Mark Tanner Construction, Inc. v. HUB International Insurance Services
169 Cal. Rptr. 3d 39
Cal. Ct. App.2014Background
- CAP was a self-insured workers’ compensation program administered by CRM; Diversified marketed CAP and HUB later acquired Diversified; Tanner and Mt. Lincoln joined CAP through Diversified as brokers; CAP’s 2009 termination left unpaid liabilities and large assessments; Plaintiffs sued HUB for professional negligence and constructive fraud; an undisclosed Regional Field Consultant Agreement (Agreement) between CRM and Diversified surfaced in discovery, suggesting Diversified’s role may have been as CRM’s agent for CAP; trial court denied amendments and continuances, granted summary judgment to HUB, and plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the trial court abuse its discretion denying amendment to SAC? | Concealment of the Agreement showed good cause to amend | Amendment futile and prejudicial | No abuse; amendment futile/prejudicial supported denial |
| Did the court abuse its discretion denying a continuance under § 437c(h)? | Continued discovery necessary due to alleged discovery violation | No specifics; fishing expedition; not justified | No abuse; continuance properly denied |
| Was HUB entitled to summary judgment on professional negligence? | Diversified was plaintiffs’ broker with duty to investigate financials | Broker had no duty to investigate insurer’s finances; no triable issue | Yes; HUB entitled to summary judgment on professional negligence |
| Was HUB entitled to summary judgment on constructive fraud? | Diversified had fiduciary relationship; concealed contract | No fiduciary duty beyond standard broker duty; no triable issue | Yes; no fiduciary duty; summary judgment affirmed |
Key Cases Cited
- Wilson v. All Service Ins. Corp., 91 Cal.App.3d 793 (Cal. Ct. App. 1979) (broker not required to investigate insurer’s finances)
- Eddy v. Sharp, 199 Cal.App.3d 858 (Cal. Ct. App. 1988) (fiduciary/constructive fraud context; misrepresentation in insurance proposal)
- Pacific Rim Mechanical Contractors, Inc. v. Aon Risk Ins. Services West, Inc., 203 Cal.App.4th 1278 (Cal. Ct. App. 2012) (broker duties; no duty to ascertain insurer financial soundness absent fiduciary relation)
- Kotlar v. Hartford Fire Ins. Co., 83 Cal.App.4th 1116 (Cal. Ct. App. 2000) (no duty to inform insured of insurer’s cancellation/financial changes beyond regulatory scheme)
- Biakanja v. Irving, 49 Cal.2d 647 (Cal. 1958) (test for whether a duty runs to a party outside privity)