The Need For Clarity In Counseling Customers
Edited by Timothy G. Ventura, Esq.
In Feist v. Andes, 2018 Pa. Super. Unpub. LEXIS 3052; 2018 WL 3980905 (Pa. Super. August 21, 2018)(unpublished), the Pennsylvania Superior Court recently held that an insurance agent did not have a duty to its client to obtain additional coverage when the agent did not exert control over the client’s decision-making and the client had knowledge that the additional coverage had not been obtained.
The Feists filed suit against their insurance agent, David Andes, for his failure to obtain additional UIM coverage for their vehicles. Andes was the Feists’ insurance agent for decades. In 2011, the Feists asked Andes to increase their UIM coverage, but Andes advised against it, telling them that he would not secure the additional coverage. Despite Andes’ refusal to obtain the additional coverage, the Feists did not obtain additional coverage from a different agent or broker and maintained their insurance policies with Andes over the years.
Later, Mr. Feist was severely injured in a motorcycle accident. At the time of the accident, the Feists had a combined total of $300,000 per person in stacked UIM coverage. The policy limits were paid. The Feists filed suit against Andes, alleging claims for negligence, breach of fiduciary duty, and breach of the duty of good faith and fair dealing. The Feists contended the agent owed them a duty to follow their requests and to obtain the additional coverage. The trial court granted the Andes’s motion for summary judgment on all counts, reasoning that the Feists knew that their UIM limits remained at $300,000 and they did not have the additional coverage they requested after meeting with Andes. Accordingly, they knew they had the option to obtain additional coverage through a different insurance agent, but they knowingly chose not to do so. The trial court dismissed the negligence claim, refusing to carve out an exception to the general rule that insurance agents do not have a common law duty to their customers. In dismissing the breach of fiduciary duty claim, the trial court determined that the evidence did not show that the Feists surrendered any decision-making authority to Andes or that Andes had any “over-mastering” influence over the Feists. Finally, the trial court dismissed the breach of the duty of good faith and fair dealing because no contract between the parties existed.
The Feists appealed the dismissal of their case to the Pennsylvania Superior Court. On appeal, they argued that: (1) a general duty was owed to them; (2) there was a fiduciary duty owed to them; and (3) there was an implied contract which created a duty of good faith and fair dealing. In affirming the trial court’s decision, the Superior Court emphasized that the Feists knew their UIM coverage limits were not going to be increased by Andes. It also recognized that the Feists were free to contact another agent to obtain the coverage increase they requested of Andes. Finally, the Superior Court held that no evidence was offered that Andes exerted any control over the Feists’ ability to control decisions related to their insurance coverage, and therefore, no fiduciary duty existed.
This opinion emphasizes the need for clarity in counseling customers. During their depositions, the Feists admitted they knew that Andes refused to obtain the additional coverage for them and that they did not have the coverage. After meeting with a customer, if an agent advises against coverage the customer requests or about which he or she inquires, it is a good practice to document your file detailing the discussions.
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