Opinion ID: 2632007
Heading Depth: 2
Heading Rank: 4

Heading: Insurer's Alleged Quasi-fiduciary Duty to the Insured

Text: (10) Village Northridge asserts that, as between insurer and insured, a quasi-fiduciary relationship exists as a matter of law. ( Love v. Fire Ins. Exchange (1990) 221 Cal.App.3d 1136, 1147 [271 Cal.Rptr. 246].) It asks us to factor that relationship into our decision here. State Farm is in a legally recognized special relationship with plaintiff, and it has duties that clearly encompass forthright and affirmative disclosure of available policy limits. However, [a]n insurer is not a fiduciary, and owes no obligation to consider the interests of its insured above its own. ( Morris v. Paul Revere Life Ins. Co. (2003) 109 Cal.App.4th 966, 973 [135 Cal.Rptr.2d 718].) As noted above, we see no need to impose a new rule that might or might not further the insured-insurer relationship. State Farm does not claim that a release exempts it from a potential fraud claim. Instead, it asserts only that if Village Northridge brings suit based on alleged fraud after entering into a valid settlement and release, it must comply with our rescission statutes, sections 1688 to 1693. In addition, the Legislature subjects the insurance industry to strict and enforceable standards of conduct through laws against misrepresenting insurance policy limits and fraud in the inducement. (See, e.g., Ins. Code, § 790.03 et seq.)