Saunders v. Cariss

Citation224 Cal.App.3d 905,274 Cal.Rptr. 186
Decision Date18 October 1990
Docket NumberNo. D009525,D009525
CourtCalifornia Court of Appeals
PartiesGlenn Duane SAUNDERS, Plaintiff and Appellant, v. Al CARISS, an individual and dba Al Cariss Agency, Defendant and Respondent.

C. Steven Cathers and Robert W. Jackson, Fallbrook, for plaintiff and appellant.

Robert L. Friedenberg, Sara M. Wheeler and Lewis, D'Amato, Brisbois & Bisgaard, San Diego, for defendant and respondent.

WIENER, Acting Presiding Justice.

Defendant Al Cariss, an insurance agent for the Farmers Group of Companies, successfully demurred to Plaintiff Glenn Duane Saunders fourth amended complaint seeking damages for fraud and emotional distress. Saunders appeals the judgment of dismissal contending his complaint alleges a valid cause of action. We agree and accordingly reverse with instructions.


In 1986, Saunders bought a Farmers automobile policy through Cariss. The policy provided for uninsured motorist coverage with $100,000 limits. That policy was in effect on January 8, 1988 when Saunders When Saunders requested payment of his policy limits, Farmers responded by providing him with copies of two "Reduction Agreements" apparently consenting to the reduction of uninsured motorist coverage to either $15,000 or $25,000. The agreements purport to bear the signature in one case of Saunders and in the other of Saunders' wife. Saunders denied that either he or his wife signed such a form or agreed in any other manner to a reduction of coverage. He alleges that without authorization Cariss signed Saunders' name and his wife's name to the forms.

was seriously injured in an accident caused by an uninsured motorist.

As a result of Farmers' refusal to pay the full $100,000 limits, Saunders retained attorney Robert Jackson, agreeing to pay him one-third of any amount over $15,000 Jackson was able to secure from Farmers. Within a short period of time, Jackson convinced Farmers to pay the full $100,000 amount demanded.

Jackson then filed this action on Saunders' behalf against Cariss, among others, alleging Cariss's unauthorized signing and submission of the Reduction Agreements damaged Saunders to the extent of the one-third contingent fee Saunders paid to Jackson. Saunders claims it would have been unnecessary for him to retain Jackson had Cariss not improperly signed the Reduction Agreements.

Cariss demurred to Saunders' fourth amended complaint, which attempted to assert causes of action against Cariss for fraud and intentional infliction of emotional distress. Cariss reasoned Farmers' eventual payment of the full $100,000 defeated any claim that Saunders had been damaged by Cariss's actions. Cariss also asserted that Saunders failed to satisfy the technical pleading requirements necessary to maintain a cause of action for fraud. Finally, Cariss took issue with Saunders' attempts to plead a cause of action for intentional infliction of emotional distress, asserting that the complaint failed to allege he had anything to do with the processing of Saunders' claim. This appeal follows the judgment of dismissal entered after the court sustained Cariss's demurrer without leave to amend as to both causes of action.


It has long been established that in ruling on a demurrer, the trial court is obligated to look past the form of a pleading to its substance. Erroneous or confusing labels attached by the inept pleader are to be ignored if the complaint pleads facts which would entitle the plaintiff to relief. (See, e.g., Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2, 229 Cal.Rptr. 605.) "It is not what a paper is named, but what it is that fixes its character." (Parnham v. Parnham (1939) 32 Cal.App.2d 93, 96, 89 P.2d 189.)

Saunders' first cause of action was labeled "fraud." Cariss responded to this cause of action by alleging it failed to contain elements of a traditional fraud cause of action. Instead of fighting the battle on this field, we believe it proper to take the more constructive approach of examining the factual allegations of Saunders' complaint as stated above. Our task is to determine whether the pleaded facts state a cause of action on any available legal theory.

Insurance agents and brokers have been held liable to insureds or applicants for insurance on a number of theories including breach of contract and professional negligence. (See, e.g., McAlvain v. General Insurance Co. of America (1976) 97 Idaho 777, 554 P.2d 955, 958 (contract and negligence); Karam v. St. Paul Fire & Marine Insurance Company (La.1973) 281 So.2d 728, 730-731 (negligence); see generally Keeton & Widiss, Insurance Law (1988) § 2.5(c), pp. 94-98; 16A Appleman, Insurance Law and Practice (1981) § 8831, pp. 2-4; see also Walker v. Pacific Indemnity Co. (1960) 183 Cal.App.2d 513, 6 Cal.Rptr. 924.) 1 Some of the cases arise in the A somewhat different situation is presented when the agent acts without client authorization, rather than incorrectly following the client's instructions. Where the agent performs an unauthorized act, there is no promise the agent may be charged with violating. The agent's liability, if any, is necessarily based on tort principles.

                context of an agent who fails to obtain insurance for a client as promised.  (E.g., Mid-Century Ins. Co. v. Hutsel (1970) 10 Cal.App.3d 1065, 89 Cal.Rptr. 421;  Keller Lorenz Co. v. Insurance Assoc.  Corp. (1977) 98 [224 Cal.App.3d 909] Idaho 678, 570 P.2d 1366;  Bulla v. Donohue (1977) 174 Ind.App. 123, 366 N.E.2d 233.)   In other cases, the agent obtains insurance but fails to obtain certain requested coverage (e.g., Port Clyde Foods, Inc. v. Holiday Syrups, Inc.  (S.D.N.Y.1982) 563 F.Supp. 893;  Wings & Wheels Express Inc. v. Sisak (Spec.Term 1973) 73 Misc.2d 846, 342 N.Y.S.2d 891) or obtains the requested coverage in the wrong amount (e.g., United Stores of Amer., Inc. v. Insurance Consult., Inc.  (E.D.Mo.1971) 332 F.Supp. 640;  Karam v. St. Paul Fire & Marine Insurance Company, supra, 281 So.2d 728).   In any of these situations, contractual liability of the agent can be at least theoretically premised on the agent's breach of an oral agreement to obtain insurance as requested by the client

We have discovered one decision on facts more analogous to this case. In Dargan v. Robinson (Tex.Civ.App.1940) 140 S.W.2d 561, an agent cancelled a policy of cargo insurance without authorization from the insured, Robinson. Thereafter, the cargo was destroyed and Robinson sued the agent. In a peremptory fashion, the court found the case governed by the general rule that an agent or broker who fails to procure insurance as requested will be liable for any resulting damage. (Id. at p. 563.)

We view the varying factual contexts within which the issue of insurance agent liability may arise to be largely irrelevant to the ultimate disposition of these cases. As a general proposition, an insurance agent will be liable to his client in tort where his intentional acts or failure to exercise reasonable care with regard to the obtaining or maintenance of insurance results in damage to the client. (See Johnson v. Illini Mutual Insurance Company (1958) 18 Ill.App.2d 211, 151 N.E.2d 634, 637 (broker liable if client "suffers damage by reason of any mistake or act of omission or commission of the broker....").) By virtue of his position and status as Saunders' insurance agent, Cariss had the means to submit the Reduction Agreements...

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