Negligence & vicarious liability claims against an insurer, agency, & agent; Duty; “Special relationship” exception to the “general no-duty-to-advice rule”; Harts v Farmers Ins Exch; Holman v Farm Bureau Gen Ins Co of MI (Holman II & III); Dictum

Holding that plaintiff-Holman failed to establish a special relationship with defendant-insurance agent (Heinzman) and that this foreclosed his claims against defendants, the court affirmed summary disposition for defendants. The case arose from an auto insurance transaction between plaintiff and defendant-Farm Bureau General Insurance Company of Michigan. He “thought he was insured when he suffered serious injuries in an automobile accident. After discovering he was not, he” filed this suit, alleging that Heinzman (and defendant-agency) was “responsible for his negligently filling out the application of insurance and that Farm Bureau” was vicariously liable for that negligence. The court previously considered the case in Holman II, the Supreme Court considered it in Holman III, and remanded the case to the trial court. On remand, defendants successfully “moved for summary disposition on plaintiff’s negligence claim. They asserted that under Harts, Heinzman had no duty to advise plaintiff of a pending or recent cancellation and that [he] and plaintiff did not form a special relationship sufficient to impose such a duty as an exception to the general no-duty-to-advise rule.” The court noted that, under “Harts, an ‘ordinary relationship between an agent and insured’ can change into a ‘special’ one so as to give ‘rise to a duty to advise on the part of the agent.’” Harts set forth four ways this can occur. Plaintiff asserted that material facts showed “he formed a special relationship with Heinzman under the first and fourth scenarios.” But as to the first, there was “no evidence that Heinzman misrepresented the nature of the coverage to plaintiff.” The most favorable reading of the record for plaintiff was that Heinzman told him “coverage would probably terminate without the proof of insurance—factual statements that plaintiff understood to be true. Thus, Heinzman made no material, false representations to [him] regarding the duration of his coverage that established a special relationship to impose a duty to advise on Heinzman.” There was also no record evidence showing he “assumed an additional duty by express agreement or promise to plaintiff under the fourth” Harts scenario. Thus, plaintiff’s negligence claim against Heinzman and his agency failed for lack of duty, which meant there could “be no vicarious liability on the part of Farm Bureau.”