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Overfelt v. Hagerty Insurance Agency, LLC

United States District Court, N.D. California

September 24, 2019



          SUSAN ILLSTON, United States District Judge.

         On September 12, 2019, the Court held a hearing on defendants’ motions to dismiss the complaint. Although defense counsel attended the hearing, plaintiff’s counsel failed to appear and the matter was submitted on the papers.[1] For the reasons set forth below, the Court GRANTS defendants’ motions to dismiss and GRANTS plaintiff leave to amend consistent with the guidance provided by this order. The amended complaint shall be filed no later than October 7, 2019.


         Defendant Essentia Insurance Company (“Essentia”) issues automobile policies, and defendant Hagerty Insurance Agency, LLC (“Hagerty”) “is an insurance agency and/or broker that provides automobile coverage policies underwritten by Essentia.” Compl. ¶¶ 6-7.[2] Plaintiff alleges that he obtained an insurance policy from defendants for his 1966 Ford Fairlane (“Fairlane”), and that he discovered the policy was inadequate after the Fairlane was declared a “total loss” after an accident. Id. ¶¶ 33-34.

         According to plaintiff, Hagerty advertises that it specializes in classic car insurance and “promises to pay the agreed upon amounts.” Id. ¶ 20. Plaintiff has attached to the complaint various Hagerty advertisements as they appeared on March 26, 2019. Id., Ex. B. The complaint quotes from these advertisements as follows:

Hagerty Collector & Classic Car Insurance. Why Hagerty? We’re as passionate about cars as you are. Our deep knowledge of cars and their owners allows us to offer you better classic car insurance coverage for less.
We [Hagerty] guarantee your value. Guaranteed Value. You tell us your classic’s value and we’ll confirm that it’s fair. In the event of a total covered loss, we guarantee that you’ll receive the amount we agreed upon.
Expert in-house claims. Our claims adjusters undergo training in classic car repair, and our parts specialists can access the original replacement parts for every vehicle we insure.
Guaranteed Value. More commonly known as “Agreed Value” coverage, it means you tell us the value of your classic and we’ll affirm that it’s a fair, accurate number. Then, we GUARANTEE that value will be paid to you in the event of a total covered loss . . . .

Compl. ¶¶ 20, 22. Plaintiff alleges that Hagerty “consistently communicated to him that there was effectively no limit to the value for which it would insure a classic automobile.” Id. ¶ 21. Plaintiff alleges, “[h]ence, by advertising, as well as conduct in course of dealings, [d]efendant Hagerty held itself out as having special expertise in [c]lassic automobile insurance . . . and assumed a special relationship with [p]laintiff . . . .” Id. ¶¶ 24, 26.

         Plaintiff alleges that he visited Hagerty’s website on April 12, 2016, to obtain insurance coverage for his Fairlane. Id. ¶ 22. Plaintiff describes the website as having had a chat feature, which included a human avatar that communicated with plaintiff to assist him in completing the online insurance application. Id. ¶¶ 15-16. Plaintiff alleges that it was under prompt by this human avatar that he disclosed “the make, model, model-year, and estimated value of the vehicle.” Id. ¶ 14. The complaint is silent regarding the estimated value that plaintiff disclosed.

         Plaintiff alleges that after he submitted the application, he received an insurance policy (“Policy”) that was issued and underwritten by Essentia. Id. ¶¶ 17-19. Essentia issued the Policy on March 20, 2016. Essentia Mot. Dismiss at 1:3-5.[3] Plaintiff alleges that Hagerty renewed the Policy on March 20, 2018, and that the policy was effective from March 30, 2018 through March 30, 2019. Id. ¶¶ 13, 18. Plaintiff has attached a copy of the Policy to the complaint, and in relevant part, it states,

Limit of Liability
We will pay the limit shown under Coverage D in the Declarations for each scheduled vehicle, which is agreed to be the value of “your covered auto, ” in case of a total loss or “constructive total loss….”
Vehicle(s) We Cover:
1966 Ford Fairlane 500 XL 2DR Hardtop Coupe….
Guaranteed Value: $30, 000

Id., Ex. A.

         Plaintiff alleges that “he communicated his perceived value of the Fairlane on every pertinent communication with every [d]efendant Hagerty agent, as well as his willingness to pay the premiums required for full coverage of the value of the Fairlane.” Compl. ¶ 23. Furthermore, according to plaintiff, various “unknown representative[s], working on behalf of [d]efendant Hagerty, communicated to [p]laintiff . . . that [p]laintiff was adequately insured . . .” and that “‘he was in good shape insurance-wise (paraphrased).’” Id. ¶¶ 28, 156(i). Plaintiff alleges that he believed “that the Fairlane was insured for its full fair market value.” Id. ¶ 29. Plaintiff does not allege any specificity about these communications, including when they occurred or the values that the parties discussed.

         Plaintiff alleges that on May 12, 2018, he was driving the Fairlane and the brakes failed, causing him to crash into several steel pylons. Id. ¶¶ 30-32. According to plaintiff, “[t]he Fairlane was declared a total loss.” Id. ¶ 33. Plaintiff alleges that “on information and belief, the Fairlane’s value, immediately prior to the collision, and at the time it was insured with [d]efendants, was over $100, 000.” Id. However, plaintiff alleges that “[d]efendant[s] . . . subsequently refused to pay for property damage to the Fairlane to cover its entire fair market value . . . claiming that it was not obligated to do so under [p]laintiff[‘s] . . . insurance policy . . . .” Id. ¶¶ 36-37. Plaintiff alleges that “[d]efendant Hagerty failed to assess the required amount of insurance [and] . . . to provide [p]laintiff . . . with adequate policy coverage limits.” Id. ¶¶ 34-35.

         On May 10, 2019, plaintiff filed this lawsuit against defendants in Alameda County Superior Court. Defendants removed the case to this Court on July 26, 2019, pursuant to diversity jurisdiction. The complaint asserts the following eight causes of action against both defendants: (1) breach of contract, (2) breach of the implied covenant of good faith and fair dealing, (3) negligent failure to obtain insurance coverage, (4) failure to use reasonable care, (5) intentional misrepresentation, (6) actionable deceit, (7) concealment, and (8) unfair business practices. Defendants move to dismiss all claims for failure to state a claim.

         LEGAL ...

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