Somnus Mattress Corp. v. Hilson
Decision Date | 21 December 2018 |
Docket Number | 1170250 |
Citation | 280 So.3d 373 |
Parties | SOMNUS MATTRESS CORPORATION d/b/a Posturecraft Mattress Company v. Stephen HILSON and Crutchfield & Graves Insurance Agency, LLC |
Court | Alabama Supreme Court |
A. Wade Leathers, Winfield; William C. Spencer and William C. Spencer, Jr., Tupelo, Mississippi; and Michael D. Greer, Tupelo, Mississippi, for appellant.
Natalie A. Daugherty and Jonathan B. Minchin of Galloway, Johnson, Tompkins, Burr & Smith PLC, Mobile, for appellees.
Somnus Mattress Corporation d/b/a Posturecraft Mattress Company ("Somnus") appeals from a summary judgment entered by the Winston Circuit Court in favor of Stephen Hilson and Crutchfield & Graves Insurance Agency, LLC ("CGIA"), on Somnus's claim that Hilson and CGIA were negligent in advising Somnus not to purchase insurance coverage for business interruption and loss of profits (hereinafter collectively referred to as "business-income coverage"). We affirm.
Somnus manufactured mattresses at a facility in Winston County. Charles Jones founded Somnus, served as its president, and made all the consequential business decisions for Somnus -- including decisions concerning business property insurance. Jones opened his first mattress store in 1981. By 1987, Jones had grown his business to include 15 stores, a warehouse in Ashridge, and his own mattress-manufacturing factory ("the factory") located in Double Springs. In 2006, a fire at the Ashridge warehouse facility resulted in a total loss of that property. Jones testified that the property was "severely underinsured" but that he had completely relied upon his insurance agent at the time "to keep me covered."1
Hilson, on behalf of CGIA, first contacted Jones in 2009 about providing property-insurance coverage for the factory. Jones testified that during 2009 Hilson came out to the factory to inspect it and to talk to Jones about insurance coverage. Jones stated that during one of those trips the two men discussed business-income coverage.
Hilson testified that their discussion about business-income coverage occurred during his first telephone call with Jones. Hilson testified that he told Jones that he needed such coverage.
Hilson noted in his testimony that the proposal he submitted to Jones for insurance coverage of the mattress factory in 2009 included a quote with business-income coverage and a quote without business-income coverage because Jones asked for both quotes.
Hilson testified that ultimately Jones elected not to pay for business-income coverage because he stated it was too expensive.
Both Hilson and Jones agree that each year after 2009 when the insurance policy for the mattress factory came up for renewal, Hilson would visit Jones to discuss Somnus's insurance needs. Hilson testified that he told Jones at every renewal period that Somnus needed business-income coverage but that Jones always declined the business-income coverage because "[i]t was too expensive." Jones testified that he could not recall any discussion about business-income coverage at the renewal meetings between him and Hilson; the only conversation he remembered about business-income coverage was the one in 2009. It is undisputed that the written proposals for insurance Hilson submitted on behalf of CGIA to Jones for Somnus in 2010, 2011, and 2012 did not include business-income coverage.
On April 12, 2013, a fire occurred at the factory. The fire rendered the factory a total loss. Somnus was forced to move its operation to a location in Mississippi in an attempt to stay in business. Somnus stayed in business for two more years. Ultimately, Somnus went out of business in 2015.
During the period after the fire while Somnus remained in business, Somnus continued to get its insurance through Hilson and CGIA. Hilson testified that he continued to recommend business-income coverage to Jones but that Jones still declined it because he said it was too expensive.
Jones testified that his decision not to purchase business-income coverage even after the fire at the factory was based on what Hilson had told him in 2009 about it being expensive and difficult to obtain.
On June 27, 2017, Hilson and CGIA filed a motion for a summary judgment. In the motion, they contended that Hilson and CGIA did not have a duty to advise Somnus on the types of insurance coverage it needed, that Hilson and CGIA did not breach a voluntary duty to advise Somnus about the adequacy of its coverage, and that, in any event, it was undisputed that Hilson advised Somnus to purchase business-income coverage during each renewal period, including for the 2012 policy renewal under which the fire loss occurred, and that Jones declined to purchase that coverage.
On August 25, 2017, Somnus filed a response in opposition to the motion for a summary judgment. Somnus maintained that Hilson and CGIA had voluntarily assumed a duty to advise Somnus and that they had been negligent in their advice concerning business-income coverage.
On October 24, 2017, the circuit court entered a summary judgment in favor of Hilson and CGIA. The summary-judgment order did not provide the specific reasons for the court's judgment. Somnus filed a timely appeal.
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