Morrison Mahoney Partner Cara Joyce recently argued successfully at the Connecticut Supreme Court, prevailing on behalf of her insurance agency client, where the plaintiffs’ homeowner’s insurance claim was denied by the insurer after a house fire because their policy had non-renewed days before the fire.
Cara had previously obtained summary judgment at the trial court stage and prevailed before the Appellate Court as well. Plaintiffs’ homeowner’s insurance policy had non-renewed after they failed to replace a large portion of missing siding on the house that was discovered on inspection by their new insurer. The defendant insurance agency had procured this homeowner’s insurance policy for the plaintiffs, and the insurance company had notified the agency of the inspection results and asked the agency to pass this information about the needed repairs on to the plaintiffs.
While the agency employees maintained they had several conversations with the plaintiffs about the need to repair the siding or risk non-renewal of the policy, the plaintiffs denied this and claimed they were never informed of the inspection results. Because the siding was never repaired, the insurance company non-renewed the policy at the end of the policy period and sent the plaintiffs a certified letter informing them of this, per Connecticut’s statutory requirements. Plaintiffs never claimed the letter, the policy non-renewed, and ~10 days later, their house burned to the ground in an accidental fire.
The insurance company declined to cover the claim, as the policy had non-renewed. Plaintiffs sued the insurance company as well as the insurance agency, claiming that the insurance agency had a duty to inform them of the impending non-renewal. All defendants obtained summary judgment, which was affirmed on appeal (where the plaintiffs attempted to raise a new argument that the insurance agency had a duty to inform them of the inspection results and failed to do so). The Appellate Court concluded that most of the plaintiffs’ claims were unpreserved, and affirmed the trial court that the insurance agency had no duty to inform them of the non-renewal, as the insurance company had met the statutory duty to inform the plaintiffs via the certified letter that they never claimed, and the insurance agency had no separate duty to inform them of the non-renewal.
The Supreme Court granted certification as to the insurance agency only, and in a 4-2 decision with a dissent that quotes Oliver Wendell Homes at length, the Supreme Court affirmed the lower courts’ rulings in favor of the insurance agency defendant. The Supreme Court agreed that the plaintiffs’ claims of a long-standing relationship with the insurance agency did not provide an exception to the general principle that an insurance agency’s duty ends when they have procured the policy they were requested to procure.
This win limits our client’s duty and confirms that they have no ongoing duty unless special circumstances exist. The two dissenting justices looked to significantly expand an insurance agent’s duty of care under the principle of fairness, but the majority pointed out that not every wrong has a remedy, and it is up to the legislature to provide such a remedy.
