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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. Such things are no more elections than those in the late, unlamented Soviet Union.

  2. It appears the police and prosecutors are allowed to change the rules halfway through the game to suit themselves. I am surprised that the congress has not yet eliminated the right to a trial in cases involving any type of forensic evidence. That would suit their foolish law and order police state views. I say we eliminate the statute of limitations for crimes committed by members of congress and other government employees. Of course they would never do that. They are all corrupt cowards!!!

  3. Poor Judge Brown probably thought that by slavishly serving the godz of the age her violations of 18th century concepts like due process and the rule of law would be overlooked. Mayhaps she was merely a Judge ahead of her time?

  4. in a lawyer discipline case Judge Brown, now removed, was presiding over a hearing about a lawyer accused of the supposedly heinous ethical violation of saying the words "Illegal immigrant." (IN re Barker) http://www.in.gov/judiciary/files/order-discipline-2013-55S00-1008-DI-429.pdf .... I wonder if when we compare the egregious violations of due process by Judge Brown, to her chiding of another lawyer for politically incorrectness, if there are any conclusions to be drawn about what kind of person, what kind of judge, what kind of apparatchik, is busy implementing the agenda of political correctness and making off-limits legit advocacy about an adverse party in a suit whose illegal alien status is relevant? I am just asking the question, the reader can make own conclsuion. Oh wait-- did I use the wrong adjective-- let me rephrase that, um undocumented alien?

  5. of course the bigger questions of whether or not the people want to pay for ANY bussing is off limits, due to the Supreme Court protecting the people from DEMOCRACY. Several decades hence from desegregation and bussing plans and we STILL need to be taking all this taxpayer money to combat mostly-imagined "discrimination" in the most obviously failed social program of the postwar period.

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