Court partially reverses summary disposition; allows excavator to amend to seek damages from incompetent agent

Land Escape Outdoor Maintenance [LEOM] sued Insurance Advisors, Inc. [IA], in Oakland County Circuit Court, after one of its dump trucks incurred a liability claim.  LEOM's insurer, Secura, had denied that there was liability coverage on the truck involved in the claim.  LEOM sued its agent, noting that for a decade it had purchased insurance through IA that was reduced during winter storage periods.  LEOM's owner manager testified that IA had represented to him that he would have limited liability coverage during storage periods; that it negligently allowed liability coverage to be removed; and that it negligently represented that the coverage was still extant.

During discovery it turned out that Secura, and not IA, had botched the coverage by making a misrepresentation about what equipment would have liability coverage and when.  For that reason, LEOM's original complaint of negligent misrepresentation by the agent was summarily dismissed and the Court of Appeals upheld that outcome.  Nevertheless, the judges concluded that it was error for the lower court to refuse to allow LEOM to amend its complaint to raise the failure by IA to write the coverage that its' insured had sought--and purchased.

The Court pointed out that even if LEOM should have read and understood that it had no liability coverage, despite IA's allegedly erroneous advice, this would be comparative fault and not entirely dispositive of LEOM's claim.  Since IA negligently procured the wrong coverage and failed to respond to Secura's erroneous endorsement, LEOM had stated a valid claim against an independent insurance agent.

The Court also rejected the argument that insurance "professionals" should be protected by the shorter, two-year, statute of limitations governing professional malpractice.  The Judges pointed out that a similar claim was recently rejected in the Court of Appeals and that, as the defendant agent explained during her deposition, her education was "irrelevant;" she "majored in English and education" and lacked any specialized education in a profession.