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Buelow v. Madlock4/13/2005
REVERSED AND DISMISSED
After a bench trial, appellee Kenneth Madlock was granted judgment in the amount of $12,563.65 on his claim of negligence against appellants Steve Buelow and his insurance agency. Buelow raises three issues on appeal. He contends: (1) that the trial court erred in imposing a duty upon him to review appellee's prior policies and inspect the premises before placing coverage; (2) that appellee's claims were barred by the statute of limitations; and (3) that the trial court's findings of negligence were clearly erroneous. We find merit in appellant's first issue and reverse and dismiss. Reversing on this point makes it unnecessary to decide the other issues.
Appellee is a businessman in Hope who owns a body shop, a Food Mart, and an upholstery shop. When the upholstery business was purchased in January 1998, appellee carried insurance on his businesses through the Green-Ellis Insurance Agency. The terms of the purchase agreement for the upholstery shop required appellee to insure the building under a standard fire and extended coverage policy. Green- Ellis provided coverage for appellee's businesses under a package policy specifically insuring the upholstery shop for $75,000 for a premium of $1,271. This policy was a "special form" policy which provided greater protection than standard extended coverage, as it covered the building from collapse due to snow and ice accumulation.
Appellee had previously purchased insurance through Buelow before moving his business to Green-Ellis. At the time the upholstery shop was purchased, Buelow still provided appellee's workers' compensation insurance. The parties are not in agreement as to who contacted whom, but in March 1998 coverage for the upholstery shop was transferred to Buelow. The policy that was issued provided standard fire and extended coverage, and the policy limit was reduced to $50,000 for a premium of $320. The policy was renewed in 1999 through March 2000.
On January 28, 2000, Hempstead County experienced a record snowfall with totals in the Hope area exceeding seventeen inches. The building that housed the upholstery shop collapsed under the weight of the snow and ice. Appellee obtained a rebuilding estimate in the amount of $22,843.60. Appellee made a claim under the policy with Buelow, but the claim was rejected because the policy specifically excluded coverage for losses occasioned by ice, snow, or sleet.
Appellee filed the instant lawsuit alleging that Buelow had been negligent because the policy did not provide coverage for the loss of the building due to snow and ice. Buelow filed a motion for summary judgment, which was denied by the trial court, and the case proceeded to trial. Appellee testified that he let Buelow know that he owed $75,000 on the building and that he wanted "full coverage" for anything that could happen to the building. He acknowledged that he now knew that "full coverage" was not a term of art recognized in the insurance industry and that he did not know that it was necessary to make special provision for snow and ice. In his testimony, appellee admitted that he had never read the policy issued through Buelow. He also did not know what coverage was provided in the Green-Ellis policy because he had not read it either. He further understood that the policy issued through Buelow provided the coverage required under his purchase agreement, but he said that Buelow had not reviewed the contract. Appellee also testified that it was his decision to reduce the limit of liability to $50,000 and that it had been his aim to obtain a cheaper premium because he thought Green-Ellis's was too high. Appellee said that he had coverage for this loss with Green-Ellis but d
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