Opinion ID: 2206807
Heading Depth: 1
Heading Rank: 1

Heading: Myers' duty of care.

Text: The right of indemnity under such circumstances is clear: If one is compelled to pay sums which another ought to pay, he is entitled to indemnity. Sampson v. City of Cedar Falls, 231 N.W.2d 609, 618 (Iowa 1975); Rozmajze v. Northland Lines, 242 Iowa 1135, 1143, 49 N.W.2d 501, 506 (1951); 41 Am.Jur.2d Indemnity § 2, at 688 (1968); 42 C.J.S. Indemnity § 20, at 594-95 (1944). Although Hunter does not challenge the general right of an agent to indemnity under such circumstances, it claims Myers had breached a concomitant duty of disclosure, thus precluding its recovery. An agent is required to exercise such skill as is required to accomplish the object of his employment. If he fails to exercise reasonable care, diligence, and judgment under the circumstances, he is liable to his principal for any loss or damage resulting. See Collegiate Manufacturing Co. v. McDowell's Agency, Inc., 200 N.W.2d 854, 857 (Iowa 1972). Thus, [u]nless otherwise agreed, a paid agent is subject to a duty to the principal to act with standard care and with the skill which is standard in the locality for the kind of work which he is employed to perform and, in addition, to exercise any special skill that he has. Restatement (Second) of Agency, § 379(1), at 177 (1958). We believe there was substantial evidence, Iowa R.App.P. 14(f)(1), to support the trial court's finding there was no breach of duty by Myers. Evidence was presented that the standard of care for import brokers did not include a special duty to render advice to the importer unless requested to do so. Expert testimony showed such brokers are basically involved in drafting the necessary papers, arranging for the necessary bonds, and actual forwarding of the duty payment. There was no evidence of a request to advise Hunter on import law, nor was there any evidence Myers was advised that Hunter was new in the import business. Hunter contends, however, Myers had a special duty of disclosure to advise Hunter the five-percent figure was advisory or only an estimate. It claims the trial court erred in failing to recognize and apply such duty of care. The scope of an agent's duty to disclose is explained by the Restatement in this manner: Unless otherwise agreed, an agent is subject to a duty to use reasonable efforts to give his principal information which is relevant to affairs entrusted to him and which, as the agent has notice, the principal would desire to have and which can be communicated without violating a superior duty to a third person. Restatement, supra § 381, at 182. This standard requires that the agent have notice the principal would desire to have the relevant information. In this case there was evidence the open-ended nature of an initial duty assessment was widely known and understood by importers. Myers was never informed of the need to convey this information to Hunter which, it could reasonably presume, possessed the fundamental knowledge of an importer. Myers was never advised of Hunter's lack of experience in the business, nor was it aware of the problem in labeling the herbicide which caused the increase in the duty charged. Absent knowledge of Hunter's special need for advice and of the circumstances which might give rise to the additional importation fees, there was no special duty on Myers to advise Hunter of the tentative nature of the assessment. Accordingly, it was not error for the trial court to refuse to recognize such a duty.