APPEAL from a judgment of the Superior Court of Los Angeles County. Mark V. Mooney, Judge. (Los Angeles County Super. Ct. No. BC329991)
The opinion of the court was delivered by: Ashmann-gerst, J.
CERTIFIED FOR PUBLICATION
Workmen's Auto Insurance Company (company) sued Guy Carpenter & Company, Inc. (Carpenter) for negligence, breach of fiduciary duty and breach of contract. After the trial court eliminated the fiduciary duty claim during pretrial proceedings, a jury decided in favor of Carpenter. The company appeals. It contends that the trial court erred when it granted summary adjudication regarding the allegation that Carpenter did not obtain the best terms for reinsurance, when it sustained a demurrer without leave to amend the fiduciary duty cause of action, and when it denied the company permission to conduct discovery on and add allegations for price fixing. We find no error and affirm. In particular, we hold that an insurance broker cannot be sued for breach of fiduciary duty.
Various pleadings and rulings regarding breach of fiduciary duty
In the first amended complaint, the company alleged that it is an insurer, Carpenter is a reinsurance intermediary and Carpenter placed reinsurance for the company with PMA Capital Insurance Company of Philadelphia, Pennsylvania (PMA). The pleading contained causes of action for negligence, breach of fiduciary duty and breach of contract. Regarding breach of fiduciary duty, it was asserted that Carpenter breached its duty by failing to secure timely payments from PMA, failing to secure the best available terms of reinsurance, and acting with the intent to injure the company by incurring inflated commissions.
Carpenter moved for summary adjudication regarding the allegation that it did not secure the best available terms. Even though the motion was not authorized by Code of Civil Procedure section 437c, subdivision (f)(1)*fn1 because it did not dispose of a cause of action, an affirmative defense, a claim for damages or an issue of duty, the company did not object. The trial court granted the motion.*fn2 The ruling left the cause of action for breach of fiduciary duty still standing because it did not adjudicate all the alleged breaches.
The company filed a second amended complaint that again alleged breach of fiduciary duty. Carpenter demurred to the breach of fiduciary duty cause of action, and the demurrer was sustained with leave to amend.
Third amended complaint;*fn3 the demurrer
In its third amended complaint, the company alleged: It entered into a brokerage agreement which appointed Carpenter as the company's reinsurance agent and intermediary. Carpenter was given the authority, inter alia, to (1) act as reinsurance intermediary for all reinsurance and limits regarding insurance programs for finite risk, quota share, per person, auto program and homeowners; (2) place various reinsurance agreements covering classes of risks authorized by the company; (3) negotiate terms and conditions of reinsurance for the benefit of the company; (4) complete and document agreements that accurately reflected the company's understanding of the benefits accruing to it under such agreements; (5) prepare and complete the written documentation and wording of reinsurance agreements as well as memorialize commencement dates, termination dates and amendments; and (6) perform all other brokerage functions customary in the reinsurance industry. In 2001, Carpenter negotiated with PMA and secured a finite quota share reinsurance agreement for certain risks covered by the company.*fn4 In the ensuing years, Carpenter breached its fiduciary duties to the company and caused over $35 million in damages.
Carpenter again demurred to the fiduciary duty cause of action. The trial court sustained it without leave to amend.
The company filed a fourth amended complaint. Subsequently, it filed a fifth amended complaint alleging causes of action for negligence and breach of contract. Carpenter filed an answer. The company served discovery intended to determine whether Carpenter had placed the company in a price-fixed reinsurance scheme. When Carpenter refused to comply, the company filed a motion to compel but did not prevail. On March 19, 2008, which was within a month of the trial date, the company moved for leave to file a sixth amended complaint in order to add price fixing allegations. The motion was denied because it was untimely, Carpenter would be prejudiced and the proposed pleading was defective.
The case proceeded to trial on the company's causes of action for negligence and breach of contract. The jury found in favor of Carpenter. Judgment was entered in favor of Carpenter with an award of costs.
This timely appeal followed.*fn5
I. The demurrer to the third amended ...