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Bock v. Hansen

(Insureds Can Sue Insurance Adjuster for Negligent Misrepresentation in Connection with Adjuster’s Own Wrongful Conduct)

In Bock v. Hansen, ___ Cal.App.4th ____ (April 2, 2014), the California First District Court of Appeal reversed the trial court’s decision sustaining a demurrer by an adjuster employed by Travelers Property and Casualty Insurance Company (“Travelers”), Craig Hansen, in connection with causes of action for negligent misrepresentation and intentional infliction of emotional distress alleged directly against him in a breach of contract and bad faith lawsuit filed by Bocks against Travelers. The parties’ dispute arose out of a property damage claim made by the Bocks in connection with damage sustained by their home as a result of a 41 foot long, 7,300 pound tree limb falling in the chimney of the home. The Bocks were insured under a homeowners policy issued by Travelers. Travelers tasked, Craig Hansen, with adjusting the claim. He allegedly visited the home for 15 minutes and took pictures after moving limbs and debris (as opposed to beforehand). He also improperly advised the Bocks that the Travelers policy did not afford coverage for debris removal and suggested that they clean up the debris with the help of neighbors. In a subsequent visit, Hansen allegedly told Mr. Bock to get his chainsaw and remove the limbs from his home, himself, and as he did so, Hansen yelled, “Attaboy! See you can do it! Now go get a few friends to finish it up.” Apparently, Mrs. Bock believed Hansen and cut her hand on glass while trying to clean up debris.

The Bocks requested Travelers to assign another adjuster to their claim, but Travelers refused to do so. Subsequently, Travelers, through Hansen, hired a contractor to inspect the Bocks’ home. The contractor was unlicensed and lied about the damages sustained by the home. A licensed contractor hired by the Bocks contradicted the Travelers adjuster and pointed out that the chimney on the home had sustained damage as a result of the tree limb falling on it. Subsequently, the Bocks filed a breach of contract / bad faith lawsuit against Travelers and named Hansen as a defendant in connection with causes of action for negligent misrepresentation and intentional infliction of emotional distress.

In reversing the trial court’s decision, the Court of Appeal noted that Hansen owed a duty of care to the Bocks as an employee of Travelers relative to their cause of action for negligent misrepresentation. The Court of Appeal also rejected Hansen’s argument that he could not be held liable for negligent misrepresentation because he was acting in the course of his employment with Travelers. The Court of Appeal dispensed with this argument by referring to hornbook law and finding that an “agent or employee is always liable for his or her own torts, whether the principal is liable or not, and in spite of the fact that the agent acts in accordance with the principal’s directions.”

In addition, the Court of Appeal held that the trial court abused its discretion and plaintiffs should be allowed to attempt to amend their complaint to allege facts supporting a cause of action for intentional infliction of emotional distress. However, the Court of Appeal expressed skepticism that plaintiffs would be able to allege such cause of action against Hansen.

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