825 F. Supp. 245, 249 (E.D.Cal. 1992); Good, 5 F. Supp.2d at 807. In such
cases, the cause of action lies against the insurance company and not its
agent. See Lippert, 241 Cal.App.2d at 383-84, 50 Cal.Rptr. 478. This rule
has been applied to claims for fraud. See Shepard v. Massachusetts
Casualty Insurance Company, 2000 WL 101246, *2-3 (N.D.Cal. Jan. 26, 2000)
(citing Campbell v. Allstate Ins. Companies, 1995 WL 376926 (C.D.Cal.
1995)). An agent cannot be held liable for a conspiracy to violate a duty
peculiar to the insurance company. See id. (citing Cooper v. Equity
General Ins. Co., 219 Cal.App.3d 1252, 1259, 268 Cal.Rptr. 692 (1990)).
As long as the duty is owed by the insurance company only, and regardless
of whether it derives from contract or tort, the insurance company's
agents cannot be held liable for conspiring to violate that duty. See
id.; Doctors' Co. v. Superior Court of Los Angeles County, 49 Cal.3d 39,
46, 260 Cal.Rptr. 183, 775 P.2d 508 (1989).
Plaintiff argues that her claims against Golden fall into an exception
to this general rule. Plaintiff relies on the cases of Younan v.
Equifax, Inc., 111 Cal.App.3d 498, 169 Cal.Rptr. 478 (1980), and Judge
Conti's decision in Shepard for the proposition that an insured can state
a cause of action against an employee of an insurer where the insured
pleads that the employee committed actual fraud. Plaintiff reads the cases
too broadly. Younan involved allegations that the defendant insurer,
American Home Assurance Company hired and employed defendant Equifax
Inc. to select and induce a local doctor to examine the plaintiff and
prepare a medical report which would falsify the plaintiffs condition.
Younan, 111 Cal.App.3d at 512, 169 Cal.Rptr. 478. The plaintiff alleged
that American Home Assurance Company retained Equifax knowing that
Equifax worked with doctors who would participate in the scheme to
prepare false medical reports. Id.*fn4 As such, Younan involved
allegations that two separate entities involved in the insurance business
conspired together to defraud the plaintiff, and did not involve
accusations that an employee of an insurance company conspired with the
insurance company to defraud an insured. There is nothing in Younan to
indicate that employees of insurers, engaged in the process of
administering a claim can be held independently liable to an insured
under a tort or contract theory. Plaintiff has not pointed to a case
similar to the present one where a court allowed a claim against an
insurance agent acting solely as the representative of the insurer in the
course of handling a claim. An employee acting solely as the
representative of the insurer cannot be held liable for a conspiracy to
violate a duty peculiar to the insurance company. See Cooper, 219
Cal.App.3d at 1259, 268 Cal.Rptr. 692. Here, the insurance company, not
Golden herself, had the duty to administer Plaintiffs claim and the duty
to defend Plaintiff in the event of a lawsuit.
Plaintiff has failed to state a claim against Golden. Golden's motion
to dismiss is GRANTED. Because "allegations of other facts consistent
with the challenged pleading could not possibly cure the defect,"
Schreiber Dist. v. Serv-Well-Furniture Co., 806 F.2d 1393, 1401 (9th
Cir. 1986), the motion to dismiss is granted without leave to amend.*fn5
B. Allstate's Motion to Dismiss
1. Contract and Bad Faith Claims
Pursuant to the express terms of the standard Policy issued to
Allstate owes a duty to defend Plaintiff against "suits," not claims.
Plaintiff concedes that she does not allege that Allstate owes a duty to
defend in any other proceedings not amounting to a civil suit. She states
that she is suing because Allstate failed to undertake a defense of the
third-party claims and investigation of the accident prior to the tender
of the third-party claims. However, the insurer's obligation to defend
and investigate is not triggered until Plaintiff tenders the defense of a
third party lawsuit to the insurer. See Foster-Gardner, Inc. v. National
Union Fire Ins. Co. of Pittsburgh, PA, 18 Cal.4th 857, 879,
77 Cal.Rptr.2d 107, 959 P.2d 265 (1998). The Court agrees with Allstate
that Plaintiffs reliance on Stein v. International Ins. Co.,
217 Cal.App.3d 609, 266 Cal.Rptr. 72 (1990) for the proposition that
Allstate owes a duty to investigate and defend "claims" is misplaced.
Unlike the present Allstate Policy, the policy language in Stein provided
coverage for expenses "resulting from the investigation, adjustment
defense and appeal of a claim, suit or proceeding." Stein, 217 Cal.App.3d
at 613 n. 2, 266 Cal.Rptr. 72 (emphasis added). The insurer's duties to
indemnify and to defend are separate obligations. Allstate apparently
satisfied its duty to indemnify by offering to pay the policy limits
($50,000). In the absence of the tender of a third-party lawsuit,
Allstate's duty to indemnify Plaintiff did not somehow trigger a
pre-tender duty to defend Plaintiff.
Finally, Plaintiff has failed to allege the existence of actual
damages. She seeks damages not only for the costs of hiring an attorney
to enforce her alleged rights under the Policy, but also for "the amount
of benefits due under the policy, the amount expended to secure and
adequate investigation and defense, the amount of liability incurred in
the third party claims, excess judgment, and consequential damages, in an
amount to be ascertained." Complaint ¶ 38. Assuming that Plaintiff
can amend her Complaint to allege that Allstate has failed to provide an
adequate post-tender defense and investigation, these damages are
speculative: no judgment in excess of the policy's limits has been entered
against Plaintiff. See Safeco Ins. Co. v. Snperior Court,
71 Cal.App.4th 782, 789, 84 Cal.Rptr.2d 43 (1999).
Plaintiff has failed to state a claim for breach of contract, and
because Plaintiff does not have a claim for breach of contract, she
necessarily cannot allege a claim for breach of the good-faith covenant.
Plaintiff will be granted leave to amend her contract and bad-faith
claims if she can (1) allege the existence of a breach of a contractual
duty and (2) allege the existence of actual damages. As an alternative,
Plaintiff may voluntarily dismiss the contract and bad-faith claims, and
re-file this lawsuit upon completion of the third-party lawsuits.
2. Fraud and Misrepresentation Claims
As for the fraud claim, the Complaint is devoid of any allegation that
Golden or Allstate promised Plaintiff it would undertake a thorough
investigation of the vehicle crash prior to the tender of the defense of
any third-party lawsuits. The Complaint merely alleges that Golden
represented she and Allstate "were doing everything they could to fulfill
Allstate's obligations under the policy." Complaint ¶ 20. Because
Allstate's obligations under the policy did not include a pre-tender
defense of "claims," Plaintiff could not as a matter of law have
reasonably relied on Allstate's representations in deciding to forego
hiring her own private investigator and accident reconstructionist.
Moreover, Allstate is correct that the Complaint fails to plead fraud
with the specificity required under Rule 9(b). Plaintiff must allege
specific facts contemporaneous to her purchase of the policy which, if
true, would establish Allstate then had no intent to perform. Plaintiffs
nebulous, retrospective allegation that Allstate never had any intention
of performing its contractual obligations is insufficient
under federal law. The fraud and misrepresentation claims against
Allstate are dismissed, with leave to amend.
3. Conspiracy Claims
For the reasons set forth in Part III (A), above, the "conspiracy to
defraud" claim is DISMISSED with prejudice. Furthermore, because an
employer cannot "conspire" with its employee as a matter of law, see
Black v. Bank of America N. T. & S.A., 30 Cal.App.4th 1, 6,
35 Cal.Rptr.2d 725 (1994), the "conspiracy" claim set forth in the third
cause of action must be dismissed.
(1) Defendant Tana Golden's Motion to Dismiss is GRANTED, without leave
(2) Defendant Allstate's Motion to Dismiss is GRANTED, with leave to
amend. Any amended complaint shall be filed no later than July 19, 2000.
As an alternative, Plaintiff may voluntarily dismiss this action and
re-file following the conclusion of the underlying civil lawsuits.
(3) Plaintiffs Motion to Remand is DENIED.