Segalla v. U.S. Fire Ins. Co.

• Decision Date: 05 April 1977
• Docket Number: No. 96-76,96-76
• Citation: 135 Vt. 185,373 A.2d 535
• Court: Vermont Supreme Court
• Parties: Remo SEGALLA v. UNITED STATES FIRE INSURANCE COMPANY et al.

Page 535

373 A.2d 535

135 Vt. 185

Remo SEGALLA v. UNITED STATES FIRE INSURANCE COMPANY et al.

No. 96-76.

Supreme Court of Vermont.

April 5, 1977.

Motion for Reargument Denied April 28, 1977.

Bloomer & Bloomer, Rutland, for plaintiff.

A. Hays Butler, Miller & Norton, Rutland, for defendants.

Before BARNEY, C. J., and DALEY, LARROW, BILLINGS and HILL, JJ.

DALEY, Justice.

This is an appeal from a judgment entered in favor of the defendant insurance company in a petition for declaratory judgment brought by the plaintiff to compel it to appear, defend and pay any judgment which might be rendered against the plaintiff in a separate civil action brought by the owner of a building which collapsed while its construction was being supervised by the plaintiff.

At the time of the collapse of the building, the plaintiff was the named insured in a comprehensive general liability policy issued by the defendant. The insurance carrier, upon being notified of the civil action brought against the plaintiff, disclaimed coverage by relying upon certain exclusion clauses contained in the policy, not in issue here.

The plaintiff subsequently brought his petition for declaratory judgment against the insurance carrier and certain other named defendants. In order for this Court to treat the judgment as a final judgment under V.R.C.P. 54(b), the plaintiff has stipulated to a dismissal of his action against all named defendants other than the insurance company. By virtue of this dismissal, it will not be necessary to reach the issues raised in the cross-appeal filed by such defendants.

In his petition, as amended, the plaintiff alleged that:

On or before April 18, 1973, the plaintiff ordered from a duly authorized agent of the defendant United States Fire Insurance Company, Inc. an insurance policy covering all phases of his operations as a general contractor. The plaintiff relied on the representations of the defendant insurance company's agents that such insurance was available and was incorporated in what was called a 'comprehensive general liability policy'.

The claimed agent of the insurer is a Rutland insurance agency, Kinney, Pike, Bell &amp Conner, Inc., hereinafter referred to as the agency.

Contrary to the allegations of the amended complaint, the superior court found and concluded that the agency, in procuring the policy for the plaintiff, was acting as agent for the plaintiff. The court then concluded that the policy, as issued by the carrier, did not provide coverage for the collapse of the building.

The plaintiff appeals, contending that the question of agency was not an issue before the superior court and that the court's findings and conclusions relating to agency are not supported by the evidence. In addition, the plaintiff challenges the superior court's failure to find that the insurance company had waived any defense of lack of an agency relationship.

The evidence shows, and the superior court found, that after the plaintiff entered into the agreement to supervise the construction of the building in Brandon, Vermont, he went to Mr. Pike, an officer of the agency, in order to obtain insurance coverage for this job. At that time, he advised Mr. Pike of circumstances of his employment and its conditions. He also informed him of the manner in which the workmen on the job were to be paid. The court further found that the plaintiff stated to Mr. Pike that he desired to be completely covered for all risks arising out of the job. Although not found by the court, it is undisputed that Mr. Pike knew that the plaintiff was a general contractor. It is also evident that the plaintiff entrusted to the agency the task of securing whatever coverage was required under the circumstances disclosed to Mr. Pike and that the plaintiff relied upon his representation that he would do so.

The focal question is whether the agency, in procuring the policy, or in failing to obtain the protection requested by the plaintiff, was acting as an authorized agent of the insurer. From the evidence, it cannot be determined whether any other insurance companies were doing business with the agency. The record is also silent upon the question of whether the agency had been appointed or employed by the insurer. Our statutes define an insurance agent as 'an individual appointed by an insurer to solicit applications for a policy of insurance or to negotiate a policy of insurance on its behalf'. 8 V.S.A. § 4791(1) (Cumm.Supp.1976). Insurance agents have a fixed and permanent relation to the insuring companies and have certain duties and allegiance to those companies. 16 J. Appleman, Insurance Law and Practice § 8725 (1968).

Contrary to the allegations of the amended complaint, the plaintiff, in direct examination, when asked if he had read the policy sent to him by the agency, replied, 'Well, I hired an agent and I anticipated that he would take care of all my needs in this particular insurance.' This testimony, in the absence of any evidence of an appointment or employment by the insurer, was sufficient to present a question of fact for the superior court's determination. Furthermore, the plaintiff, by his amended complaint, sought to bind the insurer for the acts or neglects of its alleged agent. Having done so, the plaintiff assumed the burden of proving the existence of such a relationship. Kinsley v. Willis, 120 Vt. 103, 110, 132 A.2d 163 (1957). The evidence adduced at trial failed to establish any express, implied or apparent authority on the part of the agency to act on behalf of the insurer. Since the plaintiff failed to sustain his burden of proof, the superior court upon the evidence could properly have inferred that the agency was acting in the nature of a broker and as such it was the agent of the plaintiff. See Bardwell v. Commercial Union Assur. Co., 105 Vt. 106,...