Willkie Obtains Trial Victory for Insurance Broker in Bear v. Marsh

April 30, 2018

Willkie represented Marsh in the case examining “special relationship” doctrine between policyholders and insurance brokers.

On April 23, 2018,  after an 11-day bench trial, Willkie secured a victory in the U.S. District Court for the Southern District of California in favor of insurance broker Marsh USA Inc. in a case involving an evolving area of law – whether and when a “special relationship”  exists between a policyholder and insurance broker.   In 2015, after the POLAR BEAR, a 106-foot custom-built yacht owned by Bear, LLC, was rendered a complete loss as a result of a fire, and Bear’s insurer denied coverage, Bear brought claims against Marsh for breach of oral contract, breach of fiduciary duty, and negligence.  In May 2017, the Court granted Marsh’s motion for summary judgment limiting the scope of the claims, but allowed Bear to proceed to trial on the theory that Marsh had entered into a “special relationship” with Bear that imposed heightened duties and obligated Marsh to advise and recommend that Bear purchase different insurance coverage that Bear alleged would have covered the loss.   In its decision, the Court ruled that Marsh did not enter into a special relationship with Bear that gave rise to a heightened duty to advise and that, in any event, Marsh had procured the proper policy for Bear.  The Court emphasized that “a special relationship is only found in rare circumstances” and that finding the existence of such a relationship in this case “would contravene the purpose of the exception.”

This ruling is significant for insurance brokers as the special relationship doctrine continues to evolve across the country.  The “special relationship” theory of liability had only been tested at trial once before (and with similar results – a victory for Marsh secured by Willkie.)

The Willkie trial team was led by partner Christopher St. Jeanos and associate Jocelyn Sher, and included counsel Ian Hochman and associate Victoria Sheets.