Montgomery, et al.
William Moore Agency, et al.
Timothy E. Lengkeek, Esquire Young Conaway Stargatt & Taylor, LLP
Thomas P. Leff, Esquire Casarino Christman Shalk Ransom & Doss, P.A.
Mark L. Reardon, Esquire Eckert Seamans Cherin & Mellott LLC
After oral argument, two teleconferences, and further supplementation, there are distinct issues ripe for trial. As an initial matter, the parties agree that Defendant Lynn Hitchens should be dismissed because it is conceded he acted as Defendant William Moore Agency's agent. Accordingly, summary judgment is granted as to Lynn Hitchens.
There are two core disputes best left to a jury: 1) whether Defendants met the standard of care for an insurance agent under the circumstances and 2) whether Mark Achenbach, the tortfeasor, was the Christmas Shop's employee/agent. Other disputes about coverage, the statute of limitations, and damages are more obvious.
As to the standard of care, both parties submitted expert opinions. Plaintiffs' expert originally opined it is industry custom to automatically include, or at least offer, the Hired Auto and Non-Owned Auto Liability endorsement to commercial clients. He stated: "By custom and practice in the insurance industry, " both Hired and Non-Owned Automobile Liability coverage and Umbrella Liability coverage "is considered to be an essential part of every commercial insurance program." The expert further opined that Hitchens breached the standard of care by failing "to provide the Poynters the option to obtain coverage for Hired and Non-Owned automobile liability coverage [and] . . . Umbrella Liability coverage." In a supplemental report, Plaintiffs' expert narrowed his opinion:
It is the custom and practice in the insurance industry for agents and brokers to automatically include Non-Owned Auto coverage when they provide insurance to commercial accounts. This is accomplished either by including this coverage under a Commercial Auto Policy or by adding an endorsement to a Commercial General Liability policy or Business Owners Policy (BOP). By failing to automatically provide this coverage for the Christmas Tree Shop, the defendant failed to meet the standard of care for agents and brokers.
In summary, Plaintiffs argue Defendants breached the standard of care because a reasonably competent agent would have "automatically" included the Hired and Non-Owned Automobile Liability in the Poynters' policy. Plaintiffs further argue that if it was not automatically included, Hitchens had a duty to advise the Poynters about the additional coverage based on their insurance agent-insured relationship.
Defendants' expert offered no opinion regarding the industry standard for commercial clients. He stated, generally, that an "agent ordinarily does not have a duty to give advice simply because of the agency relationship." He also said the agent's duty "is to follow the client's instructions and obtain the best insurance at the most commercially reasonable price and terms using reasonable skill and ordinary diligence." Defendants' expert further opined that Hitchens had no duty "to point out the need for additional coverage" absent a special relationship with the Poynters.
The court holds that an insurance agent must offer coverage in the way that a reasonably competent agent would under the circumstances. And, generally, an insurance agent has no duty to advise a client. This general rule, however, turns largely on the relationship between the agent and the client and will not apply if 1) the agent "voluntarily assume[s] the responsibility for selecting the appropriate policy for the insured" or 2) the insured makes an ambiguous request for coverage that requires clarification.
The record presents issues of material fact as to whether Moore, through Hitchens, breached its duty to the Poynters. First, as mentioned, Plaintiffs' expert opined that it is industry standard to automatically include the Hired Auto and Non-Owned Auto Liability coverage to commercial clients like the Poynters. On this issue, the jury will hear the experts and decide whether failing to "automatically" include the coverage was a breach of Moore's duty.
Second, William Moore Agency has been Mr. Poynter's insurance carrier for more than 60 years. Hitchens bought Moore in 1977, a couple years after the Poynters opened the Christmas Shop. Since then, Hitchens has been Mr. Poynter's insurance agent for both the tree farm and Christmas Shop. Mr. Poynter testified that, relying on Hitchens, "we bought what we were told we needed." Poynter further testified ambiguously that the discussions about the insured's coverage needs were "no more than saying that we needed liability. We needed whatever coverage we thought we needed." Furthermore, the parties agree that Hitchens said nothing to the Poynters to clarify the ambiguity about what the Poynters wanted. When ...