Parshall v. Buetzer

• Decision Date: 11 July 2006
• Docket Number: No. WD 65059.,WD 65059.
• Citation: 195 S.W.3d 515
• Parties: Roger PARSHALL, Respondent, v. Doyle O. BUETZER et al., Appellant.
• Court: Missouri Court of Appeals

Page 515

195 S.W.3d 515

Roger PARSHALL, Respondent, v. Doyle O. BUETZER et al., Appellant.

No. WD 65059.

Missouri Court of Appeals, Western District.

July 11, 2006.

Jimmy E. Allen, Jr., Leawood, KS, and Scott David Hofer, Kansas City, for Appellant.

Zel Martin Fischer, Rock Port, for Respondent.

RONALD R. HOLLIGER, Judge.

Doyle Buetzer and Green Hills Insurance Service, L.L.C. (hereinafter "Agent") appeal for the second time from the grant of summary judgment on liability in favor of Roger Parshall, doing business as Parshall Concrete, and a jury verdict awarding damages against Agent for the failure to secure insurance covering a concrete plant owned by Parshall. Agent does not contend that there are any contested facts that prevent summary judgment but that summary judgment was improper because of the erroneous interpretation and application of law. Agent also asserts error in the nature and amount of damages awarded after a jury trial.

Agent had placed insurance coverage with Employers' Mutual Casualty Co. ("Insurer") on numerous items of business property owned by Parshall. In March of 1998, Parshall requested Agent procure insurance on a portable concrete plant that Parshall was in the process of purchasing. It is uncontested that Agent agreed to secure the insurance coverage. More than a month later, a windstorm destroyed the concrete plant. Insurer denied the claim, explaining that Agent had never contacted Insurer regarding the intended coverage.

Parshall subsequently sued Agent for negligence in failing to procure insurance. The trial court granted Parshall summary judgment on liability and held a jury trial to assess damages. Agent appealed and we reversed the grant of summary judgment on liability for Parshall's negligence claim.¹ Parshall v. Buetzer, 121 S.W.3d 548, 553-54 (Mo.App. W.D.2003). On remand Parshall amended its summary judgment motion to address the deficiencies found in Parshall I. Once again the trial court entered partial summary judgment in Parshall's favor on liability. A jury again awarded damages to Parshall.

Agent appeals again, contending that the trial court erred (1) in granting summary judgment on the issue of liability, finding Agent was not an agent of Insurer with authority to bind the desired coverage; (2) in granting summary judgment finding Parshall bore no comparative fault; and (3) in allowing evidence of damages that would not have been covered by the contemplated insurance. We affirm.

Facts

Buetzer's agency is not a "captive" agent for one insurer, but instead operates as an independent contractor selling policies for several insurance companies. On March 11, 1998, Parshall purchased a portable concrete plant for $40,000. On March 20, Parshall's wife contacted Buetzer to request insurance on the new plant, and Buetzer told her the insurance coverage was bound as of the moment of that conversation. Buetzer asked Parshall's wife to have Parshall call him, but did not indicate it was necessary or urgent. Buetzer indicated that he would collect further details about the equipment, but did not follow up to get any further information. Buetzer made notes to himself at his office to follow up to get the additional information, but failed to do so. When Buetzer spoke with Parshall on March 25 about unrelated matters, Buetzer did not request the additional information. When they spoke again on March 30, Buetzer again did not seek any additional information about the concrete plant. At no time prior to April 28 did Buetzer submit a policy application or addendum to the putative insurer.

On April 28, 1998, a windstorm completely destroyed the concrete plant. The collapse of the concrete plant damaged a semi-tractor and trailer also owned by Parshall. The contents of the trailer were also damaged. Additional damages included clean-up costs and lost business over the subsequent months.

On April 29, 1998, Parshall contacted Buetzer to report the damage and initiate filing a claim. Buetzer in turn contacted Insurer, who denied the claim on the grounds that it had received no notice whatsoever of the existence of the property or any intention that Insurer cover the property. Buetzer operates under a contract (the "Agreement") with Insurer. The Agreement provides that Buetzer has authority to bind Insurer to insurance policies for three days, up to certain dollar amounts (depending on the type of policy). The Agreement provides that Buetzer must notify Insurer of the intended policy within three days of binding coverage. Upon receiving timely notice, Insurer determines whether to accept or deny the intended policy. On the type of policy contemplated in this case, Buetzer's binding authority was limited to $50,000, which was adequate to cover the $40,000 purchase price of the destroyed portable concrete plant. However, Buetzer did nothing to notify Insurer of the intended policy, either within the three-day binder period or at any time in the month prior to the plant's destruction.

Parshall sued Buetzer and Green Hills Insurance Service for negligence in failing to procure insurance. Insurer is no longer a party to this litigation.²

Discussion

I.

In his first point on appeal, Buetzer argues that summary judgment on liability was improperly granted for Parshall and should have been granted for Buetzer because he, Buetzer, was an agent for Insurer, and his authority included the power to bind Insurer to the policy contemplated in this case. He argues that when he told Parshall's wife the insurance was effectively bound, he successfully and permanently bound Insurer to an oral insurance contract, and that he was therefore not negligent. Buetzer argues both that he had actual authority under his Agreement with Insurer, and that he possessed apparent authority to permanently bind coverage. Buetzer's argument in point one relies solely on an interpretation of the Agreement; he stresses on appeal and in his counter-motion for summary judgment that the parties do not dispute the facts which determine whether the insurance was successfully procured. "Where, as here, the essential facts are not in question, disputes arising from the interpretation and application of a contract are reviewed de novo as a matter of law." Care Ctr. of Kansas City v. Horton, 173 S.W.3d 353, 355 (Mo.App. W.D.2005). Furthermore, we review a grant of summary judgment de novo. ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). Summary judgment is appropriate only where "there is no genuine issue as to any material fact and ... the moving party is entitled to judgment as a matter of law[.]" Rule 74.04(c)(6).

A person who sells insurance is commonly called an "agent," but "agent" is a legal term of art. Used as a term of art, "[a]gency is the fiduciary relation which results from the manifestation of consent by one person [a principal] to another [an agent] that the [agent] shall act on [the principal's] behalf and subject to [the principal's] control, and consent by the [agent] so to act." RESTATEMENT (SECOND) OF AGENCY Section 1 (1958). Merely calling an insurance seller an agent does not mean the seller is an agent in the legal sense. Nor does calling the seller an agent, standing alone, indicate the scope of the agent's authority to act for the principal.

Buetzer cites Missouri cases finding that an insurer is bound by the acts of its agents, even though the agent failed to comply with the insurer's instructions to the agent. Buetzer correctly cites the rule that "an insurance agent, acting within the scope of his authority, actual or apparent, may bind an insurance company by an oral contract of insurance." Voss v. Am. Mut. Liab. Ins. Co., 341 S.W.2d 270, 275 (Mo.App.1960) (emphasis added). But this begs the very question before us, namely whether Buetzer's oral promise of the insurance coverage was within the scope of his actual or apparent authority.

We first address Buetzer's argument that he had actual authority to bind Insurer to the intended coverage. Actual "[a]uthority is the power of the agent to affect the legal relations of the principal by acts done in accordance with the principal's manifestations of consent to him." RESTATEMENT (SECOND) OF AGENCY Section 7 (1958). Therefore, the scope of Buetzer's actual authority is derived from the express or implied manifestations to Buetzer of Insurer's consent.³ Buetzer is not an employee or "captive" agent of Insurer,⁴ but instead serves as an independent contractor selling policies for several insurers.⁵ In his counter-motion for summary judgment and memorandum in opposition to Parshall's motion for summary judgment, Buetzer argued he was a "general agent"⁶ for Insurer and that nothing in the Agreement prevents his temporary, three-day binding authority from effectively binding Insurer permanently. Buetzer's counter-motion for summary judgment relies solely on the Agreement as evidence of the scope of his actual authority, and adduces no evidence of implied authority given him by Insurer. The Agreement's limitation provisions include the $50,000 limit for the type of coverage sought here, and the three-day duration of his binding authority. We can no more disregard the time limitation than we can disregard the amount limitation; we can no more extend the time limitation from three days to 35 than we can extend the dollar limitation from $50,000 to one-half million. Buetzer did not merely omit some detail on the policy application, or orally promise coverage that varied from the written policy. Buetzer did nothing at all. There was no policy application, timely or late. Buetzer admitted in his response to Parshall's motion for summary judgment that Insurer "never issued a policy for the property."

Buetzer also argues that he is insulated by reason of his apparent authority. In determining the scope of apparent authority, "manifestations of the principal to the [third] party to the transaction...