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SZELENYI v. MORSE7/30/1991
457, 464 (Iowa 1984); see Hardt v. Brink, 192 F. Supp. 879, 880 (W.D.Wash. 1961). An insurance agent does not have a duty to advise an insured about adequacy of coverage merely because an agency relationship exists between the parties. Before such a duty can arise, a special agency relationship must exist between the parties. See, e.g., Nelson v. Davidson, 155 Wis.2d 674, 456 N.W.2d 343, 347 (1990); Bruner v. League Gen. Ins. Co., 164 Mich. App. 28, 416 N.W.2d 318, 320 (1987); Nowell v. Dawn Leavitt Agency, Inc., 127 Ariz. 48, 617 P.2d 1164, 1168 (App. 1980); but see Dimeo v. Burns, Brooks & McNeil, Inc., 6 Conn. App. 241, 504 A.2d 557, 559 (1986).
"The existence and extent of the duties of the agent to the principal are determined by the terms of the agreement between the parties, interpreted in light of the circumstances under which it is made. . . ." Restatement (Second) of Agency ยง 376 (1958). The agent's duties are based on the manifestations of consent of the parties and ordinarily must be inferred from the parties' conduct. Id., comment a. We agree with MPN that there is not enough in the evidence of the course of dealings between MPN and Szelenyi to infer an agreement that MPN had a duty to advise Szelenyi or give him information as to the adequacy of his professional liability coverage.
Although the parties had a course of dealings that spanned over twelve years, there is no evidence that Szelenyi ever manifested a desire for MPN to give him advice or information about adequate coverage limits, nor is there evidence that MPN gave Szelenyi advice or information about what it considered to be adequate coverage limits. When Szelenyi first procured professional liability insurance through Dow & Pinkham, MPN's predecessor, the evidence shows only that he asked that the agency contact him at home after 5:00 p.m. and that the handwriting on the initial insurance application was not Szelenyi's. There is no evidence in the record as to who did complete the application, who
The standard procedure followed by MPN for renewing Szelenyi's policy was to send him an application with certain information written in by an MPN employee to simplify the renewal process, including Szelenyi's name, address, policy number, and current coverage limits. Szelenyi argues that the jury reasonably could infer that by checking off the previous year's policy limits, MPN was undertaking a duty to advise Szelenyi as to appropriate insurance coverage. In light of evidence that MPN offered Szelenyi the opportunity to increase his coverage at least twice over the course of their relationship, however, such an inference cannot be rationally made. In a 1981 letter included with Szelenyi's renewal application, an MPN employee wrote Szelenyi that "if you are interested in increasing your limits of liability I will be happy to provide you with a quote." That offer demonstrates that MPN was leaving decisions about appropriate coverage to Szelenyi rather than undertaking any responsibility to give advice or information to Szelenyi about the adequacy of his coverage. Moreover, there is no evidence that Szelenyi responded to MPN's notices that higher coverage was available, or, if he did respond, whether MPN gave him advice or information about higher limits that he rejected.
In the evidence of the dealings between MPN and Szelenyi, there is no suggestion that they had anything more than an ordinary agency relationship that generally exists between an insurance agent and an insured party. We decline to sustain a judgment that imposes a legal duty on an insurance agent to advise or give information to an insured party concerning the adequacy of insurance coverage in the absence of evidence of a special relati
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