Skaperdas v. Country Casualty Insurance Company

2013 IL App (4th) 120986FILED
October 7, 2013
NO. 4-12-0986 Carla Bender
th
4 District Appellate
IN THE APPELLATE COURT Court, IL
OF ILLINOIS
FOURTH DISTRICT
STEVEN A. SKAPERDAS; VALERIE R. DAY; and ) Appeal from
JONATHAN JACKSON, a Minor, by Valerie Day, His ) Circuit Court of
Mother and Next Friend, ) Champaign County
Plaintiffs-Appellants, ) No. 11L121
v. )
COUNTRY CASUALTY INSURANCE COMPANY and ) Honorable
TOM LESSARIS, ) Jeffrey B. Ford,
Defendants-Appellees. ) Judge Presiding.
______________________________________________________________________________
PRESIDING JUSTICE STEIGMANN delivered the judgment of the court, with
opinion.
Justices Appleton and Pope concurred in the judgment and opinion.
OPINION
¶1 In March 2012, plaintiffs, Steven A. Skaperdas and Valerie R. Day (on behalf of
herself and as a representative of her son, Jonathan Jackson), sued defendants, Country Casualty
Insurance Company (Country Casualty) and Tom Lessaris, seeking, in pertinent part, (1) to
recover from Lessaris for his negligence in procuring insurance coverage from Country Casualty
on plaintiffs' behalf and (2) a declaration of insurance coverage. In April 2012, Lessaris filed a
motion to dismiss, arguing that he did not owe plaintiffs a duty of care in procuring insurance
coverage. Shortly thereafter, Country Casualty filed a motion to dismiss, arguing that if the trial
court determined that Lessaris cannot be liable to plaintiffs, Country Casualty could not be liable
to plaintiffs for negligence under the theory of respondeat superior.
¶2 Following a June 2012 hearing on defendants' motions to dismiss, the trial court
granted both motions. The court found that because Lessaris was an insurance "agent," rather
than an insurance "broker," he did not owe plaintiffs a duty of care in procuring insurance
coverage for them.
¶3 Plaintiffs appeal, arguing that the trial court erred by granting defendants' motions
to dismiss, given that under section 2-2201 of the Illinois Insurance Placement Liability Act (Act)
(735 ILCS 5/2-2201 (West 2010)), the insurance agent-broker dichotomy no longer exists for
purposes of duty of care. Because we agree that section 2-2201 of the Act eliminated the
common-law distinction between insurance agents and brokers for purposes of duty of care, we
reverse and remand for further proceedings.
¶4 I. BACKGROUND
¶5 From time to time in early 2008, Day drove vehicles owned by Skaperdas, her
boyfriend. Those vehicles were insured by Country Casualty. On February 5, 2008, Day was in
an accident in one of Skaperdas' vehicles. Although Day was not listed as an "additional driver"
on Skaperdas' Country Casualty auto-insurance policy, Country Casualty covered the loss, but
required Skaperdas to add Day to his insurance policy as an additional driver. Shortly thereafter,
Skaperdas had a conversation with Lessaris, an insurance agent representing Country Casualty,
about adding Day and Jackson, Day's son, to his auto-insurance policy.
¶6 Effective February 14, 2009, Skaperdas purchased a Country Casualty auto-
insurance policy through Lessaris. The declarations page ("deck" page) for that policy listed only
Skaperdas as a named insured. The "deck" page identified the driver, however, as a "FEMALE,
30-64."
¶7 In July 2009, Jackson was seriously injured when he was struck by a vehicle while
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he was on his bicycle. Day and Jackson sued the driver's insurance company and reached a
settlement for the insured's policy limits of $25,000, an amount that was insufficient to fully
compensate them for their losses. Shortly thereafter, plaintiffs made a claim for underinsured
motorist benefits under the February 14, 2009, policy Skaperdas purchased from Country
Casualty through Lessaris. Country Casualty denied the claim on the grounds that neither Day
nor Jackson was listed as a named insured on that policy.
¶8 In March 2012, plaintiffs sued defendants, seeking, in pertinent part, (1) to
recover from Lessaris for his negligence in procuring insurance coverage from Country Casualty
on plaintiffs' behalf and (2) a declaration of insurance coverage. In April 2012, Lessaris filed a
motion to dismiss under section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619
(West 2010)), arguing that he did not owe plaintiffs a duty of care in procuring insurance
coverage. Shortly thereafter, Country Casualty filed its own motion to dismiss under section 2-
619 of the Code, arguing that if the trial court determined that Lessaris was not liable to
plaintiffs, Country Casualty could not be liable to plaintiffs for negligence under the theory of
respondeat superior.
¶9 Following a June 2012 hearing on defendants' motions to dismiss, the trial court
granted both motions. The court found that because Lessaris was an insurance "agent," rather
than an insurance "broker," he did not owe plaintiffs a duty of care in procuring insurance
coverage for them.
¶ 10 This appeal followed.
¶ 11 II. ANALYSIS
¶ 12 Plaintiffs argue that the trial court erred by granting defendants' motions to
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dismiss, given that under section 2-2201 of the Act (735 ILCS 5/2-2201 (West 2010)) the
insurance agent-broker dichotomy no longer exists for purposes of duty of care. For the reasons
that follow, we agree.
¶ 13 A. Statutory Interpretation and the Standard of Review
¶ 14 Plaintiffs' argument in this case hinges on the interpretation of section 2-2201 of
the Act. A reviewing court's goal when endeavoring to interpret a statute is to ascertain the
legislature's intent. People v. Giraud, 2012 IL 113116, ¶ 6, 980 N.E.2d 1107. The most reliable
indicator of that intent is the statutory language itself. Id. When the language of the statute is
clear and unambiguous, we apply it as written, without resort to extrinsic aids to statutory
construction. Id. We will not depart from the plain language of the statute by reading into it
exceptions, limitations, or conditions that conflict with the expressed intent. Id. Because this
appeal is taken from a motion to dismiss, our review is de novo. Phoenix Insurance Co. v.
Rosen, 242 Ill. 2d 48, 54, 949 N.E.2d 639, 644 (2011).
¶ 15 B. The Pertinent Portion of Section 2-2201 of the Act
¶ 16 Section 2-2201(a) of the Act states as follows:
"An insurance producer, registered firm, and limited insurance
representative shall exercise ordinary care and skill in renewing,
procuring, binding, or placing the coverage requested by the
insured or proposed insured." 735 ILCS 5/2-2201(a) (West 2008).
¶ 17 C. This Court's Decision in Country Mutual Insurance Co. v. Carr
¶ 18 In July 2006, this court construed section 2-2201 of the Act as placing a duty on
insurance producers, including brokers and agents, to act with ordinary care in procuring
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insurance for insureds. Country Mutual Insurance Co. v. Carr, 366 Ill. App. 3d 758, 766, 852
N.E.2d 907, 914 (2006). In November 2006, the Illinois Supreme Court granted Country
Mutual's petition for leave to appeal. Following a subsequent settlement between the parties, the
supreme court vacated this court's judgment in Carr. In re Country Mutual Insurance Co., No.
103463 (Ill. Sept. 26, 2007 (supervisory order)). Although the supreme court vacated this court's
judgment in Carr because Carr's third-party claim was rendered moot, the analysis from that case
is sound. Accordingly, we adopt it.
¶ 19 In Carr, Steve Carr, d/b/a Carr Construction, purchased a commercial general
liability insurance policy issued by Country Mutual from Harold Volgelzang. After Carr
purchased the policy, he was sued for alleged damage to a home he constructed. Carr filed a
claim with Country Mutual for defense of the lawsuit. Country Mutual responded by filing a
declaratory-judgment action, asserting that it owed no duty to indemnify or defend Carr because
the cause of the alleged property damage was excluded from his policy.
¶ 20 In May 2005, Carr sued Vogelzang, positing, in pertinent part, that Vogelzang
breached the statutory duty to provide ordinary care in selling and procuring insurance under
section 2-2201 of the Act (735 ILCS 5/2-2201 (West 1998)). In August 2005, the trial court
dismissed Carr's lawsuit against Vogelzang, finding that as an agent of Country Mutual,
Vogelzang owed Carr no duty under the Act.
¶ 21 Carr appealed, arguing that although the common law did not recognize a duty
between an insurance agent and an insured, the legislature created a statutory duty in section 2-
2201 of the Act, which required an insurance agent to act with ordinary care when procuring
insurance policies for his customers. We agreed with Carr, explaining our rationale as follows:
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"Section 2-2201 does not define 'insurance producer.' The
term, however, is defined by the Illinois Insurance Code as 'a
person required to be licensed under the laws of this State to sell,
solicit, or negotiate insurance.' 215 ILCS 5/500-10 (West 2002).
A plain reading of the statute, combined with section 500-
10, is that any 'person required to be licensed * * * to sell, solicit,
or negotiate insurance' had a duty to 'exercise ordinary care' in
procuring insurance. We find no distinction in either of these
sections between an insurance agent or an insurance broker.
***
Further supporting Carr's argument section 2-2201(a)
creates a duty of care for insurance agents are the sections that
follow. Section 2-2201(d) anticipates negligence actions against
'insurance producers':
'(d) While limiting the scope of liability of
an insurance producer, * * * the provisions of this
[s]ection do not limit or release an insurance
producer * * * from liability for negligence
concerning the sale, placement, procurement,
renewal, binding, cancellation of, or failure to
procure any policy of insurance.' 735 ILCS
5/2–2201(d) (West 1998).
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In addition, section 2-2201(b) removes the common-law basis for
distinguishing between insurance brokers, who owed a fiduciary
duty to their customers (see Kanter v. Deitelbaum, 271 Ill. App. 3d
750, 755, 648 N.E.2d 1137, 1140 (1995)), and insurance agents,
who owed the fiduciary duty to the insurers (see Economy Fire &
Casualty Co. v. Bassett, 170 Ill. App. 3d 765, 771, 525 N.E.2d 539,
543 (1988)), by barring breach-of-fiduciary-duty claims against
insurance producers:
'No cause of action brought by any person or
entity against any insurance producer ***
concerning the sale, placement, procurement,
renewal, binding, cancellation of, or failure to
procure any policy of insurance shall subject the
insurance producer *** to civil liability under
standards governing the conduct of a fiduciary or a
fiduciary relationship except when the conduct upon
which the cause of action is based involves the
wrongful retention or misappropriation by the
insurance producer *** of any money that was
received as premiums, as a premium deposit, or as
payment of a claim.' 735 ILCS 5/2–2201(b) (West
1998).
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Accordingly, we hold section 2-2201(a) places a duty on
insurance producers, including brokers and agents, to act with
ordinary care in procuring insurance for insureds." Carr, 366 Ill.
App. 3d at 764-66, 852 N.E.2d at 912-14 (judgment vacated on
motion of the supreme court following the parties' settlement).
¶ 22 D. Carr and This Case
¶ 23 As previously stated, we view the analysis from Carr as sound and continue to
adhere to it. Although the supreme court vacated Carr, it did so because Carr's third-party claim
was rendered moot due to the parties' settlement, not because this court's interpretation of section
2-2201 of the Act was somehow misguided. A plain reading of section 2-2201 of the Act,
combined with section 500-10 of the Illinois Insurance Code, is that any person required to be
licensed to sell, solicit, or negotiate insurance has a duty to exercise ordinary care in procuring
insurance. We continue to find no distinction in either of these sections between an insurance
agent or an insurance broker, a position that we note is generally accepted. See Couch on
Insurance 3d § 46.49 (2011) ("An agent or broker is liable to his or her principal if by his or her
fault or neglect the agent or broker fails to procure or renew insurance as the agent or broker had
contracted to do, and as a result of the want of insurance, the principal suffers a loss. Liability
exists for breach of contract or for a tort in negligently failing to perform a duty imposed by the
contract.").
¶ 24 Accordingly, we reverse the trial court's decision to grant defendants' motions to
dismiss based upon its finding that because Lessaris was an insurance "agent," rather than an
insurance "broker," he did not owe plaintiffs a duty of care in procuring insurance coverage for
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them.
¶ 25 III. CONCLUSION
¶ 26 For the reasons stated, we reverse the trial court's judgment and remand for further
proceedings not inconsistent with our opinion.
¶ 27 Reversed and remanded.
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