Jury finds no written contract with insurance agent – Defense verdict

Plaintiff’s house burned down. The homeowner’s carrier denied the claim for a material misrepresentation in the application. Plaintiff denied a bankruptcy in the application. Plaintiff had filed for bankruptcy on Sept. 14, 2014. Plaintiff filled out the homeowner’s application on Sept. 29, 2014.

The fire took place on June 15, 2017. The insurance company denied the claim for material misrepresentation in September 2017. On Feb. 12, 2018, plaintiff filed suit against the insurance company for breach of the insurance policy and against the insurance agent for allegedly failing to fill out the application “accurately.” The insurance agent filed a demurrer for misjoinder, which the court overruled.

The insurance agent also filed a plea in bar on the three-year statute of limitations for breach of an un-written contract because the application was filled out more than three years before plaintiff filed suit. Plaintiff resisted the plea arguing that the homeowner’s application was a written contract between plaintiff and the insurance agent. If the application were a written contract between plaintiff and the insurance agent, the five-year statute of limitations for breach of a written contract applied.

The court found that there was a question of fact on whether the homeowner’s application was a written contract between plaintiff and the insurance agent. Therefore, the court set a hearing on the plea in which a seven-member jury would answer a single question: “Is the agreement between the plaintiff, Walter D. Young, and defendant Hogue Insurance Agencies Inc. in writing?”

On Sept. 25, 2018, plaintiff and the insurance agent tried the plea before a seven-member jury. The insurance agent testified he agreed to help plaintiff fill out the homeowner’s application, but the agent never intended for the application to be a written contract between plaintiff and his agency. The agent also called another insurance agent as an expert witness on whether a “reasonable insurance agent” would intend for the homeowner’s application to be a written contract between plaintiff and the insurance agent. The insurance agent-expert also testified that, in his 30 years of selling insurance, he had had never seen a written contract between a policyholder and an insurance agent.

After the homeowner’s application was signed and submitted to the insurance company, the insurance agent testified he never saw or touched plaintiff’s homeowner’s application again until after plaintiff sued the insurance agency. The insurance agent also presented testimony from the insurance company’s underwriter that the insurance company did not request renewal applications or any other form of updated underwriting from the insurance agent after the initial application.

Plaintiff testified he intended for the homeowner’s application to be a written contract with the insurance agent, particularly since the insurance agent signed the application below plaintiff’s signature.

The jury answered the interrogatory on the verdict form as follows:

“Is the agreement between the plaintiff, Walter D. Young, and defendant Hogue Insurance Agencies, Inc. in writing? No. The agreement between the plaintiff, Walter D. Young, and defendant Hogue Insurance Agencies, Inc. is not in writing.”

Based upon the verdict, the court determined that the three-year statute of limitations applies to plaintiff’s claim against the insurance agent. Therefore, the court dismissed with prejudice the action against the insurance agent. However, the action against the insurance company went forward to trial on Oct. 17, 2018.

[18-T-117]

Type of action: Alleged E&O by an insurance agent in filling out homeowner’s insurance application

Injuries alleged: Homeowner’s insurance declined to pay claim after plaintiff’s house burned down

Name of case: Walter D. Young v. Windsor-Mount Joy Mutual Insurance Company and Hogue Insurance Agencies, Inc.

Court: Franklin County Circuit Court

Case no.: CL18-2241

Tried before: Jury

Name of judge: Judge Clyde H. Perdue Jr.

Date resolved: Sept. 25, 2018

Special damages: House: $180,900.00 Contents: $60,410.00

Verdict or settlement: Defense Verdict

Amount: $0 against insurance agent; Claim against insurance company has not been tried yet.

Attorneys for plaintiff: W. Barry Montgomery, Richmond

Attorneys for defendant: For insurance agent: James N. L. Humphreys, Kingsport, Tennessee; For insurance company: Lacey U. Conn, Washington, D.C.

Defendant’s experts: Dale S. Cook, insurance agent

Insurance carrier: Utica National