Underwriters Ins. Co. v. Kirkland
| Decision Date | 12 June 1986 |
| Docket Number | BG-31 and BH-435,Nos. BF-499,s. BF-499 |
| Citation | 11 Fla. L. Weekly 1317,490 So.2d 149 |
| Court | Florida District Court of Appeals |
| Parties | 11 Fla. L. Weekly 1317 UNDERWRITERS INSURANCE COMPANY, et al., Appellants, v. Catherine KIRKLAND, Appellee. WHITMAN & WHITMAN, INC., Appellant, v. UNDERWRITERS INSURANCE COMPANY, Appellee. Catherine KIRKLAND, Appellant, v. WHITMAN & WHITMAN, INC., Appellee. |
John N. Bogdanoff, of Haas, Boehm, Brown, Rigdon, Seacrest & Fischer, P.A., Daytona Beach, for Underwriters Ins. Co.
Thomas R. Jenkins, of Beggs & Lane, Pensacola, for Whitman & Whitman, Inc.
Robert R. McDaniel, Pensacola, for Catherine Kirkland.
This is a consolidated appeal of three cases. We affirm in part, reverse in part, and remand as to Case No. BF-499, and reverse as to Case No. BG-31. It is unnecessary for us to address Case No. BH-435.
On 12/15/81 Plaintiff/Kirkland purchased a policy of homeowners insurance through Defendant/Whitman & Whitman, Inc. (hereinafter Whitman), agents for Defendant/Underwriters Insurance Company (hereinafter Underwriters). Since Kirkland was unable to pay the full premium amount at the time of the purchase, Whitman arranged for her to finance the premium by making monthly payments of $18 to Capital Premium Finance Corporation. After issuance of the policy, it was determined that Kirkland's home was worth more than originally thought and Underwriters required Kirkland to purchase additional insurance. Accordingly, a second policy was issued by Whitman, effective 4/20/82 through 4/20/83 with coverage on the dwelling in the amount of $44,000. Rather than send a check for the total premium amount, Whitman arranged for Kirkland to wait until she received a refund of the unearned premium on the first policy ($85.00) then use that amount as a downpayment on the second policy. The remainder would be financed through the Whitman agency at $30 per month. On or about 5/18/82, Underwriters issued the new policy, effective 4/20/82, and forwarded a copy of the policy to Whitman, along with an invoice for the premium amount of $170.
Linda Whitman of the Whitman agency testified at trial that in late May, 1982, she received a phone call from Sonny Martin, an employee of Underwriters. According to Whitman, Martin instructed her that Underwriters had changed their billing procedure and that premium checks should no longer be submitted with each application for new insurance but that agents would be billed by Underwriters on a monthly basis. Based on her belief that she would be billed later, Whitman failed to forward any premiums to Underwriters on the second policy. In fact, Whitman testified that the only payment made by Kirkland to Whitman between 4/20/82 and 8/82 was one $18.33 payment made on 5/26/82. Sonny Martin denied having told Whitman not to send premiums, and testified that he would only have had the authority to explain forthcoming changes in billing procedures to agents. Whitman received a copy of Underwriters' written directive dated 6/1/82 informing agents that the new billing procedure would become effective as to new business obtained after 7/1/82 and as to renewals obtained after 9/1/82. Andrea Redini of Underwriters testified that Kirkland's second policy would be classified as a rewrite as opposed to either a renewal or new business and, thus, the new billing procedure did not apply at all to the second policy.
On 7/7/82, Underwriters mailed Whitman a cancellation notice, stating that the policy would be cancelled effective 7/22/82, as well as a credit memo for the premium amount of $170. Kirkland was directly notified of the planned cancellation through her mortgage holder, FHA, which had been notified by Underwriters. Whitman also received cancellation notices on several other policies issued through their office. Linda Whitman then contacted Underwriters, sometime in August of 1982, to inform them that none of the policies should be cancelled and to request that Underwriters send a list of policyholders in cancellation status so that Whitman could pay the premiums on the policies. Kirkland's name did not appear on the list provided by Underwriters because Kirkland's policy had already been cancelled and was thus not in cancellation status. Whitman paid the premiums for the policies on Underwriters' list but, since she assumed that Underwriters would bill her later, she did not send a check for Kirkland's policy. Sometime in August 1982, Kirkland endorsed over to Whitman the $85 refund check from the first policy (which was credited to Kirkland's account with Whitman). After that, she continued to make monthly payments of $30 to Whitman until the premium was paid.
On 1/11/83, Kirkland's home was destroyed by fire and Underwriters denied coverage on the basis that the policy had been cancelled, effective 7/22/82, for nonpayment of premiums. Kirkland then brought suit against Whitman and Underwriters, claiming (1) that Whitman was negligent in failing to obtain and/or maintain the homeowner's policy requested by Kirkland, and (2) that in the event the policy was found to be in force, Underwriters failed to pay the proceeds following the fire. Underwriters cross-claimed against Whitman, seeking contribution and/or indemnity in the event a policy was found to exist and alleging breach of the agency agreement it had with Whitman. Whitman counterclaimed against Underwriters, seeking contribution and/or indemnity. Trial was held on all issues on 2/4-2/6/85 and the jury returned a verdict finding: (1) that the policy was in effect at the time of the fire; (2) that Whitman had not committed any negligence causing loss to Kirkland; (3) that Whitman had not breached its agency agreement with Underwriters; (4) that Whitman had committed negligence causing loss to Underwriters; and (5) that Underwriters had committed negligence causing loss to Whitman. Kirkland was awarded $77,944 in damages. Underwriters then moved for judgment N.O.V. and/or a new trial and Kirkland moved for attorney's fees, costs, and prejudgment interest. On 3/14/85 the trial court denied Underwriters' motion for judgment N.O.V. and/or new trial as to Kirkland but granted a new trial on Underwriters' cross-claim against Whitman, holding that the portion of the verdict finding no breach of agency agreement was contrary to the evidence and that the verdict form was confusing, inconsistent, and contained irrelevant questions. On the same day the court granted Kirkland's motion for attorney's fees, costs, and prejudgment interest.
Underwriters now appeals the final judgment (BF-499), Whitman appeals the order granting Underwriters a new trial (BG-31), and Kirkland appeals the portion of the verdict finding no negligence on Whitman's part (BH-435). Whitman cross-appeals against Kirkland in Case No. BH-435.
In this case, Underwriters appeals and raises three arguments. The first argument regards the jury's finding that the policy was in effect at the time of the fire. According to Underwriters, since the record is clear that Whitman made no payment on the policy until after the cancellation date, and since Whitman had neither express nor implied authority to either waive payment or reinstate the policy, the verdict must have been based on Whitman's apparent authority to waive payment or reinstate the policy. Underwriters acknowledges that there are numerous cases holding that an insurer is bound by the actions of its agents. However, it argues that these cases are distinguishable since Kirkland received notice of cancellation from the principal, in effect placing her on notice that Whitman had no authority to reinstate the policy.
We agree with Underwriters that Whitman had apparent authority to reinstate the policy, and affirm the finding on that basis. We do not find that Whitman's authority was in any way disrupted by Kirkland's receipt of the cancellation notice from Underwriters.
An insurer is said to be bound by the acts of its agents where the acts are within the scope of apparent authority and the insured is not aware of any limitation thereon. The insured need not make any special inquiry into the agent's powers unless he has reason to do so. Acme Oil v. Vasatka, 465 So.2d 1314 (Fla. 1st DCA 1985). The evidence in this case is undisputed that Underwriters mailed Kirkland a cancellation notice on July 7, 1982, informing her that the policy would be cancelled effective July 22, 1982, unless the premium amount of $170 was paid. However, according to the trial testimony, Kirkland contacted Whitman after receiving the notice, and was assured by Whitman that the cancellation would be taken care of by Kirkland endorsing her $85 refund check over to the agency. Based on the timing of Whitman's assurances, Kirkland was given no reason to inquire into the...
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