Arizona Professional Negligence

Case: Webb v. Gittlen, 174 P. 3d 275 (Az. 2008)

Facts: In 2000, Neal and Gail Berliant purchased The Liquor Vault, a retail liquor store located in Scottsdale, Arizona. With the assistance of Victoria Gittlen, a licensed insurance agent, they purchased a business liability policy and a liability umbrella policy for their new business from Hartford Casualty Insurance Company (“Hartford”). The Berliants contend that Gittlen failed to inform them that they could also purchase separate liquor liability coverage.

Issue: In Webb v. Gittlen, the Arizona Supreme Court unanimously held that claims against insurance agents for professional negligence are assignable to third parties. The decision overturned Premium Cigars International, Ltd. v. Farmer-Butler-Leavitt Insurance Agency, in which the Arizona Court of Appeals held such assignments invalid as contrary to public policy.

Rule of law: Insured’s assigned to plaintiff assignee their rights to sue defendants, an insurance agent and an insurer. The assignee sued defendants, the agent, the insurer, and an insurance agency, alleging negligence and breach of fiduciary duty. A trial court dismissed the claims. The Court of Appeals Division One, Arizona, affirmed. The instant court granted review to consider whether insured’s could assign claims against their insurance agent.

Holding: The decision of the court of appeals and the judgment of the trial court were reversed. The case was remanded for further proceedings.

After Webb v. Gittlen, Arizona joins the majority of jurisdictions that permit assignment of professional negligence claims against insurance agents. The relationship between insurance agents and their clients is personal, but it is not uniquely personal like the relationship between attorneys and their clients. Absent this uniquely personal relationship, the Arizona Supreme Court found no compelling justifications for maintaining the non-assignability rule that prevailed in Arizona for more than five years.

http://scholar.google.com/scholar_case?case=8305606056891876773&hl=en&as_sdt=2&as_vis=1&oi=scholarr

http://www.lexisnexis.com.proxy.msbcollege.edu/hottopics/lnacademic

http://www.supreme.state.az.us/opin/pdf2008/cv070127pr.pdf