Huffman v. Goodman

• Decision Date: 23 August 2000
• Docket Number: No. 33,647-CA.,33,647-CA.
• Citation: 766 So.2d 651
• Parties: Jack HUFFMAN, et ux., Plaintiffs-Appellants, v. Ronnie Dale GOODMAN, Jr., et al., Defendants-Appellants.
• Court: Court of Appeal of Louisiana — District of US

Page 651

766 So.2d 651

Jack HUFFMAN, et ux., Plaintiffs-Appellants, v. Ronnie Dale GOODMAN, Jr., et al., Defendants-Appellants.

No. 33,647-CA.

Court of Appeal of Louisiana, Second Circuit.

August 23, 2000.

A. Richard Snell, Bossier City, Counsel for Appellants.

Casten & Pearce by Marshall R. Pearce, Shreveport, Counsel for Appellees, Ronnie Dale Goodman and State Farm Ins. Co.

Joseph B. Stamey, Natchitoches, Counsel for Appellees Podnuh's Bar-B-Que, Inc. and Trinity Universal Ins. Co.

Pettiette, Armand, Dunkelman, Woodley, Byrd & Cromwell by Donald Armand, Jr., Edwin H. Byrd, III, Shreveport, Counsel for Appellee Argonaut Great Central Ins. Co.

Cook, Yancey, King & Galloway by Robert Kennedy, Jr., Colfax, Counsel for Appellees Powell Ins. Agency, Inc. and Utica Mutual Ins. Co.

Kantrow, Spaht, Weaver & Blitzer by Martin E. Golden, Baton Rouge, Counsel for Intervenor Appellee United Healthcare Corp.

Before BROWN, STEWART and GASKINS, JJ.

STEWART, J.

The plaintiffs, Jack Huffman and Alice D. Huffman, appeal the dismissal of their claim against Powell Insurance Agency, Inc., pursuant to exceptions of no cause of action and no right of action asserted by Powell and granted by the trial court. We affirm.

FACTS

On May 25, 1995, Jack Huffman sustained injuries when the motorcycle he was driving was struck by a vehicle which exited a commercial parking lot into his lane of travel. The vehicle which struck Huffman was driven by Ronnie Dale Goodman, Jr., who was alleged to have been in the course and scope of his employment as a delivery driver with Podnuh's Bar-B-Que, Inc., ("Podnuh's"), at the time of the accident.

Huffman and his wife filed suit for damages on July 24, 1995, naming Goodman and his insurer, State Farm Insurance Company ("State Farm"), as defendants. In a first amended petition filed October 30, 1995, Podnuh's was also named as a defendant. On October 31, 1997, the Huffmans filed a fourth amended petition naming Great Central Insurance Company ("Great Central") as an additional defendant.¹ Great Central filed an answer in which it asserted its correct corporate name as Argonaut Great Central Insurance Company, admitted that it issued a policy of insurance to Podnuh's for the period of May 5, 1995 through May 5, 1996, and denied coverage for the accident at issue on the basis that the policy of insurance did not provide coverage for hired and non-owned automobiles. In a fifth amended petition filed July 22, 1998, the Huffmans named Powell Insurance Agency, Inc., ("Powell"), as a defendant. The following allegations from the petition state the Huffmans' claim against Powell:

8.

That in the alternative that liability coverage is not found as having been provided by Argonaut Great Central Insurance Company then your petitioner avers that POWELL INSURANCE AGENCY, INC., did factually and defacto stand in the shoes and did act as an insurance company;

9.

That the said POWELL INSURANCE AGENCY, INC. did offer to Podnuh's Bar-B-Que, Inc. to provide coverage for their non-owned and hired automobiles and drivers;

10.

That the offer submitted by POWELL INSURANCE AGENCY, INC. to Podnuh's was duly accepted and the requested premium paid;

11.

That thereafter, POWELL INSURANCE AGENCY, INC. did issue a "binder" of the stated coverage;

12.

That on or about date of May 23, 1995, John O'Brien, either for the benefit of ARGONAUT GREAT CENTRAL INSURANCE COMPANY or acting on behalf of POWELL INSURANCE AGENCY, INC., did issue unto Podnuh's Bar-B-Que, Inc. a binder of liability insurance providing liability coverage for the at issue accident, said binder having an effective date of May 5, 1995.

13.

That the said binder of automobile liability insurance coverage providing coverage for the at issue accident provided policy limits for the applicable coverage in the amount of $1,000,000;

14.

That your petitioner avers by virtue of the offer and acceptance, the premium paid, and the binder of liability coverage for the at issue accident, our petitioners herein are third party beneficiaries thereof and that POWELL INSURANCE AGENCY, INC. is a defacto insurer for the damages sustained by your petitioners.

In response to the Huffmans' fifth amended petition, Powell filed the peremptory exceptions of no right and no cause of action. Powell contended that a third party tort victim does not have a cause of action or right of action against the tortfeasor's insurance agent for negligence in procuring or failing to procure proper insurance coverage. In opposition to the exceptions asserted by Powell, the Huffmans argued that their fifth amended petition stated a claim against Powell as an "insurer" and not as an "agent." The Huffmans argued that by issuing a binder of liability insurance to Podnuh's, Powell acted as an insurer, as defined in La. R.S. 22:5, against whom they are entitled to bring a direct action.²

Great Central also filed a cross-claim against Powell, the allegations of which shed light on the dealings between Great Centeral, Powell, and Podnuh's. The allegations of the cross-claim state that the binder of insurance issued by Powell erroneously included coverage for non-owned and hired automobiles; that Great Central did not authorize such coverage and advised Powell of this fact in writing; that Great Central did not include premiums attributable to coverage for non-owned and hired automobiles; and that Great Central neither charged nor collected from Podnuh's premiums for such coverage.

In a judgment rendered June 24, 1999, the trial court granted Powell's exceptions of no right and no cause of action and dismissed with prejudice the Huffmans' 14. claim against Powell. The Huffmans filed a motion for a new trial, asserting again that its cause of action was against Powell as an insurer due to its issuance of a binder of liability insurance to Podnuh's. The trial court denied the motion for a new trial in a judgment rendered September 24, 1999. The Huffmans then filed the instant appeal.

DISCUSSION

It is well-settled in our jurisprudence that an insurance agent who undertakes to procure insurance for another owes an obligation to his client to use reasonable diligence in attempting to place the insurance requested and to notify the client promptly if he has failed to obtain the requested coverage. The client may then recover from the agent the loss sustained as a result of the agent's failure to procure the requested coverage if the agent's actions warranted an assumption by the client that he was properly insured in the amount of the desired coverage. Karam v. St. Paul Fire & Marine Ins. Co., 281 So.2d 728 (La.1973); Hutchins v. Hill Petroleum Co., 609 So.2d 306 (La. App. 3 ^rd Cir.1992), affirmed, 623 So.2d 649 (La.1993).

It is also well-settled in our jurisprudence that the tort-feasor's insurance agent owes no duty to the tort victim to secure insurance coverage. Tu v. Guidry, 94-...