Judge: Maurice A. Leiter, Case: 22STCV34358, Date: 2023-08-29 Tentative Ruling

Case Number: 22STCV34358    Hearing Date: August 29, 2023    Dept: 54

Hearing Date: August 29, 2023

Department 54, Judge Maurice A. Leiter

Demurrer to Complaint

Moving Party: Defendants Afsaneh Khadem and Farmers Insurance Exchange

Responding Party: Plaintiff Manda Shahbazi

T/R:     DEFENDANTS’ DEMURRER IS SUSTAINED WITH LEAVE TO AMEND.

PLAINTIFF TO FILE AND SERVE A FIRST AMENDED COMPLAINT WITHIN 30 DAYS OF NOTICE OF RULING. DEFENDANTS TO FILE AND SERVE A RESPONSE WITHIN 30 DAYS THEREAFTER.

DEFENDANTS TO NOTICE. 

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing. 

The Court considers the moving papers, opposition, and reply.

BACKGROUND

On October 25, 2022, Plaintiff Manda Shahbazi filed a complaint against Defendants Afsaneh Khadem and Farmers Insurance Exchange, asserting causes of action for (1) conversion; (2) breach of the implied covenant of good faith and fair dealing; (3) breach of fiduciary duty; (4) money had and received; and (5) negligence. Plaintiff alleges her automobile insurance agent, Defendant Khadem, failed to obtain insurance for Plaintiff’s new vehicle despite Plaintiff’s request that it be added to the insurance plan. The vehicle was involved in an accident and Defendant Farmers refused to cover the claim.

ANALYSIS

A demurrer to a complaint may be taken to the whole complaint or to any of the causes of action in it.  (CCP § 430.50(a).)  A demurrer challenges only the legal sufficiency of the complaint, not the truth of its factual allegations or the plaintiff's ability to prove those allegations.  (Picton v. Anderson Union High Sch. Dist. (1996) 50 Cal. App. 4th 726, 732.)  The court must treat as true the complaint's material factual allegations, but not contentions, deductions or conclusions of fact or law.  (Id. at 732-33.)  The complaint is to be construed liberally to determine whether a cause of action has been stated.  (Id. at 733.)

Defendants demur to the third cause of action for breach of fiduciary duty on the grounds that insurers do not owe fiduciary obligations to insureds. (See e.g. Vill. Northridge Homeowner's Assn. v. State Farm Fire & Cas. Co. (2010) 50 Cal.4th 913, 929 ["An insurer is not a fiduciary, and owes no obligation to consider the interests of its insured above its own"].)

In opposition, Plaintiff asserts that Khadem owed her a fiduciary duty by receiving and holding insurance premiums paid for a vehicle Khadem knew Plaintiff no longer owned. (See Ins. Code § 1733 [“All funds received by any person acting as a licensee under this chapter, Chapter 5A (commencing with Section 1759), Chapter 6 (commencing with Section 1760), or Chapter 7 (commencing with Section 1800), as premium or return premium on or under any policy of insurance . . . , are received and held by that person in that person’s fiduciary capacity.”]) Plaintiff, however, does not allege that the breach of fiduciary cause of action is based on the receipt of premiums. Plaintiff alleges Khadem breached her duty by failing to obtain the correct coverage. This is insufficient to state a cause of action for breach of fiduciary duty.

Defendants’ demurrer is SUSTAINED with leave to amend.