Title: Dutton v. Chester F. Raines Agency, Inc.

State: alabama

Issuer: Alabama Supreme Court

Document:

475 So. 2d 545 (1985)
Miles Carl DUTTON
v.
CHESTER F. RAINES AGENCY, INC.
84-174.

Supreme Court of Alabama.
August 23, 1985.
*546 T.J. Carnes of Carnes & Carnes, Albertville, for appellant.
Ralph H. Ford and Joe W. Campbell of Ford, Caldwell, Ford & Payne, Huntsville, for appellee.
MADDOX, Justice.
This case involves the alleged failure of an insurance agent to procure insurance with a solvent company.
Plaintiff Chester F. Raines Agency, Inc., hereinafter referred to as "Raines," filed a complaint against Miles Carl Dutton, Charles Dutton, Nelson Gary, and Janet Gary, claiming on an account for insurance premiums. Janet Gary was dismissed as a defendant. Judgment by agreement was rendered against the other defendants for $59,252.77.
Meanwhile, defendants filed a counterclaim. They amended the counterclaim several times, striking all counterclaimants except Miles Carl Dutton and adding additional counts, so that as last amended, the counterclaim consists of five counts.
Court Four is the only count which involves the issue raised on this appeal, and will be the only one discussed in this opinion. In Count Four Dutton alleged that during 1981 and 1982 Raines was engaged in the business of being an insurance agent, and that Dutton at that time was engaged in the trucking business and was in need of insurance on various truck-tractors and trailers and engaged Raines to procure the insurance. Dutton alleged that Raines accepted this engagement and caused the insurance to be placed with Amherst Insurance Company, which was a "surplus line carrier" and was not authorized to transact insurance business in the State of Alabama. Raines placed the insurance with Amherst, according to Dutton, for the purpose of securing the advantage of getting a lower premium rate than one which would be accepted by an authorized insurer. Dutton claims that this was contrary to the obligations and duties of Raines as an insurance agent under the laws of the State of Alabama.
*547 Dutton further alleged that while the policy with Amherst was in force and effect, he experienced a loss on one of the insured vehicles; that the company failed to pay for said loss because the company was in bad financial condition or receivership; and that Dutton experienced great loss, expense, and damage as a result. He claimed damages in the amount of $50,000.00, plus interest and costs.
The facts, as found by the trial court, are as follows:
The trial court, sitting as the trier of fact, rendered a judgment in favor of Raines, and Dutton appeals here. We affirm.
Dutton limits his appeal to Count Four of his counterclaim. Count Four provides, as follows:
Dutton argues that because the trial judge did not specifically address, in his findings, the allegations of Count Four, he misapplied the law to the facts. We decline to accept this argument.
The law in Alabama is that when there is an absence of specific findings of fact by the trial court, this Court will assume that the trial court made those findings necessary to support the judgment, unless those findings would be clearly erroneous and against the great weight and preponderance of the evidence. Barrett v. Odom, May & DeBuys, 453 So. 2d 729 (Ala. 1984). While the trial court may not have specifically addressed Count Four, the court necessarily rejected that claim by rendering a judgment in favor of Raines.
Dutton claims the court erred in finding for Raines.
To establish Raines's liability, Dutton relies on Code 1975, §§ 27-10-1 and 27-10-2. Section 27-10-1 provides, in part:
Dutton argues that § 27-10-1 and 27-10-2 "place upon an agent an absolute liability for 100% of the loss any insured sustains under a policy which that agent writes with a company who is not authorized to do business in the state of Alabama."
Dutton acknowledges that Raines might be exempt pursuant to § 27-10-1(b), which provides:
Nevertheless, Dutton contends that Raines procured the surplus line insurance in violation of § 27-10-20, and by doing so removed itself from the surplus line exception of § 27-10-1(b)(2).
(Emphasis added.)
Dutton argues that § 27-10-1 and § 27-10-2 placed upon Raines, the agent, absolute liability for the loss, because Raines should not have participated "in any way in the procuring of surplus line insurance solely for the reason of price." Dutton claims that the statute imposed upon Raines a duty to protect "Dutton and others like him from themselves."
Presented, as we are, with these claims, we must construe legislative intent insofar as that intent is expressed in the statutes dealing with surplus insurance.
We find that the trial court did not err in holding that the duty of complying with § 27-10-20 was upon a licensed surplus line broker in this case. Once the insurance agent, Raines, with the consent of Dutton, authorized the surplus line broker to procure the surplus line coverage, and Raines authorized the surplus line broker to issue the policy, the court was authorized to find that no other statutory duties were placed on Raines.
Construing the exemption statute, § 27-10-1(b)(2), with the statute placing a duty on the surplus line broker, § 27-10-20 we believe the construction placed on similar statutes by our sister state of Louisiana is uniquely applicable.
In Kline v. Globe Automobile Finance Co., 100 So. 2d 517, 522 (La.1958), the court discussed the surplus line broker's duty to comply with Louisiana's similar statute:
In Kline, the Louisiana court placed upon the broker, and not the agent, the duty of complying with the surplus line statute.
In Bordelon v. Herculean Risks, Inc., 241 So. 2d 766 (La.1970), plaintiffs sought to recover against the individual surplus line broker, the corporate surplus line broker, and the insurance agency. Plaintiff had contacted an insurance agent with Alexandria Insurance Underwriters for the purpose of obtaining a fire insurance policy. The agent was unable to provide the requested insurance coverage through a regularly admitted company and he did not have a license to write surplus line insurance. Thus, the agent contacted a surplus line broker, who informed the agent that he could handle the coverage. A policy was issued by the surplus line broker. Thereafter, a loss was incurred, and it was determined that the insurance company was insolvent. In the plaintiff's suit to recover, the trial court found in favor of Alexandria Insurance Underwriters, but found against the surplus line brokers.
Here, the trial court did not err in finding that "[t]he law places the duty of determining the financial soundness of an unauthorized insurance company upon the surplus line broker," because in Alabama, the duty of determining the financial stability of a surplus line insurance carrier is placed upon the surplus line broker and the commissioner of insurance for the state of Alabama. Section 27-10-26 provides as follows:
The statute places on the commissioner the duty to determine the ineligibility of an insurer to issue surplus line insurance coverage.
Based on the foregoing, we must conclude that the trial court properly applied the law and did not err in finding that the procuring agent was not liable.
The judgment of the trial court is due to be affirmed.
AFFIRMED.
TORBERT, C.J., and JONES, SHORES and BEATTY, JJ., concur.