Wilks v. Manobianco

• Decision Date: 09 July 2015
• Docket Number: No. CV–14–0260–PR.,CV–14–0260–PR.
• Citation: 352 P.3d 912,716 Ariz. Adv. Rep. 14,237 Ariz. 443
• Parties: Lesley WILKS and Paul Wilks, wife and husband, Plaintiffs/Appellants, v. John MANOBIANCO and Sandra Lee Manobianco, husband and wife; John Manobianco Insurance Agency, Inc., Defendants/Appellees.
• Court: Arizona Supreme Court

237 Ariz. 443
352 P.3d 912
716 Ariz. Adv. Rep. 14

Lesley WILKS and Paul Wilks, wife and husband, Plaintiffs/Appellants
v.
John MANOBIANCO and Sandra Lee Manobianco, husband and wife; John Manobianco Insurance Agency, Inc., Defendants/Appellees.

No. CV–14–0260–PR.

Supreme Court of Arizona.

July 9, 2015.

352 P.3d 913

Mick Levin (argued), Tidmore Law Offices, L.L.P., Phoenix, Attorneys for Lesley Wilks and Paul Wilks.

Myles P. Hassett (argued), Julie K. Moen, and Jamie A. Glasser, The Hassett Law Firm, P.L.C., Phoenix, Attorneys for John Manobianco, Sandra Lee Manobianco, and John Manobianco Insurance Agency, Inc.

Christopher Robbins and Joel DeCiancio, DeCiancio Robbins, PLC, Tempe, Attorneys for Amicus Curiae Independent Insurance Agents and Brokers of Arizona.

David L. Abney, Knapp & Roberts, P.C., Scottsdale, Attorneys for Amicus Curiae Arizona Association for Justice/Arizona Trial Lawyers Association.

Stanley G. Feldman (argued) and Thomas G. Cotter, Haralson, Miller, Pitt, Feldman & McAnally, P.L.C., Tucson, Attorneys for Amicus Curiae Robert Murray and Marcia Murray.

Greg S. Como, Lewis Brisbois Bisgaard & Smith, LLP, Phoenix, Attorneys for Amicus Curiae Randy Jones and Farmers Insurance Company of Arizona.

Justice BERCH authored the opinion of the Court, in which Chief Justice BALES, Vice Chief Justice PELANDER, and Justices BRUTINEL and TIMMER joined.

Opinion

Justice BERCH, opinion of the Court.

237 Ariz. 444

¶ 1 Arizona Revised Statutes § 20–259.01 requires insurers to offer uninsured motorist (“UM”) and underinsured motorist (“UIM”) coverage to their insureds. Insurers may prove compliance with the statute by having their insureds sign a Department of Insurance (“DOI”) approved form selecting or rejecting such coverage. Ballesteros v. Am. Standard Ins. Co. of Wis., 226 Ariz. 345, 350 ¶ 20, 248 P.3d 193, 198 (2011). The issue in this case is whether compliance with § 20–259.01 bars a negligence claim alleging that the insurance agent failed to procure the UIM coverage requested by the insured. We hold that it does not.

352 P.3d 914

237 Ariz. 445

I. BACKGROUND ¹

¶ 2 For two years, Lesley Wilks had car insurance from State Farm Mutual Automobile Insurance Company, which she obtained through John Manobianco at the Manobianco Insurance Agency (collectively “Manobianco”). Her policy included liability and both UM and UIM coverage. Wilks later replaced the State Farm policy with a policy from another insurance company. A year later, she decided to switch back to State Farm. When doing so, Wilks asked Manobianco to obtain “the exact same coverage that [she] had previously, full coverage.” Manobianco did not look up Wilks's prior coverage and procured insurance that did not include UIM coverage. In the course of signing several insurance forms, Wilks signed the DOI-approved form, which had been filled out by Manobianco to reject UIM coverage.

¶ 3 Several years later, Wilks was rear-ended by an underinsured driver. State Farm denied the UIM claim she made under her policy. Wilks and her husband then sued Manobianco for malpractice for failing to procure the insurance coverage they had requested. Manobianco moved for summary judgment, arguing that it satisfied its duty of care as a matter of law by complying with A.R.S. § 20–259.01.

¶ 4 The trial court found “that [Manobianco's] compliance with A.R.S. § 20–259.01 demonstrated that [it] fulfilled [its] duties to Plaintiffs regarding offering the UM/UIM coverage,” and therefore Manobianco “breached no duty owed to Plaintiffs.” The court of appeals reversed. Wilks v. Manobianco, 235 Ariz. 246, 330 P.3d 1003 (App.2014). Relying on Darner Motor Sales, Inc. v. Universal Underwriters Insurance Co., 140 Ariz. 383, 397, 682 P.2d 388, 402 (1984), the court reaffirmed that insurance agents owe their clients a common law duty of reasonable care. Wilks, 235 Ariz. at 248 ¶¶ 7–10, 330 P.3d at 1005. The court then held that A.R.S. § 20–259.01(B) did not abolish that duty because the statute does not apply to insurance agents, and it is not broad enough to bar common law negligence claims against them. Id. at 249–50 ¶ ¶ 14–17, 330 P.3d at 1006–07.

¶ 5 We granted review because § 20–259.01's effect on the common law duty of insurance agents is a potentially recurring issue of statewide importance. We have jurisdiction pursuant to Article 6, Section 5(3) of the Arizona Constitution and A.R.S. § 12–120.24.

II. DISCUSSION

¶ 6 Under Arizona's common law, insurance agents owe a duty of reasonable care when obtaining insurance on behalf of their clients. Webb v. Gittlen, 217 Ariz. 363, 367 ¶ 18, 174 P.3d 275, 279 (2008) ; Darner Motor Sales, 140 Ariz. at 397, 682 P.2d at 402. That duty is founded on an agent's status as one with “special knowledge,” who “undertakes to act as an advisor” to a client. Darner Motor Sales, 140 Ariz. at 398, 682 P.2d at 402 ; see also Restatement (Third) of Agency § 8.08 (“If an agent claims to possess special skills or knowledge, the agent has a duty to the principal to act with the care, competence, and diligence normally exercised by agents with such skills or knowledge.”).

¶ 7 Manobianco argues that the legislature modified insurance agents' common law duties to their clients by enacting § 20–259.01, which creates a “safe harbor” if the insured signs a DOI-approved form rejecting UM or UIM coverage:

Every insurer writing automobile liability or motor vehicle liability policies shall ... make available to the named insured thereunder and shall by written notice offer the insured and at the request of the insured shall include within the policy underinsured motorist coverage which extends to and covers all persons insured under the policy, in limits not less than the liability limits for bodily injury or death contained within the policy. The selection of limits or rejection of coverage by a named insured or applicant on a form approved

237 Ariz. 446

352 P.3d 915

by the [DOI] director shall be valid for all insureds under the policy.

Id. § 20–259.01(B)(UIM) ; see also id. § 20–259.01(A)(UM). We must decide whether this statute, which speaks in terms of the “insurer,” also covers insurance agents and whether it bars common law negligence claims for an agent's failure to procure requested insurance coverage.

¶ 8 We interpret statutes and review summary judgment rulings de novo. Ballesteros, 226 Ariz. at 347 ¶ 7, 248 P.3d at 195. “When interpreting a statute, our primary goal is to give effect to the legislature's intent.” J.D. v. Hegyi, 236 Ariz. 39, 40 ¶ 6, 335 P.3d 1118, 1119 (2014). We...