Filed 10/05/20 (unmodified opinion attached)

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

DAVID MURRAY,

 Plaintiff and Appellant,

v.

UPS CAPITAL INSURANCE AGENCY, 

INC,

 Defendant and Respondent.

 G058353

 (Super. Ct. No. 30-2018-00997998)

 ORDER MODIFYING OPINION;

 REQUEST FOR REHEARING 

DENIED; NO CHANGE IN

 JUDGMENT

It is ordered that the opinion filed herein on September 11, 2020, be 

modified as follows: 

(1) At the top of page 2, in the first sentence the word “Postal” will be 

deleted and replaced with the word “Parcel”; and

(2) At the bottom of page 26, in the last sentence the word “presumption” 

will be deleted and replaced with the words “reasonable inference.”
2

This modification does not change the judgment.

The petition for rehearing is denied.

O’LEARY, P. J.

WE CONCUR:

BEDSWORTH, J.

GOETHALS, J.
Filed 9/11/20 (unmodified opinion)

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

DAVID MURRAY,

 Plaintiff and Appellant,

v.

UPS CAPITAL INSURANCE AGENCY, 

INC,

 Defendant and Respondent.

 G058353

 (Super. Ct. No. 30-2018-00997998)

 O P I N I O N

Appeal from a judgment of the Superior Court of Orange County, Gregory 

H. Lewis, Judge. Reversed and remanded.

Miles L. Kavaller APC and Miles L. Kavaller for Plaintiff and Appellant.

Countryman & McDaniel, Michael S. McDaniel, Christoph M. Wahner, 

and Mark P. Estrella for Defendant and Respondent.
2

David Murray purchased used computer equipment worth nearly $40,000, 

which was damaged by the United Postal Service (UPS) while it was being transported 

from California to Texas. Murray believed he purchased appropriate insurance to cover 

this loss, but the insurance company denied his claim. Murray sued his insurance broker, 

UPS Capital Insurance Agency (UPS Capital), for breach of contract and negligence. He 

asserted UPS Capital owed him a special duty to make the insurance policy language 

understandable to an ordinary person and to explain the scope of coverage. The court 

granted UPS Capital’s motion for summary judgment after concluding there was no 

heightened duty of care and dismissed Murray’s lawsuit. 

On appeal, Murray asks us to create a new rule that brokers/agents,

specializing in a specific field of insurance, hold themselves out as experts, and are 

subject to a heightened duty of care towards clients seeking that particular kind of 

insurance. We decline the invitation to create a per se rule, however, we conclude 

Murray raised triable issues of fact as to whether UPS Capital undertook a special duty 

by holding itself out as having expertise in inland marine insurance, and Murray 

reasonably relied on its expertise. We reverse the judgment and remand the matter for 

further proceedings. 

FACTUAL AND PROCEDURAL BACKGROUND

The parties do not dispute the following facts alleged in Murray’s 

complaint. In March 2018, Murray purchased computer equipment in California and 

arranged for it to be transported to Texas. Murray saw on UPS’s Web site that its 

liability is limited to $100 on packages with no declared value. Liability increased if the 

customer declared a higher value (up to $50,000 per package) and paid an additional 

charge. UPS advised Murray not to declare a higher value, but rather contact its sister 

company, UPS Capital, to purchase insurance coverage. 

Murray contacted UPS Capital and requested insurance coverage for a 

shipment that same day from California to Texas. He completed UPS Capital’s form 
3

application for a “house policy coverage” and paid $350. On the form, Murray described

the shipment as used computer equipment valued at $37,000. That same day, Tokio 

Marine America Insurance Company (Tokio) issued a “Marine Certificate of Insurance”

(Certificate), which Murray believed fully insured the shipment in the event of any loss 

or damage by UPS. 

The Certificate contained a Free From Particular Average (FPA) provision,

providing the following limitation on coverage: “Warranted free from Particular Average 

unless the vessel or craft be stranded, sunk or burnt, but notwithstanding this warranty 

Underwriters are to pay any loss or damage to the interest insured which may reasonably 

be attributed to fire, collision or contact of the vessel and/or conveyance with any 

external substance (ice included) other than water, or to discharge of cargo at port of 

distress; and also to pay the insured value of any merchandise and/or goods jettisoned 

and/or washed or lost overboard, and the risks of theft of or non-delivery of an entire 

shipping package.”

The computer equipment was packaged on a cart with wheels and shrink 

wrapped. At some point during the shipment to Texas, UPS damaged the equipment and 

Murray submitted a $36,666.85 claim. Tokio informed Murray it assigned a surveyor to 

inspect the damaged shipment and prepare a report. Tokio rejected the claim on the 

grounds the coverage Murray purchased did not cover the loss. Specifically, the 

Certificate’s FPA provision did not apply to the shipping damages. Murray later learned 

the policy “covered only catastrophic losses such as the entire destruction of the vehicle 

in which the shipment was carried by UPS and not damage caused by factors other than a 

catastrophic loss such as mishandling the freight or other causes.”

Murray sued UPS Capital for breach of contract on the grounds it sold 

Murray “an insurance product that did not cover the risks of damage to cargo in the 

ordinary course or truck transport where there was no catastrophic loss.” His negligence 

claim was based on the premise UPS Capital owed a special duty “to the public and to 
4

[Murray] . . . to exercise reasonable care in its dealings including a duty of disclosure to 

inform Murray of the products available to cover in transit cargo loss and damage in the 

absence of a catastrophic loss and further to fully explain technical provisions such as the 

‘FPA’ [provision].” Murray also asserted UPS Capital owed a “duty of good faith and 

fair dealing to its customers to give at least as much consideration to the insured’s 

interests as it does to its own.” He maintained UPS Capital breached its duty of care by 

“failing to fully explain the FPA provision in the [Certificate], not disclosing other 

available insurance products to Murray[,] and not giving Murray the opportunity to 

purchase insurance that would cover loss or damage caused by factors other than a 

catastrophic loss.”

I. Summary Judgment Motion

UPS Capital filed a motion for summary judgment. It set forth the 

following material facts. Murray completed and submitted a form application for “House 

Policy Coverage” describing the shipment as being for “used” computer equipment. The 

first page of the application form contained the following language: “Used items will not 

be insured ‘All-Risk.’” In its motion, UPS Capital explained the term “All-Risk” was 

“the broadest form of cargo insurance policy,” which insured “cargo in the event of 

physical loss or damage from any external cause subject to exclusions of specific risks. 

[Citations.]” 

UPS Capital maintained that after receiving Murray’s application form, it 

requested additional information from him. Because Murray described the shipment as 

containing used computer equipment, UPS Capital included in its e-mail the following 

statement: “FYI: We abide by FPA coverage guidelines for used goods.” The e-mail 

also restated the FPA provision quoted earlier in this opinion. 

In its summary judgment motion, UPS Capital explained an FPA provision 

provided “limited coverage that usually applies to used and certain other categories of 

goods.” It clarified this type of coverage “insures cargo only for the risk of total loss 
5

(such as theft), thereby eliminating an insurer’s liability for partial losses except in the 

event of specifically named catastrophic perils. [Citation.]” 

UPS Capital noted Murray’s initial request for insurance, submission of the 

application, premium payment, and issuance of the Tokio Certificate, all took place on 

the same day UPS began transporting the computer equipment. It stated the Certificate 

clearly contained the FPA provision (using the language previously described in this 

opinion). UPS Capital alleged the following: “Despite its inclusion in the [Certificate], 

the disclaimer language on the insurance application and the e-mail from [UPS Capital] 

bringing attention to the existence of the FPA provision, [Murray] never inquired with 

[UPS Capital] about the meaning of ‘All-Risk’ or [‘FPA’], or ‘Free of Particular 

Average’ or ‘Warranted free from Particular Average.’” It asserted, “[Murray] never 

gave any indication to UPS Capital that he did not understand the meaning or effect of 

the FPA coverage applicable to his shipment versus [‘All-Risk’] coverage.” 

Additionally, “[Murray] never raised any questions with UPS Capital regarding the 

insurance procured generally, e.g., what risks were covered, what risks were not covered, 

etc.” It noted Murray never raised any questions, complaints, requests to change the 

policy before the computer equipment shipped. Murray also did not tell UPS Capital he 

did not understand the policy or believed the shipment was insured “in case of any loss or 

damage by UPS or under [the] broader ‘All-Risk’ coverage terms.”

UPS Capital clarified Murray “never made any requests as to specific 

coverage other than what [was] contained in the communications” with UPS Capital

“which merely identify the carriage, route and type, the description and value of the 

cargo, etc.” UPS Capital maintained Murray never requested insurance to cover risks of 

partial loss or damage and “[a]t no time” did UPS Capital “make any coverage 

representations” about the purchased insurance “(e.g., it was adequate, sufficient, good, 

perfect, better, full, or complete, etc.)” 
6

In light of the above facts, UPS Capital argued Murray’s contract cause of 

action failed for the following reasons: “Given the lack of any evidence [Murray] made a 

specific request for lacking coverage or the indisputable evidence that [he] accepted the 

insurance provided without any inquiry or complaint, there is no evidence for [Murray] to 

establish [UPS Capital] had a contractual obligation to provide the lacking coverage 

much less that it breached such an obligation.”

As for the negligence cause of action, UPS Capital noted the claim was 

based on two theories. First, Murray alleged UPS Capital owed “a duty of care to 

disclose other available insurance products and provide an opportunity to purchase 

insurance not covered in the insurance product that was procured.” Second, Murray 

maintained UPS Capital had a duty of care to fully explain the Certificate’s FPA 

provision. UPS Capital asserted that as a matter of law an insurance agent’s duty of care 

would not include the tasks Murray raised in his complaint. It reasoned that because the 

communications between it and Murray did not give rise to a special duty of care, “the 

onus was on [Murray] to tell [UPS Capital what [he] needed.” Because Murray’s request 

did not include any “specificity with regard to coverage needed,” UPS Capital’s general 

duty of care did not include the responsibility of making sure Murray had “adequate 

coverage to protect against all eventualities including the one which resulted in the denial 

of coverage under the insurance procured.”

II. Opposition to Summary Judgment Motion

In his opposition, Murray cited case authority holding an insurance agent 

may assume additional duties by an express agreement or holding itself out as being a 

specialist. Relying on the evidence submitted by UPS Capital, Murray asserted the 

broker “clearly holds itself out as specializing in inland marine insurance covering UPS 

shipments [and it] acted as an agent for [Tokio,] which issued house policies for both 

FPA as well as All-Risk coverage.” He added that because UPS Capital “‘holds itself 

out’ as having expertise in this field” it had “a duty to inform the casual lay customers . . . 
7

of the basic coverage details of the insurance they are going to purchase.” Murray 

elaborated UPS Capital owed a special duty because it was only a broker “of marine or 

inland marine coverages, not the common homeowner’s, or automobile liability 

insurance, [and] had the obligation at least to advise of, if not offer, the available 

coverages and explanations of those coverages.”

To support these assertions, Murray cited to Travis Dixon’s declaration, 

filed in support of the motion for summary judgment. Dixon was a Senior Marketing 

Product Manager with UPS Capital. He declared UPS Capital was “a licensed insurance 

broker in all 50 states” and a “wholly owned subsidiary of [UPS], but does not operate 

transportation equipment, nor provide or arrange for transportation or logistics services as 

does UPS and other UPS companies.” 

Dixon also described the types of policies offered by UPS Capital as 

follows: “[It] maintained, a ‘house’ or ‘open’ policy of insurance with insurer Tokio . . .

under which [UPS Capital had] the liberty to include customer’s shipments of cargo.” 

The policy in effect provided coverage for both international shipments and domestic

shipments and was “specifically endorsed to cover U.S. domestic inland shipments by 

truck[.]” He noted, “A customer’s shipment need not be transported by UPS in order to 

be included by [UPS Capital] for coverage under the Policy.” To include a cargo 

shipment, UPS Capital would report shipment details to Tokio, who would generate a 

Certificate “thereby confirming the shipment’s inclusion for coverage under the Policy.”

Dixon confirmed Tokio issued two types of coverage. “As is consistent 

with marine and inland marine insurance policies generally, there are two fundamental 

types of coverage afforded under the Policy: ‘All-Risk’ and ‘FPA’ (Free of Particular 

Average) . . . ‘All-Risk’ is the broadest form of coverage and insures cargo in the event of 

physical loss or damage from any external cause subject to exclusions of specific risks. 

‘FPA’ coverage[,] on the other hand, insures exclusively against total loss (such as theft) 

except that partial losses are covered in the event of specifically named catastrophic 
8

perils as set forth within the FPA clause. Whether a shipment will be insured ‘All-Risk’’

or ‘FPA’ depends upon the commodity. As is consistent with marine and inland marine 

insurance policies generally, used items are insured ‘FPA’ under the Policy because their 

pre-shipment condition is unknown to the insurer. This is set forth on the second page of 

the Policy Conditions[.]”

Murray disputed UPS Capital’s claim the application clearly denoted the 

policy could not be for All-Risk coverage. As noted by Dixon in his declaration, UPS 

Capital sent Murray an application containing the following language on the first page: 

“Used items will not be insured ‘All-Risk.’” Dixon concluded that because Murray

completed the application and identified his shipment as being comprised of used items it 

was undisputed he understood the shipment would not have All-Risk coverage. Murray 

refuted this claim by pointing out the application’s second page containing payment 

information. Under the section stating the cost of the policy and that there would be a 

$100 deductible, the application indicated the coverage was All-Risk. Specifically, the 

application contained the following statement: “Coverage: All Risk/Other (To be 

completed by UPS Capital).” Nowhere on the application were the terms FPA, 

FPA provision, FPA coverage, or “Free from Particular Average” mentioned.

Murray noted Dixon stated in his deposition the word “‘Other’” on the 

second page of the application referred to FPA or a different kind of coverage. When 

asked why the words “‘All-Risk’” were not crossed out, Dixon explained, “We just 

generally leave that wide open like that. It’s ‘All Risk,’ slash, ‘Other,’ so you’re just 

paying for the coverage that you’re purchasing. You’re not slashing or circling or 

anything. You’re just leaving it completely open.” Dixon conceded Murray could have 

purchased “All-Risk” coverage for his used computer equipment in a one-time only 

shipment “if there was some type of inspection or pre-shipment survey.” Dixon said that 

Murray indicated he needed coverage for the same day he purchased the equipment. If 

Murray had wanted “All-Risk” coverage they would have needed time to contact Tokio 
9

and “see what special considerations could have been put in place.” Because none of this 

information was included in the application, Murray concluded any customer could 

reasonably assume the coverage was “All-Risk” despite the fine print statement on the 

first page. Moreover, Murray asserted that if he had been told about this option of better 

All-Risk coverage he would have delayed the shipment for the necessary survey.

Murray also disputed what reasonable inferences were created by UPS 

Capital’s e-mail to him after he confirmed he was shipping used goods. The e-mail stated 

the following: “FYI: We abide by FPA coverage guidelines for used goods” and quoted 

the exact language Tokio would include the policy’s FPA provision. Murray explained 

UPS Capital did not provide any explanation about the FPA provision listed in the e-mail. 

Moreover, Murray asserted UPS Capital sent an e-mail which created the inference his 

shipment would be covered for partial or total damage in transit. Specifically, the e-mail 

provided the following information: “Your COI has been processed successfully and is 

attached, which covers your shipment from Irvine, [California] to Spring, [Texas]. Your 

original receipt of payment is also included for reference. Keep this certificate on file for 

your records. As a friendly reminder, always leave any ‘Declared Value’ fields blank and 

do not opt for additional package or freight liability coverage when shipping with UPS 

insurance.” (Italics added.) Murray asserted he would have asked about FPA coverage, 

but this “friendly reminder” caused him to believe there was no need to question the 

scope of coverage because it included partial or total damage regardless of the cause. For 

this reason, he disagreed with UPS Capital’s claim it was undisputed he never gave any 

indication he did not understand the FPA provision or questioned the scope of insurance 

procured. Murray complains, “[This] statement might be considered misleading, if not 

actually misrepresenting the nature and scope of the FPA coverage.”

Murray concludes the insurance application wherein he identified the 

shipment as being comprised of used items clearly conveyed the need for “insurance for 

an interstate UPS motor carrier shipment of used computer equipment, making no 
10

distinction between coverage for a total loss or just partial loss or for that matter, the 

cause of the loss.” He argues, “That should have been enough for [UPS Capital] to 

advise Murray of both the FPA and All-Risk house policy options particularly where 

FPA does not provide coverage for less than a total loss caused by mishandling of cargo, 

a frequent cause of damage to interstate motor carrier shipments.” 

The trial court granted UPS Capital’s motion for summary judgment and 

dismissed the lawsuit. It concluded Murray’s claims for breach of contract and 

negligence were based on UPS Capital’s purported affirmative duty to assist him in 

purchasing an insurance product that covered the “risks of damage to cargo in the 

ordinary course or truck transport—or at the very least, to inform [Murray] of the 

availability of such products and to explain fully the technical ‘FPA’ provision.” The 

court reasoned, “Generally speaking, California law is well settled as to the limited duty 

of insurance brokers, which is only to use reasonable care, diligence, and judgment in 

procuring the insurance requested by an insured. (Travelers Property Casualty Co. of 

America v. Superior Court (2013) 215 Cal.App.4th 561, 578-579 [(Travelers)] [citations 

and quotations omitted]; see also Jones v. Grewe (1987) 189 Cal.App.3d 950, 954-955.)” 

The court also acknowledged there were three exceptions to the general rule outlined in 

the Travelers case and Kitzpatrick v. Hayes (1997) 57 Cal.App.4th 916 [re: insurance 

agents] (Kitzpatrick).) 

Applying this legal authority, the trial court determined UPS Capital met its 

burden of showing it “had no duty above and beyond those normally found in any agency 

relationship” because Murray asked for same-day insurance coverage for used computer 

equipment and was advised “All-Risk” protection was not available for cargo described 

as used. The court noted Murray did not seek additional information or ask about other 

insurance options. The court recognized Murray’s theory UPS Capital held itself out as 

having “expertise in the inland marine insurance,” however, Murray failed to provide 

evidence “that would allow a reasonable trier of fact . . . to conclude as much.” It 
11

reasoned, although UPS Capital sells “a specialized type of insurance,” Murray needs to 

provide something more to create a reasonable inference UPS Capital “‘held itself out as 

an expert in that particular field.’” In addition, the court rejected Murray’s argument 

UPS Capital had an independent, affirmative duty to advise him about the relevant FPA 

provision written in “‘archaic language.’” It determined this claim was contrary to 

established case law. 

DISCUSSION

I. Standard of Review

“Summary judgment is a severe remedy which is to be granted with 

caution.” (Paper Savers, Inc. v. Nacsa (1996) 51 Cal.App.4th 1090, 1094.) “A court 

shall grant a motion for summary judgment if all the papers show there is no triable issue 

as to any material fact and the moving party is entitled to a judgment as a matter of law. 

[Citation.]” (Nealy v. City of Santa Monica (2015) 234 Cal.App.4th 359, 370.) “We 

review a trial court’s grant of summary judgment de novo. [Citation.] ‘[T]he party 

moving for summary judgment bears an initial burden of production to make a prima 

facie showing of the nonexistence of any triable issue of material fact; if he carries his 

burden of production, he causes a shift, and the opposing party is then subjected to a 

burden of production of his own to make a prima facie showing of the existence of a 

triable issue of material fact.’ [Citation.]” (Casey v. Perini Corp. (2012)

206 Cal.App.4th 1222, 1228.) Once the defendant has met its burden, the party opposing 

summary judgment “shall not rely upon the allegations or denials of its pleadings,” but 

rather “shall set forth the specific facts showing that a triable issue of material fact exists

. . . .” (Code Civ. Proc., § 437c, subd. (p)(2).)

On appeal, “[w]e review the record and the determination of the trial court 

de novo. [Citation.]” (Kahn v. East Side Union High School Dist. (2003) 31 Cal.4th 990, 

1003.) “In performing our de novo review, we must view the evidence in a light 

favorable to plaintiff as the losing party [citation], liberally construing [the plaintiff’s] 
12

evidentiary submission while strictly scrutinizing defendants’ own showing and resolving 

any evidentiary doubts or ambiguities in plaintiff’s favor. [Citations.]” (Saelzler v. 

Advanced Group 400 (2001) 25 Cal.4th 763, 768-769 (Saelzler).) “There is a triable 

issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to 

find the underlying fact in favor of the party opposing the motion in accordance with the 

applicable standard of proof.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 

850, fn. omitted.)

II. Issues on Appeal

In his appellate briefing, Murray focuses on the negligence cause of action, 

and not the breach of contract action. We appreciate the issue of UPS Capital’s 

contractual obligation overlaps with the primary issue of his negligence claim, i.e., 

whether UPS Capital had a special duty of care to procure adequate insurance and assist 

Murray in understanding the scope of coverage. However, as noted by UPS Capital, by 

failing to set forth any legal analysis on the contract claim Murray has waived any other 

challenges to the court’s ruling on the contract claim. (Badie v. Bank of America (1998) 

67 Cal.App.4th 779, 784-785 [appellant must present reasoned argument]; In re Marriage 

of Nichols (1994) 27 Cal.App.4th 661, 672-673, fn. 3 [reviewing court may disregard 

contentions unsupported by legal or factual analysis]; Kim v. Sumitomo Bank (1993) 

17 Cal.App.4th 974, 979.)

III. Negligence

Murray contends the trial court erred in finding that the complaint did not 

adequately allege negligence liability because he failed to present facts establishing UPS 

Capital owed a heightened duty to advise Murray that All-Risk insurance was available 

and/or explain the limitations of FPA coverage. We found no published cases on the 

issue of whether insurance brokers, selling one kind of policy, automatically assume 

additional duties simply because they are specialists, implicitly holding themselves out as 

having expertise in that given field of insurance. Murray proposes we create a per se rule 
13

imposing a heightened duty of care for all specialized agents/brokers. While we decline 

to institute such a rule, we conclude public policy supports the creation of a reasonable 

inference of expertise when there is evidence the agent specializes in a particular field of 

insurance. In this case, the undisputed evidence of UPS Capital’s specialization, in 

addition to Murray’s other evidence, created a triable issue of material fact that if found 

true in Murray’s favor would show UPS Capital assumed a special duty to advise Murray 

about the limited coverage available to ship his used goods with UPS. 

A. General Rules Regarding Any Agency Relationship

As a general rule, an insurance agent “assumes only those duties found in 

any agency relationship such as ‘reasonable care, diligence, and judgment in procuring 

the insurance requested by an insured.’ [Citations.]” (Paper Savers, Inc. v. Nacsa (1996) 

51 Cal.App.4th 1090, 1095 (Nacsa).) An insurance agent has no duty to affirmatively 

advise an individual seeking insurance about different or additional coverage. (Jones v. 

Grewe (1987) 189 Cal.App.3d 950, 954; see also Gibson v. Government Employees Ins. 

Co. (1984) 162 Cal.App.3d 441, 452 [holding no fiduciary duty “to (1) make available to 

them a particular kind of insurance, (2) advise them of the availability of such coverage 

elsewhere in the industry, or (3) advise them of inadequacies in coverage of which 

plaintiffs should, as reasonable persons, have themselves been aware”].) 

However, an insurance agent may assume a greater duty to the insured 

when one of the following three exceptions arise: “(a) the agent misrepresents the nature, 

extent or scope of the coverage being offered or provided [ . . . ], (b) there is a request or 

inquiry by the insured for a particular type or extent of coverage [ . . . ], or (c) the agent 

assumes an additional duty by either express agreement or by ‘holding himself out’ as 

having expertise in a given field of insurance being sought by the insured.” (Fitzpatrick, 

supra, 57 Cal.App.4th at p. 927).) 
14

“‘[W]hether a duty of care exists is a question of law for the court. 

[Citations.] Also, whether, and the extent to which, a new duty is recognized is 

ultimately a question of public policy. [Citation.]’ [Citation.]” (Fitzpatrick, supra, 

57 Cal.App.4th at p. 920.) Any extension of these existing exceptions or creation of a 

new duty is ultimately a question of public policy. (Id. at p. 920.) 

B. Extended Duty of Care

As noted above, the Fitzpatrick case delineated three exceptions to the 

general rule limiting an agent’s duty of care. Murray asserts specialized agents, such as 

UPS Capital, are “holding themselves out as having expertise” and fall within 

Fitzpatrick’s third exception (Exception C). We found no case law specifically defining 

the phrase “holding themselves out as having expertise.” In determining what factors 

should be considered when applying this exception, it is helpful to first parse through 

existing case law.

The 1987 Jones case provides the starting framework for determining what 

constitutes “holding out” oneself out as having expertise. (Jones, supra, 189 Cal.App.3d 

at p. 954.) In Jones, a minor fell into a swimming pool and suffered serious injuries. (Id. 

at p. 953.) After settling with the family, the apartment building owners (landlords) filed 

a lawsuit against the agents who insured the apartment building, arguing they breached 

their duties by not providing enough insurance to cover the apartment building’s 

liabilities. (Ibid.) The landlords argued they were relying on the expertise of the 

insurance agents due to their past relationship of purchasing policies and history of

relying on the agent’s advice on insurance matters. (Id. at p. 956.) 
15

The court’s majority sustained the agent’s demurrer, adopting the reasoning 

provided by a 1984 Iowa Supreme Court opinion and a treatise on insurance law.

1

(Jones, supra, 189 Cal.App.3d at p. 954.) Relying on Sandbulte, the majority in Jones 

held an insurance agent only assumes “those duties normally found in any agency 

relationship” and “[t]he mere existence of such a relationship imposes no duty on the 

agent to advise the insured on specific insurance matters.” (Jones, supra, 189 Cal.App.3d 

at p. 954.) But the court also recognized an agent may “assume additional duties by an 

express agreement or a holding out,” and that “the agent may be liable to the insured for 

losses which resulted as a breach of that special duty.” (Id. at pp. 954-955.) 

“The mere allegation in a complaint . . . that an insured has purchased 

insurance from an insurance agent for several years and followed his advice on certain 

insurance matters [was] insufficient to imply the existence of a greater duty. Such 

reliance is not at all uncommon when an insured has done business with an insurance 

agency over a period of time. [Citation.] Nor can the existence of a broader agency 

relationship warranting the imposition of a greater duty be reasonably inferred from the 

complaint’s allegation that respondents had assured appellants of the adequacy of their 

liability coverage. As the court noted in Sandbulte . . . an insured’s request for ‘sufficient 

coverage’ and an agent’s assurance that the policy provided ‘adequate’ coverage do not, 

in and by themselves, imply an ‘expanded principal-agent relationship.’ Such an 

exchange usually occurs within the context of the general principal-agent relationship. 

1 Our Supreme Court embraced the holding of Sandbulte v. Farm Bureau 

Mut. Ins. Co. (Iowa 1984) 343 N.W.2d 457, 464 (Sandbulte), which cited extensively to 

16A Appleman, Insurance Law & Practice (1981) § 8836, pp. 64-66.) However, in 2010 

the Iowa Supreme Court overruled Sandbulte in Langwith v. American National General 

Insurance Co. (Iowa 2010) 793 N.W.2d 215, 223-224 (Langwith), abandoning the 

“restrictive requirements for an expended agency duty.” And then Langwith was 

legislatively overruled the following year; the Legislature codified the requirements of 

Sandbulte in Iowa Code section 522B.11(7). In short, Sandbulte is still good law in 

Iowa.
16

‘Purchasers of insurance generally seek “sufficient coverage.”’ [Citation.] To imply the 

existence of a broader agency agreement from such an exchange, the Sandbulte court 

said, would in effect make the agent ‘a blanket insurer for his principal.’ [Citation.]”

(Jones, supra, 189 Cal.App.3d at p. 956.)

While the Jones majority held continued reliance was not enough to imply 

expertise, the court declined to define what would have implied expertise. Further, the 

court considered public policy implications and ultimately declined to expand the 

principal-agent relationship duty because “[n]either an insurance agent nor anyone else 

has the ability to accurately forecast the upper limit of any damage award in a negligence 

action against the insured by a third party.” (Jones, supra, 189 Cal.App.3d at p. 957.) In 

short, because the landlords had unfettered access to the information required to properly 

calculate their liability insurance, whereas the insurance agent did not, and because future 

catastrophes are unforeseeable, the responsibility ultimately rested with the landlords to 

determine their upper limit. (Ibid.)

In his dissent, Justice Lui concluded the complaint stated facts from which 

a special duty could reasonably be inferred. (Jones, supra, 189 Cal.App.3d at p. 958 (dis. 

opn. Lui, J.).) He read the complaint to say the agents “represented themselves to be 

experts at procuring appropriate liability insurance and encouraged appellants to depend 

and rely on their advice, service, and expertise; they also expressly and impliedly 

represented that the insurance protection obtained by them was ‘adequate.’” (Ibid.) 

Justice Lui noted the majority relied on Sandbulte, which had declined to find an 

expanded agency agreement “but noted situations where a special duty might arise, for 

example, when ‘there is a long-established relationship of entrustment between insurance 

counselor or agent and client from which it clearly appears that the counselor appreciated 

that there was a duty to take the initiative in giving comprehensive advice to [the] client 

on insurance matters. . . .’ [Citation.]” (Ibid.) 
17

Justice Lui also noted the Sandbulte court relied on “Appleman, Insurance 

Law and Practice (1981) section 8836, at pages 64-66 as follows: ‘Ordinarily, of course, 

an insurance agent assumes only duties normally found in an agency relationship . . . and 

he assumes no duty to advise the insured merely by such relationship. However, where 

an agent holds himself out as a consultant and counselor, he does have a duty to advise 

the insured as to his insurance needs, particularly where such needs have been brought to 

the agent’s attention. And in so doing, he may be held to a higher standard of care than 

that required of the ordinary agent since he is acting as a specialist. Accordingly, the 

agent may be liable to an insured for the damage suffered by his failing to inform him as 

to a potential source of loss and by his failing to recommend insurance therefor.’” 

(Jones, supra, 189 Cal.App.3d at p. 958 (dis. opn. Lui, J.).)

Fast forward 25 years, and the Iowa Supreme Court has overruled its 

Sandbulte, supra, 343 N.W.2d 457 decision in Langwith, supra, 793 N.W.2d at page 224. 

It stated the following: “[T]he circumstances under which an expanded agency 

agreement could arise were narrowly circumscribed in Sandbulte: ‘the agent holds 

himself out as an insurance specialist, consultant or counselor and is receiving 

compensation for consultation and advice apart from premiums paid by the insured.’ 

[Citation.] Although this court cited some authority for its holding in Sandbulte, we gave 

no rationale for such a restrictive approach. [¶] Our examination of the general principles 

governing agency relationships convinces us that a more flexible method of determining 

the undertaking of an insurance agent is appropriate.” (Langwith, supra, 793 N.W.2d. at 

p. 221.) 

Relying heavily on The Restatement Third of Agency the court in Langwith

determined an insurance agent’s ordinary duty can be changed and expanded by 

agreement of the parties. (Langwith, supra, 793 N.W.2d at p. 221.) “The defendants 

have advanced no reason, nor have we identified one, that would justify the limitations 

placed on the circumstances that might be considered in determining the duty undertaken 
18

by an insurance agent, as stated in Sandbulte. Therefore, we hold that it is for the fact 

finder to determine, based on a consideration of all the circumstances, the agreement of 

the parties with respect to the service to be rendered by the insurance agent and whether 

that service was performed with the skill and knowledge normally possessed by insurance 

agents under like circumstances. [Citation.]” (Langwith, supra, 793 N.W.2d at p. 221.)

The Langwith expansion of the exception was legislatively overturned in 

2011 (2011 Iowa Acts ch. 70, § 45), when the Legislature enacted Iowa Code section 

522B.11(7), which provided, inter alia the following: “Unless an insurance producer 

holds oneself out as an insurance specialist, consultant, or counselor and receives 

compensation for consultation and advice apart from commissions paid by an insurer, the 

duties and responsibilities of an insurance producer are limited to those duties and 

responsibilities set forth in Sandbulte . . . .” The Legislature determined insurance 

brokers should not have higher or greater duties except in narrowly defined 

circumstances. 

This above history is noteworthy because it highlights how the Jones court 

disagreed with and refused to adopt all of Sandbulte’s analysis and holding. Neither the 

majority nor dissenting opinion mentioned the Iowa Supreme Court’s restrictive approach 

in defining an agent’s expanded duty (that was later codified). Instead, the Jones court 

adopted a totality-of-circumstances analysis, leaving it to the fact finder to examine 

multiple factors to decide if the insurance broker/agent assumed a special duty by holding 

themselves out as having expertise. As we will now discuss, other courts in California 

have adopted a similar flexible approach. 

Returning to California jurisprudence, in 1997 the appellate court in 

Fitzpatrick carefully examined the existing applicable case law and synthesized three 

succinct exceptions to the “no duty” principle announced in Jones. (Fitzpatrick, supra,

57 Cal.App.4th pp. 923-927.) The Fitzpatrick first exception, when “the agent 

misrepresents the nature, extent or scope of the coverage being offered or provided”
19

(Exception A), was based on the court’s analysis of three cases. (Fitzpatrick, supra,

57 Cal.App.4th at p. 927, citing Nacsa, supra, 51 Cal.App.4th 1090 [agent 

misrepresented policy provided full coverage to replace business personal property in 

case of total loss]; Desai v. Farmers Ins. Exchange (1996) 47 Cal.App.4th 1110 (Desai)

[agent misrepresented insured getting 100 percent replacement cost coverage with real 

property insurance policy]; and Free v. Republic Ins. Co. (1992) 8 Cal.App.4th 1726

(Free) [homeowner specifically inquired if coverage limits adequate to rebuild home].)

The second exception, when “there is a request or inquiry by the insured for 

a particular type or extent of coverage” (Exception B), was based on the Fitzpatrick 

court’s analysis of Westrick v. State Farm Insurance (1982) 137 Cal.App.3d 685

(Westrick). (Fitzpatrick, supra, 57 Cal.App.4th at p. 927.) In Westrick, an insurance 

agent failed to disclose facts about immediate coverage for a recently purchased truck in 

response to a specific inquiry about coverage. (Westrick, supra, 137 Cal.App.3d at

pp. 688-689.) The court determined the agent had a duty to explain a limiting provision 

to the insured because the insured made prior inquiries regarding coverage of a welding 

truck under his existing policy and the agent had superior knowledge of the scope of the 

policy’s automatic coverage clause. (Id. at pp. 691-692.)2

Relevant to this case, the Fitzpatrick court described the third exception, 

Exception C, as applying when “the agent assumes an additional duty by either express 

agreement or by ‘holding himself out’ as having expertise in a given field of insurance 

being sought by the insured (as in Kurtz).” (Fitzpatrick, supra, 57 Cal.App.4th at p. 927, 

citing Kurtz, Richards, Wilson & Co. v. Insurance Communicators Marketing Corp.

(1993) 12 Cal.App.4th 1249 (Kurtz).) The court briefly described the Kurtz case, where

2 We disagree with Murray’s contention this case supports his appeal. 

Exception B required evidence of a request or inquiry for specific insurance to create a 

special duty. Murray only presented evidence he did not understand inland marine 

insurance and he was relying on UPS Capital’s expertise to select appropriate coverage. 

Thus, the Westrick case is not applicable.
20

the court overruled an order sustaining a demurrer without leave to amend after 

concluding the complaint alleged the plaintiff “in its quest for group medical, life and 

accident insurance for its employees, had relied on the defendant broker ‘who held 

themselves out as expert brokers and agents in the field.’” (Fitzpatrick, supra,

57 Cal.App.4th at p. 925.) 

In the Kurtz case, plaintiffs were “not knowledgeable in the field of 

medical, life, and accident insurance, and throughout the process of obtaining insurance 

relied on” the insurance brokers. (Kurtz, supra, 12 Cal.App.4th at pp. 1254-1255.) As 

part of the application process, plaintiff’s treasurer signed a certificate stating the group 

plan was not subject to the Medicare provisions of the Tax Equity and Fiscal 

Responsibility Act of 1982 (TEFRA). Before signing the certificate, plaintiff asked the 

agent what it meant. (Id. at p. 1255.) The agent responded plaintiff was not subject to 

the Medicare provisions of TEFRA and “urged him to sign the certificate.” (Ibid.) Two 

years later, several employees became seriously ill and the insurance company cancelled 

the policy and demanded reimbursement for amounts paid out because the insured falsely 

represented on the certificate that it was not subject to Medicare. (Ibid.) Plaintiff sued 

the agent for fraud, negligent misrepresentation, and negligence. (Ibid.) 

On the element of duty, the Kurtz court rejected the agent’s argument it 

only owed a duty to the insurer and not the insured. (Kurtz, supra, 12 Cal.App.4th at 

p. 1257.) It acknowledged the general no duty rule set forth in Jones and noted “[a]n 

agent may assume additional duties by an agreement or by holding himself or herself out 

as having specific expertise. [Citation.]” (Ibid.) The court concluded the complaint 

alleged facts that if true would establish the agents “entered into a relationship with [the 

insured,] which [give] rise to a duty of care, including a special duty assumed when they 

held themselves out as experts on TEFRA.” (Ibid.) Unfortunately, for purposes of our 

analysis, the court in Kurtz did not specify what facts established the agents held 

themselves out as experts on TEFRA. However, what was plainly obvious in this case 
21

was there was evidence the parties’ interaction created a dependent relationship, whereby 

the client became reliant on the expert advice of the insurance agent. Due to multiple 

factors, the court ruled a jury could reasonably conclude the agent assumed additional 

duties to correctly advise his client and meet his specific insurance needs. 

Returning to the Fitzpatrick case, the court granted an insurance agent’s 

motion for summary judgment, rejecting the insured’s argument Exceptions B and C 

applied, or that public policy called for an expanded duty of care. (Fitzpatrick, supra,

57 Cal.App.4th at pp. 929-930.) In that case, a family (the insured) sued their agent, 

alleging he negligently failed to advise about the availability of a personal umbrella 

policy in addition to an automobile policy. In arguing Exception C applied, the insured 

presented the following facts: (1) the agent knew the insured wanted the upper limits of 

coverage, and despite knowing State Farm offered a $1 million personal umbrella policy 

at no substantial additional costs, the agent told the insured the coverage procured was 

adequate; and (2) State Farm held its agents out as experts in giving advice regarding 

coverage and advertised this expertise in its brochure. (Id. at pp. 927-928.) 

The court in Fitzpatrick rejected application of Exception C, concluding 

State Farm’s brochure (which the insureds never saw) merely suggested that the insured 

ask himself (and then the agent) about additional insurance needs was “far from a 

‘holding out’ of special expertise . . . .” (Id. at p. 929.) The court noted the brochure “in 

very bland terms” suggested “that the insured ask himself or herself—and perhaps then 

the agent—about additional insurance needs.” (Ibid.) The advertisement was insufficient 

evidence the agent was holding itself out as experts in the car insurance field.

The court also rejected the “invitation” to expand the duties of insurance 

agents and brokers to affirmatively volunteer advice about the need for additional 

umbrella coverage. (Fitzpatrick, supra, 57 Cal.App.4th at p. 929.) “The factors cited by 

[the insured] in favor of such an expanded duty, e.g., the longtime relationship between 

them and their agent, the generally superior knowledge of the agent regarding coverages, 
22

the agent’s review of the policies issued, etc., were almost all present in the authorities 

discussed above in which the courts have steadfastly refused to find any such enlarged 

duty. Even if we were disposed to expand the scope of tort duties generally, which we 

are not, this record simply does not present an appropriate basis upon which to do so.” 

(Id. at pp. 929-930.)

In their briefing, UPS Capital and Murray both cite to Travelers, supra, 

215 Cal.App.4th 561. Murray asserts Travelers supports his position that Exception C 

applies to specialists. We agree with UPS Capital’s reading of the case as merely 

reaffirming settled law that insurance brokers owe a limited duty to their clients unless 

the agent assumes additional duties. (Id. at pp. 579-580.) While the case provides a 

helpful outline of the general rule, it does not offer any insight into what characterizes 

holding oneself out as having expertise in a field of insurance. 

Both UPS Capital and Murray also discuss Williams v. Hilb, Rogal & 

Hobbs Ins. Services of California, Inc. (2009) 177 Cal.App.4th 624, 628 (Williams), a 

more helpful case that applied Exception C. In the Williams case, the owner of a 

spray-on truck bed lining dealership brought an action against an insurance agency (the 

agency) after an injured worker obtained a multimillion dollar judgment. (Id. at p. 627.) 

The owner alleged the agency was liable for negligently “advising on, procuring, and 

maintaining an insurance package for a new business venture that did not include workers 

compensation insurance.” (Ibid.) The trial court determined the agency was liable and 

the appellate court agreed, concluding there was ample evidence the agency’s

representative (the agent) held herself out as having expertise in the insurance needs of 

the dealership, creating a special duty of care. (Id. at pp. 637, 640.) 

The court in Williams specifically highlighted the following evidence as 

being relevant to its analysis: (1) the agent previously worked with the owners to bundle 

insurance plans needed for other dealerships and represented herself as “‘the expert on 

the product necessary to satisfy [the dealership’s] insurance needs’”; (2) the agent told 
23

the owners a meeting to discuss insurance plans was not necessary because of her 

expertise; (3) the owner did not request specific insurance and asked the agent for 

insurance “needed to operate the business”; (4) the owner understood the agent was “the 

go-to person” for dealership insurance needs; (5) the owner filled in basic information but 

left blank all the portions of the application relating to insurance coverages; (6) the agent 

selected the insurance coverages and did not give it to the owner to review before she 

submitted it to the insurance company; (7) the agent was aware that employees spraying 

paint had “the most dangerous jobs and that it would be important for a sprayer’s 

employer to know if its insurance provided coverage for on-the-job injuries”; (8) she was 

aware workers compensation insurance was mandatory in California; and (9) the agent 

represented and marketed the insurance package as having been specifically designed for 

the owner. (Williams, supra, 177 Cal.App.4th at pp. 627-628.) It was not until after one 

of the sprayers became severely injured in a fire that the owners learned they did not have 

the necessary workers compensation coverage. (Id. at p. 629.)

The court rejected the agency’s argument there was no legal basis for

finding the agent’s expertise “created a heightened duty to [the owners], because ‘[a]ny 

expertise that she possessed did not extend to worker’s compensation insurance, which 

was outside the scope of her alleged expertise concerning the insurance needs of [the 

dealership,’ and because [the owners] ‘never knew about the supposed expertise, and 

never relied on it.’” (Williams, supra, 177 Cal.App.4th at p. 637.) The court noted the 

first claim was contradicted by the agent’s own claims her staff calculated workers 

compensation premiums and she spoke with the owners about such insurance before she 

sent her insurance proposal. The second claim was refuted by the owner’s testimony he 

understood the agent was “‘the go-to person’” for the dealership’s insurance needs and he 

relied on her expertise and selection of insurance coverages. (Ibid.) The court held there 

was “plenty of evidence” to support the trial court’s finding the agent “held herself out as 

having expertise in the insurance needs of . . . [the] dealerships . . . .” (Ibid.) 
24

UPS Capital argues Williams is inapplicable to the facts because “[t]he 

special expertise that formed the basis for the application of the exception was not merely 

selling a particular bundle of insurance products exclusively for [the truck lining]

dealerships but rather being an expert on the products necessary to satisfy a new 

dealership’s insurance needs.” However, this analysis misstates the exception. The law 

does not necessitate an insurance agent be an expert in the needs of a particular client, nor 

does it only require the agent to procure what is mandated by law. Rather, Williams

applied Exception C because the agent held herself out “‘as having expertise in a given 

field of insurance being sought by the insured.’ [Citation.]” (Williams, supra, 

177 Cal.App.4th at p. 636.) Therefore, contrary to UPS Capital’s argument, to satisfy 

Exception C, there need only be evidence UPS Capital held itself out as having expertise

in inland marine insurance, it did not need to be an expert in Murray’s particular needs.

We are also not persuaded by UPS Capital’s interpretation of the case as 

narrowly defining an agent’s heightened duty as not including the obligation to present or 

explain insurance options. It maintains the duty was limited to procuring insurance 

legally required. The court in Williams determined that when an agent assumes 

additional duties, this may include a duty to advise because the insured is relying on 

“some level of expertise with respect to” the client’s insurance needs. (Williams, supra, 

177 Cal.App.4th at p. 637.) The court unequivocally stated liability was based on the 

agent’s “failure to advise [the owner] of the necessity for [worker’s compensation] 

insurance, and that it was not included in her package for [the] dealerships.” (Ibid., 

italics added.) It ruled the agent “breached the duty she assumed by holding herself out 

as ‘the expert on the product necessary to satisfy [the dealership’s] insurance needs.’”

(Ibid.) We are unaware of any reason why the duty to advise would be limited to only 

state-mandated insurance. Because an insured is relying on the agent’s expertise, the 

duty to advise logically extends to relevant coverage information within the agent’s 
25

“expertise in a given field of insurance being sought by the insured.” (Fitzpatrick, supra,

57 Cal.App.4th at p. 927.) 

C. Our Resolution of the Factors Relevant to Exception C

As mentioned, published case law in California regarding Exception C has 

not yet addressed the question of whether insurance brokers, who sell specialized

insurance, impliedly hold themselves out as experts. Our review of existing case 

authority revealed courts have adopted a flexible approach to determining whether a 

broker or agent has undertaken a heightened duty. We conclude neither case authority 

nor public policy support creation of a per se rule regarding specialists, but rather courts

must utilize a totality of the circumstances approach. 

Cases such as Jones and Fitzpatrick explain an agent cannot be deemed a 

specialist based on factors such as the length of the relationship with the insured, the 

agent’s general superior knowledge regarding coverages, evidence the agent reviewed the 

policies, or unread brochures merely advertising agents are well trained to answer 

questions. Those courts also acknowledged the outcome in their cases would be different 

if the agent was an acknowledged specialist or consultant. The Kurtz and Williams cases

expanded the scope of inquiry, focusing on factors relevant to examining the nature of the 

parties’ interactions. It acknowledged the term “holding out” encompassed more than 

marketing tools (advertising and brochures) and could be based on an agent’s reputation 

as the “go-to” specialist for a particular industry. Furthermore, the Williams court 

determined it can be reasonable to infer agents who customize insurance packages or sell 

exclusively to a distinct class of insured, by their actions, were proffering their expertise. 

It recognized another relevant factor for courts to consider is the degree of control the 

agent asserted in the relationship; if the agent selected the policy for the client then he or 

she has created an expectation of reliance in the agent’s expertise in meeting the client’s 

specific needs. 
26

Additionally, we note the phrase “holding out” outside the context of 

insurance cases has multiple meanings. The dictionary offers the following definitions: 

(1) “to present as something realizable,” (2) “proffer” and (3) “to represent to be.” 

(<https://www.merriam-webster.com/dictionary/hold%20out> [as of Aug. 4, 2020]). 

Estate/paternity cases, often consider whether a father “openly holds out” the child as his 

natural child. (See Estate of Burden (2007) 146 Cal.App.4th 1021, 1028.) These cases 

agree the phrase “holds out” is synonymous with the term “acknowledge,” which is 

commonly defined as “‘“[T]o show by word or act that one has knowledge of and agrees 

to (a fact or truth) . . . [or] concede to be real or true . . . [or] admit.”’” (Id. at p. 1029.) 

Such far-reaching definitions align with the Williams multi-factor approach 

as well as public policy. As our society has evolved, the insurance industry has become 

more sophisticated and developed highly specialized policies, such as insuring body 

parts, e.g., Lloyd’s insured actress America Ferrera’s smile for $10 million.

3

 There are 

countless industries that require specialized insurance coverage, and to meet these everchanging needs, agents/brokers have developed expertise and skill sets tailored to their 

particular specialty. While general insurance brokers should continue to benefit from the 

public policy of protecting them from becoming “‘a blanket insurer for his principal’”

(Jones, supra, 189 Cal.App.3d at p. 956), the same cannot be said for this emerging 

group of highly specialized insurance brokers/agents. In light of all the above, we 

conclude evidence of specialization at a minimum creates a presumption the agent/broker 

anticipates their clients will rely on their acknowledged expertise and supports courts

imposing an extended duty. 

3

<https://www.lloyds.com/about-lloyds/history/innovation-and-unusualrisks/going-out-on-a-limb.> [as of Aug. 4, 2020]. 
27

E. Analysis

As the moving party, UPS Capital had the initial burden to make a prima 

facie showing there was no triable issue of material fact regarding whether it owed 

Murray a heightened duty of care. It asserted the “undisputed communications” did not 

give rise to a special duty because the “onus was on Murray to tell UPS Capital what he 

needed.” It stated an agent’s general duty of care would not include advising Murray 

about the adequacy of coverage. Like the trial court, we conclude UPS Capital carried its

burden of production and the burden shifted to Murray. (Casey, supra, 206 Cal.App.4th 

at p. 1228.) 

We conclude Murray satisfied his burden. While UPS Capital’s evidence 

adequately refuted application of Exception B (applicable when there is a 

request/inquiry), Murray’s evidence raised a triable issue of material fact regarding 

application of Exception C. 

Murray relied upon the following evidence to support his argument there 

was a triable issue of material fact regarding whether UPS Capital held itself out as 

having expertise in marine inland insurance. First, UPS Capital only offered one type of 

policy to one-time shippers, which had limited coverage depending on the type of goods 

being shipped (All-Risk or FPA provisions). Second, the policy was specifically 

endorsed to cover domestic inland shipments by truck. Third, USP Capital was a 

subsidiary of UPS, a shipping company. Fourth, in addition to being a licensed insurance 

broker in 50 states, UPS Capital acted as the agent for one insurance company, offering 

only Tokio’s versions of inland marine insurance policy. 

Fifth, UPS Capital offered UPS shippers its one “house” policy that was

anything but understandable, especially to a one-time customer unfamiliar with marine 

transport insurance. The crucial provision explaining coverage is contained in a single,
28

lengthy, 95-word sentence.4 While the clause used ordinary sounding words, the scope 

of coverage is impossible to decipher. Phrases like “Warranted free from Particular 

Average” and “discharge of cargo at port of distress” are abstruse and require an 

unexperienced reader to guess at the meaning. Moreover, the policy inexplicably 

provided coverage for “any loss or damage” attributed to “conveyance with any external 

substance (ice included) other than water . . . . .” (We are unsure, but we read this to 

mean loss caused by the solid state of water was covered, yet damage caused by the 

liquid or gas state of water were not.) In any event, UPS Capital offered its customers 

only one marine inland policy (with two types of limited coverage), both of which plainly 

required some level of expertise to fully understand. 

Murray presented additional evidence from which the trier of fact could 

reasonably infer UPS Capital was a highly specialized broker holding itself out as having 

expertise in inland marine insurance. As described in Murray’s declaration, a UPS agent 

recommended he call UPS Capital to secure the necessary insurance for his shipment of 

used computer equipment. UPS’s referral suggested UPS Capital was the industry’s 

acknowledged “go-to” broker for inland marine shipping needs. UPS did not offer 

Murray a list of possible insurance brokers to choose from, suggesting only UPS Capital 

possessed the expertise to assist Murray with purchasing the correct policy for his UPS 

shipment. 

Furthermore, UPS Capital selected the policy for Murray. After Murray 

contacted UPS Capital, an agent provided him with a two-page application/payment

4 The FPA provision stated the following: “Warranted free from Particular 

Average unless the vessel or craft be stranded, sunk or burnt, but notwithstanding this 

warranty Underwriters are to pay any loss or damage to the interest insured which may 

reasonably be attributed to fire, collision or contact of the vessel and/or conveyance with 

any external substance (ice included) other than water, or to discharge of cargo at port of 

distress; and also to pay the insured value of any merchandise and/or goods jettisoned 

and/or washed or lost overboard, and the risks of theft of or non-delivery of an entire 

shipping package.”
29

form, having the universally recognized UPS logo in the top right-hand corner. The first 

line simply stated the application was for “House Policy Coverage,” next to the UPS 

logo, without any further explanation as to the type of policy. The rest of the application 

required Murray to provide basic contact information, a description of the type of goods, 

and specifications regarding how the shipment was packaged. Thus, the relationship was 

unlike the customers described in Jones and Fitzpatrick, in which the individual 

purchasing a general policy knows better than the agent about the risks of loss and the 

insured asset. In addition, above the signature line was the following disclaimer: “The 

carrier will rely on the representations provided by you in, and in connection with, this 

application when making decisions regarding any policy we may issue.” A jury could 

reasonably infer the application was created by a specialty broker having expertise in 

selecting appropriate policies for their clients. Further evidence UPS Capital was holding 

itself out as having expertise in this niche market was its e-mail to Murray advising him 

to leave “any ‘Declared Value’ fields blank” on the UPS forms and to “not opt for 

additional package or freight liability coverage when shipping with UPS insurance.”

(Underline omitted.) UPS Capital knowledge and advice about UPS’s shipping forms 

and whether it was necessary to purchase additional coverage in addition to its Tokio 

policy are additional factors suggesting it was holding itself out as having expertise in 

inland marine shipping insurance.

Looking at all of Murray’s evidence, we conclude he met his burden 

opposing the motion for summary judgment. “[L]iberally construing [Murray’s] 

evidentiary submission while strictly scrutinizing [UPS Capital’s] own showing and 

resolving any evidentiary doubts or ambiguities in [Murray’s] favor” (Saelzler, supra,

25 Cal.4th at p. 768), we conclude the evidence could allow a reasonable trier of fact to 

find Exception C applicable. Accordingly, the case must be remanded to permit a jury to

resolve the triable issue of material fact as to whether UPS Capital was holding itself out 
30

as having expertise in a specialized area of insurance, and therefore, assumed a 

heightened duty of care. 

DISPOSITION

We reverse the judgment and remanded the matter for further proceedings. 

Appellant shall recover his costs on appeal. 

O’LEARY, P. J.

WE CONCUR:

BEDSWORTH, J.

GOETHALS, J.