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COA rules in negligent application process case

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Addressing an issue today for the first time in state courts, the Indiana Court of Appeals had to determine whether a couple could sue their insurance broker for alleged negligence during the application process.

State courts have ruled on actions by an insured against an insurance company seeking recovery under a policy in cases such as Metropolitan Life v. Alterovitz, 214 Ind. 186, 196 14 N.E.2d 570, 574 (1938), but not in a case in which a person claims the insurance broker was negligent while filing out the application for insurance, leaving the person without any homeowner's insurance or specific coverage.

In Terence E. Brennan Jr. a/k/a Terry Brennan and Burt Insurance Co. v. Patricia and Harry Hall, No. 64A03-0811-CV-548, Terry Brennan and Burt Insurance Co. appealed the jury verdict finding them liable for negligently failing to procure insurance for the Halls.

Patricia Hall visited Brennan at his office and asked if he could get her homeowners insurance that specifically covered her dogs, including a Doberman pinscher; earthquakes; and a wood-burning stove. The insurance company Brennan selected for Hall doesn't provide insurance for Doberman pinschers; however, on the application, Brennan checked the "no" box to a question asking if the homeowner has any animals or exotic pets. Patricia, feeling rushed, signed the application without closely looking it over.

The Halls discovered they didn't have coverage for the dogs after their niece was bitten and they filed a claim with the insurance company, which was denied because the application didn't note they had a Doberman pinscher.

The Halls filed their own suit against Brennan and Burt Insurance, alleging negligence, breach of fiduciary duty, and constructive fraud by failing to acquire adequate insurance for the couple. The jury found Brennan and the company liable based on negligent failure to procure a policy. No damages were assessed because of a pending lawsuit between the Halls and the niece.

The 7th Circuit Court of Appeals addressed a similar issue in Roe v. Sewell, 128 F.3d 1098 (7th Cir. 1997), in which it limited the ruling in Alterovitz to cases by an insurance applicant directly against an insurance company. Alterovitz doesn't prohibit suits by an insurance applicant against an agent who may have been negligent in the application process, wrote Judge Michael Barnes.

"We hold that if an agent is negligent in assisting a client complete an insurance application, and such negligence leads to a basis for the insurance company to deny coverage to the applicant and/or revoke the policy, the applicant may seek damages from the agent, even if the applicant signed or ratified the application after having a chance to review it," he wrote.

The Court of Appeals affirmed the verdict.

The Court of Appeals did mention that Patricia may share some of the blame for the inaccurate application and as under Roe, it may be appropriate to assess her fault in accordance with the Comparative Fault Act. Brennan and Burt Insurance failed to make such an argument before the court, wrote Judge Barnes.

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  1. Indianapolis employers harassment among minorities AFRICAN Americans needs to be discussed the metro Indianapolis area is horrible when it comes to harassing African American employees especially in the local healthcare facilities. Racially profiling in the workplace is an major issue. Please make it better because I'm many civil rights leaders would come here and justify that Indiana is a state the WORKS only applies to Caucasian Americans especially in Hamilton county. Indiana targets African Americans in the workplace so when governor pence is trying to convince people to vote for him this would be awesome publicity for the Presidency Elections.

  2. Wishing Mary Willis only God's best, and superhuman strength, as she attempts to right a ship that too often strays far off course. May she never suffer this personal affect, as some do who attempt to change a broken system: https://www.youtube.com/watch?v=QojajMsd2nE

  3. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  4. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  5. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

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