Charles Parrott & Associates, Inc. v. Hunt

• Decision Date: 23 June 1983
• Docket Number: No. 66108,66108
• Citation: 305 S.E.2d 879,167 Ga.App. 106
• Court: Georgia Court of Appeals
• Parties: CHARLES PARROTT & ASSOCIATES, INC. v. HUNT.

Page 879

305 S.E.2d 879

167 Ga.App. 106

CHARLES PARROTT & ASSOCIATES, INC. v. HUNT.

No. 66108.

Court of Appeals of Georgia.

June 23, 1983.

Eugene A. Epting, Athens, for appellant.

Verlyn C. Baker, Decatur, for appellee.

McMURRAY, Presiding Judge.

Marvin Hunt, d/b/a Hunt Trucking Company, was the insured under a certain insurance policy issued by Reliance Insurance Company through its agent, Charles Parrott & Associates, Inc., providing insurance on several vehicles owned by Hunt and used in his trucking business. This policy was issued for a period from "10/18/78 to 10/18/79." The policy was signed by Charles Parrott & Associates, Inc., as authorized representative for the insurer, with the signature appearing to be Charles Parrott. Hunt by telephone to the office of the insurance agency on some date in the first part of May 1979, the exact date being in dispute, requested additional insurance with reference to additional vehicular equipment he had purchased. Hunt contends that around the first of May 1979, having purchased another tractor and a certain 1966 Fruehauf trailer, he wanted these added to the policy. However, the agency contends that he sought additional insurance on different dates as to this equipment. Eventually, Charles Parrott & Associates, Inc. issued an amendment to the policy as to the tractor, the amendment showing an effective date of "5-4-79," countersigned by the authorized representative, Charles Parrott & Associates, Inc., with a signature (which appears to be in facsimile form as Charles Parrott). On May 11, 1979, the trailer in question was destroyed in a wreck in Mississippi, and this wreck was duly reported to Reliance Insurance Company through Charles Parrott & Associates, Inc. However, at that point in time the policy had not been amended by endorsement showing any coverage and, indeed, the policy was never endorsed to show any such coverage as to the trailer.

Whereupon, Marvin Hunt, d/b/a Hunt Trucking Company, filed an action in four counts against both Reliance Insurance Company and Charles Parrott & Associates, Inc. Count 1 sought damages against Charles Parrott & Associates, Inc. for certain cargo losses due to negligence in the issuance of an inland marine policy covering same. Count 2 was against Reliance Insurance Company for its failure and refusal to pay a claim under the inland marine policy. Count 3 sought damages for the negligence of the defendant Charles Parrott & Associates, Inc. because of its failure to notify Reliance Insurance Company to add coverage on the trailer, alleging Reliance Insurance Company refused to pay said claim, seeking the fair market value of the trailer ($4,500) and $2,250 for loss of use of the trailer for five months. Because the defendant Charles Parrott & Associates, Inc. had acted in bad faith causing him unnecessary trouble and expense, plaintiff also sought a reasonable sum as attorney fees and cost of litigation. Count 4 sought the value of the vehicle ($4,500) at the time of the loss and defendant's bad faith refusal to pay the claim seeking an additional sum of 25% of the liability of the insurer for the loss and all reasonable attorney fees for the prosecution of the case.

The defendants answered separately, in substance, denying the claim. We note here that the defendant Charles Parrott & Associates, Inc. admitted jurisdiction, the existence of the vehicle insurance policy having been applied for and issued, the receipt of notice of the loss and alleged that "on May 11, 1979," plaintiff had telephoned defendant's office and furnished information for the purpose of securing an endorsement on the policy referred to, otherwise denying the remaining averments. Plaintiff, prior to trial, dismissed with prejudice Counts 1, 2 and 4, and eliminated claims for cargo loss and his claim against Reliance Insurance Company for the trailer loss. The case proceeded to trial on Count 3 alone against Charles Parrott & Associates, Inc., and the jury returned a verdict against the defendant in favor of the plaintiff in the amount of $3,000 and the additional amount of 15% or $450. The judgment then followed the verdict in that the jury having returned a verdict for $3,450 the same was made the judgment of the trial court. The defendant then filed a motion for judgment notwithstanding the verdict or in the alternative for a new trial. These motions were amended, and after a hearing each motion was denied. Defendant appeals. Held:

1. Defendant's first enumeration of error is that the trial court erred in denying its motion for directed verdict and motion for judgment notwithstanding the verdict, contending the only issue was as to whether the defendant had negligently failed to secure from Reliance Insurance Company an endorsement of an oral binder to provide insurance coverage and whether this was the proximate cause of any damage to the plaintiff. Defendant contends that it had made an oral binder and such notice was sent to Reliance but there was no evidence that Reliance ever contended that such binder had not been made or any notice received by it. Therefore, the plaintiff's claim for insurance coverage should be a claim against Reliance only, which claim the plaintiff had dismissed after the suit was filed and before trial. However, a reading of the evidence discloses many and numerous conflicts in the evidence as to when the request for coverage was made, whether the coverage was ever bound as to Reliance and whether or not the insurance agent could bind Reliance verbally or in writing as to the vehicle loss. We note here that the endorsement as to the tractor (plaintiff contending he desired insurance on the trailer at the same time) shows defendant as the authorized representative issuing same, yet no such endorsement was ever issued as to the trailer. Further, it is unquestioned that Reliance never acknowledged any insurance being in existence as to the trailer as having been added to the motor vehicle policy. There is some evidence that the defendant was an independent insurance agent, yet there is other evidence that it was an authorized agent for the insurance company in that both the policy and the endorsement were issued and countersigned by the defendant. No other evidence was offered that the defendant was the duly authorized agent, employee and servant of the insurance company acting in the prosecution of the company's business and within the scope of its authority. Generally, in this state, insurance agents in many instances are the agents of both the insured and the insurer. Further, where one undertakes to procure insurance for another and is guilty of fraud or negligence in the undertaking he is liable for loss or damage to the limit of the agreed policy. See Minter v. Ga. Piggly-Wiggly Co., 185 Ga. 116(1), 194 S.E. 176; Home Bldg. & Loan Assn. of LaGrange v. Hester, 213 Ga. 393, 395, 99 S.E.2d 87; Consumers Financing Corp. v. Lamb, 217 Ga. 359(2), 363, 122 S.E.2d 101; Clark v. Kelly, 217 Ga. 449, 122 S.E.2d 731; Beiter v. Decatur Fed. Savings & Loan Assn., 222 Ga. 516, 518(2), 150 S.E.2d 687. Under the circumstances here there was evidence, in the record, from which the jury could believe that the defendant was an independent insurance agent who failed to obtain an endorsement to the policy; or, having authority from its insurer as an agent, failed to issue an endorsement to the policy and is therefore personally liable to the plaintiff (the applicant) in damages for a breach of an agreement to procure the insurance; or plaintiff was simply negligent in failing to issue the endorsement prior to the loss. See Beavers Ins. Agency v. Roland, 135 Ga.App. 263, 217 S.E.2d 484. While there was conflicting testimony as to whether the insurer would be verbally bound by a statement by the defendant that the plaintiff was covered, the written policy itself shows the endorsement was never issued with reference to the vehicular loss. There is also conflicting testimony as to the coverage desired. Therefore, a jury question existed as to the relationship between the plaintiff and the defendant, as well as to any negligence on the part of the defendant. If an agent negligently fails to procure insurance for his principal the agent is liable to the principal for any resulting loss. See Thomas v. Funkhouser, 91 Ga. 478, 18 S.E. 312; Wright Body Works v. Columbus Interstate Ins. Agency, 233 Ga. 268, 270, 210 S.E.2d 801. With reference to dual agency see Spratlin, Harrington & Thomas, Inc. v. Hawn, 116 Ga.App. 175, 179, 156 S.E.2d 402. But even if a contractual arrangement existed between the insurer and the defendant, placing it in the position of an agent for the insurer to issue policies or endorsements as authorized representative, yet such agency relationship did not in and of itself relieve the agent of any responsibility or agreement with the plaintiff to obtain insurance. See Todd v. German American Ins. Co., 2 Ga.App. 789, 59 S.E. 94; Wright Body Works v. Columbus Interstate Ins. Agency, 233 Ga. 268, 270-271, 210 S.E.2d 801...