Opinion ID: 1816029
Heading Depth: 1
Heading Rank: 1

Heading: Was Hansen appellant's agent so as to make a mistake by him attributable to appellant?

Text: Hansen acted as broker in obtaining the Great Lakes endorsement on behalf of Gilbert. The endorsement was issued through the W. R. Gustin Agency. Although the appellant had an agency agreement with the Gustin Agency, it did not have one with Hansen. We are of the opinion that the trial court correctly ruled that Hansen was an agent of appellant by virtue of sec. 209.047, Stats., and, therefore, any error by Hansen was sufficient to support a judgment reforming the insurance contract. Sec. 209.047, Stats., provides in part: Every person who solicits, negotiates or effects insurance of any kind, ... on behalf of any insurance company, ... or person desiring insurance, or transmits an application for a policy of insurance ... other than for himself, to and from any such company, or who makes or proposes to make any contract for insurance, ... or who collects any premium, ... for insurance ... or in any manner aids or assists in doing either, or in transacting any business of like nature for any insurance company, ... shall be held to be an agent of such insurer to all intents and purposes, unless it can be shown that he receives no compensation for such services.... As insurance broker, Hansen, assisted in negotiating and effecting the endorsement. He transmitted the application for the endorsement to appellant through the Gustin Agency. He was to bill for the premium and was to share in the commission. Therefore, Hansen was appellant's agent as defined in sec. 209.047. Appellant argues, however, that an insurance broker is a dual agent and, notwithstanding the provisions of sec. 209.047, Stats., for the purpose of obtaining the Great Lakes endorsement, Hansen was the agent of Gilbert and not United States Fire Insurance Company. Appellant cites John R. Davis Lumber Co. v. Hartford Fire Ins. Co. (1897), 95 Wis. 226, 70 N. W. 84; Wisconsin Central Ry. Co. v. Phoenix Ins. Co. (1904), 123 Wis. 313, 101 N. W. 703; and Hause v. Schesel (1969), 42 Wis. 2d 628, 167 N. W. 2d 421, for the proposition that a broker is the agent of the insured in procuring new coverage. In John R. Davis Lumber Co. and Wisconsin Central Ry. Co. Cases, supra, this court recognized that an insurance broker may be an agent for both the insured and the insurer. However, in neither case did the court hold that the broker is exclusively the agent of the insured in procuring or extending insurance coverage. In Wisconsin Central Ry. Co., supra, the court expressly stated that under sec. 1977, Statutes of 1898, the predecessor of the present sec. 209.047, Stats., an insurance broker who procures insurance through another agent is an agent of the insurer. ... An insurance agent may be the agent of the assured in procuring insurance, if his duties as such agent do not conflict with his duties as agent of the insurance company, under sec. 1977, Stats. 1898; but when a conflict of duties arises his authority to act for the assured must yield to that imposed by this statute.... The facts [in Body v. Hartford Ins. Co. 63 Wis. 157, 23 N. W. 132] correspond to those of the instant case as to the manner of procuring insurance through an agent applying to another agency to write it. There, as here, the application was made to an agency, which placed the insurance through another, without a direction from the assured to the latter. Under such circumstances the agency receiving the order from the assured are, under sec. 1977, Stats. 1898, the agents of the insurance company issuing the insurance.... Wisconsin Central Ry. Co. v. Phoenix Ins. Co., supra, pages 316, 317. In Hause v. Schesel, supra , this court held that an insured has no cause of action against the insurer on the policy where he has established a cause of action against the agent for breach of an oral agreement to provide insurance, such causes of action being fatally inconsistent. That decision has no bearing on whether a broker in procuring insurance is an agent of the insurer. The facts in the present case are similar to those in Pouwels v. Cheese Makers Mut. Casualty Co. (1949), 255 Wis. 101, 37 N. W. 2d 869. In that case the court held an independent insurance agent who brokered insurance through an agency having a direct agency relationship with the insurer was an agent of the insurer by virtue of sec. 209.05, Stats. 1947, which is substantially the same as the present sec. 209.047. The court held that reformation was a proper remedy where the insurance contract failed to provide the coverage intended due to a mistake of the independent broker. In Trible v. Tower Ins. Co. (1969), 43 Wis. 2d 172, 181, 168 N. W. 2d 148, this court stated that a mistake made by an independent insurance agent in applying for an insurance policy is attributable to the insurer by virtue of sec. 209.047, Stats. Once the insurance company in Wisconsin accepts the application from an independent agent, it is not permitted to deny that the insurance agency was acting as its agent in taking the application. [citing sec. 209.047, Stats.] And in Artmar, Inc. v. United Fire & Casualty Co. (1967), 34 Wis. 2d 181, 148 N. W. 2d 641, 151 N. W. 2d 289, this court held that an insurance policy may be reformed where the insured informs the agent of the coverage needed, but due to the fault or neglect of the agent, the policy does not provide the coverage necessary to protect the interests of the insured.