Court Opinion

ID: 2964671
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:29:13.002639+00
Date Added: 2024-06-11T15:02:03.501569
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                            UNITED STATES COURT OF APPEALS

                                FOR THE FIRST CIRCUIT
                                FOR THE FIRST CIRCUIT

                                 ____________________

        No. 96-2220

                         CAROLINA CASUALTY INSURANCE COMPANY,

                                Plaintiff, Appellant,

                                          v.

                              THE CUMMINGS AGENCY, INC.,

                                 Defendant, Appellee.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                              FOR THE DISTRICT OF MAINE

                     [Hon. D. Brock Hornby, U.S. District Judge]
                                            ___________________

                                 ____________________

                                        Before

                                Boudin, Circuit Judge,
                                        _____________

                            Aldrich, Senior Circuit Judge,
                                     ____________________

                              and Lynch, Circuit Judge.
                                         _____________

                                 ____________________

            Robert  W.  Kline with  whom  Lisa  M.  Fitzgibbon  and Kline  Law
            _________________             ____________________      __________
        Offices were on brief for appellant.
        _______
            Wendell G. Large with whom John  B. Lucy and Richardson,  Whitman,
            ________________           _____________     _____________________
        Large & Badger were on brief for appellee.
        ______________

                                 ____________________

                                    April 7, 1997
                                 ____________________

                      ALDRICH, Senior Circuit  Judge.  After  eliminating
                               _____________________

            irrelevancies,   unsupported   statements   and,   unhappily,

            misstatements, a  core remains  that requires us  to consider

            whether  there was  error  in the  district court's  granting

            summary judgment  for the  defendant.   On this  appeal,1 the

            basic facts are these.

                      Plaintiff    Carolina   Casualty    Insurance   Co.

            ("Carolina"), a transportation specialist, wrote  a liability

            policy  on Geary  and Judith  Bonville, d/b/a  Bonville Farms

            ("Bonville  Farms").   Subsequently,  while a  Bonville Farms

            truck was carrying crushed (scrap) cars the load shifted, and

            for  the  resulting  accident  Carolina was  obliged  to  pay

            $750,000  in  damages.   It  sues The  Cummings  Agency, Inc.

            ("Cummings")  for having  "produced" the  policy, negligently

            failing to identify that Bonville Farms carried scrap cars --

            a higher risk and an undertaking that Carolina would not have

            accepted.  The application,  on Carolina's form, as submitted

            to its general agency for Maine, Surplex Underwriters, Inc. -

            -  who  investigated Bonville  Farm and  approved --  read as

            follows:   "Type of  Cargo Carried:   (Be specific)  Produce,

            Potatoes, Potash  (bagged) and  Lumber."   It could  be found

            that  Cummings  had completed  the  application  for Bonville

            Farms' signature.   Even in  this court Carolina  claims that

                                
            ____________________

            1.  There is  no merit in  defendant's claim that  the appeal
            was  filed too late.   See Lopez v.  Corporacion Azucarera de
                                   ___ _____     ________________________
            Puerto Rico, 938 F.2d 1510, 1514 (1st Cir. 1991).
            ___________

                                         -2-

            Cummings signed, too.   Very conspicuously,  it did not;  nor

            was its signature requested.   Cummings' name simply appeared

            as the "Non-Licensed Producer."  Carolina maintains, however,

            that Cummings "knew or should have known" of Bonville  Farms'

            scrap car operation  and should have reported  it.  Obviously

            this assumes a  duty to inform.   The  court ruled there  was

            none.  We affirm.

                      In order to  defeat summary judgment, Carolina  was

            required to  come forward with  an affirmative showing.   See
                                                                      ___

            Wightman v. Springfield Terminal Ry., 100  F.3d 228, 230 (1st
            ________    ________________________

            Cir.  1996); Fed.  R. Civ.  P. 56(c).   It  showed none  with

            respect to a producer's duty.  The court stated it knew of no

            special meaning  for the term producer.   Nor do we.   In the

            absence of evidence,  we equate  it with broker.   A  broker,

            under the Maine  statute, is  "any person who,  not being  an

            agent of the insurer,  as an independent contractor solicits,

            negotiates, or procures insurance or annuity contracts or the

            renewal  or continuation  thereof  on behalf  of insureds  or

            prospective  insureds other  than himself."   Me.  Rev. Stat.

            Ann.  tit. 24-A,    1506.   This  means  no duty  toward  the

            insurer,  see Giberson v. York County Mut. Fire Ins. Co., 142
                      ___ ________    ______________________________

            A. 481 (Me. 1928), 127 Me. 182, 185 (1928); cf. 3 Lee R. Russ
                                                        ___

            & Thomas  F. Segalla,  Couch on  Insurance 3d    45:4 (1995),
                                   ______________________

                                         -3-

            witha heavy burden on Carolinato make a special showing here.

                      As  there  was  no  independent  writing   on  this

            subject,  nor evidence of a  trade practice,2 we  turn to the

            application.   Over  the "Applicant's  Signature" line  it is

            stated that  the applicant  "represents that the  information

            above is true."  As noted ante, the  "Non-Licensed Producer,"
                                      ____

            elsewhere identified as  the applicant's "agent,"  represents

            nothing.

                      We ask a simple question.  If the producer is to be

            taken as making a  representation, why is not this  the place

            to ask him to make it?  The implication speaks loudly.

                      Viewed independently, what  are the  practicalities

            of Carolina's  contention?  How can a broker afford to make a

            study in depth of every customer, to the extent that, in case

            of loss, he is  accountable for what he "should  have known,"

            not   only  about   the  customer,   but  of   the  insurer's

            underwriting  standards?     Correspondingly,  no   insurance

            company is going to depend upon the ability (and industry) of

            every, non-licensed by it,  broker.  Plaintiff here  did not;

            it followed its usual  custom and commissioned an independent

            investigation.  This makes business sense, both ways.

                                
            ____________________

            2.  It  does appear  that Cummings  received from  Carolina a
            share  of   the  premium,   manifestly  payment  for   having
            "produced"  the insured, but it assumes the point to say that
            this activity implied any specific obligations.  See 3 Lee R.
                                                             ___
            Russ  &  Thomas F.  Segalla,  Couch  on  Insurance 3d    45:4
                                          _______________________
            (1995).

                                         -4-

                      At   the  same   time,  might   there  not   be  an

            intermediate ground?   Suppose a broker  actually knows facts

            about his customer that he knows would make him unacceptable,

            and  knows  that  the  would-be  insured  is  filing  a false

            application.  Should not  the insurer have a right  to expect

            good  faith?  If some  of the hearsay  proffers Carolina made

            here could be broadly accepted, it might have made out a case

            of fraud.   See   Giberson, ante.   We need  not reach  this,
                        ___   ________  ____

            however.  Carolina's brief  expressly disclaims making such a

            claim.

                      Carolina  has  failed  to  produce   evidence  that

            Cummings' status gave  rise to any duty.   Therefore Cummings

            is  entitled  to  summary  judgment.    The  decision  of the

            district court is Affirmed.
                              ________

                                         -5-