Cate School vs Assured Partners of California Insurance Services LLC

Case Number

25CV00633

Case Type

Hearing Date / Time

Fri, 08/29/2025 - 10:00

Nature of Proceedings

CMC; Demurrer

Tentative Ruling

Cate School v. Assured Partners Of California Insurance Services, LLC

Case No. 25CV00633

           

Hearing Date: August 29, 2025                                         

HEARING:              Demurrers Of Defendant To Plaintiff’s Complaint

ATTORNEYS:        For Plaintiff Cate School: Jared M. Katz, Jemma Parker Saunders, Mullen & Henzell L.L.P.

                                    For Defendant AssuredPartners of California Insurance Services, LLC: Caroline A.H. Sayers, Lathrop GPM LLP

                                   

TENTATIVE RULING:

For all reasons discussed herein, the demurrer of defendant to plaintiff’s complaint is sustained as to the fifth cause of action only, with leave to amend. Except as herein sustained, the demurrer is otherwise overruled. Plaintiff shall file its first amended complaint, if any, on or before September 12, 2025.

Background:

On January 28, 2025, plaintiff Cate School filed a complaint against defendant Assured Partners of California Insurance Services, LLC (APC), alleging five causes of action: (1) breach of fiduciary duty; (2) negligence; (3) unjust enrichment and restitution; (4) common count; and (5) conversion. As alleged in the complaint:

Plaintiff is a coeducational college preparatory school located in Carpinteria, California. (Compl., ¶ 1.) APC was an independent licensed insurance broker located in Ventura, California, on whom plaintiff relied for advice in making insurance purchases including as to the nature, extent, and scope of coverage that plaintiff needed. (Compl., ¶¶ 2 & 6.)

Beginning in 2018, plaintiff purchased and renewed primary and excess general liability insurance policies from United Educators (the United Educators policies) which did not include any automobile liability exclusions and which covered “any person legally responsible for the use of an Automobile owned, rented, leased, borrowed, hired or use by an Included Entity with its express permission.” (Compl., ¶ 9.) APC was aware of the United Educators policies. (Ibid.)

Beginning with the 2021-2022 policy period, an “Excess Automobile Liability Endorsement” was appended to the United Educators policies, confirming that the exhaustion of an aggregate underlying limit was not required for, and clarifying an expansion of these policies as applied specifically to, automobile liability claims. (Compl., ¶ 10.)

Though APC knew that plaintiff had the United Educators policies described above, between July 1, 2018, and July 1, 2024, APC advised plaintiff to purchase and placed excess auto liability insurance policies (the Excess Auto Coverage). (Compl., ¶¶ 8, 11-13.) Plaintiff relied on APC’s advice in purchasing the Excess Auto Coverage, including as to the nature, extent and scope of that coverage, and to obtain the best pricing available. (Compl., ¶ 8.) APC failed to advise plaintiff that plaintiff had already acquired the same Excess Auto Coverage under the United Educators policies. (Compl., ¶ 13.) The purchase of the Excess Auto Coverage caused plaintiff to pay $612,783 in premiums for insurance that it would not have otherwise purchased. (Compl., ¶¶ 11-12.)

On July 19, 2023, Sandi Pierce (Pierce), who is plaintiff’s Assistant Head for Finance and Operations, inquired of APC about its recommendation for plaintiff to purchase the Excess Auto Coverage in response to which APC’s agent Allison Westbrook (Westbrook) provided plaintiff with an interpretation of the scope of coverage under the United Educators policies which included quoting only part of that policies’ provisions to reach a conclusion that the United Educators policies did not apply, or that the Excess Automobile Liability Endorsement under those policies excluded automobile liability. (Compl., ¶ 15.) Westbrook’s interpretation was erroneous. (Ibid.)

On August 1, 2023, Pierce contacted United Educators’ underwriter to ask about the accuracy of the advice provided by APC. (Compl., ¶ 16.) That underwriter confirmed to Pierce that the United Educators policies provided excess auto liability coverage contrary to what APC had advised plaintiff in placing plaintiff’s insurance program and earning commissions from the premiums paid by plaintiff for the Excess Auto Coverage. (Ibid.)

Plaintiff relied on APC as an experienced expert and licensed insurance broker recognized in the industry to provide appropriate advice in connection with the purchase and analysis of the Excess Auto Coverage. (Compl., ¶¶ 22 & 24.) Plaintiff did not discover APC’s errors until August 2023. (Compl., ¶ 24.)

When Pierce told APC that it had been providing inaccurate information and erroneous advice to plaintiff, APC’s Senior Vice President and Regional Practice Leader Gregory Stephens (Stephens) advised Pierce for the first time that, while APC may have misinterpreted the United Educators policies and mistakenly believed those policies did not provide excess automobile insurance, APC believed that the excess automobile coverage provided under the United Educators policies was faulty, and that APC had been justified in recommending that plaintiff purchase the Excess Auto Coverage. (Compl., ¶¶ 17-18.)

APC, through Westbrook and Stephens, also acknowledged that APC had never previously discussed its concerns about the United Educators policies with plaintiff and had not afforded plaintiff the ability or opportunity to make an informed choice about whether to rely on the United Educators policies or purchase the Excess Auto Coverage recommended by APC. (Compl., ¶ 19.) Had APC provided accurate advice or afforded a choice to plaintiff, plaintiff would have declined to purchase the Excess Auto Coverage recommended by APC. (Compl., ¶ 20.)

On April 10, 2025, APC, who asserts that it was erroneously sued, filed a demurrer to each of the causes of action alleged in plaintiff’s complaint, on the grounds that plaintiff has failed to allege facts sufficient to constitute a cause of action, and that each cause of action is barred by the applicable statute of limitations and is uncertain.

Plaintiff opposes the demurrer.

Analysis:

“In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules. ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.’ [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

 “If the complaint states a cause of action under any theory, regardless of the title under which the factual basis for relief is stated, that aspect of the complaint is good against a demurrer.” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38 (Quelimane).)

Special demurrer for uncertainty:

A party against whom a complaint is filed may object to that complaint by demurrer, on the grounds that “[t]he pleading is uncertain.” (Code Civ. Proc., § 430.10, subd. (f).) “ ‘[U]ncertain’ includes ambiguous and unintelligible.” (Smith v. Kern County Land Co. (1958) 51 Cal.2d 205, 209.) “A special demurrer on the ground that [a pleading] is (a) ambiguous, (b) unintelligible, or (c) uncertain is insufficient unless the demurrer points out specifically wherein the pleading is ambiguous, uncertain or unintelligible.” (Coons v. Thompson (1946) 75 Cal.App.2d 687, 690.)

Though APC generally asserts, in a conclusory manner, that each of the causes of action alleged in the complaint are uncertain, ambiguous, and unintelligible (see Demurrer at pp. 3-4), wholly absent from the demurrer is any reasoned argument showing specifically where the complaint is uncertain. Furthermore, the court’s review of the complaint shows that its allegations are not so incomprehensible that APC cannot reasonably respond. (Morris v. JPMorgan Chase Bank, N.A. (2022) 78 Cal.App.5th 279, 292.)

In addition, APC includes in its demurrer a narrative of the allegations of the complaint which give rise to each cause of action described above. (Memorandum at pp. 6-7.) This narrative indicates or suggests that the complaint is not so unintelligible or ambiguous that APC cannot understand the issues or the nature of the claims alleged by plaintiff. (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245 [“a plaintiff is required only to set forth the essential facts of his case with reasonable precision and with particularity sufficient to acquaint a defendant with the nature, source and extent of his cause of action”].) For these and all further reasons discussed above, APC has failed to show why the complaint is ambiguous, uncertain, or unintelligible. Therefore, the court will overrule the special demurrer of APC.

Demurrer based on applicable statutes of limitations:

APC contends that the complaint shows that as of July 1, 2018, the date which plaintiff alleges APC procured the Excess Auto Coverage, plaintiff was in possession of all facts regarding, and suffered damages upon the overpayment of premiums for, that coverage. For this reason, APC argues, each cause of action alleged in the complaint accrued on July 1, 2018.

APC further contends that the complaint fails to allege facts showing why plaintiff was unable to discover any purported wrongdoing by APC at the time it placed the Excess Auto Coverage in 2018 or after, or that APC hid any information from plaintiff regarding the Excess Auto Coverage. For these and all further reasons discussed above, APC argues, the statute of limitations applicable to each of the causes of action were not tolled and have run, barring plaintiff’s complaint.

In its opposition to the demurrer, plaintiff argues that any applicable statute of limitations was tolled because the allegations of the complaint show that plaintiff relied on APC as an independent broker, and on APC’s representations that plaintiff required the purportedly unnecessary or duplicative Excess Auto Coverage described in the complaint, which plaintiff alleges were made during each policy renewal period as well as in July 2023, when Pierce inquired about the Excess Auto Coverage.

“A demurrer based on a statute of limitations will not lie where the action may be, but is not necessarily, barred. [Citation.] In order for the bar of the statute of limitations to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred.” (Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403.) “If the dates establishing the running of the statute of limitations do not clearly appear in the complaint, there is no ground for general demurrer. The proper remedy ‘is to ascertain the factual basis of the contention through discovery and, if necessary, file a motion for summary judgment ….’ [Citation.]” (Roman v. County of Los Angeles (2000) 85 Cal.App.4th 316, 324-325, italics omitted.)

The parties here do not appear to dispute that a cause of action upon “a contract, obligation or liability not founded upon an instrument of writing...” is subject to a two-year statute of limitations. (Code Civ. Proc., § 339.) APC further contends that plaintiff’s cause of action for conversion is subject to a three-year statute of limitations under subdivision (c) of Code of Civil Procedure section 338, and that any other cause of action alleged in the complaint not otherwise described above “must be commenced within four years after the cause of action shall have accrued.” (Code Civ. Proc., § 343.)

For all reasons discussed below, APC has failed to show why the complaint clearly and affirmatively shows that each of plaintiff’s causes of action are necessarily barred.

Relevant under the circumstances present here, an “[i]nsurance broker” is “a person who, for compensation and on behalf of another person, transacts insurance other than life, disability, or health with, but not on behalf of, an insurer.” (Ins. Code, § 33; see also Krumme v. Mercury Ins. Co. (2004) 123 Cal.App.4th 924, 931, citation omitted.) “[A]n insurance broker is generally an agent of the insured and not of the insurer.” (Marsh & McLennan of Cal., Inc. v. City of Los Angeles (1976) 62 Cal.App.3d 108, 117.)

APC does not appear to dispute that the express allegations of the complaint show or indicate that APC is an insurance broker upon whom plaintiff “relied for advice in making its insurance purchases, including as to the nature, extent and scope of coverage that [plaintiff] needed.” (See, e.g., Compl., ¶ 6.) APC also does not dispute that the complaint further alleges that APC placed plaintiff’s insurance program and earned commissions from insurance premiums paid by plaintiff. (Compl., ¶¶ 6-7 & 16.) The allegations of the complaint also do not show that APC transacted insurance on behalf of an insurer.

For all reasons discussed above, and giving the allegations of the complaint a reasonable interpretation, the complaint alleges facts which are for present purposes sufficient to show that APC was an insurance broker who, for compensation and on behalf of plaintiff, transacted insurance. These allegations are also sufficient to show that APC acted as an agent of plaintiff. Noted above, APC offers no reasoned factual or legal argument showing why the allegations of the complaint fail to show that it was plaintiff’s insurance broker and agent.

The allegations of the complaint described above also show that each cause of action arises from what plaintiff contends constitutes erroneous or misleading advice provided by APC regarding the United Educators policies, and in connection with plaintiff’s purchase of the Excess Auto Coverage which plaintiff alleges was unnecessary or duplicative of the United Educators policies, and for which APC earned commissions. (See, e.g., Compl., ¶¶ 6-12, 15-19, 27-28, 34-36, 43-44, 49-50, & 54-56.)

The allegations of the complaint do not suggest or indicate that as of July 1, 2018, when APC procured the Excess Auto Coverage or plaintiff paid premiums for that coverage, plaintiff was under an obligation or duty to discover that APC had provided erroneous advice with respect to the United Educators policies or the placement of the Excess Auto Coverage by APC. Instead, if the court accepts as true the allegation that APC was plaintiff’s insurance broker and agent as further discussed above, the complaint is sufficient to show that plaintiff was entitled to rely on APC’s representations at the time the Excess Auto Coverage was placed and renewed “without independently verifying the accuracy of those representations by examining the relevant policy provisions. This is particularly true in view of the understandable reluctance of an insured to commence a study of the policy terms where even the courts have recognized that few if any terms of an insurance policy can be clearly and completely understood by persons untrained in insurance law.” (Clement v. Smith (1993) 16 Cal.App.4th 39, 45-46.)

For all reasons discussed above, the allegations of the complaint do not clearly and affirmatively show that each of the causes of action at issue accrued on July 1, 2018.

Plaintiff also alleges in the complaint that it did not discover that APC had provided inaccurate, misleading, or erroneous information regarding the scope of coverage provided under the United Educators policies in regard to excess automobile liability until August 1, 2023. These facts, for present purposes, are also “deemed to be true, however improbable they may be.” (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604.)

Assuming the truth of plaintiff’s allegations that it relied on APC as its insurance broker for advice in making insurance purchases, including the Excess Auto Coverage, and that plaintiff did not discover the allegedly inaccurate or erroneous advice provided by APC until August 1, 2023, the complaint indicates or suggest that, to the extent a two-year statute of limitations applies, plaintiff was required to file the complaint no later than August 1, 2025. For this and all further reasons discussed above, the allegation of the complaint, if true, indicate or suggest that the filing of the complaint on January 28, 2025, was timely. For this reason, any defect based on a statute of limitations does not clearly or affirmatively appear on the face of the complaint.

Plaintiff’s opposition to the demurrer also raises some question as to whether the allegations of the complaint show that an estoppel to assert an applicable statute of limitations may exist. For example, to the extent the complaint is sufficient to show, for present purposes, that APC knew or should have known that the United Educators policies provided excess auto liability coverage at the time APC recommended and placed the Excess Auto Coverage, that the Excess Auto Coverage was not necessary or duplicative, that plaintiff was ignorant of these facts, and that APC knew or intended that plaintiff would rely on its advice to purchase the Excess Auto Coverage to plaintiff’s prejudice, there is some question in regard to the existence of an estoppel. (Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates, Inc. (2004) 115 Cal.App.4th 1145, 1165-1166 (Hydro-Mill).) The court, for present purposes, expresses no opinion as to this issue apart from its determination of the present pleading challenge.

For all reasons discussed above, the complaint does not clearly and affirmatively show on its face that each cause of action is barred under any applicable statute of limitations. Therefore, the court will overrule the demurrer on this ground.

Demurrer to the first and second causes of action:

As grounds for its demurrer to the first cause of action for breach of fiduciary duty, APC contends that plaintiff alleges no facts giving rise to a fiduciary relationship between APC and plaintiff. Though APC asserts that “the gravamen of the [c]omplaint is for professional negligence” (Demurrer at p. 6, ll. 15-16), APC also appears to contend that the fact pattern alleged in the complaint, which according to APC does not show that APC failed to obtain sufficient insurance, cannot form the basis for the negligence claim alleged in the second cause of action.

An insurance broker may be under a greater duty in circumstances where the broker “misrepresents the nature, extent or scope of the coverage being offered or provided”, the insured makes a “request or inquiry ... for a particular type or extent of coverage”, or the broker “assumes an additional duty by either express agreement or by ‘holding himself out’ as having expertise in a given field of insurance being sought by the insured [citation].” (Fitzpatrick v. Hayes (1997) 57 Cal.App.4th 916, 927; see also Paper Savers, Inc. v. Nacsa (1996) 51 Cal.App.4th 1090, 1096-1097 [general discussion of circumstances under which a greater duty may be imposed].)

In addition, to the extent the complaint alleges facts which, if true, establish that APC entered into a relationship with plaintiff and held itself out as an expert in the type of insurance plaintiff required, these facts may also be sufficient to give rise to a special duty of care owed by APC to plaintiff. (Kurtz, Richards, Wilson & Co. v. Insurance Communicators Marketing Corp. (1993) 12 Cal.App.4th 1249, 1257; see also Williams v. Hilb, Rogal & Hobbs Ins. Services of California, Inc. (2009) 177 Cal.App.4th 624, 639 [discussing issues of fact as to whether agent “held herself out as having expertise in the insurance needs of [plaintiff’s] dealerships, and whether [plaintiff] reasonably relied on that expertise.”].)
 

By way of example, the trier of fact in Westrec Marina Management, Inc. v. Jardine Ins. Brokers Orange County, Inc. (2000) 85 Cal.App.4th 1042, found in favor of plaintiff on plaintiff’s claim that its insurance broker breached a fiduciary duty “by placing “an insurance policy at a premium higher than the best available price....” (Westrec Marina Management, Inc. v. Jardine Ins. Brokers Orange County, Inc. (2000) 85 Cal.App.4th 1042, 1045, 1049-1050.)

Furthermore, “[w]here the agency relationship exists there is not only a fiduciary duty but an obligation to use due care.” (Eddy v. Sharp (1988) 199 Cal.App.3d 858, 865.)

The allegations of the complaint more fully described above are sufficient to show, expressly and by inference, that APC entered into a relationship with plaintiff in 2018 for the purpose of placing plaintiff’s insurance program, that APC held itself out as having expertise in the “complex issue of ... excess auto insurance coverage”, that APC erroneously represented the scope of the United Educators policies and the necessity for the Excess Auto Coverage, that APC placed or procured unnecessary or duplicative insurance on behalf of plaintiff, and that APC failed to appropriately advise plaintiff. (Compl., ¶¶ 6-7, 24.) These allegations are sufficient, for pleading purposes, to show that APC owed a fiduciary duty to plaintiff under the circumstances alleged in the complaint. The court does not consider, for present purposes, whether or not plaintiff can prove these allegations. (Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1034.)

Furthermore, if plaintiff’s complaint states a cause of action under any theory, the demurrer cannot be sustained. (Quelimane, supra, 19 Cal.4th at p. 38.) A demurrer also “cannot rightfully be sustained to part of a cause of action ....” (Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1047 (Kong).)

Even if the court were to determine that the first cause of action fails to allege facts giving rise to a fiduciary duty owed by APC, APC fails to explain why the first cause of action does not state a claim under any theory including with respect to any purportedly incorrect or erroneous representations regarding plaintiff’s existing insurance program or need for the Excess Auto Coverage. (See, e.g., Hydro-Mill, supra, 115 Cal.App.4th at pp. 1154-1156 [discussion of elements of claims for professional negligence and negligent misrepresentation].)

For example, APC fails to explain why the alleged failure to correctly advise plaintiff as to whether the United Educators policies included excess automobile insurance, or why the placing of the purportedly duplicative or unnecessary Excess Auto Coverage by APC, does not constitute a breach of APC’s duty “to use reasonable care and diligence in procuring insurance.” (Mark Tanner Constr. v. Hub Internat. Ins. Servs. (2014) 224 Cal.App.4th 574, 586 (Mark Tanner).)

The elements of a cause of action for negligent misrepresentation are a “misrepresentation of a past or existing material fact, without reasonable ground for believing it to be true, and with intent to induce another’s reliance on the fact misrepresented; ignorance of the truth and justifiable reliance on the misrepresentation by the party to whom it was directed; and resulting damage.” (Home Budget Loans, Inc. v. Jacoby & Meyers Law Offices (1989) 207 Cal.App.3d 1277, 1285.) “California courts have recognized a cause of action for negligent misrepresentation, i.e., a duty to communicate accurate information, in two circumstances. The first situation arises where providing false information poses a risk of and results in physical harm to person or property. The second situation arises where information is conveyed in a commercial setting for a business purpose.” (Friedman v. Merck & Co. (2003) 107 Cal.App.4th 454, 477.)

The allegations of the complaint described above are sufficient to show or suggest the existence of an agency relationship between APC and plaintiff, that APC owed plaintiff a duty to use reasonable care in procuring or placing the Excess Auto Coverage and in communicating accurate information to plaintiff regarding the necessity for that coverage, that APC made inaccurate representations in regard to the scope of the coverage provided under the United Educators policies and the need for the Excess Auto Coverage, that APC did not have a reasonable ground for believing these purported representations to be true, that APC as plaintiff’s insurance broker intended to induce plaintiff’s reliance on the representations described in the complaint regarding the scope of the United Educators policies and the need for the Excess Auto Coverage, plaintiff’s justifiable reliance, and resulting damage to plaintiff. The allegations of the complaint also show that the alleged misrepresentations were conveyed for a business purpose (here, to place insurance and earn commissions).

For all reasons discussed above, the court is unable to conclude, as a matter of law, that the allegations of the complaint, if proven, fail to give rise to a fiduciary duty owed by APC under the circumstances present here. (See, e.g., Mark Tanner, supra, 224 Cal.App.4th at pp. 585-586 [general discussion, also noting that a fiduciary duty may also refer to the “ ‘avoidance of ... self-dealing [or] excessive compensation’ [citation]”].) Furthermore, the complaint states facts sufficient to constitute a cause of action for negligence. To the extent APC contends that the complaint cannot include two negligence causes of action, “ ‘redundancy’ is not a cause for demurrer.” (McDonell v. American Trust Co. (1955) 130 Cal.App.2d 296, 303 (McDonell).) For these and all further reasons discussed above, the court will overrule the demurrer to the first and second causes of action alleged in the complaint.

Demurrer to the third and fourth causes of action:

As to the third cause of action for unjust enrichment/restitution, APC contends that unjust enrichment is a remedy and not a cause of action.

 “ ‘Unjust enrichment is not a cause of action.’ It is ‘just a restitution claim.’ [Citation.]” (De Havilland v. FX Networks, LLC (2018) 21 Cal.App.5th 845, 870.) It “is ‘ “a general principle, underlying various legal doctrines and remedies,” ’ rather than a remedy itself. [Citation.]” (Cameron v. Evans Securities Corp. (1931) 119 Cal.App. 164, 172; Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 793 [also noting that unjust enrichment is “synonymous with restitution”].) “The elements of a cause of action for unjust enrichment are simply stated as ‘receipt of a benefit and unjust retention of the benefit at the expense of another.’ [Citation.]” (Professional Tax Appeal v. Kennedy-Wilson Holdings, Inc. (2018) 29 Cal.App.5th 230, 238.)

Apart from arguing that unjust enrichment is not a cause of action, APC fails to explain, with reasoned argument, why plaintiff has failed to allege APC’s receipt of a benefit (here, commissions on premiums paid by plaintiff as further detailed above) and unjust retention of that benefit at plaintiff’s expense. Furthermore, to the extent APC’s demurrer is directed to a type of remedy alleged in the third cause of action, it cannot be sustained. (Kong, supra, 108 Cal.App.4th at p. 1047.)

As to the fourth cause of action for common count, APC contends that plaintiff alleges the same facts and seeks the same recovery as all other causes of action, and is therefore deficient for the same reasons further discussed above. As further noted above, “[t]he fallacy of [APC’s] argument is that ‘redundancy’ is not a cause for demurrer.” (McDonell, supra, 130 Cal.App.2d at p. 303.) The same reasoning and analysis set forth above with respect to the first and second causes of action apply here.

For all reasons discussed above, the court will overrule the demurrer to the third and fourth causes of action alleged in the complaint.

Demurrer to the fifth cause of action:

APC contends that the fifth cause of action for conversion alleged in the complaint fails because the complaint fails to state facts demonstrating a specific or identifiable sum, because plaintiff’s generalized claim for money is not actionable, and because any disposition of money by APC was consistent with plaintiff’s instructions regarding that disposition.

“Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff’s ownership or right to possession of the property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages.” (Burlesci v. Petersen (1998) 68 Cal.App.4th 1062, 1066 (Burlesci).) “Money can be the subject of an action for conversion if a specific sum capable of identification is involved.” (Shopoff & Cavallo LLP v. Hyon (2008) 167 Cal.App.4th 1489, 1507.) Furthermore, as conversion is a strict liability tort, “questions of the defendant’s good faith, lack of knowledge, and motive are ordinarily immaterial.” (Burlesci, supra, 68 Cal.App.4th at p. 1066.)

The allegations which give rise to plaintiff’s claim for conversion include that APC “wrongfully exercised control over [p]laintiff’s property, namely, the unnecessary policy premiums paid for the duplicative Excess Auto Insurance policies”, that plaintiff “owned or otherwise had a right to possess these funds paid as unnecessary and duplicative policy premiums, that plaintiff was “induced by reliance on [APC’s] misrepresentations ... to make the payments described above and would not have consented otherwise.” (Compl., ¶¶ 54-56.) Plaintiff further alleges it has been damaged in the sum of $612,783, which reflects the amount of premiums paid by plaintiff for the Excess Auto Coverage which plaintiff would not otherwise have purchased. (Compl., ¶¶ 11 & 23.)  

Though the allegations of the complaint describe a sum which is capable of identification, the fifth cause of action for conversion does not, for all reasons discussed below, “fit[] well with the traditional understanding of the tort, nor is well suited to address the particular problem [plaintiff] alleges.” (Voris v. Lampert (2019) 7 Cal.5th 1141, 1162 (Voris).)

“California cases permitting an action for conversion of money typically involve those who have misappropriated, commingled, or misapplied specific funds held for the benefit of others.” (PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 396.) The allegations of the complaint do not show or suggest that APC accepted or held funds paid by plaintiff for the benefit of another and failed to apply those funds in the manner intended by plaintiff (for example, for the payment of the policy premiums alleged in the complaint). Instead, the allegations of the complaint in regard to the payment of policy premiums effectively describe an overcharge for premiums incurred in connection with what plaintiff alleges was unnecessary or duplicate insurance procured by APC. Plaintiff “cite[s] no authority for the proposition that a cause of action for conversion may be based on an overcharge.” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1491–1492.)

Furthermore, “conversion is a strict liability tort. It does not require bad faith, knowledge, or even negligence; it requires only that the defendant have intentionally done the act depriving the plaintiff of his or her rightful possession.” (Voris, supra, 7 Cal.5th at p. 1158.) Under the circumstances alleged in the complaint, a conversion claim based on premiums paid for insurance that was unnecessary or duplicative “would reach well beyond” cases involving a “good-faith mistake.” (Id. at p. 1162.)

For all reasons discussed above, the allegations of the complaint are insufficient to give rise to “an additional tort remedy in the nature of conversion.” (Voris, supra, 7 Cal.5th at p. 1163.) Therefore, the court will sustain the demurrer as to the fifth cause of action for conversion alleged in the complaint.

Leave to amend:

As to the demurrer to the fifth cause of action for conversion, “[p]laintiff must show in what manner [it] can amend [its] complaint and how that amendment will change the legal effect of [its] pleading.” (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) Apart from asserting a general request for leave to amend, plaintiff offers no reasoned argument showing the manner in which the complaint can be amended to cure the deficiencies described herein.

Notwithstanding plaintiff’s failure to show how the complaint may be amended, as this is plaintiff’s original complaint which does not show on its face that it is incapable of amendment, the court will grant plaintiff leave to amend. (Eghtesad v. State Farm General Insurance Company (2020) 51 Cal.App.5th 406, 411-412.)

Plaintiff’s request for judicial notice:

In support of its opposition to the demurrer, plaintiff requests that the court take judicial notice of the “homepage”, the “Business Insurance” page, and the “Educational Insurance” page of APC’s web site. (Pl. RJN at pp. 1-2 & Exhs. 1-3.) Plaintiff contends that these pages provide “important information regarding [APC’s] services provided to clients such as [plaintiff] evidencing [APC’s] role as an independent broker with fiduciary duties to its clients, including [plaintiff].” (Pl. RJN at p. 2, ll. 15-19.)

The pages of APC’s web site, and information appearing in those pages, are not alleged in or attached to the complaint. As a demurrer tests only the pleadings and not extrinsic evidence outside the pleading, the court does not consider these web site pages. (Executive Landscape Corp. v. San Vicente Country Villas IV Assn. (1983) 145 Cal.App.3d 496, 499-500.) The court also does not take judicial notice of the truth of the contents of the pages of APC’s web site described above, which are “plainly subject to interpretation....” (Ragland v. U.S. Bank National Assn. (2012) 209 Cal.App.4th 182, 194; L.B. Research & Education Foundation v. UCLA Foundation (2005) 130 Cal.App.4th 171, 180, fn. 2.)

For all reasons further discussed above, the court will deny plaintiff’s request for judicial notice of the web site pages described above.