Insured Failed to Prove Agent Breached Duty of Care
It is not unusual for an insured to select the minimum required uninsured or underinsured motorist coverage to save money. Only after an accident, with 20/20 hindsight, does the insured understand the need for higher limits. When the injuries are serious and the limits are inadequate, invariably the agent is sued for failing to acquire sufficient limits.
Such was the case in Omar Alabassi v. T.I.B. Insurance Brokers, Inc., No. 19-1183, United States Court Of Appeals For The Tenth Circuit (September 17, 2020) when the plaintiff, Omar Alabassi, was covered by an insurance policy obtained through T.I.B. Insurance Brokers (“TIB”). He was involved in a hit-and-run collision with another driver who fled the scene.
Alabassi brought a negligence claim against TIB, alleging that TIB failed to meet its standard of care in (1) providing him with adequate insurance coverage and (2) preparing and submitting his insurance application. The district court granted summary judgment in favor of TIB because Alabassi failed to present expert testimony establishing that TIB breached its duty of care.
Alabassi was driving his personal vehicle to pick up a customer at Denver International Airport. Before the accident, TIB sold Alabassi a commercial auto insurance policy issued by Columbia Insurance that covered both Alabassi and his limousine company. TIB advised Alabassi about which insurance policy to purchase and then helped Alabassi to prepare and submit his insurance application.
The insurance application contained a Colorado Coverage Selection Form, which allows the insured to choose the amount of uninsured motorist coverage that will be covered by his policy. Alabassi selected the minimum coverage required by Colorado law but he also checked a box for $50,000 single limit coverage. Alabassi claimed that these two options conflict with each other.
Following the accident, Alabassi claimed that he suffered over $86,000 in medical expenses but Columbia Insurance offered him only $55,000. Alabassi alleged in his complaint that TIB was negligent. At trial, TIB moved for summary judgment on the ground that Alabassi failed to offer expert testimony establishing essential elements of his negligence claim.
The parties suggest, without any citation to this circuit’s precedent, that the Tenth Circuit review a grant of summary judgment for failure to present expert testimony for abuse of discretion. Finding no need to decide the appropriate standard of review to be applied in this case, however, because it determined that the district court properly held expert testimony to be required.
To succeed on a negligence claim, a plaintiff must show that the defendant breached a duty of care owed to the plaintiff and thereby caused the plaintiff’s damages. When a claim of negligence is based on an allegation that a professional was negligent, the plaintiff must show that the professional’s conduct fell below the standard of care associated with that profession. For those practicing a profession involving specialized knowledge or skill, reasonable care requires the actor to possess a standard minimum of special knowledge and ability consistent with members of the profession in good standing. In such professional negligence cases, expert testimony is ordinarily necessary to help the factfinder determine the applicable standard of care because in most cases such standards are not within the purview of ordinary persons.
The standard of care in this case is based on TIB’s determination of the proper insurance for Alabassi—a determination requiring knowledge of terms and practices specific to the insurance industry. An ordinary person, even an experienced judge, would neither understand how a reasonably prudent insurance broker would determine the proper policy for a client nor whether TIB’s conduct was consistent with those practices.
Alabassi selected the minimum coverage required by Colorado law. Colorado law requires minimum coverage of $25,000 for one person and $50,000 for two or more persons in any one accident. Because knowledge of terms specific to the insurance industry is needed to determine whether selecting the Colorado minimum conflicts with selecting a $50,000 single limit, the district court needed expert testimony to resolve the issues.
Expert testimony was required to determine whether the options selected in Alabassi’s insurance application were inconsistent. No specialized or technical knowledge was required to determine that the insurer failed to act in good faith under those circumstances. Conversely, in this case, Alabassi’s allegations that TIB was negligent were based on an understanding of terms and practices outside the common knowledge and experience of ordinary persons. Thus, the district court did not err by deciding that expert testimony was required.
When a professional – an insurance agent or broker, a physician, a lawyer, an architect, an insurer or an accountant – is sued for breach of his or her duty of care (negligence) it is the obligation of the plaintiff to prove, first, the professional’s duty of care and that the duty was breached and that the breach caused the plaintiff damage. To establish a duty of care of a professional, like TIB in this case, requires an expert witness to explain to the trier of fact (a judge or jury) what the duty was and whether it was breached by the professional acting outside the custom and practice of the profession.
© 2020 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and email@example.com.
Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.
Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.
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