Opinion ID: 1221995
Heading Depth: 1
Heading Rank: 5

Heading: liability of klassen

Text: (6) The allegations in plaintiff's causes of action against Klassen are substantially identical to those set forth with respect to CAARP. In addition, plaintiff alleged that in October 1971 Travelers Indemnity Company (Travelers) had refused to insure Warkentin because Klassen had furnished Travelers with a letter from Warkentin's physician which stated that Warkentin was unable to drive safely because of senility; that on October 5, 1971, Klassen filled out Warkentin's application for assigned risk insurance with CAARP and certified he had included all required information given him by Warkentin; that Klassen wilfully omitted furnishing CAARP with the letter from Warkentin's physician; and that Klassen owed a duty to the motoring public to furnish that letter to CAARP. The preceding discussion of CAARP's liability would appear dispositive of the action against Klassen. As explained above, CAARP had no statutory or common law duty to inquire regarding Warkentin's mental or physical condition. In fact, CAARP would have been required by the applicable administrative regulations to accept Warkentin's application under the plan, despite any doubts it might have had regarding his ability to operate a motor vehicle. His case fell within none of the exceptions recognized in the regulations which bound both CAARP and Klassen. It follows, accordingly, that Klassen's alleged knowledge of Warkentin's senility, and the alleged failure to disclose that knowledge to CAARP, is wholly immaterial and would not give rise to a cause of action in favor of plaintiff. It should be noted, further, that imposition of liability under the circumstances of this case could result in undesirable consequences in future cases. Klassen, as Warkentin's agent, owed to Warkentin an affirmative duty of securing assigned risk insurance for him if it could be obtained legally. Imposition of tort liability upon a broker for his failure to volunteer unrequested information regarding the applicant's ability to operate a motor vehicle would create a substantial conflict of interest. The broker in such a situation would be required to choose between serving his client's best interests in obtaining coverage, on the one hand, or protecting himself against personal liability to any member of the motoring public by voluntarily disclosing unsolicited information of a type which cannot affect the carrier's obligation to extend coverage in any event. Such a rule, in our view, would inevitably cause brokers to refuse to seek for their high risk clients assigned risk coverage. This would thereby defeat the clear public policy favoring such insurance. We by no means condone concealment, intentional or otherwise, of informational material called for by insurance applications or questionnaires. We also recognize that in the instant case had there been revealed the information unfavorable to Warkentin there would have been no different result insofar as assigned risk coverage was concerned. Accordingly, we hold that Klassen's obligations to CAARP (and to plaintiff) were satisfied by furnishing only that information sought by CAARP in its application form. The case raises conflicting policy considerations. We think that to impose tort liability on CAARP and Klassen would be to narrow rather than to broaden insurance coverage of California highway accidents and, by decreasing rather than by increasing the number of insured motorists, serve to defeat the demonstrated legislative intent underlying the creation of the assigned risk plan. The judgments of dismissal are affirmed.