Myers v. Yoder

• Decision Date: 25 February 2010
• Docket Number: No. 01A02-0906-CV-539.,01A02-0906-CV-539.
• Citation: 921 N.E.2d 880
• Parties: Donald W. MYERS and Sandra F. Myers, as Individuals and as Husband and Wife, Appellants-Plaintiffs, v. Andrew W. YODER, d/b/a CLS Construction, Amy Krueger, An Individual, Bixler Insurance, Inc., An Indiana Corporation, and Cincinnati Insurance Company, Appellees-Defendants.
• Court: Indiana Appellate Court

921 N.E.2d 880

Donald W. MYERS and Sandra F. Myers, as Individuals and as Husband and Wife, Appellants-Plaintiffs, v. Andrew W. YODER, d/b/a CLS Construction, Amy Krueger, An Individual, Bixler Insurance, Inc., An Indiana Corporation, and Cincinnati Insurance Company, Appellees-Defendants.

No. 01A02-0906-CV-539.

Court of Appeals of Indiana.

February 25, 2010.

Bruce Norman Stier, Logan & Stier, LLC, Fort Wayne, IN, Attorney for Appellants.

Michael E. Brown, Eric D. Johnson, Kightlinger & Gray, LLP, Indianapolis, IN, Attorneys for Appellees.

OPINION

BAKER, Chief Judge.

Appellants-plaintiffs Donald W. Myers and Sandra F. Myers (collectively, the Myerses) appeal the trial court's grant of summary judgment in favor of appellees-defendants Amy Krueger, Bixler Insurance, Inc. (Bixler), and Cincinnati Insurance Company (Cincinnati Insurance) (collectively, the appellees), regarding the Myerses' claim that the appellees were negligent in failing to advise them about their homeowner's insurance policy.¹ Specifically, the Myerses argue that a genuine issue of material fact exists as to whether the appellees breached their respective duties to provide adequate coverage to them.

Concluding that the trial court properly entered summary judgment in favor of the appellees, we affirm.

FACTS

In 1998, the Myerses were in the process of building a residence in Adams County. At some point, they contacted Deryll Zurcher to obtain insurance for their home. The Myerses knew Zurcher from church and wanted to "give him the business on the house." Appellants' App. p. 40-41. At the time, Zurcher was an agent with the Insurance Haus.

Zurcher wrote a builder's risk policy for the Myerses with the Lake States Insurance Company (Lake States) for $102,000, which was the amount that the Myerses stated was the cost of the house after construction was completed. When the policy was written, Krueger worked for Zurcher as a customer service representative and performed filing, typing, and other clerical tasks.

After the house was fully constructed in 1999, Zurcher completed a replacement cost estimator on the residence, which indicated that the replacement cost of the residence would amount to $124,000. As a result, Lake States issued a homeowner's policy to the Myerses in that amount. In 2000, a homeowner's policy was renewed with policy limits of $128,000. Shortly after the renewal, Zurcher left the insurance industry and Krueger became an insurance agent for Bixler. Krueger then solicited Zurcher's former clients, including the Myerses. Krueger converted the Myerses' homeowner's policy from Lake States to Cincinnati Insurance because Bixler did not offer insurance through Lake States. As a result of the conversion, the policy limits were increased to $130,000 for a three-year term. In 2003, the Myerses' homeowner's policy with Cincinnati Insurance renewed again with an increase in limits to $136,000.

Although Sandra could not recall having a conversation with Krueger when she learned that Zurcher was leaving the insurance business, she assumed that she gave Krueger approval for the Cincinnati Insurance policy. However, Sandra "knew" that she had communicated to Krueger that she wanted "full coverage" on the house. Appellants' App. p. 83. Russell Flueckiger, the owner of Bixler, believes that when a customer requests "full coverage," the agent should ask questions about the use of that term. Id. at 148-49.

Flueckiger and Krueger both believed that the insurance industry recommends that new policies be issued only after a replacement cost estimator is performed. A replacement cost estimator is used to determine a home's replacement value before homeowner's insurance is issued. Flueckiger admitted that it is a good practice to perform a replacement cost estimator before extending homeowner's coverage.

Although the Myerses believed that the Cincinnati Insurance policy provided "full coverage" on their residence for any loss, no replacement cost estimator was ever performed by Krueger or Bixler before the Cincinnati Insurance homeowner's policy was issued.

Sandra had one other conversation with Krueger in July 2004. In particular, Sandra inquired about insuring a shed on the property. Sandra told Krueger that the shed cost $25,000 to build and Krueger responded that, based on the Myerses' homeowner's policy, the coverage on the residence would have to be increased to insure the shed for the amount paid.

In August 2004, the Myerses hired CLS Construction (CLS) to dig a trench on their property. According to the Myerses, CLS negligently cut a propane line that caused the gas to leak into the basement. Thereafter, the Myerses' home and contents were destroyed when the gas in the basement exploded.

The Myerses filed a claim under their Cincinnati Insurance policy for the replacement value of the home. Although the amount of the policy was $136,000, it was determined that the cost of replacing the home alone totaled nearly $223,594.34. Thus, the Myerses sustained a loss in the amount of $87,592.34.

Following the incident, the Myerses filed a complaint against CLS, claiming that it was negligent and reckless in operating the trencher. The Myerses also alleged that Krueger and Bixler were negligent in issuing the homeowner's policy because they failed to "follow ... industry standards in determining the appropriate coverage for the value of [the] home and its contents." Appellants' App. p. 20. The Myerses also argued that Cincinnati Insurance was negligent "in receiving and accepting incomplete and inaccurate information and then issuing an insurance policy which provided inadequate coverage to Plaintiffs." Id.

After denying the allegations, the appellees moved for summary judgment, arguing that they were entitled to judgment as a matter of law because they did not owe the Myerses a duty to advise them as to the amount for which they should insure their house. More particularly, the appellees argued that the standard relationship between the agent and insured is not sufficient to create an obligation on the agent to advise the insured of the type or amount of coverage needed. The appellees maintained that the undisputed evidence established that no intimate, long-term relationship or other special relationship existed between Krueger and the Myerses so as to impose a duty on the appellees to determine the amount of coverage that the Myerses needed.

In response to the motion for summary judgment, the Myerses filed the affidavit of insurance expert, Dr. Marshall Reavis. Dr. Reavis averred that insurance industry standards recommend that new policies be issued only after a replacement cost estimator is performed. Id. at 181. The trial court admitted the affidavit over the appellees' objections, and following a hearing, the trial court granted the motion for summary judgment. The trial court's order provided in pertinent part that 16. The Court has not granted Bixler and Krueger's Motion to Strike the affidavits of Reavis, but the arguments in support of that motion are very relevant in regards to the decision in regards to a summary judgment.

17. The real question is: Do the affidavits and the attachments thereto establish the requisite experience and knowledge to testify in regards to the standard of care for insurance agents in Indiana and, in particular, the necessity to complete a replacement cost estimator prior to issuing a homeowner's policy. The Court thinks not.

18. In this case, a replacement cost estimator was utilized to determine the replacement cost of the home in 1999 and the cost was determined to be $124,000.00 and later the next year, October 11, 2000, the policy was written by Cincinnati for $130,000.00.

19. Cincinnati did not require a replacement cost estimator.

20. No case law was provided indicating that the standard of care for insurance agents in Indiana requires an agent to complete a replacement cost estimator.

21. It is true that Myers had several contacts with Krueger, including the contact at the Insurance Haus and later with Bixler, but the Court finds that there was not an intimate, long-term relationship that would be required to create a duty to advise Myers in regards to the amount of insurance. Very simply, Myers was aware of the amount of coverage, was paying premiums based upon said coverage and the relationship between Myers and Krueger and Bixler did not create the duty to advise Myers regarding the amount of insurance needed.

22. Myers indicates that when the construction of the home was initially completed, she requested full coverage because she just had builders risk or other insurance, so she needed full coverage on the home now that it was finished. ... There was a discussion in regards to the amount of coverage and a replacement cost estimator was completed by Zurcher as mentioned above, and a policy was issued by Lake States in the amount of $124,000. The Court finds once again that the facts presented in the exhibits do not create a duty to advise Myers in regards [to] the value of the home, its replacement cost or the amount of insurance needed.

23. The court finds that the Reavis affidavits failed to demonstrate that a genuine issue of fact exists and, therefore, the Court finds in favor of Bixler and Krueger and grants their Motion for Summary Judgment.

Id. at 15-17. The Myerses now appeal.

DISCUSSION AND DECISION

I. Standard of Review

The purpose of summary judgment is to terminate litigation for which there can be no factual dispute and which can be determined as a matter of law. Beradi v. Hardware Wholesalers, Inc., 625 N.E.2d 1259, 1261 (Ind.Ct.App.1993). When reviewing a grant of summary judgment, our standard of review is the same as that of the trial court. Dreaded, Inc. v. St. Paul Guardian Ins. Co., 904 N.E.2d 1267, 1269 (Ind.2009). Considering only those facts that the parties designated to the trial court, we must determine whether there is a genuine issue as to any...