Case Title: Booska v. Hubbard Insurance Agency

Citation: 160 Vt. 305, 627 A.2d 333

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 1992-11-01T00:00:00Z

Document:
BOOSKA_V_HUBBARD_INSURANCE_AGENCY.92-067; 160 Vt. 305; 627 A.2d 333


 NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
 as well as formal revision before publication in the Vermont Reports.
 Readers are requested to notify the Reporter of Decisions, Vermont Supreme
 Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in
 order that corrections may be made before this opinion goes to press.


                                 No. 92-067


 Ora J. and Susan J. Booska                   Supreme Court

                                              On Appeal from
      v.                                      Addison Superior Court

 Hubbard Insurance Agency, Inc.,              November Term, 1992
 Deborah Wheeling and
 Northern Security Co.


 Frank G. Mahady, J.

 Kevin E. Brown and Anthony G. Patt of Langrock Sperry & Wool, Middlebury,
    for plaintiffs-appellants

 Michael J. Harris of Paul, Frank & Collins, Inc., Burlington, for
    defendants-appellees Hubbard Insurance Agency and Wheeling

 Marc B. Heath and Christopher D. Roy of Downs Rachlin & Martin, Burlington,
    for defendant-appellee Northern Security Insurance Co.


 PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.



      JOHNSON, J.   Plaintiffs sued their insurance agency, one of its
 individual agents, and plaintiffs' fire insurance carrier, following a fire
 that severely damaged a house they had purchased and were in the process of
 renovating.  The trial court granted summary judgment in favor of all
 defendants, and plaintiffs appeal.  We affirm.
      Plaintiffs bought a house in Bristol for $47,500 in 1989.  It is
 undisputed that plaintiff Ora Booska met with Deborah Wheeling, an agent of
 defendant Hubbard Insurance Agency, Inc., at or near the date of the
 closing.  At that time, according to Booska's sworn statement, he told
 Wheeling that he
           would be changing [the house] into a one-apartment
           house because I don't need a house divided like that.

                            *     *     *

           . . . I told her there were a few things that I wanted
           to do, you know, to make it into a one-apartment house,
           like open up the doors and stuff like that.  And there
           was a little bit of cosmetic work, I call it, that
           needed to be done.  But I didn't want to fool with the
           plaster because I don't know anything about patching
           plaster.

 Wheeling recommended that Booska insure the home for 80 percent of its
 replacement value, to avoid a coinsurance penalty in the event of a partial
 loss, and Booska agreed.  A policy was issued by Northern Security
 Insurance Co., Inc. with coverage limits of $95,000 for the residence and
 $47,500 for its contents.
      Thereafter, Ora Booska began substantial work on the house, including
 removal of the plaster, lath, carpeting, and window trim from an upstairs
 bedroom; removal of the wood paneling, plaster, lath, linoleum, cabinetry,
 and a sink from a kitchen-dining room; removal of a central floor furnace
 heating system, hot water heater, and a segment of sewer pipe from the
 basement, and the replacement of rotten floor joists and support beams;
 removal of the bathroom adjoining the main kitchen, including walls and
 fixtures; removal of the sheetrock, plaster, lath, linoleum, cabinetry and a
 sink from the main kitchen; and removal of some sheetrock and replacement
 of flooring with plywood in a small living room.  As a result of these
 extensive renovations, plaintiffs remained in their original residence and
 did not move into the new house, though they had begun to move some of their
 personal property into it.
      The house burned in May 1990.  Northern advised plaintiffs that they
 were entitled to receive the replacement cost of the house upon replacement
 of the structure.  Plaintiffs hired a building contractor, who estimated
 that replacement of the house would cost $103,300, but at no point did
 plaintiffs seek to replace the house.  Northern tendered a check for
 $46,812, representing the company's assessment of the actual cash value of
 the building immediately before the fire.  A second check for $2,121 was
 offered shortly thereafter, based on new information provided by Ora Booska
 during the taking of a statement under oath.  Northern also tendered checks
 for $21,958, representing the actual cash value of plaintiffs' personal
 property, and $1,600 for additional living expenses as a result of the fire.
 Plaintiffs accepted all checks tendered, without prejudice to subsequent
 claims.
      Plaintiffs commenced the present action, seeking $95,000, the full face
 amount of the policy.  They also sought consequential damages from defendant
 Northern as insurer and from defendants Hubbard and Wheeling as agents for
 breach of their duty to advise plaintiffs appropriately in securing
 insurance and in explaining relevant details of their policy, in light of
 plaintiffs' proposed renovation plans.  The trial court granted defendants'
 motions for summary judgment, and plaintiffs appealed.
                                     I.
      Plaintiffs' main argument as to defendants Hubbard and Wheeling is
 based on Wheeling's asserted failure to act in accordance with her "special
 relationship" with the plaintiffs.  Plaintiffs assert that the agent had
 served Ora Booska's insurance needs for twelve years and that "[a]s a
 result of this special relationship, Ora Booska relied on Wheeling's advice
 and expertise when he entered her office to obtain insurance for his home."
 With that "special relationship" in mind, plaintiffs contend that Wheeling
 was negligent in failing to explain the effect that a loss before completion
 of remodeling would have, under the policy issued, on their coverage.
 Particularly critical, according to plaintiffs, was Wheeling's failure to
 explain that they would not receive the full policy face amount of $95,000
 if fire occurred while the house was being remodeled and while the actual
 cash value of the house fell below $95,000 as a result of the first stages
 of renovation.
      Defendants Hubbard and Wheeling correctly state that the record before
 the trial court, when it considered the summary judgment motion, did not
 clearly show that Mr. Booska had informed Ms. Wheeling that extensive
 remodeling would occur.  Based on Mr. Booska's own sworn statement, the
 changes would be modest and "cosmetic."  It is not the function of the
 trial court, however, to find facts on a motion for summary judgment, even
 if the record appears to lean strongly in one direction.  "Summary judgment
 is not a substitute for a determination on the merits as long as evidence
 has been presented which creates an issue of material fact, no matter what
 view the court may take of the relative weight of that evidence."  See
 Vermont Envtl. Bd. v. Chickering, 155 Vt. 308, 319, 583 A.2d 607, 613-14
 (1990).  At the time the court ruled on the summary judgment motions, a
 genuine issue of fact remained as to how detailed Mr. Booska was in his
 description of the proposed renovations.
      The grant of summary judgment in favor of Hubbard and Wheeling was not
 error because neither the agency nor its employee had a duty to inquire
 about special circumstances within the insurance purchaser's control that
 might affect the quality or degree of protection available under a policy.
 Plaintiffs' argument makes clear that they expected defendant Wheeling to
 have foreseen the extent of the renovations, to have determined that the
 manner in which the renovations were conducted would at least temporarily
 reduce the amount recoverable under the policy, and to have foreseen that
 the result (actual-value coverage of the house during renovation) was one
 which, though not contrary to law or public policy, was such an unreasonable
 risk that it necessitated a special warning. (FN1)
      Such far-reaching expectations would have imposed on Wheeling, not the
 duty of a reasonable insurance agent, but that of a soothsayer.  The trial
 court correctly ruled that the duty of Hubbard and Wheeling was rather "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."
 Rocque v. Co-Operative Fire Ins. Ass'n., 140 Vt. 321, 326,