Court Opinion

ID: 9531121
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:07:43.323066+00
Date Added: 2024-06-11T13:28:21.052338
License: Public Domain

JUSTICE TRAPP, dissenting: I must dissent from the principal opinion in its conclusion that the transactions between plaintiff and defendant were such that the former became a fiduciary as a subagent for the latter, and that the failure to invoke the “relief clause” constituted a breach of a fiduciary duty. It is agreed that by statutory definition defendant was a broker with the insured as his principal, and that by the same measure, plaintiff was an agent with the insuring company as its principal. The opinion points to the “potential for conflict” but without citation of authority transforms the plaintiff, an agent of the insurer, into a contemporaneous subagent of the defendant, a broker. Such result is fairly characterized as contrary to clearly defined dichotomy stated in section 490 of the Illinois Insurance Code (Ill. Rev. Stat. 1979, ch. 73, par. 1065.37) as quoted in the principal opinion. In City of Chicago v. Barnett (1949), 404 Ill. 136, 88 N.E.2d 477, the issue was whether or not the city could constitutionally include an insurance broker within the generic class of “broker” for purposes of imposing a license requirement. In its rationale the court had occasion to consider the obligations and the powers of a “broker,” both genetically and in the field of insurance. The opinion noted that occasionally a broker is declared by statute, as presently in Illinois, to be an agent of the insurer for certain purposes. The opinion quoted dictionary statements that in limited instances a broker may be the agent of both parties in the execution of acts but only when the “bargain or contract has been definitely settled, * * One finds no comparable modification of the obligations and powers of an agent. Having created a fiduciary relationship between the agent of the insurer and the broker, the majority opinion finds a duty of the agent to invoke the “relief clause” for the benefit of the broker, and concludes that because plaintiff failed to invoke such clause for such benefit he committed a breach of the fiduciary duty. This result is rationalized only by saying that the agent’s placing of the broker’s application for a policy for the insured transforms the former into an agent or subagent of the broker. Such reasoning would require the conclusion that where an insurance agent, as statutorily defined, procures an insurance policy for an applicant insured he thereupon becomes the agent of that insured. It is stated that this is a reasonable result for the reason that the insurer has provided for the “relief clause” in its contract with its agent and has agreed to relieve the agent. One finds no language in that contract as heretofore set out which suggests that there is any third-party beneficiary implication in the contract. It is apparent that as between plaintiff, an agent for the insurer, and defendant, a broker for the insured, the plaintiff would clearly violate the obligation of an agent to his principal in releasing any possible liability of the broker. While there is conflicting testimony as to whether defendant advised plaintiff of the default or requested the exercise of the “relief clause,” that question is of no relevance where there is an obvious conflict of interest in the respective representative capacities of the parties. I would hold that there is no duty in plaintiff to either invoke the clause or to accede to defendant’s request to do so. The trial court found that, as a matter of law, there was a breach of duty as a fiduciary which bars recovery by the plaintiff. This court affirms but chooses a different reason for imposing a fiduciary obligation. Thus, the record does not disclose whether or not other facts created any contractual obligations between these parties. For these reasons, I would reverse the judgment of the trial court and remand for further proceedings.