After a coverage dispute for damage caused by Hurricane Harvey was settled, the insured's claims against its insurance broker for providing insufficient coverage were dismissed. Hitchcock Indep. Sch. Dist. v. Arthur J. Gallagher & Co., 2021 U.S. Dist. LEXIS 57452 (S.D. Texas Feb. 26, 2021).      The School District suffered $3.5 million in property damage after Hurricane Harvey struck. Its insurers denied coverage and the School District sued. During the litigation, the School District learned that the policies contained an arbitration clause and a New York choice of law provision. Rather than pursue its claims in arbitration, the School District settled with its insurers and sued its broker for failing to obtain insurance without arbitration or choice of law provisions. The broker moved to dismiss     The School District claimed that it had to settle with the insurers for less than what it would have settled had the arbitration and choice of law provisions not been in its policies. The court found this novel theory to be based upon pure speculation.      The court determined that the School District had no claim for breach of fiduciary duty against the broker. The relationship between an insurance agent and an insured did not give rise to a formal fiduciary duty. An informal fiduciary relationship could arise where one person trusts in and relies upon another, whether the relationship is a moral, social domestic, or purely personal one. Such a duty required a special relationship of trust and confidence existing prior to, and apart from, the agreement made the basis of the suit. The fact that the broker had assisted the School District in the past was insufficient to give rise to a fiduciary relationship.      Nor were the claims for fraud, fraudulent, misrepresentation and intentional misrepresentation viable. The broker had no fiduciary duty to the School District, so it had no affirmative duty to disclose the presence of the arbitration clause and choice of law provisions. The School District could have easily discovered these provisions by simply reading the policy.      Therefore, the motion to dismiss was granted. 

from Insurance Law Hawaii https://ift.tt/3n0vlTo