Hamill v. Pawtucket Mut. Ins. Co., No. 05-025.

Docket NºNo. 05-025.
Citation2005 VT 133, 892 A.2d 226
Case DateDecember 30, 2005
CourtUnited States State Supreme Court of Vermont

Page 226

892 A.2d 226
2005 VT 133
Samuel HAMILL
v.
PAWTUCKET MUTUAL INSURANCE CO., David Andrulat, Smith & Carson, Inc. and Richard Dineley.
No. 05-025.
Supreme Court of Vermont.
December 30, 2005.

Howard B. Myers of Myers Associates, PLLC, and David Cullenberg of Cullenberg & Tensen, PLLC, Lebanon, New Hampshire, for Plaintiff-Appellant.

Allan R. Keyes of Ryan, Smith & Carbine, Ltd., Rutland, for Defendants-Appellees Andrulat, Smith & Carson, Inc. and Dineley.

Present: REIBER, C.J., DOOLEY, JOHNSON and SKOGLUND, JJ., and ALLEN, C.J. (Ret.), Specially Assigned.

Page 227

ALLEN, C.J. (Ret.), Specially Assigned.


¶ 1. In this appeal, we consider whether an insured homeowner whose residence allegedly became uninhabitable due to water damage, and later mold growth, has a cause of action in negligence against the independent adjusters hired by the homeowner's insurer to investigate the insured's initial claim. We affirm the superior court's summary judgment ruling that the adjuster has no cognizable legal duty vis-a-vis the homeowner with respect to the type of damages claimed here, and that the homeowner's only remedy was against his insurer.

¶ 2. The parties stipulated to the following facts. Sometime between February 10 and 12, 2001, while plaintiff Samuel Hamill was away on a business trip, a power outage occurred at his home, causing his pipes to freeze and then burst, resulting in flooding within the house. Hamill discovered the damage when he returned to his home on February 13, 2001. That same day he reported the loss to his insurance agent, who, in turn, notified his insurer, defendant Pawtucket Mutual Insurance Company. Pawtucket contracted out the initial adjusting of the claim to the Vermont office of defendant Smith & Carson, Inc. (known at that time as CSB Group, Inc.). The supervisor of that office, defendant Richard Dineley, assigned the claim to defendant adjuster David Andrulat. Andrulat visited Hamill's home on two occasions in early March 2001 to assess the damage, but Hamill and Pawtucket could not come to an agreement on the value of the loss. Pawtucket allegedly denied Hamill's claims in November 2001 following further brief inspections of the home during the previous month. Hamill asserts that the adjusters negligently investigated his claim, thereby depriving him of insurance proceeds and causing him to incur expenses that he would not otherwise have incurred.

¶ 3. In his second amended complaint, filed in April 2002, Hamill included counts of breach of contract, negligence, bad faith, and punitive damages against Pawtucket, and counts of gross negligence and punitive damages against Andrulat. Hamill alleged that he presented Andrulat with estimates of between $150,000 and $200,000—excluding plumbing, heating, electrical, roofing, and masonry costs—to repair the water damage, but that, based on a brief visual inspection of the premises, Andrulat rejected the estimates, accused Hamill of insurance fraud, and offered to settle the matter then and there for $5000. Hamill also alleged that after he rejected the adjuster's settlement offer, Andrulat did not get back to him for weeks, even though Andrulat knew or should have known that the water-damaged premises needed to be repaired immediately to prevent the possibility of mold growth. According to the complaint, as the result of Andrulat's failure to carefully investigate Hamill's claims, to consider his repair estimates, and to make an immediate and thorough inspection of the subject premises, mold spread through the house, making it uninhabitable. The complaint alleged that if Andrulat had acted reasonably in inspecting the premises and assessing the damages, the interior of Hamill's house would have been gutted and rebuilt before the mold had begun to grow.

¶ 4. In February 2004, Hamill filed a complaint against Dineley and Smith & Carson, alleging that they acted negligently and in bad faith by failing to supervise the investigation and processing of his insurance claim. He sought both compensatory and punitive damages. Shortly thereafter, Hamill settled his claims against Pawtucket. On December 9, 2004, after the complaints were consolidated, the superior

Page 228

court entered summary judgment in favor of defendants. The court ruled that Hamill had not alleged a cognizable duty on the part of the adjusters with respect to his negligence action, and that if the adjusters acted in bad faith, resulting in additional damage to Hamill's home, his remedy was to include such claims in his breach-of-contract action against Pawtucket. The court concluded that Hamill was claiming economic losses rather than direct physical loss to his property, and that such losses were not compensable in a tort action under the economic-loss doctrine, which generally disallows claims of economic loss to third parties absent privity of contract.

¶ 5. On appeal, Hamill argues that an independent insurance adjuster should be subject to liability for physical damage to an insured's property resulting from the adjuster's negligent conduct. In his view, no sound public policy considerations justify denying his common-law negligence action against defendant adjusters. Relying primarily on Morvay v. Hanover Insurance Cos., 127 N.H. 723, 506 A.2d 333, 335 (1986), in which the New Hampshire Supreme Court permitted insured property owners to file a negligence action alleging that agents hired by an insurance company to investigate a claimed fire loss breached their duty to conduct a fair and reasonable investigation of the claim, Hamill argues that defendant adjusters owed him a cognizable legal duty that supports his tort action against them because he was a foreseeably affected third party. According to Hamill, the adjusters knew or should have known that their failure to act properly and promptly in investigating his claim would result in further damage to his property.

¶ 6. We do not find these arguments persuasive. Generally, whether there is a cognizable legal duty that supports a tort action depends on a variety of public policy considerations and relevant factors, only one of which is foreseeability. Langle v. Kurkul, 146 Vt. 513, 519-20, 510 A.2d 1301, 1305 (1986) (citing relevant factors); see Charleston Dry Cleaners & Laundry, Inc. v. Zurich Amer. Ins. Co., 355 S.C. 614, 586 S.E.2d 586, 588 (2003) ("Foreseeability of injury, in and of itself, does not give rise to a duty."). Ultimately, whether a duty exists is a question of fairness that depends on, among other factors, the relationship of the parties, the nature of the risk, and the public interest at stake. Langle, 146 Vt. at 520, 510 A.2d at 1305.

¶ 7. Further, because negligence law does not generally recognize a duty to exercise reasonable care to avoid economic loss unless the alleged tortfeasor's conduct has inflicted some accompanying physical harm, we have recognized that another significant factor in determining whether there is a cognizable duty that would support a tort action is whether the plaintiff seeks damages for only economic loss. O'Connell v. Killington, Ltd., 164 Vt. 73, 77, 665 A.2d 39, 42 (1995); see Wentworth v. Crawford & Co., 174 Vt. 118, 126, 807 A.2d 351, 356 (2002) ("It is well established in Vermont that absent some accompanying physical harm, there is no duty to exercise reasonable care to protect another's economic...

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48 practice notes
  • Trinity Baptist Church v. Bhd. Mut. Ins. Servs., LLC, 113,072.
    • United States
    • Supreme Court of Oklahoma
    • December 9, 2014
    ...insureds and insurers often disagree on the extent of coverage or the amount of damages.” Hamill v. Pawtucket Mut. Ins. Co. [179 Vt. 250], 892 A.2d 226, 257 [231] (Vt.2005) (internal citation omitted).Wallace, 2012 WL 2060664, *2.Put more succinctly, “ ‘[c]reating a separate duty from the a......
  • Trinity Baptist Church v. Bhd. Mut. Ins. Servs., LLC, No. 113,072.
    • United States
    • Supreme Court of Oklahoma
    • December 9, 2014
    ...and insurers often disagree on the extent of coverage or the amount of damages.” Hamill v. Pawtucket Mut. Ins. Co. [179 Vt. 250] , 892 A.2d 226, 257 [231] (Vt.2005) (internal citation omitted).Wallace, 2012 WL 2060664, *2. Put more succinctly, “ ‘[c]reating a separate duty from the adjuster......
  • In re Zantac (Ranitidine) Prods. Liab. Litig., MDL NO. 2924
    • United States
    • United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
    • December 31, 2020
    ...parties, the nature of the risk, and the public interest at stake." Id. at 705 (quoting Hamill v. Pawtucket Mut. Ins. Co. , 179 Vt. 250, 892 A.2d 226, 228 (2005) ); see also Langle v. Kurkul , 146 Vt. 513, 510 A.2d 1301, 1305 (1986). The court held that because[a] pharmacist is required by ......
  • Schuler v. Rainforest Alliance, Inc., Docket No.: 2:14-cv-226
    • United States
    • United States District Courts. 2nd Circuit. District of Vermont
    • February 11, 2016
    ...notion that foreseeability alone is sufficient to create a duty for purposes of a negligence claim. See Hamill v. Pawtucket Mut. Ins. Co., 2005 VT 133, ¶ 6, 179 Vt. 250, 253–54, 892 A.2d 226, 228 (“Generally, whether there is a cognizable legal duty that supports a tort action depends on a ......
  • Request a trial to view additional results
48 cases
  • Trinity Baptist Church v. Bhd. Mut. Ins. Servs., LLC, 113,072.
    • United States
    • Supreme Court of Oklahoma
    • December 9, 2014
    ...insureds and insurers often disagree on the extent of coverage or the amount of damages.” Hamill v. Pawtucket Mut. Ins. Co. [179 Vt. 250], 892 A.2d 226, 257 [231] (Vt.2005) (internal citation omitted).Wallace, 2012 WL 2060664, *2.Put more succinctly, “ ‘[c]reating a separate duty from the a......
  • Trinity Baptist Church v. Bhd. Mut. Ins. Servs., LLC, No. 113,072.
    • United States
    • Supreme Court of Oklahoma
    • December 9, 2014
    ...and insurers often disagree on the extent of coverage or the amount of damages.” Hamill v. Pawtucket Mut. Ins. Co. [179 Vt. 250] , 892 A.2d 226, 257 [231] (Vt.2005) (internal citation omitted).Wallace, 2012 WL 2060664, *2. Put more succinctly, “ ‘[c]reating a separate duty from the adjuster......
  • In re Zantac (Ranitidine) Prods. Liab. Litig., MDL NO. 2924
    • United States
    • United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
    • December 31, 2020
    ...parties, the nature of the risk, and the public interest at stake." Id. at 705 (quoting Hamill v. Pawtucket Mut. Ins. Co. , 179 Vt. 250, 892 A.2d 226, 228 (2005) ); see also Langle v. Kurkul , 146 Vt. 513, 510 A.2d 1301, 1305 (1986). The court held that because[a] pharmacist is required by ......
  • Schuler v. Rainforest Alliance, Inc., Docket No.: 2:14-cv-226
    • United States
    • United States District Courts. 2nd Circuit. District of Vermont
    • February 11, 2016
    ...notion that foreseeability alone is sufficient to create a duty for purposes of a negligence claim. See Hamill v. Pawtucket Mut. Ins. Co., 2005 VT 133, ¶ 6, 179 Vt. 250, 253–54, 892 A.2d 226, 228 (“Generally, whether there is a cognizable legal duty that supports a tort action depends on a ......
  • Request a trial to view additional results

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