Michelle Moriarty v. Bayside Insurance Associates

• Court: Court of Appeals for the Ninth Circuit
• Decided: September 7, 2021
• Docket: 20-56139
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS SEP 7 2021 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

MICHELLE L. MORIARTY, Individually, No. 20-56139 as Successor-In-Interest to Heron D. Moriarty, Decedent, on Behalf of the Estate D.C. No. of Heron D. Moriarty, and on Behalf of the 3:17-cv-01709-BTM-WVG Class,

Plaintiff-Appellant, MEMORANDUM*

v.

BAYSIDE INSURANCE ASSOCIATES, INC., a California Corporation,

Defendant-Appellee,

and

AMERICAN GENERAL LIFE INSURANCE COMPANY, a Texas Corporation; DOES, 1 thru 20 Inclusive,

Defendants.

Appeal from the United States District Court for the Southern District of California Barry Ted Moskowitz, District Judge, Presiding

Submitted September 1, 2021**

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision Pasadena, California

Before: IKUTA, BENNETT, and R. NELSON, Circuit Judges.

Plaintiff-Appellant Michelle Moriarty appeals the district court’s grant of

summary judgment to Defendant-Appellee Bayside Insurance (“Bayside”). Bayside

was Moriarty’s husband’s insurance agent when he purchased a life insurance policy

from American General Life Insurance Company (“AGLIC”) in September 2012,

with Moriarty as the sole beneficiary. The policy’s premiums went unpaid for

several months in 2016, and the policy lapsed due to those unpaid premiums nine

days before Moriarty’s husband died.

Moriarty brought a putative class action against AGLIC and professional

negligence and negligent misrepresentation claims against Bayside. She contends

that Bayside owed her “a general and special duty of care to investigate the status of

[the life insurance policy] and its potential forfeiture and to fully and promptly

communicate . . . what actions and steps could and should be taken to avoid

termination of the Policy.” She alleges that Bayside breached that duty with its

handling of her email request for certain policy information that she sought so that

she could pay the overdue policy premiums before the policy lapsed. Bayside

responded with the information that Moriarty would need to make a payment and

told Moriarty that it was “trying” to have a team follow up with AGLIC. It never

without oral argument. See Fed. R. App. P. 34(a)(2).

2 followed up.

The district court granted summary judgment to Bayside on the professional

negligence claim, finding that Bayside did not owe the duty that Moriarty alleged.

Later, the parties stipulated to the dismissal of Moriarty’s negligent

misrepresentation claim, as duty is an element of both claims. The district court then

entered final judgment for Bayside under Federal Rule of Civil Procedure 54(b). We

review the district court’s grant of summary judgment de novo and affirm. Tzung v.

State Farm Fire & Cas. Co., 873 F.2d 1338, 1339 (9th Cir. 1989).

In California, “whether a duty of care exists is a question of law for the court.”

Fitzpatrick v. Hayes, 67 Cal. Rptr. 2d 445, 448 (Ct. App. 1997) (citation and

alteration omitted). In the usual case, “[i]nsurance [agents] owe a limited duty to

their clients, which is only to use reasonable care, diligence, and judgment in

procuring the insurance requested by an insured.” Pac. Rim Mech. Contractors, Inc.

v. Aon Risk Ins. Servs. W., Inc., 138 Cal. Rptr. 3d 294, 297 (Ct. App. 2012) (quotation

marks and citation omitted). Thus, in Kotlar v. Hartford Fire Insurance, 100 Cal.

Rptr. 2d 246 (Ct. App. 2000), the California Court of Appeal held that an insurance

agent does not owe an insured a general duty to notify him of an insurer’s intent to

cancel his insurance policy due to nonpayment of premiums. Id. at 250. California

will impose a special duty beyond this limited duty “when—but only when—one of

. . . three things happens.” Fitzpatrick, 67 Cal. Rptr. 2d at 452 (emphasis added).

3 First, California will impose a special duty when “the agent misrepresents the

nature, extent or scope of the coverage being offered or provided.” Id. Moriarty

does not allege that Bayside misrepresented the nature, extent, or scope of her

husband’s life insurance policy. Unlike in Free v. Republic Insurance, 11 Cal. Rptr.

2d 296 (Ct. App. 1992), Bayside answered Moriarty’s email inquiry with correct

information. Cf. id. at 297–98. And unlike in Paper Savers, Inc. v. Nasca, 59 Cal.

Rptr. 2d 547 (Ct. App. 1996), Bayside did not induce Moriarty’s husband to

purchase the life insurance policy through affirmative misrepresentations. Cf. id. at

554.

Second, California imposes a special duty to volunteer certain information

regarding additional or different coverage when “there is a request or inquiry by the

insured for a particular type or extent of coverage.” Fitzpatrick, 67 Cal. Rptr. 2d at

452. This exception, by its own terms, doesn’t apply here. Cf. Westrick v. State

Farm Ins., 187 Cal. Rptr. 214, 217–19 (Ct. App. 1982) (holding that an insurance

agent has “an affirmative duty of disclosure” during the sale of an insurance policy

if a client’s inquiry puts the agent on notice that the policy will not meet the client’s

unique needs).

Third, California will impose a special duty when “the agent assumes an

additional duty by either express agreement or by ‘holding [it]self out’ as having

expertise in a given field of insurance being sought by the insured.” Fitzpatrick, 67

4 Cal. Rptr. 2d at 452. Bayside did not enter into an express agreement with the

Moriartys to tell them about the status of the life insurance policy. Its statement that

it was “trying to have a team follow up on status” was not an express agreement to

do so. Nor did Bayside hold itself out as a life insurance expert. Unlike in Murray

v. UPS Capital Insurance Agency, Inc., 269 Cal. Rptr. 3d 93 (Ct. App. 2020),

Bayside does not specialize in the type of insurance at issue, cf. id. at 110, and

Moriarty does not otherwise show that Bayside held itself out as a life insurance

expert.

Moriarty also argues that Bayside owed her a duty because of their “special

relationship.” But Moriarty has not shown that Bayside was in a more “unique

position” than the typical insurance agent to protect her or her husband from injury.

See Brown v. USA Taekwondo, 483 P.3d 159, 166 (Cal. 2021). Finally, Moriarty

argues that the panel should impose an affirmative duty on Bayside under Rowland

v. Christian, 443 P.2d 561 (Cal. 1968). But the California Supreme Court recently

held in Brown v. USA Taekwondo, 483 P.3d 159, that “[t]he multifactor test set forth

in Rowland was not designed as a freestanding means of establishing duty, but

instead as a means for deciding whether to limit a duty derived from other sources.”

Id. at 166.

Thus, as the district court found, Moriarty’s professional negligence and

negligent misrepresentation claims fail because she has not established an essential

5 element—duty. See Ericksson v. Nunnik, 120 Cal. Rptr. 3d 90, 100 (Ct. App. 2011);

Eddy v. Sharp, 245 Cal. Rptr. 211, 213 (Ct. App. 1988).1

AFFIRMED.

1 Because Moriarty fails to establish that Bayside assumed any special duty, we need not reach her argument that under Biakanja v. Irving, 320 P.2d 16 (Cal. 1958), Bayside’s duties to her husband extend to her as the sole beneficiary of her husband’s life insurance policy.