Homeowners' insurance claim is denied despite alleged errors by agent
Marvin and Debrah Micheau sued their insurance agency and agent Steven Patrick Braun in Delta County Circuit Court. They had experienced a fire in one room before purchasing insurance and decided they needed coverage. The house was then destroyed by a second fire several months later. The insurance policy they had purchased did not cover the fire because the insurance company claimed Micheaus had misrepresented the fact that the home was "under construction."
According to Debrah, when they purchased coverage, she called Braun and answered his insurance application questions over the phone. She claimed that she explained to Braun that they had experienced a fire, that they were making repairs, and asked Braun to mail the policy to her temporary rental address. She claimed that by Braun's explanation to her, the house was not "under construction" at the time the damaged ceiling was being repaired.
The agent had an entirely different account of the conversation. He claimed that Debrah never disclosed anything about the previous fire or that the home was not currently occupied while under repair. He took pictures of an entirely different home which he mistakenly believed was the home Debrah was describing. (Well, that sounds like he made a very professional investigation and analysis...Did he not ask Debrah for the street number or did he simply not verify it when he went to take pictures?) Somehow, it seems to us that his fact of photographing and filing pictures of the wrong house lend credence to Debrah's claims that the insurance application issues arose on the agent's end.
In any event, the trial judge dismissed the claim summarily, ruling that the insurance agent owed no duty to the Micheaus. The Supreme Court ruled a few years ago that an insurance agent's only duty is to the insurance company to sell insurance, absent a "special relationship" involving an insured's unusual reliance on the agent for advice. In this case, on appeal, the Court of Appeals ruled that the Micheaus had proved a "special relationship" because he took on the fiduciary duty to procure coverage and if Debrah's tesimony is believed, Braun performed that duty negligently.
Nevertheless, the court upheld summary disposition of the claim against Braun because the court ruled that the home was completely uninsurable after the first fire. The court based this conclusion on an affidavit filed by the attorneys for the agent, attesting to the fact that coverage could not be procured on an temporarily unoccupied, fire-damaged home. This seems unlikely, but the Micheaus did not file any contradictory evidence.