Procedural Posture

Procedural Posture

Plaintiff insured appealed from a summary judgment of the Superior Court of Los Angeles County (California) in favor of defendants, an insurer, a surplus lines broker, and the broker’s owner, in the insured’s action for breach of insurance contract, breach of duty of good faith and fair dealing, negligent misrepresentation, and fraud.

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Overview

The insured obtained an insurance policy for her jewelry store that she thought covered her for theft. The insured requested such coverage, but the policy actually issued did not include coverage for theft. Thereafter, the insured’s store was burglarized, and her insurance claim was rejected. The court held that the provisions of the policy clearly and unambiguously did not provide coverage for theft. Even if the binder prepared by the insurance agent could be deemed the actual policy for a limited time, the binder expired on the date the actual policy was issued under Cal. Ins. Code § 382.5(c), and long before the insured incurred her theft loss. Moreover, the insurance agent’s mistaken representation within the binder that the policy was a “special form” policy could not be imputed to the insurer or the broker. The insurance agent was an agent for the insured and was not an agent of the insurer for the purposes in question. Because the policy did not provide coverage for the insured’s loss, there was no bad faith. Even if there were any misrepresentations, the insurer and the surplus lines broker were blameless because all communications went through the insurance agent.

Outcome

The court affirmed the judgment.