Alternate Avenues of Risk and Recovery
Wilks v. Manobianco, __ P.3d __, 2015 WL 4132181 (Ariz. July 9, 2015)
Plaintff obtained UM and UIM automobile insurance coverage from defendant broker for two years. Following this time, plaintiff switched to another automobile insurance company. One year later, plaintiff decided to go back to his first carrier and contacted defendant, allegedly instructing him to obtain the exact same coverage as she had in the past. Defendant procured insurance coverage that did not contain UIM coverage and provided Wilks with Department of Insurance (hereinafter “DOI’) approved forms which stated that she was declining UIM coverage. Plaintiff signed the forms. Following this, Plaintiff was involved in an accident with an underinsured driver. Following the denial of plaintiff’s UIM claim, she filed a malpractice action against defendant. Defendant moved for summary judgment asserting that Plaintiff’s completion of the DOI approved forms barred a common law negligence claim. The trial court granted summary judgment in favor of Defendant. However, the Court of Appeals reversed holding that Plaintiff’s completion of the DOI approved forms did not negate an insurance agents’ duty of reasonable care. Defendant appealed.
By statute (A.R.S. Section 20-259.01), insurance agents are required to offer UIM coverage to clients. Insurance agents are allowed to prove compliance with this statute by having an insured complete DOI approved forms. Under common law, an insurance agent owes a duty of reasonable care when obtaining coverage on behalf of their clients. The Arizona Supreme Court held that the common law duty of reasonable care is distinct and separate from the statutory obligation of an agent to offer UM and UIM coverage. Defendant asserted that the statute provided agents a “safe harbor” so long as they had a client sign DOI approved forms. The Court rejected this argument as the statute did not discuss whether an agent must honor a client’s request for such coverage. Moreover, the Court concluded that if the legislature intended to preempt a cause of action they would have done so explicitly. Whether Defendant breached his duty of reasonable care under a negligence theory is a question for the trier of fact. The Court affirmed the decision of the Court of Appeals.
While not a case that addresses a dispute regarding insurance coverage, this outcome does illustrate the alternative resources which are likely to be attacked in the event of a disagreement as to coverage. Similar to the broad interpretation frequently given to insurance policies, the Court here appears to have gone to some length to ensure a recovery, despite plaintiff’s apparent understanding and execution of a form, rejecting the coverage being sought.