Atic Enterprises, Inc. v. Cottingham & Butler Insurance Services, Inc.
690 F. App'x 313
| 6th Cir. | 2017Background
- Atic Enterprises, a Kentucky trucking company (now defunct), bought cargo insurance through Cottingham & Butler for 2012–13 and applied for a 2013–14 policy. Atic did not disclose it transported copper.
- The 2012–13 policy (sold after Atic’s representations) contained no copper exclusion.
- Westchester (insurer) notified Atic it would not automatically renew and that future terms could differ; Cottingham & Butler’s agent Zeal exchanged renewal materials with Atic.
- Cottingham & Butler’s July 2013 proposal and the mailed 2013–14 policy explicitly listed a copper exclusion (separate endorsement titled "COPPER EXCLUSION"). Atic admits reading some documents but says it did not notice the exclusion and disputes receiving the final policy.
- In November 2013 two loads of copper were stolen; Atic submitted a claim which was denied due to the copper exclusion. Atic sued Cottingham & Butler for negligence.
- The district court granted summary judgment for Cottingham & Butler; the Sixth Circuit affirmed, applying Kentucky law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether agent owed enhanced "adviser" duty to disclose/explain coverage changes | Atic: Zeal acted as insurance advisor and assumed a heightened duty to notify and discuss policy changes (copper exclusion) | Cottingham & Butler: Only standard duty of reasonable care applied; no special adviser role was assumed | Held: No heightened duty; only standard duty applied because no special undertaking, extra consideration, long course of dealing, or specific request for advice existed |
| Whether additional notice beyond policy language was required to effectuate the copper exclusion | Atic: Needed separate, affirmative notification about the exclusion because it did not receive/notice the final policy | Cottingham & Butler: Kentucky law requires no separate notice when contract language is unambiguous; they also provided proposal and endorsement showing the exclusion | Held: No extra notice required; the exclusion was unambiguous and was communicated in proposal and endorsement, satisfying any duty |
Key Cases Cited
- Mullins v. Commonwealth Life Ins. Co., 839 S.W.2d 245 (Ky. 1992) (analyzed when an agent impliedly assumes duty to advise)
- Marcum v. Rice, 987 S.W.2d 789 (Ky. 1999) (no separate notice required if policy language unambiguously states terms unless change misleads insured)
- Associated Ins. Servs., Inc. v. Garcia, 307 S.W.3d 58 (Ky. 2010) (agent owes standard duty of reasonable care)
- Great Am. Ins. Co. v. E.L. Bailey & Co., Inc., 841 F.3d 439 (6th Cir. 2016) (summary judgment standard reviewed de novo)
- Hartsel v. Keys, 87 F.3d 795 (6th Cir. 1996) (evidence must permit reasonable jury finding to avoid summary judgment)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (standard for evaluating genuine disputes at summary judgment)