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Skaperdas v. Country Cas. Ins. Co.

Supreme Court of Illinois

March 19, 2015

STEVEN A. SKAPERDAS et al., Appellees,
v.
COUNTRY CASUALTY INSURANCE COMPANY et al., Appellants

Page 748

[Copyrighted Material Omitted]

Page 749

Laura A. Petersen and Sadiq M. Shariff, of Quinn, Johnston, Henderson, Pretorius & Cerulo, of Peoria, and Stanley E. Freeman, of Champaign, for appellants.

Aaron D. Lauter, of Frederick & Hagle, of Urbana, for appellees.

Craig L. Unrath, of Heyl, Royster, Voelker & Allen, of Peoria, for amicus curiae Illinois Insurance Association.

JUSTICE KILBRIDE delivered the judgment of the court, with opinion. Chief Justice Garman and Justices Freeman, Thomas, Karmeier, Burke, and Theis concurred in the judgment and opinion.

OPINION

KILBRIDE, JUSTICE.

Page 750

[¶1] In this case, we consider whether an insurance company's agent has a duty to exercise ordinary care and skill in procuring the specific insurance coverage requested by his customer. The appellate court held section 2-2201 of the Code of Civil Procedure (Code) (735 ILCS 5/2-2201 (West 2010)), imposes a duty on an insurance agent to act with ordinary care under the circumstances presented in this case. For the following reasons, we affirm the appellate court's judgment.

[¶2] I. BACKGROUND

[¶3] In 2006, Country Casualty Insurance Company, through its agent Tom Lessaris, issued an automobile insurance policy to Steven A. Skaperdas. Skaperdas's fiancé e, Valerie R. Day, was subsequently involved in an accident while driving one of his vehicles. Country Casualty covered the loss but required Skaperdas to change his policy to include Day as an additional driver.

[¶4] Skaperdas met with Lessaris to request coverage for Day under the insurance policy. Lessaris prepared the policy, but identified only Skaperdas as a named insured. Day was not included as a named insured under the policy. The declarations page for the policy, however, identified the driver as a " female, 30-64."

[¶5] Following issuance of the policy, Day's minor son, Jonathon Jackson, was struck by a vehicle while riding his bicycle and seriously injured. The driver's automobile insurance policy limit of $25,000 was insufficient to cover Jackson's medical expenses. Plaintiffs, therefore, made a demand for underinsured motorist coverage under the Country Casualty policy. Country Casualty denied the claim on the ground that neither Day nor Jackson was listed as a named insured on the policy.

[¶6] Skaperdas and Day, on behalf of herself and as representative of Jackson, filed a complaint alleging in count I that Lessaris was negligent in failing to procure the insurance coverage requested by Skaperdas. Plaintiffs alleged Lessaris breached his duty to exercise ordinary care and skill in renewing, procuring, binding, and placing the requested insurance coverage as required by section 2-2201 of the Code (735 ILCS 5/2-2201 (West 2010)). In count II, plaintiffs alleged Country Casualty was responsible for the acts or omissions of its agent under the doctrine of respondeat superior. In count III, plaintiffs alleged a claim for reformation of contract to include Day as an additional named insured, and in count IV they sought a declaration of insurance coverage.

[¶7] Lessaris moved to dismiss the negligence claim under section 2-619 of the Code. 735 ILCS 5/2-619 (West 2010). Lessaris claimed he did not owe plaintiffs a duty of care in procuring the requested insurance coverage. Country Casualty also filed a section 2-619 motion to dismiss the claim based on respondeat superior, asserting that it was not liable for the alleged negligence of Lessaris because he did not owe plaintiffs a duty.

[¶8] The circuit court of Champaign County granted the motions to dismiss counts I and II of the complaint. The trial court also found no just reason for delaying appeal of the dismissal of those counts. Accordingly, the trial court allowed Lessaris's and plaintiffs' motions for a Supreme Court Rule 304(a)

Page 751

finding. Ill. S.Ct. R. 304(a) (eff. Feb. 26, 2010).

[¶9] The appellate court held that a plain reading of section 2-2201 together with the definition of " insurance producer" in section 500-10 of the Illinois Insurance Code (Insurance Code) (215 ILCS 5/500-10 (West 2010)), established that " any person required to be licensed to sell, solicit, or negotiate insurance has a duty to exercise ordinary care in procuring insurance." 2013 IL App. (4th) 120986, ¶ 23, 996 N.E.2d 766, 374 Ill.Dec. 1071. Accordingly, the appellate court concluded that as an insurance producer, Lessaris owed plaintiffs a duty of care in procuring insurance coverage for them. The appellate court, therefore, reversed the trial court's dismissal of counts I and II of plaintiffs' complaint and remanded for further proceedings. 2013 IL App. (4th) 120986, ¶ ¶ 23, 24.

[¶10] We allowed Lessaris's petition for leave to appeal. Ill. S.Ct. R. 315 (eff. July 1, 2013). We also allowed the Illinois Insurance Association to file an amicus curiae brief. Ill. S.Ct. R. 345 (eff. Sept. 20, 2010).

[¶11] II. ANALYSIS

[¶12] On appeal to this court, Lessaris contends that section 2-2201 does not impose a duty of ordinary care on a " captive insurance agent" to procure a specific type or amount of coverage for a client. A captive agent of an insurance company owes a duty to the company, not to the insured. Lessaris argues that only insurance brokers owe a fiduciary duty to an insured by virtue of being employed by the insured, and section 2-2201 is intended to limit the liability of insurance brokers in a fiduciary relationship. Thus, according to Lessaris, the statute applies only to insurance brokers. Lessaris contends the statute is not intended to create a new duty for captive agents to insureds. Accordingly, as a captive agent of Country Casualty, he owed no duty to plaintiffs.

[¶13] Country Casualty adopts Lessaris's argument that he did not owe a duty to plaintiffs. Country Casualty maintains that it cannot be held liable to plaintiffs for the alleged negligence of its agent when ...


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