INSURANCE-RELATED COURT CASES
Digested from case reports published online
Garret and Shelly Falkenburg contracted with Laramie Investment Company, Inc., and its owner and president, Brad Jackson, to obtain a policy for their ranch and surrounding outbuildings in Douglas, Wyoming. The Falkenburgs wanted a policy that covered their land, their house and its contents, and several outbuildings on their property, including a Quonset hut.
Jackson obtained a policy from Nationwide AgriBusiness Company. The synopsis of the policy read:
$1,000,000/$2,000,000 general – premises liability limit (for your 406 acres, and the 9,000 leased acres)
Additional Insured Endorsement (for the leased land – for the landowner to be listed & notified)
Dwelling/Home insured at $411,460
Personal property insured at $288,022 (70% of dwelling limit)
Other Structures on Property insured at $41,146 (10% of dwelling limit)
Dwelling and personal property is insured at replacement cost.
Deductible is $1,000
Total annual premium is $4,148.00 for the year and can be issued full pay or with payments.
The policy was effective as of July 5, 2018.
On July 28, after a tornado destroyed their home and Quonset hut, the Falkenburgs discovered that the policy did not cover the Quonset hut or its contents. On the two-year anniversary of the tornado, the Falkenburgs sued Laramie Investment Company and Jackson for breach of contract, negligence, and “reasonable expectations.” The district court concluded that the statute of limitations had expired and granted summary judgment to Laramie Investment Company and Jackson. The Falkenburgs appealed.
On appeal, the Falkenburgs contended that their claim was governed by the four-year statute of limitations applicable to ordinary negligence actions because Jackson was not a “professional.” They relied on the definition of “professional” found in the Wyoming Professional Review Panel Act, which defines a “professional” as a person having at least one year of specialized post-secondary education. The Falkenburgs concluded that, because insurance agents are not required to have any specific post-secondary education, they are not professionals, and their actions are not subject to the two-year statute of limitations.
The court found that Jackson qualified as a “professional.” The insurance industry is subject to state regulation and licensure requirements. An insurance producer is “a person required to be licensed under the laws of this state to sell, solicit or negotiate insurance, including, but not limited to, agents and brokers.” To obtain a license to produce insurance, applicants must be at least 18 years of age, demonstrate they have not committed an act resulting in the denial, suspension, or revocation of a license, successfully pass specific examinations, pay license fees, and provide the commissioner with fingerprints and other necessary information to complete a criminal background check. Maintaining the license requires continuing education, including “ethics” training. Like real estate agents, insurance agents who violate the insurance code are subject to sanctions.
Moreover, the Falkenburgs’ expert witness opined that insurance agents are “professionals” and referred to selling insurance as a “profession.” Finally, the Falkenburgs relied on Jackson to procure the appropriate insurance for their situation by virtue of his profession. The court concluded that the two-year statute of limitations applied to the Falkenburgs’ claims against Jackson.
Finally the court addressed the Falkenburgs’ contention that the court should extend Wyoming’s “continuous care doctrine” to Jackson’s actions in this case. They argued that Jackson had the ability and duty to correct the policy omission up until the date of the tornado and continued to act as their agent after the tornado, providing “continuous care” and tolling the statute of limitations. The court disagreed.
According to the court, Jackson was a professional, the two-year statute of limitations expired before the Falkenburgs filed their complaint, the district court correctly granted summary judgment to Jackson and Laramie Investment Company, and the court declined to apply the “continuous care doctrine” to the facts of this case.
Falkenburg v. Laramie Investment Co., Inc., and Brad M. Jackson—Wyoming Supreme Court—August 10, 2023—No. S-22-0313.