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ROBINSON v. J. SMITH LANIER & COMPANY3/15/1996
Plaintiffs appeal the trial court's grant of summary judgment to defendant insurance agent on the basis that no injury could result to plaintiffs as a result of any negligence of defendant in failing to timely procure workers' compensation coverage as no workers' compensation claim had been timely filed for benefits under such coverage and the relevant statute of limitation barred any future claim.
Glenn R. Robinson and Ronald C. Robinson d/b/a Robinson & Robinson Construction Company (the Robinsons) appeal the trial court's grant of summary judgment to J. Smith Lanier & Company of Carrollton (J. Smith Lanier), an insurance agency, on the Robinsons' claim for negligent failure to procure insurance.
On December 13, 1990, the Robinsons paid a premium to J. Smith Lanier for workers' compensation insurance. The Robinsons allege that coverage was to begin on December 14, 1990. On that very day, December 14th, the Robinsons allege that one of their employees suffered a work-related injury. The Robinsons reported the accident and learned that coverage had been assigned to United States Fidelity & Guaranty (USF&G; and became effective on December 17, 1990. USF&G;denied coverage, claiming that its insurance was not in effect at the time of the accident. While the Robinsons reported the accident to USF&G; the employee never filed a workers' compensation claim. Glenn R. Robinson deposed that the employee was given $200 per week or a total of $7,720 during the time that he was not working so that the employee could pay his bills. However, the employee testified to his understanding that the money was a loan, and almost all of the check stubs produced by the Robinsons reflecting these payments were marked as a "loan." The Robinsons did not pay or promise to pay their employee anything else including medical bills. The Robinsons' final payment to the employee occurred in September 1991.
On February 22, 1992, the Robinsons sued J. Smith Lanier for negligently failing "to place the insurance coverage in a timely manner." Subsequently, the trial court granted J. Smith Lanier's motion for summary judgment concluding that, as a matter of law, the Robinsons had not and could not suffer any damages due to the insurance agent's alleged negligence.
Assuming that J. Smith Lanier failed to procure the coverage in a timely manner, the trial court found no evidence that the Robinsons had been harmed as a result of the alleged error (a) because no workers' compensation claim had been timely filed and (b) because relevant statutes of limitation barred any such claim in the future. For the reasons outlined below, the trial court did not err in granting
defendant's motion for summary judgment.
1. When an insurance agent negligently fails to procure insurance, he steps into the shoes of the carrier and becomes "liable for loss or damage to the limit of the agreed policy. (Citations and punctuation omitted.) Ga. Farm Bureau Mut. Ins. Co. v. Arnold, 175 Ga. App. 850, 852 (334 S.E.2d 733) (1985). Similarly, when an agent negligently fails to procure insurance, his liability is limited to those losses that would have been covered by the agreed policy. Peagler & Manley Ins. Agency v. Studebaker, 156 Ga. App. 786 (275 S.E.2d 385) (1980) (" here there has been no showing that recovery against the insurance carrier would have been possible, the alleged negligence of the insurance agent in failing to procure . . . coverage has not been shown to have caused the loss").
Assuming without deciding that defendant was negligent in failing to timely procure the subject coverage, it is undisputed that no workers' compensation claim was ever filed s
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