Court Opinion

ID: 4249720
Source: CourtListenerOpinion
Date Created: 2018-02-28 21:20:41.591635+00
Date Added: 2024-06-11T14:44:06.350808
License: Public Domain

IN THE SUPREME COURT OF IOWA
                              No. 08–0778

                        Filed December 30, 2010

DENNIS LANGWITH and BEN LANGWITH, Individuals,

      Appellants,

vs.

AMERICAN NATIONAL GENERAL INSURANCE COMPANY, a
Corporation; AMERICAN NATIONAL PROPERTY AND CASUALTY CO.,
a Corporation; and JANET FITZGERALD, Individually and d/b/a
AMERICAN NATIONAL JANET FITZGERALD INSURANCE SERVICES,

      Appellees.

      Appeal from the Iowa District Court for Polk County, Karen A.

Romano, Judge.

      Plaintiffs appeal dismissal of their negligence claims against an

insurance agent and the insurance companies represented by the agent.

DISTRICT COURT JUDGMENT AFFIRMED IN PART AND REVERSED

IN PART; CASE REMANDED.

      John R. Hearn, Des Moines, for appellants.

      Karl T. Olson of Bradshaw, Fowler, Proctor & Fairgrave, P.C.,

Des Moines, for appellees American National General Insurance Co. and

American National Property and Casualty Co.

      John F. Lorentzen and Mitchell R. Kunert of Nyemaster, Goode,

West, Hansell & O’Brien, P.C., Des Moines, for appellee Fitzgerald.
                                     2

TERNUS, Chief Justice.

      The primary issue presented by this appeal is the scope of liability

of an insurance agent to her clients. The appellants, Dennis Langwith

and his son, Ben Langwith, sued Dennis’s insurance agent, appellee

Janet Fitzgerald, alleging she breached a duty of reasonable care, which

resulted in their partially uninsured exposure on a personal injury claim

filed against them. The Langwith plaintiffs contend appellees American

National General Insurance Company and American National Property

and Casualty Co. (collectively American National) are vicariously liable
for the actions of Fitzgerald, American National’s captive agent.

      The district court granted summary judgment to Fitzgerald and

American National, ruling Fitzgerald did not owe a duty beyond a

“general duty to procure the insurance requested by the Langwiths,” and

therefore, Fitzgerald had no duty to advise Dennis Langwith with respect

to the coverage provided by Dennis’s umbrella liability policy or to render

risk-management advice to her client, as alleged by the plaintiffs. The

district court denied two motions for partial summary judgment filed by

the plaintiffs in which they raised collateral issues pertinent to the risk-

management claim. We reverse the district court’s summary judgment

ruling insofar as it determined the defendants had demonstrated they

were entitled to judgment as a matter of law with respect to the claim

that Fitzgerald should have advised the plaintiffs on the status of their

coverage under the umbrella liability policy.      We affirm the district

court’s ruling in all other respects and remand this case for further

proceedings.

      I. Background Facts and Proceedings.
      Fitzgerald is a self-employed captive agent for American National

doing business under the name of American National Janet Fitzgerald
                                    3

Insurance Services. Prior to the events giving rise to this lawsuit, Dennis

and his wife, Susan Langwith (hereinafter the Langwiths), had purchased

substantially all of their insurance through Fitzgerald. During this time,

they had consistently carried an automobile liability insurance policy

with limits of $250,000 and an umbrella policy with $3,000,000 limits,

both issued by American National.         These policies also covered the

Langwiths’ two children, including Ben.

      In December 2003, Ben’s driver’s license was suspended, which

prompted American National to cancel Ben’s coverage under the
automobile liability policy. American National also sought to cancel the

umbrella policy, but did not do so after Dennis and Susan signed a form

agreeing to a driver exclusion for Ben.        (This exclusion precluded

coverage under the umbrella policy for any insured for any loss

sustained while the vehicle was being operated by Ben.)       When Ben’s

driver’s license was reinstated, Susan spoke with Fitzgerald regarding

insurance coverage for Ben. As a result of that conversation, Fitzgerald

procured a high-risk policy from American National that covered Ben

when driving the Langwiths’ vehicles. This policy had limits of $250,000.

The Langwiths assumed Ben was once again covered by the umbrella

policy since Ben’s driver’s license had been reinstated and he had

obtained the required underlying liability coverage.     Contrary to this

understanding, the driver exclusion for Ben remained on the Langwiths’

umbrella policy.

      On July 16, 2006, Ben was in an accident when driving a

Chevrolet Suburban titled in Dennis’s name.           Corey Shannon, a

passenger in Ben’s vehicle, was severely injured.     Shannon sued Ben
based on Ben’s alleged negligent operation of the Suburban, and he sued

Dennis under the owner-liability statute.      See Iowa Code § 321.493
                                      4

(2005) (imposing liability on the owner of a vehicle for damages caused

by a consent driver). American National acknowledged coverage for these

claims under the automobile liability policy issued to the Langwiths and

has provided a defense to Dennis and Ben in the Shannon lawsuit

pursuant to its obligations under this policy.        American National has

denied any liability under the umbrella policy, however, based on the

driver exclusion for Ben.

      Dennis and Ben filed this suit alleging, after various amendments,

that Fitzgerald breached a duty of care to them by (1) failing to disclose
that the driver exclusion in the umbrella policy continued after Ben’s

license was reinstated, and (2) failing to advise the Langwiths that

Dennis could avoid all personal liability for Ben’s driving by transferring

title to the Suburban to Ben. The plaintiffs sought to hold the insurers

vicariously liable for Fitzgerald’s breach of duty.

      After conducting discovery, the plaintiffs filed two motions for

partial summary judgment.         The first motion for partial summary

judgment sought adjudication of issues concerning proximate cause as it

related to the plaintiffs’ contention Fitzgerald should have advised them

to transfer title to the vehicle driven by Ben.       The second motion for

partial summary judgment sought a ruling that advice by an insurance

agent to a client on how to title the client’s vehicle is not legal advice that

would render the agent’s conduct the unauthorized practice of law.

Before the court ruled on these motions, Fitzgerald filed a motion for

summary judgment requesting that the court rule as a matter of law that

informing the Langwiths that the driver exclusion continued on the

umbrella policy and advising them that title to the Suburban should be
transferred to Ben so Dennis could avoid legal liability for Ben’s negligent

driving “are outside the scope of Fitzgerald’s duty as an insurance agent.”
                                     5

American National joined in Fitzgerald’s motion for summary judgment.

As noted earlier, the district court granted the motion filed by Fitzgerald

and denied the plaintiffs’ motions for partial summary judgment.        The

plaintiffs appealed.

      II. Scope of Review.

      We review rulings on motions for summary judgment for the

correction of errors at law.   Hunter v. City of Des Moines Mun. Hous.

Auth., 742 N.W.2d 578, 584 (Iowa 2007).           “ ‘To obtain a grant of

summary judgment on some issue in an action, the moving party must
affirmatively establish the existence of undisputed facts entitling that

party to a particular result under controlling law.’ ” Baker v. City of Iowa

City, 750 N.W.2d 93, 97 (Iowa 2008) (quoting Interstate Power Co. v. Ins.

Co. of N. Am., 603 N.W.2d 751, 756 (Iowa 1999)); see Iowa R. Civ. P.

1.981(3) (authorizing summary judgment when “there is no genuine

issue as to any material fact” and “the moving party is entitled to a

judgment as a matter of law”). In determining whether the district court

correctly ruled the defendants had met their burden under this standard,

we view the evidence in a light most favorable to the nonmoving party.

Hunter, 742 N.W.2d at 584.

      III. Defendant’s Motion for Summary Judgment.

      A. Duty of Insurance Agent.            The district court granted

Fitzgerald’s motion for summary judgment on the ground that Fitzgerald

had no duty to advise the Langwiths with respect to umbrella coverage

on Ben or with respect to avoiding Dennis’s vicarious liability for Ben’s

negligent driving. In reaching this conclusion, the court relied on settled

Iowa law restricting the obligation of insurance agents to their clients.
See Sandbulte v. Farm Bureau Mut. Ins. Co., 343 N.W.2d 457, 464–65

(Iowa 1984); Collegiate Mfg. Co. v. McDowell’s Agency, Inc., 200 N.W.2d
6

854, 857–58 (Iowa 1972). We begin our discussion with a review of these

cases.

         In Collegiate Manufacturing Co., the plaintiff sued its insurance

agent, claiming the agent negligently failed to provide adequate coverage

for the plaintiff’s business inventory. 200 N.W.2d at 856.      After an

adverse jury verdict, the plaintiff appealed, asserting error in the trial

court’s instructions. Id. at 856–57. Specifically, the plaintiff objected to

an instruction that stated in part:

         You are instructed that there is a duty upon the owner of
         insurable property to familiarize himself with the quantity
         and value of such property, its insurability, the kinds and
         amounts of insurance available, and in general the terms
         and conditions of the insurances issued upon his property.
         As applied to this case, it was the duty of the plaintiff to
         advise Stoll [the insurance agent], generally, as to the
         quantity and value of the property to be insured and the
         kinds and amounts of insurance desired, and then it was the
         duty of Stoll to use due diligence to procure the insurance
         and at all times to keep the plaintiff advised and informed as
         to the insurances available and procured.

Id. at 857. This court rejected the plaintiff’s challenge to this instruction,

noting the relationship between an insured and an insurance agent is

one of principal/agent. Id. at 858. Consistent with the nature of this

relationship, we held an insurance agent “owes his principal the use of

such skill as is required to accomplish the object of his employment.” Id.

at 857 (emphasis added). Acknowledging that an agent’s duties may be

limited or enlarged “by agreement of the parties,” id., we concluded there

was no evidence showing “the burden of deciding for plaintiff both the

type and amount of insurance to be provided” had been delegated to the

insurance agent. Id. at 859.

         In our subsequent decision in Sandbulte, we discussed the
circumstances under which an insurance agent’s “general duty . . . to
                                          7

use reasonable care, diligence, and judgment in procuring the insurance

requested by an insured” could be enlarged. 343 N.W.2d at 464. We

stated:

              An expanded agency agreement, arrangement or
       relationship, sufficient to require a greater duty from the
       agent than the general duty, generally exists when the agent
       holds himself out as an insurance specialist, consultant or
       counselor and is receiving compensation for consultation
       and advice apart from premiums paid by the insured.

Id. We rejected the notion that such an expanded agency relationship

could be established solely by proof of a long-standing relationship
between the insurance agent and his client. Id. at 465.

       The Langwiths claim a later decision of this court casts some

doubt on the continuing validity of the Sandbulte requirements for

expanding the duty owed by an insurance agent to his client.                        In

Humiston Grain Co. v. Rowley Interstate Transportation Co., 512 N.W.2d
573 (Iowa 1994), this court characterized the claim made by the plaintiff

against its insurance agent as one of “professional negligence.” 512
N.W.2d at 574. Quoting from a prior decision of this court that quoted

Restatement (Second) of Torts section 299A, at 73 (1965), we noted that

“[p]ersons engaged in the practice of a profession or trade are held to the

standard of ‘ “the skill and knowledge normally possessed by members of

that profession or trade in good standing in similar communities.” ’ ” Id.

at 575 (quoting Kastler v. Iowa Methodist Hosp., 193 N.W.2d 98, 101

(Iowa 1971)).1

       1As  we have indicated, the language we quote in this opinion from Humiston
Grain Co. originated in Kastler. See Humiston Grain Co., 512 N.W.2d at 575 (quoting
Kastler, 193 N.W.2d at 101). In Humiston Grain Co., this court erroneously attributed
the Kastler quote to Restatement (Second) of Torts section 283. In fact, Kastler quoted
from and cited to Restatement (Second) of Torts section 299A. Kastler, 193 N.W.2d at
101.
                                          8

       The issue presented in Humiston Grain Co. was whether expert

testimony was required to prove the insurance agent’s negligence.                  Id.

Noting the diverse transactions that can form the basis for a claim of

professional negligence against an insurance agent, we stated:

       Because insurance agents are professionally engaged in
       transactions ranging from simple to complex, the
       requirement of expert testimony varies from jurisdiction to
       jurisdiction depending on the nature of the alleged negligent
       act. At one end of the spectrum are those cases in which an
       agent negligently fails to procure coverage or permits
       coverage to lapse by failing to advance premiums due.
       Under these circumstances, commonly understood by
       laypersons, courts have held that expert testimony regarding
       the standard of care and its breach is not necessary.
             At the other end of the spectrum are cases involving
       the agent’s alleged failure to discern coverage gaps or risks of
       exposure in more complex business transactions. In such
       cases, courts have required expert testimony to establish the
       applicable standard of care.
              ....
             . . . [W]e hold that where an insurance agent is alleged
       to have breached a professional duty, if the error or omission
       extends beyond the agent’s mere failure to procure coverage
       requested and paid for by the client, proof of the standard of
       care applicable to the circumstances must be established by
       expert testimony.

Id. at 575–76 (citations omitted).2 Because the claim in Humiston Grain
Co. was not one in which the agent “was directed to procure specific

insurance and failed to do so,” we held the plaintiff was required to prove

the agent’s breach of duty through the testimony of an expert witness.

Id. at 576.

       2Although  we refer to expert testimony to prove “the standard of care” in
Humiston Grain Co., the standard of care is established by section 299A (“the skill and
knowledge normally possessed by members of [the defendant’s] profession or trade”).
Expert testimony actually addresses whether that standard has been breached; in other
words, whether the defendant’s conduct is consistent with “the skill and knowledge
normally possessed by members of [the defendant’s] profession or trade.”
                                     9

      The defendants contend the existence of a duty was apparently

presumed in Humiston Grain Co. so that decision did not address and

does not undermine the limitations on an insurance agent’s duty to his

client recognized in Collegiate Manufacturing Co. and Sandbulte. Taking

a contrary view, the plaintiffs contend the court in Humiston Grain Co.

discarded the requirements for an expanded agency duty “without

specifically saying so . . . and simply held that agents must adhere to the

prevailing ‘standard of care’ for insurance agents.”

      We decline to read into our decision in Humiston Grain Co. the
sweeping changes suggested by the plaintiffs. Moreover, we think these

three cases can be reconciled rather easily: Collegiate Manufacturing Co.

and Sandbulte discuss the circumstances under which an insurance

agent owes a more expansive duty to a client than the general duty to

procure   the   requested   insurance,    and   Humiston Grain Co.       and

Restatement (Second) of Torts section 299A, cited in that decision, define

the standard of care that applies to the agent’s exercise of his or her duty

and how a breach of that standard must be proved.

      As the defendants in this case acknowledge, it is entirely

appropriate to require an insurance agent “to exercise the skill and

knowledge    normally   possessed    by   [insurance   agents]   in   similar

communities” in rendering services to their clients.      See Restatement

(Third) of Agency § 8.08 cmt. c, at 346 (2006) (stating that an agent who

“undertakes to perform services as a practitioner of a trade or profession”

must conform to the standard of care set forth in the Restatement

(Second) of Torts section 299A, “unless the agent represents that the

agent possesses greater or lesser skill”); 3 Am. Jur. 2d Agency § 212, at
600 (2002) (“An agent who holds himself or herself out as having

particular skills and talents in a certain field assumes an obligation to
                                       10

exercise such care and skills as would characterize counterparts in the

same field, and different in kind from the diligence or capacity of the

ordinary citizen. Likewise, a professional agent is required to have the

particular knowledge and to exercise the particular skill and diligence

expected of it.”     (Footnotes omitted.)).   In this respect, our decision in

Humiston Grain Co. was consistent with prior Iowa case law on this

subject. See Smith v. State Farm Mut. Auto. Ins. Co., 248 N.W.2d 903,

906 (Iowa 1976) (holding insurance agent must “ ‘exercise such

reasonable skill and ordinary diligence as may fairly be expected from a
person in his profession or situation’ ” (quoting Couch on Insurance 2d

§ 25:32, at 329)).

       The question presented in the case before us is the scope of the

duty owed by an insurance agent to his client, not the standard by which

performance of that duty is judged. With respect to the former issue, the

import of our decisions in Collegiate Manufacturing Co. and Sandbulte

was to limit an insurance agent’s obligation to procurement of the

coverage requested by the client, relieving the agent of any duty to advise

his client of the kinds and amounts of insurance that would protect his

client’s insurable interests unless there was evidence of an expanded

agency agreement.         Moreover, the circumstances under which an

expanded agency agreement could arise were narrowly circumscribed in

Sandbulte:   “the agent holds himself out as an insurance specialist,

consultant or counselor and is receiving compensation for consultation

and advice apart from premiums paid by the insured.” 343 N.W.2d at

464.    Although this court cited some authority for its holding in

Sandbulte, we gave no rationale for such a restrictive approach.
       Our examination of the general principles governing agency

relationships convinces us that a more flexible method of determining
                                          11

the undertaking of an insurance agent is appropriate. The Restatement

(Third) of Agency ties the duty of the agent to the agent’s contractual

undertaking.     Restatement (Third) of Agency § 8.07, at 334 (“An agent

has a duty to act in accordance with the express and implied terms of any

contract between the agent and principal.” (Emphasis added.)); id. § 8.07

cmt. a, at 334 (“This section makes the basic point that an agent’s duties

of performance to the principal are subject to the terms of any contract

between them.”). As the authors of the Restatement note in a comment

to section 8.08, “The specific skills that an agent must possess to be
competent depend on the nature of the service that the agent undertakes

to provide and the circumstances under which it will be provided . . . .”3

Id. § 8.08 cmt. c, at 345–46 (emphasis added); see also id. § 8.08 cmt. b,

at   343    (“Regardless     of   their   content,     contractually     shaped     or

contractually created duties are grounded in the mutual assent of agent

and principal.”); see id. § 8.08 cmt. d, at 347 (“Ordinarily, the scope of an

agent’s duty to be diligent is limited by the scope of the services the agent

undertakes to perform for the principal.”); see also Peterson v. Big Bend

Ins. Agency, Inc., 202 P.3d 372, 377 (Wash. Ct. App. 2009) (“An

insurance agent assumes only the duties found in an agency relationship

unless the agent assumes additional duties by contract or by holding

himself or herself out as possessing an extraordinary skill.”).                   This

approach is consistent with our statement in Collegiate Manufacturing

Co. that an insurance agent’s ordinary duty “may be altered . . . by

agreement of the parties.” 200 N.W.2d at 857.

       3Because the duty analysis in this case is based on agency principles and

involves economic loss, the duty analysis adopted by this court in Thompson v.
Kaczinski, 774 N.W.2d 829 (Iowa 2009), based on Restatement (Third) of Torts: Liability
for Physical and Emotional Harm, is not dispositive.
                                      12

      The defendants have advanced no reason, nor have we identified

one, that would justify the limitations placed on the circumstances that

might be considered in determining the duty undertaken by an

insurance agent, as stated in Sandbulte. Therefore, we hold that it is for

the fact finder to determine, based on a consideration of all the

circumstances, the agreement of the parties with respect to the service to

be rendered by the insurance agent and whether that service was

performed with the skill and knowledge normally possessed by insurance

agents under like circumstances. See Fowler v. Berry Seed Co., 248 Iowa
1158, 1165, 84 N.W.2d 412, 416 (1957) (stating extent of agency is a fact

question). Some of the circumstances that may be considered by the fact

finder in determining the undertaking of the insurance agent include the

nature and content of the discussions between the agent and the client;

the prior dealings of the parties, if any; the knowledge and sophistication

of the client; whether the agent holds himself out as an insurance

specialist, consultant, or counselor; and whether the agent receives

compensation for additional or specialized services.       See Fitzpatrick v.

Hayes, 67 Cal. Rptr. 2d 445, 452 (Ct. App. 1997) (holding that, “as a

general proposition, an insurance agent does not have a duty to

volunteer to an insured that the latter should procure additional or

different insurance coverage,” but that such a duty can arise when “(a)

the agent misrepresents the nature, extent or scope of the coverage being

offered or provided . . ., (b) there is a request or inquiry by the insured for

a particular type or extent of coverage . . ., or (c) the agent assumes an

additional duty by either express agreement or by ‘holding himself out’ as

having expertise in a given field of insurance being sought by the
insured”); Harts v. Farmers Ins. Exch., 597 N.W.2d 47, 52 (Mich. 1999)

(stating “the general rule of no duty changes when (1) the agent
                                        13

misrepresents the nature or extent of the coverage offered or provided, (2)

an ambiguous request is made that requires a clarification, (3) an inquiry

is made that may require advice and the agent, though he need not, gives

advice that is inaccurate, or (4) the agent assumes an additional duty by

either express agreement with or promise to the insured” (footnotes

omitted)); Murphy v. Kuhn, 682 N.E.2d 972, 975–76 (N.Y. 1997) (noting

“jurisdictions have recognized such an additional duty of advisement in

exceptional situations where, for example, (1) the agent receives

compensation for consultation apart from payment of the premiums; (2)
there was some interaction regarding a question of coverage, with the

insured relying on the expertise of the agent; or (3) there is a course of

dealing over an extended period of time which would have put objectively

reasonable insurance agents on notice that their advice was being sought

and specially relied on” (citations omitted)); Houck v. State Farm Fire &

Cas. Ins. Co., 620 S.E.2d 326, 329 (S.C. 2005) (“In determining whether

an implied duty [to advise an insured] has been created, courts consider

several factors, including whether: (1) the agent received consideration

beyond a mere payment of the premium, (2) the insured made a clear

request for advice, or (3) there is a course of dealing over an extended

period of time which would put an objectively reasonable insurance agent

on notice that his advice is being sought and relied on.”                (Citations

omitted.)); see also 43 Am. Jur. 2d Insurance § 162, at 205–06 (2003);4 3

      4This   provision states:
              Although an insurance agent has an obligation to follow a
      customer’s instructions and procure adequate coverage on the best terms
      available, an agent who fulfills this obligation does not have a duty to
      advise the insured regarding the adequacy of the coverage, absent a
      specific agreement to do so or a special relationship with the customer
      involving a discussion of the subject and the customer’s reliance on the
      agent’s expertise. Since insureds have the primary responsibility to
      determine their own needs, an agent is not required to advise an
                                          14

Lee R. Russ & Thomas F. Segalla, Couch on Insurance 3d § 46:61, at 46–

91 to 46–92 (1995) [hereinafter Couch on Insurance 3d].5

       The client bears the burden of proving an agreement to render

services beyond the general duty to obtain the coverage requested.

Murphy, 682 N.E.2d at 976. In the absence of circumstances indicating

the insurance agent has assumed a duty beyond the procurement of the

coverage requested by the client, the insurance agent has no obligation

to advise a client regarding additional coverage or risk management. See

Sintros v. Hamon, 810 A.2d 553, 555 (N.H. 2002) (“A majority of courts
that have considered the issue have held that an insurance agent owes

_________________________
       applicant who is knowledgeable about insurance, as the relationship is
       not one of trust accompanied by the agent’s awareness of a duty to take
       the initiative in giving advice.
               An insurance agent’s duty to advise does not arise until the
       customer seeks advice or questions the adequacy of coverage. The scope of
       any duty is ordinarily defined by the nature of the request made by the
       customer, and the customer must provide sufficient information, so that
       the agent can ascertain the customer’s requirements. Even where an
       agent has some knowledge that an insured may require additional
       insurance, a duty does not arise if the agent and customer had no prior
       dealings in which the agent has customarily taken care of the client’s
       needs without consulting him or her. Therefore, while insurance agents
       are not necessarily personal financial counselors and risk managers, and
       thus have no continuing duty to advise a client to obtain additional
       coverage, an agent who holds him or herself out as an insurance
       specialist, consultant or counselor, and receives compensation for
       consultation, in addition to premiums, is under a greater duty to advise
       the insured.
43 Am. Jur. 2d Insurance § 162, at 205–06 (footnotes omitted and emphasis added).
       5Couch   states on this subject:
               Generally, an insurance agent does not have affirmative duty to
       advise client regarding the adequacy of policy’s coverage, but a duty to
       advise may arise when a “special relationship” exists between the
       insurance company or its agent and the policyholder. Something more
       than ordinary insured/insurer relationship is required to create “special
       relationship”––there must be a long-standing relationship between
       parties, some type of interaction on question of coverage, and reliance by
       insured on representations of insurance agent to insured’s detriment.
3 Couch on Insurance 3d § 46:61, at 46–91 to 46–92 (footnotes omitted).
                                           15

clients a duty of reasonable care and diligence, but absent a special

relationship, that duty does not include an affirmative, continuing

obligation to inform or advise an insured regarding the availability or

sufficiency of insurance coverage.”). We think this analytical framework

respects the principal/agent relationship, yet accounts for the diverse

undertakings of an insurance agent that can vary from the simple

procurement of the particular insurance coverage requested by the client

to a full risk assessment to anything in-between.                     In light of our

abandonment of the restrictive requirements for an expanded agency
duty, we overrule our Sandbulte decision to the extent it limits an

expanded duty to those cases in which the agent holds himself out as an

insurance specialist, consultant, or counselor and receives compensation

for additional or specialized services.6

       B. Application of Summary Judgment Standard. Applying the

principles announced above, we now examine the defendants’ contention

they are entitled to judgment as a matter of law.                The plaintiffs claim

Fitzgerald was negligent in two respects: (1) failing to disclose that the

driver exclusion in the umbrella policy continued after Ben’s license was

reinstated, and (2) failing to advise the Langwiths that Dennis could

avoid all personal liability for Ben’s driving by transferring title to the

       6We do not overrule our decision in Collegiate Manufacturing Co., as it is entirely

consistent with our decision in the present case. We said in that case regarding “the
nature and extent” of an insurance agent’s duty to his client:
       Generally an agent owes his principal the use of such skill as is required
       to accomplish the object of his employment. If he fails to exercise
       reasonable care, diligence, and judgment in this task, he is liable to his
       principal for any loss or damage occasioned thereby.
              This general rule may be altered, either to limit or enlarge the
       ordinary duties, by agreement of the parties.
Collegiate Mfg. Co., 200 N.W.2d at 857 (citations omitted).
                                            16

Suburban to Ben.7           We must examine the record, in the light most

favorable to the plaintiffs, to determine whether there are facts that

would support a finding of an “agreement between the parties,

interpreted in light of the circumstances under which it is made,” that

obligated Fitzgerald to advise the Langwiths that the driver exclusion on

the umbrella policy continued and that Dennis could avoid liability for

Ben if he put the title to the Suburban in Ben’s name.

       The     summary       judgment       record     shows     the    Langwiths       had

purchased nearly all their insurance policies through Fitzgerald for ten to
twelve years.8         Dennis Langwith had several conversations with

Fitzgerald over the years with respect to property insurance and general

liability insurance on his business and his business properties, as well

as with respect to liability insurance on his business vehicles. Dennis

testified in his deposition that Fitzgerald recommended the appropriate

       7The    plaintiffs claim on appeal that Restatement (Second) of Torts section 552,
at 126–27 (1977), supports the imposition of liability on an insurance agent in addition
to liability based on negligence in performing the general duty to procure the insurance
requested by the client. Section 552 concerns the tort of negligent misrepresentation.
This tort “does not apply to the failure to provide information.” Sain v. Cedar Rapids
Cmty. Sch. Dist., 626 N.W.2d 115, 128 (Iowa 2001). Both allegations of negligence made
by the plaintiffs in this case involve the failure of Fitzgerald to provide information or
give advice. Therefore, the tort of negligent misrepresentation is not implicated here,
and we give it no further attention. See Sewell v. Great N. Ins. Co., 535 F.3d 1166, 1172
(10th Cir. 2008) (holding insured did not have claim against insurance agent for
negligent misrepresentation where agent “made no false statements”).
        For the first time in their reply brief, the plaintiffs argue Fitzgerald’s conduct is
actionable under Restatement (Second) of Torts section 551 governing liability for
nondisclosure. We will not consider issues raised for the first time in a reply brief. See
Harrington v. Univ. of N. Iowa, 726 N.W.2d 363, 366 n.2 (Iowa 2007). Nonetheless, we
note that liability under section 551 rests on “a duty to the other to exercise reasonable
care to disclose the matter in question.” Restatement (Second) of Torts § 551(1), at 119.
Absent a duty to disclose, there is no liability. Id. § 551 cmt. a, at 119–20. We
question, therefore, whether an analysis under section 551 would be materially different
than the analysis in which we engage in this opinion.
       8The only insurance not purchased through Fitzgerald was professional liability
insurance obtained by Dennis Langwith, an orthodontist, through a different agent.
                                    17

coverage to meet his insurance needs, advice that he usually, but not

always, followed.

      Susan had the most contact with Fitzgerald with respect to family

insurance matters and testified in her deposition that their relationship

was based solely upon the Langwiths’ “insurance liability and needs.”

Susan also stated that Fitzgerald gave the Langwiths advice on insurance

matters, which they would usually follow.      When Ben lost his driver’s

license, Susan called Fitzgerald to have Ben removed from their

automobile liability policy. At that time, Fitzgerald asked the Langwiths
to sign an exclusion on their umbrella policy for any liability arising from

Ben’s operation of any vehicle in order to avoid cancellation of that

policy.   The Langwiths signed the requested form and were aware the

exclusion precluded coverage under the umbrella policy for claims

arising from Ben’s driving.

      After Ben’s license was reinstated, Susan met with Fitzgerald at

Fitzgerald’s office and asked Fitzgerald “what we could do about Ben.”

Susan testified she meant “how can we cover him? How can we provide

liability coverage that protects him and all of us?” Susan said she “was

asking for [Fitzgerald’s] professional advice.”   Fitzgerald told her they

could get a high-risk policy for Ben with limits of $250,000, which

Fitzgerald did.     Although Susan and Fitzgerald did not discuss the

umbrella coverage, Susan and Dennis assumed the umbrella policy

covered Ben’s driving once his license was reinstated. Fitzgerald did not

inform the Langwiths that the driver’s exclusion had been removed from

the umbrella policy, nor did she tell them it had not been removed. The

parties disagree as to whether the Langwiths should have known the
exclusion continued based on the declarations pages they periodically

received.
                                          18

       Dennis testified they had never asked Fitzgerald for advice on

matters other than those that involved insurance. More specifically, the

Langwiths never asked Fitzgerald for advice as to how to title their

business or personal vehicles.          Nonetheless, Susan testified Fitzgerald

should have advised them to have title to the Suburban put in Ben’s

name due to the following circumstances: (1) the Langwiths “had quite a

communication with her [Fitzgerald] through the years,” and “[i]t wasn’t

as if [they] just went into her office all of a sudden”; (2) Fitzgerald “knew

[their] family,” “knew the situation of [their] family dynamics and
covering [them] in every way through insurance”; and (3) Fitzgerald

“knew who was driving and . . . knew the age and all the data that . . .

you have at your disposal when you are an agent, to know when the kids

have the most trouble, need the most help when they’re in their driving

situations.”    Dennis testified that he thought Fitzgerald should have

advised them to put title to the Suburban in Ben’s name because she

was “in the business of risk management.”9

       We conclude the record shows a genuine issue of material fact with

respect to the plaintiffs’ first claim of negligence, namely, that Fitzgerald

should have told the Langwiths that the driver exclusion remained on the

umbrella policy.       A fact finder could conclude from Susan’s inquiry

regarding “what [they] could do about Ben” that she was seeking

Fitzgerald’s “professional guidance” regarding “liability coverage that

[would] protect[] him and [the Langwiths],” as Susan testified.                 A fact

finder could also conclude that Fitzgerald understood or should have

       9Other   than Dennis’s stated belief that Fitzgerald was “in the business of risk
management,” there was no evidence that Fitzgerald held herself out as a specialist or
consultant on risk management. Indeed, the plaintiffs acknowledge in their appellate
brief that Fitzgerald did not hold herself out as an insurance specialist, counselor, or
consultant and that she was not compensated beyond her commission on insurance
premiums.
                                    19

understood the nature of this request and that she responded by finding

an automobile liability policy to insure Ben. Accordingly, a fact finder

could find that the parties had an implied agreement that Fitzgerald

would advise the Langwiths with respect to the liability coverage that

could or should be put in place to protect Ben and his parents, including

umbrella liability coverage.   Cf. Fitzpatrick, 67 Cal. Rptr. 2d at 452

(stating duty may arise if “there is a request or inquiry by the insured for

a particular type or extent of coverage”); Murphy, 682 N.E.2d at 976

(noting jurisdictions have recognized “an additional duty of advisement
. . . where, for example . . . there was some interaction regarding a

question of coverage, with the insured relying on the expertise of the

agent”); 4 Couch on Insurance 3d § 55:5, at 55–12 (1996) (stating

“although insurer’s agents are not required under a general duty of care

to advise the insured regarding the sufficiency of coverage limits . . .,

once they elect to respond to his or her inquiries, a special duty arises

requiring them to use reasonable care”).       See generally Restatement

(Third) of Agency § 8.11 cmt. d, at 377 (“If an agent fails to provide

information to the principal that is material to decisions that the

principal will make, the agent may not have acted with the diligence and

care reasonably to be expected of an agent in a particular position.”).

Therefore, we reverse that part of the district court’s summary judgment

ruling granting judgment to the defendants on the claim Fitzgerald

negligently failed to advise the Langwiths regarding coverage under the

umbrella policy. See Peter v. Schumacher Enters., Inc., 22 P.3d 481, 487

(Alaska 2001) (stating whether client made inquiry that required

insurance agent to advise client on available levels of coverage for
UM/UIM coverage is a fact question to be resolved at trial).
                                          20

       We reach a contrary conclusion with respect to the allegation that

Fitzgerald should have advised the Langwiths to transfer title on the

vehicle driven by Ben from Dennis to Ben. It is undisputed there was no

express agreement that Fitzgerald would assess the Langwiths’ liability

risk with respect to Ben and advise them on how to avoid that risk.

Fitzgerald did not hold herself out as a specialist, consultant, or

counselor, nor did the Langwiths compensate her for consultation and

advice apart from the premiums they paid. Moreover, there were no prior

dealings between these parties in which Fitzgerald was ever requested to
give advice outside of the proper insurance policy to ensure a particular

risk. As Susan testified, Fitzgerald had never given them advice in the

past “about matters other than insurance.” The fact that the parties had

a long-standing relationship through which Fitzgerald gained knowledge

of the “family dynamics” is not sufficient evidence from which a fact

finder could find that there was an implied agreement to expand

Fitzgerald’s undertaking from advising how risk could be insured to

advising how risk could be avoided. Cf. Nelson v. Davidson, 456 N.W.2d
343, 347 (Wis. 1990) (“The mere allegation that a client relied upon an

agent and had great confidence in him is insufficient to imply the

existence of a duty to advise.”), superseded on other grounds by statute,

Wis. Stat. § 632.32(4m) (1995), as recognized in Avery v. Diedrich, 734
N.W.2d 159, 165 n.3 (Wis. 2007). There is a material distinction between

insuring risk and avoiding risk, and there are no circumstances present

here that support a finding the parties agreed Fitzgerald would advise the

Langwiths on risk avoidance.10

       10The  plaintiffs note that, when Susan asked Fitzgerald what they “could do
about Ben,” Fitzgerald said, “Get him a bike.” The plaintiffs suggest on appeal that this
response demonstrates Fitzgerald undertook to render risk-avoidance advice and that
Fitzgerald “misled Langwiths to believe she could properly give such advice and would
                                           21

       We have considered the plaintiffs’ contention, which they seek to

establish through expert testimony, that all insurance agents have a

duty to render risk-management advice to their clients under such

circumstances. We reject this argument, as it is not consistent with the

general agency principles we apply, making the duty of the agent to his

client dependent upon the parties’ agreement as determined from the

peculiar circumstances of each case.             See Murphy, 682 N.E.2d at 976

(“Insurance agents or brokers are not personal financial counselors and

risk managers, approaching guarantor status. Insureds are in a better
position to know their personal assets and abilities to protect themselves

more so than general insurance agents or brokers, unless the latter are

informed and asked to advise and act.” (Citation omitted and emphasis

added.)). Therefore, we affirm that part of the district court’s summary

judgment ruling granting judgment to the defendants on the plaintiffs’

claim Fitzgerald was negligent in failing to advise the Langwiths to put

title to the Suburban in Ben’s name alone.11 See Sewell v. Great N. Ins.

Co., 535 F.3d 1166, 1171 (10th Cir. 2008) (affirming summary judgment

for insurance agent, finding no facts to show agent assumed any

responsibilities for personal risk-management services).

_________________________
do so.” We decline to rest an agreement to render risk-management advice on such an
isolated, even flippant, comment, particularly when Susan testified that, during this
meeting with Fitzgerald, she was seeking Fitzgerald’s professional advice “regarding
liability coverage.” See 43 Am. Jur. 2d Insurance § 162, at 205 (“The scope of any duty
is ordinarily defined by the nature of the request made by the customer.”).
       11Because     the record does not support a finding that Fitzgerald had a duty to
advise the Langwiths on risk-management strategies unrelated to insurance coverage,
the plaintiffs’ claim that Fitzgerald should have advised the Langwiths to put the title on
the Suburban in Ben’s name fails, whether that claim rests on agency principles or on
Restatement (Second) of Torts section 551.
                                    22

      IV. Plaintiffs’ Motions for Partial Summary Judgment.

      Because we have affirmed the district court’s dismissal of the

plaintiffs’ claim based on an alleged duty of Fitzgerald to render risk-

management advice, we need not consider the collateral issues raised in

the plaintiffs’ motions for partial summary judgment, including whether

advice by an insurance agent that title to a vehicle should be transferred

to avoid legal liability constitutes the unauthorized practice of law,

whether any negligence in failing to advise the Langwiths to transfer title

of the Suburban to Ben was a proximate cause of damage to the
plaintiffs, and whether the proffered expert testimony on these matters is

admissible. In light of our ruling on the defendants’ motion for summary

judgment, these issues are now moot. Therefore, we affirm the district

court’s denial of the plaintiffs’ motions for partial summary judgment.

      The final matter we address concerns references in the parties’

appellate briefing regarding American National’s vicarious liability for

Fitzgerald’s negligence.   This issue was raised in American National’s

resistance to the plaintiffs’ first motion for partial summary judgment

regarding the causal relationship between Fitzgerald’s alleged negligence

in failing to render risk-avoidance advice and the plaintiffs’ damages.

American National alleged in its resistance that Fitzgerald had no duty to

advise the Langwiths on how to title their vehicles.            It alleged

alternatively that, if an expanded agency agreement existed so as to give

rise to such a duty, Fitzgerald’s rendering of such advice would be

beyond the scope of the contractual relationship between American

National and Fitzgerald. The trial court did not rule on this latter issue

when it considered the plaintiffs’ first motion for partial summary
judgment.
                                     23

      Because the issues raised in the plaintiffs’ first motion for partial

summary judgment are moot, we need not address the issues raised in

American National’s resistance to that motion. American National has

not challenged its vicarious liability for the remaining claim based on

Fitzgerald’s failure to advise the plaintiffs that the driver exclusion

remained on the umbrella policy. For these reasons, we do not discuss

American National’s vicarious liability for Fitzgerald’s conduct.

      V. Disposition.

      The district court’s summary judgment in favor of the defendants
on the plaintiffs’ claim Fitzgerald breached a duty to advise them that

coverage for Ben was excluded from the umbrella liability policy after

Ben’s license was reinstated is reversed. The district court’s summary

judgment in favor of the defendants on the plaintiffs’ claim that

Fitzgerald had a duty to advise the Langwiths on how to avoid legal

liability for Ben’s negligent driving is affirmed, as is the district court’s

denial of the plaintiffs’ motions for partial summary judgment addressing

issues collateral to that claim.     This case is remanded for further

proceedings consistent with this opinion.

      DISTRICT     COURT     JUDGMENT       AFFIRMED       IN   PART    AND

REVERSED IN PART; CASE REMANDED.