Wiles v. Mullinax, 603

• Decision Date: 25 May 1966
• Docket Number: No. 603,603
• Citation: 148 S.E.2d 229,267 N.C. 392
• Court: North Carolina Supreme Court
• Parties: Bernadine WILES d/b/a Centerview Taxi v. Ralph P. MULLINAX, Jr. and Mullinax Insurance Agency, Inc.

Page 229

148 S.E.2d 229

267 N.C. 392

Bernadine WILES d/b/a Centerview Taxi v. Ralph P. MULLINAX, Jr. and Mullinax Insurance Agency, Inc.

No. 603.

Supreme Court of North Carolina.

May 25, 1966.

Williams, Willeford & Boger, Concord, for plaintiff appellant.

Hartsell, Hartsell & Mills, by Harold H. Smith, Concord, for defendant appellees.

SHARP, Justice.

This Court has several times stated the rule applicable to plaintiff's allegations and evidence:

'It is very generally held that, where an insurance agent or broker undertakes to procure a policy of insurance for another affording protection against a designated risk, the law imposes upon him the duty in the exercise of reasonable care to perform the duty he has assumed, and within the amount of the proposed policy he may be held liable for the loss properly attributable to his negligent default.' Elam v. Smithdeal Realty Co., 182 N.C. 599, 602, 109 S.E. 632, 633, 18 A.L.R. 1210.

Accord, Interstate Textile Equipment Co. v. Swimmer, 259 N.C. 69, 130 S.E.2d 6; Bank of French Broad Inc. v. Bryan, 240 N.C. 610, 83 S.E.2d 485; Meiselman v. Wicker, 224 N.C. 417, 30 S.E.2d 317; Boney, Insurance Comr. v. Central Mut. Insurance Co., 213 N.C. 563, 197 S.E. 122. See also 4 Couch, Insurance § 26:460 (2d Ed. 1960); 44 C.J.S. Insurance § 172 (1945); 29 Am.Jur., Insurance § 163 (1960).

If a broker or agent is unable to procure the insurance he has undertaken to provide, he impliedly undertakes--and it is his duty--to give timely notice to his customer, the proposed insured, who may then take the necessary steps to secure the insurance elsewhere or otherwise protect himself. Annot., Insurance Broker or Agent--Liability, 29 A.L.R.2d 171, 184 (1953); 29 Am.Jur., Insurance § 164 (1960). When, under these circumstances, the broker fails to give such notice, he renders himself liable for the resulting damage which his client suffered from lack of insurance. 44 C.J.S. Insurance § 172 (1945).

Where an insurance broker becomes liable to his customer for failure to provide him with the promised insurance, the latter at his election, may sue for breach of contract or for negligent default in the performance of a duty imposed by contract. Interstate Textile Equipment Co. v. Swimmer, supra; Bank of French Broad Inc. v. Bryan, supra; Elam v. Smithdeal Realty Co., supra; 44 C.J.S. Insurance § 172(b) (1945).

Viewing the evidence in the light most favorable to plaintiff, as we are required to do, it appears: (1) In 1951, defendants had agreed to provide plaintiff with continuous workmen's compensation coverage, and, from November 1951 through November 1958, without any further request from her, they had done so; (2) Plaintiff had paid the premium or arranged for its payment only when she was billed; (3) On November 18, 1958, after unsuccessful efforts to place her insurance with two companies, defendants permitted her coverage to expire without notice to her; and (4) As a result, she became personally liable, 21 days later, to pay the widow of a deceased employee...