Jeffrey S. & Terri Norris, V, Farmers Insurance Company Of Washington , 415 P.3d 1219 ( 2018 )


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  •       IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
    )
    JUNFANG HE,                             )          No. 76236-2-1
    )
    Plaintiff,          )          DIVISION ONE
    )
    v.                         )
    )
    JEFFREY S. NORRIS and TERRI             )          UNPUBLISHED
    NORRIS, and the marital community       )
    composed thereof; and JOHN DOES         )          FILED: March 19, 2018
    1-5,                                    )
    )
    Defendants.         )
    )
    JEFFREY S. NORRIS and TERRI             )
    NORRIS,                                 )
    )                                                         :•••)
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    Appellants,         )                                                     C)
    )                                                          -71
    v.                         )                                       .1,14
    W-7
    r4171
    )
    FARMERS INSURANCE COMPANY               )                                               c:3
    3F:
    OF WASHINGTON, a Washington             )                                      07
    1\3
    rz-;
    -c*
    corporation; AMY ELIZABETH              )
    MARCH, a Washington resident; and       )
    DAN ANDERSON, a Washington              )
    resident,                               )
    )
    Respondents.        )
    )
    Cox, J. — Jeffrey and Terri Norris (together "Norris") appeal the trial
    court's order granting summary judgment to Farmers Insurance Company of
    Washington and its agents Dan Anderson and Amy Elizabeth March and
    No. 76236-2-1/2
    dismissing Norris's third party complaint with prejudice. Because there is neither
    any showing of a duty owed by Farmers nor any genuine issue of material fact
    whether a special relationship exists, summary judgment is proper. We affirm.
    The material facts are largely undisputed. Norris hit Junfang He, a
    pedestrian, while driving, and He sued Norris for damages that exceeded the
    liability limits of their auto insurance policy with Farmers Insurance. Farmers
    offered to settle with the pedestrian for the policy limits, but He refused this offer.
    Norris then impleaded Farmers by a third party complaint, claiming
    negligence. Farmers moved for summary judgment, arguing that it had no legal
    duty and that no genuine issue of material fact existed regarding any claimed
    special relationship that might have created a duty. The trial court agreed and
    dismissed the third party complaint with prejudice.
    Norris appeals.
    DUTY
    Norris argues that there are genuine issues of material fact whether
    Farmers owed a duty to Norris, an essential element of the negligence claim.
    Specifically, they argue that a duty arises because of a special relationship
    between the parties. We disagree.
    "[S]ummary judgment is appropriate where there is `no genuine issue as to
    any material fact and .. . the moving party is entitled to a judgment as a matter of
    law.'"1 Although the evidence is viewed in the light most favorable to the
    1 Elcon Constr., Inc. v. E. Washington Univ., 
    174 Wash. 2d 157
    , 164, 273
    P.3d 965(2012)(quoting CR 56(c)).
    2
    No. 76236-2-1/3
    nonmoving party, if that party is the plaintiff and it fails to make a factual showing
    sufficient to establish an element essential to its case, summary judgment is
    warranted.2
    Once the moving party shows there are no genuine issues of material fact,
    the nonmoving party must bring forth specific facts to rebut the moving party's
    contentions.3 The nonmoving party must put forth admissible evidence showing
    the existence of a triable issue.4 It cannot rely on the allegations contained in its
    pleadings, conclusory statements, or speculation.5 If the "nonmoving party fails
    to controvert relevant facts supporting a summary judgment motion, those facts
    are considered to have been established."6 Finally, loin review of an order
    granting or denying a motion for summary judgment, the appellate court will
    consider only the evidence and issues called to the attention of the trial court."7
    2 Young v. Key Pharmaceuticals, Inc., 
    112 Wash. 2d 216
    , 225, 
    770 P.2d 182
    (1989), overruled on other grounds by 
    130 Wash. 2d 160
    (1996).
    3 Elcon   Constr., 
    Inc., 174 Wash. 2d at 169
    .
    "Seven    Gables Corn. v. MGM/UA Entm't Co., 
    106 Wash. 2d 1
    , 13, 721 P.2d
    1(1986).
    5   Elcon Constr., 
    Inc., 174 Wash. 2d at 169
    ; 
    Young, 112 Wash. 2d at 225
    .
    6 Cent. Washington    Bank v. Mendelson-Zeller, Inc., 
    113 Wash. 2d 346
    , 354,
    779 P.2d 697(1989).
    7 RAP   9.12.
    3
    No. 76236-2-1/4
    "For a claim of negligence, the plaintiff must establish duty, breach,
    causation, and damages."8 The "determination of whether a legal duty exists is
    initially a question of law for the court."8
    Washington law is clear—an insurance company and its agents have no
    duty to review or counsel an insured on the adequacy of coverage unless there is
    a special relationship between the insured and the agent.1° A special
    relationship exists between the agent and insured if: "(1) the agent holds himself
    out as an insurance specialist and receives additional compensation for
    consulting and advice, or (2) there is a long-standing relationship, some type of
    interaction on the question of coverage, and the insured relied on the agent's
    expertise to the insured's detriment."11 "[I]n cases where the insured never
    consulted with the agent about the adequacy of coverage and the agent never
    gave any advice, courts have held that no special relationship exits."12
    We review de novo a trial court's summary judgment order.13
    8 Lipscomb v. Farmers Ins. Co. of Wash., 
    142 Wash. App. 20
    , 28, 
    174 P.3d 1182
    (2007).
    McClammy v. Cole, 
    158 Wash. App. 769
    , 773-74, 243 P.3d 932(2010)
    9
    (quoting Gates v. Logan, 
    71 Wash. App. 673
    , 676, 
    862 P.2d 134
    (1993)).
    10 
    McClammy, 158 Wash. App. at 774
    ; 
    Lipscomb, 142 Wash. App. at 28
    ;
    Shows v. Pemberton, 
    73 Wash. App. 107
    , 114-15, 
    868 P.2d 164
    (1994); 
    Gates, 71 Wash. App. at 678
    ; Suter v. Virgil R. Lee & Son, Inc., 
    51 Wash. App. 524
    , 528-29, 754
    P.2d 155(1988).
    11 
    Lipscomb, 142 Wash. App. at 28
    ; see 
    Gates 71 Wash. App. at 677
    .
    12   
    Id. at 28-29
    (citing 
    Gates, 71 Wash. App. at 677-78
    ; 
    Suter, 51 Wash. App. at 529
    ).
    13   Elcon Constr., 
    Inc., 174 Wash. 2d at 164
    .
    4
    No. 76236-2-1/5
    Norris fails to argue persuasively that Farmers owes any duty aside from
    that established by a special relationship. Any other claim would be unsupported
    by well-established case law in the area of insurance.
    Norris argues that there are genuine issues of material fact whether
    Farmers voluntarily assumed a duty to advise them about liability limits, and then
    breached that duty. In support, they cite non-insurance cases that recognize a
    duty "to exercise reasonable and ordinary care."14 We refuse to consider this
    argument because Norris fails to cite any authority recognizing such a duty in the
    insurance context.15
    Norris relies on the declaration of their expert, J. Kay Thorne, to support
    their argument that they have raised a genuine issue of material fact whether
    Farmers and its Agents owed them a duty to review their coverage for gaps and
    inadequate liability limits. That reliance is misplaced.
    Because the existence of a duty is a question of law, Thorne's statements
    are insufficient to raise a genuine issue of material fact as to the existence of a
    duty on the part of Farmers and its agents.16
    Norris also cites to the deposition testimony of Farmers management as
    support for their argument, claiming that the duty was "described and embraced
    14 See, e.g., Gordon   v. Deer Park Sch. Dist., No. 414, 
    71 Wash. 2d 119
    , 122,
    
    426 P.2d 824
    (1967).
    15 SeeDarkenwald v. Emp't Sec. Dep't, 
    183 Wash. 2d 237
    , 248, 350 P.3d
    647(2015); RAP 10.3(a)(6); King Aircraft Sales, Inc. v. Lane,68 Wn. App. 706,
    717, 
    846 P.2d 550
    (1993).
    16   
    Suter, 51 Wash. App. at 527
    .
    5
    No. 76236-2-1/6
    by Farmers, its managers, and its agents." Again, because the existence of a
    duty is a question of law, the testimony of Farmers Insurance management is
    insufficient to raise a genuine issue of material fact whether Farmers had a duty
    to advise Norris about the liability limits of their insurance policy.17
    Special Relationship
    Thus, the question we decide is whether there are any genuine issues of
    material fact whether a special relationship exists under the circumstances of this
    insurance case. We conclude that there are no such issues.
    The claim is based on the argument that a long-standing relationship
    between the parties existed, the interactions between Norris and the agents on
    questions of coverage, and Norris's reliance on the agents' expertise. A careful
    review of the record shows these claims have no basis in fact.
    In support of its summary judgment motion, Farmers submitted
    declarations from both agents. The declarations established that neither agent
    ever received compensation or consideration from Norris for consultation or
    advice on issues involving coverage or policy limits. Norris never discussed
    liability coverage limits with the agents. Norris did not ask the agents either to
    recommend higher or lower limits with regards to their auto insurance liability or
    whether excess or umbrella coverage might be available until after the accident.
    Instead, Norris only communicated with the agents to add or remove vehicles
    from the policy or to discuss claims.
    17   
    Id. 6 No.
    76236-2-1/7
    Farmers also submitted portions of Norris's deposition testimony where
    Norris acknowledged that they never paid any money to the agents for providing
    advice on insurance issues. Norris never discussed policy limits for liability
    coverage with the agents or asked them about the sufficiency of the liability
    policy limits. They never spoke either with them or anyone working with them
    about what would be an appropriate amount of liability coverage, and the agents
    never offered an opinion on that issue.
    In opposition to summary judgment, Norris submitted affidavits of their
    own as well as from Thorne. They also submitted excerpts from the deposition
    testimony of Farmers Insurance management. But none of their submissions
    controvert the material facts supporting the summary judgment motion. That is
    because the submissions fail to show that Norris discussed their policy liability
    limits with the agents.18 Even Thorne admits that there was no evidence of any
    interaction between Norris and the agents on the issue of auto liability limits.
    Thus, Norris failed to establish any genuine issue of material fact whether they
    had a special relationship with the agents.18
    Norris relies on their long term relationship with Farmers, but case law is
    clear that, in order to raise a genuine issue of material fact on the existence of a
    special relationship, the insured must introduce some evidence showing that
    they interacted with the insurance agent regarding the adequacy of coverage.
    For example, in Lipscomb v. Farmers Insurance Co. of Washington, William
    18 See   Cent. Washington 
    Bank, 113 Wash. 2d at 354
    .
    18 Seven   Gables 
    Corp., 106 Wash. 2d at 13
    .
    7
    No. 76236-2-1/8
    Lipscomb purchased a property and casualty insurance policy for his rental
    property that had a $100,000 liability limit.20 Lipscomb's tenant was badly burned
    when the rental property caught fire, and the damages exceeded the policy
    limits.21 Lipscomb sued Farmers and the agent who sold him the policy for
    negligently failing to ensure that he was adequately insured and failing to advise
    him of an appropriate liability limit.22
    Lipscomb claimed that he had a special relationship with his insurance
    agent because they had a long term relationship, they discussed coverage limits,
    and the agent had assured him that he was adequately covered.23 He argued
    that he relied on his agent's assurances that he was covered and never thought
    to ask about the adequacy of that coverage.24
    This court concluded that the record failed to establish any genuine issues
    of material fact about the existence of a special relationship.25 There was no
    evidence that the agent received additional compensation, and Lipscomb failed
    to establish that he and the agent ever discussed the adequacy of the policy
    limits.26 Although the insured and the agent discussed coverage, there was no
    20
    142 Wash. App. 20
    , 22, 
    174 P.3d 1182
    (2007).
    21   
    Id. at 23.
           22   
    Id. 23 Id.
    24    
    Id. at 25.
    25    
    Id. at 29.
    26    
    Id. 8 No.
    76236-2-1/9
    special relationship as a matter of law because the insured "did not request
    advice about whether he should increase his policy limits."27
    Likewise, in McClammy v. Cole, Division Three of this court held that even
    though there was an actual exchange between the agent and the insured about
    improvements to the insured's home and the homeowner's policy limits, there
    was no special relationship as a matter of law.28 After making the home
    improvements, Richard and Mary Lou McClammy(McClammy) went to their
    insurance agent's office to discuss an increase in their policy premiums.29 The
    agent also emailed McClammy regarding premiums and factors that go into the
    calculation of coverage and rates, but McClammy admitted that they never asked
    the agent to increase the limits on their homeowner's policy.39
    The court concluded that there was no special relationship because there
    was no evidence of any interaction about the adequacy of coverage.31
    McClammy's request for information and the agent's act of providing an
    estimated cost of replacement figure was not enough.32
    In their response opposing summary judgment below and in their briefing
    on appeal, Norris fails to address Lipscomb, McClammy or any of the earlier
    27   Id.
    28   
    158 Wash. App. 769
    , 774-76, 243 P.3d 932(2010).
    29   
    Id. at 772.
    38   
    Id. 31 Id.
    at 774.
    32   
    Id. at 775.
    9
    No. 76236-2-1/10
    cases establishing that, in the absence of a special relationship, an insurance
    agent has no obligation to review or counsel the insured on insurance liability
    limits.33 We must assume Norris has knowledge of these cases, but no means to
    rebut them with anything that is material.
    Instead they rely on Shah v. Allstate Ins. Co. as support for their
    argument.34 Such reliance is misplaced.
    In Shah, both the trial court and this court appear to have assumed that
    there was a legally recognized duty.35 In any event, neither the trial court nor this
    court identified any authority for that proposition. Thus, we conclude that case is
    of little or no value in considering the question now before us.
    In any event, the insurance agent in Shah specifically told Ratilal and
    Lalita Shah (Shah)that their insurance premiums were for replacement cost
    coverage of their property.36 Because Shah specifically asked about the
    adequacy of coverage, there were genuine issues of material fact whether the
    agent was negligent in failing to advise Shah that they had inadequate
    coverage.37 Also, because the agent provided Shah with erroneous advice, there
    was a genuine issue of material fact whether the agent's failure to verify his
    33 See, e.g., 
    Shows, 73 Wash. App. at 114-15
    ; 
    Gates, 71 Wash. App. at 677
    -
    78; 
    Suter, 51 Wash. App. at 528-29
    .
    34   
    130 Wash. App. 74
    , 
    121 P.3d 1204
    (2005).
    
    36 130 Wash. App. at 81-83
    .
    36   
    Id. at 79.
    37   
    Id. at 83-85.
    10
    No. 76236-2-1/11
    calculations for the necessary amount of replacement cost coverage caused
    Shah to underinsure.38 The record here is unlike that case.
    Likewise, Norris misplaces reliance on Peterson v. Big Bend Insurance
    Agency, Inc.39 In that case, Roger and Larae Peterson (Peterson) expressly
    stated that they wanted to insure their home for its full replacement value, and
    the insurance agent agreed to calculate the replacement cost value.40 The agent
    incorrectly advised Peterson on how replacement value would be calculated.41 In
    concluding that there was a genuine question of material fact whether a duty
    existed, the court distinguished cases that "did not involve a specific promise by
    an agent as part of the agency relationship."42
    Here, there is no evidence that Norris asked the agents about the
    adequacy of their insurance. So Norris's reliance on the holdings in Shah and
    Peterson is misplaced. Because Norris never consulted with the agent about the
    adequacy of coverage and the agent never gave any advice, Norris failed to
    establish a genuine issue of material fact whether they had a special relationship
    with the agents.43
    38   
    Id. at 82.
    39   
    150 Wash. App. 504
    , 202 P.3d 372(2009).
    40 
    Peterson, 150 Wash. App. at 510
    .
    41   
    Id. at 514.
    42   
    Id. at 517.
    43   
    McClammy, 158 Wash. App. at 774
    (quoting 
    Lipscomb, 142 Wash. App. at 28
    -29).
    11
    No. 76236-2-1/12
    FAILURE TO TRAIN AND SUPERVISE
    Norris argues that there are genuine issues of material fact whether
    Farmers failed to train, supervise, and monitor its agents and whether it failed to
    take reasonable steps to enforce compliance with the standards that Farmers
    expects from its agents. We disagree.
    Norris concedes that Famers agents are independent contractors. They
    fail to cite to any authority imposing an obligation on an insurance company to
    train or supervise an independent contractor. Accordingly, we reject this
    argument without further discussion."
    We affirm the trial Court's order granting summary judgment.
    WE CONCUR:
    c/tc
    44 See    
    Darkenwald, 183 Wash. 2d at 248
    .
    12