October 8, 2020

Murray v. UPS Capital Insurance Agency, Inc. (2020) 54 Cal.App.5th 628

Plaintiff purchased used computer equipment and had it shipped from California to Texas. The equipment was damaged in transit. Plaintiff believed he purchased insurance to cover this loss, but the insurance company denied his claim. Plaintiff sued his insurance broker, claiming the broker owed him a special duty to explain the policy language and scope of the coverage he was purchasing. The trial court granted the broker’s motion for summary judgment after concluding the broker owed no such duty of care.

The Court of Appeal reversed. Although unwilling to adopt a per se rule applicable in all cases, the court held that brokers/agents who specialize in a particular field of insurance and hold themselves out as experts may, depending on the facts, take on a heightened duty of care towards clients seeking that kind of insurance. The court held that in this case, there were triable issues of fact whether the broker undertook a special duty by holding itself out as having special expertise in the type of insurance plaintiff was seeking, and that plaintiff reasonably relied on that expertise.