Indiana Restorative Dentistry, P.C. v. The Laven Insurance Agency, Inc. and ProAssurance Indemnity Co., Inc. F/K/A the Medical Assurance Co., Inc.
2015 Ind. LEXIS 173
| Ind. | 2015Background
- Indiana Restorative Dentistry (IRD) maintained business personal property insurance through an agency that became Laven Insurance Agency (Laven) and an insurer ProAssurance; policy covered office contents with a $204,371 limit.
- In October 2009 a fire destroyed IRD’s office; contents loss was about $704,394, leaving a ~$500,000 shortfall after the policy limit was paid.
- IRD sued Laven (tort and contract) and ProAssurance (vicarious liability) claiming: (1) Laven had a tort duty to advise under a “special relationship,” and (2) Laven breached an implied contract to procure full/§350,000 contents coverage.
- The trial court granted partial summary judgment for ProAssurance, finding no duty to advise and no implied contractual duty; IRD appealed; Court of Appeals reversed on duty to advise but found a factual issue on vicarious liability.
- Indiana Supreme Court: (a) reversed summary judgment as to Laven’s duty to advise because genuine factual disputes exist over whether a “special relationship” existed; (b) affirmed summary judgment against IRD on the implied-contract-to-procure-full-coverage claim for lack of a meeting of the minds; (c) summarily affirmed that factual issues remain on ProAssurance’s vicarious liability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Laven owed a tort duty to advise based on a "special relationship" | IRD: long-standing relationship, annual questionnaires, Laven marketed dental expertise and thus had a duty to advise on adequacy of coverage | Laven: relationship was arms-length and routine agent-insured interactions; no special relationship | Genuine factual dispute exists; summary judgment improper — remand for trial on duty-to-advise issue |
| Whether Laven breached an implied contract to procure full (or $350,000) contents coverage | IRD: past dealings and renewals imply Laven agreed to procure full coverage; breach caused $500k shortfall | Laven: no meeting of the minds; no request or agreement for full coverage identified | No evidence of the five contract elements or any specific agreement — summary judgment for Laven affirmed (no implied contract) |
| Whether breach of duty to procure can be pled in contract rather than only tort | IRD: agent’s failure to procure may be contractual or tortious | Laven: agent malpractice should be only tort; policy reasons to bar contract claims | Court: longstanding Indiana precedent allows breach-of-procure claims in contract or tort; agreed with IRD that contract theory is viable, but no contract existed here |
| Whether ProAssurance is vicariously liable for Laven’s alleged omissions | IRD: insurer may be vicariously liable for agent’s acts | ProAssurance: argued no basis for vicarious liability as decided below | Court of Appeals (and Supreme Court summarily) found material factual issues remain; remanded for further proceedings on vicarious liability |
Key Cases Cited
- Filip v. Block, 879 N.E.2d 1076 (Ind. 2008) (distinguishes duty-to-procure from duty-to-advise; no duty to advise absent special relationship)
- Dye v. American Family Mutual Ins. Co., 634 N.E.2d 844 (Ind. Ct. App. 1994) (special-relationship factors and insured’s burden to prove duty to advise)
- Stockberger v. Meridian Mutual Insurance Co., 395 N.E.2d 1272 (Ind. App. 1979) (agent’s failure to procure insurance may sound in contract; five elements for a contract to procure insurance)
- Parker v. State Farm Mutual Automobile Ins. Co., 630 N.E.2d 567 (Ind. Ct. App. 1994) (long relationship alone insufficient; focus on nature of relationship)
- Hughley v. State, 15 N.E.3d 1000 (Ind. 2014) (summary judgment standard: court must draw all reasonable inferences for nonmoving party)