Opinion
NO. COA12-791
12-18-2012
RAYFIELD PROPERTIES, LLC, Plaintiff, v. BUSINESS INSURERS OF THE CAROLINAS, INC., Defendant.
Safran Law Offices, by M. Riana Smith and Perry R. Safran, for Plaintiff-Appellant. Teague, Rotenstreich, Stanaland, Fox & Holt, PLLC, by Stephen G. Teague, for Defendant-Appellee.
An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
Orange County
No. 10 CVS 1834
Appeal by Plaintiff from judgment entered 24 January 2012 by Judge Richard A. Baddour, Jr., in Orange County Superior Court. Heard in the Court of Appeals 29 November 2012.
Safran Law Offices, by M. Riana Smith and Perry R. Safran, for Plaintiff-Appellant.
Teague, Rotenstreich, Stanaland, Fox & Holt, PLLC, by Stephen G. Teague, for Defendant-Appellee. BEASLEY, Judge.
Rayfield Properties, LLC, (Plaintiff) appeals from the trial court's entry of summary judgment in favor of Defendant. For the following reasons, we affirm.
Plaintiff owned real property ("the property") in Burlington, North Carolina, and used Defendant's services as an insurance agency to procure insurance on the property. The property remained vacant at all relevant times.
In April of 2009, George Townsend, Plaintiff's Vice President emailed Misty Teague, one of Defendant's agents, to request a summary of its insurance coverage on the property, specifically requesting information regarding the "[c]ost, annual inspections, coverage limits, etc." believing that the cost of coverage was too expensive. Ms. Teague responded that the cost was greater because the building was vacant.
On 19 November 2009, Ms. Teague emailed Betty Bartolotta, one of Plaintiff's employees, to determine whether the property was "still vacant" in order to ascertain whether better pricing was available. Ms. Bartolotta confirmed via a response email that the property was indeed still vacant.
On 12 July 2010, Plaintiff discovered that the copper coils from seventeen of the property's rooftop air conditioners had been stolen and irreparably damaged and the property had been vandalized. At this time, the property was insured under a policy with Travelers, secured by Defendant in 2007. It appears uncontested that the policy covered loss or damage resulting from other causes, including "lightening [sic], fire, wind, storm, riot, [etc.]," without limitation for vacancy. However, the policy contained an express limitation that excluded coverage of loss or damage resulting from theft or vandalism if the building had been vacant for more than sixty consecutive days prior to the loss or damage. Plaintiff did not read the policy at any time. Plaintiff submitted a claim for replacement of the units and repairs to the roof, totaling $134,567.00, but the claim was denied because the building had been vacant for sixty days prior under the express limitation set forth in the policy.
On 19 October 2011, Plaintiff brought the present action, alleging professional negligence and breach of contract against Defendant. On 5 January 2012, Defendant filed a motion for summary judgment, and the trial court filed an order granting the motion on 24 January 2012 after oral arguments.
"Our standard of review of an appeal from summary judgment is de novo; such judgment is appropriate only when the record shows that 'there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.'" In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008)(quoting Forbis v. Neal, 361 N.C. 519, 524, 649 S.E.2d 382, 385 (2007)).
Plaintiff first argues that the trial court erred in granting Defendant's motion for summary judgment because a genuine issue of material fact exists as to whether Defendant was negligent and breached its duty by failing to procure the insurance coverage Plaintiff requested and by misrepresenting that Plaintiff had such coverage. We disagree.
We first note that Defendant is correct in arguing that Plaintiff's complaint alleges professional negligence but Plaintiff failed to present any evidence of a professional standard of care via expected expert witness testimony or any other acceptable method. See Associated Indus. Contr'rs, Inc. v. Fleming Eng'g, Inc., 162 N.C. App. 405, 410, 590 S.E.2d 866, 870 (2004) (citations omitted)("Ordinarily, expert testimony is required to establish the standard of care [in a professional negligence claim]."), aff'd, 359 N.C. 296, 608 S.E.2d 757 (2005). However, as Plaintiff observes, we have also held that a mislabeled complaint will not bar the claim where the "critical facts are sufficiently pled [sic] in the body of the complaint." Buchanan v. Hunter Douglas, Inc., 87 N.C. App. 84, 86, 359 S.E.2d 271, 272 (1987). Yet, as we find that the complaint fails to sufficiently plead duty under a common negligence action, Plaintiff's claim fails regardless of the mislabeling error and we need not determine the effect of such error.
"The elements of a cause of action based on negligence are: a duty, breach of that duty, a causal connection between the conduct and the injury and actual loss." Davis v. N.C. Dep't of Human Res., 121 N.C. App. 105, 112, 465 S.E.2d 2, 6 (1995).
It is well established in this State that if an insurance agent or broker undertakes to procure for another insurance against a designated risk, the law imposes upon him the duty to use reasonable skill, care and diligence to procure such insurance and holds him liable to the proposed insured for loss proximately caused by his negligent failure to do so.Kaperonis v. Underwriters at Lloyd's, London, 25 N.C. App. 119, 128, 212 S.E.2d 532, 538 (1975)(citations omitted). "[T]he insurer is not obligated to procure a policy that has not been requested by the proposed insured. . . . [T]he agent does not have a duty to advise the individual of other types of insurance coverage for which he is eligible, if that information is not requested." Cobb v. Pa. Life Ins. Co., ___ N.C. App. ___, ___, 715 S.E.2d 541, 548 (2011)(citations omitted). Further, an insurance agent has no "legal duty to explain the meaning and effect of all the provisions in the policy." Hardin v. Liverpool & London & Globe Ins. Co., 189 N.C. 423, 427, 127 S.E. 353, 355 (1925). However, such a duty may arise where specific coverage is requested. See Baggett v. Summerlin Ins. & Realty, Inc., 143 N.C. App. 43, 50-52, 545 S.E.2d 462, 467-68 (Tyson, J., dissenting), rev'd, 354 N.C. 347, 554 S.E.2d 336 (2001)(adopting the dissenting opinion). In lieu of special circumstances, including where a duty to inform arises, an insured's failure to read the policy may bar recovery. See id. at 53, 545 S.E.2d at 468-69.
In Baggett, the dissenting opinion, later adopted by the Supreme Court adopted, held that the insurer was under no duty to inform the plaintiffs that the policy did not include flood insurance where the plaintiffs asked the insurer to extend the same coverage as her previous policy and that policy did not include flood insurance, despite the fact that the house was situated on a flood plain. Id. at 52, 545 S.E.2d at 468. Further, our Court has previously held that it was "clearly not the duty of an insurer or its agent to inquire and inform an insured as to all parts of his policy" where the plaintiff requested fire insurance but failed to read the policy to learn that the insurance coverage would be reduced if there was no working telephone on the premises, even though the insurer knew that there was no phone on the premises and the insured believed the insurer represented full coverage was provided. Greenway v. N.C. Farm Bureau Mut. Ins. Co., 35 N.C. App. 308, 313-14, 241 S.E.2d 339, 342-43 (1978). We find Baggett and Greenway similar to the case sub judice.
Here, Plaintiff presents no evidence that it requested vacancy coverage specifically for theft. In fact, there is no evidence of a request for vacancy coverage at all. At best, Plaintiff demonstrated only an implied acceptance of the coverage offered by Defendant when Plaintiff did not cancel the policy upon learning that the higher cost was due to the vacant status of the building. It is not contested that the policy provided coverage in recognition of the building being vacant: It provided coverage for damage resulting from "lightening [sic], fire, wind, storm, riot, [etc.]" Plaintiff did not show that any more than this was requested. Because of this lack of request, Defendant was under no duty to inform Plaintiff of the exact provisions of the policy. See Cobb, __ N.C. App. at __, 715 S.E.2d at 548.
However, Plaintiff was under a duty to read the policy. Greenway, 35 N.C. App. at 313, 241 S.E.2d at 343 ("In the case sub judice the limiting endorsement was an integral part of the original policy and was clearly referred to on its face. The fact that plaintiff did not read his policy did not excuse him from his provisions."). The failure to read constitutes contributory negligence such as to bar recovery on a negligence claim. See Cobb, ___ N.C. App. at ___, 715 S.E.2d at 552. Plaintiff itself presented direct evidence and does not contest on appeal that no one read the policy to determine what coverage was provided.
Plaintiff instead contends that a fiduciary relationship existed between itself and Defendant negating the duty to read the policy because Plaintiff was justified in relying upon the expertise of its fiduciary, Defendant.
An insurance agent has a limited fiduciary duty to the insured, to wit, the agent must correctly name the insured in the policy and correctly advise the insured of the nature and extent of his coverage under the policy. An implied duty to advise may only be shown if '(1) the agent received consideration beyond mere payment of the premium; (2) the insured made a clear request for advice; or (3) there is a course of dealings over an extended period of time which would put an objectively reasonable insurance agent on notice that his advice [was] being sought and relied on.'Cobb, ___ N.C. App. at ___, 715 S.E.2d at 548.
Here, there was no evidence provided that the agent received consideration beyond the premium payment. There was no clear request for advice, since, as discussed above, there was no clear request for either blanket or specific vacancy coverage. Plaintiff thus argues that the relationship arose because the parties "had a long business relationship . . . dating back to the 1990s." While length of time is a factor necessary to the consideration of whether the agent should have been on notice that his advice was requested, there must also be evidence of a particular course of dealings during this time to suggest such a relationship. Id.
In Bigger v. Vista Sales & Marketing, Inc., 131 N.C. App. 101, 505 S.E.2d 891 (1998), we distinguished a fact pattern where the evidence failed to show the insured and insurer ever discussed the matter of specific insurance coverage, despite a long relationship, from the fact pattern in Fli-Back Co., Inc. v. Philadelphia Manufacturers Mutual Insurance Co., 502 F.2d 214 (4th Cir. 1974), where past dealings involved both knowledge of a specific insurance need and a pattern of taking steps to meet that need. Bigger, 131 N.C. App. at 104, 505 S.E.2d at 893. We stated,
The Biggers failed to provide any evidence regarding the extent of the course of dealings between Bebber and Vista Sales, and merely alleged the existence of a 28 year relationship between Bebber and Alderson. We do not find the allegation that Bebber acted on behalf of Alderson for 28 years to be sufficient evidence to establish a courseId. at 105, 505 S.E.2d at 893-94 (internal citation omitted). Similarly, Plaintiff produced no evidence suggesting that Defendant should have been on notice of fiduciary duties to inform other than the fact that the parties had a longstanding business relationship. This alone is not sufficient. Id. Thus, such a fiduciary duty did not exist and Plaintiff may not recover on a negligence claim.
of dealings between Bebber and Vista Sales, which would put an objectively reasonable insurance agent on notice that his advice is being sought and relied on. Without any additional evidence, we do not find that Bebber impliedly undertook to advise the Biggers.
Plaintiff next argues that the trial court erred in granting summary judgment because a genuine issue of material fact exists as to whether Defendant breached its contract with Plaintiff. We disagree.
"The elements of a claim for breach of contract are (1) existence of a valid contract and (2) breach of the terms of that contract." Poor v. Hill, 138 N.C. App. 19, 26, 530 S.E.2d 838, 843 (2000). Here, Plaintiff presents no evidence of a contract with Defendant to procure vacancy coverage for theft and vandalism. As discussed above, such a specific request was never made. Thus, there could not have been a contract to procure such insurance. Further, Plaintiff failed to produce evidence that Defendant misrepresented the coverage in violation of the parties' contract where the evidence shows that the building had vacancy coverage for certain events. Plaintiffs failed to produce sufficient evidence of their claim to establish a genuine issue of material fact. Nor does the evidence show that any contract term existed to require Defendant to explain all provisions of the policy. Consequently, Plaintiff failed to establish a claim for breach of contract sufficient to survive summary judgment.
Affirmed.
Judges STROUD and HUNTER, JR. concur.
Report per Rule 30(e).