MEMORANDUM AND ORDER RE: MOTION TO DISMISS
I. Factual and Procedural Background
Plaintiff Julia Hadley brought this action against defendant The Prudential Insurance Company of America alleging violations of state law following defendant's rejection of her claim for dependent life benefits. Plaintiff alleges that she purchased a policy for dependent life benefits from defendant in 1991. (Compl. ¶ 1.) Her employer, the University of California ("UC Regents"), allegedly acted as the third-party administrator for that policy and as defendant's agent. (Id. ¶ 4.)
In October 2005, plaintiff and her husband divorced. Plaintiff thereafter inquired with UC Regents as to whether she and her now ex-husband could qualify as legal domestic partners for the purposes of benefits. (Id. ¶ 7.) In response, UC Regents allegedly informed her that as long as she submitted a Declaration of Domestic Partnership, she and her husband would qualify as domestic partners. (Id.) According to plaintiff, UC Regents, acting on behalf of defendant, further represented that as qualified domestic partners, plaintiff would be paid $200,000 under her dependent life benefits policy upon the death of her ex-husband. (Id. ¶ 29.) Plaintiff subsequently continued to pay the premiums on her policy and did not seek a new or different dependent benefits policy. (Id. ¶ 8.)
Plaintiff's ex-husband died on February 6, 2007. (Id.) She then made a claim for benefits under her policy, but, on August 20, 2007, defendant responded that the policy was "null and void" and declined to pay plaintiff benefits under the policy. (Id. ¶¶ 16, 29.) Plaintiff subsequently filed her Complaint on January 9, 2009, in the Sacramento County Superior Court, asserting claims for breach of insurance contract, breach of the implied covenant of good faith and fair dealing, negligence, negligent misrepresentation, and negligent infliction of emotional distress. Defendant removed the action to this court on February 1, 2009, on the basis of diversity jurisdiction. (See Notice of Removal (Docket. No. 2) 1:24-25.)
Pursuant to Federal Rule of Civil Procedure 12(b)(6), defendant now moves to dismiss plaintiff's third claim for negligence, fourth claim for negligent misrepresentation, and fifth claim for negligent infliction of emotional distress.
On a motion to dismiss, the court must accept the allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Davis v. Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322 (1972). To survive a motion to dismiss, a plaintiff needs to plead "only enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1974 (2007). Dismissal is appropriate, however, where the plaintiff fails to state a claim supportable by a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990); see also Conley v. Gibson, 355 U.S. 41, 47 (1957), abrogated on other grounds by Twombly, 127 S.Ct. at 1968 (complaint must "give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests").
In some circumstances, an insurance agent may assume a special duty of care to an insured to provide accurate information regarding the terms or adequacy of a policy's coverage and may be held liable for negligence if that duty is breached. See Paper Savers, Inc. v. Nacsa, 51 Cal. App. 4th 1090, 1097 (1996) (explaining that an insurance agent "may  assume a greater duty toward his insured by misrepresenting the policy's terms or extent of coverage"); Free v. Republic Ins. Co., 8 Cal. App. 4th 1726, 1729-30 (1992) (holding that an insurance agent and insurer could be held liable for negligence for breaching a special duty of care that arose when the agent elected to respond to the insured's specific inquiries as to the adequacy of his coverage); Westrick v. State Farm Ins., 137 Cal. App. 3d 685, 692 (1982) (explaining that an insurance agent could be liable for negligence when, because the agent failed to request more information following the insured's inquiry as to the extent of coverage, the insured falsely believed his new vehicle was automatically covered under his existing policy).
When an insurance agent breaches such a duty, the insurer can be held vicariously liable for negligence if it directed, authorized, or ratified the agent's conduct. Desai v. Farmers Ins. Exch., 47 Cal. App. 4th 1110, 1118, 1121 (1996) (citing Shultz Steel Co. v. Hartford Accident Indemnity Co., 187 Cal. App. 3d 513, 518-19 (1986)); see Free, 8 Cal. App. 4th at 1731 (noting that a plaintiff may need to show that the insurance agent acted within the scope of its authority to hold the insurer liable at trial). But cf. Sanchez v. Lindsey Morden Claims Servs., Inc., 72 Cal. App. 4th 249, 254 (1999) (noting, in the context of whether an insurance adjuster could be held liable for negligence to an insured, that "negligence is not among the theories of recovery generally available against insurers").
Here, plaintiff alleges that UC Regents responded to her specific inquiry about her coverage under the dependent life benefits policy and informed her that she and her ex-husband, as recognized domestic partners, qualified for benefits under that policy. (Compl. ¶ 7.) Nevertheless, plaintiff avers that no attempt was made to determine whether she and her husband in fact qualified as domestic partners (id. ¶ 23), and defendant ultimately denied her claim for benefits under the policy (id. ¶ 16).
The Complaint avers that UC Regents served as the third-party administrator of the policy (id. ¶ 4), though the policy itself references UC Regents as the policyholder (see id. Ex. A).*fn1 Under California law, an employer that administers a group insurance policy for the benefit of its employees acts as the agent of the insurer, even when the policy names the employer as the insured. Elfstrom v. New York Life Ins. Co., 67 Cal. 2d 503, 505, 512 (1967) ("We are convinced that the employer is the agent of the insurer in performing the duties of administering group insurance policies."); see McCormick v. Sentinel Life Ins. Co., 153 Cal. App. 3d 1030, 1041 (1984) (recognizing that a third party that administers a policy for an insurer may qualify as the insurer's agent depending on the nature of its duties).
As alleged, UC Regents thus acted as defendant's agent when it responded to plaintiff's coverage inquiry and assumed a special duty to plaintiff that was then breached. Plaintiff's allegations are sufficient to state a claim for negligence against defendant, and the court ...