AMCO Insurance v. All Solutions Insurance Agency, LLC
198 Cal.Rptr.3d 687
Cal. Ct. App.2016Background
- Singh owned property where a 2009 fire (caused by his negligence) destroyed his building and damaged neighboring properties owned by Saari (insured by AMCO) and Restauranteurs (Koto).
- Singh had received a notice of nonrenewal and communicated with employees of All Solutions Insurance Agency (Broker) before the fire; parties dispute whether Singh requested Broker to procure coverage and from whom.
- Singh stipulated to judgments in favor of Restauranteurs and AMCO and assigned to each his causes of action against Broker for allegedly failing to obtain insurance.
- AMCO (after paying its insured Saari) pursued subrogation against Singh, obtained judgment, and also received Singh’s assignment of claims against Broker.
- Broker moved for summary judgment arguing (1) claims against brokers are not assignable, (2) equitable subrogation/superior equities bar the assignments, and (3) Broker did not breach a duty; the trial court granted judgment for Broker.
- The Court of Appeal reversed, holding assignability applies, equitable-subrogation limitations do not bar these contractual assignments here, and triable factual disputes exist about whether Singh requested coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are causes of action against an insurance broker assignable? | Singh (via AMCO/Restauranteurs) — yes; general rule and Troost support assignability. | Broker — should follow legal-malpractice nonassignability; claims against brokers should be nonassignable. | Assignable: California follows the general rule; Troost and majority rule uphold assignability. |
| Do equitable-subrogation principles (superior equities) limit contractual assignments here? | AMCO/Restauranteurs — no; equitable subrogation applies only when assignee is insurer-subrogee of the assignor. | Broker — Meyers/Dobbas permit applying superior-equities to bar these assignments (AMCO and Restauranteurs lack superior equities). | Limited application: Superior-equities applies only where assignee is potential equitable subrogee (insurer who paid insured). It does not bar these contractual assignments; Broker failed to show AMCO’s equities were not superior. |
| Did Broker establish no triable issue on negligence (failure to procure coverage)? | Plaintiffs — disputed facts: Singh and Broker employees differ about who requested insurance and when. | Broker — relied on deposition excerpts to show Singh did not request coverage before the fire. | Triable issue exists: conflicting evidence about requests to Rajni vs. Harish Kapur; summary judgment improper. |
Key Cases Cited
- Troost v. Estate of DeBoer, 155 Cal.App.3d 289 (insured’s negligence claim against broker is assignable)
- Meyers v. Bank of America etc. Assn., 11 Cal.2d 92 (equitable subrogation can limit contractual assignments)
- Dobbas v. Vitas, 191 Cal.App.4th 1442 (applied superior equities to bar insurer-assignee where insurer’s equity not superior)
- Fireman’s Fund Ins. Co. v. McDonald, Hecht & Solberg, 30 Cal.App.4th 1373 (legal-malpractice claims generally not assignable — discussed as distinct)
- Patent Scaffolding Co. v. William Simpson Constr. Co., 256 Cal.App.2d 506 (elements and purpose of insurer’s equitable subrogation)
- Wikstrom v. Yolo Fliers Club, 206 Cal. 461 (Civil Code §§ 953–954 liberalize assignability)
- Amalgamated Transit Union, Local 1756 v. Superior Court, 46 Cal.4th 993 (cause of action assignable if arising from legal obligation or property right)
- Brown v. Guarantee Ins. Co., 155 Cal.App.2d 679 (insured’s claim against insurer for refusal to settle is assignable)
- State Farm Gen. Ins. Co. v. Wells Fargo Bank, N.A., 143 Cal.App.4th 1098 (discussion of conventional vs equitable subrogation in insurer contexts)