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3918 In an action by an insurer against an insurance broker the elements of fraud were sufficiently pleaded by allegations that the broker made a false written statement concerning an applicant's loss history by forging a letter from another insurance carrier intentionally, with knowledge of its falsity, and with the intent to cause the insurer to issue a policy, that the insurer had no reason to suspect the falsity of the statement and relied on the statement in issuing a policy, and that the falsified prior loss history was a material element in the insurer's decision to issue the policy, which resulted in various costs and losses to the insurer; since the insurer could not logically argue that the broker unreasonably believed the statements to be true, it could not plead a case of negligent misrepresentation; but since the broker owed the insurer a duty to avoid deliberate misstatements, it could plead a case of negligence.CitationCENTURY SURETY CO v CROSBY (Insurance Forgery) 124 CA4 116 [See: Solomon v Federal 176 C 133; Purcell v Pacific 19 CA2 230; City of Atascadero v Merrill Lynch 68 CA4 445, T/AT 1/99]
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