Opinion ID: 1016881
Heading Depth: 2
Heading Rank: 1

Heading: The Existence of Fiduciary Duties

Text: Addressing the fiduciary duty arising from an implied agency relationship between Miller and Mannino and Reliance, the district court first explained that, under Maryland law, a broker can serve as an agent for both the insured (in procuring the insurance) and for the insurer (for the purposes of the delivering the policy and collecting the premiums). Neither Miller nor Mannino contest this basic principle. Applying that settled principle to the facts of record, the district court held that, notwithstanding the absence of an express agency agreement, Miller and Mannino were Reliance’s agents for the purpose of collecting premiums and remitting them to Reliance. Miller and Manning contend that, on this record, there were factual issues that had to be submitted to a jury to ascertain whether Miller and Mannino were the agents of Reliance. We agree with the district court that the undisputed facts demonstrate that, under settled Maryland law, Miller and Mannino were the agents of Reliance for the purpose of collecting premiums from Gunther and remitting them to Reliance. Accordingly, there was no need to submit that question to the jury. As to the fiduciary duty arising under Maryland’s insurance regulations, the district court relied upon the Code of Maryland Administrative Regulations (“COMAR”), Title 31, Subtitle 3. In particular, the district court concluded that, under relevant Maryland regulations, Miller and Mannino, in their capacity as 13 brokers, had fiduciary duties not to remove monies from premium trust accounts without the express permission of the insured and not to mingle premium monies with the funds of Hickman, Inc. In their statement of issues on appeal, Miller and Mannino did not challenge that ruling. However, in the substance of their brief, they assert that the district court erred in holding that those insurance regulations provided an independent basis for a fiduciary relationship between Miller and Mannino and Reliance. In making that argument, Miller and Mannino do not contend that the district court erred in finding that the Maryland regulations actually created fiduciary obligations the breach of which constitute constructive fraud. Instead, they argue that the regulations distinguish between agents and brokers, by making the agent a fiduciary only of the insurer and by making the broker a fiduciary of only the insured.6 The argument misses the point because it ignores § 10-127 of the Insurance Code which, along with the definitions set forth in § 10-101(i), makes the broker an agent of the insurer for purposes of collecting premiums. Md. Code Ann., 6 Mannino did not make this argument in the district court. Instead, she simply ignored the regulation contending that she, individually, could not be impressed with the fiduciary duties to Reliance because she did not agree to act as Reliance’s agent or form some contractual relationship with Reliance. Thus, as to Mannino we need not notice the regulatory argument here. Singleton v. Wulff, 428 U.S. 106, 120 (1976); Muth v. United States, 1 F.3d 246, 250 (4th Cir. 1993). However, the argument must be considered because Miller raised it below. 14 [Ins.] § 10-127, § 10-101(i). We find no error in the district court’s resolution of that issue.7