Opinion
CASE NO. 22-CV-14433-MIDDLEBROOKS
2023-12-12
Edward Blake Paul, Michael Thomas Konen, Peterson & Myers, Lakeland, FL, for Plaintiffs. Brian Daniel Webb, David Barry Krouk, Butler Pappas Weihmuller Katz Craig, Tampa, FL, for Defendant.
Edward Blake Paul, Michael Thomas Konen, Peterson & Myers, Lakeland, FL, for Plaintiffs.
Brian Daniel Webb, David Barry Krouk, Butler Pappas Weihmuller Katz Craig, Tampa, FL, for Defendant.
ORDER ON SUMMARY JUDGMENT
Donald M. Middlebrooks, United States District Judge.
THIS CAUSE comes before the Court on Defendant State Farm Mutual Automobile Insurance Company's ("State Farm") Motion for Summary Judgment ("Motion"), filed on October 9, 2023. (DE 29). Plaintiff similarly filed a Motion for Summary Judgment on October 10, 2023, as to the two affirmative defenses raised by Defendant. (DE 31). Defendant withdrew those two affirmative defenses on October 23, 2023. (DE 35). Therefore, I denied Plaintiff's Motion for Summary Judgment as Moot. (DE 60). Before me now is Defendant's Motion for Summary Judgment, to which the Plaintiff responded, and Defendant replied. (DE 36, DE 41). For the reasons stated below, Defendant's Motion for Summary Judgment is granted.
I. FACTS
On July 25, 2019, Wendy Medina was in a car accident with a driver operating a van owned by America First Air Conditioning and Heating, LLC ("America First"). The car accident left Ms. Medina severely injured; she was flown via emergency helicopter to the hospital, received multiple immediate surgeries, has still been unable to return to work, and has incurred a total of $538,303.17 in medical bills to this point. At the time of the accident, America First held an automobile insurance policy through State Farm that provided bodily injury liability limits of $25,000 per person and $50,000 per accident. The policy was procured through Agent Dan Evers.
The recounted facts are undisputed.
Wendy Medina sued America First for negligence on September 19, 2019, in state court in Highlands County, Florida. During the pendency of that lawsuit, Medina and America First settled. As part of the agreement, State Farm paid the $25,000 policy maximum, and America First paid
her $22,500. Thereafter, a consent judgment was entered in the amount of $2 million. As part of that consent judgment, America First assigned to Medina any and all claims it had against State Farm and the Agent who helped provide the insurance policy to America First.
Medina filed the current action on behalf of America First against State Farm alleging that State Farm breached its duties to America First when it failed to advise Santiago Gomez, one of the owners of the company, of the availability and desirability of obtaining higher policy limits. The Complaint also alleges that State Farm breached its duty by failing to secure insurance coverage that was clearly warranted by America First's expressed needs and its knowledge of their operations and activities.
II. SUMMARY JUDGMENT STANDARD
"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "Genuine disputes are those in which the evidence is such that a reasonable jury could return a verdict for the non-movant." Ellis v. England, 432 F.3d 1321, 1325-26 (11th Cir. 2005). "For factual issues to be considered genuine, they must have a real basis in the record." Id. at 1326 (internal citation omitted). "For instance, mere conclusions and unsupported factual allegations are legally insufficient to defeat a summary judgment motion." Id. (internal citation omitted).
The movant "always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting Fed. R. Civ. P. 56(c)(1)(A)).
When the moving party bears the burden of proof at trial, "the moving party must show that, on all the essential elements of its case on which it bears the burden of proof at trial, no reasonable jury could find for the nonmoving party." United States v. Four Parcels of Real Prop, in Greene & Tuscaloosa Ctys. in State of Ala., 941 F.2d 1428, 1438 (11th Cir. 1991) (internal citation omitted). "If the moving party makes such an affirmative showing, it is entitled to summary judgment unless the nonmoving party, in response, comes forward with significant, probative evidence demonstrating the existence of a triable issue of fact." Id. (internal quotations and citations omitted).
Where the nonmoving party bears the burden of proof on an issue at trial, the movant may simply "[point] out to the district court that there is an absence of evidence to support the nonmoving party's case." Id. at 325, 106 S.Ct. 2548. After the movant has met its burden under Rule 56(c), the burden shifts to the non-moving party to establish that there is a genuine issue of material fact. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). "The non-movant's response must be tailored to the method by which the movant carried its initial burden." Hinson v. United States, 55 F. Supp. 2d 1376, 1380 (S.D. Ga. 1998), aff'd, 180 F.3d 275 (11th Cir. 1999). "If the movant presented evidence affirmatively negating a material fact, the non-movant 'must respond with evidence sufficient to withstand a directed verdict motion at trial on the
material fact sought to be negated.'" Id. (citing Fitzpatrick v. City of Atlanta, 2 F. 3d 1112, 1116 (11th Cir. 1993)). "If the movant demonstrated an absence of evidence on a material fact, the non-movant must either show that the record contains evidence that was 'overlooked or ignored' by the movant, or 'come forward with additional evidence sufficient to withstand a directed verdict motion at trial based on the alleged evidentiary deficiency.'" Id. (citing Fitzpatrick, 2 F. 3d at 1116).
III. LAW PERTAINING TO THE CLAIM OF NEGLIGENT ADVICE.
This case focuses on the somewhat unusual issue of an insurance agent's duty to volunteer advice to a client. The majority of the Parties' briefing is dedicated to whether a genuine issue of disputed fact exists to support that there was a "special relationship" between America First owner Santiago Gomez and Agent Evers. Both Parties agree that an insurance agent generally does not have a duty to affirmatively offer unsolicited advice to his client. Both Parties also acknowledge that there is a growing body of case law around the country that an insurance agent might have an affirmative duty to advise the client about the availability of policies with higher limits if there is a "special relationship" between the two individuals. However, the Parties disagree whether the jury could find such a relationship in this case.
This is a diversity case in which I must apply Florida law. When presented with an issue that has not yet been addressed by the Florida Supreme Court, such as when a duty for an insurance agent to advise their client on the adequacy of their insurance coverage arises, a court must "adhere to the decisions of the state's intermediate appellate courts absent some persuasive indication that the state's highest court would decide the issue otherwise." Ernie Haire Ford, Inc. v. Ford Motor Co., 260 F.3d 1285, 1290 (11th Cir. 2001).
A. Florida Law.
Under Florida law, the general duty of an insurance agent who agrees to procure a policy for a client is to use reasonable care in procuring that policy. See Wachovia Ins. Servs., Inc. v. Toomey, 994 So. 2d 980, 990 (Fla. 2008). That duty further consists of both informing a client and explaining to the client the policies and changes to the policies that the agent is providing and to use "reasonable care in rendering advice on insurance matters." Id. at 990 n.4 (citing 5 Florida Torts § 150.24 (2007)).
Florida appellate courts have recognized that the "general duty" of an insurance agent sometimes "requires the agent to exercise due care in correctly advising the insured of the existence and availability of particular insurance, including the availability and desirability of obtaining higher limits." Adams v. Aetna Cas. & Sur. Co., 574 So. 2d 1142, 1155 (Fla. Dist. Ct. App. 1991). That additional duty "depend[s] on the scope of the agent's undertaking." Id.
Certain scenarios can expand the scope of the agent's undertaking. For example, in Warehouse Foods, Inc. v. Corp. Risk Mgmt. Servs., Inc., 530 So.2d 422, 424 (Fla. Dist. Ct. App. 1988), the court recognized that an insurance agent may be held liable for negligently failing to "properly advise the insured as to coverage" if the insured reasonably relied upon "an agent's claimed expertise and advice." In Seascape of Hickory Point Condo. Ass'n. v. Associated Ins. Servs., Inc., 443 So. 2d 488, 490 (Fla. Dist. Ct. App. 1984), the court held that a "duty to volunteer advice to [a] client" might arise when an agent has been
given "separate consideration apart from the premium" he is already receiving, or when there is "a long-established relationship of entrustment between insurance counselor or agent and client from which it clearly appeal's that the insurance counselor appreciate[s] that there [is] a duty to take the initiative in giving comprehensive advice to his client." Id.
Perhaps most applicable here is the Fourth District Court of Appeal decision Woodham v. Moore, 428 So. 2d 280, 280 (Fla. Dist. Ct. App. 1983). In Woodham, the plaintiffs sued the defendants for failing to advise them of the "desirability of obtaining higher limits of liability insurance." Id. The evidence showed that the plaintiffs had once held the higher policy limits, became ineligible for the higher limits due to a history of accidents, and were assigned risk coverage at a lower limit. Id. Subsequently, the plaintiffs became eligible for the higher policy limits again. Id. Despite their eligibility for their prior insurance rates, and despite the policy of the insurance agents to periodically review the files for their clients, the insurance company never informed the plaintiffs of their eligibility for higher limits. Id. The court reversed the decision of a district court that granted summary judgment in favor of the insurance agent on a claim of "failing to advise the [plaintiff] of the availability and desirability of obtaining higher limits of liability insurance." Id. at 281.
B. "Special Relationship" Exception.
Although not cited by name in Florida appellate cases, courts around the country have provided an umbrella term stating that the general duty to use reasonable skill and diligence in obtaining a policy that is specifically requested or clearly warranted by the insured's expressed needs also includes volunteering advice as to the sufficiency of the coverage when the insurance agent and his client share a "special relationship." See e.g., Sintros v. Hamon, 148 N.H. 478, 481, 810 A.2d 553 (2002).
Various state courts have enacted a flexible approach when determining the undertaking of an insurance agent; a variety of factors might indicate whether a special relationship could have existed. Such factors are similar to those inherently recognized by the courts of appeal in Florida. For example, the Supreme Court of Michigan recognizes that the "general no-duty-to-advise rule" might be "subject to change" if an agent "assumes an additional duty by either express agreement with or promise to the insured." Harts v. Farmers Ins. Exch., 461 Mich. 1, 10, 597 N.W.2d 47 (1999). Minnesota has established that a special relationship might exist if the agent is aware that "the insured is unsophisticated in insurance matters, that the insured is relying on the agent to provide appropriate coverage, and that the insured needs the protection at issue." Beauty Craft Supply & Equip. Co. v. State Farm Fire & Cas. Ins. Co., 479 N.W.2d 99, 101 (Minn. Ct. App. 1992). The Maine Supreme Court held that the determination of what duty an insurance agent owes to his client, including whether to find there was an additional duty in light of a special relationship, is "based on the manifestations of consent of the parties and ordinarily must be inferred from the parties' conduct." Szelenyi v. Morse, Payson & Noyes Ins., 594 A.2d 1092, 1094 (Me. 1991) (citing the Restatement (Second) of Agency § 376 (1958)).
The Supreme Court of Iowa perhaps adopted the most flexible of all approaches when it held that it is up for the fact finder to determine "based on a consideration of all the circumstances" whether a special relationship existed that expanded the agent's responsibilities. See Langwith v. Am. Nat. Gen. Ins. Co., 793 N.W.2d 215,
222 (Iowa 2010). However, that decision was subsequently overturned by statute when the Iowa legislature outlined that unless "an insurance producer holds oneself out as an insurance specialist . . . and receives compensation for consultation and advice apart from commissions paid by an insurer, the duties and responsibilities of an insurance producer are limited to those duties [to use reasonable care, diligence, and judgment in procuring the insurance requested by an insured]." Iowa Code Ann. § 522B.11 (West). The walking back of the Iowa Supreme Court's imposition of such a broad exception to the "no general duty to give unsolicited advice" underscores why the exception is still a narrow one — insureds are in a "better position to know their personal assets and abilities to protect themselves" and the risk of loss to which they might be exposed. Peter v. Schumacher Enterprises, Inc., 22 P.3d 481, 483-83 (Alaska 2001); Sadler v. Loomis Co., 139 Md. App. 374, 410, 776 A.2d 25 (2001).
Plaintiff hones in on three factors that other courts have considered when establishing that an insurance agent could owe a duty to a client beyond that which is typical. First, the "length and depth" of an insured's relationship with his agent supports a court finding an affirmative duty to provide advice. See Tiara Condo. Ass'n, Inc. v. Marsh, USA, Inc., 991 F. Supp. 2d 1271, 1281 (S.D. Fla. 2014); see also Campbell v. Valley State Agency, 407 N.W.2d 109, 112 (Minn. Ct. App. 1987) (holding that a jury could have found a special relationship between the agent and the insured on the facts before them, where one of those facts was that the agent was "familiar with [Plaintiff's] net worth."). Second, some courts have found an affirmative duty can arise if there is a "course of dealing over an extended period of time which would put an objectively reasonable insurance agent on notice that his advice is being sought and relied on." Houck v. State Farm Fire & Cas. Ins. Co., 366 S.C. 7, 12, 620 S.E.2d 326, 329 (2005) (internal citation omitted). Finally, an agent's knowledge "that the insured was unsophisticated in insurance matters" could support a special relationship. Gabrielson v. Warnemunde, 443 N.W.2d 540, 544 (Minn. 1989).
IV. ANALYSIS.
In Defendant's Motion, it argues that there are no disputed material facts that would create a jury issue as to the existence of a special relationship. To the extent the Parties label a fact "disputed," they seem to object to the inferences that a jury could draw from the undisputed facts. However, if the undisputed material facts could provide competent substantial evidence to support a finding of a special relationship, then summary judgment would be inappropriate, and the issue of whether a special relationship in fact existed would be for the jury to decide. See Luckey v. Willis Ins. Agency, Inc., 409 So. 2d 1218, 1218 (Fla. Dist. Ct. App. 1982). Thus, without weighing evidence or making credibility determinations, I must determine if there is more than a mere "scintilla" of evidence supporting the Plaintiff's position. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
A. The Relationship Between Agent Evers and Santiago Gomez.
Mr. Gomez had his home and personal vehicles insured with State Farm through Agent Evers as far back as 2000. That original policy was a family policy that had bodily injury limits of $25,000 per person and $50,000 per accident. When Gomez first took out the family policy, he never received different quotes for different coverage options. In 2007, Mr. Gomez became involved with America First. He was responsible for procuring insurance on the vehicles that America First used out of its Avon Park office. He testified that he chose Dan Evers as the insurance agent because his home and vehicle were insured through State Farm, as well as the fact that it involved "people [he] knew in the community for a long time" and was close to his house. (Deposition of Santiago Gomez, p. 28-29 at 1-6). Gomez began adding vehicles to his State Farm policy for use in his business. At the time, Gomez did not tell Agent Evers or any employee of Agent Evers that he was adding the car to his business for business purposes. Further, Gomez did not have a discussion with Agent Evers or any employee about what his liability limits should be. Gomez continued to add vehicles to his policy consistently between 2010 and 2019. Each time he added a vehicle, he would either call or stop by Agent Evers's office. Employees of Agent Evers would ask if he wanted the "same policy," and Gomez always said yes. (Id. p. 43 at 11-17). His interactions with Agent Evers himself were minimal.
It is undisputed that Mr. Gomez never told Agent Evers, his employees, or anyone at State Farm about the fact that his business was expanding. The policies themselves were listed as business and commercial policies. (Deposition of Debra Prater, pp. 74-75 at 18-25, 1). And at the time of the accident, America First had fifteen business vehicles insured with Dan Evers and State Farm. But it is undisputed that he never inquired about whether his insurance was enough or reasonable for someone running a business.
Agent Evers died in 2019. In 2022, three years after the accident between Wendy Medina and an America First employee, Gomez's new State Farm agent, Craig Jordan, told Gomez that America First needed to procure a policy with higher limits. Thereafter, Gomez increased the liability coverage to $1 million per person and $1 million per accident.
B. Special Relationship
On this record, even when the facts and all reasonable inferences are drawn in Plaintiffs favor, I do not think that Plaintiff can meet her burden of adducing evidence from which a reasonable jury could find that that there was a special relationship between Agent Evers and Mr. Gomez. It is undisputed that Gomez never inquired about the desirability of a higher policy limit, that he never asked for higher limits, that he never paid additional consideration outside of the premium for Agent Evers's expertise, and that he never asked for his advice.
Plaintiff heavily relies on the "length and depth factor" when arguing that the evidence could support the existence of a special relationship between Mr. Gomez and Agent Evers. It is true that Agent Evers procured insurance for Mr. Gomez for nineteen years. But Florida appellate courts require "a long-established relationship of entrustment." See Seascape of Hickory Point Condo. Ass'n., 443 So. 2d at 490. A reasonable jury might find that nineteen years is sufficiently "lengthy." But the factor is conjunctive; nothing in the record could lend support to a finding that there was any "depth" to their relationship. Mr. Gomez himself admitted that he exclusively dealt with Agent Evers's employees and at most said "hi" to him a few times over the years. As a matter of law, the relationship must have "depth" beyond that of a typical agent-insured relationship. A lengthy relationship with an insurance company or their agents cannot alone impose a duty on an agent to provide unsolicited advice to a client. Compare Libow v. Fullerton & Co., 34 F. App'x 543, 545-46 (9th Cir. 2002) (upholding a district
court's grant of summary judgment in favor of the insurance company when the client "never specifically asked whether such coverage was sufficient and never requested that [the agent] raise the liability limits," despite the fact that the agent insured the client for over fifty years and considered the clients "personal friends.").
Plaintiff also argues that there was a course of conduct that would put an objectively reasonable insurance agent on notice that his advice was being relied upon. Plaintiff cites the undisputed facts that Gomez added vehicles every year from 2014 to 2019, America First's fleet of vehicles doubled in size between 2016 and 2019, and that State Farm has training manuals suggesting small businesses are great targets as customers because small business owners prefer to "one-stop shop" for both their personal and business insurance. But Plaintiff misconstrues the type of affirmative conduct that Florida courts have recognized might place an agent on reasonable notice that his advice is being relied upon. Even in Woodham, the Florida court of appeal remanded with "reluctance" but allowed the plaintiffs to amend their pleadings because they had originally been on the higher maximum policy limit and were forced to take the lesser policy maximum. 428 So. 2d at 281. In Woodham, it was also the insurance company's policy to review client files for the specific purpose of noticing such situations. Id. Because the plaintiffs had their policy limit forcibly revoked, and then subsequently the clients became qualified to get the higher maximum back, a reasonable insurance agent could have been on alert that the clients would desire a higher limit. If anything, in this case, nineteen years of Mr. Gomez consistently asking for the exact same policy limit and never once indicating his interest in or asking about the desirability of higher limits for commercial vehicles undermines any argument that there was a course of conduct that would put a reasonable insurance agent on notice that his advice was being relied upon.
Plaintiff points to the testimony of their expert, Andrew Boyd, to argue that there is sufficient evidence for a jury to find that Agent Evers should have been on notice that his advice was relied upon by Mr. Gomez. As a threshold matter, Plaintiff disclosed the identity and affidavit of Andrew Boyd exceedingly late and past the deadline required by Federal Rule of Civil procedure 26(a)(2)(D)(i). Plaintiff did not disclose the identity of their expert until October 9, 2023, almost a month after the discovery deadline in the pretrial scheduling order. (DE 20). Over a week after Defendant filed its Motion for Summary Judgment, Defendant had still not received the expert report of Mr. Boyd. (DE 33, DE 38). Such untimely disclosure means that any expert testimony from Mr. Boyd is subject to being stricken.
However, even if such testimony were not stricken from the record, I would still find that summary judgment is appropriate. Mr. Boyd's affidavit discusses that the "standard for agents in the commercial insurance industry required Mr. Evers . . . to do more than simply renew the policies that Mr. Gomez requested." (DE 37-2 at 6). He goes on to say that "Dan Evers should have known that America First's and Mr. Gomez's assets were increasing in value and as a professional, responsible, knowledgeable, and caring insurance advisor Mr. Evers . . . should have reached out to Mr. Gomez to discuss . . . a $1,000,000 commercial automobile policy." (Id.). Mr. Boyd's testimony might go to whether or not Agent Evers breached a duty had there been a special relationship between him and Mr. Gomez. But the existence of whether a duty existed for Agent Evers to breach is a matter of law for the Court to decide. Limones v. Sch. Dist. of
Lee Cnty., 161 So. 3d 384, 389 (Fla. 2015) ("[D]uty is a legal question because duty is the standard to which the jury compares the conduct of the defendant").
The record makes clear — and without genuine dispute — that Mr. Gomez had minimal conduct with Agent Evers, never went to him for advice, and Agent Evers never provided Mr. Gomez with any advice or held himself out as an expert. Therefore, as a matter of law, Agent Evers had no additional duty to inform Mr. Gomez about the desirability of higher premium limits.
V. CONCLUSION.
For all the reasons cited above, Defendant's Motion for Summary Judgment (DE 29) is GRANTED. Final judgment will be entered by separate order.
Defendant also argues that Agent Evers was not an agent of State Farm. Because I find that Agent Evers did not owe a duty to advise Mr. Gomez, I do not address whether this issue could go to a jury.