Jester v. Hill

• Decision Date: 05 March 1982
• Docket Number: No. 62782,62782
• Citation: 161 Ga.App. 778,288 S.E.2d 870
• Parties: JESTER v. HILL et al.
• Court: Georgia Court of Appeals

Page 870

288 S.E.2d 870

161 Ga.App. 778

JESTER v. HILL et al.

No. 62782.

Court of Appeals of Georgia.

March 5, 1982.

Certiorari Denied April 29, 1982.

William H. Hedrick, Albany, for appellant.

Edmund A. Landau, III, Thomas S. Chambless, Albany, for appellees.

McMURRAY, Presiding Judge.

This case involves automobile insurance in which summary judgment has been granted to the alleged insurer.

For the purposes of consideration of the grant of summary judgment the following facts are admitted as true. The Brundick Company, Inc. is a Florida corporation qualified to do business in Georgia, being a managing general agency in the fire and casualty insurance field which operates as an intermediary between insurance companies wishing to do business in a state and agents wishing to represent a company. In April 1979 it acquired the general agency business of another corporation in Georgia and began operating as "Trident Brundick." In May 1979 The Brundick Company, Inc. entered into a general agency contract with First Financial Insurance Company by and through its underwriting managers Special Insurance Services, Inc., and American Cycle Agency, for the production of automobile insurance in Georgia. Under this contract it was empowered to produce automobile insurance at stated schedules and with certain underwriting and binding rules, the production to be secured from existing licensed insurance agents on a brokerage basis.

A marketing flyer designated as that of "Trident-Brundick Company," the Georgia trade name, was made available to numerous individual insurance agents in Georgia, including Hill & Hilson Insurance Agency, Inc. It also made available a form of brokerage agreement under the name "Trident-Brundick Company, The Brundick Company, Inc.," as well as application form or forms of First Financial Insurance Company and The Brundick Company, Inc. for applicants to apply for automobile insurance with reference to type of insurance desired including rejection of uninsured motorist coverage.

On April 8, 1980, a brokerage agreement was entered by and between Willie Hill, licensed insurance agent, and/or broker of Hill & Hilson Insurance Agency, Inc. "T-B" (ostensibly Trident-Brundick) agreed therein to assert its best effort to place with an insurer or insurers such risk as it may be called upon by "B/A" (ostensibly Hill & Hilson Insurance Agency, Inc., a brokering agent). This agreement does not, however, make Hill & Hilson Insurance Agency, Inc. or Willie Hill an agent to bind "Trident-Brundick Company" or The Brundick Company, Inc. or First Financial Insurance Company in the issuance of automobile insurance. Nevertheless, the flyer for the sale of automobile insurance is shown as that of "Trident-Brundick Company," and the application forms of same to be for First Financial Insurance Company having its logo thereon and The Brundick Company, Inc.

On March 6, 1980, Lucious Jester, a prospective customer, entered the office of Hill & Hilson to purchase full coverage insurance for his 1978 Toyota. Mr. Hill took his application, received Jester's money and stated Jester was immediately covered at that time. No explanation was made to him that there would be any waiting period or that he had to wait to receive insurance. Willie Hill, agent, ostensibly for First Financial Insurance Company, executed a "Certificate of Insurance" certifying that Jester was "now covered by a liability insurance policy meeting the requirements of the Georgia Motor Vehicle Accident Reparations Act." The certificate was addressed to Department of Public Safety, No-Fault Unit of the State of Georgia, showing date of policy "3-6-80." Lucious Jester also received a receipt upon payment of $160.00 dated March 6, 1980, for full coverage (six months) with the language "First Financial." The receipt was signed "By P. S. Hill."

On April 1, 1980, thereafter, Lucious Jester was injured in an automobile collision and incurred medical expenses and lost wages. He attempted to file a claim under the purported insurance policy and both First Financial Insurance Company and Trident Brundick Company denied coverage, contending that no policy had been issued for Lucious Jester and no request for a binder, therefore, there was no coverage for Jester.

Subsequently, Jester filed suit naming as defendants Willie Hill, Charles A. Hilson, Hill & Hilson Insurance Agency, Inc., Trident Brundick Company (Trident Brundick) and First Financial Insurance Company (First Financial). Plaintiff alleged that Hill, Hilson and Hill & Hilson Insurance Agency, Inc. were designated agents of First Financial Insurance Company and Trident Brundick Company. It was further alleged that Hill & Hilson Insurance Agency, Inc. at the times the events involved herein occurred was a " 'shell' " corporation having no assets and established for the sole purpose of shielding the principals from personal liability for their negligence, fraud and deceit and this was a sufficient basis for the court to " 'pierce the corporate veil.' " Plaintiff alleged fraud and deceit on the part of Willie Hill which was known to all of the defendants and that the other defendants were liable for his fraud and deceit since at the time of the fraudulent conduct Hill was the partner of Hilson and agent of the other defendants acting in the normal course and scope of their business. As to the defendants Trident Brundick and First Financial, the plaintiff later amended his complaint to add allegations of negligence in selecting Hill, Hilson and Hill & Hilson Insurance Agency, Inc. as their agents.

After discovery the defendants First Financial and Trident Brundick moved for summary judgment which was later granted. Plaintiff appeals. Held :

1. In support of motions for summary judgment First Financial and Trident Brundick produced unrefuted evidence that no actual agency relationship existed between them and the remaining defendants. Consequently, any recovery upon agency theory must be predicated upon an apparent agency relationship. By brief these defendants contend this case is controlled adversely to the plaintiff by reason of Beck v. First of Georgia Underwriters Company, 157 Ga.App. 73, 276 S.E.2d 124, which holds therein that it is controlled by a similar case, Brewer v. Southeastern Fidelity Insurance Company, 147 Ga.App. 562, 563, 249 S.E.2d 668. The latter case holds that the bare assertion or denial of the existence of an agency relationship made by one of the purported parties to the relationship is a statement of fact but when made by an outsider these bare assertions or denials are merely conclusions of law. That case also cited Mullis v. Merit Finance Company of Savannah No. 1, Inc., 116 Ga.App. 582, 585, 158 S.E.2d 415, setting forth that the fact of an agency may be established by proof of circumstances, apparent relations, the conduct of the parties, and the declarations of the alleged agent, such declarations of the alleged agent being inadmissible if standing alone but becoming admissible as part of the res gestae of the transaction and as such may be considered in establishing the fact of agency. Nevertheless, this court held therein that upon the positive direct denial of agency by the purported principal and agent, the apparent contrary circumstances observed by the plaintiff did not create a material issue of fact and affirmed the granting of summary judgment to the insurer therein.

Nevertheless, it has been held by this court in numerous decisions and as set forth in United States Fidelity & Guaranty Company v. Hilliard, 107 Ga.App. 266, 269, 129 S.E.2d 559, that " '[a]pparent authority is the power to affect the legal relations of another person by transactions with third persons, professedly as agent for the other, arising from and in accordance with the other's manifestations to such third persons' '... Apparent authority to do an act is created as to a third person by written or spoken words or any other conduct of the principal which, reasonably...