Opinion ID: 2622237
Heading Depth: 2
Heading Rank: 2

Heading: did youngblood reasonably rely on the agent's misrepresentations

Text: ¶ 32 Having established that an agent made material misrepresentations regarding the policy's coverage, a plaintiff must next demonstrate that he acted prudently and reasonably relied on those misrepresentations. [17] When a party knows or should have known reliance would be in error, the party cannot reasonably rely on the misrepresentation as a matter of law. In this case, the question is whether Youngblood should have known that reliance would be in error. ¶ 33 Under our caselaw, `[a] party claiming an estoppel cannot rely on representations or acts if they are contrary to his knowledge of the truth or if he had the means by which with reasonable diligence he could ascertain the truth.' [18] Youngblood argues that because we have not previously dealt with this particular fact pattern  an agent making oral misrepresentations upon which an insured relied in purchasing his policy  our estoppel analysis should allow more leniency to the insured in his reliance, given the nature of insurance agents and insurance contracts. [19] Although we are sympathetic toward those who rely on an agent's misrepresentations, recovery can be permitted only when that reliance is reasonable. To do otherwise would allow too much room for sympathy, passion, and error, and drastically diminish the predictability needed by insureds and insurers in the marketplace. ¶ 34 On the other hand, the determination of reasonableness is not based on the subjective state of mind of the person claiming he was misled, but rather is to be based on an objective test, i.e., what would a reasonable person conclude under these circumstances. [20] This reasonable person standard, known for centuries in the law, is the safest way to protect those who would be unduly taken advantage of, be it insured or insurer. ¶ 35 Reliance upon an agent's material misrepresentations regarding coverage may or may not be reasonable, depending upon the facts of the individual case. The policy of the law is not only to protect consumers from fraudulent sales and from agents who misrepresent provisions to make a sale, but also to deter unscrupulous insureds from fabricating agent's statements in order to receive additional coverage or benefits after an injury has occurred. ¶ 36 The law holds insurance agents to accurately representing policy provisions and honestly answering consumer questions. Agents who are not trained to act with complete honesty and integrity in their interactions with consumers, or who simply refuse to do so, place themselves and their principals at risk. The law will hold both principal and agent liable for misrepresentations upon which consumers reasonably rely. ¶ 37 Correspondingly, insurance purchasers fail to make the effort to read and understand the content of their insurance policies at their peril. When the language is clear, direct, understandable to ordinary people, and complete, it will be more difficult to prove reasonable reliance on contrary oral promises. On the other hand, when the language is unintelligible, incomplete, or simply too complex to be understood by persons of reasonable intelligence, reliance on an agent's plain language explanations and representations of what the policy covers becomes easier to establish. In addition, the reasonableness of reliance may be affected by the ease, or lack of it, that confronts a person of ordinary intelligence in discovering the whereabouts of otherwise clear, direct, and understandable terms within an insurance contract. A conclusion that an insurance contract term is unambiguous, while certainly relevant to the issue of whether reliance on a contradictory representation is reasonable, is not the end of the inquiry. A perfectly clear insurance term is of no use if it cannot be located. ¶ 38 In this case, the question of whether or not Youngblood's reliance on the agent's misrepresentations of the scope of coverage under the policy was reasonable is unresolved. It is one of fact. Youngblood may not recover under the doctrine of estoppel if his reliance on the agent's statements was not reasonable. A material question of fact remains to be resolved by the trier of fact, and we therefore remand for proceedings consistent with this opinion.