Judge: Melvin D. Sandvig, Case: 22CHCV00583, Date: 2023-12-07 Tentative Ruling
Case Number: 22CHCV00583 Hearing Date: January 3, 2024 Dept: F47
Dept. F47
Date: 1/3/24 TRIAL
DATE: 12/9/24
Case #22CHCV00583
SUMMARY
JUDGMENT/SUMMARY ADJUDICATION
Motion filed on 10/20/23.
MOVING PARTY: Defendants Nicholas
Wayne Diamenti and Leigh Alexander Diamenti
RESPONDING PARTY: Plaintiff William Hewitt dba Hewitt
Construction
NOTICE: ok
RULING: The motion is denied.
SUMMARY OF FACTS & PROCEDURAL HISTORY
This action arises out of defendants’, including Nicholas
Wayne Diamenti, an individual and dba NDI Insurance Agency; Leigh Alexander
Diamenti, an individual and dba NDI Insurance Agency (collectively, NDI and/or
Diamenti Defendants) and Robert E. Thomas, Jr. an individual and dba Bob Thomas
Insurance Agency (BTI) (collectively, the Thomas Defendants), alleged failure
to procure the necessary insurance to cover Plaintiff William Hewitt dba Hewitt
Construction’s (Plaintiff) business in 2014 leading to Plaintiff not being
covered by any insurance policy when a construction defect lawsuit was filed
against him. NDI contends that it is a
separate business entity from BTI and had no involvement with the procurement
of Plaintiff’s business/commercial insurance policies.
On 8/1/22, Plaintiff filed this action against the
Diamenti Defendants and the Thomas Defendants and
Does 1-100 for: (1) Professional Negligence, (2) Breach of Fiduciary Duty, (3)
Negligent Misrepresentation, (4) Intentional Misrepresentation, (5)
Constructive Fraud; (6) Breach of Oral Agreement, (7) Breach of Implied
Covenant of Good Faith and Fair Dealing and (8) Unjust Enrichment.
On 2/24/23, the Diamenti Defendants answered the
complaint and on 4/19/23, they filed a cross-complaint against the Thomas
Defendants and Roes 1-20 for: (1) Equitable Indemnity, (2) Equitable
Contribution, and (3) Declaratory Relief.
On 10/20/23, the Diamenti Defendants filed and served the
instant motion seeking an order granting summary judgment in favor of
Defendants Nicholas Wayne Diamenti and Leigh Alexander Diamenti on Plaintiff
William Hewitt dba Hewitt Construction’s complaint. Alternatively, the Diamenti Defendants seek
an order granting summary adjudication in their favor as to each of the eight
causes of action in Plaintiff’s complaint and Plaintiff’s request for punitive
damages. Plaintiff has opposed the
motion and the Diamenti Defendants have filed a reply to the opposition.
ANALYSIS
The Diamenti Defendants objections (numbers 1-10) to the
declaration of William Hewitt are overruled.
CCP 437c(p) provides, in relevant part:
“For purposes of motions for
summary judgment and summary adjudication:
. .
.
(2) A defendant or cross-defendant
has met his or her burden of showing that a cause of action has no merit
if the party has shown that one
or more elements of the cause of action, even if not separately pleaded, cannot
be established, or that there is a complete defense to the cause
of action. Once the defendant or cross-defendant has met that burden, the
burden shifts to the plaintiff or cross-complainant to show that a triable
issue of one or more material facts exists as to the cause
of action or a defense thereto. The plaintiff or cross-complainant shall not
rely upon the allegations or denials of its pleadings to show that a
triable issue of material fact exists but, instead, shall set forth the
specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.”
In ruling on a motion for summary judgment/summary
adjudication, the moving party’s evidence must be strictly construed while the
opposing party’s evidence must be liberally construed. Schachter (2009) 47 C4th 610,
618. Doubts about the propriety of
granting summary judgment or adjudication must be resolved in favor of the
opposing party. Johnson (2006) 143
CA4th 297, 304.
The Diamenti Defendants contend that NDI and the Thomas
Defendants are entirely separate business entities with no interest in each
other and that Thomas was never a principal, owner, agent or employee of NDI. (Separate Statement (SS) 1-5, 8-11). The Diamenti Defendants contend that they
fulfilled only Plaintiff’s personal insurance needs while the Thomas Defendants
fulfilled Plaintiff’s commercial/business insurance needs. (SS 12-19).
As such, the Diamenti Defendants contend that they cannot be liable to
Plaintiff for any of his claims because:
(1) NDI owed no duty to procure or advise on commercial
or business insurance for Plaintiff (1st cause of action – General
Negligence);
(2) Plaintiff was not in a fiduciary relationship with NDI
and NDI owed no duty to procure or advise on commercial or business insurance
for Plaintiff (2nd cause of action – Breach of Fiduciary Duty);
(3) NDI made no misrepresentation about commercial or
business insurance to Plaintiff (3rd cause of action – Negligence
Misrepresentation);
(4) NDI made no misrepresentation about commercial or
business insurance to Plaintiff (4th cause of action – Intentional
Misrepresentation);
(5) Plaintiff was
not in a fiduciary relationship with NDI and NDI owed no duty to procure or
advise on commercial or business insurance for Plaintiff (5th cause
of action – Constructive Fraud);
(6) Plaintiff did not enter into an oral agreement with
NDI about procuring or advising on commercial or business insurance for
Plaintiff (6th cause of action – Breach of Oral Contract);
(7) Plaintiff did not enter into an oral agreement with
NDI about procuring or advising on commercial or business insurance for
Plaintiff (7th cause of action – Breach of the Covenant of Good
Faith and Fair Dealing);
(8) NDI did not receive any benefits from Plaintiff in
relation to procuring or advising on commercial or business insurance for
Plaintiff (8th cause of action – Unjust Enrichment); and
(9) Plaintiff’s claim for punitive damages in relation to
his intentional misrepresentation and construct fraud claims fails because NDI
made no misrepresentation and owed no fiduciary duty related to the commercial
insurance at issue.
To establish his negligence cause of action against NDI,
Plaintiff must prove: (1) the existence of a legal duty; (2) breach of that
duty; (3) proximate cause, and (4) damages.
Wallman (2011) 200 CA4th 1288, 1309. Generally, in California, insurance
agents/brokers do not owe insureds a duty to advise them on the adequacy of
their insurance coverage. Id. However, three exceptions to the general rule
exist: (1) When the agent misrepresents the nature, extent, or scope of the
insured’s coverage; (2) When the insured requests or inquires about a
particular type, or extent, of coverage; and (3) When there is either an
express agreement or the agents held themselves out as having expertise in a
given field of insurance being sought by the insured. Fitzpatrick (1997) 57 CA4th 916, 927.
A fiduciary relationship/duty is a necessary element of
both Plaintiff’s breach of fiduciary duty and constructive fraud causes of
action. See Pellegrini
(2008) 165 CA4th 515, 524; Prakashpalan (2014) 223 CA4th 1105, 1131; Younan
(1980) 111 CA3d 498, 516, fn.14; Richelle L. (2003) 106 CA4th 257,
270. In California, it is unclear
whether a fiduciary relationship exists between an insurance broker and an
insured. Hydro-Mill Co., Inc.
(2004) 115 CA4th 1145, 1156. To the
extent any such duty existed between Plaintiff and NDI, it would only extend to
procuring the type of insurance requested by Plaintiff. See Mark Tanner Construction, Inc.
(2014) 224 CA4th 574, 588.
Both Plaintiff’s negligent misrepresentation and
intentional misrepresentation causes of action require a misrepresentation by
NDI regarding Plaintiff’s commercial/business insurance. See Gentry (2002) 99 CA4th 816,
835.
Plaintiff’s breach of oral contract and breach of implied
covenant of good faith and fair dealing causes of action require a contractual
relationship between Plaintiff and NDI regarding the procurement of
commercial/business insurance. See
D’Arrigos Bros. of California (2014) 224 CA4th 790, 800; Smith
(1990) 225 CA3d 38, 49.
To be liable under Plaintiff’s unjust enrichment cause of
action, NDI must have received and unjustly retained a benefit at Plaintiff’s
expense. Peterson (2008) 164
CA4th 1583, 1593.
Contrary to NDI’s assertions that they only provided
services to Plaintiff regarding his personal insurance needs, Plaintiff has
submitted his declaration wherein he states that on several occasions prior to
2018, he spoke with NDI regarding his business/commercial insurance needs and
was never informed that he needed to address such issues with the Thomas
Defendants. (See Plaintiff’s
Response to Separate Statement (PRSS) 12-15).
As such, a triable issue of material fact exists as to whether NDI can
be held liable for Plaintiff’s causes of action and claim for punitive
damages.
Even if the evidence established that Plaintiff never
consulted with the Diamenti Defendants regarding his commercial/business
insurance needs and/or that the Diamenti Defendants never advised Plaintiff
regarding same, a triable issue of material fact exists as to whether the
Thomas Defendants were acting as NDI’s agent in advising Plaintiff on and
procuring insurance for his commercial/business needs. In the motion, NDI does not argue that the
Thomas Defendants are not liable under any of Plaintiff’s causes of
action.
A triable issue of material fact exists regarding whether
an agency relationship existed between NDI and the Thomas Defendants regarding
the procurement of personal and/or commercial/business insurance for Plaintiff. (See Complaint ¶8).
An agency relationship can be established by agreement
between the agent and the principal which is a true agency; or an agency can be
based on ostensible authority which is some intentional conduct or neglect on
the part of the alleged principal which creates a belief in the minds of third
persons that an agency exists, and a reasonable reliance thereon by such third
persons. Goldman (2013) 220 CA4th
1160, 1173; Pereda (2022) 85 CA5th 759, 768.
Ostensible agency is based on the principle of estoppel. J.L. (2009) 177 CA4th 388, 404; Ermoian
(2007) 152 CA4th 475, 502 (If a principal’s actions have led others to believe
that they have conferred authority on an agent, the principal cannot then assert,
as against third parties who have relied thereon in good faith, that the
principal did not intend to confer such power.).
In order to recover against a principal for the acts of
an ostensible agent, the following requirements must be met: (1) the person
dealing with an agent must do so with a reasonable belief in the agent’s
authority; (2) such belief must be generated by some act or neglect by the
principal sought to be charged; and (3) the person relying on the agent’s
apparent authority must not be negligent in holding that belief. Associated Credidtors’ Agency (1975)
13 C3d 374, 399; Deutsch (2008) 164 CA4th 748, 782.
Whether an ostensible agency relationship exists is
generally a question of fact and may only become one of law where the facts can only be viewed in one way. See Kaplan (1997) 59 CA4th 741,
748; See Metropolitan Life Insurance Company (1982) 32 C3d 649,
658.
The Diamenti Defendants admit that NDI and the Thomas
Defendants share the same office space and on occasion share clerical and
administrative resources. (SS 6,
7). More importantly, the Diamenti Defendants’ admissions and
Plaintiff’s evidence show that NDI and Thomas use stationary which identifies
only “NDI Insurance Agency” and not BTI.
(SS 25; Hewitt Decl. ¶¶5-6, Ex.B-C).
Further, NDI admits that NDI has a practice of preparing draft
Certificates of Insurance for the Thomas Defendants and did so with regard to
Plaintiff and such certificate identified NDI as the producer. (SS 20-22 and Hewitt Decl. ¶14, Ex,A). Even accepting the Diamenti Defendants’
contention that such identification was merely a clerical error, that error
when viewed in connection with all of the foregoing facts is sufficient to
create a triable question of material fact as to whether Thomas was acting as
NDI’s ostensible agent in his dealings with Plaintiff. Such a conclusion is further supported by
Plaintiff’s declaration wherein he states that he was unaware of the separate
nature of NDI and the Thomas Defendants until after this action was filed and
that he relied on the advice and expertise of both NDI and the Thomas
Defendants with regard to all of his insurance needs. (See Hewitt Decl. ¶¶4-10, 24).
CONCLUSION
The motion is denied in its entirety.