
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                FOR THE FIRST CIRCUIT                                 ____________________        No. 96-2220                         CAROLINA CASUALTY INSURANCE COMPANY,                                Plaintiff, Appellant,                                          v.                              THE CUMMINGS AGENCY, INC.,                                 Defendant, Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                              FOR THE DISTRICT OF MAINE                     [Hon. D. Brock Hornby, U.S. District Judge]                                            ___________________                                 ____________________                                        Before                                Boudin, Circuit Judge,                                        _____________                            Aldrich, Senior Circuit Judge,                                     ____________________                              and Lynch, Circuit Judge.                                         _____________                                 ____________________            Robert  W.  Kline with  whom  Lisa  M.  Fitzgibbon  and Kline  Law            _________________             ____________________      __________        Offices were on brief for appellant.        _______            Wendell G. Large with whom John  B. Lucy and Richardson,  Whitman,            ________________           _____________     _____________________        Large & Badger were on brief for appellee.        ______________                                 ____________________                                    April 7, 1997                                 ____________________                      ALDRICH, Senior Circuit  Judge.  After  eliminating                               _____________________            irrelevancies,   unsupported   statements   and,   unhappily,            misstatements, a  core remains  that requires us  to consider            whether  there was  error  in the  district court's  granting            summary judgment  for the  defendant.   On this  appeal,1 the            basic facts are these.                      Plaintiff    Carolina   Casualty    Insurance   Co.            ("Carolina"), a transportation specialist, wrote  a liability            policy  on Geary  and Judith  Bonville, d/b/a  Bonville Farms            ("Bonville  Farms").   Subsequently,  while a  Bonville Farms            truck was carrying crushed (scrap) cars the load shifted, and            for  the  resulting  accident  Carolina was  obliged  to  pay            $750,000  in  damages.   It  sues The  Cummings  Agency, Inc.            ("Cummings")  for having  "produced" the  policy, negligently            failing to identify that Bonville Farms carried scrap cars --            a higher risk and an undertaking that Carolina would not have            accepted.  The application,  on Carolina's form, as submitted            to its general agency for Maine, Surplex Underwriters, Inc. -            -  who  investigated Bonville  Farm and  approved --  read as            follows:   "Type of  Cargo Carried:   (Be specific)  Produce,            Potatoes, Potash  (bagged) and  Lumber."   It could  be found            that  Cummings  had completed  the  application  for Bonville            Farms' signature.   Even in  this court Carolina  claims that                                            ____________________            1.  There is  no merit in  defendant's claim that  the appeal            was  filed too late.   See Lopez v.  Corporacion Azucarera de                                   ___ _____     ________________________            Puerto Rico, 938 F.2d 1510, 1514 (1st Cir. 1991).            ___________                                         -2-            Cummings signed, too.   Very conspicuously,  it did not;  nor            was its signature requested.   Cummings' name simply appeared            as the "Non-Licensed Producer."  Carolina maintains, however,            that Cummings "knew or should have known" of Bonville  Farms'            scrap car operation  and should have reported  it.  Obviously            this assumes a  duty to inform.   The  court ruled there  was            none.  We affirm.                      In order to  defeat summary judgment, Carolina  was            required to  come forward with  an affirmative showing.   See                                                                      ___            Wightman v. Springfield Terminal Ry., 100  F.3d 228, 230 (1st            ________    ________________________            Cir.  1996); Fed.  R. Civ.  P. 56(c).   It  showed none  with            respect to a producer's duty.  The court stated it knew of no            special meaning  for the term producer.   Nor do we.   In the            absence of evidence,  we equate  it with broker.   A  broker,            under the Maine  statute, is  "any person who,  not being  an            agent of the insurer,  as an independent contractor solicits,            negotiates, or procures insurance or annuity contracts or the            renewal  or continuation  thereof  on behalf  of insureds  or            prospective  insureds other  than himself."   Me.  Rev. Stat.            Ann.  tit. 24-A,    1506.   This  means  no duty  toward  the            insurer,  see Giberson v. York County Mut. Fire Ins. Co., 142                      ___ ________    ______________________________            A. 481 (Me. 1928), 127 Me. 182, 185 (1928); cf. 3 Lee R. Russ                                                        ___            & Thomas  F. Segalla,  Couch on  Insurance 3d    45:4 (1995),                                   ______________________                                         -3-            witha heavy burden on Carolinato make a special showing here.                      As  there  was  no  independent  writing   on  this            subject,  nor evidence of a  trade practice,2 we  turn to the            application.   Over  the "Applicant's  Signature" line  it is            stated that  the applicant  "represents that the  information            above is true."  As noted ante, the  "Non-Licensed Producer,"                                      ____            elsewhere identified as  the applicant's "agent,"  represents            nothing.                      We ask a simple question.  If the producer is to be            taken as making a  representation, why is not this  the place            to ask him to make it?  The implication speaks loudly.                      Viewed independently, what  are the  practicalities            of Carolina's  contention?  How can a broker afford to make a            study in depth of every customer, to the extent that, in case            of loss, he is  accountable for what he "should  have known,"            not   only  about   the  customer,   but  of   the  insurer's            underwriting  standards?     Correspondingly,  no   insurance            company is going to depend upon the ability (and industry) of            every, non-licensed by it,  broker.  Plaintiff here  did not;            it followed its usual  custom and commissioned an independent            investigation.  This makes business sense, both ways.                                            ____________________            2.  It  does appear  that Cummings  received from  Carolina a            share  of   the  premium,   manifestly  payment  for   having            "produced"  the insured, but it assumes the point to say that            this activity implied any specific obligations.  See 3 Lee R.                                                             ___            Russ  &  Thomas F.  Segalla,  Couch  on  Insurance 3d    45:4                                          _______________________            (1995).                                         -4-                      At   the  same   time,  might   there  not   be  an            intermediate ground?   Suppose a broker  actually knows facts            about his customer that he knows would make him unacceptable,            and  knows  that  the  would-be  insured  is  filing  a false            application.  Should not  the insurer have a right  to expect            good  faith?  If some  of the hearsay  proffers Carolina made            here could be broadly accepted, it might have made out a case            of fraud.   See   Giberson, ante.   We need  not reach  this,                        ___   ________  ____            however.  Carolina's brief  expressly disclaims making such a            claim.                      Carolina  has  failed  to  produce   evidence  that            Cummings' status gave  rise to any duty.   Therefore Cummings            is  entitled  to  summary  judgment.    The  decision  of the            district court is Affirmed.                              ________                                         -5-
