## Facts

- Neal and Gail Berliant bought a liquor store, The Liquor Vault, and purchased business and umbrella liability policies through Victoria Gittlen, a licensed insurance agent.
- The Berliants alleged Gittlen did not advise them that they could also purchase liquor-liability coverage.
- The Liquor Vault sold beer to a minor; the beer was given to another youth who crashed his car, killing a passenger, J.W.
- J.W.’s father, D. Jere’ Webb, sued the Berliants and The Liquor Vault for wrongful death.
- The Berliants’ insurer refused to defend the wrongful-death claim on the ground that the Berliants lacked liquor-liability coverage.
- The wrongful-death lawsuit was resolved by a stipulated $3 million judgment against the Berliants; Webb agreed not to execute on the judgment in exchange for an assignment of the Berliants’ claims against their insurer and against Gittlen and her associated agencies.
- Webb sued Gittlen and two insurance agencies, alleging professional negligence and breach of fiduciary duty for failing to advise the Berliants about liquor-liability coverage.

## Issues

1. Whether Arizona law permits insureds to assign to a third party claims against an insurance agent for professional negligence and related breach of fiduciary duty arising from alleged failures in procuring or advising about coverage.
2. Whether public-policy limits on assignment applicable to personal-injury claims or certain legal-malpractice claims bar assignment of insurance-agent negligence claims.

## Decision

- The Arizona Supreme Court reversed the Rule 12(b)(6) dismissal and remanded for further proceedings.
- The court held that claims against insurance agents for professional negligence are assignable to third parties.
- The court overruled prior Arizona authority to the extent it treated professional-negligence claims against insurance agents as non-assignable on public-policy grounds.

## Legal Principles

- Arizona generally permits assignment of unliquidated legal claims, with limited exceptions, most commonly for personal-injury claims.
- Assignability turns on the nature of the claim; insurance-agent professional negligence in failing to procure or advise about coverage is primarily an economic-loss claim, not a “purely personal” injury claim.
- The existence of an underlying tort involving bodily injury does not convert an economic-loss claim against an insurance agent into a personal-injury claim for assignment purposes.
- Public-policy exceptions to assignability are narrow; limits applicable to certain legal-malpractice claims do not automatically extend to insurance-agent negligence because the relationships and confidentiality concerns differ.
- Concerns about collusive or inflated stipulated judgments do not justify a categorical ban on assignment; such concerns can be addressed through existing doctrines governing settlement reasonableness and good faith.

## Conclusion

The Arizona Supreme Court held that insureds may assign professional-negligence and fiduciary-duty claims against insurance agents to third parties, reversed the dismissal based on non-assignability, and remanded for litigation on the merits.


Webb v. Gittlen, 174 P.3d 275 (Ariz. 2008)