INSURANCE-RELATED COURT CASES

Digested from case reports published online

COURT DECISIONS

Yankee go home
Yankee Pride Transportation and Logistics, Inc., was a long-distance freight hauler owned by Larry Sidelinger. UIG was an independent insurance agency that acted as an intermediary between its clients and the insurance carriers it represented. Yankee Pride engaged UIG to handle its insurance needs starting in 2012. UIG employee Karie Michaud managed Yankee Pride’s account. The parties had a course of dealing over the years that included UIG “facilitating Yankee Pride’s renewal of its insurance on an annual basis.” In 2014, Michaud secured a policy for Yankee Pride from Great West Casualty Company and renewed that policy at the ends of 2015, 2016, and 2017.
On February 20, 2018, Great West sent UIG a notice of nonrenewal regarding Yankee Pride’s policy, which was due to expire on December 27, 2018. The notice cited Yankee Pride’s poor safety record as the basis for nonrenewal. After receiving the notice, Michaud contacted Great West underwriter Craig Harmon and asked him if Great West would reconsider its decision regarding Yankee Pride. Harmon told Michaud to contact him closer to the time of renewal, at which point he would assess whether Yankee Pride’s safety problems persisted.
Michaud had been trying to contact Harmon for “quite some time” to revisit the renewal issue before finally speaking with him by phone on or around December 21, 2018—less than a week before Yankee Pride’s policy was due to lapse. Harmon asked Michaud to send him the details of her request in writing, which she did by email that same day. Michaud also called Sidelinger on December 21, 2018, and told him about her difficulties renewing Yankee Pride’s policy with Great West. Sidelinger asked Michaud if he should shop around for insurance himself and thereafter contacted at least one other insurance agency. Meanwhile, Great West affirmed its decision not to renew Yankee Pride’s policy in late December 2018 based on Yankee Pride’s safety record.
On January 2, 2019, six days after Yankee Pride’s policy lapsed, Michaud emailed Sidelinger to inform him that Yankee Pride could secure insurance by entering an assigned risk pool and estimated what the policy would cost. Michaud informed Sidelinger that Yankee Pride would have to include a check for 25% of the policy’s cost with an application for insurance. Sidelinger forcefully declined the assigned risk pool option because he thought it was too expensive.
Peter Clavette, UIG’s agency manager and Michaud’s supervisor, emailed Sidelinger on January 9, 2019, about the renewal issues. Clavette admitted that UIG had let Yankee Pride “know about the issues in finding coverage way too late.”
After its insurance lapsed, Yankee Pride lost a client, Huber Engineered Woods, because it could not provide proof of insurance. A Huber representative testified at a deposition that the company would have remained a client had Yankee Pride been able to provide proof of insurance. The loss of Huber was a major blow to Yankee Pride’s business.
Yankee Pride filed a complaint against UIG alleging negligence and breach of contract and later added a count for breach of fiduciary duty. UIG moved for summary judgment on all counts, which the court granted on the ground that there was no genuine dispute of material fact as to breach of duty. After having its motion for reconsideration denied, Yankee Pride timely appealed.
On appeal, Yankee Pride argued that it had an implied contract with UIG based on the parties’ long-standing relationship and that UIG breached that contract by failing to make timely efforts to renew Yankee Pride’s policy. The parties agreed that their course of dealing included UIG “facilitating Yankee Pride’s [insurance] renewal” each year. Even if UIG had impliedly contracted to advise Yankee Pride of policy details without an affirmative request for that information, however, the court said that Yankee Pride’s claim for breach of contract failed for lack of causation.
With respect to negligence, the court found that this assertion also failed for the same reason as the breach of contract claim: There was no competent evidence that established causation. For the same reason the court found that Yankee Pride’s claim of breach of fiduciary failed for lack of causation.
The judgment of the trial court was affirmed.
Yankee Pride Transportation and Logistics, Inc. v. UIG, Inc.—Maine Supreme Judicial Court—December 23, 2021—No. 2021 ME-65.