ILNews

Court: Alleged negligence didn't cause injury

Jennifer Nelson
January 1, 2008
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The Indiana Court of Appeals affirmed a trial court grant of summary judgment in favor of an insurance agent because it found her alleged negligence was not a cause of injury to the plaintiffs.

At issue in Jerry and Becky French v. State Farm Fire & Casualty Company and Jane Hodson, No. 18A02-0612-CV-1161, is whether the trial court erred in granting summary judgment in favor of Hodson on the Frenches' claim of negligent advice and procurement of insurance.

The Frenches decided to purchase a manufactured home for their Delaware County plot of land, and Jerry French visited his insurance agent, Hodson, to determine the new homeowner's insurance policy. The value of the home was just less than $80,000.

Hodson asked Jerry questions about the home and entered his answers into the Insurance-to-Value calculator, which estimated the cost of replacement to be approximately $173,000. Jerry signed off on this figure. Hodson never asked if Jerry's home was manufactured or stick-built, nor the purchase price, and Jerry never specified the type of policy he wanted. State Farm had different policies for manufactured and stick-built homes.

Under Coverage A of their policy, the Frenches were covered for up to $173,000 to repair or replace with similar construction. Under Coverage B, their personal property was insured, and in the event of a loss they would be awarded 75 percent of the Coverage A amount.

A fire struck the home several months after the Frenches moved in, and a claim representative inspected the loss and told the Frenches they could use up to the total amount of coverage to rebuild their home. The Frenches decided to construct a stick-built home instead of a manufactured home because they believed an electrical issue in the manufactured home caused the fire. The cost to build the new home was more than their policy limit.

The claim representative informed the Frenches the policy would only cover the purchase of a similar or exact unit to the manufactured home. State Farm offered to pay the Frenches $80,000 under the policy to purchase a replacement manufactured home; they accepted the amount and continued to build a new home. They also were paid approximately $130,000 under their Coverage B policy.

The Frenches filed suit against State Farm and Hodson, alleging State Farm breached the terms of the policy by only offering $80,000 and that Hodson negligently failed to procure insurance for the Frenches as requested. Both parties filed for summary judgment, in which the trial court granted summary judgment in favor of Hodson, ruling that the insurance policy did cover the risk and that the Frenches actually received $70,000 more in contents payments than what they would have received with the lower dwelling limits, so Hodson cannot be held liable for negligence with respect to the policy limits.

The Court of Appeals upheld the grant of summary judgment, although it had "serious misgivings" as to whether Hodson actually exercised reasonable skill and diligence in obtaining more than $200,000 worth of coverage on a $76,000 manufactured home.

The Frenches did not suffer an injury proximately caused by Hodson's alleged negligence, and in fact received a benefit of more than $70,000 from the error. The Frenches decided to construct a stick-built home that cost more than the value of their manufactured home, so they did not rely on Hodson's conducts knowing there was a coverage dispute when they continued with the construction.

Judge Edward Najam wrote the court expressed no opinion about the ultimate resolution of the Frenches' claim for breach of contract but held that the trial court didn't error in granting summary judgment in favor of Hodson.
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  1. The practitioners and judges who hail E-filing as the Saviour of the West need to contain their respective excitements. E-filing is federal court requires the practitioner to cram his motion practice into pigeonholes created by IT people. Compound motions or those seeking alternative relief are effectively barred, unless the practitioner wants to receive a tart note from some functionary admonishing about the "problem". E-filing is just another method by which courts and judges transfer their burden to practitioners, who are the really the only powerless components of the system. Of COURSE it is easier for the court to require all of its imput to conform to certain formats, but this imposition does NOT improve the quality of the practice of law and does NOT improve the ability of the practitioner to advocate for his client or to fashion pleadings that exactly conform to his client's best interests. And we should be very wary of the disingenuous pablum about the costs. The courts will find a way to stick it to the practitioner. Lake County is a VERY good example of this rapaciousness. Any one who does not believe this is invited to review the various special fees that system imposes upon practitioners- as practitioners- and upon each case ON TOP of the court costs normal in every case manually filed. Jurisprudence according to Aldous Huxley.

  2. Any attorneys who practice in federal court should be able to say the same as I can ... efiling is great. I have been doing it in fed court since it started way back. Pacer has its drawbacks, but the ability to hit an e-docket and pull up anything and everything onscreen is a huge plus for a litigator, eps the sole practitioner, who lacks a filing clerk and the paralegal support of large firms. Were I an Indiana attorney I would welcome this great step forward.

  3. Can we get full disclosure on lobbyist's payments to legislatures such as Mr Buck? AS long as there are idiots that are disrespectful of neighbors and intent on shooting fireworks every night, some kind of regulations are needed.

  4. I am the mother of the child in this case. My silence on the matter was due to the fact that I filed, both in Illinois and Indiana, child support cases. I even filed supporting documentation with the Indiana family law court. Not sure whether this information was provided to the court of appeals or not. Wish the case was done before moving to Indiana, because no matter what, there is NO WAY the state of Illinois would have allowed an appeal on a child support case!

  5. "No one is safe when the Legislature is in session."

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