Sadler v. Loomis Co.
| Decision Date | 05 July 2001 |
| Docket Number | No. 1356,1356 |
| Citation | 776 A.2d 25,139 Md. App. 374 |
| Parties | Evelyn E. SADLER, v. The LOOMIS COMPANY. |
| Court | Court of Special Appeals of Maryland |
Allen W. Cohen (Cohen & Greene, P.A., on the brief), Annapolis, for appellant.
Robert J. Carson (Robert J. Carson, P.A., Thomas F. Corcoran and Baxter, Sidle, Conn & Jones, P.A., on the brief), Baltimore, for appellee.
Argued before HOLLANDER, SALMON and WILLIAM W. WENNER (Retired, Specially Assigned), JJ.
This unfortunate case has its genesis in a tragic automobile accident that occurred on May 13, 1996, involving appellant Evelyn Sadler, an elderly driver, and Timothy Prophet, a motorcyclist. As a result of injuries sustained in the accident, Prophet's leg was amputated. At the time of the accident, Sadler had an automobile liability insurance policy that provided maximum coverage of $100,000. The policy was procured by The Loomis Company ("Loomis"), appellee, an insurance agency that had procured insurance for appellant for several years. When Prophet filed a $10,000,000 negligence suit against Sadler, it became painfully evident that Sadler was woefully underinsured.1
About one month after the vehicular accident, on June 20, 1996, Sadler conveyed her waterfront home to her two siblings for $10.00. At that time, Sadler's home had a fair market value of $650,000. When Prophet learned of the transfer, he lodged a fraudulent conveyance suit against Sadler and her siblings, seeking to set aside the transfer.
In 1999, Sadler settled both of Prophet's cases for almost $1,000,000, a sum well in excess of her policy limits; her insurer, USF & G, contributed the amount of money available under the policy. Thereafter, appellant instituted suit against Loomis for $2,000,000, claiming that Loomis was negligent because it knew of Sadler's financial position, yet failed to provide her with periodic quotes as to the cost of additional protection, or sufficient information to enable her to make an informed decision as to an appropriate level of liability coverage. Appellant sought to recover the value of her settlement with Prophet as well as damages for mental anguish.
Loomis subsequently moved for summary judgment, asserting that it did not owe appellant a duty to counsel her regarding the appropriate amount of automobile liability coverage, and she was not entitled to compensatory damages for mental anguish. After the court granted Loomis's motion, this appeal followed. Appellant presents three questions for our consideration:
I. Did the lower court err in granting summary judgment and thereby determining, as a matter of law, that an insurance agent owed no duty to his client?
II. Did the lower court err in determining as a matter of law that plaintiff Evelyn Sadler was not damaged when her home was transferred to a motorcyclist that she had injured as part of the settlement of the claims filed by the motorcyclist?
III. Did the lower court err when it disregarded plaintiff Evelyn Sadler's sworn testimony concerning the physical manifestations of her emotional distress and determined as a matter of law that emotional damages were not compensable?
For the reasons set forth below, we conclude that Loomis did not have a continuing, affirmative tort duty to render unsolicited advice to Sadler concerning the advisability or availability of liability coverage in a greater amount than was selected by Sadler. Rather, "`the onus is ... squarely on the insured to inform the agent of the insurance he requires.'" Charlin v. Allstate Insurance Co., 19 F.Supp.2d 1137, 1142 (C.D.Cal.1998) (citation omitted). Therefore, we shall affirm.
Evelyn Sadler was born on May 11, 1919, and she has been driving since 1937. Sadler never married and, at the time of the accident in 1996, she still resided in the family home, located at 824 Bywater Road in Annapolis, where she had lived since 1951. Until her death in 1990, appellant's mother resided in the same house. When Sadler's mother died, Sadler became the sole owner of the home. Along with her brother and sister, Sadler also owned three other real properties, which were sold in the 1990's.
Following Sadler's graduation from high school, she embarked on a course of study in commercial bookkeeping, shorthand, and math. Sadler's skills were put to use during the 50 years that she worked in the family business, Sadler's Hardware, located in Annapolis. Appellant's duties at the business included keeping the books, payment of bills, and handling loan payments. When Sadler's Hardware incorporated in 1977, long after the death of appellant's father in 1943, appellant, her mother, and her siblings became directors, stockholders, and corporate officers.
Sadler's Hardware procured its business insurance through E. Churchill Murray. Later, that agency became known as Murray, Martin & Olsen ("Murray"). Although appellant was not primarily responsible for handling the insurance needs of the business, she testified at her deposition that she reviewed each insurance policy and verified that the amount of coverage corresponded to what had been discussed with the insurance agency. At about the time that Sadler's Hardware went out of business in 1987, Loomis acquired the Murray agency.
Since 1941, Sadler has continuously utilized the same insurance agency that was used by the family business. Thus, for over 50 years, appellant was a customer of both Murray and its successor, Loomis. Indeed, since the time that Loomis acquired Murray, appellant obtained her homeowner's insurance and automobile liability insurance from Loomis. Nevertheless, appellant never had a "special person" at Loomis with whom she dealt for her insurance needs. Appellant asserts in her brief that, "[o]nce The Loomis Company took over, there were no more personal meetings" with an insurance agent. Rather, Sadler acknowledges that she "had contact" with Loomis only "when she had a question."
At her deposition, appellant recalled various times when she had occasion to contact a representative of Loomis. After the death of Sadler's mother in 1990, for example, appellant notified Loomis to remove her mother as an insured. In 1996, Sadler telephoned Carol Scaffe, a Loomis agent, and instructed her to remove certain items of silver from coverage under her homeowner's policy, because Sadler had distributed those particular pieces to members of her family and no longer owned them. On another occasion, appellant asked Scaffe to correct an error as to the year of construction of her home.
At the time of the underlying accident, Sadler had replacement coverage for her home in the amount of $231,000. In addition, Sadler had coverage of $23,825 for her silverware. With respect to the $100,000 coverage under appellant's automobile liability insurance, Sadler said at her deposition: "I assumed I had enough." Sadler acknowledged that she understood that if she was involved in an automobile accident for which she was deemed at fault, her liability insurer had no obligation to pay more than the stated policy limit of $100,000, regardless of the actual amount of damages. But, Sadler maintained that she did not realize that she would be liable for any shortfall. The following deposition testimony is relevant:
From time to time over the years, Sadler received written correspondence from Loomis pertaining to her various insurance policies. For example, Sadler received letters from Loomis dated February 17, 1993, and August 5, 1993, which requested, inter alia, that she contact Loomis if she had questions about her automobile coverage. The letter of February 17, 1993 stated, in relevant part:
RE: AUTO POLICY PPA10147968609
Dear Ms. Sadler:
(Emphasis added).
Similarly, the letter of August 5, 1993,...
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