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Tortious Interference & Unfair Competition

By April 16, 2014Insurance



  • Based on its expertise in business litigation and insurance, Cummins & White successfully represented a small commercial auto insurance broker when it sued a subsidiary of one of the top 10 insurance brokers in the United States for stealing clients and using unfair methods of competition.
  • At trial, attorney Larry Arnold proved that the defendant employed deceptive business practices to lure away longtime clients, causing economic hardship to the plaintiff.
  • After a swift deliberation, the jury awarded the insurance broker nearly $740,000 in damages, including substantial punitive damages, which are rare and difficult to obtain in business tort cases.


Case Study

Larry Arnold of Cummins & White, LLP, secured a jury verdict for an insurance broker who claimed the San Diego office of a leading national competitor lured away taxi clients by promising discounted rates for insurance policies based on misrepresentations to the insurers and policyholders. The broker filed suit against the competitor citing intentional interference with prospective economic advantage and unfair competition. After a two-and-a-half-week trial, the jury awarded the broker nearly $740,000 in compensatory and punitive damages.


A small Southern California insurance broker specializing in commercial auto insurance retained Cummins & White, LLP, when a national competitor lured away two longtime taxi clients. The insurance broker sued the competitor for intentional interference with prospective economic advantage and unfair competition, alleging that the defendants stole customers by promising significantly discounted rates for insurance policies based on misrepresentations to the insurers and policyholders.

Legal Strategy

Larry Arnold of Cummins & White represented the insurance broker in litigation, beginning with several settlement conferences. When a settlement was not reached, the case proceeded to trial in San Diego County Superior Court.

At trial, Mr. Arnold pursued a strategy that included:

  • Establishing that the insurance broker had a reasonable expectation of economic advantage based on its longstanding business relationship with the taxi companies.
  • Proving that the defendant interfered with this advantage intentionally and with malice—despite claims that its conduct was privileged competition in the marketplace—and that the interference caused the loss of the expected economic advantage, as well as damages.

Mr. Arnold showed through subpoenaed evidence and testimony from the taxi company clients that the defendants wrongfully obtained lower premium rates by:

  • Misrepresenting garaging locations of taxicab units and geographic areas of operation;
  • Offering discounts that did not exist, including a “spare taxi discount”;
  • Promising coverage that was not available from a specific insurer;
  • Paying rebates, subsidies, cash gifts that were actual refunds of paid premiums, or other unlawful/misrepresented financial incentives in order to obtain broker of record designations.


After a two-and-a-half-week trial, the jury deliberated just hours before awarding the insurance broker nearly $140,000 in compensatory damages, plus $600,000 in punitive damages.

Mr. Arnold said the verdict was a significant victory. “This was a true case of David vs. Goliath. Our client, a small business owner, was committed to pursuing this case against one of the top 10 insurance brokers in the country. After nearly four years of litigation and a trial, the jury agreed and awarded not only compensatory damages, but also substantial punitive damages that underscore the defendant’s unfair business practices and their negative impact on the ability of our client to compete fairly in the commercial auto insurance marketplace.”