and specifically, for the type of risks our family business encountered’ and
‘offered to act as our insurance consultant, advising us on our insurance needs’ are too
conclusory to raise a triable issue of fact. Notably missing from these statements are
what [the agent] said to give rise to the Wallmans’ purported belief that he was an expert
in insurance matters. And, under Jones, the mere assertion that plaintiffs purchased
insurance from [the agent] for several years and followed his advice on insurance matters
is insufficient to create a heightened duty.” (Ibid.)
In Fitzpatrick, supra, 57 Cal.App.4th 916, the plaintiffs claimed the insurer held
its agents out as experts in giving advice to clients regarding coverage, and advertised
that its agents could perform a formal family insurance checkup; the plaintiffs asserted
this was essentially what the agent had done for them. (Id. at p. 928.) The court rejected
the holding out theory. There was no evidence the plaintiffs saw or relied on the
brochure. Further, “even a cursory reading of that brochure makes clear that it is far from
a ‘holding out’ of special expertise; rather, and in very bland terms, it suggests that the
insured ask himself or herself—and perhaps then the agent—about additional insurance
needs.” (Id. at p. 929.)
In contrast, in Williams v. Hilb, Rogal & Hobbs Ins. Services of California, Inc.
(2009) 177 Cal.App.4th 624, the court found the “holding out” exception applied. The
plaintiffs opened a Rhino Linings dealership and sought insurance for it through
defendant Thaw, an insurance agent they understood had a custom-made insurance
package specific to the Rhino Linings operation. (Id. at pp. 627-628.) When the
14
plaintiffs contacted Thaw, she told them a meeting would not be necessary because she
was very familiar with Rhino Linings dealerships and was an expert on what was
necessary to satisfy their insurance needs. (Id. at p. 628.) She offered the plaintiffs a
program designed specifically for Rhino Liners dealers. (Ibid.) The plaintiffs completed
an application, leaving the coverages portions blank; Thaw selected the insurance
coverages and submitted the application. (Ibid.) After an employee was injured, the
plaintiffs discovered the policy omitted coverage for workers’ compensation. (Id. at p.
629.) The trial court found Thaw “‘obviously acted as more than an ordinary agent,’ and
held herself out as having expertise with respect to the insurance needs of Rhino Linings
dealerships.” (Id. at p. 634.) The appellate court concluded “there was plenty of
evidence … to support that finding,” and upheld the judgment in favor of the plaintiffs.
(Id. at pp. 637, 644.)
In Kurtz, supra, 12 Cal.App.4th 1249, the court found the plaintiffs adequately
alleged a special duty based on holding out the insurance broker as having special
expertise. There, an employer sought group insurance for its employees from brokers
who held themselves out as experts in the field. (Id. at pp. 1254-1255.) In reliance on the
brokers’ advice, the employer signed a TEFRA5 certificate erroneously representing the
group plan was not subject to Medicare. (Id. at p. 1255.) The insurer sued to rescind the
group policy based on misrepresentation. (Ibid.) The employer cross-complained against
the brokers. The court concluded the cross-complaint adequately alleged facts that, if
true, “would establish that [the brokers] entered into a relationship with [the insured]
which gave rise to a duty of care, including a special duty assumed when they held
themselves out as experts on TEFRA.” (Id. at p. 1257.)
Plaintiffs point to no evidence in the record that Harless held himself out to be
more than an ordinary agent or an expert in any particular field of insurance. They cite
5 Tax Equity and Fiscal Responsibility Act of 1982, 42 U.S.C. § 1395y; TEFRA.
15
no evidence in the record that Harless represented he had any special expertise as an
insurance agent. Plaintiffs simply assert that he offered them a comprehensive review of
all of their insurance policies. Like the brochure in Fitzpatrick inviting insureds to ask
about additional insurance needs, this invitation to Harless’s clients to have their
insurance policies reviewed did not constitute a holding out of the agent as an expert in
any particular field of insurance.
Plaintiffs pursued their action on the theory defendants owed them a general duty
of care as their insurance agent to advise them of the availability of higher UM/UIM
coverage limits or to procure for them UM/UIM coverage with limits equal to the limits
of their bodily injury liability coverage. Generally, no duty is imposed on an insurance
agent to volunteer information about the availability of additional coverage, to advise the
insured to procure additional or different coverage, or to point out to the insured the
advantages of additional coverage. (Fitzpatrick, supra, 57 Cal.App.4th at p. 927.) The
three exceptions to this general rule recognized by Fitzpatrick were not pled or argued in
the trial court, and the jury made no findings related to them. They are not properly
before this court and, if they were, we would conclude that plaintiffs have not established
that any of the exceptions applied or imposed a duty on Harless to advise of, recommend,
or procure for plaintiffs higher limits of UM/UIM coverage. The trial court properly
granted the motion for judgment notwithstanding the verdict on the ground defendants
owed no duty to plaintiffs to advise them of the availability of higher UM/UIM limits or
to procure for them a policy with UM/UIM limits matching their liability limits.
III. Other Theories
Plaintiffs assert defendants had a duty to disclose to them a conflict of interest,
“because failure to do so is a misrepresentation of the nature of the product.” The
conflict they identify is that liability insurance costs six times as much as UM/UIM, so
there was a “built-in incentive to sell more liability limits and less UM/UIM limits.” This
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theory of liability was not litigated in the trial court, is not supported by any citation of
authority in plaintiffs’ brief,6 and is based on allegations of misrepresentation. The
misrepresentation cause of action was dismissed and never submitted to the jury.
Therefore we decline to address this theory.
Plaintiffs also argue that “[a]n inexperienced and unsupervised insurance agent
should be liable to an insured when the agent knows that the insured is detrimentally
relying on the advice of the agent.” This theory of liability also was not litigated in the
trial court, is not supported by the citation of any authority supporting the existence of a
heightened duty based on inexperience or lack of supervision, and is based on allegations
of misrepresentation. We decline to address this theory of duty as well.
In their reply brief, plaintiffs argue that, because there was conflicting evidence
regarding whether Harless’s actions triggered a duty to the insureds under any of the
exceptions set out in Fitzpatrick, the trial court’s determination that the exceptions did
not apply was based on an impermissible reweighing of the evidence. Additionally, they
assert the trial court erred in deciding the motion for judgment notwithstanding the
verdict based on its recollection of the evidence at trial, due to the unavailability of the
reporter’s transcript. Neither of these contentions was presented in plaintiffs’ opening
brief. “‘A point not presented in a party’s opening brief is deemed to have been
abandoned or waived. [Citations.]’ [Citation.]” (Wurzl v. Holloway (1996) 46
Cal.App.4th 1740, 1754, fn. 1.) Accordingly, we will not address these points.
6 “When an appellant fails to raise a point, or asserts it but fails to support it with reasoned
argument and citations to authority, we treat the point as waived. [Citation.]” (Benach v. County
of Los Angeles (2007) 149 Cal.App.4th 836, 852, fn. omitted.)
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DISPOSITION
The judgment is affirmed. Defendants are entitled to their costs on appeal.
_____________________
HILL, P. J.
WE CONCUR:
_____________________
CORNELL, J.
_____________________
GOMES, J.
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