Court Opinion

ID: 1043481
Source: CourtListenerOpinion
Date Created: 2013-10-08 00:07:50.865581+00
Date Added: 2024-06-11T09:50:43.018740
License: Public Domain

2013 IL App (4th) 120986
                                                                                   FILED
                                                                                  October 7, 2013
                                          NO. 4-12-0986                            Carla Bender
                                                                               th
                                                                              4 District Appellate
                                   IN THE APPELLATE COURT                            Court, IL

                                           OF ILLINOIS

                                       FOURTH DISTRICT

STEVEN A. SKAPERDAS; VALERIE R. DAY; and                       )        Appeal from
JONATHAN JACKSON, a Minor, by Valerie Day, His                 )        Circuit Court of
Mother and Next Friend,                                        )        Champaign County
             Plaintiffs-Appellants,                            )        No. 11L121
             v.                                                )
COUNTRY CASUALTY INSURANCE COMPANY and                         )        Honorable
TOM LESSARIS,                                                  )        Jeffrey B. Ford,
             Defendants-Appellees.                             )        Judge Presiding.
______________________________________________________________________________

               PRESIDING JUSTICE STEIGMANN delivered the judgment of the court, with
opinion.
               Justices Appleton and Pope concurred in the judgment and opinion.

                                            OPINION

¶1             In March 2012, plaintiffs, Steven A. Skaperdas and Valerie R. Day (on behalf of

herself and as a representative of her son, Jonathan Jackson), sued defendants, Country Casualty

Insurance Company (Country Casualty) and Tom Lessaris, seeking, in pertinent part, (1) to

recover from Lessaris for his negligence in procuring insurance coverage from Country Casualty

on plaintiffs' behalf and (2) a declaration of insurance coverage. In April 2012, Lessaris filed a

motion to dismiss, arguing that he did not owe plaintiffs a duty of care in procuring insurance

coverage. Shortly thereafter, Country Casualty filed a motion to dismiss, arguing that if the trial

court determined that Lessaris cannot be liable to plaintiffs, Country Casualty could not be liable

to plaintiffs for negligence under the theory of respondeat superior.

¶2             Following a June 2012 hearing on defendants' motions to dismiss, the trial court
granted both motions. The court found that because Lessaris was an insurance "agent," rather

than an insurance "broker," he did not owe plaintiffs a duty of care in procuring insurance

coverage for them.

¶3             Plaintiffs appeal, arguing that the trial court erred by granting defendants' motions

to dismiss, given that under section 2-2201 of the Illinois Insurance Placement Liability Act (Act)

(735 ILCS 5/2-2201 (West 2010)), the insurance agent-broker dichotomy no longer exists for

purposes of duty of care. Because we agree that section 2-2201 of the Act eliminated the

common-law distinction between insurance agents and brokers for purposes of duty of care, we

reverse and remand for further proceedings.

¶4                                     I. BACKGROUND

¶5             From time to time in early 2008, Day drove vehicles owned by Skaperdas, her

boyfriend. Those vehicles were insured by Country Casualty. On February 5, 2008, Day was in

an accident in one of Skaperdas' vehicles. Although Day was not listed as an "additional driver"

on Skaperdas' Country Casualty auto-insurance policy, Country Casualty covered the loss, but

required Skaperdas to add Day to his insurance policy as an additional driver. Shortly thereafter,

Skaperdas had a conversation with Lessaris, an insurance agent representing Country Casualty,

about adding Day and Jackson, Day's son, to his auto-insurance policy.

¶6             Effective February 14, 2009, Skaperdas purchased a Country Casualty auto-

insurance policy through Lessaris. The declarations page ("deck" page) for that policy listed only

Skaperdas as a named insured. The "deck" page identified the driver, however, as a "FEMALE,

30-64."

¶7             In July 2009, Jackson was seriously injured when he was struck by a vehicle while

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he was on his bicycle. Day and Jackson sued the driver's insurance company and reached a

settlement for the insured's policy limits of $25,000, an amount that was insufficient to fully

compensate them for their losses. Shortly thereafter, plaintiffs made a claim for underinsured

motorist benefits under the February 14, 2009, policy Skaperdas purchased from Country

Casualty through Lessaris. Country Casualty denied the claim on the grounds that neither Day

nor Jackson was listed as a named insured on that policy.

¶8             In March 2012, plaintiffs sued defendants, seeking, in pertinent part, (1) to

recover from Lessaris for his negligence in procuring insurance coverage from Country Casualty

on plaintiffs' behalf and (2) a declaration of insurance coverage. In April 2012, Lessaris filed a

motion to dismiss under section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619

(West 2010)), arguing that he did not owe plaintiffs a duty of care in procuring insurance

coverage. Shortly thereafter, Country Casualty filed its own motion to dismiss under section 2-

619 of the Code, arguing that if the trial court determined that Lessaris was not liable to

plaintiffs, Country Casualty could not be liable to plaintiffs for negligence under the theory of

respondeat superior.

¶9             Following a June 2012 hearing on defendants' motions to dismiss, the trial court

granted both motions. The court found that because Lessaris was an insurance "agent," rather

than an insurance "broker," he did not owe plaintiffs a duty of care in procuring insurance

coverage for them.

¶ 10           This appeal followed.

¶ 11                                      II. ANALYSIS

¶ 12           Plaintiffs argue that the trial court erred by granting defendants' motions to

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dismiss, given that under section 2-2201 of the Act (735 ILCS 5/2-2201 (West 2010)) the

insurance agent-broker dichotomy no longer exists for purposes of duty of care. For the reasons

that follow, we agree.

¶ 13                  A. Statutory Interpretation and the Standard of Review

¶ 14           Plaintiffs' argument in this case hinges on the interpretation of section 2-2201 of

the Act. A reviewing court's goal when endeavoring to interpret a statute is to ascertain the

legislature's intent. People v. Giraud, 2012 IL 113116, ¶ 6, 980 N.E.2d 1107. The most reliable

indicator of that intent is the statutory language itself. Id. When the language of the statute is

clear and unambiguous, we apply it as written, without resort to extrinsic aids to statutory

construction. Id. We will not depart from the plain language of the statute by reading into it

exceptions, limitations, or conditions that conflict with the expressed intent. Id. Because this

appeal is taken from a motion to dismiss, our review is de novo. Phoenix Insurance Co. v.

Rosen, 242 Ill. 2d 48, 54, 949 N.E.2d 639, 644 (2011).

¶ 15                     B. The Pertinent Portion of Section 2-2201 of the Act

¶ 16           Section 2-2201(a) of the Act states as follows:

               "An insurance producer, registered firm, and limited insurance

               representative shall exercise ordinary care and skill in renewing,

               procuring, binding, or placing the coverage requested by the

               insured or proposed insured." 735 ILCS 5/2-2201(a) (West 2008).

¶ 17            C. This Court's Decision in Country Mutual Insurance Co. v. Carr

¶ 18           In July 2006, this court construed section 2-2201 of the Act as placing a duty on

insurance producers, including brokers and agents, to act with ordinary care in procuring

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insurance for insureds. Country Mutual Insurance Co. v. Carr, 366 Ill. App. 3d 758, 766, 852

N.E.2d 907, 914 (2006). In November 2006, the Illinois Supreme Court granted Country

Mutual's petition for leave to appeal. Following a subsequent settlement between the parties, the

supreme court vacated this court's judgment in Carr. In re Country Mutual Insurance Co., No.

103463 (Ill. Sept. 26, 2007 (supervisory order)). Although the supreme court vacated this court's

judgment in Carr because Carr's third-party claim was rendered moot, the analysis from that case

is sound. Accordingly, we adopt it.

¶ 19           In Carr, Steve Carr, d/b/a Carr Construction, purchased a commercial general

liability insurance policy issued by Country Mutual from Harold Volgelzang. After Carr

purchased the policy, he was sued for alleged damage to a home he constructed. Carr filed a

claim with Country Mutual for defense of the lawsuit. Country Mutual responded by filing a

declaratory-judgment action, asserting that it owed no duty to indemnify or defend Carr because

the cause of the alleged property damage was excluded from his policy.

¶ 20           In May 2005, Carr sued Vogelzang, positing, in pertinent part, that Vogelzang

breached the statutory duty to provide ordinary care in selling and procuring insurance under

section 2-2201 of the Act (735 ILCS 5/2-2201 (West 1998)). In August 2005, the trial court

dismissed Carr's lawsuit against Vogelzang, finding that as an agent of Country Mutual,

Vogelzang owed Carr no duty under the Act.

¶ 21           Carr appealed, arguing that although the common law did not recognize a duty

between an insurance agent and an insured, the legislature created a statutory duty in section 2-

2201 of the Act, which required an insurance agent to act with ordinary care when procuring

insurance policies for his customers. We agreed with Carr, explaining our rationale as follows:

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        "Section 2-2201 does not define 'insurance producer.' The

term, however, is defined by the Illinois Insurance Code as 'a

person required to be licensed under the laws of this State to sell,

solicit, or negotiate insurance.' 215 ILCS 5/500-10 (West 2002).

        A plain reading of the statute, combined with section 500-

10, is that any 'person required to be licensed * * * to sell, solicit,

or negotiate insurance' had a duty to 'exercise ordinary care' in

procuring insurance. We find no distinction in either of these

sections between an insurance agent or an insurance broker.

                                 ***

        Further supporting Carr's argument section 2-2201(a)

creates a duty of care for insurance agents are the sections that

follow. Section 2-2201(d) anticipates negligence actions against

'insurance producers':

                '(d) While limiting the scope of liability of

        an insurance producer, * * * the provisions of this

        [s]ection do not limit or release an insurance

        producer * * * from liability for negligence

        concerning the sale, placement, procurement,

        renewal, binding, cancellation of, or failure to

        procure any policy of insurance.' 735 ILCS

        5/2–2201(d) (West 1998).

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In addition, section 2-2201(b) removes the common-law basis for

distinguishing between insurance brokers, who owed a fiduciary

duty to their customers (see Kanter v. Deitelbaum, 271 Ill. App. 3d

750, 755, 648 N.E.2d 1137, 1140 (1995)), and insurance agents,

who owed the fiduciary duty to the insurers (see Economy Fire &

Casualty Co. v. Bassett, 170 Ill. App. 3d 765, 771, 525 N.E.2d 539,

543 (1988)), by barring breach-of-fiduciary-duty claims against

insurance producers:

                'No cause of action brought by any person or

       entity against any insurance producer ***

       concerning the sale, placement, procurement,

       renewal, binding, cancellation of, or failure to

       procure any policy of insurance shall subject the

       insurance producer *** to civil liability under

       standards governing the conduct of a fiduciary or a

       fiduciary relationship except when the conduct upon

       which the cause of action is based involves the

       wrongful retention or misappropriation by the

       insurance producer *** of any money that was

       received as premiums, as a premium deposit, or as

       payment of a claim.' 735 ILCS 5/2–2201(b) (West

       1998).

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                       Accordingly, we hold section 2-2201(a) places a duty on

               insurance producers, including brokers and agents, to act with

               ordinary care in procuring insurance for insureds." Carr, 366 Ill.

               App. 3d at 764-66, 852 N.E.2d at 912-14 (judgment vacated on

               motion of the supreme court following the parties' settlement).

¶ 22                                   D. Carr and This Case

¶ 23           As previously stated, we view the analysis from Carr as sound and continue to

adhere to it. Although the supreme court vacated Carr, it did so because Carr's third-party claim

was rendered moot due to the parties' settlement, not because this court's interpretation of section

2-2201 of the Act was somehow misguided. A plain reading of section 2-2201 of the Act,

combined with section 500-10 of the Illinois Insurance Code, is that any person required to be

licensed to sell, solicit, or negotiate insurance has a duty to exercise ordinary care in procuring

insurance. We continue to find no distinction in either of these sections between an insurance

agent or an insurance broker, a position that we note is generally accepted. See Couch on

Insurance 3d § 46.49 (2011) ("An agent or broker is liable to his or her principal if by his or her

fault or neglect the agent or broker fails to procure or renew insurance as the agent or broker had

contracted to do, and as a result of the want of insurance, the principal suffers a loss. Liability

exists for breach of contract or for a tort in negligently failing to perform a duty imposed by the

contract.").

¶ 24           Accordingly, we reverse the trial court's decision to grant defendants' motions to

dismiss based upon its finding that because Lessaris was an insurance "agent," rather than an

insurance "broker," he did not owe plaintiffs a duty of care in procuring insurance coverage for

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them.

¶ 25                                  III. CONCLUSION

¶ 26          For the reasons stated, we reverse the trial court's judgment and remand for further

proceedings not inconsistent with our opinion.

¶ 27          Reversed and remanded.

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