Eric Cox and Pea Cocks Corp. d/b/a Cox's Pub v. Mayerstein-Burnell Co., Inc. d/b/a MBAH Insurance and Jeff Clute
19 N.E.3d 799
Ind. Ct. App.2014Background
- Eric Cox is president of Cox’s Pub; Julie Burton managed operations and procurement of insurance and had authority to bind the business.
- Cox’s Pub previously had a Society Insurance policy with $383,000 building limits but let it lapse in May 2010 due to increased premiums after a wrongful-death settlement.
- Burton engaged agent Jeff Clute (MBAH) in August 2010, provided the prior declarations and building information, and asked for quotes that would keep premiums low.
- Clute submitted an ACORD application to Illinois Casualty; Illinois Casualty produced a valuation estimating replacement cost at $265,049 and offered two quotes: $354,000 and $265,000 building limits.
- Burton chose the $265,000 policy (lower premium); about a month later the Pub was destroyed by fire and recovery under the policy was allegedly insufficient to rebuild.
- Plaintiffs sued Clute and MBAH for negligence and breach of contract; the trial court granted summary judgment for defendants. On appeal, court addressed standing, duty based on a special relationship, and assumption of duty.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Standing (Cox individually) | Cox may pursue negligence claims individually. | Defendants argued Cox lacked a separate individual duty and thus no standing. | Cox has standing; defendants failed to designate evidence negating standing. |
| 2. Special-relationship duty to advise | Clute’s procurement of a valuation and interaction imposed a duty to advise adequacy of coverage. | Clute only procured standard quotes and did not counsel or recommend; no special relationship. | No special relationship as a matter of law; Clute did not counsel or provide specialized advice. |
| 3. Assumption of duty by providing valuation | Even absent a special relationship, preparing/providing the valuation showed Clute assumed a duty to advise. | Preparing/forwarding a valuation is a standard intermediary act; no affirmative assurances were made so no assumed duty. | No assumed duty as a matter of law; valuation alone (and no assurances) does not create an assumed duty to advise. |
Key Cases Cited
- Hughley v. State, 15 N.E.3d 1000 (Ind. 2014) (summary-judgment standards and burden on movant to negate opponent’s claim)
- Am. Family Mut. Ins. Co. v. Dye, 634 N.E.2d 844 (Ind. Ct. App. 1994) (factors defining when an insurance agent owes a duty to advise)
- Filip v. Block, 879 N.E.2d 1076 (Ind. 2008) (agent may assume duty by affirmative misrepresentations; valuation alone insufficient)
- Anderson Mattress Co. v. First State Ins. Co., 617 N.E.2d 932 (Ind. Ct. App. 1993) (repeated promises that procured coverage differed can create factual issue on assumed duty)
- Parker ex rel. Parker v. State Farm Mut. Auto. Ins. Co., 630 N.E.2d 567 (Ind. Ct. App. 1994) (insured best positioned to assess coverage needs; agent not obligated to advise absent special circumstances)
- Myers v. Yoder, 921 N.E.2d 880 (Ind. Ct. App. 2010) (preparation of a valuation is a standard insurer-insured practice; does not by itself create advisory duty)
- DeHayes Group v. Pretzels, Inc., 786 N.E.2d 779 (Ind. Ct. App. 2003) (standard property/casualty quotes and insured’s selection do not constitute counseling)