Opinion ID: 681237
Heading Depth: 3
Heading Rank: 1

Heading: The Reasonable Reliance Issue

Text: 8 Plaintiff contends that the following evidence was sufficient for a jury to find that its reliance was reasonable: (1) testimony that Williams had said that Breshears would be fully covered if vandals caused a gasoline spill from an above ground tank; (2) Williams testified that he intended his customers to rely upon his descriptions of coverage; (3) Williams testified that he knew Federated would deny coverage for such a claim; (4) testimony that plaintiff's President believed the CGL part of the policy applied to above ground tanks; and (5) testimony that plaintiff's President did not have a copy of the 1990 Commercial Package Policy (containing the CGL part) when Williams made the alleged misrepresentations because no copy of the renewed policy was delivered to plaintiff before the spill occurred. We agree with plaintiff that these facts constitute sufficient evidence to support a finding for Breshears on the reasonable reliance issue. 9 Federated argues that other evidence showed that reliance on Williams' statements would be unreasonable as a matter of law. Federated also contends that the language of the policy was clear in explicitly not covering damage of this type, thereby precluding justifiable reliance on Williams' representations as a matter of law. Neither contention has merit. The evidence that Federated points to does not prove that plaintiff's version of the events is untrue or that plaintiff's reliance on Williams' statements was unreasonable. Under California law, even though the policy indeed might not have been reasonably read to cover the losses incurred, absent notice to that effect the insured may still justifiably rely on the contrary representations of the insurer's agent. Clement v. Smith, 16 Cal.App.4th 39, 45 (1993). Although Federated claims to have sent notices to Breshears regarding the effect of the pollution exclusion clauses in the policy, there is no evidence of notice given to Breshears that a vandalism -caused spill would not be covered. Thus we conclude that there was sufficient evidence to support a finding that Breshears reliance on Williams' representations was justifiable.