When is an agent not an agent?
Charles Popham contacted independent agent Steven Greenberg to obtain a commercial general liability policy for his tree removal business. Greenberg obtained a quote from Tapco Underwriters, which had authority to issue policies on behalf of Landmark American Insurance Company. Popham met with Greenberg on November 17, 2010, at which time Popham signed an application and made a down payment on the premium. Popham received a certificate of insurance from Greenberg showing a policy effective date of November 17, 2010.
Tapco issued a binder to Popham stating that it would provide temporary coverage until November 29, 2010, provided that Tapco “receive[d] a properly completed application and a premium payment within 12 days.” Per the terms of the binder, Popham’s failure to remit a completed application and the premium payment to Tapco by that date would nullify and void coverage. The language of the binder also provided that the binder “exists on its own terms and expires on its own terms. When a binder expires on its own terms, no coverage exists thereafter. Requirements for notice of cancellation to insureds do not apply to expired binder.”
On November 29, 2010, Popham met with Greenberg to make another premium payment, and Greenberg mailed a premium check and Popham’s application to Tapco either that day or the following day. It was undisputed that Tapco did not receive the premium payment and the application by November 29, 2010.
On December 7, 2010, Tapco notified Greenberg that it had not received the application and premium check for Popham’s policy and that the binder was null and void. Two days later, on December 9, 2010, Tapco received Greenberg’s mailing containing the application and the premium check and deposited the check that day. The next day Tapco informed Greenberg that additional application materials were required to issue the policy and that the policy’s effective date would be December 9, 2010. Greenberg faxed the additional materials to Tapco, and Tapco, acting on behalf of Landmark, wrote a policy for Popham with an effective date of December 9, 2010.
Meanwhile, on December 1, 2010, Popham was cutting trees with two other men. One of the men was seriously injured when a tree fell on him. The injured man sued Popham in late 2011 and won a default judgment against him in early 2012, after Popham failed to respond to the suit. Popham later filed a claim with Landmark; the insurer denied the claim, stating that no policy was in effect on the date of the accident.
On November 17, 2014, Popham filed suit against Landmark, alleging negligence, breach of contract, and bad faith failure to pay a claim. Popham also sought punitive damages and attorney fees. The court granted motions for summary judgment in favor of the defendants with respect to all claims, and Popham appealed.
In deposition, Greenberg and Popham stated that they each understood that the premium payment had to be made by November 29, 2010.
On appeal, Popham alleged several errors in the trial court’s ruling. First, he argued that the court erred in ruling that there was no agency relationship formed between Greenberg and Tapco or Greenberg and Landmark. He argued that Greenberg was acting as an agent for Tapco and/or Landmark, and that, therefore, genuine issues of fact existed as to whether an insurance contract between Popham and Tapco and/or Landmark was in effect at the time of the December 1, 2010, accident.
Second, Popham claimed that the trial court erred in finding that no insurance contract existed between Popham and either Tapco or Landmark at the time of the December 1, 2010, accident. Third, Popham claimed that the trial court erred in allowing Landmark to amend its answer to assert a statute of limitations defense to his personal injury claims after the trial court’s scheduling order deadline. Derivative of those rulings, Popham claimed that the trial court erred in granting summary judgment on his bad faith claim and his claims for punitive damages and attorney fees.
Greenberg indicated in his deposition that he was acting as an agent for Popham in bidding out his request for liability insurance to multiple underwriters, including Tapco. He testified that he was not an agent or employee of Landmark and had no contract with Landmark. Greenberg claimed he did not have the authority to issue a binder or a policy on behalf of Tapco or Landmark. Both Tapco and Landmark repeatedly denied that Greenberg had ever been their agent.
The appellate court agreed with the trial court that Popham had not produced evidence that Greenberg was expressly granted the authority to bind coverage on behalf of Landmark or Tapco. The court likewise found that Popham had not been harmed by the trial court’s decision to permit Landmark to raise the statute of limitations defense.
Popham’s additional assertions of error regarding claims against Tapco and Landmark for bad faith, punitive damages, and attorney fees were mooted by the appellate court’s ruling above. The court stated: “Because each of Popham’s claims against Tapco and Landmark fails as a matter of law, Popham cannot recover punitive damages or attorney fees.”
Popham vs. Landmark American Insurance Company-Court of Appeals of Georgia-March 9, 2017- A16A1851.