Thompson v. Cannon

Opinion

MOORE, J. Nancy Thompson appeals the granting of summary judgment in favor of Tony Cannon and Cannon & Johnson, Inc. (collectively Cannon). The issues on appeal are whether an insured is a third party beneficiary to a contract between an insurer and an independent insurance adjuster, and whether an independent insurance adjuster hired by the insurer stands in a fiduciary capacity to the insured.

I

Thompson’s house was destroyed by fire and she filed claims with her insurers, State Farm Insurance Company (State Farm) and Allwest/ Crumm & Forster (Allwest), for real and personal property loss and for additional living expenses. Because of the size of Thompson’s claims and their suspicions about the cause of the fire, the insurers retained Cannon, an independent adjuster, to investigate the matter. Subsequently, State Farm and Allwest denied Thompson’s claims.

Thompson brought suit against State Farm, Allwest and Cannon, alleging numerous causes of action including breach of fiduciary duty.1 During the course of the litigation, all causes of action against Cannon were dismissed, either voluntarily or by court order, except the breach of fiduciary duty claim. Cannon moved for summary judgment, contending that, as a matter of law, it had no fiduciary relationship with Thompson. Thompson contended there was a fiduciary relationship by virtue of the fact that the [1416]insurers retained Cannon to investigate and adjust the claim and that she was a third party beneficiary of the contract between Cannon and her insurers. Cannon’s motion was granted and this appeal followed. The relevant facts are not in dispute.

II, III*

IV

Thompson contends she was a third party beneficiary of a contract between her insurers and Cannon, because the insurers expressly retained the independent adjuster “to promote the readiness and ability to cover losses” and “to expedite the benefits she would receive from the policy for which she paid premiums.” We disagree.

When there is a dispute as to coverage of an insured’s claim, it cannot be said that the retention of an independent adjuster by an insurer is expressly for the benefit of the insured. “The insurance adjuster is the agent of the insurer. [Citations.] That the adjuster can under particular fact situations become also the agent of the insured is clear, and this most usually will occur when no issue as to coverage arises. Where coverage is in issue, however, it is obvious that the adjuster’s loyalties are divided and the insured and his counsel cannot reasonably expect that he represents only the interest of the insured . . . .” (State Farm Fire & Casualty Co. v. Superior Court (1989) 216 Cal.App.3d 1222, 1227 [265 Cal.Rptr. 372]; see also Doctors’ Co. v. Superior Court (1989) 49 Cal.3d 39, 48 [260 Cal.Rptr. 183, 775 P.2d 508]; Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566, 576 [108 Cal.Rptr. 480, 510 P.2d 1032].)