Opinion ID: 2604080
Heading Depth: 1
Heading Rank: 14

Heading: Hoiness' Negligence:

Text: We also agree with the trial court that Hoiness breached its agreement with Nielsen to obtain a payment bond for the project. On appeal, Julien asserts that the trial court also should have found that Hoiness was negligent in failing to obtain the proper coverage under a payment bond for Nielsen as principal and Julien as a third-party beneficiary. Under the negligence theory, Julien asserts that it is entitled to recovery of its costs and attorney's fees from Hoiness, a claim which under the breach of contract finding, the trial court denied. This court has held: The law is clear that a broker or agent who, with a view to compensation for his services, undertakes to procure insurance for another and through fault or neglect fails to do so, will be held liable for any damage resulting. His liability arises under the concept that he is agent for the insured in negotiating for a policy and owes a duty to his principal to exercise reasonable skill, care and diligence in causing the issuance of a policy. His liability may arise either for breach of contract or negligent default in the performance of a duty imposed by contract, at the election of his client. Hursh Agency, Inc. v. Wigwam Homes, Inc., supra, 664 P.2d at 32. Courts in other jurisdictions have held that not only the principal, but also a third-party beneficiary under the insurance policy is entitled to maintain an action against the agent for breach of his duty to procure the appropriate coverage. Sturcke v. Clark, La. App., 261 So.2d 717 (1971), app. denied 262 La. 309, 263 So.2d 47 (1972); Rider v. Lynch, 42 N.J. 465, 201 A.2d 561 (1964). We agree with those courts, and hold that Julien, as a third-party beneficiary of Hoiness' agreement to obtain the bond for Nielsen, is entitled to maintain an action against Hoiness for breach of contract and for negligence. In Count I of Julien's amended complaint against Hoiness, Julien asserts the breach-of-contract claim. In Count II, Julien asserts a negligence claim. The trial court granted judgment for Julien on the breach-of-contract claim, but did not determine Julien's claim against Hoiness for negligence in perhaps viewing that negligence claim as duplicative. While we do not intimate that Julien could be entitled to recover twice for Hoiness' failure to procure the bond for Nielsen, we do recognize the validity of a negligence claim under the unquestioned facts. On that basis, we conclude that Julien, in recognition of the negligence of Hoiness, should be granted attorney's fees as the natural and proximate result as injury from the negligent omission. Absence of the payment bond precipitated the litigation and incurrence of attorney's fees to pursue repayment by suing Allied and Nielsen. We do not necessarily say here nor decide that the right would have occurred if the initial litigation had only involved Hoiness. See Annot., 45 A.L.R.2d 1183. See also, Safway Rental & Sales Co. v. Albina Engine & Machine Works, Inc., 343 F.2d 129 (10th Cir.1965); Hursh Agency v. Wigwam Homes, Inc., supra; Kvenild v. Taylor, Wyo., 594 P.2d 972 (1979); Brem v. United States Fidelity & Guaranty Co., D.C.App., 206 A.2d 404 (1965); Griffin v. Bredouw, Okla., 420 P.2d 546 (1966). Cf. L.F. Pace & Sons, Inc. v. Travelers Indemnity Co., 9 Conn. App. 30, 514 A.2d 766, certification denied 201 Conn. 811, 516 A.2d 886 (1986) (attorney's fees included in the punitive-damages award). In this case, where negligent failure to provide the agreed bond coverage invoked litigation with the surety and the subcontractor, we find the damages proximately resulting properly include attorney's fees incurred.