Northeastern Ins. Agency, Inc. v. Courson
| Decision Date | 06 January 1981 |
| Docket Number | No. 60422,60422 |
| Citation | 274 S.E.2d 714,156 Ga.App. 321 |
| Parties | NORTHEASTERN INSURANCE AGENCY, INC. et al. v. COURSON et al. |
| Court | Georgia Court of Appeals |
John W. Wilcox, Edward L. Savell, Atlanta, for appellants.
Spencer W. Saunders, Sr., Alfred B. Adams, III, Atlanta, for appellee.
Summary Judgment. Northeastern Insurance Agency, Inc., and William D. McKinney appeal from an order of the trial court granting summary judgment in the amount of $15,000 in favor of Mrs. Courson contending it was error to grant summary judgment to Mrs. Courson. Mrs. Courson brought suit against Pennsylvania National Mutual Insurance Company, Northeastern and McKinney alleging that after McKinney had obtained a fire insurance policy on her rental property and a homeowner's policy on her residence at the request of her son who was acting as her agent, McKinney failed to maintain the fire policy. After the rental property was destroyed by fire on August 19, 1978, she attempted to file a claim with Pennsylvania National and discovered that the three-year policy had expired on July 28, 1978, and that neither the insurance company nor McKinney's insurance agency had notified her that it was time to renew the insurance. The agency, however, did renew her homeowner's insurance. In ruling on the motions for summary judgment, the trial court granted summary judgment in favor of Pennsylvania National and dismissed it from the suit. Held :
1. The record clearly shows that Northeastern handled Mrs. Courson's insurance for six years prior to the fire. Northeastern obtained fire insurance and homeowner's insurance from American States Insurance Company from June 28, 1972, to July 28, 1975. This insurance was then placed with Pennsylvania National from July 28, 1975, to July 28, 1978. The homeowner's insurance was renewed on July 28, 1978. McKinney also obtained automobile insurance for her from Hartford and Kemper from 1972 to 1975. The agency's records show that Mrs. Courson had established credit with it and that McKinney made certain efforts on Mrs. Courson's behalf in filing a claim with Pennsylvania National after the fire. McKinney admits in his answers to interrogatories that he owns fifty percent of the stock of Northeastern, that he is the corporation's secretary-treasurer, and that he obtained the insurance at the request of Mrs. Courson's son, M. R. Dimsdale.
In support of her motion for summary judgment, appellee's affidavit states that the policies covering the rental property and her residence were obtained through McKinney, that she had established credit with the agency for the payment of insurance premiums and relied upon them to maintain fire insurance on her rental property. She never received any notice of Pennsylvania National's intent not to renew the fire insurance on her rental property. She says she was assured by McKinney that the failure to renew the insurance was caused by an oversight in his office. McKinney did not file a counteraffidavit in support of his motion.
At the hearing on the motions, appellant's counsel stated that When asked by the court if he notified the plaintiff when he sent her the invoice for the other policy that the company was refusing to renew the fire policy, counsel replied that he did not.
It seems clear that McKinney was an independent insurance agency which placed insurance with several insurers and was acting as appellee's insurance agent. An agent who negligently fails to procure insurance for his principal is liable to the principal for any resulting loss. Wright Body Works v. Columbus Interstate Ins. Agency, 233 Ga. 268, 210 S.E.2d 801; Johnson v. Pennington Ins. Agency, 148 Ga.App. 147, 251 S.E.2d 116; Beavers Ins. Agency v. Roland, 135 Ga.App. 263, 217 S.E.2d 484. However, the facts of this case make this rule inapplicable.
In order for the doctrine of negligence to apply, there must have been a duty on the part of the agency toward the principal. See Ford Motor Co. v. Carter, 141 Ga.App. 371, 374, 233 S.E.2d 444. The facts show that Mrs. Courson entered into an agreement with Northeastern to procure insurance coverage by homeowner's insurance and fire insurance for the period 1975 to 1978. No evidence was presented that she had a continuing agreement with Northeastern to ensure continued coverage. The evidence also shows that the insurer, Pennsylvania National, had issued a homeowner's policy for the three-year period which contained a right of automatic renewal. That policy was renewed by Mrs. Courson through Northeastern upon its expiry. The fire insurance policy however did not contain an automatic right of renewal and Pennsylvania National declined to renew the policy on the premises insured. Though Mrs. Courson was the insured and was charged with the knowledge of the contents of her insurance policies (Fields v. Goldstein, 97 Ga.App. 286, 288(3), 102 S.E.2d 921), she did not pursue the fire insurance policy even though she was presented with no renewal policy when she received a renewal notice on her homeowner's policy. As an interested insured, she should have made...
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