Title: Somnus Mattress Corp. v. Hilson
Citation: N/A
Docket Number: 1170250
State: Alabama
Issuer: Alabama Supreme Court
Date: December 21, 2018

REL:  December 21, 2018
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2018-2019
____________________
1170250
____________________
Somnus Mattress Corporation d/b/a Posturecraft Mattress
Company
v.
Stephen Hilson and Crutchfield & Graves Insurance
Agency, LLC
Appeal from Winston Circuit Court
(CV-15-900038)
MENDHEIM, Justice.
Somnus Mattress Corporation d/b/a Posturecraft Mattress
Company ("Somnus") appeals from a summary judgment entered by
the Winston Circuit Court in favor of Stephen Hilson and
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Crutchfield & Graves Insurance Agency, LLC ("CGIA"), on
Somnus's claim that Hilson and CGIA were negligent in advising
Somnus not to purchase insurance coverage for business
interruption and loss of profits (hereinafter collectively
referred to as "business-income coverage").  We affirm. 
I. Facts
Somnus manufactured mattresses at a facility in Winston
County.  Charles Jones founded Somnus, served as its
president, and made all the consequential business decisions
for 
Somnus 
-- 
including decisions concerning business 
property
insurance.  Jones opened his first mattress store in 1981.  By
1987, Jones had grown his business to include 15 stores, a
warehouse in Ashridge, and his own mattress-manufacturing
factory ("the factory") located in Double Springs.  In 2006,
a fire at the Ashridge warehouse facility resulted in a total
loss of that property. Jones testified that the property was
"severely underinsured" but that he had completely relied upon
his insurance agent at the time "to keep me covered." 1
1Jones testified that his insurer at that time was Robert
Blake Insurance Company, located in Hamilton, and that he had
relied upon Robert Blake to provide him with the proper amount
of insurance coverage.
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Hilson, on behalf of CGIA, first contacted Jones in 2009
about providing property-insurance coverage for the factory. 
Jones testified that during 2009 Hilson came out to the
factory to inspect it and to talk to Jones about insurance
coverage.  Jones stated that during one of those trips the two
men discussed business-income coverage.
"[Jones:]  ...  I remember Stephen [Hilson] and I,
we used to -- we would walk out into the factory,
and we'd just look around.
"And he would kind of look and see what all --
what it looked like make sure that wasn't nobody
smoking, no cigarette butts and stuff like that
that, you know -- and I remember we were -- and I
remember we were standing near the foundation
department near a couple some overhead doors.  And
from what I remember, the subject did come up.  I
asked -- I asked Stephen -- 'What do you think about
it?'
"And, Stephen, you -- you told me that 'It's
pretty expensive, and it's hard to get because
you've got to come up with a lot of records to
verify whatever you're claiming; and so I don't
think you need it.'"
Hilson testified that their discussion about business-
income coverage occurred during his first telephone call with
Jones.  Hilson testified that he told Jones that he needed
such coverage.
"Q.  Did you think Mr. Jones needed business income
insurance?
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"A.  [Hilson:]  Yes.
"Q.  Did you advise him that?
"A.  Yes.
"Q.  All right.  So you advised Mr. Jones to buy
business insurance but he declined?
"A.  Yes.
"Q.  Do you have anything in writing on that?
"A.  No, I did not.  Other than he purchased and
paid premiums on the amount without business
income."
Hilson noted in his testimony that the proposal he
submitted to Jones for insurance coverage of the mattress
factory in 2009 included a quote with business-income coverage
and a quote without business-income coverage because Jones
asked for both quotes.  
"Q.  Now, I notice that this one has -- in your
quotes, you have two quotes.  See if I can find what
page they're on.  It would be on the page that's
called premium summary, which would be the –-
"....
"Q.  The fourth page.  Sure, Crutchfield Graves
[exhibit] 7.  Is that what it is?
"A.  [Hilson:]  Yes.
"Q.  And there are two premium quotes.  Why are
there two premium quotes?
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"A.  We had quoted -- we had quoted the [policy]
with business income coverage, and then Mr. Jones
wasn't sure if he wanted it.  He asked to quote it
with and without."
Hilson testified that ultimately Jones elected not to pay for
business-income coverage because he stated it was too
expensive.
Both Hilson and Jones agree that each year after 2009
when the insurance policy for the mattress factory came up for
renewal, Hilson would visit Jones to discuss Somnus's
insurance needs.  Hilson testified that he told Jones at every
renewal 
period 
that 
Somnus 
needed 
business-income coverage 
but
that Jones always declined the business-income coverage
because "[i]t was too expensive."  Jones testified that he
could 
not 
recall 
any 
discussion 
about 
business-income coverage
at the renewal meetings between him and Hilson; the only
conversation he remembered about business-income coverage was
the one in 2009.  It is undisputed that the written proposals
for insurance Hilson submitted on behalf of CGIA to Jones for
Somnus in 2010, 2011, and 2012 did not include business-income
coverage.  
On April 12, 2013, a fire occurred at the factory.  The
fire rendered the factory a total loss. Somnus was forced to
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move its operation to a location in Mississippi in an attempt
to stay in business.  Somnus stayed in business for two more
years.  Ultimately, Somnus went out of business in 2015.  
During the period after the fire while Somnus remained in
business, Somnus continued to get its insurance through Hilson
and CGIA.  Hilson testified that he continued to recommend
business-income coverage to Jones but that Jones still
declined it because he said it was too expensive.  
"Q.  Okay.  And is that also true even after the
fire 
[Jones] 
still 
declined 
the 
business
interruption insurance?
"....
"A. [Hilson:]  We offered him $1 million in business
income the last year he was in business, and he made
us take it off because it was too expensive."
Jones testified that his decision not to purchase
business-income coverage even after the fire at the factory
was based on what Hilson had told him in 2009 about it being
expensive and difficult to obtain.
"Q.  So during that time, you never had business
income insurance?  Even after this fire?
"A. [Jones:]  I don't believe I did.
"Q.  Okay.  Why not?
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"A. Because it was --  I was -- I was told that it
was expensive and it required a lot of record -- to
produce a lot of records and it was hard to get."
On April 8, 2015, Somnus sued Hilson, CGIA, and
Acceptance 
Indemnity 
Insurance 
Company 
("Acceptance").2 
Somnus alleged claims of negligence against Hilson and CGIA
and breach of contract and bad faith against Acceptance.  On
April 30, 2015, Somnus dismissed its claims against
Acceptance.  On the same date, Somnus filed an amended
complaint in which it asserted a single count of negligence
against Hilson and CGIA, which specifically alleged that
Hilson and CGIA
"were negligent in not advising [Somnus] in regard
to insurance coverage for business interruption and
loss of profits which was available under an
insurance policy similar to the one attached as
Exhibit 'A.'  Had [Hilson and CGIA] offered business
interruption and loss of profits coverage, [Somnus]
would have certainly accepted the same and would
have had insurance coverage for all of the income
losses sustained as a result of the fire loss and
continuing.  Therefore, the negligence of [Hilson
and CGIA] in failing to advise and failing to
procure business interruption and loss of profits
coverage has proximately caused [Somnus] to be
damaged 
in 
excess 
of 
Two 
Million 
Dollars
($2,000,000.00), and the losses are continuing."
2Acceptance was the underwriter of the policy Somnus had
purchased through CGIA.
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On June 27, 2017, Hilson and CGIA filed a motion for a
summary judgment.  In the motion, they contended that Hilson
and CGIA did not have a duty to advise Somnus on the types of
insurance coverage it needed, that Hilson and CGIA did not
breach a voluntary duty to advise Somnus about the adequacy of
its coverage, and that, in any event, it was undisputed that
Hilson advised Somnus to purchase business-income coverage
during each renewal period, including for the 2012 policy
renewal under which the fire loss occurred, and that Jones
declined to purchase that coverage.  
On August 25, 2017, Somnus filed a response in opposition
to the motion for a summary judgment.  Somnus maintained that
Hilson and CGIA had voluntarily assumed a duty to advise
Somnus and that they had been negligent in their advice
concerning business-income coverage.  
On October 24, 2017, the circuit court entered a summary
judgment in favor of Hilson and CGIA.  The summary-judgment
order did not provide the specific reasons for the court's
judgment.  Somnus filed a timely appeal.
II.  Standard of Review
"'The standard of 
review 
applicable to 
a 
summary
judgment is the same as the standard for granting
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the motion....' McClendon v. Mountain Top Indoor
Flea Market, Inc., 601 So. 2d 957, 958 (Ala. 1992).
"'A summary judgment is proper when
there is no genuine issue of material fact
and the moving party is entitled to a
judgment as a matter of law.  Rule
56(c)(3), Ala. R. Civ. P.  The burden is on
the moving party to make a prima facie
showing that there is no genuine issue of
material fact and that it is entitled to a
judgment 
as 
a 
matter 
of 
law. 
 
In
determining whether the movant has carried
that burden, the court is to view the
evidence in a light most favorable to the
nonmoving party and to draw all reasonable
inferences in favor of that party.  To
defeat 
a 
properly 
supported 
summary
judgment motion, the nonmoving party must
present "substantial evidence" creating a
genuine issue of material fact -- "evidence
of such weight and quality that fair-minded
persons in the exercise of impartial
judgment 
can 
reasonably 
infer 
the 
existence
of the fact sought to be proved."  Ala.
Code 1975, § 12–21–12; West v. Founders
Life Assurance Co. of Florida, 547 So. 2d
870, 871 (Ala. 1989).'
"Capital Alliance Ins. Co. v. Thorough–Clean, Inc.,
639 So. 2d 1349, 1350 (Ala. 1994).  Questions of law
are reviewed de novo. Alabama Republican Party v.
McGinley, 893 So. 2d 337, 342 (Ala. 2004)."
Pritchett v. ICN Med. Alliance, Inc., 938 So. 2d 933, 935
(Ala. 2006).
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III.  Analysis
Somnus presents two arguments on appeal.  First, it
contends that an issue of fact exists as to the advice Hilson
gave Jones with respect to business-income coverage because
Jones testified that Hilson advised him that Somnus did not
need such coverage, whereas Hilson testified that he told
Jones that Somnus should procure business-income coverage.
Second, Somnus argues that Hilson and CGIA voluntarily assumed
a duty to advise Somnus about the adequacy of its insurance
coverage and that they were negligent in carrying out this
duty because Hilson inappropriately advised Somnus not to
purchase business-income coverage.
On the surface, whether an issue of fact exists as to
whether Hilson and CGIA negligently advised Somnus about
business-income coverage seems straightforward because the
testimony of the two principals -- Jones and Hilson --
conflicts with regard to what Hilson advised Jones in 2009
concerning Somnus's need for business-income coverage.  As
Hilson and CGIA observe, however, whatever the content of the
conversation may have been in 2009 is irrelevant because the
active insurance policy at the time of the fire was the one
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Somnus renewed in 2012.  Testimony about conversations in 2012
are not in dispute.  Hilson testified that he met with Jones
annually before it was time for Somnus to renew the insurance
policy and that each year Hilson told Jones that Somnus needed
business-income coverage. 
"Q.  Okay.  Every year that you met, did you meet
with [Charles] Jones and maybe a couple other
employees but at least Jones and a representative of
Somnus every year from 2009 to the last year that
you wrote insurance for them?
"....
"A.  [Hilson:]  Yes.
"Q.  All right.  And every time that you met with 
Jones to discuss renewal of his policy for Somnus,
did you always recommend that he get business
interruption insurance?
"....
"A.  Yes.
"Q.  Okay.  And what happened every time you
recommended it? Did he reject it? What did he say?
"A.  It was too expensive.
"Q.  Okay.  So he always declined the coverage?
"A.  Yes."
As noted in the rendition of the facts, for his part,
Jones admitted that he met with Hilson each year, but he
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testified that he could not remember the content of those
conversations and specifically that he could not recall
whether Hilson told him during those conversations that Somnus
needed business-income coverage.
"Q.  And, Mr. Jones, this is the insurance proposal
from Somnus to Somnus Mattress from [CGIA] and
Stephen Hilson, dated October 20, 2010.  So it would
have been the next year.
"A. [Jones:]  Yes, ma'am.
"Q.  Now, do you recall -- remember Stephen in 2010
coming to your office and meeting with you to
discuss renewing your policy?
"A.  Yes, ma'am.
"Q.  Okay.  Do you recall Stephen talking to you
about, you know, '[Charles], you really need to get
this business income insurance' -- talking to you
about that?
"A.  No, ma'am.
"Q.  You don't remember any conversations about
getting business income insurance?
"A.  Now, one conversation I remember.
"Q.  Okay.  The one in 2009?
"A.  I think that's when it was.
"....
"Q.  Now, whenever you would meet with Stephen
during renewal time, did y'all usually go over, you
know, new property that you would acquire? Whether
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it was more automobiles or if you had more employees
that you needed to insure, things like that.
"Did y'all talk about those type of things?
"....
"A.  I don't.  I don't remember any particular time.
I know that we would always meet when the policy
expired and when it was time to renew.  And we would
discuss whatever -- whatever needed to be added.
"Q.  Okay.
"A. 
 
But 
I 
don't 
remember 
any 
particular
conversations -–"
In sum, the record reflects that Hilson testified that he
advised Jones in 2012 to purchase business-income coverage,
that Jones could recall meeting with Hilson each year, but
that 
Jones 
could 
not 
recall 
the 
content 
of 
those
conversations.  Not remembering a conversation does not
constitute evidence indicating that what the opposing party
contends was relayed in that conversation did not occur.  This
Court described a similar evidentiary situation in Giles v.
Brookwood Health Services, Inc., 5 So. 3d 533, 554 (Ala.
2008):
"Dr. Adcock established a prima facie case that
no genuine issue of material fact existed as to the
f i r s t  
e l e m e n t  
o f  
G i l e s ' s
failure-to-obtain-informed-consent claim 
and 
that 
he
was entitled to judgment as a matter of law on that
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claim.  According to Dr. Adcock's testimony and
medical notes, he had certain conversations with
Giles regarding the intended scope and potential
risks of the operation, including the possibility
that either or both ovaries would be removed.  Dr.
DeSalvo testified that the conversations described
by Dr. Adcock's testimony and his contemporaneous
notes would have met the standard for informing
Giles that he might remove either ovary, or both,
and the risks and long-term effects of doing so.
"Therefore, the burden then shifted to Giles to
put forth evidence creating a genuine issue of
material fact as to whether Dr. Adcock failed to
inform her of all material risks associated with the
procedure.  Giles did not meet this burden. She
submitted no evidence that the conversations Dr.
Adcock described did not occur. At most, she
provides evidence indicating that she does not
recall whether Dr. Adcock had those conversations
with her.  Giles's inability to recall those
conversations 
does 
not 
constitute 
substantial
evidence that the conversations did not occur, only
that she cannot remember whether they occurred or
what Dr. Adcock discussed with her.  Therefore, no
genuine 
issue 
of 
material 
fact 
exists, 
and
Dr. Adcock is entitled to judgment as a matter of
law on Giles's failure-to-obtain-informed-consent
claim."
(Emphasis added.) 
Somnus attempts to counter its lack of evidence resulting
from Jones's failure to recall those conversations by arguing
that the "Insurance Proposal" submitted by CGIA to Somnus in
October 2012 did not include business-income coverage. 
Moreover, the cover page of this document stated: 
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"This presentation is designed to give you an
overview of the insurance coverages we recommend for
your company. It is meant only as a general
understanding of your insurance needs and should not
be construed as a legal interpretation of the
insurance policies that will be written for you.
Please refer to your specific insurance contracts
for 
details 
on 
coverages, 
conditions, 
and
exclusions."
(Emphasis added.)  Somnus essentially contends that this
document constitutes substantial evidence that Hilson did not
advise Somnus to purchase business-income coverage in 2012.
The difficulty with this contention is that the document
in question does not directly contradict Hilson's testimony
because it addresses what CGIA recommended following Hilson's
conversations with Jones each year, not what was discussed
during their conversations.  In other words, the insurance
proposal does not actually speak to the fact at issue, i.e.,
whether 
Hilson 
recommended 
business-income 
coverage 
for 
Somnus
in 2012 during their conversations and such coverage was
declined by Jones.  Because the document does not directly
contradict Hilson's unrefuted testimony that he recommended
business-income coverage to Jones in 2012 but that Jones opted
not to purchase it, it does not constitute substantial
evidence that Hilson negligently advised Somnus that it did
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not need to purchase business-income coverage.  Accordingly,
the circuit court correctly concluded that no issue of fact
existed concerning Somnus's negligent-advice claim.
Even if Somnus had presented substantial evidence
creating a genuine issue of material fact as to what Hilson's
advice actually was, Somnus also had to demonstrate that
Hilson and CGIA are not entitled to a judgment as a matter of
law, i.e., that Hilson and CGIA had a duty to advise Somnus
concerning the adequacy of its insurance coverage and that
they breached that duty.  Hilson and CGIA correctly observe
that jurisdictions throughout the country have overwhelmingly
concluded that insurers have no such duty to advise clients. 
A leading insurance treatise ably summarizes the 
general rule:
"Absent a specific agreement to do so, an
insured's agent does not have a continuing duty to
advise, guide, or direct the insured's coverage
after the agent has complied with his or her
obligation to obtain coverage on behalf of the
insured. 
 
Insurance 
agents 
do 
not 
have 
an
independent duty to identify their clients' needs
and to advise them regarding whether they may be
underinsured 
because 
it 
is 
the 
client's
responsibility or duty, not the insurance agent's,
to determine the amount of coverage needed and
advise the agent of those needs.  In addition, upon
receiving the policy of insurance, the client has a
duty to review the policy to ascertain that his or
her needs are met.  In addition, insurance agents
generally are not liable for actions other than
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obtaining insurance coverage for their insureds
unless a special relationship has been established
between the parties."
3 Steven Plitt et al., Couch on Insurance § 46:38 (3d ed.
2011) (footnotes omitted).  
Several cases from other jurisdictions have explained the
reasons for the courts' unwillingness to impose such a duty
upon insurance agents.
"A majority of courts that have considered the issue
have held that an insurance agent owes clients a
duty of reasonable care and diligence, but absent a
special relationship, that duty does not include an
affirmative, continuing obligation to inform or
advise an insured regarding the availability or
sufficiency of insurance coverage.  See, e.g., Peter
v. Schumacher Enterprises, Inc., 22 P.3d 481,
482–83, 486 (Alaska 2001); Szelenyi v. Morse, Payson
& Noyes Ins., 594 A.2d 1092, 1094 (Me. 1991); Sadler
v. Loomis, 139 Md. App. 374, 776 A.2d 25, 46 (2001);
Robinson v. Charles A. Flynn Ins. Agency, 39 Mass.
App. Ct. 902, 653 N.E.2d 207, 207–08 (1995); Harts
v. Farmers Ins. Exchange, 461 Mich. 1, 597 N.W.2d
47, 48 (1999); Murphy v. Kuhn, 90 N.Y.2d 266, 660
N.Y.S.2d 371, 682 N.E.2d 972, 974 (1997); Nelson v.
Davidson, 155 Wis. 2d 674, 456 N.W.2d 343, 344
(1990).  But see SW Auto Painting v. Binsfeld, 183
Ariz. 444, 904 P.2d 1268, 1271–72 (1995); Dimeo v.
Burns, Brooks & McNeil, Inc., 6 Conn. App. 241, 504
A.2d 557, 559 (1986).
"That 
general 
duty 
of 
care 
excludes 
an
affirmative obligation to give advice regarding the
availability or sufficiency of coverage for several
persuasive reasons.  Some courts have reasoned that
insureds are in a better position to assess their
assets and the risk of loss to which they may be
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exposed.  See, e.g., Peter, 22 P.3d at 486; Sadler,
776 A.2d at 40; see also Annotation, Liability of
Insurer or Agent of Insurer for Failure to Advise
Insured as to Coverage Needs, 88 A.L.R.4th 249, 257
(1991) ('unrealistic to impose on an insurance agent
the ongoing duty of surveillance with respect to an
insured's 
constantly 
changing 
circumstances'). 
These courts have also noted that decisions
regarding the amount of insurance coverage are
personal and subjective, based upon a trade-off
between cost and risk.  See Peter, 22 P.3d at 486;
Sadler, 776 A.2d at 40.  An insurance agent is in no
better position than the insured to predict the
extent of damage that the insured might incur at
some time in the future.  See Sadler, 776 A.2d at
40; Murphy, 660 N.Y.S.2d 371, 682 N.E.2d at 976.
"Imposing liability on insurance agents for
failing to advise insureds regarding the sufficiency
of their insurance coverage would 'remove any burden
from the insured to take care of his or her own
financial needs and expectations in entering the
marketplace and choosing from the competitive
products available,' Nelson, 456 N.W.2d at 346, and
would convert agents into 'risk managers with
guarantor status.' Sadler, 776 A.2d at 40–41
(quotation omitted); see also Murphy, 660 N.Y.S.2d
371, 682 N.E.2d at 976.  Significantly, 'the
creation of a duty to advise could afford insureds
the opportunity to insure after the loss by merely
asserting they would have bought the additional
coverage had it been offered.' Nelson, 456 N.W.2d at
346. 'This would amount to retroactive insurance, a
concept that turns the entire theory of insurance on
its ear.' Peter, 22 P.3d at 486 (quotation
omitted)."
Sintros v. Hamon, 148 N.H. 478, 480–81, 810 A.2d 553, 555–56
(2002).  See, e.g., Peter v. Schumacher Enters., Inc., 22 P.3d
481, 486–87 (Alaska 2001); Harts v. Farmers Ins. Exch., 461
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Mich. 1, 9–11, 597 N.W.2d 47, 51–52 (1999); and Nelson v.
Davidson, 155 Wis. 2d 674, 681–82, 683-84, 456 N.W.2d 343,
346, 347 (1990).
Somnus appears to concede that an insurer has no general
duty to advise clients concerning the adequacy of their
insurance coverage.  Somnus insists, however, that an insurer
can voluntarily assume such a duty by offering advice to a
client about the level of insurance the client should
purchase.  As Somnus states in its reply brief:  "The issue
before this Court is ... whether once an agent does advise an
insured as to coverages and amounts of insurance to purchase,
and the insured follows such advice to its detriment, can the
agent/agency be liable if they were negligent in volunteering
such advice?"  Somnus's reply brief, p. 8.
There is no dispute that the general notion of voluntary
assumption of a duty can be applied to insurance companies and
agents.  
"No doubt, ... although a person may not owe a
duty to another, a duty can arise when that person
volunteers to act on behalf of another.  Berkel &
Co. Contractors, Inc. v. Providence Hospital, 454
So. 2d 496, 503 (Ala. 1983); Rudolph v. First
Southern Federal Savings & Loan Association, 414 So.
2d 64, 67 (Ala. 1982); Dailey v. City of Birmingham,
378 So. 2d 728, 729 (Ala. 1979).  This principle of
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law applies to insurance agents and insurance
companies.  See, e.g., Barnes v. Liberty Mutual
Insurance Co., 472 So. 2d 1041, 1042 (Ala. 1985);
United States Fidelity & Guar. Co. v. Jones, 356 So.
2d 596, 597–98 (Ala. 1978); Waldon v. Commercial
Bank, 50 Ala. App. 567, 281 So. 2d 279 (1973)."
Palomar Ins. Corp. v. Guthrie, 583 So. 2d 1304, 1306 (Ala.
1991).
However, in this case the questions are whether this
particular duty -- the duty to advise a client concerning the
adequacy of insurance coverage -- can be voluntarily assumed,
and, if so, what triggers such a duty?  Hilson and CGIA
observe that in its appellate brief Somnus failed to cite a
single case in which an Alabama court has concluded that an
insurer has voluntarily assumed such a duty.  In its reply
brief, Somnus attempts to respond to this point by quoting
from Highlands Underwriters Insurance Co. v. Elegante Inns,
Inc., 361 So. 2d 1060, 1065 (Ala. 1978):
"The law in regard to the duty that insurance
agents or brokers owe to their principals, the
insureds, is stated as follows:
"'... when an insurance agent or broker,
with a view to compensation, undertakes to
procure 
insurance 
for a client, 
and
unjustifiably or negligently fails to do
so, he becomes liable for any damage
resulting therefrom.  (See annotation at 29
A.L.R.2d 171.)'  Timmerman Ins. Agency,
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Inc., v. Miller, 285 Ala. 82, 85, 229 So.2d
475, 477 (1969).
"Once the parties have come to an agreement on
the procurement of insurance, the agent or broker
must exercise reasonable skill, care, and diligence
in effecting coverage.  Crump v. Geer Brothers,
Inc., 336 So. 2d 1091 (Ala. 1976); Waldon v.
Commercial Bank, 50 Ala. App. 567, 281 So. 2d 279
(1973).  When the agent or broker has failed in the
duty he assumes, the principal may sue either for
breach of the contract or, in tort, for breach of
the duty imposed on the agent or broker.  Waldon v.
Commercial Bank, supra."
(Emphasis added.)
The problem with using Highland Underwriters is that it
concerns a voluntary duty to procure requested insurance
coverage, not a voluntary duty to advise clients about the
adequacy of their insurance coverage.  Several Alabama cases
hold that if a client asks an insurance agent to procure a
particular type of insurance coverage, the agent can be held
liable for failing to fulfill that duty.  See, e.g., Alfa Life
Ins. Corp. v. Colza, 159 So. 3d 1240, 1248 (Ala. 2014).  That
is not the duty Somnus accuses Hilson and CGIA of breaching in
this case:  Somnus did not ask Hilson and CGIA to procure an
insurance 
policy 
that 
included 
business-income 
coverage, 
which
Hilson and CGIA ultimately failed to provide.  Instead, Somnus
alleges that Hilson proactively convinced Jones that Somnus
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did not need business-income coverage and Somnus therefore did
not purchase such coverage.  In short, procuring insurance
requested by a client and advising a client about all the
types of insurance coverage the client may possibly need are
two 
entirely 
different 
duties; 
therefore, 
Highland
Underwriters does not provide Somnus with legal authority for
establishing the existence of such a duty in Alabama.
Indeed, we have been unable to find any Alabama authority
holding that an insurer may voluntarily assume a duty to
advise a client regarding the adequacy of the client's
insurance coverage.  Moreover, to the extent that courts in
other jurisdictions have concluded that such a duty can be
voluntarily assumed, they have done so only in instances in
which the insurer misrepresented information the client could
not have known from reading the insurance policy or in which
a "special relationship" existed.  
One case relied upon by Somnus, Mladineo v. Schmidt, 52
So. 3d 1154 (Miss. 2010), summarized in the following quote
from Robichaux v. Nationwide Mutual Fire Insurance Co., 81 So.
3d 1030, 1040 (Miss. 2011), illustrates the instances in which
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a factual misrepresentation is made to the insured and not
clarified by the insurance policy:
"The plaintiffs in Mladineo were told by their agent
that they were not in a flood plain and were advised
not to procure flood insurance.  [Mladineo, 52 So.
3d at 1162].  That was incorrect, as a portion of
the plaintiffs' property was located in a flood
plain and was damaged by storm surge. Id. at 1157. 
This Court recognized that the plaintiffs could not
have known their property was located in a flood
plain by reading their policy; thus, even though
they were imputed with the knowledge of the policy's
contents, an issue of material fact existed as to
whether they detrimentally relied on their agent's
misrepresentation regarding their lack of need of
flood insurance."
Somnus has not alleged that Hilson misrepresented whether
Somnus 
qualified for 
business-income coverage; 
Jones 
was 
fully
aware in 2009 that business-income coverage was available. 
Somnus simply chose not to purchase such coverage because, it
alleges, Hilson told Jones: "I don't think you need it."  This
was not a misrepresentation as to coverage; at most, it was
Hilson's assessment of whether Somnus should purchase
insurance for an uncovered risk that was known to Somnus. 
Somnus has provided no authority for the proposition that 
Hilson and CGIA could voluntarily assume a duty to advise on
that basis.
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The other way some jurisdictions have concluded that an
insurance agent has voluntarily assumed a duty to advise a
client about the adequacy of coverage is if a "special
relationship" exists between the agent and the client.  The
criteria for how such a "special relationship" is formed vary
among the courts that have adopted this approach.
"It is more difficult to derive any absolute
rule from the caselaw as to the requirements of a
'special relationship.'  However, it is apparent
that 
something 
more 
than 
the 
standard
insured-insurer relationship is required in order to
create a special relationship obligating the insurer
to advise the policyholder concerning his or her
insurance coverage.  Bruner v. League General Ins.
Co., 164 Mich. App. 28, 416 N.W.2d 318 (1987).  Some
courts require an express agreement, or a long
established relationship of entrustment from which
it clearly appears the agent appreciated the duty of
giving advice, and compensation for consultation and
advice was received apart from the premiums paid by
the insured.  See, e.g., Sandbulte v. Farm Bureau
Mut. Ins. Co., 343 N.W.2d 457 (Iowa 1984); Gibson
[v. Government Emps. Ins. Co.], 162 Cal. App. 3d
[441,] at 448-49, 208 Cal. Rptr. 511 [(1984)];
Nowell v. Dawn-Leavitt Agency, Inc., 127 Ariz. 48,
617 P.2d 1164, 1168 (Ariz. App. 1980); Fleming v.
Torrey, 273 N.W.2d 169 (S.D. 1978).  Other courts
hold that a special relationship may be shown by an
insurance agent who holds himself or herself out as
being a highly-skilled insurance expert, coupled
with the insured's reliance on the expertise of the
agent to the insured's detriment.  See Hardt [v.
Brink], 192 F. Supp. [879,] at 881 [(1961)]."
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Nelson, 155 Wis. 2d at 683–84, 456 N.W.2d 343, 347 (emphasis
added).  See also Sintros v. Hamon, 148 N.H. 478, 481–82, 810
A.2d 553, 556 (2002) ("An insured can demonstrate a special
relationship by showing that there exists something more than
the standard insurer-insured relationship.  ...  Examples
include express agreement, 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.  ...  Some courts also
recognize a special relationship when the insured relies upon
an agent's offered expertise regarding a question of 
coverage,
or where there is a course of dealing over time putting the
agent on notice that his advice is being sought and relied
upon."); Harts v. Farmers Ins. Exch., 461 Mich. 1, 9–11, 597
N.W.2d 47, 51–52 (1999) (holding that the general rule of no-
duty changed and a special relationship exists "when (1) the
agent misrepresents the nature or extent of the coverage
offered or provided, (2) an ambiguous request is made that
requires a clarification, (3) an inquiry is made that may
require advice and the agent, though he need not, gives advice
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that is inaccurate, or (4) the agent assumes an additional
duty by either express agreement with or promise to the
insured." 
(footnotes 
omitted)); 
and 
Rawlings 
v. 
Fruhwirth, 
455
N.W.2d 574, 576–77 (N.D. 1990) ("[W]here an agent also holds
himself out as a consultant and counselor, he does have a duty
to advise the insured as to his insurance needs, particularly
where such needs have been brought to the agent's attention. 
And in so doing, he may be held to a higher standard of care
than that required of the ordinary agent since he is acting as
a specialist.").
Another case cited by Somnus, European Bakers, Ltd. v.
Holman, 177 Ga. App. 172, 338 S.E.2d 702 (1985), illustrates
a special relationship.  In Holman, the insured's agent
recommended a change in the form of business-interruption
coverage the insured had.  After the insured accepted the
change for its renewal of the policy, an explosion of an oven
caused an interruption in business production for 
the 
insured. 
It then became apparent that the insured was underinsured, a
situation that triggered a co-insurance penalty and resulted
in the insured receiving compensation for only 28 percent of
its loss.  The Georgia Court of Appeals concluded that the
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independent insurance agent was acting as the insured's agent
and that the agent must be held to a higher standard of care
because "[t]he uncontradicted evidence in this case is that
[the insured's agent] held himself out as an expert and
undertook to advise [the insured] on its insurance needs, and
that [the insured] relied on [the insured's agent] to do so." 
177 Ga. App. at 175, 338 S.E.2d at 705.
In contrast to Holman and similar cases, in this case
Somnus never demonstrated that a "special relationship"
existed between it and Hilson.  None of the characteristics
cited by courts for a "special relationship" was argued by
Somnus or was present in the record.  There was no express
agreement, nor was Hilson paid additional compensation to
provide advice about the adequacy of Somnus's insurance
coverage.  Somnus did not claim the existence of a long-
established relationship of entrustment.  There was no
evidence indicating that Hilson held himself out as an expert
and that Somnus justifiably relied upon that expertise.
In short, even if we were inclined to adopt the notion
from certain other jurisdictions that an insurance agent can
voluntarily assume a duty to advise a client concerning the
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adequacy of the client's insurance coverage, the types of
elements that trigger such a duty were not present in this
case.  At most, even viewing the evidence in the light most
favorable to Somnus, Hilson simply relayed information to
Jones that Somnus has never contended was false or misleading
-- that obtaining business-income coverage is difficult
because it is expensive and requires a great deal of
documentation -- and then he offered an opinion based upon
that information, i.e., "I don't think you need it."  It was
up to Jones to accept or reject that opinion, knowing Somnus's
finances and needs.  Indeed, Somnus never explains how Jones,
who had been operating a mattress business since 1981 and who
had previously suffered a fire loss to business property in
2006, could have justifiably relied upon Hilson's opinion even
if Hilson had a duty to advise Somnus about the adequacy of
its insurance coverage.
Based on the foregoing, we conclude that Hilson and CGIA
did not have a duty to advise Somnus concerning the adequacy
of its insurance coverage.  Without such a duty, as a matter
of law Somnus could not establish that Hilson and CGIA were
negligent in their actions.  Therefore, the circuit court did
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not err in entering a summary judgment in favor of Hilson and
CGIA.
IV.  Conclusion
Somnus failed to present substantial evidence creating a
genuine issue of material fact as to the advice Hilson gave
Jones in 2012 with respect to Somnus obtaining business-income
coverage.  Somnus also failed to establish that Hilson and
CGIA had voluntarily assumed a duty to advise Somnus
concerning 
the 
adequacy 
of 
its 
insurance 
coverage. 
Accordingly, the circuit court's summary judgment in favor of
Hilson and CGIA is due to be affirmed. 
AFFIRMED. 
Stuart, C.J., and Parker, Main, and Bryan, JJ., concur.
29