Allied North American Insurance Brokerage of Texas, L.L.C. v. Diamond Pump & Transport, LLC and the Insurance Company of the State of Pennsylvania, 11-13-00249-CV

Garrett died from a collision caused by Sanchez, a Diamond driver, driving a Diamond vehicle insured by ICSOP; Sanchez was listed as an excluded driver in the policy,” the exclusion disputed as to its effectiveness.
Allied North America Insurance Brokerage of Texas, the Diamond broker, prepared a renewal quote and proposal that failed to reveal Sanchez’s exclusion to Diamond, while ICSOP’s final bound policy did exclude Sanchez.
ICSOP initially defended Diamond in the Garrett wrongful-death suit, then withdrew defense and denied coverage after learning Sanchez was excluded, leaving Diamond to defend and ultimately settle for $625,000.
Diamond incurred $22,524.63 in attorney’s fees and $50,824.88 in interest on funds borrowed to pay the Garrett claim; trial court awarded Diamond $625,000 plus prejudgment interest and related costs, while denying Allied relief.
The appellate court addressed (i) the validity and effect of the excluded-driver endorsement, (ii) Allied’s duty to procure insurance and possible negligence, and (iii) related challenges to ICSOP’s duty and the trial court’s findings, ultimately affirming the trial court’s judgment.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Is the excluded driver endorsement effective to exclude Sanchez from coverage?	Allied failed to notice the exclusion and misrepresented coverage; the endorsement was void or voidable	The endorsement was valid and effective; Diamond accepted coverage under the policy terms	Yes, the endorsement is effective and excludes Sanchez; Allied’s challenges fail
Did Diamond owe a duty to review or understand the policy, and was Allied negligent in procuring coverage?	Allied had a duty to use reasonable diligence and inform Diamond of exclusions	Diamond failed to read the policy and cannot rely on Allied for misrepresentation	Yes, Allied owed a duty; its negligence proximately caused damages; judgment affirmed on negligence grounds
Did Allied have a duty to warn Diamond that the policy would contain an exclusion for Sanchez?	Allied should have informed Diamond of the exclusion	No duty to disclose beyond duties in procuring insurance; reliance issues separate	Yes, Allied breached its duty by not informing Diamond of the exclusion and by not comparing policy terms to the proposal
Were Allied’s arguments regarding a supposed special relationship with ICSOP meritorious?	Allied relied on a special relationship to create a duty of care	No special relationship exists between insurer and broker	No, no special relationship created a duty; issue resolved in favor of applying standard agency duties

Anderson v. City of Seven Points, 806 S.W.2d 791 (Tex. 1991) (fact-finder deference in trial-to-appeal review of findings of fact)
Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standards for reviewing findings of fact and legal sufficiency)
Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132 (Tex. 1994) (contract interpretation in insurance policy context)
Republic Nat’l Life Ins. Co. v. Spillars, 368 S.W.2d 92 (Tex. 1963) (policy construction; plain language governs)
Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472 (Tex. 1995) (negligence elements; duty, breach, proximate cause)
May v. United Servs. Ass’n of Am., 844 S.W.2d 666 (Tex. 1992) (duty of reasonable diligence by insurance agents)
Powell v. Narried, 463 S.W.2d 43 (Tex. Civ. App.—El Paso 1971) (agent duty not to misrepresent coverage)
Travis v. City of Mesquite, 830 S.W.2d 94 (Tex. 1992) (proximate cause; foreseeability)
IHS Cedars Treatment Ctr. v. Mason, 143 S.W.3d 794 (Tex. 2004) (definition of proximate cause; cause in fact vs. foreseeability)
Urrutia v. Decker, 992 S.W.2d 440 (Tex. 1999) (contract/endorsement ambiguity and enforceability)
Callaway Dev. Corp. v. Steadfast Ins. Co., 2007 WL 1032303 (W.D. Tex. 2007) ((excluded from list due to WL citation))