Opinion ID: 1645406
Heading Depth: 1
Heading Rank: 4

Heading: ISSUE II: Assignability of a Claim for Breach of Fiduciary Duty

Text: The Eleventh Circuit's second certified question asks whether a claim for breach of fiduciary duty against an insurance broker may be assigned. Wachovia contends that this Court's recent decision in Cowan Liebowitz & Latman, P.C. v. Kaplan, 902 So.2d 755 (Fla.2005), makes it clear that a breach of fiduciary duty is intensely personal because it arises out of a highly confidential relationship, and thus is non-assignable. On the other hand, Holman and Toomey assert that this Court in Forgione v. Dennis Pirtle Agency, Inc., 701 So.2d 557 (Fla.1997), receded from on other grounds by Cowan Liebowitz & Latman, P.C. v. Kaplan, 902 So.2d 755, 757 (Fla.2005), held that the relationship between an insured and an insurance broker is not so personal as to preclude an assignment of the claim against the insurance broker. Wachovia contends that in determining whether the cause of action is assignable, it is the type of duty allegedly breached that has to be identified, not the parties. On the other hand, Holman and Toomey contend that only identifying the duty sets out a bright line rule that all breaches of fiduciary duty are non-assignable. Holman and Toomey argue that instead the relationship between the parties should be examined to determine whether the cause of action is assignable. After reviewing comparable cases, we find that both the duty and the relationship must be examined to determine whether the cause of action is assignable. In the instant case, both the examination of the relationship between the parties and the duty breached lead to the conclusion that the cause of action against Wachovia is assignable. The relationship between IMC and Wachovia was that of an insurance broker and insured. Therefore, Wachovia had the duty to inform and explain the coverage it was providing to IMC and to advise IMC of the changes Wachovia was making to IMC's insurance policy. This Court analyzed the nature of a similar type of relationship in Forgione. We compared the relationship between a prospective insured and an insurance agent to that of an attorney and client. We explained in dicta that an attorney-client relationship is a very personal and confidential relationship because of the constraints placed on communication of the client's information to others. On the other hand, we found that the relationship between a prospective insured and an insurance agent is substantially different because [t]he law does not impose similar constraints on communications between an insurance agent and an insured as it does on communications between an attorney and a client. 701 So.2d at 560. Furthermore, we found that while an attorney-client relationship is personal in that [a]n attorney may not substitute another attorney in his or her place without the client's permission, in an insurance agent-insured relationship, insurance agents are often substituted without prior notification to the insured. Id. Because the instant case involves an insurance broker-insured relationship, our determination in Forgione applies here. Thus, similar to the relationship in Forgione, the relationship between IMC and Wachovia is not so personal and confidential that the cause of action cannot be assigned to Holman and Toomey. Second, an assessment of the duty breached by Wachovia also weighs in favor of assignability. In Cowan, this Court made a similar assessment concerning the duty breached in regard to the legal services an attorney provided to determine whether a legal malpractice claim could be assigned to a third party. In Cowan, we receded from the dicta in Forgione prohibiting the assignment of all legal malpractice claims. 902 So.2d at 757. While acknowledging that the vast majority of legal malpractice cases could not be assigned because of the personal relationship between attorney and client, we said that the legal service itself has to be examined to determine whether or not it is personal in nature. As to the particular facts of Cowan, we determined that the claims assigned did not involve personal services or implicate confidentiality concerns. Id. at 761. Even though laid out in the context of an attorney-client relationship, our decision in Cowan indicates that it is not only the relationship, but also the nature of the services rendered that must be assessed to determine whether a cause of action is assignable. In Forgione, the district court certified the question of whether a claim for negligence by an insured against an insurance agent for failure to obtain proper insurance coverage could be assigned to a third party. In examining this question, we distinguished particular claims that could be assigned and those that were considered personal. We held that causes of action based on a contract or a statute could be assigned. Forgione, 701 So.2d at 559. In addition, an insured's cause of action against an insurance agent for failure to settle a claim in good faith was also determined to be assignable. Id. However, the Court held that purely personal tort claims cannot be assigned under Florida law. Id. Examples of purely personal tort claims that were held not to be assignable were claims for medical malpractice and claims for intentional infliction of emotional distress. Id. (citing Fla. Patient's Comp. Fund v. St. Paul Fire & Marine Ins. Co., 535 So.2d 335 (Fla. 4th DCA 1988), approved, 559 So.2d 195 (Fla.1990); Notarian v. Plantation AMC Jeep, Inc., 567 So.2d 1034 (Fla. 4th DCA 1990)). Thus, the question to determine in the instant case is whether or not the duty breached is a personal tort. In the district court, the jury found Wachovia to have violated its fiduciary duty to IMC in one of several ways. [3] In examining the particular ways in which Wachovia breached its duty to IMC, the breach of fiduciary duty claim appears to actually be a bad faith claim, which Florida courts have held to be assignable. As explained by this Court in Cope, [t]he essence of a `bad faith' insurance suit (whether it is brought by the insured or by the injured party standing in his place), is that the insurer breached its duty to its insured by failing to properly or promptly defend the claim ... all of which results in the insured being exposed to an excess judgment. Cope, 462 So.2d at 460 (quoting Kelly v. Williams, 411 So.2d 902, 904 (Fla. 5th DCA 1982)). When Wachovia summarily removed coverage for IMC's breach of employment contract claims, Wachovia, in essence, refused to defend IMC against the judgment entered in favor of Holman and Toomey. Wachovia did breach its duty by acting in bad faith, which resulted in IMC being exposed to an excess judgment that it was not able to pay. Thus, this claim is in essence a bad faith claim, which has been held to be assignable in Florida courts. See Aaron v. Allstate Ins. Co., 559 So.2d 275 (Fla. 4th DCA) (holding that the insured's cause of action against insurer for failure to provide adequate defense was assignable because not based on a personal tort), review denied, 569 So.2d 1278 (Fla.1990); see also Higgs v. Indus. Fire & Cas. Ins. Co., 501 So.2d 644 (Fla. 3d DCA 1986) (holding that the insured may validly assign to a third party the right to pursue the insured's bad faith claim against his insurer); McNulty v. Nationwide Mut. Ins. Co., 221 So.2d 208 (Fla. 3d DCA) (concluding that a bad faith action is assignable because it arises out of the insurance contract whereby the insurer has a contractual obligation to exercise good faith in settling claims), cert. discharged, 229 So.2d 585 (Fla.1969); Selfridge v. Allstate Ins. Co., 219 So.2d 127 (Fla. 4th DCA 1969). Because the insurance broker-insured relationship between IMC and Wachovia was not a confidential relationship, and because the breach of duty claim against Wachovia was essentially a bad faith claim, the cause of action in the instant case is assignable by IMC to Holman and Toomey. Accordingly, for purposes of the instant case, we answer the second certified questioncan a claim for breach of fiduciary duty against an insurance broker be assignedin the affirmative.