The Opinion of Judge Thomas F. Burke, Jr. in the case of Feist v. Andes, No. 2013-2678 (C.P. Luz. Co. July 19, 2017 Burke,
J.), a decision from over a year ago, was recently published in the Luzerne
Legal Register.
In this decision, Judge Thomas F. Burke, Jr., of the Luzerne County Court of
Common Pleas granted a carrier’s Motion for Summary Judgment case where the
Plaintiffs asserted that their insurance carrier and agent refused to provide
them with the increase UIM coverage they had requested before one of the
Plaintiff was involved in a motor vehicle accident.
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| Judge Thomas F. Burke, Jr. Luzerne County |
The Plaintiffs alleged that they had met with the insurance
agent on two (2) separate occasions and had requested increase UIM coverage at
each meeting but were not granted the same by the insurance agent. The Plaintiffs asserted that the insurance agent allegedly
attempted to talk them out of such increase coverage and/or did not provide
them with such coverage.
The court emphasized that the Plaintiff’s knew at the
end of their meetings with the agent that they did not secure that
increased coverage. The court also noted that the Plaintiffs admitted that they
were aware that they could have sought out another insurance agent or another
insurance company but did not do so.
The Plaintiffs sued the insurance agent and the carrier
under counts of negligence, breach of fiduciary duty and/or duty of loyalty,
and breach of a duty of good faith and fair dealing.
The court granted summary judgment on each of these theories
of liability. On the negligence theory,
the court found that, as a general rule of law in Pennsylvania, insurance
agents have no common-law duty to their customers unless the insurance agent
receives consideration for his services apart from the premium which is paid by
the customer for the insurance policy itself, or whether the agent acts as an
insurance counselor through an extensive and complex course of dealings with
regards to the client’s business matters.
The court reiterated that even accepting the facts noted above as
being true, the Plaintiffs knew when the left the meeting with the insurance
agent that they had not been granted increased coverages and that they likewise knew
that they could have switched to a different insurance agent and/or
carrier.
Applying the principles of
negligence law, the court was unwilling to find that an exception to the general
rule of law that insurance agents have no common law duty to their customers
existed in this case.
Given this ruling on the negligence claim against the
insurance agent, the court also entered judgment in favor of the carrier on the
claim that the carrier owed a duty to the Plaintiff under the doctrine of
respondeat superior. The court also
noted that there is no independent cause of action for respondeat superior
liability under Pennsylvania law.
The court additionally entered summary judgment in favor of
the agent and the carrier on the claim of a breach of fiduciary duty and/or
duty of loyalty.
Judge Burke noted that, under Pennsylvania law, the purchase
of an insurance policy is considered to be an “arm’s length” transaction, in
which the carrier owes no fiduciary duty apart from the terms defined in the
insurance contact.
The court also noted
that, generally, the relationship between an insurance agent and a customer
cannot be characterized as a fiduciary relationship, except in limited
circumstances in which the policyholder has authorized the insurance agent to
make decisions on behalf of the policyholder.
Such was not the case in this matter based upon the court’s
review of the facts. Judge Burke found
that the record was devoid of any evidence that would show that the Plaintiff
had relinquished their decision-making authority to the insurance agent or that
the insurance agent had an “over-mastering” influence over the Plaintiffs.
In this regard, the court noted that both Plaintiffs
indicated that they had business knowledge with regards to purchasing
automobile and homeowner’s insurance over the years. Both Plaintiffs also acknowledged that they
had consulted with and received legal advice from an attorney about increasing
their coverage limits. As such, the
court found that the Plaintiffs were not relying upon the insurance agent’s
advice, but rather, were relying upon their own knowledge as well as the advice
of their attorney.
The court ruled in this case that the Plaintiff did not rely
upon any purported statement by the insurance agent that they had sufficient
UM/UIM coverage limits. Rather, the
Plaintiffs testified that they did not agree with the insurance agent’s
assessment in this regard and had every intention of increasing their limits at
some future time.
The court emphasized the Plaintiffs nevertheless continued to renew
their insurance policies during the ten (10) month time period leading up to
the accident by paying the premiums by being completed away as to the current
status of their limits.
Lastly, the court also granted summary judgment in favor of
the carrier on the Plaintiffs’ claim of a breach of a duty of good faith in
fair dealing. In so ruling, the court
found that there was no evidence of any contract between the Plaintiffs and the
Defendant insurance agent. The court
noted that the breach of a duty of good faith and fair dealing are intertwined
and arise out of contract law.
Given that there is no contract with the insurance agent,
the court entered summary judgment in favor of the insurance agent on these claims. The court additionally entered summary
judgment in favor of the carrier as the Plaintiffs attempted to latch this
theory on the carrier by way of a theory of respondeat superior. The court noted that, since there is no
contract found between the Plaintiffs and the insurance agent, there could no
liability on the part of the carrier as well under a respondeat superior theory of liability.
Overall, the court entered summary judgment on all of the
claims presented.
At the end of this Opinion is an Editor’s note indicating that the Pennsylvania Superior
Court affirmed Judge Burke’s decision by way of an August 21, 2018
non-precedential decision under docket number 1326 MDA 2017 (Pa. Super. Aug.
21, 2018).
Anyone wishing to review a copy of this case may click this LINK.
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