Nipper v. California Automobile Assigned Risk Plan
| Citation | 58 Cal.App.3d 752,130 Cal.Rptr. 100 |
| Decision Date | 27 May 1976 |
| Docket Number | No. 2400,2400 |
| Court | California Court of Appeals |
| Parties | Robert Eugene NIPPER, Plaintiff and Appellant, v. CALIFORNIA AUTOMOBILE ASSIGNED RISK PLAN et al., Defendants and Respondents. |
McCormick, Barstow, Sheppard, Coyle & Wayte and Stephen R. Cornwell, Fresno, for plaintiff and appellant.
Bagley, Bianchi, Hoskins & Rosenberg and Albert Bianchi, San Rafael, for defendant and respondent California Auto Assigned Risk Plan.
Stutsman & Nagel and Peter C. Morris, Fresno, for defendants and respondents H. B. Klassen and Klassen & Ratzlaff.
This appeal presents two questions of first impression: Does the California Automobile Assigned Risk Plan, an unincorporated association organized pursuant to Insurance Doe section 11620 et seq. for the purpose of insuring applicants for automobile liability insurance who are unable to procure such insurance through ordinary methods, owe a duty to the motoring public to make inquiry concerning the applicants' mental and physical characteristics which pertain to their ability to safely and lawfully operate an automobile? We hold that it does.
Second, does a licensed insurance broker who is the 'producer of record' owe a duty to the motoring public to disclose to the Assigned Risk Plan any information of which he has actual knowledge concerning the applicants's mental and physical characteristics which pertain to their ability to safely and lawfully operate an automobile? We hold that he does.
This action was filed by appellant to recover for personal injuries sustained in a collision between the pickup truck he was driving and the automobile being driven by defendant H. K. Warkentin. In addition to Warkentin, appellant sought recovery against respondents H. B. Klassen and Klassen & Ratzlaff, a licensed insurance broker and agency (Klassen), and against respondent California Automobile Assigned Risk Plan (CAARP). After respondents' general demurrers were sustained without leave to amend, appellant proceeded to trial and obtained a judgment against Warkentin in the amount of $200,000, of which $180,000 remains unsatisfied.
As to respondent CAARP, this appeal is concerned with the validity of the third, fourth and fifth causes of action in the first amended complaint. The third cause of action alleges:
(1) that H. B. Klassen is a licensed insurance broker in the insurance agency of Klassen & Ratzlaff; that said agency is in the business of writing automobile casualty insurance;
(2) that CAARP is an unincorporated association of insurance companies organized pursuant to statute and operating according to rules and regulations in the California Administrative Code; that Does 10-200 are insurance companies jointly administering CAARP; that CAARP is their agent and employee, and that all the things complained of were done in the scope of that employment;
(3) that in November 1971, Warkentin was 79 years of age and not possessed of sufficient alertness and mental capacity to safely operate an automobile; that he had been insured by Travelers Indemnity Company for the operation of an automobile; that in 1971 Travelers refused to further insure Warkentin because of information received from Klassen;
(4) that on October 5, 1971, Klassen submitted an application to CAARP, 1 signed by Warkentin, to insure Warkentin for $15,000; that Klassen did not submit with the application any information regarding Warkentin's inability to safely operate an automobile even though he had personal knowledge of these facts from Warkentin's physician and his observations of Warkentin;
(5) that Warkentin was issued a policy pursuant to CAARP with United Services Automobile Association (United) for $15,000 in violation of the Insurance Code and the Administrative Code because of Warkentin's inability to safely drive an automobile; that the issuance of the policy by CAARP and United induced Warkentin to believe he could safely operate an automobile, thereby proximately causing the accident;
(6) that CAARP's application form failed to require applicants to submit information concerning their mental or physical capability to drive an automobile, and that, had such information been sought as required by law, neither CAARP nor United would have issued the policy;
(7) that CAARP would have informed the Department of Motor Vehicles (DMV) as required by law of such rejection, and that the DMV would have revoked Warkentin's license;
(8) that Warkentin, if uninsured and unlicensed, would not have been driving his automobile on the date of the accident;
(9) that it was foreseeable that the negligence and violations of law alleged would result in the operation of an automobile by unqualified persons and would result in physical injury to the motoring public; and it was foreseeable that issuance of a policy would induce Warkentin to believe he was capable of driving an automobile.
The fifth cause of action alleges that CAARP and Does 21-200 wilfully and with reckless disregard for the possible injury to the motoring public, wrongfully failed to abide by the statutes, rules and regulations controlling CAARP and to abide by their duties to the motoring public; that CAARP and Does 21-200 did so in order to induce persons unqualified to operate automobiles to do so for the purpose of profiteering, and that Does 21-200 authorized and/or ratified CAARP's alleged conduct.
The first amended complaint prays against all defendants for general damages, medical and other expenses, losses incurred by reason of plaintiff's inability to pursue his usual activities, and damages to plaintiff's automobile according to proof, and for punitive damages.
CAARP and Klassen demurred to the first amended complaint on several grounds including that facts alleged were insufficient to state a cause of action. The trial court sustained CAARP's demurrer without leave to amend, and sustained Klassen's demurrer with leave to amend.
Appellant filed a second amended complaint, and the third cause of action against Klassen was amended as follows:
(1) that in 1971 Travelers Indemnity Company had refused to further insure Warkentin because Klassen had supplied them with a letter from Warkentin's physician stating that he was not able to safely operate an automobile because of senility;
(2) that on October 5, 1971, Klassen had Warkentin's physician's opinion; that Klassen filled out the application and certified that he had read the California Automobile Assigned Risk Plan and had included all required information given to him by Warkentin;
(3) that Klassen wilfully omitted the physician's opinion from the application, thereby making the application incorrect and misleading;
(4) that Klassen owed a duty to the motoring public to submit the physician's opinion because it was required by California Administrative Code, title 10, section 2430, and as a licensed insurance broker, and it was foreseeable that such omission would lead to the insuring of Warkentin and his driving on public streets;
(5) that Klassen knew that if Warkentin was uninsured he would not drive, and Warkentin, in fact, would not have driven without insurance.
The balance of the third cause of action remained as it had read in the first amended complaint. The prayer was the same except for the deletion of the claim for punitive damages.
Klassen again demurred to the second amended complaint on the ground that the alleged facts did not state a cause of action. The demurrer was sustained without leave to amend.
Judgments of dismissal were entered in favor of CAARP and Klassen. Appellant filed a timely appeal.
The essence of appellant's complaint against CAARP is that it breached a duty of ordinary care to the motoring public by failing to make inquiry in its application form as to facts relevant to Warkentin's physical and mental capacity to safely operate a motor vehicle; that the breach resulted in the issuance of an automobile liability policy to Warkentin which induced him to believe he was qualified and competent to drive and that he did drive, causing injury to appellant.
The existence of a legal duty of care owing by a defendant to the class of persons of which the plaintiff is a member is primarily a question of law. (Weirum v. primarily a question of law. (Weirum v. RKO General, Inc. (1975) 15 Cal.3d 40, 46, 123 Cal.Rptr. 468, 539 P.2d 36.) Such a duty is the court's 'expression of the sum total of those considerations of policy which lead the law to say that the particular plaintiff is entitled to protection.' (Prosser, Law of Torts (4th ed. 1971) pp. 325-326.) While the question of whether one owes a duty to another must be decided on the particular facts of each case, every case is governed by the general rule that all persons are required to use ordinary care to prevent others from being injured by their conduct. (Civ.Code, § 1714; Weirum v. RKO General, Inc., supra, 15 Cal.3d at p. 46, 123 Cal.Rptr. 468, 539 P.2d 36; Rowland v. Christian (1968) 69 Cal.2d 108, 112, 70 Cal.Rptr. 97, 443 P.2d 561; Hilyar v. Union Ice Co. (1955) 45 Cal.2d 30, 36, 286 P.2d 21.)
In the absence of overriding policy considerations foreseeability of the risk created by the defendant's conduct is the primary consideration in establishing a duty of care. (Weirum v. RKO General, inc., supra, 15 Cal.3d at p. 46, 123 Cal.Rptr. 468, 539 P.2d 36; Dillon v. Legg (1968) 68 Cal.2d 728, 739, 69 Cal.Rptr. 72, 441 P.2d 912.) As foreseeability is a question of fact (Weirum v. RKO General, Inc., supra, 15 Cal.3d at p. 46, 123 Cal.Rptr. 468, 539 P.2d 36), and as appellant has alleged that it was foreseeable that he insuring of Warkentin would cause him to drive thereby creating a hazard to others on the highway, appellant has pleaded...
To continue reading
Request your trial