PLAINTIFF WAS NOT A NAMED INSURED AND COULD NOT CLAIM THE INSURER BREACHED A FIDUCIARY DUTY UNDER THE POLICY (Philadelphia Federal)

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Plaintiff asserted that the insurer breached a fiduciary duty. The insurer moved to dismiss, alleging plaintiff was not a named insured. Rather the policy was issued to his mother.  The court rejected plaintiff’s argument that because he was a co-owner of the underlying asset he should be treated as an insured, and the claim was dismissed with prejudice.

The court observed that under Pennsylvania law:

  1. “[A]n insurer does not have a fiduciary duty to an insured, except in limited circumstances such as where the insurer asserts a right to defend claims against the insured.”

  2. “[T]he existence of a fiduciary duty . . . is predicated upon an existing contractual relationship between the insurer and the insured.”

  3. “To determine who is an insured under a given policy, the Court ‘must look to the terms of the [p]olicy.’”

Applying these principles, the plaintiff could not claim a breach of fiduciary duty when he was not a named insured.  “Notwithstanding his alleged co-ownership of the underlying asset, plaintiff cannot claim that the defendants owed him a fiduciary duty or that he was entitled to recover under the terms of the policy.”

Date of Decision: July 13, 2020

Deckard v. Steven Emory, U.S. District Court Eastern District of Pennsylvania CIVIL ACTION NO. 17-5182, CIVIL ACTION NO. 19-2001, 2020 U.S. Dist. LEXIS 122720 (E.D. Pa. July 13, 2020) (DuBois, J.)

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