California Service Station & Automobile Repair Ass'n v. American Home Assurance Co.

California Service Station and Automobile Repair Association (CSSARA), CSSARA Services, Inc., and CSSARA Business Insurance Trust appeal a judgment notwithstanding the verdict (JNOV) and alternative grant of a new trial overturning a jury verdict on their negligence action against respondent American Home Assurance Company. Appellants’ claims were based on respondent’s failure to disclose past dividend calculations for its workers’ compensation policies when appellants agreed to market respondent’s policies to their members. This appeal raises two issues regarding the JNOV: (1) whether respondent was liable to appellants based on a presumption of negligence arising out of a violation of section 2505 of title 10 of the California Code of Regulations; and (2) whether it was liable under ordinary negligence principles. We conclude respondent was not liable under either theory and affirm.

Background

We report only those facts necessary for an understanding of the issues we deem dispositive. CSSARA is an industry association representing gas stations, car washes and garages that, among other things, markets insurance to its members. It uses the combined negotiating power of…