Shin v. State Farm General Ins. Co. CA4/1 ( 2023 )

Filed 12/14/23 Shin v. State Farm General Ins. Co. CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
MICHAEL SHIN et al., D081678
Plaintiffs and Appellants,
v.
(Super. Ct. No. 37-2020-
STATE FARM GENERAL 00036998-CU-BC-CTL)
INSURANCE COMPANY et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of San Diego County,
John S. Meyer, Judge. Affirmed.
Corbett, Steelman & Specter and Bruce R. Corbett for Plaintiffs and
Appellants.
Hughes & Nunn, Randall M. Nunn, and E. Kenneth Purviance for
Defendants and Respondents.
Michael Shin, Ajay Bhatt, Aloha Wound Care Group, LLC (Aloha), and
Karl Stemmler (collectively, Plaintiffs) appeal from a judgment entered
against them after the trial court granted a motion for summary judgment in
favor of State Farm General Insurance Company (State Farm) and Greg
Johnson Insurance Agency, Inc. (Johnson; collectively, Defendants). The core
of the dispute is whether Johnson, as an insurance agent for State Farm, had
a duty to provide or suggest errors and omissions coverage—a special type of
liability coverage, like malpractice insurance, that protects against claims
arising out of alleged errors and omissions in the performance of professional
services—for Stemmler’s medical billing business in response to Stemmler’s
general request for comprehensive business liability insurance.1 The trial
court concluded that Defendants did not owe Plaintiffs such a duty and, thus,
that Plaintiffs could not maintain their sole cause of action for negligence.
On the record before us, we agree. We therefore affirm the judgment.
I. FACTUAL AND PROCEDURAL BACKGROUND
Stemmler started Physicians Professional Billing Service (PPBS), a
medical billing company, in 1998.2 Stemmler described PPBS as a sole
1 Croskey et al., California Practice Guide: Insurance Litigation (The
Rutter Group 2023) ¶ 7:2400 describes “ ‘Errors and omissions’ Insurance” as
follows:
“A special type of liability insurance is available for professionals
(lawyers, accountants, medical care providers, architects, engineers,
etc.): ‘Errors and omissions’ (E&O) insurance, including ‘malpractice
insurance,’ protects such persons against claims arising out of alleged
errors and omissions in the performance of services within the scope
of their profession. (See typical insuring clause at ¶ 7:2452.)
“E&O coverage can extend beyond professional malpractice insurance.
Financial institutions and other business entities often purchase E&O
insurance to protect against third party claims alleging economic
losses.”
2 Defendants submitted a letter to this court, dated March 20, 2023,
attaching copies of certain exhibits lodged with the trial court in support of
their motion for summary judgment. We construe the letter as a motion to
augment the record with the attached exhibits and hereby grant the request.
(Cal. Rules of Court, rule 8.155(a)(1)(A).)
2
proprietorship and stated that he and his wife, Elena Stemmler, ran it
together without any formal partnership agreement.
Stemmler first obtained insurance through Johnson, as an appointed
agent for State Farm, sometime around 2001. At that time, Stemmler asked
Johnson to provide insurance policies for all of his needs, including his
personal home and auto insurance, as well as insurance for the PPBS
business. According to the operative second amended complaint (SAC)
Stemmler told Johnson “that his business was providing professional medical
billing services to physicians” and “that he wanted coverage for all his
business liabilities.” “Stemmler ha[d] no experience in insurance and relied
on Johnson to provide all the necessary coverage.” Stemmler did not use the
words “errors and omissions,” but also did not recall the exact words that he
did use.
In 2005, Stemmler purchased an office condominium for PPBS. The
mortgage lender for the condo had certain building insurance requirements
for the loan, which they communicated directly to Johnson. Johnson
provided an updated insurance policy for PPBS, satisfying the lender’s stated
requirements, in late 2005. “[Stemmler] understood that his insurance
carried forward his prior coverage for all his business liability. Johnson
never advised [Stemmler] otherwise or that he needed additional or different
coverage.” Stemmler looked at the policy when he first received it in the mail
and “understood that he was covered for his business liability.”
In October 2018, Dr. Shin, Dr. Baht, and Aloha filed a complaint
against PPBS and Karl and Elena Stemmler. Dr. Shin and Dr. Baht were
licensed physicians that worked for Aloha. They alleged that they had a
contract with PPBS for professional billing services, which they attached as
an exhibit to the complaint, and that PPBS made numerous errors, including
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“failing to prepare and mail billing statements, failing to post insurance
payments, failing to file insurance claims in a timely manner, failing to
provide monthly report updates, and failing to follow up on past due
amounts.” In addition, they asserted that Elena Stemmler represented
herself to them as an experienced, certified medical coder but then made false
representations about their ability to obtain certain reimbursements in an
effort to generate greater revenues and, later, to avoid liability. Based on
those claims, they asserted causes of action for breach of contract, fraud,
negligence, breach of fiduciary duty and accounting against PPBS and Karl
and Elena Stemmler.
Stemmler made a demand on State Farm for defense and coverage. At
the time, Stemmler had a worker’s compensation policy and a business office
liability policy from State Farm. The business office liability policy covered
claims such as employee dishonesty, loss of income due to suspension of
operations, monetary losses due to theft or destruction, and utility
interruption. It also had a number of exclusions. The policy stated that
State Farm would have the right and duty to defend lawsuits seeking
damages for “ ‘bodily injury,’ ‘property damage’ or ‘personal and advertising
injury’ ” as defined by the policy. It specifically excluded coverage for
expected or intended injuries, contractual liability, and claims “arising out of
the rendering or failure to render any professional service or treatment.”
(See Croskey et al., Cal. Practice Guide: Insurance Litigation, supra,
¶ 7:2400 [explaining that errors and omissions coverage typically protects
against such claims].)
State Farm denied Stemmler’s claim and request for defense based, in
part, on the foregoing exclusions. Stemmler had not heard the phrase “errors
and omissions” coverage before and this was the first time that he learned
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that the policy that State Farm had provided did not cover such claims.
Stemmler proceeded in the litigation without assistance from State Farm and
later entered into a settlement agreement that included a partial assignment
to the Plaintiffs of his claims against Defendants.
Plaintiffs then jointly filed the SAC against Defendants. In the SAC,
Plaintiffs assert a single cause of action for negligence against Defendants.
Plaintiffs allege that Johnson and other State Farm agents “held themselves
out to Plaintiffs as specialists in the small business insurance arena and in
obtaining comprehensive insurance coverage,” and “thus owed duties of
reasonable care, diligence and loyalty, and judgment to Plaintiffs in
procuring insurance and to assure that coverage as requested and promised
was in place to protect Plaintiffs and PPBS.” Plaintiffs allege further that
“Defendants breached that duty, by failing to obtain the appropriate coverage
as requested by Plaintiffs; by failing to properly and accurately name the
policy to cover the known individuals working for the business; by failing to
accurately represent and report the coverage obtained; and by failing to
properly warn Plaintiffs of potential coverage limitations or exclusions.”
In addition, Plaintiffs allege that “Defendants knew or should have
known that Plaintiffs would need coverage sufficient to indemnify against
errors and omissions in performance of their business by all individuals
engaged in Plaintiffs’ business. Plaintiffs relied upon Defendants to obtain
such coverage.” As a result, Plaintiffs allege that they “sustained damages
for loss of insurance benefits it would have received had Defendants procured
the proper coverage as well as attorney fees and costs sustained in defending
such allegations.”
Johnson and State Farm each filed general denials and affirmative
defenses. After some discovery, including written discovery and a deposition
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of Stemmler, Defendants moved for summary judgment. They asserted that
Plaintiffs could not state a claim for negligence as a matter of law because
they could not establish that Johnson or State Farm had a duty to provide or
suggest errors and omissions coverage to Stemmler in the absence of a
specific request for that type of coverage. The trial court agreed, granted the
motion for summary judgment, and issued judgment in favor of Defendants.
Plaintiffs filed a timely notice of appeal.
II. DISCUSSION
A. Standard of Review
A trial court shall grant a motion for summary judgment “if all the
papers submitted show that there is no triable issue as to any material fact
and that the moving party is entitled to a judgment as a matter of law.”
(Code Civ. Proc. § 437c, subd. (c).)
A defendant moving for summary judgment has the initial burden to
present evidence sufficient to establish that the plaintiff either cannot prove
at least one element of, or that there is a complete defense to, each cause of
action as alleged in the complaint. (Code Civ. Proc., § 437c, subd. (p)(2);
Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850, 853 (Aguilar);
Hutton v. Fidelity National Title Co. (2013) 213 Cal.App.4th 486, 493 [“the
burden of a defendant moving for summary judgment only requires that he or
she negate plaintiff's theories of liability as alleged in the complaint; that is, a
moving party need not refute liability on some theoretical possibility not
included in the pleadings.”].)
If the defendant does so, the burden shifts to the plaintiff to present
evidence demonstrating there is a triable issue of material fact. (Code Civ.
Proc., § 437c, subd. (p)(2); Aguilar, supra, 25 Cal.4th at p. 850.) A triable
issue of material fact exists if the evidence would allow a reasonable trier of
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fact to make a factual finding that is necessary under the pleadings in favor
of the party opposing the motion. (Aguilar, supra, at pp. 843, 850.) The
plaintiff may not rely on the allegations in the pleadings to establish the
existence of a triable issue of material fact and, instead, must “ ‘set forth the
specific facts showing that a triable issue of material fact exists as to that
cause of action or a defense thereto.’ ” (Aguilar, at p. 849; Code Civ. Proc.,
§ 437c, subd. (p)(1) & (2).) The trial court may not weigh the evidence and
must deny the motion if the evidence presented by the opposing party, or any
inferences reasonably drawn therefrom, raises a triable issue of material fact.
(Aguilar, at p. 856.)
On appeal from a summary judgment, we apply the same legal
standard used by the trial court and independently assess the correctness of
the trial court’s ruling. (Moore v. Regents of University of California (2016)
248 Cal.App.4th 216, 231; Coral Construction, Inc. v. City and County of San
Francisco (2010) 50 Cal.4th 315, 326.) “[W]e examine the record de novo,
liberally construing the evidence in support of the party opposing summary
judgment and resolving doubts concerning the evidence in favor of that
party.” (Miller v. Department of Corrections (2005) 36 Cal.4th 446, 460.)
However, “ ‘[a]s with an appeal from any judgment, it is the appellant’s
responsibility to affirmatively demonstrate error and, therefore, to point out
the triable issues the appellant claims are present by citation to the record
and any supporting authority.’ ” (Claudio v. Regents of the University of
California (2005) 134 Cal.App.4th 224, 230; see also Vulk v. State Farm
General Ins. Co. (2021) 69 Cal.App.5th 243, 253 (Vulk) [“Because the trial
court’s judgment is presumed to be correct, [P]laintiffs (as the appellants)
have the burden of affirmatively establishing reversible error.”].)
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B. The Trial Court Properly Sustained Defendants’ Evidentiary
Objection to Stemmler’s Declaration
Before turning to the merits of the summary judgment motion itself, we
consider the trial court’s ruling sustaining Defendants’ objection to certain
statements in a declaration that Stemmler submitted in opposition to the
motion for summary judgment.
1. Additional Background
Defendants took Stemmler’s deposition prior to filing their motion for
summary judgment and relied on statements made during the deposition as
support for their motion. Defendants asserted in their moving papers that
Stemmler said he “asked for coverage for ‘anything associated with medical
billing’ but [that] he admit[ed] he never discussed wanting to be insured for
errors in his business’ medical billing service, or even saying he had concerns
about such billing.” In support, they quoted the following exchanges from
Stemmler’s deposition:
“Q. Okay. Did you discuss with him any concerns about being
sued by customers for errors in the medical billing services?
“A. I did not.
“Q. Did you discuss with him wanting to be insured for
professional services of your business?
“A. I don’t recall whether I used those words.
“Q. Okay. I’m looking to see if you said anything more specific
than I want insurance for anything associated with my
business.
“A. I can’t be more specific looking back 20-something years.
“Q. Okay.
“A. I do not recall.”
In a declaration filed in support of Plaintiffs’ opposition to the motion
for summary judgment, Stemmler stated, in relevant part: “While as I said
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in my deposition I do not remember exactly what was said in my initial
meeting with Johnson, I remember what I was thinking and what I must have
conveyed to Johnson and later his employees. I wanted liability protection for
my business [PPBS]. I am sure I discussed with Johnson and others that
PPBS was a billing service and I wanted liability protection for that service.”
(Italics added.)
Defendants objected to the italicized portion of Stemmler’s statement
as inadmissible speculation pursuant to Evidence Code section 702, and as
improperly contradicting his own prior deposition testimony. They asserted,
“Plaintiff’s attempt to contradict his sworn testimony by way of a speculative
and self-serving declaration is simply insufficient to raise a triable issue of
fact on motion for summary judgment.”
The trial court agreed and sustained the objection as to the italicized
language.
2. Analysis
Where, as here, a trial court rules on an evidentiary objection in the
context of a summary judgment proceeding, we review the ruling for an abuse
of discretion. (Doe v. SoftwareONE Inc. (2022) 85 Cal.App.5th 98, 103–104.)
We find no abuse of discretion in the trial court’s ruling.
Evidence Code section 702, subdivision (a) provides that testimony
from non-expert fact witnesses “concerning a particular matter is
inadmissible unless he has personal knowledge of the matter. Against the
objection of a party, such personal knowledge must be shown before the
witness may testify concerning the matter.” A party may rely on hearsay
presented through affidavits and deposition testimony to support or oppose a
motion for summary judgment, but any such affidavit or declaration “shall be
made by a person on personal knowledge, shall set forth admissible evidence,
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and shall show affirmatively that the affiant is competent to testify to the
matters stated in the affidavits or declarations.” (Code Civ. Proc., § 437c,
subds. (b)(1) & (2), (d).)
Plaintiffs assert that the italicized statements were admissible because
they were based on Stemmler’s personal knowledge of what he was thinking
when he met with Johnson, and because Stemmler’s state of mind was a
relevant fact that he was permitted to testify about. (See, e.g., Love v. Wolf
(1967) 249 Cal.App.2d 822, 832–833 [“ ‘The state of mind of a person . . . is a
fact to be proved like any other fact when it is relevant to an issue in the
case, and the person himself may testify directly thereto.’ ”].) Although we
agree that evidence regarding one’s state of mind is generally admissible,
here, Stemmler’s state of mind was not at issue or pertinent to determining
whether Johnson or State Farm owed him a duty. As we will discuss in more
detail, post, what was relevant is what Stemmler said to Johnson regarding
the type of insurance he was seeking. And Stemmler conceded, both at the
deposition and in the declaration itself, that he did not remember “exactly
what was said.” His contradictory assertion that he “must have conveyed”
certain information while admitting that he could not remember “exactly
what was said” is purely speculative and not grounded in personal knowledge
or recollection.
Regardless, even if the foregoing statements were technically
admissible, they were of minimal evidentiary value. As we have already
explained, they are both internally inconsistent and in direct contradiction to
Stemmler’s prior deposition testimony. Accordingly, we agree with
Defendants that the italicized statements are not sufficient to create a triable
issue of material fact. (See D’Amico v. Board of Medical Examiners (1974)
11 Cal.3d 1, 22 (D’Amico) [concluding that admissions obtained during
10
discovery should be afforded greater deference than evidentiary allegations in
affidavits]; Kerr v. Rose (1990) 216 Cal.App.3d 1551, 1563 (Kerr) [“the normal
policy of ‘liberal construction’ given to declarations opposing summary
judgment does not apply where the declaration contradicts the declarant’s
earlier admissions in a deposition.”]; see also Park v. First American Title Co.
(2011) 201 Cal.App.4th 1418, 1427 [any error in sustaining evidentiary
objections was harmless where declaration did not prove the claim in any
event].)
As we explain next, given the totality of the evidence submitted in
support and opposition to the motion for summary judgment, we find no error
in the trial court’s conclusion that Plaintiffs could not establish that
Defendants had a duty to provide or suggest errors and omissions coverage to
Stemmler, and therefore cannot establish their sole cause of action for
negligence as a matter of law.
C. Plaintiffs Have Not Established a Duty Necessary to Support
Their Cause of Action for Negligence
“To succeed in a negligence action, the plaintiff must show that (1) the
defendant owed the plaintiff a legal duty, (2) the defendant breached the
duty, and (3) the breach proximately or legally caused (4) the plaintiff's
damages or injuries.” (Thomas v. Stenberg (2012) 206 Cal.App.4th 654, 662.)
“ ‘[W]hether a duty of care exists in a given circumstance, “is a question of
law to be determined on a case-by-case basis.” ’ ” (Ibid.; Vulk, supra, 69
Cal.App.5th at p. 254.) Accordingly, here, if Plaintiffs cannot establish that
Defendants owed them a legal duty, they cannot prevail on their negligence
cause of action as a matter of law.
“ ‘[A]s a general proposition, an insurance agent does not have a duty to
volunteer to an insured that the latter should procure additional or different
insurance coverage.’ ” (Vulk, supra, 69 Cal.App.5th at p. 254.) “The general
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no-duty rule changes only when one of the following three things occurs:
(1) the agent misrepresents the nature, extent or scope of the coverage being
offered or provided; (2) there is a request or inquiry by the insured for a
particular type or extent of coverage; or (3) the agent assumes an additional
duty by either express agreement or by holding themself out as having
expertise in a given field of insurance being sought by the insured.” (Id. at
pp. 254–255, italics omitted.) The trial court concluded that only the second
scenario was at issue here, and Plaintiffs do not contest that finding on
appeal. “To trigger a special duty of care under the second scenario, an
insured’s request for a particular type or extent of coverage must be
sufficiently ‘targeted’ or ‘specific’ before an insurance agent will be held to
have undertaken an obligation to procure the coverage.” (Id. at p. 255.)
In Vulk, the plaintiff told his State Farm insurance agent “that he
wanted the ‘best policy’ for his home,” and, in response, the agent told him his
policy “provided ‘full coverage.’ ” (Vulk, supra, 69 Cal.App.5th at pp. 250–
251.) A fire destroyed the plaintiff’s home and, although he recovered a
substantial sum in coverage from State Farm, he sued, claiming that State
Farm “breached its duty to use reasonable care in estimating the replacement
cost of his home for the purpose of setting coverage limits, thereby resulting
in unreasonably low coverage limits.” (Id. at p. 252.) The trial court granted
summary judgment in favor of State Farm and the appellate court upheld the
judgment. (Ibid.) In doing so, the Vulk court pointed out that the plaintiff
“did not direct the trial court to any evidence showing that he specifically
requested [the agent] procure full replacement cost coverage for his home,”
and, instead, “stated in his deposition that he never made a specific inquiry
as to the type or extent of coverage provided by his homeowners policy.” (Id.
at p. 257.) The court therefore concluded, “that the evidence was insufficient
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to establish a triable issue of fact as to whether [the agent] assumed a special
duty of care to ensure [the plaintiff] had full replacement cost coverage for his
home under a misrepresentation of coverage theory or a failure to procure the
agreed-upon coverage theory.” (Id. at p. 258.)
By contrast, the court in Greenfield v. Insurance Inc. (1971)
19 Cal.App.3d 803 found that the evidence did establish a potential duty on
behalf of the insurer. Greenfield, the insured, filed a complaint alleging,
among other causes, that Insurance Inc. was negligent for having failed to
obtain a business interruption policy covering mechanical breakdown of a
shredder that he purchased for his business. (Id. at pp. 807–808.) As the
court explained, the evidence showed that Greenfield had “specifically
requested business interruption insurance covering a mechanical breakdown
of the shredder,” and that his insurance agent confirmed that “ ‘everything
would be covered,’ except breakdown cause by flood or earthquake.” (Id. at p.
808, italics added.) However, the policy that Greenfield received excluded
losses cause by mechanical breakdown, which Greenfield only discovered
when the shredder did break down. (Id. at p. 809.) The Greenfield court
found that the evidence supported a finding of negligence, in part because
Insurance Inc. had a duty to exercise reasonable care to provide the specific
coverage that Greenfield requested. (Id. at p. 810.)
Likewise, in Westrick v. State Farm Insurance (1982) 137 Cal.App.3d
685 (Westrick), the court found that State Farm had a duty to inform the
insured, Westrick, that a vehicle he purchased was not covered under a 30-
day automatic coverage provision in his existing policy that he and his agent
had specifically discussed. (Id. at p. 688–689.) Westrick spoke to his regular
agent, Doug Crawford, in May about buying a truck for his business, and
Doug told him that the automatic coverage clause in his policy would cover
13
the vehicle for 30 days. (Id. at p. 688.) Westrick did not end up buying that
truck but did purchase a welding business for his son that July, which
included a pickup truck and a one-and-a-half-ton welding truck. (Ibid.)
Westrick called Doug immediately, but Doug’s father, Jim, who was also a
State Farm agent, answered the phone. (Ibid.) Westrick described the newly
acquired vehicles to Jim and stated that he wanted insurance for them.
(Ibid.) He offered more information, but the agent stated that was not
necessary and that Doug would be in the next day. (Ibid.)
Unfortunately, before Westrick spoke with Doug, his son was involved
in an accident while driving the welding truck. (Westrick, supra, 137
Cal.App.3d at p. 689.) Thereafter, Westrick learned that the automatic
coverage clause did not apply to the welding truck because it was a
commercial six-wheeled vehicle. (Ibid.) The court found that the agents “had
superior knowledge concerning the scope of the automatic coverage clause,”
and there was at least a triable issue as to whether the agents had a duty to
explain the limitations of the coverage, given Doug’s previous conversation
with Westrick concerning the provision, the content of Westrick’s call with
Jim the day he purchased the welding truck at issue, and the foreseeability of
harm. (Id. at p. 692.)
Relying on this line of cases and the more recent case, Jones v. Grewe
(1987) 189 Cal.App.3d 950 (Jones), Plaintiffs assert, generally, that “an
insurer has a duty to exercise reasonable care in seeking coverage as
requested by the insured, and violates that duty by not obtaining the
coverage.” (Id. at p. 955.) They argue that, here, as in Westrick, Johnson
knew that Stemmler wanted coverage “ ‘for anything associated with medical
billing and that type of business,’ ” and therefore had an obligation to either
provide errors and omissions coverage or to inform Stemmler that it was not
14
included. However, unlike those cases, in which the insured had asked about
a very specific type of coverage, here, Stemmler concedes that he never asked
specifically for errors and omissions coverage. In fact, he states that he had
not even heard of the term “errors and omissions policy.” Moreover, at his
deposition, Stemmler repeatedly stated that he did not know the exact words
he used, but that he did not discuss “any concerns about being sued by
customers for errors in the medical billing services.”
After considering both Greenfield and Westrick, the court in Jones
clarified: “The general duty of reasonable care which an insurance agent
owes his client does not include the obligation to procure a policy affording
the client complete liability protection, as appellants seek to impose here.”
(Jones, supra, 189 Cal.App.3d at p. 956.) The court continued: “The mere
allegation in a complaint, as in this case, that an insured has purchased
insurance from an insurance agent for several years and followed his advice
on certain insurance matters is insufficient to imply the existence of a greater
duty. Such reliance is not at all uncommon when an insured has done
business with an insurance agency over a period of time.” (Id. at p. 956.)
“Ordinarily, the person seeking liability insurance knows better than the
insurance agent the extent of his personal assets, and the premium he can
afford or is willing to pay.” (Ibid.)
The trial court concluded this case was more akin to Ahern v.
Dillenback (1991) 1 Cal.App.4th 36 (Ahern). We agree. “In September 1982,
the Aherns, residents of Connecticut who were visiting Monterey, California,
decided to purchase an automobile insurance policy that would provide
coverage for their upcoming anticipated travels in Europe.” (Id. at p. 40.)
The Aherns contacted a local insurance agent and told him that “they wanted
a foreign policy that would provide full coverage or the ‘best coverage that
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exists,’ ” and, according to Joan Ahern, the agent “advised her she would
receive full insurance coverage with policy limits that would safely protect
her and her husband.” (Ibid.) “At the time, Joan Ahern was generally
unaware of uninsured motorist coverage and the subject did not come up.”
(Ibid.)
While in Europe, Joan “was seriously injured in a hit-and-run
automobile accident with an unidentified and uninsured motorist.” (Ahern,
supra, 1 Cal.App.4th at p. 41.) Joan filed a claim under the policy, but the
claim was denied. (Ibid.) The Aherns filed suit against the insurance agent
and the agency he worked for, claiming negligence in failing to secure a policy
that covered uninsured motorists, among other claims. (Ibid.) The trial court
granted summary judgment and the Aherns appealed. (Ibid.) Relying on
Jones, the Ahern court concluded the defendants did not have a duty to
procure a specific type of insurance that the Aherns did not request (i.e.,
uninsured motorist coverage), or to inform them of the availability of such
coverage. (Id. at p. 43.) The court explained, “ ‘ “An agent may point out to
[the insured] the advantages of additional coverage and may ferret out
additional facts from the insured applicable to such coverage, but he is under
no obligation to do so; nor is the insured under an obligation to respond.” ’ ”
(Ibid.) “Hence, as a matter of law, the defendants did not owe the requisite
duty to the Aherns to sustain their cause of action for negligent procurement
of insurance.” (Ibid.)
Plaintiffs assert that, unlike the Aherns, Stemmler did request “the
exact coverage that [Defendants] did not supply.” But, as the trial court
explained, business liability insurance and errors and omissions insurance
“are two very different types of coverage.” “A CGL [Commercial General
Liability] policy is intended to cover general liability, not an insured’s
16
professional or business skill. [Citation.] Often referred to as a business
general liability policy, a CGL policy provides liability insurance for
businesses.” (Energy Ins. Mutual Limited v. Ace American Ins. Co. (2017) 14
Cal.App.5th 281, 292, italics omitted.) “In general, ‘CGL policies are limited
to providing coverage for accidental occurrences, and do not provide coverage
for professional negligence claims.’ ” (Ibid., italics added.) “As a result, ‘CGL
policies often contain exclusions for loss resulting from the rendering of or
failure to render professional services.’ ” (Ibid.)
The evidence presented in the summary judgment proceedings
conclusively establishes that Stemmler asked generally for business liability
coverage, and that he did not specifically ask for errors and omissions
insurance. Plaintiffs assert that Stemmler did not use the words “errors and
omissions” because he did not know what errors and omissions insurance
was, but they present no authority suggesting that Stemmler’s own lack of
knowledge about the specific type of insurance he was seeking somehow
conferred a duty on Johnson or State Farm to inform him of all available
types of coverage, nor do they present any evidence suggesting that either
Johnson or State Farm held themselves out to be experts in the field of
medical billing insurance or errors and omissions insurance. (See Vulk,
supra, 69 Cal.App.5th at pp. 254–255.) Rather, as the trial court explained,
generally “ ‘an insurance agent does not have a duty to volunteer to an
insured that the latter should procure additional or different insurance
coverage.’ ” (Id. at p. 254, italics added.)
Based on the foregoing, we conclude, on our own de novo review, that
Plaintiffs have not presented evidence sufficient to establish a triable issue of
17
material fact as to whether Defendants had a duty to provide errors and
omissions insurance.3
III. DISPOSITION
The judgment is affirmed. Defendants are entitled to costs on appeal.
KELETY, J.
WE CONCUR:
O’ROURKE, Acting P. J.
CASTILLO, J.
3 Plaintiffs also assert that State Farm did not inform Stemmler of the
exclusion by specifically pointing it out, but he conceded at his deposition
that State Farm did send him copies of his policy, that he “probably looked at
it every year,” and that he reviewed at least some of the exclusions.
Stemmler’s assertion in his declaration that he “never read the whole policy
because [he] was relying on [his] understanding that [State Farm] had in fact
obtained the insurance [he] told them [he] wanted” is not sufficient to
establish a triable issue of material fact. (See, e.g., Fields v. Blue Shield of
California (1985) 163 Cal.App.3d 570, 578 [“an insured has a duty to read his
policy”]; D’Amico, supra, 11 Cal.3d at p. 22; Kerr, supra, 216 Cal.App.3d at p.
1563.)
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