Sanchez

Summary

An independent adjuster engaged by an insurer owes no duty of care to the claimant insured, with whom the adjuster has no contract. The adjuster is not liable in tort to the insured for alleged negligent claims handling which causes only economic loss.

Facts and Proceedings in Trial Court

The relevant facts, which appear from appellant Luis Sanchez’s first amended complaint, and from a status conference memorandum judicially noticed in the trial court, are as follows: Sanchez was engaged in business, transporting commercial machinery, under the fictitious business name LA Machinery Moving. Sanchez purchased cargo insurance issued by an underwriter at Lloyd’s of London. A commercial dryer was damaged while Sanchez was moving it to Los Angeles. Sanchez made a claim on the cargo policy for repair of the dryer. The damage was capable of repair in one week’s time, at a cost of $12,000. Sanchez advised that immediate repairs were needed because the dryer’s purchaser, Five Star Dye House, was suffering business loss. Lloyd’s engaged respondent Lindsey Morden Claims Services, a claims adjuster, to investigate and adjust the loss. Three months passed before the claim…