Dahms v. Nodak Mutual Insurance Co.
2018 ND 263
| N.D. | 2018Background
- In 2008 Scott and Shannon Dahms bought a Nodak homeowners policy through independent agent Mike Bruckbauer; the policy renewed annually.
- After purchase the Dahms built an unroofed, lag-bolted deck between their two-story house and a detached two-story garage/carriage house; they did not inform Bruckbauer of the deck.
- In April 2013 the detached garage was destroyed by fire; Nodak paid Coverage B limits ($34,891) after concluding the garage was an "other structure" set apart by clear space.
- Coverage A (dwelling and structures attached to the dwelling) limit was $348,907; Coverage B (other structures set apart by clear space) had a lower limit.
- The Dahms sued Nodak seeking Coverage A limits (arguing the garage was attached via the deck) and sued Bruckbauer for professional negligence for failing to secure adequate coverage.
- The district court granted summary judgment for defendants, concluding the deck constituted "clear space" so Coverage B applied and that Bruckbauer breached no professional duty; the Supreme Court of North Dakota affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the garage was "attached" to the dwelling so Coverage A limits apply | Dahms: deck physically connected house and garage, so garage is "attached" and Coverage A applies | Nodak: policy distinguishes "attached" structures from "other structures" separated by clear space; a deck between buildings is clear space akin to a fence or patio, so Coverage B applies | Court: Coverage B applies as a matter of law; the deck is "clear space" and does not render the garage "attached" |
| Whether insurance agent had a professional duty to obtain higher coverage when deck was added | Dahms: agent liable for failing to protect them from coverage gaps and to advise on needs | Bruckbauer: no duty breached—deck did not exist when policy was issued, insureds never informed or requested change, and no special circumstances creating affirmative duty | Court: No genuine factual dispute; as matter of law agent breached no duty; summary judgment for agent affirmed |
Key Cases Cited
- Borsheim Builders Supply, Inc. v. Manger Ins., Inc., 917 N.W.2d 504 (N.D. 2018) (rules for interpreting insurance policies and contract-as-a-whole principle)
- Pettinger v. Carroll, 912 N.W.2d 305 (N.D. 2018) (summary judgment standard and review)
- Forsman v. Blues, Brews & Bar-B-Ques, Inc., 903 N.W.2d 524 (N.D. 2017) (policy interpretation principles and adhesion-contract rule)
- Rawlings v. Fruhwirth, 455 N.W.2d 574 (N.D. 1990) (standard of care and typical duties of insurance agents)
- Nassar v. Liberty Mut. Fire Ins. Co., 508 S.W.3d 254 (Tex. 2017) (illustrative hypothetical and reasoning limiting transitive "attachment" via fences or similar connections)
- Porco v. Lexington Ins. Co., 679 F. Supp. 2d 432 (S.D.N.Y. 2009) (construing "attached" vs. "connected" and treating patios/decks as clear space)