Fleming v. Torrey

• Citation: 273 N.W.2d 169
• Decision Date: 29 December 1978
• Docket Number: No. 12032,12032
• Parties: Berdell FLEMING and Dennis Fleming, Assignors, and Anthony Benton, Assignee, Plaintiffs and Respondents, v. Harry K. TORREY, Defendant and Appellant.
• Court: South Dakota Supreme Court

Page 169

273 N.W.2d 169

Berdell FLEMING and Dennis Fleming, Assignors, and Anthony

Benton, Assignee, Plaintiffs and Respondents, v. Harry K. TORREY, Defendant and Appellant.

No. 12032.

Supreme Court of South Dakota.

Dec. 29, 1978.

Curtis D. Ireland and Fred M. Winkler of Lynn, Jackson, Shultz, Ireland & Lebrun, Rapid City, Norman K. Blatchford, Hot Springs, for plaintiffs and respondents.

Chester A. Groseclose, Jr. of Richardson, Groseclose, Kornmann & Wyly, Aberdeen, for defendant and appellant.

PORTER, Justice.

Defendant, duly licensed to sell insurance in this state, became, on January 1, 1971, the agent for State Farm Insurance Company in Hot Springs. In August, 1971, plaintiff Fleming, a farmer-rancher in the area, purchased from defendant a State Farm liability insurance policy covering Fleming's 1954 Ford 2 ton truck. Five weeks later the truck was in an accident, leading to a judgment against Fleming in favor of one Benton. Benton, as Fleming's assignee, and Fleming sued defendant for $107,500, the balance remaining due on the Benton judgment after State Farm paid the $15,000 per person liability limit of the policy Fleming purchased in August.

Plaintiffs sued on the theory that defendant agent negligently failed "to suggest or advise" Fleming to purchase a policy with higher liability limits, since the agent knew the truck was to be driven by Fleming's 18 year old son and was to be used for commercial hauling, thereby increasing the owner's risk. Plaintiffs alleged that defendant held himself out to the public as an expert in insurance qualified to advise on all phases of liability insurance and that Fleming always insured his vehicles with State Farm and "relied on (defendant's) expertise for advice, . . . and counsel" regarding the amount and type of liability insurance to properly protect him. Plaintiffs also alleged that Fleming would have purchased additional liability insurance on the truck had he been advised to do so by defendant.

At the trial plaintiff Fleming testified in substance: (1) That he went to defendant's office for the purpose of buying liability insurance on the 1954 model truck; (2) that he did not ask for defendant's advice as to liability limits but instead indicated that he wanted the same amount as on his other vehicles; (3) that there was no other discussion concerning liability limits, but he knew of no reason why he wouldn't have followed defendant's advice, (if offered) as to the liability limits he should purchase. ¹

We accept plaintiff Fleming's testimony as the factual version most favorable to the verdict winner.

The insurance agent's duty was to procure insurance of the kind and with the provisions specified by the insured. Feldmeyer v. Engelhart, 54 S.D. 81, 222 N.W. 598 (1928); Lindsay v. Pettigrew, 5 S.D. 500, 59 N.W. 726 (1894); Collegiate Mfg. Co. v. McDowell's Agency, Inc., 200 N.W.2d 854 (Iowa 1972). That is what the agent here expressly undertook to do. E. S. Harper Co. v. General Ins. Co. of America, 91 Idaho 767, 430 P.2d 658 (1967).

There was no prior course of dealing from which the jury could infer a duty on the agent's part to go beyond this undertaking. Although Fleming was a fifteen year customer of the State Farm agency in Hot Springs, and of State Farm, neither State Farm nor any of the agents Fleming dealt with during that time are parties defendant. Although defendant Torrey had a file showing Fleming's insurance history with the agency and the insurer, the policy on the 1954 truck was the first policy Fleming purchased from defendant. There is no evidence that Torrey explicitly agreed to be responsible for unilaterally choosing appropriate liability limits nor is there evidence in Fleming's testimony that he expected Torrey to do so. We do not find any such arrangement followed, by custom and practice, or by agreement, during Fleming's pre-Torrey dealings with the agency or the company. ²

For the purposes of our opinion we assume that plaintiff Fleming relied on defendant, had confidence in him and would likely follow his advice on insurance matters. But where the insured did not request the agent's advice as to liability limits but instead ordered specific limits; where the subject involved is a money limit rather than a more complex policy provision; and where there is no special relationship beyond that shown here, we cannot find a legal duty upon the agent to volunteer advice regarding liability limits for the breach of which the agent could become liable for...