Adjusters Beware!

In a stunning reversal of a trial court the First Appellate District Court recently ruled that an insurance adjuster employed by an insurer can be sued personally under certain circumstances . Bock v. Hansen (No. A136567, filed 4/2/14).  The case involved fairly egregious acts by the insurance adjuster but all of the alleged acts were done in the course and scope of the the adjuster’s duties in adjusting the claim.

The case came to the court of appeals after the trial court dismissed claims against the adjuster for negligent misrepresentation and intentional infliction of emotional distress on demurrer.  The trial court agreed with the defendant that the adjuster was an agent of the insurer and could not be held liable apart from the employer.

On appeal, the court found that the adjuster, like the insurance company, has a “special relationship” with the insured which imposes a duty between the insured and the adjuster.

Its difficult to see how the duty between the insured and the adjuster is separate and independent from the duty between the insurer and the insured.  This appears to be a case were extremely bad facts led to the imposition of bad law.

Its interesting to note that following the hearing on appeal, the parties entered into a settlement and informed the court of such.  The court however, rejected the stipulation to dismiss the appeal, “in light of the issues presented.”

It difficult to predict how future courts will apply this decision.  Its even more difficult to predict how insurers will use this decision to potentially disclaim liability for act of its adjusters.

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