Turner, Wood & Smith, Inc. v. Reed

• Decision Date: 05 December 1983
• Docket Number: No. 67405,67405
• Citation: 169 Ga.App. 213,311 S.E.2d 859
• Court: Georgia Court of Appeals
• Parties: TURNER, WOOD & SMITH, INC. v. REED.

Page 859

311 S.E.2d 859

169 Ga.App. 213

TURNER, WOOD & SMITH, INC. v. REED.

No. 67405.

Court of Appeals of Georgia.

Dec. 5, 1983.

Thomas M. Cole, George L. Simpson III, Gainesville, for appellant.

Robert J. Reed, Gainesville, for appellee.

BANKE, Judge.

Acting through the appellant insurance agency, the appellee obtained a policy of "farm protection" insurance which provided, among other things, fire protection on a dwelling he intended to renovate. The structure burned during the policy period, but because it had been vacant for more than 60 days at the time, the insurer took the position that the policy no longer covered it. The appellee filed suit against both the insurer and the appellant agency, charging the latter with negligence in failing to procure adequate coverage. The trial court granted summary judgment to the insurer, but the claim against the agency proceeded to jury trial and a resulting verdict in the appellee's favor. The agency filed this appeal from the denial of its motion for judgment notwithstanding the verdict.

The purchase of the insurance policy had been handled by the appellee's wife on his behalf. She testified that she made the purchase through the appellant because she and her husband had dealt with that agency before and had come to rely on it to provide them with proper coverage, and she maintained that she specifically informed the agency representative with whom she dealt that the house in question was to be renovated as soon as the tenant who was currently residing there moved out. After the policy was issued, but before the fire occurred, the appellee's wife became disenchanted with this representative due to certain mistakes he had allegedly made, and she complained about him to another employee at the agency. Despite these misgivings, however, neither she nor her husband read the policy between the time they received it and the occurrence of the fire; and they were consequently unaware that it did not cover any dwelling which was vacant for more than 60 days. Although the appellee's wife testified that she specifically told the appellant's representative that the dwelling in question would be vacant during the renovation period, she admitted that she did not specify the amount of time the renovations were expected to take, explaining that the representative never indicated to her that this might be a relevant factor. She further testified that when she spoke with this representative after the claim was denied by the insurer, he expressed surprise to her that such a vacancy clause existed.

Held:

Generally speaking, an insurance agent who undertakes to procure a policy of insurance for his principal but negligently fails to do so may be held liable to the principal for any resulting loss. See, e.g., Carrollton Fed. S. & L. Assn. v. Young, 165 Ga.App. 262, 299 S.E.2d 395 (1983); Holyoak v. Houston-Gaskins Agency, 160 Ga.App. 565, 287 S.E.2d 572 (1981); Speir Ins. Agency, v. Lee, 158 Ga.App. 512, 281 S.E.2d 279 (1981); Northeastern Ins. Agency v. Courson, 156 Ga.App. 321, 322-323, 274 S.E.2d 714 (1980). However, where the agent does procure the requested policy and the insured fails to read it to determine which particular risks are covered and which are excluded, the agent is thereby insulated from liability, even though he may have undertaken to obtain "full coverage." See Ethridge v. Assoc. Mutuals, 160 Ga.App. 687, 288 S.E.2d 58 (1981); Barnes v. Levenstein, 160 Ga.App. 115, 286 S.E.2d 345 (1981); Smith v. Avemco Ins. Co., 157 Ga.App. 531, 278 S.E.2d 112 (1981); Barnes v. Mangham, 153 Ga.App. 540, 265 S.E.2d 867 (1980); Ga. Mut. Ins. Co. v. Meadors, 138 Ga.App. 486, 226 S.E.2d 318 (1976).

The appellant contends that the Supreme Court's decision in Wright Body Works v. Columbus Interstate Ins. Agency, 233 Ga. 268, 210 S.E.2d 801 (1974), did away with the absolute requirement that the insured read...