{
  "id": 8524040,
  "name": "SYLVESTER BALDWIN v. LITITZ MUTUAL INSURANCE COMPANY and LLOYD BATTEN T/A LLOYD BATTEN INSURANCE COMPANY",
  "name_abbreviation": "Baldwin v. Lititz Mutual Insurance",
  "decision_date": "1990-07-17",
  "docket_number": "No. 8913SC874",
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  "casebody": {
    "judges": [
      "Chief Judge HEDRICK and Judge PARKER concur."
    ],
    "parties": [
      "SYLVESTER BALDWIN v. LITITZ MUTUAL INSURANCE COMPANY and LLOYD BATTEN T/A LLOYD BATTEN INSURANCE COMPANY"
    ],
    "opinions": [
      {
        "text": "COZORT, Judge.\nInsurance agent appeals from a jury verdict finding that he negligently failed to procure or maintain insurance on a house constructed by plaintiff and assessing damages in the amount of $18,781.77. We reverse.\nPlaintiff and his brother, Tillman Baldwin, had been in the business' of constructing residential houses for approximately fifteen years. During that time, they had built five or six hundred homes, most of which were constructed pursuant to a contract with a buyer, but a few were \u201cspeculation\u201d homes, or homes constructed, at least initially, without a specific buyer. Plaintiff had obtained \u201cbuilder\u2019s risk\u201d insurance through defendant Lloyd Batten\u2019s company, Lloyd Batten Insurance Company, \u201cmore than a hundred [times] almost.\u201d Policies were purchased with a stated term of one year, although plaintiff usually completed construction in three or four months. After construction of a house, the builder\u2019s risk insurance would be cancelled, the homeowner would procure insurance, and defendant would send plaintiff a refund of any \u201cunearned premium.\u201d\nIn March of 1985, defendant issued a builder\u2019s risk policy, through Lititz Mutual Insurance Company (Lititz), covering a speculation house that plaintiff was building on Jewel Street in Whiteville. The stated term of the policy was from 27 March 1985 to 27 March 1986. Under the terms of the policy, insurance was provided only to the dwelling \u201cwhile under construction\u201d and required plaintiff to \u201cadvise us when construction is completed.\u201d Tillman Baldwin testified that he was the one who applied for insurance coverage from defendant and that he specifically requested a builder\u2019s risk policy but did not read the policy prior to incurring damages. The house was completed sometime in June or July of 1985.\nIn early August of 1985, Lititz contacted the Lloyd Batten Agency and requested information regarding the status of the construction. On 13 August 1985, Teresa Stephens, an employee at the Batten Agency, telephoned Tillman Baldwin, who informed her that construction had been completed. Stephens testified that she advised Mr. Baldwin that there would be no insurance coverage on the house if it were completed and unoccupied and that plaintiff should get in touch with Mr. Batten about obtaining other coverage. Tillman Baldwin testified that he was asked whether construction was completed but was not told that coverage had ended and that other arrangements would have to be made. On 16 August, Mr. Baldwin informed defendant that there had been a fire and that the house had been damaged. According to Stephens\u2019 testimony, she said, \u201cWell, you know you don\u2019t have insurance on that house,\u201d and Baldwin stated in response that \u201che knew he was probably up the creek without a paddle.\u201d\nLititz denied coverage under the policy because the loss was incurred after construction was completed and thus the policy was \u201cnull and void.\u201d Plaintiff filed the instant civil action against Lititz and Lloyd Batten. Lititz was dismissed from the suit on its motion for summary judgment. That ruling by the trial court is not before this Court. At trial, defendant\u2019s motions for directed verdict at the close of plaintiff\u2019s evidence and after presentation of all the evidence were denied. The jury returned a verdict finding that plaintiff suffered a loss of $18,781.77 as a result of defendant\u2019s negligent failure to procure or maintain insurance for plaintiff. Defendant\u2019s motion for judgment notwithstanding the verdict was thereafter denied. Defendant appealed.\nThe relationship between insurance agent and an insured is fiduciary as well as contractual. R-Anell Homes, Inc. v. Alexander & Alexander, Inc., 62 N.C. App. 653, 303 S.E.2d 573 (1983). As a general rule, when an insurance agent undertakes to procure insurance for a customer to afford protection against a designated risk, the law imposes upon the agent the duty to exercise reasonable care in performing that undertaking, and the agent will be liable for loss attributable to the negligent performance or default of that duty. Wiles v. Mullinax, 267 N.C. 392, 395, 148 S.E.2d 229, 231-32 (1966). If the agent is unable to procure the insurance he has undertaken to provide, then he has the further duty to give timely notice to his customer so that the customer may secure the insurance elsewhere or take other steps to protect his interests. Id., 148 S.E.2d at 232. The agent\u2019s duty may extend to an obligation to renew an existing policy. Barnett v. Security Ins. Co. of Hartford, 84 N.C. App. 376, 352 S.E.2d 855 (1987). This State has also recognized a cause of action against an insurance agent for \u201cnegligent advice.\u201d R-Anell Homes. But it is equally well established that an insurance agent is not obligated to assume the duty of procuring a policy of insurance for a customer. Alford v. Tudor Hall & Assoc., 75 N.C. App. 279, 281-82, 330 S.E.2d 830, 832, disc. review denied, 315 N.C. 182, 337 S.E.2d 855 (1985). In determining whether an agent has undertaken to procure insurance for a customer, the court must consider the conduct of the parties and the communications between them tending to show that the agent accepted an obligation to provide insurance. Id. at 282, 330 S.E.2d at 832.\nViewing the evidence in the light most favorable to plaintiff, as we must in considering defendant\u2019s motion for judgment notwithstanding the verdict, we hold that the evidence was insufficient as a matter of law to support a verdict in plaintiff\u2019s favor. Plaintiff\u2019s evidence shows that plaintiff requested a builder\u2019s risk policy from defendant, that such a policy was provided and by its express terms covered loss during the time that the dwelling was under construction, that plaintiff misunderstood the policy and thought that he was covered until the house was sold, that defendant contacted plaintiff to find out whether construction was completed but did not specifically remind plaintiff that coverage would lapse as of date of completion of construction, and that the damage occurred after that date. Thus, defendant assumed the duty of procuring builder\u2019s risk insurance which would cover the house during the construction period, and he fulfilled that duty.\nWhile there is an issue of fact with respect to whether defendant informed plaintiff of the need to take additional steps to protect his property and whether plaintiff understood that coverage had terminated, resolving those factual disputes in favor of plaintiff is of no avail to his case. There is no evidence that plaintiff expected, or could have reasonably expected, defendant to procure coverage on the property past completion of construction. Nor was there evidence that defendant misled plaintiff, incorrectly explained the policy, or knew that plaintiff misunderstood the coverage requested and provided. Defendant had always provided only builder\u2019s risk insurance to plaintiff and had never \u201cconverted\u201d any previous builder\u2019s risk policy into some other type of policy. He cannot be charged with that responsibility now. Defendant\u2019s motion for judgment notwithstanding the verdict should have been allowed.\nReversed.\nChief Judge HEDRICK and Judge PARKER concur.",
        "type": "majority",
        "author": "COZORT, Judge."
      }
    ],
    "attorneys": [
      "Williamson & Walton, by C. Greg Williamson, for plaintiff appellee.",
      "Anderson, Cox, Collier & Ennis, by Clay A. Collier, for defendant appellant, Lloyd Batten, t/a Lloyd Batten Insurance Company."
    ],
    "corrections": "",
    "head_matter": "SYLVESTER BALDWIN v. LITITZ MUTUAL INSURANCE COMPANY and LLOYD BATTEN T/A LLOYD BATTEN INSURANCE COMPANY\nNo. 8913SC874\n(Filed 17 July 1990)\nInsurance \u00a7 2.2 (NCI3d)\u2014 builder\u2019s risk policy \u2014 no coverage on house after completion \u2014 no failure of agent to procure insurance\nIn an action to recover for negligent failure to procure or maintain insurance on a house constructed by plaintiff, the evidence was insufficient as a matter of law to support a verdict in plaintiff\u2019s favor where plaintiff\u2019s evidence tended to show that he requested a builder\u2019s risk policy from defendant; such a policy was provided and by its express terms covered loss during the time that the dwelling was under construction; plaintiff misunderstood the policy and thought that he was covered until the house was sold; defendant contacted plaintiff to find out whether construction was completed but did not specifically remind plaintiff that coverage would lapse as of the date of completion of construction; the damage occurred after that date; and defendant thus assumed the duty of procuring builder\u2019s risk insurance which would cover the house during the construction period and he fulfilled that duty.\nAm Jur 2d, Insurance \u00a7\u00a7 139, 140, 244.\nAPPEAL by defendant Lloyd Batten from Judgment of Judge Coy E. Brewer, Jr., entered 15 March 1989 in COLUMBUS County Superior Court. Heard in the Court of Appeals 2 April 1990.\nWilliamson & Walton, by C. Greg Williamson, for plaintiff appellee.\nAnderson, Cox, Collier & Ennis, by Clay A. Collier, for defendant appellant, Lloyd Batten, t/a Lloyd Batten Insurance Company."
  },
  "file_name": "0559-01",
  "first_page_order": 589,
  "last_page_order": 592
}
