Bertleson v. Sunbeam Products, Inc., No. S0312-04 CnC (Norton, J., July 7,
2005)

[The text of this Vermont trial court opinion is unofficial. It has been
reformatted from the original. The accuracy of the text and the
accompanying data included in the Vermont trial court opinion database is
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STATE OF VERMONT                                      SUPERIOR COURT
Chittenden County, ss.:                           Docket No. S0312-04 CnC



BERTELSON

v.

SUNBEAM PRODUCTS, INC.



                                  ENTRY



        Plaintiffs brought suit to recover damages caused by a fire that
resulted from an allegedly defective electric blanket. In addition to
bringing a complaint against the blanket’s manufacturer, Sunbeam
Products, Inc., Plaintiffs complaint alleges two causes of action against
their insurance agent, The Allen Agency, Inc., alleging negligence and
breach of contract for its failure to provide adequate insurance. The

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agency’s motion to bifurcate the insurance issues from the product liability
issues was granted by entry order dated October 1, 2004. The agency now
moves for summary judgment on all counts against it. For the reasons
stated below, the Allen Agency’s motion for summary judgment is granted.

        Summary judgment is granted “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the
affidavits, if any . . . show that there is no genuine issue as to any material
fact and that any party is entitled to judgment as a matter of law.” V.R.C.P.
56(c)(3). In determining whether a genuine issue of fact exists, the
nonmoving party receives the benefit of all reasonable doubts and
inferences. Robertson v. Mylan Labs., Inc., 2004 VT 15, ¶ 15. Allegations
to the contrary must be supported by specific facts sufficient to create a
genuine issue of material fact. Id.

                                   FACTS

        The following facts are undisputed. Plaintiffs Joel Bertelson, Daniel
Mendl, Katherine Hope Bertelson, and The Bigfoot Ranch, II, Inc. have an
interest in property at 1422 Clay Point Road, Colchester, Vermont known
as Bigfoot Ranch. A fire occurred on Bigfoot Ranch on April 14, 2003. As
a result of the fire, the Plaintiffs suffered property loss and personal injury.

       The insurance policy in effect on April 14, 2003 was number
0442354 issued to Mr. Mendl and Ms. Bertelson by New England Guaranty
Insurance Co., Inc. This policy was procured by the Allen Agency at the
request of Bernadette Fischer, acting as a representative of Marco Insurance
Agency of Colchester, Vermont. Ms. Fischer acted as a intermediary in the
transaction. Ms. Fischer provided the agency with the initial values to
provide quotations and to procure the coverage including the limit of

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liability for the dwelling.

       The agency never agreed to conduct an appraisal of the personal
property at Bigfoot Ranch. The content limit of the policy was derived
from a percentage of the dwelling limits, a number first provided by Ms.
Fischer. It is not the practice of the agency to go into insureds’ homes and
assess and appraise the value of their personal property.

       On February 1, 2001, the agency sent a letter to the named insureds,
Mr. Mendl and Ms. Bertelson, which stated “Enclosed please find your new
insurance policies written with New England Guaranty. We ask that you
review these policies and their contents to be sure you are adequately
protected.” During the term of the policy, the agency sent the insureds
copies of documents (including policies, declaration pages, invoices and
renewals) that clearly reflected the various limits, including the limits for
dwelling and personal property.

                               DISCUSSION

        Plaintiffs claim, as a result of a fire, to have sustained losses that
exceed their insurance coverage. For their uninsured losses Plaintiffs allege
that the agency was both negligent and in breach of contract for its failure
to provide adequate insurance.

Negligence

       An insurance agent’s duty to an insured is to “use reasonable care
and diligence to procure insurance that will meet the needs and wishes of
the prospective insured, as stated by the insured.” Booska v. Hubbard Ins.
Agency, Inc., 160 Vt. 305, 309-10 (1993) (quoting Rocque v. Co-Operative

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Fire Ins. Ass’n, 140 Vt. 321, 326 (1981)). After procuring a policy that is
consistent with this standard of care, the agent owes no further duty to the
insured with respect to this insurance. Id. at 310.
        The undisputed facts of this case indicate that the Allen Agency
provided Plaintiffs with an insurance policy that covered the property based
on a reasonable interpretation of the information that the agency had. Any
of the additional claims that Plaintiffs make concern information that was
outside the scope of what the agency knew or could have known short of an
inventory or appraisal of the property, something they were not obligated to
perform. The duty that the agency owed to Plaintiffs was only one of an
ordinary insurer: to meet the needs of the insured as stated by the insured.
In this case, the Allen Agency fulfilled its duty by insuring its clients to the
extent of the reported value of their home and possessions.

        In certain cases, an agent does have an affirmative duty to advise
clients regarding the adequacy of a policy’s coverage but only where a
“special relationship”exists between the agent and the insured. Couch on
Ins. § 46:61 (3d ed.). This type of “special relationship” arises under
particular facts, such as “express agreements, long established relationships
of entrustment in which the agent clearly appreciates the duty of giving
advice, additional compensation apart from premium payments, and the
agent holding out as a highly-skilled expert coupled with reliance by the
insured.” Sintros v. Hamon, 810 A.2d 553, 555–56 (N.H. 2002) (collecting
cases); Couch on Ins. at § 46:61; Booska, 160 Vt. at 308–10 (no special
relationship existed merely because agent had served insured for 12 years).

       Plaintiffs contend that Ms. Fischer’s role in procuring the insurance
created a special relationship and that there are disputed factual issues over
whether Ms. Fischer acted as an agent of the Allen Agency in procuring the
policy. But, even if Ms. Fischer was an agent of the Allen Agency, that, by

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itself, is insufficient to create a “special relationship.” Cf. Sintros, 810
A.2d at 556. The general principle behind the “special relationship”
exception is that affirmative acts by insurance agents create more than a
mere insurer–insured relationship, on which the plaintiffs come to rely.
Plaintiffs have not alleged facts in either their complaint or response to
summary judgment sufficient to find that any “special relationship” existed
with Ms. Fischer. In the absence of such a relationship with either the
agency or Ms. Fischer, the agency had no duty to inspect the Plaintiffs’
property or otherwise make certain that Plaintiffs were fully insured.

Breach of Contract

       Plaintiffs have not identified a specific provision of the policy that
required the agency to inspect their property or otherwise make certain that
Plaintiffs were fully insured. Without such an explicit agreement, the
agency had no inherent duty to make such an inspection or appraisal of
Plaintiffs’ property. In light of this limited duty and the rules of insurance
contract construction, the court declines to impose a general, after-the-fact
duty on the agency to have made certain that Plaintiffs were fully insured.
See N. Sec. Ins. Co. v. Perron, 172 Vt. 204, 209 (2001) (insurance policies
are construed according to their terms and the intent of the parties as
expressed in the policy).

        During the term of the policy, Plaintiffs were sent documents clearly
reflecting their various limits, including limits for dwelling and personal
property. They were well aware of their insurance levels and were in a far
better position to question any particular level of coverage or to ask to
extend it to any omitted items. By accepting the policy, paying the
premiums, and renewing, Plaintiffs effectively ratified their level of
insurance coverage and may not now argue that in hindsight it was

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unsatisfactory.

     Accordingly, defendant The Allen Agency, Inc.’s motion for
summary judgment is granted.
     Dated at Burlington, Vermont this ____ day of July, 2005.

                                      ____________________________
                                      Hon. Richard W. Norton
                                      Presiding Judge




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