Opinion
45039.
ARGUED FEBRUARY 2, 1970.
DECIDED JUNE 17, 1970. REHEARING DENIED JULY 24, 1970.
Action for damages. Bibb Superior Court. Before Judge Culpepper.
Martin, Snow, Grant Napier, Cubbedge Snow, for appellants.
Billy L. Evans, for appellee.
On motion for summary judgment, the movants failed to establish, as a matter of law, the absence of any genuine issue of material fact. Hence, it was not error to deny the motion.
ARGUED FEBRUARY 2, 1970 — DECIDED JUNE 17, 1970 — REHEARING DENIED JULY 24, 1970.
Redwal Music Company filed its claim in Bibb Superior Court against Robert F. Cunningham and Bobby Anderson. It was alleged that its officers are the sole stockholders of the plaintiff corporation and consulted with the two defendants concerning the purchase of a plan of insurance on the lives of its officers; that the defendants submitted a written proposal which provided for life insurance policies on the officers in the amount of $50,000 with accidental death benefits totaling $100,000 loss payable to the plaintiff corporation; that on December 4, 1967, the plaintiff agreed to the proposal after it had been personally represented to them by said defendants Anderson and Cunningham that they had been successful in arranging for all coverage as proposed, particularly the accidental death benefit coverage in the amount of $100,000 on officer Otis Redding, Jr., and that all that was needed for immediate coverage was the checks for the various premiums thereon.
The claim then alleged that on the same date checks were issued by the plaintiff corporation to the defendants for the premiums on the policies; that it was further represented to the plaintiff that one of the officers, Otis Redding, Jr., was covered immediately; that the plaintiff being inexperienced in the insurance field relied on the representations made by the defendants; that on December 10, 1967, Otis Redding was accidentally killed in a plane crash and subsequently the plaintiff was notified that Otis Redding was not covered for accidental death in the amount of $100,000 as had been represented by the defendants but that the total coverage was only $50,000; that the representations as to total coverage were made by the defendants wilfully to deceive the plaintiff or recklessly without knowledge and were relied upon to the detriment of the plaintiff.
It was further alleged in the claim that the relationship of principal and agent existed between plaintiff and defendants; that defendants in their capacity as agents undertook to secure insurance for the plaintiff and owed to their principal, the plaintiff, the duty to discharge this trust with ordinary care and skill and that they failed to exercise such care and skill. Damages were sought in the amount of $50,000 plus expense of litigation.
The defendants duly filed their defenses to the claim as stated. They then moved for summary judgment alleging that Otis Redding executed his application for insurance to the Continental Insurance Company and that the application plainly showed that Solomon-Truesdel was the agent of Continental Insurance Company; that they acted with proper diligence in presenting the application to the insurance agency. Attached to the motion for summary judgment were affidavits which showed that Bobby Anderson was the district manager for Mutual Benefit Life Insurance Company and that Robert Cunningham was soliciting agent for the same company; that they went to the offices of the plaintiff where Otis Redding signed an application for the insurance in question and then went to the bookkeeping office where they picked up a check to accompany the application; that the check and application were delivered to Mrs. Dorothy M. Truesdel, officer manager of the Solomon-Truesdel Agency.
The plaintiff filed various counter-affidavits in which the following facts appear: that the officers of the plaintiff corporation consulted with defendants concerning a plan of insurance to cover their officers; that the defendants submitted a written proposal whereby the plaintiff was advised to purchase through the defendants life insurance policies; that on December 4, 1967, the officers of the plaintiff were advised by the defendants that the coverage sought had been obtained and that all that was needed for immediate coverage were the checks for the premiums; that when checks drawn on the corporation were handed to the defendant Cunningham, he represented that complete coverage was effective immediately; that relying on the statement that coverage was effective no further action was taken to obtain any other insurance.
The trial judge overruled the defendants' motion for summary judgment. Upon a certificate that such judgment is subject to review, the defendants appeal.
In passing upon the ruling of the lower court the following often reiterated rules are applicable. On motion for summary judgment the burden of showing the absence of any genuine issue of material fact rest upon the movant. Hence, the party opposing the motion is given the benefit of all reasonable doubts and favorable inferences that may be drawn from the proof offered. Internat. Brotherhood v. Newman, 116 Ga. App. 590, 592 ( 158 S.E.2d 298). Until the movant produces proof which pierces the pleadings, there is no requirement that the opposing party offer any counter proof. Southern Bell Tel. c. Co. v. Beaver, 120 Ga. App. 420 (2) ( 170 S.E.2d 737).
In this case, the defendants, as movants, state that they were agents for Mutual Benefit Life Insurance Company, but do not expressly deny that they were agents for Solomon-Truesdel Insurance Agency. This being so, we can not hold that the evidence demanded a finding that they were, or were not, agents for Solomon-Truesdel Agency.
Most important, there is no evidence or pleadings which can be construed as showing conclusively that the defendants were not agents of the plaintiff. Argument, is made that absent an allegation "that the insurer consented for appellants to act as agents for both parties appellants could not, as a matter of law, be the individual agents of the appellee." The "dual agency" concept is primarily designed to afford protection to the original principal (and under some circumstances to the second principal) where the agent acts for another in the same transaction. Napier v. Adams, 166 Ga. 403, 407 ( 143 S.E. 566). It does not, necessarily, extend to situations where one acts as agent for more than one principal in different transactions involving non-conflicting interests. Todd v. German American Ins. Co., 2 Ga. App. 789, 800 ( 59 S.E. 94). While giving full recognition to the principle applicable to the "dual agency" theory, here the proof offered by the defendants, while not conclusive, tended to establish that they were not the agents of the insurance agency and the company which was to issue the policy. In any case, we find no clear proof of the existence of an undisclosed dual agency. Thus, there would be no impediment to the defendants entering an agency relation with the plaintiff. See Ga. Ins. Service v. Wise, 97 Ga. App. 461, 463 ( 103 S.E.2d 445).
If the defendants were occupying such relation as to the plaintiff, they would owe it a higher duty of care ( Code § 37-707 and 4-203) and their statements to the plaintiff even though they were misrepresentations of law, would be actionable. Clinton v. State Farm c. Ins. Co., 110 Ga. App. 417 (2a) ( 138 S.E.2d 687). "The law implies, as a part of the contract by which every agency arises, that the agent agrees to have and exercise towards his principal diligence, loyalty, and absolute good faith." Render Hammett v. Hartford Fire Ins. Co., 33 Ga. App. 716 (4b) ( 127 S.E. 902). See Harrison v. Harrison, 214 Ga. 393 (1) ( 105 S.E.2d 214).
"There is controlling authority for the proposition that where one undertakes to procure insurance for another and is guilty of fraud or negligence in his undertaking, he is liable for loss or damage to the limit of the agreed policy." Beiter v. Decatur Federal c. Assn., 222 Ga. 516 (2) ( 150 S.E.2d 687), and cases cited therein. See Thomas v. Funkhouser, 91 Ga. 478 ( 18 S.E. 312); 43 AmJur2d 230, Insurance § 174-176. "A cause of action will lie for breach of contract to procure insurance on behalf of another ... and irrespective of contractual duty, an action in tort may be based upon a misrepresentation that insurance coverage has been effected when no policy or binder has been issued." Brown v. Mack Trucks, Inc., 111 Ga. App. 164, 165 ( 141 S.E.2d 208), and cases cited therein.
The proof offered failed to negate the plaintiff's right to recover for the defendant's failure to obtain the insurance sought. Moreover, from all that is shown by the record, we cannot hold that the misrepresentations were of law rather than of fact. According to the affidavit submitted by the plaintiff, it was represented to the plaintiff that insurance coverage had been obtained and that complete coverage was effective immediately. The application attached as an exhibit contained the following language: "this insurance effective upon payment and acceptance by this company." The defendants' statement that they had obtained coverage would not be expressing an opinion as to the legal effect of the policy. Instead, such statement was a representation as to the fact of existence of the policy. Pope v. Ledbetter, 108 Ga. App. 869, 871 ( 134 S.E.2d 873). See Brown v. Mack Trucks, Inc., 111 Ga. App. 164, 65, supra. The language used in the application would not militate against this proposition since the representations can be construed to mean that the insurance company had given its acceptance as stated in the application and therefore, upon payment being tendered, all had been accomplished necessary to the creation of a valid policy within the terms of the application.
For all of the foregoing reasons, the trial judge properly denied the motion for summary judgment.
Judgment affirmed. Bell, C. J., and Whitman, J., concur.