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Insurance Claims professional presents articles and videos on insurance, insurance Claims and insurance law for insurance Claims adjusters, insurance professionals and insurance lawyers who wish to improve their skills and knowledge. Presented by an internationally recognized expert and author.
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September 26, 2024
When Insurance Agent Controlled Action of Broker No Action Against Broker

No Right to Sue Broker Who Does Not Have Special Relationship With Insured

Post 4899

Posted on September 26, 2024 by Barry Zalma

See the full video at https://rumble.com/v5gatm5-when-insurance-agent-controlled-action-of-broker-no-action-against-broker.html and at https://youtu.be/DfMnGZdF-Ek

Plaintiff Green Technology Lighting Corporation (“Green Tech”) appealed the order of the District Court for the District of Idaho granting summary judgment in favor of Defendant Crouse and Associates Insurance Services of Northern California (“Crouse”).

In Green Technology Lighting Corp. v. Crouse And Associates Insurance Services Of Northern California, Inc., a California Corporation, No. 24-66, United States Court of Appeals, Ninth Circuit (September 20, 2024) resolved the dispute over the existence of a special relationship between an insured and its broker.

FACTUAL BACKGROUND

The district court granted summary judgment to Crouse on Green Tech’s claim of negligence and broker malpractice for two independent reasons: First, the court held that Crouse did not owe Green Tech a duty of care, an essential element of negligence claims under Idaho law; and Second, the court determined that Idaho’s economic loss rule bars recovery for any negligence committed by Crouse.

Idaho prohibits the recovery of purely economic losses in all negligence actions.. A purely economic loss is one that is not connected to an injury to a person or property because the economic loss rule limits the actor’s duty so that there is no cause of action in negligence. Summary judgment is only appropriate in cases where the rule applies. Green Tech alleged only economic losses connected to the recall of its products. Unless some exception applies, Green Tech has no cause of action for negligence under Idaho law.

Idaho generally recognize two exceptions to the economic loss rule:

where a special relationship exists between the parties, or
where unique circumstances require a reallocation of the risk.

The district court concluded that neither applied in Green Tech’s case.

ANALISYS

The special relationship exception is extremely narrow and applies in only limited circumstances. Idaho recognizes two situations in which a special relationship has been held to exist:

where a professional or quasi-professional performs personal services; or
where an entity holds itself out to the public as having expertise regarding a specialized function, and by so doing, knowingly induces reliance on its performance of that function.

The Ninth Circuit concluded that neither situation fits the facts of this case. The district court correctly held that, although Crouse was a professional insurance broker, it lacked the “custody or control” over Green Tech’s insurance coverage that would justify recognizing a special relationship giving rise to liability. Crouse did not have ultimate authority over which insurance policies Green Tech obtained rather, it was Insure Idaho-Green Tech’s insurance agent-that instructed Crouse to bind the policy with less coverage. Crouse did not unilaterally control the level of liability coverage that Green Tech would receive.

The Ninth Circuit concluded there was thus no special relationship between Crouse and Green Tech based on the professional services Crouse offered. Nor did a special relationship exist due to Green Tech’s reliance on Crouse’s expertise. This exception requires that an expert have actively sought to induce reliance on the part of the plaintiff.

Where there is no indication in the record that the plaintiffs relied upon or were even aware of the defendant’s provision of its special services, there is no special relationship.

The district court found that Green Tech had no knowledge of Crouse’s existence as it interfaced only with Insure Idaho in seeking to procure insurance for its business. Green Tech failed to raise a genuine factual dispute as to this finding. The economic loss rule thus prohibited Green Tech from recovering for any alleged negligence on Crouse’s part.

Assuming that Crouse owed some duty of care to Green Tech in how it performed its brokering services, the Ninth Circuit agreed with the district court that the economic loss rule is fatal to Green Tech’s negligence suit.

ZALMA OPINION

The economic loss rule prevented a suit against a broker who had no relationship with the insured and only contact with the insured’s agent. Since the broker acted, basically, as an order taker for the insurance agent and provided no advice or counsel to the insured nor hold itself out as a specialist giving advice to the insured, there was insufficient contact with the plaintiff-insured to allow it to maintain a suit because of the economic loss rule since the plaintiff only lost money.

(c) 2024 Barry Zalma & ClaimSchool, Inc.

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00:07:44
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September 05, 2025
Interpleader Helps Everyone Potential Claimant to Insurance Proceeds

Interpleader Protects All Claimants Against Life Policy and the Insurer

Who’s on First to Get Life Insurance Proceeds

Post 5184

See the full video at https://lnkd.in/gyxQfnUz and at https://lnkd.in/gAd3wqWP, and at https://zalma.com/blog plus more than 5150 posts.

Go to X @bzalma; Go to Barry Zalma videos at Rumble.com at https://lnkd.in/gRthzSnT; Go to Barry Zalma on YouTube- https://lnkd.in/g2hGv88; Go to the Insurance Claims Library – https://lnkd.in/gwEYk.
Interpleader Protects All Claimants Against Life Policy and the Insurer

In Metropolitan Life Insurance Company v. Selena Sanchez, et al, No. 2:24-cv-03278-TLN-CSK, United States District Court, E.D. California (September 3, 2025) the USDC applied interpleader law.
Case Overview

This case involves an interpleader action brought by the Metropolitan Life Insurance Company (Plaintiff-in-Interpleader) against Selena Sanchez and other defendants (Defendants-in-Interpleader).

Key Points

Plaintiff-in-Interpleader’s Application:

The Plaintiff-in-Interpleader...

00:06:34
September 05, 2025
Demands for Reasons for Termination not a “Claim”

A Claim by Any Other Name is not a Claim
Post 5182

It is Imperative that Insured Report Potential Claim to Insurers

Read the full article at https://lnkd.in/gfbwAsxw, See the full video at https://lnkd.in/gea_hgB3 and at https://lnkd.in/ghZ7gjxy, and at https://zalma.com/blog plus more than 5150 posts.

In Jeffrey B. Scott v. Certain Underwriters At Lloyd’s, London, Subscribing To Policy No. B0901li1837279, RLI Insurance Company, Certain Underwriters At Lloyds, London And The Insurance Company, Subscribing To Policy No. B0180fn2102430, No. 24-12441, United States Court of Appeals, Eleventh Circuit (August 25, 2025) the court explained the need for a claim to obtain coverage.

Case Background:

This appeal arises from a coverage dispute under a Directors & Officers (D&O) insurance policy. Jeffrey B. Scott, the plaintiff-appellant, was terminated from his role as CEO, President, and Secretary of Gemini Financial Holdings, LLC in October 2019. Following his termination, Scott threatened legal action against Gemini, and ...

00:08:22
September 04, 2025
Demands for Reasons for Termination not a “Claim”

A Claim by Any Other Name is not a Claim
Post 5182

It is Imperative that Insured Report Potential Claim to Insurers

Read the full article at https://lnkd.in/gfbwAsxw, See the full video at https://lnkd.in/gea_hgB3 and at https://lnkd.in/ghZ7gjxy, and at https://zalma.com/blog plus more than 5150 posts.

In Jeffrey B. Scott v. Certain Underwriters At Lloyd’s, London, Subscribing To Policy No. B0901li1837279, RLI Insurance Company, Certain Underwriters At Lloyds, London And The Insurance Company, Subscribing To Policy No. B0180fn2102430, No. 24-12441, United States Court of Appeals, Eleventh Circuit (August 25, 2025) the court explained the need for a claim to obtain coverage.

Case Background:

This appeal arises from a coverage dispute under a Directors & Officers (D&O) insurance policy. Jeffrey B. Scott, the plaintiff-appellant, was terminated from his role as CEO, President, and Secretary of Gemini Financial Holdings, LLC in October 2019. Following his termination, Scott threatened legal action against Gemini, and ...

00:08:22
September 03, 2025

Barry Zalma: Insurance Claims Expert Witness
Posted on September 3, 2025 by Barry Zalma
The Need for a Claims Handling Expert to Defend or Prove a Tort of Bad Faith Suit

© 2025 Barry Zalma, Esq., CFE

When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.

On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive ...

post photo preview
September 03, 2025
Barry Zalma, Esq., CFE Insurance Claims Expert Witness

The Need for a Claims Handling Expert to Defend or Prove a Tort of Bad Faith Suit
© 2025 Barry Zalma, Esq., CFE

When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.

On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive and became a consultant and expert witness for lawyers representing insurers and lawyers ...

post photo preview
September 03, 2025
Evidence Required to Prove Breach of Contract

APPRAISAL AWARD SETS AMOUNT OF DAMAGES RECOVERED FROM INSURER

Post 5180

See the full video at https://rumble.com/v6yd2z0-evidence-required-to-prove-breach-of-contract.html and at https://youtu.be/2ywEjs3hZsw, and at https://zalma.com/blog plus more than 5150 posts.

It’s a Waste of Time to Sue Your Insurer if You Don’t Have Evidence

Evidence Required to Prove Breach of Contract

Read the full article at https://www.linkedin.com/pulse/evidence-required-prove-breach-contract-barry-zalma-esq-cfe-rfelc, see the full video at https://rumble.com/v6yd2z0-evidence-required-to-prove-breach-of-contract.html and at https://youtu.be/2ywEjs3hZsw, and at https://zalma.com/blog plus more than 5150 posts.

It’s a Waste of Time to Sue Your Insurer if You Don’t Have Evidence

In Debbie Beaty and Jonathan Hayes v. Homeowners Of America Insurance Company, No. 01-23-00844-CV, Court of Appeals of Texas, First District (August 26, 2025) Debbie Beaty and Jonathan Hayes filed a claim under their homeowner’s insurance policy with Homeowners of ...

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