Benante v. United Pacific Life Ins. Co.

• Decision Date: 28 December 1995
• Docket Number: No. 37S03-9505-CV-548,37S03-9505-CV-548
• Citation: 659 N.E.2d 545
• Parties: Margie A. BENANTE, Appellant, v. UNITED PACIFIC LIFE INSURANCE COMPANY, Appellee, and Joseph A. Kobielak, Non Party to Appeal.
• Court: Indiana Supreme Court

Page 545

659 N.E.2d 545

Margie A. BENANTE, Appellant, v. UNITED PACIFIC LIFE INSURANCE COMPANY, Appellee, and Joseph A. Kobielak, Non Party to Appeal.

No. 37S03-9505-CV-548.

Supreme Court of Indiana.

Dec. 28, 1995.

Mark A. Thiros, Cohen and Thiros, Merrillville, for appellant.

Karen L. Hughes, Daniel A. Medrea, Lucas, Holcomb & Medrea, Merrillville, for appellee.

ON PETITION TO TRANSFER

SULLIVAN, Justice.

At issue in this case is whether an insurance broker who represents several insurance companies can be found to be an agent for a particular company even if no application for insurance was made to (and no policy issued by) that company, thereby exposing that company to liability for the broker's acts.

Facts

Margie Benante, a widow living in Highland, Indiana, contacted Joseph Kobielak, an insurance salesman, in 1987 after she heard him on a local radio station telling listeners that he sold insurance products. Kobielak first met with Benante at Benante's home in January of 1988. Kobielak represented himself to Benante as an agent of United Pacific Life (UPL), specifically discussed UPL annuities, and left with Benante several brochures regarding a UPL annuity product called "Auto 7".

After meeting with Benante again, Kobielak told Benante he would invest $83,000 of her money in a UPL mutual fund. Some time later, Kobielak had Benante sign what appeared to be official UPL documents, purportedly authorizing Kobielak to transfer Benante's money from the mutual fund into the Auto 7 annuity. Benante wrote Kobielak a personal check for $83,000 so that he could invest this money first in the UPL mutual fund and then later in the UPL annuity. She later wrote Kobielak a check for $1,000, again intended for the purchase of the annuity.

Benante had also given Kobielak money to purchase a life insurance policy from Lafayette Life Insurance Company. However, when she later discovered that Kobielak had not used all of the money she gave him to purchase this policy, she demanded he return the money she gave him for the life insurance policy. Kobielak did so.

After discovering that Kobielak did not apply all of the money she gave him for the Lafayette Life Insurance policy toward it, Benante phoned UPL to see if Kobielak had invested the money she gave him for the annuity. UPL informed Benante that it knew nothing of this investment. Benante then demanded a refund of her money from UPL, but UPL refused. Benante also demanded her money back from Kobielak, but he returned only $10,000 to her. UPL subsequently terminated the General Agent Agreement that Kobielak had previously entered into with UPL. Benante eventually filed suit against both UPL and Kobielak.

At trial, UPL moved for judgment on the evidence, claiming that Kobielak was not an agent of UPL and that therefore UPL could not be liable for his conduct. The trial court denied UPL's motion and ultimately the jury returned a verdict against both Kobielak and UPL. The Court of Appeals reversed the trial court's ruling and remanded the case to the trial court with instructions to enter judgment on the evidence in favor of UPL. Benante v. United Pac. Life Ins. Co. (1994), Ind.App., 639 N.E.2d 375, 378. The Court of Appeals reasoned that since "[n]o checks payable to UPL were collected from Benante; no cash funds were tendered to UPL on Benante's behalf [and] ... [n]o policy or annuity was ever issued by UPL for Benante," Kobielak was merely an agent of Benante and therefore UPL could not be held liable for his conduct. Id. Judge Rucker dissented, maintaining that since there was some evidence that Kobielak could have been an agent for UPL, this question was appropriate for the jury to determine and therefore the trial court properly denied UPL's motion for judgment on the evidence. Id.

Discussion

Indiana Trial Rule 50(A) provides that where an issue or issues in a case before a jury are not supported by sufficient evidence, the court "shall withdraw such issues from the jury and enter judgment thereon." Ind.Trial Rule 50(A). However, judgment on the evidence is not appropriate in a case where there is sufficient evidence to support the non-moving party's case. "If there is any probative evidence or reasonable inference to be drawn from the evidence in favor of the plaintiff or if there is evidence allowing reasonable people to differ as to result, judgment on the evidence is improper." Ross v. Lowe (1993), Ind., 619 N.E.2d 911 (citing Jones v. Gleim (1984), Ind., 468 N.E.2d 205, 206). Also, when the trial court considers a motion for judgment on the evidence, it must view the evidence in a light most favorable to the non-moving party. Sipes v. Osmose Wood Preserving Co. (1989), Ind., 546 N.E.2d 1223, 1224 (citing Jones, 468 N.E.2d 205, 206-07).

In general, an insurer is not liable for the acts of an insurance agent who is merely a broker. City of Lawrence v. Western World Ins. Co. (1993), Ind.App., 626 N.E.2d 477, trans. denied. The Court of Appeals reasoned that (1) an insurance agent who represents several insurance companies is an insurance broker and is considered the agent of the proposed insured when the agent undertakes to procure insurance, citing Stockberger v. Meridian Mut. Ins. Co. (1979), 182 Ind.App. 566, 395 N.E.2d 1272, and (2) only when such a broker makes an application for insurance and the policy is issued, does the broker become an agent for the insurance company, citing Aetna Ins. Co. v. Rodriguez (1988), Ind., 517 N.E.2d 386. Benante, 639 N.E.2d at 377. We agree with the Court of Appeals that this is the general rule. However, we think the Court of Appeals misapplied this rule when it held that the fact that Kobielak did not apply for the insurance policy necessarily meant that...