920 N.W.2d 293
N.D.2018Background
- Scott and Shannon Dahms purchased an annual Nodak homeowners policy covering: Coverage A (dwelling and structures attached to dwelling; limit $348,907) and Coverage B (other structures set apart by clear space; limit $34,891).
- After purchase they built a large deck between their house and a detached two‑story carriage house (used as a garage); they did not notify their agent, Mike Bruckbauer.
- In April 2013 the garage was destroyed by fire; estimated loss exceeded $87,003.40.
- Nodak paid the Coverage B limit ($34,891), concluding the garage was an "other structure" separated by clear space (the deck).
- The Dahms sued Nodak for the additional Coverage A proceeds (arguing the garage was "attached" via the deck) and sued Bruckbauer for professional negligence for failing to secure higher coverage or advise them.
- The district court granted summary judgment for defendants; the Dahms appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the garage is covered under Coverage A ("attached to the dwelling") or Coverage B ("other structure" set apart by clear space) | The deck connected the garage to the dwelling, so the garage is "attached" and Coverage A limits apply | The deck functions as clear space (like a patio/fence); allowing the Dahms' view would render Coverage B meaningless | Court held the deck constituted clear space; garage is an "other structure" and Coverage B limits apply |
| Whether the agent, Bruckbauer, breached professional duties by not procuring or advising higher coverage after deck added | Agent had a duty to protect insureds from coverage gaps and to advise; failure to do so caused loss | Agent sold the requested policy before the deck existed; Dahms never informed or requested changes; no special circumstances creating extra duty | Court held as a matter of law no breach: no request, no notice, and no special circumstances; summary judgment for agent affirmed |
Key Cases Cited
- Porco v. Lexington Ins. Co., 679 F. Supp. 2d 432 (S.D.N.Y. 2009) (court treats patios/decks as clear space separating dwelling from other structures; denies transitive "attached" theory)
- Nassar v. Liberty Mut. Fire Ins. Co., 508 S.W.3d 254 (Tex. 2017) (hypothetical and discussion explaining that connections like fences or similar links should not convert other structures into "attached" structures under Coverage A)
- Rawlings v. Fruhwirth, 455 N.W.2d 574 (N.D. 1990) (defines insurance agent standard of care and when affirmative duties beyond instructions may arise)