Harrell v. Davenport

299 S.E.2d 308 (1983)

Roy Lee HARRELL
v.
William A. DAVENPORT, Jr. and North Carolina Farm Bureau Mutual Insurance Company.

No. 828SC176.

Court of Appeals of North Carolina.

February 1, 1983.

Wilton R. Duke, Jr., Farmville, for plaintiff-appellant.

Fred W. Harrison, Kinston, for defendant-appellee Davenport.

Speight, Watson & Brewer by Susan Parrott Carlton and William C. Brewer, Jr., Greenville, for defendant-appellee North Carolina Farm Bureau Mut. Ins. Co.

WELLS, Judge.

The threshold substantive question before us is whether, under the forecast of evidence before the trial court, the statements and conduct of defendant Davenport might be construed as an undertaking to procure a policy of insurance on plaintiff's tractors. In Wiles v. Mullinax, (first appeal), 267 N.C. 392, 148 S.E.2d 229 (1966), our Supreme Court recited the rule applicable to the forecast of evidence in this case, as follows:

"It is very generally held that where an insurance agent or broker undertakes to procure a policy of insurance for another, affording protection against a designated risk, the law imposes upon him the duty, in the exercise of reasonable care, to perform [sic] the duty he has assumed and within the amount of the proposed policy he may be held liable for the loss properly attributable to his negligent default."

We hold that the forecast of evidence in this case raises a genuine, material question of fact as to whether defendant Davenport entered into such an undertaking. Defendants contend that the undertaking was not consummated because plaintiff and Davenport failed to agree on all the elements of the policy. The forecast of evidence shows that plaintiff and Davenport discussed the identity of the property to be insured and the value of the property. The forecast of evidence does not indicate that plaintiff and Davenport discussed the policy period, or that they agreed on the amount of the premium. Mayo v. Casualty Co., 282 N.C. 346, 192 S.E.2d 828 (1972) involved the negligent failure of an insurance agent to issue a binder for a fire insurance policy. The Court held that no specific form or provision is necessary to constitute an oral communication intended as a binder, that it is not required that the communication leading to a binder set forth all the terms of the contemplated insurance policy, and that the provisions of the statutory standard insurance policy are read into a binder. See also Sloan v. Wells, 296 N.C. 570, 251 S.E.2d 449 (1979). Applying the foregoing Mayo and Sloan principles to the present case, we hold that the communications between plaintiff and defendant Davenport were sufficient to allow but not require a jury to find that Davenport entered into an undertaking to obtain a standard policy on plaintiff's tractors to insure them for $4,000.00 each against loss by fire. The fact that plaintiff and Davenport did not agree on the amount of the premium to be paid is not fatal to plaintiff's claim, as the jury might find an implied promise by plaintiff to pay the premium as calculated by Davenport.

We are also persuaded that from the forecast of evidence before the trial court, there was a genuine material issue of fact as to whether Davenport used reasonable diligence to procure the policy of insurance plaintiff desired for his tractors.

The next substantive issue we address is whether defendant insurance company was entitled to summary judgment under principles of agency law. Defendant insurance company contends that the record is barren of facts or evidence from which it could be inferred that defendant Davenport was an employee of defendant insurance company, and thus, there was no showing that defendant insurance company was responsible or answerable for Davenport's alleged negligent acts. In his complaint, plaintiff alleged that Davenport was an agent of defendant insurance company, had authority to issue policies and binders for defendant insurance company, that in response to plaintiff's request, Davenport advised plaintiff that the requested policy would be issued by defendant insurance company, and that while acting as defendant insurance company's agent, Davenport negligently failed to procure or issue the policy. These allegations were sufficient to state a claim for relief against defendant insurance company under generally accepted principles of agency law as applied to the relationship of insurance agents and companies they represent or are employed by. See Mayo v. Casualty Co., supra; Little v. Poole, 11 N.C.App. 597, 182 S.E.2d 206 (1971). Under these circumstances, on a motion for summary judgment, defendant insurance company had the burden of showing that plaintiff's claim was fatally defective in this respect. See Lowe v. Bradford, 305 N.C. 366, 289 S.E.2d 363 (1982). This, defendant company failed to do. On the contrary, defendant Davenport, in his deposition, testified that he was defendant insurance company's exclusive agent in Greene County and stated in his affidavit that he was "employed as an agent" by defendant insurance company from December of 1957 through July of 1980.

For the reasons stated, we hold that summary judgment was improvidently entered for the defendants. The judgment below is reversed and the case is remanded for trial.

Reversed and Remanded.

VAUGHN and WHICHARD, JJ., concur.