Opinion ID: 2319126
Heading Depth: 1
Heading Rank: 1

Heading: Claims against INA

Text: Kenney also sought to hold INA, the underwriter of its policy on the Fleetwing, liable for the alleged negligence and breach of contract of its agent Starkweather. The only relevant fact we need consider in order to dispose of the claim against INA is that Starkweather was not authorized by INA to extend commitments for offshore policies relating to extraterritorial travel without first conferring with INA's underwriters. At the close of the evidence at trial, INA made a motion for a directed verdict, which the trial justice granted. Kenney appeals the granting of that motion, claiming that under the holding of Cardente v. Maggiacomo Insurance Agency, Inc., 108 R.I. 71, 272 A.2d 155 (1971), INA is bound by and liable for the acts of its agent here, Starkweather. In Cardente we held that an agent acting on behalf of a disclosed principal is not personally liable to a third party for acts performed within the scope of his authority. Id. at 73, 272 A.2d at 156. Stated another way, a disclosed principal is liable to a third party for the authorized acts of its agent. We reaffirm this fundamental principle of agency law but hold that it has no application to the case at hand. First, we have determined above that Starkweather had no duty toward and is not liable to Kenney, and consequently there is no liability stemming from Starkweather's acts as INA's agent that can be imputed to INA. Second, and more fundamental, the Cardente rule comes into play only when an agent performs acts within the scope of his or her authority. Unauthorized acts do not trigger application of the rule. We conclude that Starkweather was a soliciting agent in respect to this type of insurance, which status authorized Starkweather to procure applications and collect premiums but not to accept risks or to agree upon and settle terms. 16 John Appleman and Jean Appleman, Insurance Law and Practice, § 8696 at 274 (1981). Accepting a risk, for example, by extending a commitment for coverage for an extraterritorial race to Bermuda, would be an unauthorized act that could not subject INA to liability under the Cardente rule. For the foregoing reasons we hold that INA is not liable to Kenney, and therefore, the trial justice properly granted INA's motion for a directed verdict. For the reasons stated, the appeal of the defendant Starkweather is sustained and the judgment in favor of Kenney is vacated. The conditional appeal of the plaintiff Kenney from the entry of a directed verdict in favor of INA is denied and dismissed. The papers of this case are remanded to the Superior Court with directions to enter judgment in favor of Starkweather.