Wayne v. DHL Worldwide Express

Filed 6/24/08 Wayne v. DHL Worldwide Express CA2/8

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

APPEAL from a judgment of the Superior Court of Los Angeles County, Wendell Mortimer, Jr., Judge. Affirmed.

The Rossbacher Firm, Henry H. Rossbacher, James S. Cahill, Talin K. Tenley; Hagens Berman Sobol Shapiro, Craig R. Spiegel, and Elaine T. Byszewski for Plaintiff and Appellant.

Orrick, Herrington & Sutcliffe, Edwin V. Woodsome, Jr., D. Barclay Edmundson and Tina Tran for Defendant and Respondent.

* * * * * *

Appellant Alan Wayne brought an action against respondent DHL Worldwide Express, Inc. (DHL), on the ground that DHL is unlawfully selling insurance. The trial court granted a motion for summary judgment brought by DHL. We agree with the trial court that Wayne cannot show that he was injured and that he therefore lacks standing. Accordingly, we affirm the judgment.

FACTS

It is undisputed that on June 21, 2000, Wayne contracted with DHL to ship a package and that Wayne paid $1.40 for shipment insurance, which is now referred to as shipment value protection or SVP.^[1] It is also undisputed that DHL delivered the package on time and at the correct location and that the package was not lost or damaged.

On June 23, 2000, Wayne filed a complaint naming DHL as the sole defendant. The complaint alleges two causes of action, the second of which, brought under the Consumer Legal Remedies Act (Civ. Code, 1750 et seq.), was dismissed at Waynes request. The remaining cause of action alleges that DHL violates Business and Professions Code section 17200 et seq. by (a) selling insurance under the label shipment insurance even though it is not licensed to do so; (b) failing to inform consumers that it does not abide by applicable state laws regarding rate calculations of its shipment insurance; (c) not complying with state laws requiring DHL to file a rating system with the California Insurance Commissioner; (d) charging excessive premiums for shipment insurance; and (d) employing unlicensed persons to sell insurance. We will refer to this as the unfair competition action.

PROCEDURAL HISTORY

This case has been before us on a prior occasion in Wayne v. DHL Express (USA), Inc., No. B171591, filed on May 16, 2005, a nonpublished opinion, wherein we reversed a judgment on the pleadings on the ground that the allegations of the complaint adequately set forth that DHL was selling insurance. We rejected the invitation to consider matters not apparent on the face of the pleadings. (We also traced in our prior opinion the [mis]fortunes of this litigation in federal court, which accounts in part for the lapse of years since the action was commenced in California state court in the year 2000.)

Following the remand of this case, DHL filed two motions for summary judgment. In the motion that is referred to as the Insurance Motion, which is the motion granted by the trial court and which is the subject of this appeal, DHL contended that Wayne lacked standing to bring the unfair competition action because he was not injured in that he lost no money or property as a result of DHLs actions or practices. The Insurance Motion also contended that since the principal object and purpose of the contract between Wayne and DHL, referred to as the Airwaybill, was the carriage of goods and not insurance, SVP is not insurance. Finally, the Insurance Motion contended that DHL is not an unlicensed agent selling insurance on behalf of its marine insurance carrier. The background for the last contention is that DHL has contracted with American Home Assurance Company to insure against losses of property consigned to DHL; DHL is the sole named insured and shippers who purchase SVP do not become additional insureds under DHLs policy with American Home Assurance Company.

DHLs second motion for summary judgment contended that Waynes claim is preempted by the federal Airline Deregulation Act of 1978, which preempts any state laws relating to price, route or service of an air carrier. This is referred to as the Preemption Motion.

The trial court ruled in DHLs favor on all three grounds asserted in the Insurance Motion. In view of this ruling, the trial court held that the Preemption Motion, and a motion for summary judgment filed by Wayne, were moot.

DISCUSSION

Effective November 3, 2004, Proposition 64 amended Business and Professions Code section 17204 to provide in relevant part that a person who has suffered injury in fact and has lost money or property as a result of . . . unfair competition may maintain an action under Business and Professions Code section 17200 et seq. This amendment applies to this case, which was pending when the amendment became effective. (Californians for Disability Rights v. Mervyns, LLC (2006) 39 Cal.4th 223, 227.)

Wayne seeks to show that he was injured in two ways.

First, he contends that he was injured because he paid $0.70 per $100 of value or a total of $1.40 for the stated value of $200 for the package that he shipped. Wayne points to the fact that the marine insurance contract issued by American Home Assurance Company to DHL charges $0.35 per $100 of value and that $0.70 per $100 is therefore an illegal commission. In other words, Wayne contends that the rate charged for SVP is an excessive commission, and that it is the excessive commission that constitutes his injury.

Second, Wayne contends that he was injured by being required to pay $1.40 for insurance that was unlawful.

Neither contention is meritorious.

1. Wayne Is Barred from Contending That the Rate of $0.70 Per $100 Is Excessive

In its motion for summary judgment, DHL contended among other things that there is no private right of action for excessive insurance rates. DHL relied on Farmers Ins. Exchange v. Superior Court (2006) 137 Cal.App.4th 842, 854, which so held. In response, Wayne proposed the additional fact that, initially, Wayne had sought relief in his second cause of action under the Consumers Legal Remedies Act for excessive rates, that this cause of action had been dismissed on Waynes own motion, and that therefore  [e]xcessive rates are no longer at issue in this case.

Waynes declaration that excessive rates are not at issue in this case was not a happenstance event. It was proposed by Wayne as an additional fact in response to DHLs contention that there is no private right of action for excessive insurance rates. Thus, Waynes declaration was no passing comment or footnote in a legal memorandum but a deliberate decision to withdraw and eliminate the matter of excessive rates as an issue in this case.^[2]

A party is not permitted to change a theory on appeal that he has pursued in the trial court. Referred to as the doctrine of the theory of the trial (see generally 9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, 399, pp. 451-452), it prevents a party from doing what Wayne is seeking to do in this appeal. A party is not permitted to change his position and adopt a new and different theory on appeal. To permit him to do so would not only be unfair to the trial court, but manifestly unjust to the opposing litigant. (Ernst v. Searle (1933) 218 Cal. 233, 240-241.)

The matter at hand is not a question of law^[3]but rather a declaration by a plaintiff that a given factual question is not at issue in the case. A common application of the doctrine of the theory of the case is when litigants have tried a case on the theory that a certain issue is material and when, on appeal, a party claims that the issue is immaterial. (9 Witkin, Cal. Procedure, supra, Appeal, 402, pp. 454-455 [Matters in Issue].) By a parity of reasoning, when, as here, a party has definitively declared that a matter is not at issue, the doctrine of the theory of the case prevents that party from asserting a contrary position on appeal.

The considerations that call for the doctrine of the theory of the trial are the same whether a party seeks to eliminate on appeal an issue addressed at trial or, alternatively, when, as here, a party seeks to introduce on appeal an issue deliberately excluded in the trial court. Fairness to the parties and the trial court, and preventing gamesmanship by the litigants, require the same result in both instances. In this case, the trial court and DHL were entitled to rely on Waynes additional fact that excessive rates were not an issue in the case. At a minimum, Waynes assertion of this additional fact had the direct effect of ensuring that nothing would be done to produce facts that would shed light on the question whether a rate of $0.70 per $100 is actually excessive; there was simply no reason to get into this question. Nor of course is there a ruling by the trial court on this issue. Thus, as a reviewing court we are asked to accept a factual assertion at face value ‑‑ that $0.70 per $100 is excessive ‑‑ when it can be confidently predicted that DHL would have sharply challenged this assertion, if it had been tendered in the trial court.

In this connection, we note that the circumstance that American Home Insurance Company charges DHL $0.35 per $100 does not establish that $0.70 per $100 is excessive. Given DHLs size and market position, American Home Insurance Company may well have decided to charge DHL below the market rate. Be that as it may, since this matter was expressly excluded from consideration in the proceedings in the trial court, there are simply no facts of record that speak to this issue.

But, irrespective of what DHL might have done or not done if faced with this issue in the trial court, this case presents a clear instance when a party cannot be permitted to pursue a theory on appeal that he has explicitly and unambiguously abandoned in the trial court. Wayne is barred from asserting in this court that the fee charged by DHL is excessive.

2. The Payment of $1.40 Was Not Payment for Insurance

We note at the outset that Waynes claim that he was injured by the payment of $1.40 rests on the narrow theory that a payment for a service that is illegal constitutes injury in fact. We say narrow because from a pragmatic perspective it is perfectly clear that Wayne suffered no injury: he hired DHL to deliver a package, which DHL did on time and without damage to the contents. Thus, Waynes claim of injury is predicated on nothing more or less than the assertion that DHL required him to pay $1.40 for a service that was illegal.

Viewing the claim of injury in the foregoing terms, there is a preliminary consideration that makes this claim questionable.

It is not true that DHL required Wayne to pay shipment insurance or SVP. Wayne could opt not to pay for this service and could have shipped the package without SVP. Since Wayne voluntarily chose to pay for SVP, it is questionable that he can claim that he was injured by this payment. In other words, he could have avoided this injury by the simple expedient of choosing not to pay. Thus, the injury of which he complains he brought upon himself. In other words, but for Waynes decision to pay for SVP, the injury would not have occurred.

This could end the matter. But, in light of the fact that the trial court and the parties expended considerable time and effort on whether SVP is insurance, we will address this contention on its merits.

Analysis begins with the question whether the contract between Wayne and DHL, the so-called Airwaybill, is a contract of insurance.

In ruling on DHLs motion for summary judgment, the trial court found that Wayne has submitted no evidence that raises a triable issue as to any material fact with respect to the principal object and purpose of the contract. The trial court went on to find that SVP is only one provision of the Airwaybill, that a shipment may be carried out without SVP but that a shipment cannot be effected without an Airwaybill. In sum, the trial court found that the Airwaybills primary object and purpose is transportation.

Wayne had ample opportunity to set forth facts to show that the object and purpose of the Airwaybill was not shipment but insurance; he did not do so. Accordingly, the finding stands that the object and purpose of the Airwaybill is transportation and not insurance.

In determining whether a given contract is a contract of insurance, the decisive question is the principal object and purpose of the contract. (Transportation Guar. Co. v. Jellins (1946) 29 Cal.2d 242, 249.) The fact that the contract includes a distribution of risk is not determinative since many contracts involve a distribution or allocation of risk without being considered contracts of insurance. (Id. at pp. 248-249.) The entire contract, or plan of operation, must be examined to determine whether the principal object and purpose of the contract is service or indemnity.^[4]

We had occasion to apply the principal-object-and-purpose test in Automotive Funding Group, Inc. v. Garamendi (2003) 114 Cal.App.4th 846 (Automotive Funding Group). In that case, Automotive Funding Group, Inc. (AFG), bought installment sales contracts from used car dealers and made loans to the car buyers. AFG obtained a lien on the car as security for the loan. As a condition of the loan, the buyer was required to protect AFGs lien either by obtaining insurance for physical damage to or theft of the car or by participating in the loss damage waiver program (LDW). The LDW expressly stated that it did not provide liability coverage. The charge for LDW was predicated on the loan amount and ranged from $100 to $6,480 per year, the average monthly charge being $55. (Id. at pp. 849-850.) We concluded in that case that [w]e do not believe that the LDW represents the principal object of AFGs transaction. As noted above, the LDW is not mandatory. Nor is there evidence that its cost is inflated, that it provides some profit to AFG, or confers any benefit on AFG apart from covering the risks it assumes under the LDW. Protecting AFGs security interest in the cars it finances is a secondary objective which AFG allows through either third party insurance or the LDW. (Id. at p. 855.)

Although there are some distinctions between this case and Automotive Funding Group, it is noteworthy that in that case we took account of the entire plan of operation, i.e., the entire contract between the car buyer and AFG. If we do likewise in this case, we are left with the undisputed facts that the purpose of the Airwaybill is transportation, that SVP, like LDW in Automotive Funding Group, is not mandatory, and that SVP operates as a service to the shipper. It follows from these facts that SVP is not insurance.

We conclude that the undisputed purpose of the Airwaybill is transportation and not insurance and because SVP is peripheral to that purpose it is not insurance but a service to the shipper.

3. DHL Is Not Selling Inland Marine Insurance

Citing to the fact that DHL has contracted with American Home Assurance Company to insure DHL against losses of property consigned to DHL, Wayne contends that this means that DHL is selling this form of marine insurance to its shippers. DHL propounded as an additional fact that shipment insurance sold by DHL is actually inland marine insurance.

The trial court rejected this contention on the ground that the Airwaybill does not include evidence that contractual privity was created with American Home Assurance Company and that shippers do not become additional insureds under DHLs policy with American Home Assurance Company.

The trial courts conclusions are supported by the declaration of Susan Tribby, who is DHLs director of loss control.

According to Tribby, since 1996 DHL has maintained inland marine insurance with American Home Assurance Company (AHAC). DHL is the sole named insured under the policy. According to Tribby, AHAC will pay DHL, not the shippers, in the event any customer suffers a loss that DHL is responsible for paying. DHLs customers do not become additional insureds under the AHAC cargo inland marine policy when they elect to buy DHLs SVP service at the time of shipment. Tribbys declaration goes on to state that when a loss occurs and the claim is found to be valid, DHL will reimburse the shipper up to $100 if the shipper did not purchase SVP and, if SVP has been purchased, DHL will pay the shipper directly the amount of the declared value. The declaration states: Pursuant to the standard terms of DHLs cargo inland marine insurance policy, DHL is authorized to issue certificates of insurance to shippers who require such a certificate in connection with their shipment. Generally, such a requirement arises from the shipment of goods that constitute a lenders collateral. While DHL is authorized to issue such certificates, DHL has a practice against issuing such certificates on any domestic shipment, and has never issued any such certificates to any shipper placing a domestic shipment with DHL. This includes any shippers who are members of Waynes putative class. The declaration closes by noting that premiums charged by AHAC are not tied to DHLs SVP and that the only information DHL provides AHAC is its gross revenue, making no mention of the value of shipments.

Wayne claims that Tribbys deposition contradicts her declaration. This is incorrect. Tribbys deposition, which was filed under seal and which we have reviewed, is completely consistent with her declaration. As an example, under aggressive questioning by Waynes counsel, Tribby stated over half a dozen times that DHL does not sell insurance and that SVP is not insurance. Her description of the functioning of a certificate of insurance, and of DHLs policy regarding this instrument, is also completely congruent with her declaration, as is her description of DHLs policy with AHAC, including the important fact that DHL is the sole insured under that policy.

In this connection, we reject Waynes contention that the trial court erred in overruling Waynes objections to Tribbys declaration. Contrary to Waynes claim, there was an adequate foundation for her declaration in that she held her position as director of loss control for over a year prior to her deposition in 2006 and before then held a variety of senior management positions with DHL in the same field over a span of several years. She provided an ample showing that she had personal knowledge of the matters as to which she testified and she offered no hearsay testimony on matters that were relevant and were at issue.

Tribbys declaration is completely congruent with the nature and purpose of inland marine insurance. Inland marine insurance had its genesis in marine insurance which historically covered the insurance of ships and their cargoes against loss from both customary and unusual hazards. (1 Appleman on Insurance 2d (Holmes ed. 1996) 1.12, p. 59.) Inland marine insurance developed to cover the goods while in transit over land. Modern inland marine insurance is of various types, of which transportation insurance for goods in transit is one. (Id., pp. 60-61.) For the purposes of this case, a salient aspect of inland marine insurance is that it is insurance taken out by the carrier, to protect the carrier against claims brought against it by the shipper.^[5] Fundamentally, inland marine insurance insures the carrier, not the shipper, although, as we discuss below, the carrier can extend the protection of the inland marine insurance policy to specific shipments.

The nature and function of inland marine insurance is recognized in California Insurance Code section 1635, subdivision (h), which exempts shippers such as UPS [United Parcel Service] and Staples from insurance licensing requirements if they complete or deliver a certificate of coverage under an inland marine insurance contract to their customers without being paid or receiving a commission. (Wayne v. Staples, Inc. (2006) 135 Cal.App.4th 466, 477.) That is, the carrier (e.g., UPS or DHL) obtains inland marine insurance to cover itself and may deliver to the shipper a certificate of coverage under an inland marine insurance contract.^[6] Notably, if the carrier does not charge a commission for the certificate, it is exempt from insurance licensing requirements.

The dissent states that, in opposition to the motion for summary judgment, evidence was propounded that shows that DHL acts as an agent for AHAC. The dissent points to materials generated by DHL that contain statements that DHL will arrange for insurance coverage upon the shippers request.

There is a pragmatic, as well as a conceptual reason why this point of view is not persuasive. Pragmatically, it is undisputed that DHL does not issue certificates of insurance for domestic shipments. Thus, while DHL may well be acting as an agent in international shipments, this simply does not occur in domestic shipments. Conceptually, if DHL would issue a certificate of insurance in a domestic shipment and thus act as an agent in effectively selling a policy issued by AHAC, it could avail itself of the exemption set forth in subdivision (h) of Insurance Code section 1635 by not charging for this service. Thus, in the hypothetical instance of a certificate of insurance issued for a domestic shipment, DHL could avail itself of the statutory exemption.

The question is whether, for the purposes of summary judgment, the statement by DHL that it will arrange for insurance creates a triable issue of fact; the dissent concludes that it does. DHLs retort is that this statement refers to certificates of insurance. In fact, in the Worldwide Express Guide the statement about arranging for insurance is followed by: This coverage shall be governed by all of the terms and conditions contained in the policy issued by the insurance carrier. A certificate of insurance is available upon request from any DHL Service Center. Appellant had an opportunity to present facts showing that DHL in fact does issue certificates of insurance in domestic shipments, and that it charges for this service. Appellant did not do so. This means that it is an undisputed fact that DHL does not issue certificates of insurance in domestic shipments. It follows that the statement about arranging insurance refers to international shipments, which are not the subject of this lawsuit. We conclude for the foregoing reasons that DHLs statement that it will arrange for insurance does not create a triable issue of fact.

We conclude that SVP is not inland marine insurance. DHLs policy with AHAC is inland marine insurance, but DHL does not make that insurance available to its shippers, i.e., to specific domestic shipments.

4. Waynes Claim That He Became an Additional Insured Under DHLs Policy with AHAC Is Without Merit

Wayne contends that the holding in our prior decision in Wayne v. DHL Express (USA), Inc., supra, B171591 that SVP is insurance continues to be controlling. This holding was based on the fact that the complaint alleges that DHL is selling insurance.

In our prior decision, the allegations of the complaint were central because we were considering a judgment on the pleadings. In the instant appeal, however, the allegations of the complaint are not dispositive. In this appeal, the question is whether it is a triable issue of fact whether Wayne became an additional insured under a policy of insurance. In deciding this question, we must look to the facts propounded in support of, and in opposition to, the motion for summary judgment, and not the complaint.

Wayne contends that because there is a provision that DHL may, upon request, issue a certificate of insurance, SVP is in fact insurance. The facts do not support this claim. First, it is undisputed that Wayne was not issued a certificate of insurance. Second, it is also undisputed that DHL has never issued a certificate of insurance on a domestic shipment. That there is a heretofore unrealized potential that DHL might in some future case issue a certificate of insurance does not convert the SVP purchased by Wayne into insurance.^[7]

Wayne also contends that he, like other shippers, automatically becomes an additional insured under DHLs policy with AHAC.^[8]

DHLs AHAC policy states, among other things, that the policy covers shipments for which the Assured [DHL] may hold or receive instructions to effect insurance, provided such instructions be given in writing prior to shipment but excluding such shipments as are bought by the Assured on C.I.F. terms or other terms which include marine insurance. While this provision is not a model of clarity, it appears that a shipper cannot request coverage under the AHAC policy if the shipment is potentially covered by inland marine insurance. This makes sense, since there is no point in two insurance policies when one is perfectly sufficient.

Wayne is therefore mistaken that DHLs AHAC policy automatically extends to cover shippers. In fact, the contrary is true; shippers are not covered by DHLs inland marine insurance policy unless DHL issues a certificate of insurance, which it has never done in the instance of domestic shipments.

5. Wayne v. Staples, Inc.,Supra, 135 Cal.App.4th 466Is Distinguishable from This Case

Relying on Wayne v. Staples, Inc., supra, 135 Cal.App.4th 466, Wayne contends that the sale of SVP by DHL is actually the sale of inland marine insurance. Wayne v. Staples, Inc., held that sale of insurance coverage as an incidental part of a more extensive transaction is subject to regulation by the Insurance Code, irrespective of the principal-object-and-purpose test set forth in Transportation Guar. Co. v. Jellins, supra, 29 Cal.2d 242, 249. (Wayne v. Staples, Inc., supra, at pp. 476-477.)

The fact of the matter is that Wayne v. Staples, Inc.,is a case that shows inland marine insurance in operation. In that case, UPS was the shipper. Staples accepted goods for shipment by UPS. Shippers could buy excess value coverage for $0.35 per $100 of value; this amount was collected by Staples and forwarded to UPS. UPSs excess value coverage or excess value insurance is provided through an inland marine basic policy from the National Union Fire Insurance Company of Pittsburgh, Pa. (National Union). Customers who purchase the coverage at Staples or at other UPS shipping sites are additional insureds under the policy. (Wayne v. Staples, Inc., supra, 135 Cal.App.4th at p. 472.) Indeed, it appears that in the trial court Staples admitted that excess value insurance was, in fact, insurance. (Id. at p. 475, fn. 3.) In sum, UPS, as the carrier, was the insured under its inland marine policy with National Union and could certify shippers as additional insureds under that policy. When it did so, the particular shipment was covered under the National Union policy.

This case differs from Wayne v. Staples, Inc.,because in this case the carrier, DHL, does not make its inland marine insurance available to shippers. This is shown by the undisputed fact that DHL has not issued a certificate of insurance to Wayne or any other domestic shipper. This is corroborated by the undisputed fact that in case of loss it is DHL, and not AHAC, that will pay for the loss if the shipper has purchased SVP. This is yet another distinction between these two cases since in Wayne v. Staples, Inc.,the loss was paid by National Union and not UPS.

The refusal of the court in Wayne v. Staples, Inc., to follow the principal-object-and-purpose test is explained by the important fact that excess value coverage in that case was admittedly insurance, specifically inland marine insurance. Nonetheless, it is undeniable that there is a certain tension between the principal-object-and-purpose test and the opinion of the court in Wayne v. Staples, Inc., a tension that is underlined by Justice Woodss dissent in that case. It is not for us to resolve that tension. We note, however, that the principal-object-and-purpose test was laid down by the California Supreme Court, that it continues to be authoritative (2 Witkin, Summary of Cal. Law (10th ed. 2005) Insurance, 8(1), p. 30) and that it is therefore incumbent on us to follow that decision.

6. The Balance of Waynes Contentions Are Without Merit

The trial court granted DHLs motion to strike the reports of five alleged experts who opined that DHL is selling insurance. Although Wayne contends on appeal that this was not evidence but persuasive authority, we think that these declarations were neither evidence, nor persuasive, nor even authoritative. An expert opinion on an issue of law is inadmissible. (See generally 1 Witkin, Cal. Evidence (4th ed. 2000) Opinion Evidence, 97, pp. 644-646.) For the same reason, the court did not err in striking that portion of Waynes declaration in which he states that SVP is insurance.

Finally, the trial court ruled correctly in striking a blank certificate of insurance attached to Waynes opposition to the motion for summary judgment. Wayne was never issued a certificate of insurance. Moreover, this document, even in the abstract, is irrelevant because it is undisputed that DHL has never issued it in a domestic shipment.

7. Conclusion

In sum, it is undisputed that Wayne, and a shipper in Waynes position, never became an insured under DHLs policy with AHAC. Thus, even if we ignore the fundamental fact that Wayne is the cause of his own injury because he voluntarily bought SVP and even if we apply Wayne v. Staples, Inc., supra, 135 Cal.App.4th 466 and ignore the principal-object-and-purpose test, which we think applies to this case, Wayne cannot show that what he purchased was insurance. Accordingly, he cannot prevail with his contention that the $1.40, which he voluntarily paid for SVP, was an illegal exaction. In other words, he was not injured.

DISPOSITION

The judgment is affirmed. Respondent is to recover its costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

FLIER, J.

I concur:

EGERTON, J.^*

RUBIN - I respectfully dissent.

I agree with much of the majoritys analysis, including its discussion of Automotive Funding Group, Inc. v. Garamendi (2003) 114 Cal.App.4th 846.

I depart with the majoritys apparent finding that DHL Worldwide Express, Inc. (DHL) is not in the business of selling insurance on behalf of American Home Assurance Company (AHAC). It may very well be that the evidence is more persuasive that insurance is not being sold to appellant Alan Wayne, that the only insurance involved in this and similar transactions is inland marine insurance that AHAC sells to DHL, and that the protection that a shipper purchases is, in the words of the majority, some other form of service to the shipper. (Slip opn., at p. 9.) But this case does not come to us after a court trial where the trial judge has found more persuasive one of several disputed factual scenarios or has placed greater reliance on some evidence over other. This is an appeal from the grant of summary judgment where neither the trial judge nor this court is allowed to weigh the evidence or choose among conflicting inferences. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 856.)

In my view, evidence in opposition to the summary judgment motion, if believed, suggests insurance is being sold to Wayne and that DHL is acting as an agent for AHAC in that sale. If that is so, then because DHL is not licensed, DHL may be in violation of Insurance Code section 1631.^[9] Such conduct would give rise to a private cause of action for unfair competition under Business and Professions Code 17200. I thus conclude summary judgment should have been denied as a triable issue of fact exists.

The most telling piece of evidence that insurance and not another service is being sold is that DHL refers to the product as shipment insurance. The majority uses the acronym SVP to refer to the products current name shipment value protection but this moniker came about only after the transactions in question had taken place. I acknowledge that merely calling something insurance does not make it so, but the majority seems too quick in its willingness to find the converse.

The next fact that suggests DHL is selling insurance is that DHL is making money off the transaction. Although there is a dispute about whether it is earning a 50 percent commission, there does not appear to be any dispute that when the insurance is purchased, AHAC profits as does DHL. DHL takes the position that it is not a carrier a position echoed by Waynes counsel at oral argument but a reasonable inference from that concession is that AHAC, undisputedly an insurance carrier, is the principal and DHL is its agent in the sale of the insurance.

Further support for this conclusion is found in the declaration testimony of DHLs own witness, Director of Loss Control Susan Libby. She states: Pursuant to the standard terms of DHLs cargo inland marine insurance policy, DHL is authorized to issue certificates of insurance to shippers who require such a certificate in connection with their shipment. If DHL is not the carrier but is issuing a certificate of insurance, one reasonable inference is that it is issuing the certificate as an insurance agent for the carrier, here, AHAC. It is true that Libby also testified that DHL has a practice against issuing such certificates on any domestic shipment, and has never issued any such certificates to any shipper placing a domestic shipment with DHL. Accepting her statement as true does not suggest that DHL is not the broker in this transaction; it just means DHL has not in fact issued certificates even though it is authorized by the agent/principal relationship with AHAC to do so.

Finally, DHLs own written materials suggest that DHL is acting as AHACs agent. For example, the Shipment Airwaybills advises shippers: We recommend that you insure your shipment with DHL. We can arrange insurance for you for up to US $5 million. Please note that our shipmentinsurance does not cover [certain losses]. And DHLs World Wide Express Guide provides: DHL will, upon shippers request and payment of an additional charge, arrange insurance coverage in an amount not to exceed US $25,000. Insurance amounts in excess of $25,000 may be arranged with prior notice and approval by DHL. (Emphasis added.) While the word arrange could mean that DHL only provides names or recommendations of insurance carriers, a contrary reasonable inference, especially in light of the phrase our shipment insurance is that DHL, as agent, will broker the sale of insurance to the shipper. DHL is paid directly by the shipper for this service, and the fee is divided between principal and agent.^[10]

The majoritys analysis is sound as far as it goes. If the current appeal only challenged substantial evidence to support a judgment, I, too, would favor affirmance. But this is a motion for summary judgment and in my view there are reasonable inferences that can be drawn from the evidence that DHL is acting as an agent in the sale of insurance.^[11]

RUBIN, Acting P.J.

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^[1] DHL changed shipment insurance to shipment value protection in 2002. We will use SVP on the understanding that when Wayne paid for this item, it was called shipment insurance.

^[2] In its reply to this additional fact propounded by Wayne, DHL commented that this meant that Wayne had admitted that he was not injured in fact in the sense of Business and Professions Code section 17204 and therefore lacked standing.

^[3] An exception to the doctrine of the theory of the case may arise when the appellant adopts a new legal theory based on the same facts that were developed in the trial court. (9 Witkin, Cal. Procedure, supra, Appeal, 407, p. 459.) This exception manifestly does not apply to an express representation that a given fact ‑‑ whether the rates are excessive ‑‑ is not at issue. See text, post.

^[4] The opinion in Jordan v. Group Health Assn. (1939), 107 F.2d 239, 245, and that in California Physicians Service v. Garrison (1946), 28 Cal.2d 790, make it clear that the element of assumption of risk or indemnification of loss is not controlling. As stated in the Jordan case (p. 247 of 107 F.2d), That an incidental element of risk distribution or assumption may be present should not outweigh all other factors. If attention is focused only on that feature, the line between insurance or indemnity and other types of legal arrangement and economic function becomes faint, if not extinct. . . . But obviously it was not the purpose of the insurance statutes to regulate all arrangements for assumption or distribution of risk. That view would cause them to engulf practically all contracts, particularly conditional sales and contingent service agreements. The fallacy is in looking only at the risk element, to the exclusion of all others present or their subordination to it. The question turns, not on whether risk is involved or assumed, but on whether that or something else to which it is related in the particular plan is its principal object and purpose. In the California Physicians Service case it is held that (p. 809) Absence or presence of assumption of risk or peril is not the sole test to be applied in determining . . . status. The question, more broadly, is whether, looking at the plan of operation as a whole, service rather than indemnity is its principal object and purpose.  (Transportation Guar. Co. v. Jellins, supra, 29 Cal.2d 242, 248-249.)

^[5] Thus, the term inland marine was employed to embrace all manner of risks to goods originally considered comparable to marine policies in that the carrier or custodian had goods in his possession for the loss of which he was answerable to the owner with a certain few exceptions. To protect himself against legal loss and to protect his good will by making good such losses to the one who had entrusted the property to his custody, he sought a coverage embracing these aspects. (1 Appleman on Insurance 2d, supra, 1.12, p. 60.)

^[6] Subdivision (h) of Insurance Code section 1635 is predicated on the fact that the carrier has an insurable interest: The completion or delivery of a declaration or certificate of coverage under a running inland marine insurance contract evidencing coverage thereunder and including only those negotiations as are necessary to the completion or delivery if the person performing those acts or his or her employer has an insurable interest in the risk covered by the certificate or declaration.

^[7] We note parenthetically that if DHL issues a certificate of insurance in the future, it could avail itself of the exception crafted for inland marine insurance by Insurance Code section 1635, subdivision (h) (see text, ante, p. 12) by not charging a fee for the SVP issued to the shipper.

^[8] This contention was particularly stressed during oral argument.

^* Judge of the Los Angeles County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.

^[9] Section 1631 provides: Unless exempt by the provisions of this article, a person shall not solicit, negotiate, or effect contracts of insurance, or act in any of the capacities defined in Article 1 (commencing with Section 1621) unless the person holds a valid license from the commissioner authorizing the person to act in that capacity. The issuance of a certificate of authority to an insurer does not exempt an insurer from complying with this article.

Section 1621 provides: An insurance agent is a person authorized by and on behalf of an insurer to transact all classes of insurance, except life insurance. The term insurance agent as used in this chapter does not include a life agent as defined in this article.

^[10]By the same analysis, I conclude there is a triable issue of fact as to whether or not appellant was injured in fact under Business and Professions Code section 17204 and Colgan v. Leatherman Tool Group, Inc. (2006) 135 Cal.App.4th 663, 701, footnote 26. If there is a triable issue of fact that DHL, as an agent, received compensation for its role in the sale of insurance, it follows that as an unlicensed agent, DHL received monies to which it was not lawfully entitled. That part of appellants insurance payment would be appellants out of pocket damages.

^[11] As the majority opinion notes, there were two motions for summary judgment, one referred to as the Insurance Motion, the other as the Preemption Motion. (Slip opn., at p. 3.) The trial court concluded that summary judgment was proper on the former and hence it did not decide the Preemption Motion. The majority opinion agrees with the trial court and does not discuss the Preemption Motion either. If we were to reverse summary judgment on the Insurance Motion, the Preemption Motion would then be ripe for decision. In my view, the Preemption Motion should be first considered by the trial judge; accordingly, I would remand this case for the trial courts ruling on that motion.