Tri-Delta Engineering, Inc. v. Insurance Co. of North America

Defendants-appellants Cooksey, Battersby & MacBeth, a corporation (hereafter referred to as C, B & M), and Peter Donovan, appeal from a judgment in Santa Clara County Superior Court following a juiy verdict in favor of plaintiff-respondent Tri-Delta Engineering, Inc. (hereafter referred to as respondent) in an action brought by respondent against appellants and Insurance Company of North America (hereafter INA) for breach of contract, negligent misrepresentation, fraud, and breach of duty of good faith and fair dealing, in connection with an insurance policy issued by INA through appellants as brokers and agents.

Appellant Peter Donovan (hereafter Donovan) was an insurance salesman employed by appellant C, B & M, an insurance brokerage firm. C, B & M had an agency agreement with INA, permitting it to write commercial insurance for INA.

In 1973, Donovan learned that INA had a package insurance program for machine shops. He contacted Louis Rizzo, president of respondent Tri-Delta Engineering, to find out whether Rizzo was interested in getting a quote for this coverage. Rizzo responded affirmatively, stating that he was interested in an “all risk” policy. Donovan stated…