Duggan v. Rooney, Civ. A. No. 89-4032-S.

• Citation: 749 F. Supp. 234
• Decision Date: 28 September 1990
• Docket Number: Civ. A. No. 89-4032-S.
• Court: U.S. District Court — District of Kansas
• Parties: Joan H. DUGGAN, individually as heir at law of John M. Duggan, and as executrix of the estate of John M. Duggan, Plaintiff, v. Richard D. ROONEY, Defendant.

749 F. Supp. 234

Joan H. DUGGAN, individually as heir at law of John M. Duggan, and as executrix of the estate of John M. Duggan, Plaintiff, v. Richard D. ROONEY, Defendant.

Civ. A. No. 89-4032-S.

United States District Court, D. Kansas.

September 28, 1990.

COPYRIGHT MATERIAL OMITTED

Thomas E. Wright, Davis, Wright, Unrein, Hummer & McCallister, Topeka, Kan., for plaintiff.

Frank Eschmann, Ascough, Eschmann, Oyler, P.A., Topeka, Kan., for defendant.

MEMORANDUM AND ORDER

SAFFELS, District Judge.

This matter is before the court on motion of defendant Richard D. Rooney ("Rooney") for summary judgment, pursuant to Rule 56 of the Federal Rules of Civil Procedure. This is a tort action arising out of the alleged negligence of an insurance agent with respect to the issuance of a life insurance policy by Massachusetts Mutual Life Insurance Company ("Massachusetts Mutual").

A moving party is entitled to summary judgment only when the evidence indicates that no genuine issue of material fact exists. Fed.R.Civ.P. 56(c); Maughan v. SW Servicing, Inc., 758 F.2d 1381, 1387 (10th Cir.1985). The requirement of a "genuine" issue of fact means that the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The moving party has the burden of showing the absence of a genuine issue of material fact. This burden "may be discharged by `showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2553-54, 91 L.Ed.2d 265 (1986). "A party opposing a properly supported motion for summary judgment may not rest on mere allegations or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 256, 106 S.Ct. at 2514. Thus, the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. Id. The court must consider factual inferences tending to show triable issues in the light most favorable to the existence of those issues. United States v. O'Block, 788 F.2d 1433, 1435 (10th Cir.1986). The court must also consider the record in the light most favorable to the party opposing the motion. Bee v. Greaves, 744 F.2d 1387, 1396 (10th Cir.1984), cert. denied, 469 U.S. 1214, 105 S.Ct. 1187, 84 L.Ed.2d 334 (1985).

For purposes of defendant's summary judgment motion, the court adopts as a summary of undisputed facts the Statement of Facts incorporated in its April 17, 1990, Memorandum and Order granting plaintiff, Joan H. Duggan's (hereafter referred to as "plaintiff" or "Duggan"), motion for summary judgment against defendant Massachusetts Mutual. 736 F.Supp. 1072.

I. Failure to State a Claim

In this case, plaintiff contends that Rooney's failure to be licensed in the state of Kansas when he solicited the decedent constituted a breach of legal duty owed to Duggan. Plaintiff bases her contention upon the fact that K.S.A. 40-244 requires insurance agents to be licensed in Kansas prior to the solicitation of insurance contracts in the state of Kansas. Plaintiff further contends that this breach of duty resulted in a delay in the processing of the decedent's application for life insurance so that plaintiff had to sue on the conditional receipt to recover insurance proceeds. Plaintiff contends that if Rooney had been licensed at the time of decedent's application, a life insurance policy would have been issued. Thus, she would not have had to institute litigation in order to recover the policy proceeds. In addition, plaintiff alleges defendant was negligent in not inquiring as to the status of the decedent's application. Further, plaintiff alleges that defendant was negligent in his representation to the decedent that "everything was looking good" despite his lack of a Kansas license.

In response, defendant contends that plaintiff was harmed not because of defendant's failure to be licensed; rather, defendant asserts that the delay in the processing of Duggan's application was caused by the negligence of his former co-defendant, Massachusetts Mutual. Defendant further contends that the duty which allegedly has been breached is one owed by Massachusetts Mutual to act promptly upon the submission of an application. Last, defendant argues that because a policy of insurance was found to exist under the conditional receipt, plaintiff has suffered no injury, and therefore, defendant is not liable as a matter of law.

In support of his motion for summary judgment, defendant Rooney first contends that plaintiff has failed to state a claim because defendant has not breached a legal duty. In order to state a claim of negligence in Kansas, the plaintiff must "establish a duty of reasonable care owed by the defendant to the plaintiff, a breach of that duty, damage to plaintiff, and a causal connection between the duty breached and the damage sustained." Baker v. City of Garden City, 240 Kan. 554, 731 P.2d 278, 280 (1987) (citation omitted). In Marshel Investments, Inc. v. Cohen, 6 Kan.App.2d 672, 634 P.2d 133, 141 (1981), the Kansas Court of Appeals stated that "an insurance agent or broker ... owes to the client a duty to exercise the skill, care, and diligence that would be exercised by a reasonably prudent and competent insurance agent or broker acting under the same circumstances."

The court finds that under Marshel Investments, Inc., defendant Rooney, as an insurance agent, owes a legal duty to plaintiff to "exercise the skill, care and prudence that a reasonably prudent and competent insurance agent or broker" would exercise when soliciting life insurance policies. 634 P.2d at 141.¹ The duty owed is a duty which arises out of "both an implied contractual term of the undertaking (contract duty) and a part of the fiduciary duty owed the client by reason of the principal-agent relationship arising out of the undertaking (tort duty)." Id. at 142. The court further finds that whether defendant deviated from the standard of a "reasonably prudent and competent insurance agent or broker" by his failure to be licensed in Kansas is a question of fact which is uniquely suited for the jury. Thus, the court finds that plaintiff has properly pleaded a legal duty upon which a cognizable claim may be based. Therefore, the court will not grant summary judgment for defendant on grounds that plaintiff fails to state a claim.

Plaintiff further alleges that defendant was negligent as a matter of law because he breached a statutory duty which requires that Rooney be licensed in Kansas prior to soliciting insurance contracts in the state of Kansas. In Kansas, actions may be brought under the theory of negligence per se. Plains Transp. of Kan., Inc. v. King, 224 Kan. 17, 25, 578 P.2d 1095, 1101 (1978). "Breach of a duty imposed by law or ordinance may be negligence per se, unless the legislature clearly did not intend to impose civil liability." Ling v. Jan's Liquors, 237 Kan. 629, Syl. ¶ 4, 703 P.2d 731 (1985). The elements of a negligence per se action are: "(1)a violation of a statute, ordinance or regulation and, (2) the violation must be the cause of the damages resulting therefrom." Id. 578 P.2d at 1101 (citation omitted). In this case, plaintiff alleges that defendant Rooney violated K.S.A. 40-244 which requires that Rooney have a license in the state of Kansas prior to accepting an application for insurance executed in Kansas. The express language of this provision in relevant part is as follows:

it shall be unlawful for any person, without conforming to the provisions of this code, to represent himself or herself to be the agent of any insurance company, or, as agent, to negotiate, effect or attempt to effect any contracts of insurance, suretyship or indemnity or renewal thereof within this state.

K.S.A. 40-244. The court finds that K.S.A. 40-244 does impose a statutory requirement that defendant be licensed in the state of Kansas because K.S.A. 40-241 specifically mandates licensure of defendant Rooney. Further, it is undisputed by the parties that at the time the life insurance policy was executed in Kansas defendant did not have a Kansas license to sell insurance.

Thus, the next issue becomes whether violation of the above statutory requirement may be the foundation for a negligence per se action. In Noland v. Sears, Roebuck & Co., 207 Kan. 72, 483 P.2d 1029, 1032 (1971), the Kansas Supreme Court stated, "it is the unquestioned rule of this jurisdiction that the breach of a duty imposed by law or ordinance constitutes negligence per se, providing a basis for the recovery of damages proximately resulting therefrom." (citation omitted). Thus, on the undisputed facts before the court, the court finds that plaintiff has pleaded a cause of action under a negligence per se theory under Kansas law, and the court will, therefore, deny defendant's motion for summary judgment in regard to defendant's contention that defendant has failed to state a claim.

II. Proximate Causation

Under Kansas law, negligence is actionable only where the breach of duty is the actual and proximate cause of the injury. Baker, 731 P.2d at 280. Likewise, in actions asserting negligence per se, a statutory violation is only actionable where there is a causal connection between the violation and the damages sustained. Williams v. Esaw, 214 Kan. 658, 522 P.2d 950, 953 (1974). The Kansas Supreme Court defines proximate cause as "the proximate or legal cause of an injury ... which in natural and continuous sequence, unbroken by an efficient intervening cause, produces the injury and without which the injury would not have occurred, the injury being the natural and probable consequence of the wrongful act." Baker, 731 P.2d at 280 (citing Wilcheck v. Doonan Truck & Equip., Inc., ...