Auto-Owners Ins. Co. v. Yates, AUTO-OWNERS

• Decision Date: 16 March 1979
• Docket Number: No. 78-49,AUTO-OWNERS,78-49
• Citation: 368 So.2d 634
• Parties: INSURANCE COMPANY, a Michigan Corporation, Appellant, v. Elizabeth S. YATES, Appellee.
• Court: Florida District Court of Appeals

Page 634

368 So.2d 634

AUTO-OWNERS INSURANCE COMPANY, a Michigan Corporation, Appellant, v. Elizabeth S. YATES, Appellee.

No. 78-49.

District Court of Appeal of Florida, Second District.

March 16, 1979.

H. Vance Smith and M. W. Graybill, of Macfarlane, Ferguson, Allison & Kelly, Tampa, for appellant.

W. Nelson Rivers, Tampa, for appellee.

GRIMES, Chief Judge.

This is an appeal from a summary judgment declaring the applicable limits of certain uninsured motorist coverage.

Appellee (Ms. Yates) was severely injured while a passenger in her own car on January 21, 1977. The limits of liability coverage available from the other vehicle's insurer were $20,000/$40,000. Ms. Yates submitted a claim to appellant (Auto-Owners), her own insurance carrier, for underinsured motorist coverage. Auto-Owners denied the claim because the stated limits of uninsured motorist coverage on the policy issued to Ms. Yates were $15,000 per person/$30,000 per occurrence. Ms. Yates sued for declaratory relief.

Discovery developed the following pertinent facts: In 1975, the Cadillac in which Ms. Yates was later injured was insured by Unigard Mutual Insurance Company (Unigard) along with several other vehicles owned by Ms. Yates and her husband. Ms. Yates divorced her husband in the summer of 1976 and the Cadillac became her property as a result of the divorce. The Unigard insurance had been handled by the Allied Insurance Agency, and Hugh Harless was the Allied employee who was directly involved in placing the coverage. Harless left Allied in December of 1975 to establish his own insurance agency. When Harless learned that Ms. Yates had divorced, he contacted her about handling her insurance needs. As a result of their conference, she authorized him to place insurance for her on the Cadillac and some other property which she owned.

Harless was an authorized agent for several insurance companies, including one which wrote automobile liability insurance for commercial vehicles. However, he was not then an agent for any company writing insurance on family vehicles. Until he built up his business to the point where he could become an authorized agent for a company writing family automobile liability coverage, he obtained family automobile coverage for his customers from the Elmer Johnson insurance agency. This agency was an authorized agent for several companies writing this type of coverage, including Auto-Owners. Accordingly, Harless talked to Elmer Johnson of the Johnson agency about insurance on Ms. Yates' Cadillac, and he obtained from Johnson a blank Auto-Owners' insurance application. He took the application form to his office, filled it out, and returned it to Johnson, requesting liability insurance of $100,000/$300,000 and uninsured motorist coverage of $15,000/$30,000. Unbeknownst to Johnson, Harless signed Ms. Yates' name to the application in the two places indicated for the signature of the insured. The application contained a provision just above one of the signatures which stated that under Section 627.727 of the Florida Statutes the company was required to offer uninsured motorist coverage limits equal to the bodily injury limits unless specifically lower limits were requested. There was a check next to the line which stated that the applicant requested uninsured motorist coverage in the reduced limits of $15,000/$30,000.

The Auto-Owners policy was issued effective July 10, 1976, in Ms. Yates' name with the limits as requested by Harless. The policy was sent to Harless who mailed it to Ms. Yates. She sent the premium to Harless. He forwarded the premium to Johnson and received a portion of the premium back for his services. The policy was renewed by endorsement effective January 10, 1977, with the same limits. Once again, Harless and the Johnson agency shared the premium.

Prior to July 10, 1976, Harless had obtained other insurance policies from Auto-Owners through Johnson for his customers, and on some of these occasions he had signed his customers' names on the applications. Johnson was unaware that Harless sometimes signed the applications for his customers.

Ms. Yates and Harless differed with respect to their recollections of the discussion between them concerning the amount of uninsured motorist coverage to be included in the policy. Harless testified that he told her she could obtain uninsured motorist coverage in limits up to the amount of her liability limits but that it would cost more than the minimum uninsured motorist coverage which she previously had with Unigard. He said she told him that she wished to maintain the same limits which she had with Unigard, but that she wanted a price quote for the whole package. He then obtained a price quote from Johnson and relayed the information to Ms. Yates. She authorized him to obtain the policy on that basis. Ms. Yates recalled no specific discussion with Harless about uninsured motorist coverage, but she testified that she told him she wanted the "fullest coverage." She said that she did not authorize him to sign her name on the application and that she had no idea that he had done so.

Both parties moved for summary judgment. The trial court concluded that Harless had provided Ms. Yates with no information regarding the selection of uninsured motorist coverage and that he had signed the insurance application without authority from Ms. Yates. The court further found that all of the acts of Harless were the acts of the Auto-Owners and that Ms. Yates had not rejected the uninsured motorist coverage in an amount equivalent to her liability limits to which she was otherwise entitled under Section 627.727(2), Florida Statutes (Supp.1976). The court ruled that the uninsured motorist coverage limits in the Auto-Owners policy applicable to Ms. Yates' injuries were $100,000/$300,000.

Auto-Owners argues (1) that Harless was an insurance broker who acted as an agent for Ms. Yates rather than for Auto-Owners, and (2) that, in any event, there was a material issue of fact as to whether Ms. Yates requested Harless to obtain the higher coverage. Because we agree with Auto-Owners on the first point, there is no need to consider the second.

The distinction between an insurance broker and an insurance agent is explained in 3 Couch on Insurance 2d, § 25:92 (1960):

An "insurance broker" is one who acts as middleman between the insured and the insurer, and who solicits insurance from the public under no employment from any special company, and who, upon securing an order, places it with a company selected by the insured, or, in the absence of such a selection, with a company selected by himself; whereas an "insurance agent" is one who represents an insurer under an employment by it. Whether a person acts as a broker or agent is not determined by what he is called but is to be determined from what he does. In other words, his acts determine whether he is an agent or a broker.

In discussing the status of an insurance broker, 16 Appleman, Insurance Law and Practice § 8726 (1968) states:

A broker is ordinarily defined as being one who acts as a middleman between the insured and insurer and who solicits insurance from the public under no employment from any special company, but having secured an order either places the insurance with a...