Canal Ins. Co. v. Harrison
| Decision Date | 05 December 1988 |
| Docket Number | No. 76719,76719 |
| Parties | CANAL INSURANCE COMPANY v. HARRISON. |
| Court | Georgia Court of Appeals |
Gray, Gilliland & Gold, John B. Austin, Atlanta, for appellant.
Nicholas E. Bakatsas, for appellee.
Harrison sued Canal Insurance Company to recover casualty insurance benefits allegedly due him for damage to a truck. Canal denied liability, contending that the loss was not covered by the policy in question and that any contrary representations which may have been made to Harrison by the independent broker who had secured the policy on his behalf were not binding on the company due to the absence of any agency relationship between itself and that broker. The case was tried before a jury, which determined that Canal was liable for benefits in the amount of $5,650.85, plus a bad-faith penalty in the amount of $565 and attorney fees in the amount of $4,000. Canal appeals.
Harrison is a self-employed asphalt paving contractor who performs work in several states. In April of 1986, while working on a job in Lexington, South Carolina, he telephoned Wright (the president of Allied Assurance Agency located in Columbia, South Carolina) seeking casualty insurance coverage for two dump trucks used in his business. Allied was an independent broker which placed coverage with several insurance companies, including Canal. In response to Harrison's call, Wright obtained premium information from Canal, gave Harrison a quote, and mailed him a policy application. Harrison signed the application form (which he contends was uncompleted) and returned it to Wright, along with money orders for the down payment on the premium. Wright then mailed the completed application and down payment to Canal, which thereupon issued the policy in question and mailed it to Wright. The effective date shown on the policy was the date Canal received the completed application and premium payment from Wright.
Consistent with the language of the completed application and with the amount of the premium charged for the insurance, the policy did not provide coverage outside a radius of a hundred miles from Lexington, South Carolina, the location where Harrison had been working at the time he initiated contact with Wright. While the policy was in effect, one of the covered vehicles rolled down a hill at a job side in Chattanooga, Tennessee, and sustained the damage upon which the present claim is predicated. A copy of the policy had not as of that date been forwarded to Harrison. Harrison notified Wright of the mishap, and Wright notified Canal, which ultimately denied the claim on the ground that the accident had occurred outside the radius of coverage. Held:
1. 3 AmJur2d 574, Agency § 71. See generally OCGA § 10-6-1.
It is apparent without dispute from the evidence in this case that if Wright was acting as Canal's agent in this transaction, he was acting as a dual agent--i.e., as an agent for both parties. There is no suggestion either that Canal was aware of the preliminary discussions between Harrison and Wright regarding the coverage to be procured or that it was otherwise in complicity with Wright with respect to any misrepresentations he may have made to Harrison in this regard. It follows that Canal cannot be held liable to Harrison in tort for any negligence or wrongdoing on Wright's part. " 'It is generally recognized that where an agent represents two adverse parties in a transaction with the knowledge and consent of both, neither principal is liable to the other for the tortious acts of the agent so situated where the opposite principal is not in complicity with the agent or in no way participates in the tortious act.' " Home Materials v. Auto Owners Ins. Co., 250 Ga. 599, 602, 300 S.E.2d 139 (1983), citing Hodges v. Mayes, 240 Ga. 643, 644, 242 S.E.2d 160 (1978). Accord Southern Guaranty Ins. Co. v. Cotton States Mut. Ins. Co., 176 Ga.App. 140, 144(4), 335 S.E.2d 598 (1985).
However, Home Materials v. Auto Owners Ins. Co., supra, 250 Ga. at 603, 300 S.E.2d 139. Thus, there remains the question of whether Canal may be held contractually liable to Harrison on the basis of Wright's alleged misrepresentations regarding the extent of coverage, on the theory that it had clothed Wright with actual or apparent authority to contract with him on its behalf.
"Independent insurance agents or brokers are generally considered the agent of the insured, not the insurer." European Bakers v. Holman, 177 Ga.App. 172, 173, 338 S.E.2d 702 (1985). There is no basis in the record before us for an inference that the situation was otherwise in the present case. Canal's assistant vice-president for claims testified unequivocally that the independent brokers, including Wright, through which it sold its policies were not empowered to bind coverage, that "the company is the only one that can bind the coverage." Consistent with that testimony, the record reflects that the coverage at issue in the present case did not become effective on the day that Wright mailed the application and premium payment to Canal but on the day Canal actually received the application and premium payment from him.
The only evidence offered by Harrison as support for a contrary finding--i.e., that Wright was authorized to enter into an insurance contract with him on Canal's behalf--consists of the following testimony by Wright: (Emphasis supplied.) Only if the existence of the alleged agency may otherwise be inferred from the circumstances, apparent relations and conduct of the parties surrounding the transaction may the declarations of the alleged agent be considered in establishing the agency. See Mullis v. Merit Fin. Co., 116 Ga.App. 582, 585, 158 S.E.2d 415 (1967); Akridge v. Atlanta Journal Co., 56 Ga.App. 812, 815, 194 S.E. 590 (1937). Thus, in the face of Canal's unequivocal denial that Wright was empowered to act as its agent, and in the absence of any circumstantial evidence which could be said to conflict with this denial, we hold that Wright's equivocal, speculative statement that he "may" have been acting as Canal's agent is not sufficient to warrant an inference that he had actual authority to consummate the transaction--i.e., to bind the insurance company to coverage. Accord Booth v. Watson, 153 Ga.App. 672(1), 674-5, 266 S.E.2d 326 (1980).
Similarly, there is no evidence in the present case from which it could be inferred that Canal, by course of dealing or otherwise, had cloaked Wright with the appearance of authority to bind coverage on its behalf. Harrison testified that he had never even heard of Canal until after the accident occurred and that up until then, he thought his coverage was with Wright or Wright's firm, Allied Assurance Agency. Thus there is no evidentiary basis whatever upon which the company could be considered bound by Wright's actions. We must accordingly conclude that Canal's liability is limited as a matter of law by the terms of the policy which it issued, with the result that the trial court erred in denying Canal's motion for directed verdict.
2. Harrison's motion for imposition of damages against Canal for filing a frivolous appeal is, perforce, denied.
JUDGMENT REVERSED.
The evidence is to be viewed most favorably toward Harrison, see Eddie Parker Interests v. Booth, 160 Ga.App. 15, 17, 285 S.E.2d 753 (1981).
1. Appellant claims that there was no evidence at trial that an agency relationship existed between it and Allied. It asserts that there was no evidence that its "conduct, representations, course of dealing, or knowledge of material facts" led Harrison to believe that such an agency relationship existed and that this, coupled with denial of agency by Canal and Allied, required a finding of no...
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