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Defendants, an insurance agency and an insurance agent, appealed a judgment of the Superior Court of San Diego County (California) which found defendants liable to plaintiff, their former client, on a negligent misrepresentation theory.

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Overview

Following a trial, defendants, an insurance company and insurance agent, were found liable to plaintiff, their former client, for negligent misrepresentation based on statements made by defendant agent assuring plaintiff of contractual liability insurance coverage which plaintiff did not in fact possess. Defendants appealed arguing various legal and factual errors by the trial court. The court affirmed the trial court. The court held that substantial evidence supported the trial court’s determination that defendant agent misrepresented the extent of insurance coverage purchased by plaintiff. The court also held that substantial evidence supported the conclusion that plaintiff’s reliance on defendant agent’s representations was reasonable. Finally, the court held that causation was established by the fact that plaintiff could have obtained other insurance which would have provided contractual liability coverage to defeat defendants’ contention that plaintiff’s conduct was willful for purposes of denying recovery under Cal. Ins. Code § 533.

Outcome

The court affirmed the judgment.

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