Daryl MAY and Wife, Faith May, Individually and as Next Friends for Jared Ryan May v. UNITED SERVICES ASSOCIATION OF AMERICA, the Preston Agency, Inc., et al.
No. C-9989.
Supreme Court of Texas.
Dec. 22, 1992.
Rehearing Overruled Jan. 20, 1993.
844 S.W.2d 666
Mike Hatchell, Gregory D. Smith, Ramey & Flock, P.C., Tyler, Hugo C. Schmidt, Saunders, Schmidt & Echols, Tyler, for respondents.
OPINION
PHILLIPS, Chief Justice.
This case involves the scope of an insurance agent‘s common-law duty to a customer in rendering advice about and procuring a policy for health insurance. The plaintiffs asserted only common-law causes of action, making no claim under the Texas Deceptive Trade Practices-Consumer Protection Act,
Facts
To reverse the judgment of the court of appeals, the petitioners, Daryl and Faith May, must demonstrate that some evidence in the record supports the verdict in their favor. The evidence most favorable to the Mays is that, because health insurance was not provided by Daryl‘s employer, they decided to take out a health insurance policy shortly after their marriage in December of 1982. Daryl‘s mother, Alice May, worked next door to Preston Insurance Agency, Inc. (“Preston“), from which Daryl had previously purchased automobile insurance. As a favor, Alice told Faith that she would find out what health insurance policies Preston offered. Alice visited Preston and spoke with one of the agents there, Rex Wiley. When she returned, she gave Faith a brochure describing the “Double Eagle” group policy.
The Double Eagle policy was underwritten by Continental Bankers of the South (“Continental“) and could be purchased by members1 of the United Services Association of America (“United“).2 The Double Eagle policy featured relatively low premiums and deductibles, but its termination provision allowed the underwriter to cancel the entire group at any time. The policy also contained a deferral provision that permitted the underwriter to defer coverage on group members or covered dependents
On March 16, 1983, Faith May visited the Preston Agency herself and spoke with Wiley about the Double Eagle policy. Wiley explained the basic provisions of the policy to her, though he did not tell her that Continental had only received a “C” rating from the A.M. Best Company,4 nor that Preston sold other coverages, including an individual health policy from Reserve Life.
In a prior marriage, Faith May had lost an infant child. Because the Mays were planning to have children of their own, they were interested in maternity and dependent health coverage. They told Wiley that they were concerned about covering medical expenses associated with pregnancy and childbirth. Wiley added a handwritten maternity rider to the policy. The Mays then joined the United group for a fifteen dollar membership fee and purchased the Double Eagle policy. Their coverage began on April 1, 1983.
In mid-1984, the Mays received notice that Continental had terminated the entire United group, and that another underwriter, Hermitage Insurance Company (“Hermitage“), had agreed to underwrite a plan with identical Double Eagle plan benefits for all United members previously insured by Continental. Faith May was pregnant at the time. Upon learning of the change in underwriters, she telephoned Wiley to determine what effect the change would have on the Mays’ coverage. Wiley told her that Hermitage would continue to cov
In July 1985, however, Hermitage also terminated the United group. Keystone Life Insurance Company (“Keystone“) then voluntarily assumed the group. Keystone, however, classified Jared May as a totally disabled dependent and, asserting the deferral provision of the policy, refused to cover any of his medical expenses. Pursuant to the terms of the policy, Hermitage covered Jared May for ninety days after termination, until September 30, 1985. Thereafter, however, Jared May was without insurance coverage until he died in November of 1987.
On January 27, 1987, the Mays filed suit against Preston, United, Keystone, and Hermitage seeking actual damages for unpaid medical bills and mental anguish, punitive damages and interest. Their causes of action against Keystone and Hermitage were severed because both companies were involved in receivership proceedings. Against United and Preston, the Mays alleged a number of common law causes of action, including misrepresentation and negligence.5 Although the jury failed to find misrepresentation,6 it did find that the negligence of both United and Preston proximately caused the Mays’ injuries,7 assessing their percentages of causation at 60% and 40%, respectively. The jury awarded $140,000 in damages for unpaid medical expenses and $40,000 in exemplary damages against Preston and United each. The jury awarded no damages for mental anguish. As the jury failed to find gross negligence against either defendant, the trial court rendered judgment against Preston and United jointly and severally for $140,000 plus interest and costs.
Only Preston appealed. The court of appeals, holding that there was no evidence of a negligent act by Preston that was a proximate cause of the loss of the Mays’ coverage, reversed the trial court‘s judgment as to Preston‘s liability and rendered judgment that the Mays take nothing.
The questions submitted to the jury in this case did not require the jury to specify a particular negligent act by Preston. See note 7, supra. Therefore, we must reverse the judgment of the court of appeals and render judgment on the jury verdict if there is any evidence that any of Preston‘s alleged failures constituted negligence and proximately caused the Mays’ loss.
The Mays went to trial on a pleading alleging negligence in three particulars: (1) Preston was “negligent in placing the coverage of the Mays with [Hermitage and/or Keystone] in that it exposed them to the possibility of having no coverage on their minor child,” as Preston “knew or should have known, of the danger of placing Plaintiffs in such a plan where the shifting of the insurance coverage could subject them to just exactly this type of catastrophic
Negligence in Selecting the Double Eagle Policy
The first theory charges that Preston was negligent in failing to procure for the Mays the type of policy that they requested or that would insure them against the risk they identified as important in their conversation with Wiley. It is established in Texas that an insurance agent8 who undertakes to procure insurance for another owes a duty to a client to use reasonable diligence in attempting to place the requested insurance and to inform the client promptly if unable to do so. In Burroughs v. Bunch, 210 S.W.2d 211 (Tex. Civ. App.—El Paso 1948, writ ref‘d), an agent was held liable for fire damage to a house being built by his customer when the agent, after agreeing to have a builder‘s risk policy issued on the house, failed to notify the customer that he had not procured such a policy. Id. at 214. Similarly, in Scott v. Conner, 403 S.W.2d 453 (Tex. Civ. App.—Beaumont 1966, no writ), an agent was held liable for fire damage after his customer requested a new policy to replace one cancelled by the insurer, and the agent neither procured such a replacement policy nor alerted the customer to this failure by returning the unearned portion of the premium from the original policy. Id. at 458.
Liability was imposed in the Burroughs and Scott cases because the agent induced the plaintiff to rely on his performance of the undertaking to procure insurance, and the plaintiff reasonably, but to his detriment, assumed that he was insured against the risk that caused his loss. See Burroughs, 210 S.W.2d at 213-14; Scott, 403 S.W.2d at 458.9 Unlike the plaintiffs in the Burroughs and Scott cases, however, the Mays were not misled into believing that a
The Mays failed to obtain favorable jury findings as to misrepresentation, and Faith May acknowledged at trial that Wiley told her of the termination provision allowing an underwriter to cancel coverage for the entire group. Rather, the Mays’ first negligence claim directly challenges Wiley‘s professional judgment in recommending the Double Eagle policy to Alice May and in allowing Daryl and Faith May to purchase it.11 We have found no Texas cases addressing a similar claim,12 and few from any jurisdiction.
One such case is Jones v. Grewe, 189 Cal.App.3d 950, 234 Cal.Rptr. 717 (1987). There, the holders of a $300,000 liability insurance policy on an apartment complex
Sobotor v. Prudential Property & Casualty Insurance Co., 200 N.J.Super. 333, 491 A.2d 737 (1984) (per curiam), also involved a claim of negligent procurement with no allegation that the plaintiff was misled in any way about the coverage obtained. There, an agent was sued by a customer who, despite requesting the “best available” automobile insurance package, received only the minimum uninsured-underinsured motorist coverage required by state law and was subsequently struck by an underinsured driver. The plaintiff introduced evidence that at the time of his request the agent was authorized to issue a policy from the same insurer that, for an additional five-dollar premium, provided over six times as much per-person coverage and ten times as much per-accident coverage. The court viewed the additional duty claimed to have been violated as simply one to inform a customer of the available options. The court concluded that the agent had been negligent, and that through his request for the “best available” insurance the customer had put the agent on notice of reliance on his expertise. Id. at 741-42.
Several other courts have imposed liability where the client, though not misled in any way about his or her coverage, was misled about how that coverage compared to other policies. See Bates v. Gambino, 72 N.J. 219, 370 A.2d 10, 13 (1977) (per curiam) (because of agent‘s ignorance of applicable regulations, customers believed they could not obtain temporary coverage while their application was being considered); Seascape of Hickory Point Condominium Association, Inc. v. Associated Insurance Services, Inc., 443 So.2d 488, 491 (Fla.App.1984) (agency repeatedly advised customer that insurance to protect a seawall against storm damage did not exist, when in fact the availability of such insurance was widely known among insurance professionals).
Although they have followed different approaches, these courts, departing from the theory of Burroughs, Scott, and Rainey-Mapes, have allowed the possibility of liability against an agent for negligent procurement based not on the customer‘s reliance on the existence or scope of coverage, but simply on the agent‘s failure to perform his duties with sufficient skill. See Bates, 370 A.2d at 12.
In the case before us, Faith May testified that in seeking health insurance from Preston, she told Wiley that she had previously lost a child and wanted to make sure that any policy she purchased for herself and her husband “would cover my pregnancy and any testing that I may need to have, and then any child and any problems that he may have or any testing that a child would have at birth.” She also told Wiley that she and her husband “would like to have an insurance policy that we could
The shortcoming of the Double Eagle policy, as events developed for the Mays, was the interaction of the termination and the deferral provisions. The deferral provision became applicable anew for all insured individuals when there was a change of underwriters. Thus, hospitalized or disabled individuals whose medical care was covered because they became disabled at a time when they were already covered under the policy, or because they were born to individuals who were covered under the policy,15 faced the risk that they would lose coverage if the current underwriter dropped the entire group and a new underwriter took over.
The Mays contend that the procurement of a policy with this limitation in response to their request was negligent. Like the Jones plaintiffs, however, they base their claim solely on a limitation of coverage about which they were fully apprised, and
Unquestionably, Wiley could have done a better job by ascertaining whether the Mays would have preferred to pay a higher premium for a nongroup policy without a comparable termination provision.18 How
Therefore, we hold that there is no evidence to support the Mays’ first negligence theory.
Negligence in Failing to Investigate the Underwriters
The Mays’ second and third theories allege that Preston was negligent in placing the coverage because Wiley either failed to investigate, or failed to adequately investigate, the financial solvency of Hermitage and Keystone, or if he did discover the financial condition of the underwriters, he was negligent for nonetheless placing the Mays’ coverage with them.
At the time Wiley placed the coverage in 1983, Hermitage and Keystone were not yet in the picture; the underwriter was Continental.19 It is therefore difficult to see how any negligence by Wiley in investigating Hermitage or Keystone could be relevant to the earlier decision to place the Mays in the United group and procure the Double Eagle policy. Even reading their complaint in the most generous light possible—that is, construing it to allege negli
Although at trial and in the Mays’ brief to this Court much is made of the facts that Hermitage had a “C” rating from A.M. Best and that Hermitage and Keystone eventually ended up in receivership, there is no showing of how the financial condition of any of those companies contributed to the Mays’ loss. No claims under the policy went unpaid because of the insolvency of any underwriter.20 Hermitage did not go into receivership in Texas until twenty-one months after it had cancelled the United group, and Faith May testified at trial that as far as she knew all claims she made while Hermitage was the underwriter were paid. The receiver for Hermitage was granted a directed verdict on this basis. There is no evidence (or any allegation) that Keystone‘s decision to exclude Jared from coverage under the deferral provision was a consequence of a weak or precarious financial condition. The only potentially meritorious claim of harm the Mays could make is that Hermitage‘s decision to drop the United group—which exposed Jared to the possibility of being excluded under the deferral provision by Hermitage‘s successor—was prompted by its poor financial condition. There is, however, no testimony in the record to support this theory.
Because there is no evidence to support the jury‘s finding as to any of the three theories alleged in the Mays’ complaint, the judgment of the court of appeals was proper. We affirm.
DOGGETT, Justice, dissenting.
All members of the court seem to agree that a professional insurance agent has a responsibility to disclose certain information to assist a client in making an informed decision. The debate today is limited to whether there is any evidence of the negligence of the agent who dealt with this particular East Texas family. The Rusk County jury that heard the case found that the agent failed to use ordinary care in selling the Mays an insurance policy. Increasingly, however, when this majority disagrees with a jury verdict, it simply replaces the deliberations of twelve members of the local community with the preferences of a majority of the “high nine” in Austin.1 Today this disturbing trend continues.
In reviewing a “no evidence” point, this court “must consider only the evidence and inferences tending to support the jury‘s finding, viewed most favorably in support of the finding, and disregard all contrary evidence and inferences.” Havner v. E-Z Mart Stores, Inc., 825 S.W.2d 456, 458 (Tex.1992); State v. $11,014.00, 820 S.W.2d 783 (Tex.1991) (per curiam); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965). In concluding that there is no evidence of negligence “under the facts of this case,” the majority ignores this long-standing rule and instead reweighs the evidence to determine its factual sufficiency. Where more than a “scintilla” of evidence exists to support a finding, we remand to the court of
Here the jury found that the insurance agent made no misrepresentations, but was nonetheless negligent in advising the Mays. I do not personally view the evidence underlying that finding to be overwhelmingly persuasive. In fact, I disagree with Justice Gammage that this agent may have breached his duties to the Mays for personal financial gain. Making a reasonable profit is hardly illegal; indeed, it is at the core of our economic system. There is no evidence that this agent, Rex Wiley, could not have earned just as much from selling the Mays a different policy. Even without such a comparison, in some instances a jury may be entitled to infer an improper financial motive, but that cannot be done on this record, nor here is this even a relevant consideration. Regardless of Wiley‘s state of mind, his failure to make a reasonable disclosure to his clients was some evidence of negligence.
When Faith May sought an affordable “good policy” that would provide coverage for any future children, she entrusted to Wiley the job of assessing the available alternatives and advising her as to the most appropriate coverage. He not only failed to make such an evaluation, but neglected to inform the Mays that there were any alternatives to the policy he recommended. While emphasizing Wiley‘s disclosure of the particular termination clause that eventually caused coverage to lapse, see 844 S.W.2d at 670 n. 10, the majority fails to note that the Mays had no way of knowing whether there were any available alternatives to better meet their needs or
An insurance agent, like other professionals, is not a guarantor of the client‘s happiness and should not be subject to liability any time the client is dissatisfied. Nor should the fact that the agent earns a reasonable profit from providing a service, by itself, be evidence the service has been negligently performed. But as the agent should not bear responsibility for every bad result, neither should the consumer.
An insurance agent is required to “keep his clients fully informed so that they can remain safely insured.” Trinity Universal Insurance Co. v. Burnette, 560 S.W.2d 440, 442 (Tex.Civ.App.—Beaumont 1977, no writ) (quoting Cateora v. British Atlantic Assurance, Ltd., 282 F.Supp. 167, 174 (S.D.Tex.1968)). In Frank B. Hall & Co. v. Beach, Inc., 733 S.W.2d 251, 261 (Tex. App.—Corpus Christi 1987, writ ref‘d n.r.e.), the court upheld a jury finding that an insurance agent was negligent in failing to “thoroughly acquaint himself” with his client‘s needs and in failing to procure the coverage most appropriate to fulfill them. See also Kitching v. Zamora, 695 S.W.2d 553 (Tex.1985). Recognizing that insurance agents must exercise reasonable care in advising consumers, the majority cites a number of opinions from other states, such as Sobotor v. Prudential Property & Casualty Insurance Co., 200 N.J.Super. 333, 491 A.2d 737, 741-42 (App.Div.1984) (per curiam). There the court affirmed a finding that an agent was negligent in failing to inform the client of the availability of uninsured motorist cov
Although the majority acknowledges that Wiley “could have done a better job” by informing the Mays more fully, it nonetheless concludes that there is no evidence to support a negligence claim. 844 S.W.2d at 672. Distinguishing Sobotor on the grounds that requesting “the best available” insurance is qualitatively different from requesting “good” coverage, 844 S.W.2d at 673, the majority approaches the case from the perspective of the factfinder. The jury here was entitled to find that, in light of all the surrounding circumstances, a reasonable insurance agent in Wiley‘s position should have informed the Mays of the availability of other policies. In Kabban v. Mackin, 104 Or.App. 422, 801 P.2d 883, 891 (1990), the court held that the question of whether the agent should have advised the client of a potential coverage problem was for the jury to determine. Because the trial court had essentially usurped the jury‘s role through instructions defining the standard of care, the case was reversed and remanded for a new trial. Like the trial judge in Kabban, the majority today supplants the jury as fact-finder by holding that, even though Wiley‘s conduct was less than exemplary, the record contains no evidence of his negligence. Because the majority continues its steady erosion of our right to trial by jury, I dissent.
GAMMAGE, Justice, dissenting.
I respectfully dissent. The majority admits an insurance agent has a duty to advise his customers, but concludes that either the duty in this case was so narrow that there was no evidence Wiley negligently failed to give it, or that if he did
The majority holds there is no evidence to support jury findings favoring the Mays. The standard for review of evidence to support jury findings is well established: the court may consider only evidence and reasonable inferences drawn therefrom in the light most favorable to support the jury findings, and must disregard all contrary inferences and inconsistent evidence. Lofton v. Texas Brine Corp., 777 S.W.2d 384, 387 (Tex.1989); Lucas v. Texas Industries, Inc., 696 S.W.2d 372, 377 (Tex.1984); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965). In crucial instances, the majority fails to properly recognize the evidence and clear inferences from it.
Faith May testified that her inquiry to Wiley concerned available health coverage. The inquiry was initially transmitted through Daryl‘s mother, Alice. Faith testified Alice “told us that she would talk to an agent to find out what policies they offered.” Even after questioning and emphasizing her need for the best available and affordable health policy, Faith says the Double Eagle was the sole policy shown. She further testified she emphasized the need for continuing insurance coverage of the children she and Daryl planned to have.
The principle involved here is simply that a person who holds himself out to the public as possessing special knowledge, skill or expertise must perform his activities according to the standard of his profession. ***
We are a nation which also prides itself on a tradition of allowing a person to rely upon the words of another who, because of special knowledge, undertakes to act as an advisor. If an agent has an economic self-interest in imparting information, sound policy does require that the agent‘s duty to speak without negligence be reinforced by basic tort principles inherent in the common law. [Citation omitted.]
Darner Motor Sales v. Universal Underwriters, 140 Ariz. 383, 682 P.2d 388, 403 (Ariz.1984).
This “duty to speak” may arise in two different contexts—the blackletter law and what are sometimes called “special circumstances.” What I have called the “blackletter” law comes from the usual statement of an insurance agent‘s duty.1 Part of that duty is “to have adequate knowledge as to the different companies and the variety of terms available with respect to the undertaking he has assumed.” Annot., Duty and Liability of Insurance Broker or Agent to Insured with Respect to Procurement, Continuance, Terms, and Coverage of Insurance Policies, 29 A.L.R.2d 171, 187 (1953). The agent must have reasonable knowledge of the types of policies, their different terms, and the coverage available in the area in which the client seeks to be protected. Seascape of Hickory Point Condominium Ass‘n, Inc., Phase III v. Associated Ins. Services, Inc., 443 So.2d 488, 490 (Fla.App. [2d Dist.] 1984, rev. den.). The agent has a duty to disclose the information to the client and to advise the client as to the insurance he seeks. Darner Motor Sales, 682 P.2d at 402; Seascape of Hickory Point, 443 So.2d at 490; McAlvain v. General Ins. Co., 97 Idaho 777, 780, 554 P.2d 955, 958 (1976); Kenyon v. Larsen, 205 Neb. 209, 217, 286 N.W.2d 759, 764 (1980); Bates v. Gambino, 72 N.J. 219, 370 A.2d 10 (1977).
There is evidence to support the jury finding that Preston Agency breached this duty. Wiley testified he did not know the differential in premium between the Double Eagle group policy and the policies that could have been obtained outside of a group. Contrary to this admission, the majority asserts the Double Eagle “according to his [Wiley‘s] testimony, achieved lower rates and lower deductibles by its group structure and by excluding persons who could not answer the health questions affirmatively.” 844 S.W.2d at 672. Why accept Wiley‘s testimony against the jury verdict,2 but ignore his contrary admissions supporting the verdict?
Wiley further admitted he didn‘t even do any premium comparisons for the Mays of other “single company” policies that would have avoided the loss of coverage for Jared. The reasonable inference from Wiley‘s testimony is that he had such other single company policies available.3 Wiley
All attempts by Wiley to justify his advice to the Mays are suspect. In his pretrial deposition, Wiley testified that he dealt with Faith and Daryl May exclusively through the mother-in-law in procuring their Double Eagle policy; he claimed he never met with them personally. At trial, when confronted with the maternity coverage rider exclusively in his handwriting, Wiley conceded it meant he must have met with the Mays, but he could not recall what was said.
Wiley testified that placing the Mays in a “single company” non-group health insurance policy would have avoided the loss of coverage for Jared, and further admitted that he made no attempt to determine relative cost or show the Mays what the premium difference would be.
There was evidence from which the jury could have reasonably inferred that Wiley had a financial motive to push the Double
Wiley testified he was “concerned” that the Double Eagle went through two underwriters, both of which were the subject of insolvency proceedings immediately following their Double Eagle connection, but he never communicated that concern to the Mays. Rather, each time the Mays contacted him to express their concern, he reassured them and urged them to stick with the Double Eagle.
There is clearly evidence that Wiley, lacking adequate knowledge regarding health insurance coverage and policies available, may have placed the Mays into the Double Eagle group for his own profit. There is evidence of negligence. As explained in Darner Motor Sales, that is the reason tort law liability should be imposed to require the agent to place his professional duty to advise above his economic interest to sell the client whatever profits the agent, as opposed to what is appropriate for the client‘s needs.
The second context in which the affirmative duty to advise arises is sometimes
The evidence supports these two types of “special circumstances.” Wiley testified that Preston Agency advertised that “the insurance professionals at Preston will take care of your insurance needs.” He further admitted the message of their advertising was “something in the concept” that they would tell potential customers to come in and sit and talk with them, and together they would go over their insurance needs, and “we‘ll tell you what type of coverage you need in a given situation.”
Faith May testified they requested advice, and Wiley agreed to give it. The record is replete with evidence that Wiley continued to give the Mays advice long after their initial purchase of the Double Eagle policy.
An insurance agent is liable when he fails to provide accurate information regarding available insurance which he knows or should know the customer desires. Woodham v. Moore, 428 So.2d 280 (Fla.App. [4th Dist.] 1983). By holding themselves out as insurance professionals who would give sound advice, the agents
To distinguish a number of cases, particularly Bates v. Gambino, Seascape of Hickory Point and Sobotor, the majority here creates the “misled” requirement. Under the majority‘s analysis, to be actionable a statement must “mislead” about the availability or adequacy of coverage. Thus, if the agent chooses the inappropriate policy or coverage, it is not “negligent.” According to the majority, giving no advice is fine, even if there is a duty to advise, and only giving misleading advice is actionable. The cases do not so limit the agent‘s duty to advise. Especially in Sobotor, where there was no express misleading advice, just a failure to advise, the distinction fails. The majority essentially argues that the Mays lost their negligence cause of action when the jury failed to find misrepresentation. That is not the law. The negligence cause of action is distinct from the misrepresentation cause of action.
The majority places much reliance on Jones v. Grewe, 189 Cal.App.3d 950, 234 Cal.Rptr. 717 (1987). Plaintiffs in that case argued the insurance agent had a duty to determine what their worth was, to fix an amount for liability insurance. The obvious distinction is that in Grewe the insureds neither specifically asked for the coverage nor informed the insurance agency of the risk that concerned them. Here the Mays informed Wiley that they wanted to be sure of continuous coverage for any children they might have.
The majority accepts evidence and inferences contrary to the jury verdict, and disregards or substitutes its own gloss on evidence supporting the verdict. There was evidence the Preston Agency under the circumstances of this case had the duty to advise the Mays of their insurance needs. It should have either offered them insurance appropriate for their needs or told them it did not offer what they needed. There was also evidence supporting the jury‘s finding that Preston Agency breached that duty, because it did not disclose any insurance options other than the Double Eagle, which was particularly ill-suited to the Mays’ needs. Preston Agency had its duty to disclose both under the blackletter law and because it held itself out as offering expert insurance advice, agreeing to give the Mays such advice. The majority recognizes no minimum standards of due diligence other than to avoid affirmative misrepresentation. The majority denies the Mays both their facts and the protection they should have under the law. I therefore dissent.
MAUZY, J., joins in this dissent.
No. D-0650.
Supreme Court of Texas.
Dec. 31, 1992.
Notes
[A]n insurance agent or broker, employed by a prospective client to effect insurance on behalf of the client, must exercise such reasonable skill and ordinary diligence as may fairly be expected of a person in his profession or situation, in doing what is necessary to effect a policy, in seeing that it effectually covers the property or risks to be insured, in selecting the insurer and ascertaining that it is of good credit and standing, and in obtaining as good terms as are reasonably possible.
Q: [W]hen we read your deposition testimony and it‘s in evidence, the question was that, “The way Jared fell between the cracks was this changing of underwriters?”
A: Changing from Hermitage to Keystone is where he fell, yes.
Q: Now, there are underwriters of insurance coverage who put people with a single company, and they stay the insured of that company?
A: Right.
Q: And this problem of changing underwriters and that situation is avoided, isn‘t it?
A: Right.
A: But you never even did so much as a premium check to be able to tell the Mays what the difference between one of those types of plans and this type of plan was, did you?
A: I don‘t remember whether I did or not.
* * * * * *
Q: Okay. If your deposition says that you didn‘t, do you stand by what you said in your deposition?
A: As far as I know, I don‘t guess I did.
Question 1: Did any party named below make any representation to Faith May or Daryl May about the quality, character, or type of coverage available under the Double Eagle Plan?
Answer: Preston: Yes
United: Yes
Question 2: Did Faith or Daryl May rely on any such representation made in enrolling in the Double Eagle Plan?
Answer: Preston: Yes
United: Yes
Question 3: Was such representation relied upon untrue?
Answer: Preston: No
United: No
Did the negligence, if any, of the parties below proximately cause the loss, if any, in question?
Answer: Preston: Yes
United: Yes
“[A broker] procures insurance and acts as middleman between the insured and the insurer, and solicits insurance business from the public under no employment from any special company, but, having secured an order, places the insurance with the company selected by the insured, or, in the absence of any selection by him, with the company selected by such broker....” An insurance agent, on the other hand, has a fixed and permanent relationship to an insurance company that the agent represents and has certain duties and allegiances to that company.
See also 1 Bertram Harnett, Responsibilities of Insurance Agents and Brokers § 2.02 (1991 & Supp.); 3 Couch on Insurance 2d § 25:95, 448-55 (Rev. ed. 1984 & Supp.1990).
Although some Texas courts have used the term “insurance broker” in this sense, see, e.g., Foundation Reserve Insurance Co. v. Wesson, 447 S.W.2d 436, 438 (Tex.Civ.App.—Dallas 1969, writ ref‘d); Zurich General Accident & Liability Insurance Co. v. Fort Worth Laundry Co., 58 S.W.2d 1058, 1059 (Tex.Civ.App.---Fort Worth 1933, no writ), the broker/agent distinction is not found in the Texas Insurance Code. Although the Code does distinguish in some contexts between local recording agents and soliciting agents,