No Evidence of a "Special Relationship" Between the Insured and Agent under Washington Law
The Washington Court of Appeals has affirmed a trial court’s grant of summary judgment to an insurer and a broker in a failure to procure action on the basis that the insured failed to demonstrate that he had a “special relationship” with the agent requiring the agent to make certain the insured had adequate insurance coverage.
The insured owned several rental properties that he insured through a “Landlord Protector Package Policy” with Farmers. The insured obtained these policies through an insurance agent that later sold his entire book of insurance business to a different agent. When the new agent took over the accounts, he did not review the insured’s policies nor did the insured request that any changes be made to the policies. In 2002, a fire broke out at one of the rental properties and a tenant was badly injured. The tenants sued and sought damages far in excess of the liability policy limits. The insured thereafter sued Farmers and the agent alleging that they were “negligent in failing to ensure that he had adequate insurance coverage.” The insured specifically alleged that he attempted to speak to the agent on several occasions and sought clarification on his coverage on several occasions but that the agent never returned his calls. Farmers and the agent moved for summary judgment arguing that there was no “special relationship” between the insured and broker that required the agent to ensure there was adequate coverage on the properties.
The Washington Court of Appeals affirmed the trial court’s grant of summary judgment to Farmers and the broker on the basis that there was no special relationship between the parties. The court found that there was no evidence in the record that the broker held himself out as an expert or received extra compensation nor was there any evidence that there was a long-standing relationship between the parties or that they actually discussed the adequacy of the policy limits. While the court acknowledged that the insured attempted to contact the agent on numerous occasions to no avail, these contacts concerned only the insured’s request for copies of his policies and not a specific question on coverage. The court specifically noted that there was no evidence that the insured was told by the agent that he had adequate coverage rather the evidence only showed that the insured asked to verify his current limits. Accordingly, the court affirmed the trial court’s original dismissal of the matter on summary judgment.
