                                                                                                                           Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


1-9-2004

Benjamin v. Gen Accident Ins Co
Precedential or Non-Precedential: Non-Precedential

Docket No. 02-2398




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Recommended Citation
"Benjamin v. Gen Accident Ins Co" (2004). 2004 Decisions. Paper 1106.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/1106


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                                        UNREPORTED - NOT PRECEDENTIAL

                     UNITED STATES COURT OF APPEALS
                          FOR THE THIRD CIRCUIT

                                    NO. 02-2398
                                 ________________

                  CECIL BENJAMIN; FERRYNEISA BENJAMIN,
                                                Appellants,

                                          v.

                 GENERAL ACCIDENT INSURANCE COMPANY
                 OF PUERTO RICO; THOMAS HOWELL GROUP

                     ___________________________________

                          On Appeal From the District Court
                                  of the Virgin Islands
                              (D.C. Civ. No. 96-cv-00071)
                     District Judge: Honorable Thomas K. Moore
                           __________________________

                                       Argued
                                    April 29, 2003

            Before: ROTH, MCKEE, AND COWEN, CIRCUIT JUDGES

                                (Filed January 9, 2004)

F. GLENDA CAMERON, ESQUIRE (ARGUED)
Law Offices of Lee J. Rohn
1101 King Street, Suite 2
Christiansted, St. Croix
U.S. Virgin Islands 00820

      Attorney for Appellants

SHELLEY H. LEINICKE, ESQUIRE (ARGUED)
Wicker, Smith, O’Hara, McCoy, Graham & Ford, P.A.
1 East Broward Blvd.
South Trust Tower, Suite 500
P.O. Box 14460
Ft. Lauderdale, FL 33302

MICHAEL SANFORD, ESQUIRE
#1 Queen Cross Street
Christiansted, St. Croix 00820

       Attorneys for Appellee

                                   _________________

                                OPINION OF THE COURT
                                   _________________


ROTH, CIRCUIT JUDGE.

       Appellants Cecil and Ferryneisa Benjamin were insured by General Accident

Insurance Company of Puerto Rico when they suffered property damage to their home in

St Croix, U.S. Virgin Islands, during Hurricane Marilyn in 1995. Due to a large number

of property damage claims in the area, General Accident contracted with the Thomas

Howell Group (THG), an independent adjustor, to adjust claims of loss arising from the

hurricane. The Benjamins allege that they were kept waiting for months for an inspection

of their property, that they were treated in a discourteous and unprofessional manner by

THG adjustors, and that, when THG finally proposed a specific amount in settlement of

the property damage claim, it was quite low.

       As a result the Benjamins sued General Accident and THG in the District Court of

the Virgin Islands, alleging breach of fiduciary duty and fair dealing, negligent



                                               2
misrepresentation, tortious interference with contract, intentional infliction of emotional

distress, and breach of contract. The Benjamins settled their claims with General

Accident within a year of filing suit for an amount roughly equal to their contractors’

estimates and considerably higher than THG’s proposal. 1

       Dissatisfied, the Benjamins amended their complaint to proceed against THG. The

breach of fiduciary duty and negligent misrepresentation counts in the amended complaint

were based, in part, on a general assignment executed at the time of settlement by General

Accident of any claims General Accident might have against THG arising out of the

Benjamins’ claim. The Benjamins alleged that they could recover for General Accident’s

losses as a result of the settlement, and as a result of having incurred costs and attorneys’

fees. These costs and attorneys’ fees were not specified in the amended complaint.

       At the conclusion of discovery THG moved for summary judgment, and, in an

order entered on April 23, 2002, the District Court granted the motion. The District Court

concluded that THG was an independent, and not a public, adjustor under Virgin Islands

law. Pursuant to 22 V.I. Code Ann. § 751(a)(1), an independent adjustor is an adjustor

who represents the interests of an insurer only. THG had a contract with General

Accident; it had no contract with the Benjamins, and thus owed them no independent duty

of care as a result of the insurance policy. Since General Accident settled all claims with



   1
     The Benjamins obtained two estimates for repairing the damage to their home, one
at $213,000 and the other at $233,642. General Accident settled for $225,000. THG
recommended settlement of the claim at approximately $75,000.

                                              3
the Benjamins in accordance with the insurance policy, and the Benjamins released

General Accident from further liability, the counts of breach of fiduciary duty and

negligent misrepresentation could not be maintained. The District Court determined that

THG was plainly entitled to summary judgment on the remaining counts in the

complaint. 2 The Benjamins appealed.

        We will affirm. Summary judgment is appropriate where the evidence adduced

establishes that there is no genuine issue as to any material fact, Fed. R. Civ. Pro. 56(c),

and thus no reason for a trial. Under Rule 56(e), the nonmoving party may not rest on the

pleadings but must come forth with specific facts that would allow a reasonable juror to

find in favor of the nonmovant. See Lundy v. Adamar of New Jersey, Inc., 34 F.3d 1173,

1178 (3d Cir. 1994). We agree with the District Court that THG was entitled to judgment

as a matter of law on the breach of fiduciary duty and negligent misrepresentation counts,

because of the complete absence of any duty owed by THG to the Benjamins under 22

V.I. Code Ann. § 751(a).

        This case is governed by Virgin Islands statutory law. Section 751(a) of title 22

clearly provides that the duty of care owed by an adjustor is determined by who employs

the adjustor. 3 If the insured employs the adjustor under section 751(a)(2), he or she is a


   2
     We agree with the District Court that THG was entitled to summary judgment on the
remaining counts because they were so lacking in merit and evidentiary support. We will
affirm the District Court’s order to that extent without further discussion.
   3
       Section 751, entitled “Definitions,” provides:


                                              4
public adjustor and owes a duty of care to the insured named in the policy. If the

insurance company employs the adjustor, he or she is an independent adjustor under

section 751(a)(1) and owes a duty solely to the insurance company. It is undisputed that

THG contracted with General Accident and not with the Benjamins. The obligation of

good faith and fair dealing set forth in the Restatement (Second) of Contracts § 205, and

on which the Benjamins rely, is limited to those instances where a contract exists.4 Cases

cited by the Benjamins from other jurisdictions holding that such a duty exists conflict

with section 751(a) and may not be applied here.

       With respect to the Benjamins’ claim of negligent misrepresentation, again the law

specifically limits the liability of an independent adjustor to the insurer for whose benefit


              (a) "Adjuster" means any person who, for compensation as an independent
              contractor or as an employee of an independent contractor, or for fee or
              commission, investigates or reports to his principal relative to claims arising
              under insurance contracts, on behalf solely of either the insurer or the
              insured....

              (1) "Independent adjuster" means such an adjuster representing the interests
              of the insurer.

              (2) "Public adjuster" means an adjuster employed by and representing solely
              the financial interests of the insured named in the policy.

22 V.I. Code Ann. § 751(a) (1993) (emphasis added).
   4
      See 1 V.I. Code Ann. § 4 (“The rules of the common law, as expressed in the
Restatements of the Law by the American Law Institute ... shall be the rules of decision in
the courts of the Virgin Islands in cases to which they apply, in the absence of local laws
to the contrary.”) See also Action Engineering v. Martin Marietta Aluminum, 670 F.2d
456, 459 (3d Cir. 1982).


                                              5
and guidance the information is intended. See J.E. Mamiye & Sons, Inc. v. Fidelity Bank,

813 F.2d 610, 615 (3d Cir. 1987) (citing Restatement (Second) of Torts § 552(2)(a)). The

independent adjustor provides his or her information solely for the benefit of the insurer

for use in determining the value of the claim made by the insured.

       It is, nevertheless, undisputed that General Accident assigned all claims it might

have against THG to the Benjamins at the time of settlement. No specific claims are

identified in the assignment or even implied, however, and it does not appear that General

Accident had any claims to assign. The Benjamins theorize in their Reply Brief that THG

was underfunded, took on more than it could handle, was not qualified to handle claims,

and, to that extent, breached its contract with General Accident. They contend that

General Accident, although it ultimately settled their property damage claim within the

policy limits, incurred costs and attorneys’ fees it would not have incurred had THG not

committed a breach, and that General Accident assigned the right to collect these costs

and fees to the Benjamins.

       The flaw in this argument is that, pursuant to Rule 56(e), the Benjamins must

adduce evidence in support of their claim that General Accident was harmed by THG;

otherwise they cannot prevail at the summary judgment stage. They must move beyond

the allegations to the facts, Lundy, 34 F.3d at 1178, and they have not done so. There

simply is no evidence that General Accident was harmed by THG. General Accident

owed the Benjamins money under the terms of the policy for property damage as a result



                                             6
of the hurricane. The money General Accident paid at settlement is money it would have

had to pay regardless of THG’s shortcomings. General Accident did not settle with the

Benjamins for an amount in excess of the policy limits, and there is no evidence that

General Accident was harmed by the delay in settling the Benjamins’ claim. Moreover,

the Benjamins adduced no evidence that THG caused General Accident to incur costs and

attorneys’ fees either prior to the commencement of this litigation or even after litigation

commenced. In sum, having achieved a full recovery from General Accident, and having

released General Accident from liability, there is no further basis for the Benjamins to

recover.

       For the above reasons, we will affirm the order of the District Court granting

summary judgment to the Thomas Howell Group.




                                              7
TO THE CLERK:

    Please file the foregoing opinion.




                                                /s/ Jane R. Roth
                                             Circuit Judge




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