Filed 4/2/14
                           CERTIFIED FOR PUBLICATION

               IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                             FIRST APPELLATE DISTRICT

                                     DIVISION TWO


MICHAEL BOCK et al.,
        Plaintiffs and Appellants,
                                                   A136567
v.
CRAIG HANSEN,                                      (Napa County
                                                   Super. Ct. No. 2657438)
        Defendant and Respondent.


        A 41-foot long, 7,300 pound tree limb crashed onto the home of appellants
Michael and Lorie Bock, an incident they reported to their homeowner’s insurer,
Travelers Property and Casualty Insurance Company (Travelers). Travelers assigned
respondent Craig Hansen to adjust the loss, whose behavior, as alleged by the Bocks, can
best be described as appalling. On Hansen’s first visit to the scene (which lasted no more
than 15 minutes), he altered the scene before taking pictures, spoke derogatorily to
Mr. Bock, and misrepresented the policy coverage, causing the Bocks to begin the clean
up themselves, in the course of which Mrs. Bock was injured. Travelers refused the
Bocks’ request to replace Hansen, who in the course of adjusting the loss is alleged to
have revised an estimate to include a false statement by the Bocks, conspired with an
unlicensed contractor to create a false report, and engaged in various other misconduct.
        The Bocks sued Travelers and Hansen, their claims against Hansen alleging
negligent misrepresentation and intentional infliction of emotional distress. The trial
court sustained Hansen’s demurrer without leave to amend, concluding that the Bocks
“have presented no convincing argument for allowing these claims to stand against
defendant Hansen in what is a contract based action.” We conclude otherwise and
reverse, holding first that negligent misrepresentation can be asserted against an

                                             1
insurance adjuster, and that such claim was adequately pleaded here. We also hold that
the intentional infliction of emotional distress claim was not adequately pleaded, but that
the trial court abused its discretion in denying leave to amend.1
                                     BACKGROUND
       The Facts
       The facts for our analysis are those alleged by the Bocks, all of which are admitted
by Hansen’s demurrer (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967),
as are any facts that may be implied or inferred from those expressly alleged. (Traders
Sports, Inc. v. City of San Leandro (2001) 93 Cal.App.4th 37, 43.) Those facts must be
accepted no matter how unlikely or improbable (Del E. Webb Corp. v. Structured
Materials Co. (1981) 123 Cal.App.3d 593, 604), and without regard to the Bocks’ ability
to prove them. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983)
35 Cal.3d 197, 213-214.) Those facts are these:
       In December 2001, the Bocks purchased from Travelers a homeowner’s policy
covering their home in the city of Angwin, Napa County. The policy covered certain
risks of physical loss to their home and provided additional coverage for debris removal.
       Early on the morning of September 9, 2010, a large limb—41 feet long, some two
feet in diameter, and weighing 7,300 pounds—broke off from an oak tree in the Bocks’
front yard, “crashing into the chimney, the front of the house, and through the living
room window.” The giant limb caused three other large limbs to fall, which came to rest
on a portion of the Bocks’ chimney. The limbs “caused significant damage to the Bocks’
chimney, which had been in working condition prior to the incident and was used as the


       1
         This case was argued on January 22, 2014, and submitted that day. Today,
April 2, 2014, the day the opinion is filed, the clerk’s office received a letter from counsel
advising that the parties have settled and enclosing a stipulation for dismissal of the
appeal. We do not have to accept such stipulation. (See Cal. Rules of Court,
rule 8.244(c)(2).) And we do not, especially in light of the issues presented. (Bay
Guardian Co. v. New Times Media, LLC (2010) 187 Cal.App.4th 438, 445, fn. 2;
Castro v. Superior Court (2004) 116 Cal.App.4th 1010, 1014, fn. 3; DVD Copy Control
Assn., Inc. v. Bunner (2004) 116 Cal.App.4th 241, 245, fn. 2.)


                                              2
Bocks’ primary heating source for their home.” The limbs also broke three windows and
caused damage to the interior of the home, the Bocks’ fence, and Mrs. Bock’s car.
       The Bocks reported the incident to Travelers that same day. Travelers did not
send an adjuster to the scene until the following day, September 10, when Hansen
arrived. Upon arrival, Hansen told Mrs. Bock that he only had a few minutes to review
the damage, and in fact spent no more than ten to fifteen minutes at their home. Before
Hansen took any pictures of the damage, he pushed several branches out of the living
room window. When Mrs. Bock asked Hansen why he had not taken the pictures first, he
ignored her, telling her to “clean up the mess,” and demanding she clean up the living
room. Moving outside, Hansen also removed the limbs leaning against the chimney and
the fence before taking any pictures, all the while making derogatory comments about
PG&E, Mr. Bock’s employer, which Mrs. Bock found rude and upsetting.
       Before leaving, Hansen wrote a check for $675.69. When Mrs. Bock said that the
amount would not be enough to even clean up, let alone repair, the damage, Hansen told
her that cleanup was not covered under the policy and that she should contact “friends
and family members with chainsaws” to clean up the limbs and the mess in the house and
backyard. Relying on these statements, Mrs. Bock attempted to clean up the broken
glass, sustaining a cut on her hand.
       After Hansen left, Mr. Bock discovered that the fallen limbs had caused significant
damage to the chimney. The next day, September 11, Mrs. Bock sent an email to
Travelers Property Field Manager Frank Blaha, reporting the chimney damage. She also
requested that another adjuster be assigned to their claim because Hansen was “rude,
disinterested, and rushed during his initial visit.”
       Travelers ignored the request, and Hansen prepared an estimate, which Blaha sent
to the Bocks on September 13. The estimate, which totaled $3,479.54 , reflected minimal
amounts for each category of repairs needed, and was unreasonably low, as the Bocks
had obtained an estimate the same day in the amount of $2,065 for cut up and removal of
the tree limbs alone.



                                               3
       On September 15, Hansen again came to the house, this time accompanied by
Blaha. The Bocks were present, as was Ron Priest, a licensed general contractor who
was there at the Bocks’ request. Hansen and Blaha were shown the significant cracks in
the chimney, as well as gouges where the limbs had hit it, and Hansen took pictures of
the damage to the chimney. Again, Hansen falsely told the Bocks that their policy did
not cover the cost of clean up, explaining, “If a car had hit the tree causing it to fall, then
the clean-up would be covered but since the wind caused the limb to fall, the cost to clean
up the limbs was not covered.” Hansen told Mr. Bock to get his chainsaw and remove
the limbs himself, and as he did so, Hansen yelled, “Atta boy! See you can do it! Now
go get a few friends to finish it up.”
       On September 17, Travelers provided the Bocks with a revised estimate for the
loss. While the revised estimate increased the amount payable to $3,655.23, it eliminated
amounts previously included for damage to the hardwood floor and fence, based on the
false statement that the Bocks had confirmed during the reinspection that there was no
damage to those items, despite obvious physical evidence to the contrary.
       That same day, acting at the request of Travelers, Roy Anderson of Vertex
Construction Services (Vertex) inspected the Bocks’ house. Neither Vertex nor
Anderson had a valid California contractor’s license. Because the limbs and debris had
already been removed, Mrs. Bock provided Anderson a disk containing digital images
that showed the fallen limbs and damage on the morning of the accident. Anderson sent
Hansen a report dated September 29, detailing the results of his inspection and which
concluded—falsely, the Bocks alleged—that “[n]o scarring, gouging, or scuff marks were
noted on the siding or trim materials on the northeast corner of the residence.”
Anderson’s report also falsely stated that “[t]here was no visual evidence that the fallen
tree branch impacted the chimney, or that the fallen tree branch . . . propagated any
damage to the natural rock chimney,” instead concluding that the “fireplace appear[ed] to
be in good and serviceable condition.” Finally, Anderson’s report concluded that the
observed cracks in the chimney were minor and were “due to the age of the chimney and
the residence,” and that inspection of the interior and exterior of the house revealed that


                                               4
“[t]he only damage . . . due to the fallen tree branch [was] the broken window and
frame.” Hansen did not perform any tests to support his conclusion, and did not include
in his report any statements from the Bocks or Priest.
       By letter dated October 1, Hansen informed the Bocks that based on the Vertex
report Travelers was denying coverage for the chimney damage.
       The Bocks asked Priest, a licensed contractor, to review the Vertex report and
provide a response. He did, preparing a report disputing the false statements contained in
the Vertex report and describing how the tree limb damaged the chimney, a conclusion he
reached having inspected the property three times. On January 14, 2011, the Bocks,
through their attorney, submitted additional information to Travelers, including Priest’s
report, and requested that Travelers reconsider its coverage determination. Travelers
never responded.
       The Proceedings Below
       The Bocks filed a complaint naming Travelers, Hansen, and Vertex. The
complaint asserted six causes of action, including five against Travelers, styled as
follows: first, breach of contract; second, breach of the implied covenant of good faith
and fair dealing (bad faith); third, intentional misrepresentation (false promise with no
intent to perform); fourth, intentional misrepresentation (false statement); and sixth,
violation of Business and Professions Code section 17200 et seq. The fourth cause of
action, for intentional misrepresentation, was also alleged against Hansen. Two causes of
action, the fifth, for intentional interference with contract, and the sixth, were alleged
against Vertex.2
       Travelers demurred to the third, fourth, and sixth causes of action on the ground
that each failed to state a claim. Travelers also filed a motion to strike all allegations that
it acted with malice, oppression, and fraud, and all requests for punitive damages and
attorney fees. As to the third cause of action, promise without intent to perform,


       2
         Vertex answered the original complaint, as well as the first amended complaint ,
and its involvement is not pertinent to the issues before us.


                                               5
Travelers argued that the complaint failed to allege any facts demonstrating that Travelers
never intended to perform under the terms of the policy at the time it was issued to the
Bocks. As to the fourth cause of action, false statement, Travelers argued that the
complaint failed to allege the specificity required of a fraud claim, and was an improper
attempt by the Bocks to turn a contract dispute into a fraud claim. And as to the sixth
cause of action, violation of Business and Professions Code section 17200, Travelers
argued that the Bocks failed to identify a California law that Travelers allegedly violated
and failed to allege conduct that was unfair or fraudulent, since a section 17200 claim
cannot be based on mere claims mishandling.
       The First Amended Complaint
       Before Travelers’ demurrer came on for hearing, the Bocks filed a first amended
complaint (FAC). They withdrew their claim for intentional misrepresentation based on
a false statement, but added claims for negligent misrepresentation (fourth cause of
action) and intentional infliction of emotional distress (a new fifth cause of action). Both
claims were alleged against Travelers and Hansen, and are the causes of action involved
in this appeal.
       The fourth cause of action, negligent misrepresentation, alleged that Hansen
falsely told the Bocks that their policy did not cover the cost of clean up; that Hansen
either knew the representations were false when he made them, or he made them with
reckless disregard of their truth; and that the Bocks relied on Hansen’s false statements
and performed the cleanup on their own, to their detriment.
       The fifth cause of action, intentional infliction of emotional distress, alleged that
the actions of both Travelers and Hansen were extreme and outrageous and were known
by them to be substantially certain to cause the Bocks significant distress. In support of
this allegation, the Bocks asserted that defendants abused their position of power over
them to falsely induce them to perform the cleanup; purposely ignored information
demonstrating coverage when they denied the claim; and withheld information from
Vertex when the chimney was inspected—all to “justify [defendants’] predetermined
course of denying payments justly due to [the Bocks] under the policy.”


                                              6
       Travelers again demurred to all causes of action except for the breach of contract
and bad faith claims. Travelers’ fundamental argument was that the causes of action
were all premised on Travelers’ alleged mishandling of a claim, and was in essence a
dispute properly asserted only as claims for breach of contract and bad faith. Travelers
also filed another motion to strike, again seeking to strike all allegations of malice,
oppression, and fraud, and all requests for punitive damages and attorney fees.
       Following the Bocks’ opposition, and Travelers’ reply, the demurrer and motion to
strike came on for hearing on March 13, 2012. Ten days later, the court issued its brief,
four-paragraph ruling, sustaining the demurrer without leave to amend. The substance of
the order reads in its entirety is as follows:
       “Defendant’s demurrer to the causes of action for intentional and negligent
misrepresentation, intentional infliction of emotional distress and unfair business
practices is SUSTAINED, without leave to amend.
       “It is clear from the allegations, and from the arguments made in plaintiffs’
opposition, that this action is strictly contract based. None of the facts alleged in the
[First Amended Complaint] support a fraud based claim, and plaintiffs have not
suggested any facts they could allege that would support a misrepresentation claim or a
claim for intentional infliction of emotional distress. Because none of these causes of
action are [sic] supported, there is also no basis to include a claim for unfair business
practices.
       “The court notes that plaintiffs previously amended their complaint in response to
a demurrer raising these same arguments as to fraud claims in the original complaint.
Because plaintiffs have not successfully cured the defects noted in that earlier demurrer,
and have not set forth facts and argument suggesting that the defects can be cured, the
court will sustain the demurrer to the subject causes of action without leave to amend.”
       The court also granted Travelers’ motion to strike, again without leave to amend,
explaining in full as follows: “Defendant’s motion to strike plaintiffs’ claims for punitive
damages and for private attorney general attorney’s fees is GRANTED, without leave to
amend. As noted above, the court sustains without leave to amend all causes of action


                                                 7
upon which plaintiffs’ claims for punitive damages and attorney’s fees rest. The FAC
simply contains no allegations to support these claims, and the court finds no basis for
allowing leave to file a second amended complaint.”3
       The court ordered Travelers to answer the remaining causes of action within ten
days, which it did.
       The next month, Hansen filed his own demurrer to the two causes of action against
him, negligent misrepresentation and intentional infliction of emotional distress. As to
the claim for negligent misrepresentation, Hansen argued that the claim failed for four
reasons: (1) the Bocks failed to show that Hansen owed them an actionable legal duty;
(2) the Bocks were simply trying to reconstitute their breach of contract claim against
Travelers as a negligent misrepresentation claim against him; (3) the Bocks had
constructive knowledge of their policy and thus could not justifiably rely on Hansen’s
statement; and (4) the documents attached to the first amended complaint showed that
Travelers did actually pay for debris removal. As to the claim for intentional infliction of
emotional distress, Hansen argued that the Bocks failed to allege extreme and outrageous
conduct, and that a mere denial of benefits is insufficient to support a claim of infliction
of emotional distress.
       The Bocks filed opposition. As to the cause of action for negligent
misrepresentation, the Bocks argued that, while case law may hold that an adjuster cannot
be held liable for breach of contract or bad faith, such authority is “wholly irrelevant to
whether [Hansen] can be held liable for his own deceit.” The Bocks also disputed
Hansen’s claim that Travelers paid all cleanup and removal costs.
       As to the emotional distress claim, the Bocks argued that Hansen ignored
overwhelming evidence that the tree limb hit and cracked the chimney; insulted and


       3
        While the issue of punitive damages is not before us, we find the trial court’s
ruling on the motion to strike curious, as punitive damages may be available when an
insured prevails on a tort claim for breach of the implied covenant of good faith and fair
dealing. (Blue Shield of California Life & Health Ins. Co. v. Superior Court (2011)
192 Cal.App.4th 727, 730, fn. 1.)


                                              8
disparaged them; altered the scene of the accident before taking photographs;
misrepresented the terms of the policy; prepared false claim reports; conspired with
Vertex to prepare an intentionally false report; and knowingly relied on the false report in
order to deny a legitimate claim. Finally, the Bocks requested leave to amend if the court
determined that the first amended complaint lacked specificity.
       Hansen filed a reply, noting that the Bocks completely ignored the court’s prior
ruling dismissing these same causes of action against Travelers. In addition to disputing
the merits of the Bocks’ arguments, Hansen urged the court to sustain the demurrer
without leave to amend because the Bocks had not demonstrated how they could amend
the complaint to cure its deficiencies.
       The court heard argument on Hansen’s demurrer, at the conclusion of which it
took the matter under submission.4 The following week, the court issued a two-
paragraph order, the one substantive paragraph of which reads in its entirety as follows:
       “Defendant Hansen’s demurrer to the FAC is sustained, without leave to amend.
In sustaining co-defendant Travelers’ demurrer, this court previously ruled that plaintiff’s
complaint does not, and cannot, state causes of action for negligent misrepresentation and
intentional infliction of emotional distress. The court recognizes that this demurrer is
brought by a different defendant, but plaintiffs have presented no convincing argument
for allowing these claims to stand against defendant Hansen in what is a contract based
action.”
       Hansen moved for dismissal of the first amended complaint and requested
judgment in his favor. The court granted the motion, and entered judgment for Hansen.
This timely appeal followed.
                                          DISCUSSION
       Standard of Review
       Our standard of review is de novo, as we exercise our independent judgment to
determine whether the complaint states a cause of action as a matter of law. (Traders

       4
           The transcript of the hearing is not in the record before us.


                                                9
Sports, supra, 93 Cal.App.4th at p. 43.) We give the complaint a reasonable
interpretation, reading it as a whole and viewing its parts in context. (Blank v. Kirwan
(1985) 39 Cal.3d 311, 318.)
       Negligent Misrepresentation Can Lie Against an Insurance Adjuster, and
       Such a Claim Was Pleaded Here
       As noted, the trial court held that a negligent misrepresentation claim cannot lie
against an insurance adjuster as a matter of law, adopting the argument made by Hansen
below. Hansen makes the same argument here, beginning his brief with the fundamental
argument that he cannot be held personally liable for negligent misrepresentation “based
on conduct that occurred while adjusting a claim because, as a matter of law, he does not
owe plaintiffs a legal duty.” Or, as Hansen succinctly puts it later, “Courts have held that
agents and employees of insurance companies do not owe a duty to the insured; instead,
any liability for their actions lies on the insurer so long as the agency was disclosed to the
insured and the conduct took place within the course and scope of such agency.
(Sanchez v. Lindsey Morden Claims Services, Inc. (1999) 72 Cal.App.4th 249, 253
(Sanchez); Lippert v. Bailey (1966) 241 Cal.App.2d 376, 382.)” We are not persuaded,
certainly not by the two cases cited.
       Lippert involved insurance agents who were involved in the initial procurement of
the insurance policy, not an adjuster involved in adjusting a loss. It has nothing to do
with the circumstances here. And Sanchez is distinguishable.
       Sanchez, supra, 72 Cal.App.4th 249, arose in the context of a cargo insurance
policy issued to Sanchez, a mover. Some property he was moving for a customer was
damaged during a move, and Sanchez made a claim on the policy for repair of that
property, which Sanchez said would cost $12,000 and take a week. The insurer retained
defendant Lindsey Morden Claims Services (Lindsey), an independent adjuster, to
investigate and adjust the loss. Sanchez advised Lindsey that immediate repairs were
required because the purchaser of the property was suffering business losses. Sanchez’s
advice went unheeded, and three months passed before the claim was paid and the repairs




                                             10
completed. As a result the customer sued Sanchez, and obtained a judgment against him
for $1,325,000. (Id. at p. 251.)
       Sanchez sued the insurer for breach of the insurance policy and also sued the
adjuster on a negligence theory. The adjuster demurred, arguing it had no contract with
Sanchez and owed him no duty of care. The trial court sustained the demurrer without
leave to amend, and the Court of Appeal affirmed, following a six-page analysis of why
no duty of care was owed that would support a claim for negligence. (Sanchez, supra,
72 Cal.App.4th at pp. 250–255.)5
       Sanchez is inapplicable here. The Bocks do not allege negligence. They allege
negligent misrepresentation. They are different torts, as the Supreme Court expressly
observed in Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, 407: “[N]either the courts
(ourselves included), the commentators, nor the authors of the Restatement Second of
Torts have made clear or careful distinctions between the tort of negligence and the
separate tort of negligent misrepresentation. The distinction is important not only
because of the different statutory bases of the two torts, but also because it has practical
implications for the trial of cases in complex areas . . . . [¶] Negligent misrepresentation is
a separate and distinct tort, a species of the tort of deceit.” In short, the elements of each
tort are different. Perhaps more importantly, the policies behind each tort sometimes call
for different results even when applied to the same conduct. (Id. at pp. 396–397,
406-407, 412–413.)
       It is beyond dispute that, in addition to breach of contract, various tort theories are
available to insureds against their insurers. The most prominent, of course, is bad faith.
There are others as well, as the leading California treatise points out: “When supported
by appropriate facts, an insurer’s mishandling of a claim . . . may also be actionable under
one or more of the following alternative tort theories: [¶] . . . [¶] Negligent
Misrepresentation.” (Croskey et al., Cal. Practice Guide: Insurance Litigation (The

       5
        In the course of its lengthy exposition, Sanchez observed that “indeed,
negligence is not among the theories of recovery generally available against insurers.”
(Sanchez, supra, 72 Cal.App.4th at p. 254.)


                                              11
Rutter Group 2013) ¶ 11:9, p. 11-3 (Croskey).) And the treatise goes on to state, in point
blank terms: “The insurer’s agents and employees may have committed some
independent tort in the course of handling the third party claims; e.g., misrepresentation
or deceit, invasion of privacy, intentional infliction of emotional distress, etc. In such
event, they can be held personally liable, even though not parties to the insurance
contract. (See Doctors’ Co. v. Sup. Ct. (Valencia)[(1989) 49 Cal.3d 39,] 47;
Gruenberg v. Aetna Ins. Co.[(1973) 9 Cal.3d 566, 576]; and Younan v. Equifax Inc.
(1980) 111 Cal.App.3d 498, 511 [(Younan)].)” (Croskey, supra, ¶ 12:104, p. 12A-36,
italics added.)
       Witkin is similar: “Tort recovery for improper claims practices may be based on
more intentional torts than breach of the implied covenant . . . . These include the
following: [¶] . . . [¶] (2) Negligent Misrepresentation.” (2 Witkin, Summary of Cal.
Law (10th ed. 2005) Insurance, § 251, p. 371.) This law is well grounded in policy.
       As quoted above, Hansen’s fundamental position, based on Sanchez, is that he
owed no duty to the Bocks. It is true that, as in negligence, “responsibility for negligent
misrepresentation rests upon the existence of a legal duty, imposed by contract, statute or
otherwise, owed by a defendant to the injured person. The determination of whether a
duty exists is primarily a question of law.” (Eddy v. Sharp (1988) 199 Cal.App.3d 858,
864.) We answer that question of law against Hansen, and easily find such duty here.
       In Vu v. Prudential Property & Casualty Ins. Co. (2001) 26 Cal.4th 1142, the
Supreme Court recognized that while the relationship between the insurer and insured is
not a true fiduciary one, it is nevertheless “special,” citing and quoting from cases that
have used various terms to describe that relationship: “[L]ater cases have built upon this
premise and declared that an insurer and its insured have a ‘special relationship’
[citations]. Under this special relationship, an insurer’s obligations are greater than those
of a party to an ordinary commercial contract. [Citation.] In particular, an insurer is
required to ‘give at least as much consideration to the welfare of its insured as it gives to
its own interests.’ [Citation.] Cases have referred to the relationship between insurer and
insured as a limited fiduciary relationship [citation]; as ‘akin to a fiduciary relationship’


                                              12
[citation]; or as one involving the ‘qualities of decency and humanity inherent in the
responsibility of a fiduciary’ [citation]. [¶] The insurer-insured relationship, however, is
not a true ‘fiduciary relationship’ in the same sense as the relationship between trustee
and beneficiary, or attorney and client. [Citation.] It is, rather, a relationship often
characterized by unequal bargaining power [citation] in which the insured must depend
on the good faith and performance of the insurer [citations]. This characteristic has led
the courts to impose ‘special and heightened’ duties, but ‘[w]hile these “special” duties
are akin to, and often resemble, duties which are also owed by fiduciaries, the
fiduciary-like duties arise because of the unique nature of the insurance contract, not
because the insurer is a fiduciary.’ ” (Id. at pp. 1150–1151.)
       Such special relationship leads to the conclusion that Hansen, the employee of the
party in the special relationship, had a duty to the Bocks. Likewise, the general law of
negligent misrepresentation.
       It is generally said that “California courts have recognized a cause of action for
negligent misrepresentation, i.e., a duty to communicate accurate information, in two
circumstances. The first situation arises where providing false information poses a risk of
and results in physical harm to person or property. The second situation arises where
information is conveyed in a commercial setting for a business purpose.” (Friedman v.
Merck & Co. (2003) 107 Cal.App.4th 454, 477.) The setting here involves both:
Mrs. Bock was injured as a result of Hansen’s misrepresentation. And Hansen said what
he said for a business purpose.
       Hansen attempts to diminish the extent of Ms. Bock’s injury, deeming it this
nothing but an “incidental injury [that] does not render the negligent misrepresentation
claim actionable.” We find the potential consequences of such assertion dangerous.
Perhaps Mrs. Bock’s injury was merely an “incidental injury.” Perhaps not. But if it
were, Hansen should consider himself lucky. It is not difficult to imagine Mr. Bock,
being told that the cleanup of a 3.6 ton tree limb is dependent upon his own
resourcefulness and hard work, standing on his roof with a chainsaw in order to clean up
the mess, and accidentally falling, sustaining serious injuries—injuries that might not be


                                              13
recoverable in an action on the policy or the bad faith claim. (See Richards v. Sequoia
Ins. Co. (2011) 195 Cal.App.4th 431, 438 [to prevail in tort action for breach of covenant
of good faith and fair dealing, insured must show proof of economic loss; action is one
seeking recovery of property right, not for personal injury].)
       In any event, the fact is that the Bocks have alleged that Mrs. Bock sustained a cut
on her hand as a result of cleaning up the glass and debris as instructed by Hansen. This
is actionable. (See Rest.2d Torts, § 311: one “who negligently gives false information to
another is subject to liability for physical harm caused by action taken by the other in
reasonable reliance upon such information.”)
       Hansen also argues that he cannot be liable as an agent because he was acting in
the course and scope of his employment. The complete answer is found in the terse
statement of the rule in Witkin: “An agent or employee is always liable for his or her
own torts, whether the principal is liable or not, and in spite of the fact that the agent acts
in accordance with the principal’s directions. [Citations.] [¶] Similarly, an agent who
commits an independent tort, such as fraud, remains liable despite the fact that the
principal, by ratification, also becomes liable.” (3 Witkin, Summary of Cal. Law, supra,
Agency & Employment, § 199, p. 252.)
       Hansen cites three federal cases, two published, one not, which he cites for the
proposition that insurance adjusters can never be liable for negligent misrepresentation
claims if the false statement was made in the course of the adjuster’s employment:
Good v. Prudential Ins. Co. of America (N.D. Cal. 1998) 5 F.Supp.2d 804; Icasiano v.
Allstate Ins. Co. (N.D. Cal. 2000) 103 F.Supp.2d 1187, 1190; and Moreno v. Allstate Ins.
Co. (C.D. Cal. Sep. 10, 2002, Civ. No. S02-1426) 2002 WL 31133203. We find Good
distinguishable and Icasiano and Moreno unpersuasive. Good involved an insurance
agent who made representations about the benefits of an increased variable life insurance
policy, not an adjuster. As to Icasiano, the entire “analysis” of the issue was this: “An
agent of an insurance company is generally immune from suits brought by claimants for
actions taken while the agent was acting within the scope of its agency. (See Lippert v.
Bailey (1966) 241 Cal.App.2d 376, 382; Gasnik v. State Farm Ins. Co. (E.D. Cal. 1992)


                                              14
825 F.Supp. 245, 249; Good, supra, 5 F.Supp.2d at p. 807.) In such cases, the cause of
action lies against the insurance company and not its agent. (See Lippert, supra,
241 Cal.App.2d at pp. 383–384.)” (Icasiano, supra, 103 F.Supp.2d at p. 1189–1190.)
And Moreno did nothing more than follow Icasiano.
       In sum, we hold that a cause of action for negligent misrepresentation can lie
against an insurance adjuster. We also hold that one was adequately alleged here.
       “The elements of negligent misrepresentation are (1) a misrepresentation of a past
or existing material fact, (2) made without reasonable ground for believing it to be true,
(3) made with the intent to induce another’s reliance on the fact misrepresented,
(4) justifiable reliance on the misrepresentation, and (5) resulting damage.” (Ragland v.
U.S. Bank National Assn. (2012) 209 Cal.App.4th 182, 196; CACI 1903.) The Bocks
adequately alleged such claim here, that: Hansen falsely told the Bocks that their policy
did not cover the cost of clean up; Hansen either knew the representation was false when
he made it, or he made it with reckless disregard of their truth; and the Bocks relied on
Hansen’s false statements to their detriment.
       Hansen makes two other arguments, essentially fact-based, as to why the Bocks
cannot state a claim for negligent misrepresentation. Neither has merit. The first asserts
that the Bocks did not justifiably rely on Hansen’s misrepresentation. In Hansen’s words:
“[The Bocks’] reliance was unjustified as a matter of law. An insured cannot justifiably
rely on an adjuster’s representations about coverage when they contradict the express
terms of the policy”; and, he goes on, “[h]ad [the Bocks] read the policy . . . they would
have seen that Hansen’s alleged statements clearly were incorrect.” We are nonplussed:
not only does Hansen acknowledge his “clearly” erroneous statement to the Bocks, but he
then faults them for believing him. In any event, the argument has no merit.
       Over 100 years ago our Supreme Court observed that “ ‘It is a matter almost of
common knowledge that a very small percentage of policy-holders are actually cognizant
of the provisions of their policies . . . . The policies are prepared by the experts of the
companies, they are highly technical in their phraseology, they are complicated and
voluminous . . . and in their numerous conditions and stipulations furnishing what


                                              15
sometimes may be veritable traps for the unwary. . . . [¶] The courts, while zealous to
uphold legal contracts, should not sacrifice the spirit to the letter nor should they be slow
to aid the confiding and innocent.” (Raulet v. Northwestern etc. Ins. Co. (1910) 157 Cal.
213, 230.) As the court put it in Clement v. Smith (1993) 16 Cal.App.4th 39, 49, albeit in
the setting of a claim against an originating insurance agent, “When dealing with a
contract as adhesive as the typical insurance policy, we are unwilling to impose on the
insured so onerous a burden as would automatically defeat any agent’s liability for
misrepresentation. Certainly an insured cannot remain intentionally ignorant of the terms
of his or her policy. . . . Absent some notice or warning, an insured should be able to rely
on an agent’s representations of coverage without independently verifying the accuracy
of those representations by examining the relevant policy provisions.” (Accord, Eddy v.
Sharp, supra, 199 Cal.App.3d at p. 864 [“ ‘ “[it] is a matter almost of common
knowledge that a very small percentage of policy-holders are actually cognizant of the
provisions of their policies . . . .” ’ ”].)
       Hansen’s other fact-based argument asserts that the Bocks did not rely, and did not
“sustain any damage as a result of the representation,” as they had notice when they
received their first estimate, which included a minimal amount for debris cleanup, that
the policy provided coverage. This argument ignores the fact that the Bocks immediately
relied upon Hansen’s statement before an estimate was ever received, the allegation being
that the Bocks began cleaning up the debris while Hansen was still present. Moreover,
the fact that Travelers paid some of the cleanup costs does not mean that the Bocks did
not sustain any damages. Indeed, they expressly alleged that they submitted an estimate
of $2,065 for removal of the limbs, and that Travelers paid only a fraction of the total
cost. And, of course, the Bocks’ own time and effort in the clean up has value.
       The negligent misrepresentation claim against Hansen may proceed.




                                               16
       Intentional Infliction of Emotional Distress Can Lie Against an Insurance
       Adjuster, But Such Claim Was Not Adequately Pleaded Here
       As quoted above, the trial court held that the Bocks “presented no convincing
argument for allowing these claims to stand against defendant Hansen in what is a
contract based action,” apparently holding that such claim failed as a matter of law.
Hansen does not make such argument here, understandably, as the law is otherwise.
(See, for example, Hailey v California Physicians’ Service (2007) 158 Cal.App.4th 452,
473-476; Hernandez v. General Adjustment Bureau (1988) 199 Cal.App.3d 999, 1007;
Fletcher v. Western National Life Ins. Co. (1970) 10 Cal.App.3d 376, 385, 408 [claims
supervisor].) Rather, Hansen’s position is that the Bocks did not allege, and cannot
amend their complaint to allege, the requisite outrageous conduct. We agree with
Hansen’s first statement. But find the second statement premature.
       The law was confirmed in Hughes v. Pair (2009) 46 Cal.4th 1035, 1050–1051
(Pair), where, affirming a summary judgment for defendants, the Supreme Court
observed as follows:
       “A cause of action for intentional infliction of emotional distress exists when there
is ‘ “ ‘ “(1) extreme and outrageous conduct by the defendant with the intention of
causing, or reckless disregard of the probability of causing, emotional distress; (2) the
plaintiff's suffering severe or extreme emotional distress; and (3) actual and proximate
causation of the emotional distress by the defendant’s outrageous conduct.” ’ ” ’ A
defendant’s conduct is ‘outrageous’ when it is so ‘ “ ‘extreme as to exceed all bounds of
that usually tolerated in a civilized community.’ ” ’ And the defendant’s conduct must be
‘ “ ‘intended to inflict injury or engaged in with the realization that injury will result.’ ” ’
[Citation.]
       “Liability for intentional infliction of emotional distress ‘ “does not extend to mere
insults, indignities, threats, annoyances, petty oppressions, or other trivialities.”
[Citation.]’ [Citations.]
       “With respect to the requirement that a plaintiff show severe emotional distress,
this court has set a high bar. ‘Severe emotional distress means “ ‘emotional distress of


                                               17
such substantial quality or enduring quality that no reasonable [person] in civilized
society should be expected to endure it.’ ” ’ ” (To the same effect, see Schlauch v.
Hartford Acc. & Indem. Co. (1983) 146 Cal.App.3d 926, 936 [conduct must be “ ‘ “so
extreme as to exceed all bounds of that usually tolerated in a civilized community” ’ ”];
and CACI 1602 [conduct must go beyond mere insults, indignities, threats, hurt feelings
or bad manners that a reasonable person is expected to endure].)
       The Bocks assert there are numerous ways outrageous conduct may be
demonstrated, including, for example, “ ‘ “if a defendant (1) abuses a relation or position
which gives him power to damage the plaintiff’s interest; (2) knows the plaintiff is
susceptible to injuries through mental distress; or (3) acts intentionally or unreasonably
with the recognition that the acts are likely to result in illness through mental
distress.” ’[Citations.]” (Hailey v. California Physicians’ Service, supra,
158 Cal.App.4th 454 at p. 474.) We generally agree. But whether such a claim measures
up is the question. And referring to this, Croskey notes that “[w]hether particular conduct
is ‘outrageous’ can best be determined in light of holdings in earlier cases dealing with
particular types of conduct. (Soto v. Royal Globe Ins. Co. (1986) 184 Cal.App.3d 420,
430.)” (Croskey, supra, § 11:69, p. 11-22.)
       Seemingly recognizing this, the Bocks contend their allegations “are similar to the
allegations that were made in Younan[, supra,] 111 Cal.App.3d 498, and Little v.
Stuyvesant Life Ins. Co. [(1977)] 67 Cal.App.3d 451.”
       In Younan, supra, 111 Cal.App.3d 498, the Court of Appeal held that the insured
sufficiently pled outrageous conduct where he alleged that his disability insurer required
him to take a medical examination, but instead of sending him to a medical doctor, sent
him to several psychological clinicians, one of whom omitted the results of certain tests
in his report. (Id. at pp. 503–505.) After receiving the false report, the insurer denied the
insured’s claim for disability benefits (id. at p. 506), which denial occurred at a time
when he was unable to earn a living to support himself and his family. (Id. at p. 504.)
       In Little, supra, 67 Cal.App.3d 451, 461–462—which was not a pleading case but
followed a jury verdict for the insured—the Court of Appeal found outrageous conduct


                                              18
when the defendant disability insurer “purposely ignored the great bulk of the medical
information it had and withheld that information . . . to justify its predetermined course of
discontinuing disability benefit payments justly due” under the insured’s policy.
Specifically, the disability insurer terminated benefits after ignoring “overwhelming”
evidence that the insured was totally disabled. (Id. at p. 457.) The insurer then withheld
from its evaluating physician information about the insured’s job duties and reports from
other physicians in order to elicit a pro-insurer opinion from the evaluating physician.
(Id. at pp. 459-460.) As a result of the termination of benefits, the insured was forced to
sell her home and subsequently attempted suicide by ingesting an entire bottle of Valium.
(Id. at p. 460.)
       Relying on these cases, the Bocks argue that their pleading was sufficient. In their
words, “Similar to the factual situation in Little and Younan, the Bocks alleged that
Hansen ignored the overwhelming evidence that supported coverage; altered the scene of
the accident in order to later deny the claim; created a false claim report stating that the
Bocks had confirmed no damage to their floor and fence even though the Bocks never
made those statements . . . ; conspired with an unlicensed contractor to create a
knowingly false report that was used to wrongly deny the Bocks’ claim for damage to
their chimney; and that Hansen knew the chimney was the Bocks’ primary source of heat
and that winter was approaching. [Citation.] [¶] The FAC also alleged that when the
Bocks submitted documentation, including and [sic] expert report and photographs,
directly refuting the stated grounds for the denial, Hansen refused to even acknowledge,
let consider [sic] the information. [Citation.] [¶] The Bocks also alleged that Hansen
made rude and disparaging remarks to them as part of his outrageous course of conduct.
[Citation.] Insults, indignities, and threats are also part on [sic] an outrageous course of
conduct that will subject a defendant to liability. [Citation.]”
       We are not persuaded. The setting here is a far cry from those in Youman or Little,
where the insureds were particularly susceptible to distress, the insured in Younan unable
to provide for his family, the insured in Little forced to sell her house. The Bocks were
not disabled and were not facing a denial of benefits necessary to pay for their daily


                                              19
living expenses. While the Bocks allege that Hansen knew they were vulnerable because
the chimney was their primary source of heating, they do not allege Hasen knew they
would have to go without heat for the winter, did not have the resources to otherwise
repair the chimney, or would be unable to use an alternative heating source—nor that any
of these events actually occurred.
       As noted, Pair was a summary judgment case citing other summary judgment
cases. The Bocks contend that whether conduct is outrageous is “usually a question of
fact,” citing Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th
1004, 1045 and Ragland v. U.S. Bank National Assn., supra, 209 Cal.App.4th 182, 204.
While both cases say what the Bocks represent, many cases have dismissed intentional
infliction of emotional distress cases on demurrer, concluding that the facts alleged do not
amount to outrageous conduct as a matter of law. (See, for example, Mintz v. Blue Cross
of California (2009) 172 Cal.App.4th 1594, 1608–1609; Coleman v. Republic Indemnity
Ins. Co. (2005) 132 Cal.App.4th 403, 416–417; Ricard v. Pacific Indemnity (1982)
132 Cal.App.3d 886, 895.) This case may be another. But it is too early to tell.
       As noted, the Bocks requested leave to amend below, which the trial court denied
without explanation, indeed, probably without reflection, given the basis of its ruling.
We review that denial for abuse of discretion. “While the decision to sustain or overrule
a demurrer is a legal ruling subject to de novo review on appeal, the granting of leave to
amend involves an exercise of the trial court’s discretion. [Citations.] When the trial
court sustains a demurrer without leave to amend, we must also consider whether the
complaint might state a cause of action if a defect could reasonably be cured by
amendment. If the defect can be cured, then the judgment of dismissal must be reversed
to allow the plaintiff an opportunity to do so. The plaintiff bears the burden of
demonstrating a reasonable possibility to cure any defect by amendment.” (Traders
Sports, Inc., supra, 93 Cal.App.4th at p. 43.)
       The Bocks contend that they can allege additional facts to support their claim that
Hansen acted outrageously. According to them, these facts include that “Hansen
deliberately withheld information from Vertex and Roy Anderson in order to ensure that


                                             20
the Vertex report would support Hansen’s pre-determined decision to deny the Bocks’
claim”; that Hansen sent Anderson his own conclusions as to why the chimney damage
was not caused by the tree limbs before Anderson wrote his report; that Hansen
subsequently edited Anderson’s report before it was finalized; and that Hansen’s
supervisor took notes that acknowledged damage to the Bocks’ home, which were never
put into the claim file and have since been destroyed.” The Bocks also claim that they
could state facts that show Hansen abused a relationship of power over them and that he
knew they were susceptible to injuries through mental distress, although they failed to
actually name those facts. In light of the Bock’s contention, and the fact that the trial
court did not even address their request, we reverse, to allow the Bocks to amend their
claim.
                                      DISPOSITION
         The judgment for Hansen is reversed, and the matter remanded for further
proceedings consistent with this opinion. The Bocks shall recover their costs on appeal.



                                                  _________________________
                                                  Richman, J.


We concur:


_________________________
Kline, P.J.


_________________________
Haerle, J.




                                             21
Trial Court:                               Napa County Superior Court

Trial Judge:                               Honorable Diane M. Price


Attorney for Plaintiffs and Appellants:    GCA Law Partners, Kathryn C. Curry,
                                           Kenneth R. Van Vleck

Attorneys for Defendant and Respondent:    Horvits & Levy, Peder K. Batalden, Julie
                                           L. Woods; Weston & McElvain, Randy M.
                                           McElvain




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