Wiles v. Mullinax

148 S.E.2d 229 (1966)

267 N.C. 392

Bernadine WILES d/b/a Centerview Taxi v. Ralph P. MULLINAX, Jr. and Mullinax Insurance Agency, Inc.

No. 603.

Supreme Court of North Carolina.

May 25, 1966.

*231 Williams, Willeford & Boger, Concord, for plaintiff appellant.

Hartsell, Hartsell & Mills, by Harold H. Smith, Concord, for defendant appellees.

SHARP, Justice.

This Court has several times stated the rule applicable to plaintiff's allegations and evidence:

"It is very generally held that, where an insurance agent or broker undertakes to *232 procure a policy of insurance for another affording protection against a designated risk, the law imposes upon him the duty in the exercise of reasonable care to perform the duty he has assumed, and within the amount of the proposed policy he may be held liable for the loss properly attributable to his negligent default." Elam v. Smithdeal Realty Co., 182 N.C. 599, 602, 109 S.E. 632, 633, 18 A.L.R. 1210.

Accord, Interstate Textile Equipment Co. v. Swimmer, 259 N.C. 69, 130 S.E.2d 6; Bank of French Broad Inc. v. Bryan, 240 N.C. 610, 83 S.E.2d 485; Meiselman v. Wicker, 224 N.C. 417, 30 S.E.2d 317; Boney, Insurance Comr. v. Central Mut. Insurance Co., 213 N.C. 563, 197 S.E. 122. See also 4 Couch, Insurance § 26:460 (2d Ed. 1960); 44 C.J.S. Insurance § 172 (1945); 29 Am.Jur., Insurance § 163 (1960).

If a broker or agent is unable to procure the insurance he has undertaken to provide, he impliedly undertakesand it is his dutyto give timely notice to his customer, the proposed insured, who may then take the necessary steps to secure the insurance elsewhere or otherwise protect himself. Annot., Insurance Broker or AgentLiability, 29 A.L.R.2d 171, 184 (1953); 29 Am.Jur., Insurance § 164 (1960). When, under these circumstances, the broker fails to give such notice, he renders himself liable for the resulting damage which his client suffered from lack of insurance. 44 C.J.S. Insurance § 172 (1945).

Where an insurance broker becomes liable to his customer for failure to provide him with the promised insurance, the latter at his election, may sue for breach of contract or for negligent default in the performance of a duty imposed by contract. Interstate Textile Equipment Co. v. Swimmer, supra; Bank of French Broad Inc. v. Bryan, supra; Elam v. Smithdeal Realty Co., supra; 44 C.J.S. Insurance § 172(b) (1945).

Viewing the evidence in the light most favorable to plaintiff, as we are required to do, it appears: (1) In 1951, defendants had agreed to provide plaintiff with continuous workmen's compensation coverage, and, from November 1951 through November 1958, without any further request from her, they had done so; (2) Plaintiff had paid the premium or arranged for its payment only when she was billed; (3) On November 18, 1958, after unsuccessful efforts to place her insurance with two companies, defendants permitted her coverage to expire without notice to her; and (4) As a result, she became personally liable, 21 days later, to pay the widow of a deceased employee compensation for his death. This was plenary evidence for the jury's consideration on the question of defendants' liability.

Conceding, arguendo, that defendants used reasonable diligence to procure coverage for plaintiff, yet they neglected to notify her of their failure to get it for her. If, after a diligent effort to provide the insurance, defendants were unable to do so, all they were required to do in order to avoid liability was to tell plaintiff seasonably that they could not write the policy. Feldmeyer v. Englehart, 54 S.D. 81, 222 N.W. 598.

Defendants' asserted defenses are not pertinent to this decision, which relates only to the question of the sufficiency of the evidence to survive the motion for nonsuit.

The judgment of nonsuit is

Reversed.

MOORE, J., not sitting.

PLESS, J., took no part in the consideration or decision of this case.