District Court Finds That Claims Handler Is Not A Proper Party To Insurance Dispute For Acts Allegedly Within The Course And Scope Of Her Employment
Durben v. State Farm Gen. Ins. Co.,2016 U.S. Dist. LEXIS 100485 (E.D. Cal. July 29, 2016)
In Durben v. State Farm Gen. Ins. Co., the district court dismissed, without leave to amend, intentional misrepresentation and negligent misrepresentation claims the insureds brought against the claims handler for a fire claim submitted under a homeowner’s insurance policy, concluding she was not a proper defendant.
The insureds’ home was destroyed by fire while insured by State Farm. The insureds obtained an estimate of the cost to restore the home to its pre-fire condition. State Farm obtained an estimate from another contractor which was significantly lower than the insureds’ initial quote, and refused to pay for any repair costs exceeding the quote obtained by State Farm. Instead of repairing the home, the insureds sold their home at a loss and then filed suit against State Farm as well as the individual claims handler that had handled the fire claim.
Granting a motion to dismiss, the district court concluded that, under California law, employees of insurance companies who act within the course and scope of their employment cannot be held individually liable for that conduct unless they act as a dual agent or for their own personal benefit. Because the insureds specifically alleged that the claim handler acted within the course and scope of her employment, did not allege any facts suggesting that she acted outside the course and scope of her employment, and the only injury she allegedly caused is the same as the insurer’s denial of benefits, the court dismissed the claims.
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