Town & Country Mut. Ins. Co. v. Savage
| Decision Date | 15 June 1981 |
| Docket Number | No. 2-880A289,2-880A289 |
| Citation | 421 N.E.2d 704 |
| Parties | TOWN & COUNTRY MUTUAL INSURANCE COMPANY, Appellant (Defendant Below), v. Curt SAVAGE, d/b/a Curt's Marathon, Appellee (Plaintiff Below), Charles E. Evans, Appellee (Defendant Below). |
| Court | Indiana Appellate Court |
C. Wendell Martin, Martin & Hartley, Indianapolis, Edward S. Mahoney, Lacy, O'Mahoney, Mahoney, Angel & Jessup, Kokomo, for appellant.
C. Michael Cord, Bayliff, Harrigan, Cord & Maugans, Merrill W. Otterman, Kerwin & Otterman, Kokomo, for appellee Curt Savage, d/b/a Curt's Marathon.
Defendant-appellant Town & Country Mutual Insurance Company appeals from an $8,000 judgment entered against it in favor of Curt Savage, d/b/a Curt's Marathon under color of an insurance policy issued by it to Curt Savage. Savage appeals from denial of pre-judgment interest.
We affirm in part and reverse in part.
The facts most favorable to the judgment are as follows:
On November 18, 1975, Curt Savage (d/b/a Curt's Marathon, hereinafter referred to as Savage) met with Charles Evans (Evans) and Louis "Bud" Robertson (Robertson) to discuss the insurance needs of his service station in Kokomo, Indiana.
Evans was an independent insurance agent who represented a number of companies, including Town & Country Mutual Insurance Company (Town & Country), defendant herein. He had previously dealt with Savage in insurance matters.
Robertson was a field sales manager directly employed by Town & Country. Robertson held himself out to Savage as an employee of Town & Country and took part in the discussion about Savage's insurance needs.
For the purposes of this inquiry, the critical portion of that discussion concerned burglary coverage for the tools and inventories Savage kept at his station. At the time, Savage had $6,000 coverage on his inventory with a carrier other than Town & Country. Evans suggested that he increase that policy to $10,000 or $12,000; the parties settled on $8,000. Savage showed Robertson the burglar alarm and told him that often a guard dog was kept in the station at night.
Robertson asked Savage how much cash he kept in the register, to which Savage replied $250.00.
Robertson participated in the conversation and took notes. He voiced no objections about issuing the policy to the station to either Evans or Savage. Robertson prepared the application for insurance. Neither Savage nor Evans ever saw that form. The application omitted the $8,000 theft coverage which was agreed upon.
A three-year policy taking effect December 1, 1975 was then issued to Savage by Town & Country, but it did not include $8,000 theft coverage.
On February 3, 1977 Savage's station was burglarized, and numerous tools and other items taken. When Savage reported his loss to Evans both were under the impression Savage had $8,000 coverage. 1 Robertson, however, informed Evans that Savage only had $250.00 in theft insurance. 2
After discussion with Town & Country proved fruitless, Savage filed suit against Town & Country and Evans. Evans filed a cross-complaint against Town & Country seeking indemnity for any amount awarded Savage, and damages for libel and slander to his professional reputation by Town & Country.
Following a bench trial, judgment was entered in favor of Savage in the amount of $8,000 against Town & Country. The trial court held against Evans on his cross-complaint. 3
Town & Country presents the following issues for review:
1. Is the evidence sufficient to support the finding that Town & Country was negligent in failing to provide burglary insurance in the amount of $8,000 to Savage?
(a) Was the requisite agency relationship between either Evans or Robertson and Town & Country established?
(b) Was there a duty of reasonable conduct applicable to Town & Country's dealings with Savage?
(c) Did Town & Country act reasonably in responding to Savage's request for insurance?
(d) Was Savage contributorily negligent in failing to read his policy?
Savage presents the following issue for review:
2. Did the trial court err in refusing to award Savage pre-judgment interest on the judgment amount entered?
ISSUE ONE Is the evidence sufficient to support the finding that Town & Country was negligent in failing to provide burglary insurance in the amount of $8,000 to Savage?
CONCLUSION There was sufficient evidence from which the trial court could conclude that Town & Country was negligent.
Trial in this case was had to the bench. If there is conflicting testimony on any of the elements necessary to establish negligence, we cannot re-weigh the evidence. T.R. 52(A). "On appeal of claims tried by the court without a jury ... the court on appeal shall not set aside the findings or the judgment unless clearly erroneous." Id. See, e. g., Beech Grove v. Schmith (1975), 164 Ind.App. 536, 329 N.E.2d 605. An appellate court will not reweigh the evidence nor judge the credibility of the witnesses, Jones v. State (1978), Ind., 377 N.E.2d 1349, but will affirm the judgment if there is sufficient evidence to support it First National Bank of Mishawaka v. Kamm (1972), 152 Ind.App. 353, 283 N.E.2d 563. If the trial court's resolution of these questions was not clearly erroneous, we have no basis for reversal of the trial court.
With these guidelines in mind, we explore the elements of negligence which Town & Country alleges were insufficiently proven.
(a) Was the requisite agency relationship between either Evans or Robertson and Town & Country established?
CONCLUSION The requisite relationship was established.
At the outset, we observe that Town & Country has argued at length about the status of Evans vis-a-vis Town & Country. That argument is irrelevant to our inquiry. We must indulge in every reasonable presumption in favor of the trial court's action. Stover v. Stover (1965), 137 Ind.App. 578, 205 N.E.2d 178. There was ample evidence that Robertson, an employee of Town & Country, played a vital role in the discussions preceding the issuance of this policy. He took notes while present at Savage's station and prepared the application for the policy. Robertson, undeniably a servant of Town & Country, effectively supplanted Evans as the key representative of the company. There was therefore a factual basis for the trial court's determination that Savage dealt with Town & Country.
Furthermore, even assuming without deciding that Evans was a broker, and was Savage's agent, the verdict of the trial court stands. Uncontroverted testimony shows that Evans and Savage both thought that Savage had $8,000 theft coverage. Robertson never spoke to Evans about the non-existence of that coverage until after the loss. Consequently, there was no notice of any problem to Evans which could be imputed to Savage.
In light of the foregoing, the trial court's finding that Evans was an agent of Town & Country is at most harmless error. T.R. 61.
Because there was ample evidence that Savage also dealt with Robertson, an agent of Town & Country, we conclude that the trial court could properly find that Savage did in fact seek theft coverage from Town & Country through its employee, Robertson.
(b) Was there a duty of reasonable conduct applicable to Town & Country's dealings with Savage?
CONCLUSION There was a duty of reasonable care applicable to Town & Country.
Bulla v. Donahue (1977), Ind.App., 366 N.E.2d 233, addresses the arguments presented in this case. It held that accompanying an undertaking to procure insurance is a duty to exercise reasonable skill, care and diligence, and a corresponding duty to seasonably notify the applicant if the agent is unable to obtain insurance.
Additionally, we agree that
(w)here an insurance agent or broker promises, or gives some affirmative assurance, that he will procure or renew a policy of insurance under circumstances which lull the insured into the belief that such insurance has been effected, the law will impose upon the broker or agent the obligation to perform the duty which he has thus assumed.
3 Couch on Insurance 2d § 25:46, p. 352.
This concept has been accepted by Indiana courts:
If untrained or over-zealous agents make negligent or reckless representations as to policy coverage and it can be shown that the company had actual knowledge thereof or that knowledge may be implied from the circumstances of a particular situation, the company must accept the responsibility.
Vernon Fire & Casualty Insurance Co. v. Thatcher (1972), 152 Ind.App. 692, 285 N.E.2d 660, 671. See also, Western & Southern Life Insurance Co. v. Lottes (1946), 116 Ind.App. 564, 64 N.E.2d 405, reh. denied 116 Ind.App. 578, 64 N.E.2d 805.
So Indiana does impose a duty of reasonable care on individuals who represent that they can supply insurance. The state of the law in this regard, coupled with the fact the trial court did not err in finding that Savage dealt with Robertson, an agent of Town & Country, as well as Evans (Issue One (a), supra), leads us to conclude that there was a duty of reasonable care applicable to Town & Country's dealings with Savage.
(c) Did Town & Country act reasonably in responding to Savage's request for insurance?
CONCLUSION Town & Country did not act reasonably.
We are asked here to make a determination that is primarily factual. The trial court found
that it is more probably true than not true that the defendants did lead plaintiffs to believe that theft coverage was provided in the policy issued to plaintiff, and that defendants were negligent in failing to either see that theft coverage was provided or notify plaintiff that it would not be provided.
Because this determination was made on the basis of conflicting evidence, and is not clearly erroneous, we must affirm it. T.R. 52(A); Jones, supra; Schmith, supra; Kamm, supra; Stover, supra.
(d) Was Savage contributorily negligent in failing to read his policy?
CONCLUSION Savage was not...
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