Seven Bridges Foundation v. Wilson Agency Inc.
When an insurance product is uncommon and complex, and an insurance agent indicates that the agent will furnish advice and counsel, an insurance agent-client relationship can result in a fiduciary duty. Allegedly, the plaintiff, Seven Bridges Foundation, purchased $6.5 million in builders' risk insurance. The plaintiff reduced the builders' risk insurance to $3 million when a portion of the project was completed. Allegedly, a fire destroyed the building, and it cost $5.2 million to repair the damage. The plaintiff lacked enough insurance, and it sued the defendants, the Wilson Agency Inc. and Charles Wilson Jr., alleging negligence and breach of fiduciary duty. The plaintiff's complaint alleged it relied "exclusively upon [the defendants'] advice and recommendations regarding insurance" and would have maintained more insurance, if aware of the risks. "A fiduciary or confidential relationship is characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the interests of the other," pursuant to Dunham v. Dunham, a 1987 decision of the Connecticut Supreme Court. To allege breach of fiduciary duty, a plaintiff must allege: 1.) existence of a fiduciary duty; and 2.) breach of that duty, specifically, a breach of the duty of loyalty and honesty. Allegations that the defendants served as the plaintiff's insurance agents for many years, and that the defendants knew that the plaintiff was not knowledgeable about insurance and relied on the defendants' advice, were sufficient to allege that a fiduciary duty existed. The plaintiff failed to allege that the defendants were not loyal and honest. The plaintiff's complaint did not adequately allege breach of fiduciary duty, and the court granted the defendants' motion to strike that count.