Plaintiff insured appealed a summary judgment from the Superior Court of Los Angeles County (California), which ruled in favor of defendant insurer on the insured’s causes of action for negligence and declaratory relief after the insurer denied coverage for a fire loss. On the insurer’s cross-complaint, the trial court ruled that the insurer was entitled to reimbursement of a good faith advance payment.
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Overview
A licensed insurance broker submitted a commercial insurance application stating that the insured had sprinklers. The insurer issued a commercial property policy that contained an endorsement requiring the insured, as a condition of the insurance, to maintain an automatic sprinkler system. A fire occurred, and the insurer denied the claim because the building did not have a sprinkler system. The court held that no triable issues existed as to the negligence claim because the insurer had no duty to investigate the representations in the application or to advise the insured regarding its coverage. When the broker procured the insurance, it was acting as a broker under Ins. Code, §§ 33, 1623, and not as an agent under Ins. Code, §§ 31, 1621, 1631, 1704, subd. (a). A claim of ostensible agency under Civ. Code, § 2317, also lacked merit because there was no evidence of any statements by the insurer suggesting that an agency relationship existed. Because the endorsement was a condition precedent to coverage, the insured’s noncompliance with the sprinkler requirement precluded coverage, and summary judgment was properly granted on the declaratory claim under Code Civ. Proc., § 1060.
Outcome
The court affirmed the judgment.