Insurance – Fraud – Duty

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7^th Circuit Court of Appeals

Case Name: M.G. Skinner and Associates Insurance Agency, Inc., et al v. Norman-Spencer Agency, Inc.

Case No.: 15-2290

Officials: FLAUM and RIPPLE, Circuit Judges, and PETERSON, District Judge.

Focus: Insurance – Fraud – Duty

This case arises out of a complex insurance transaction that ended badly because the supposed insurance turned out to be a complete fraud. Despite the complexities of the broader transaction and the litigation that it spawned, this appeal presents, essentially, a single question: whether Norman‐Spencer Agency, Inc., an Ohio insurance agency, owed a duty to M.G. Skinner and Associates Insurance Agency, Inc. and Western Consolidated Premium Properties, Inc., two entities that had engaged a chain of sub‐brokers to procure insurance for a vast collection of real property.   M.G. Skinner and Associates and Western Consolidated Premium Properties, plaintiffs‐appellants here, contend that defendant‐appellee Norman‐Spencer Agency was one of the sub‐brokers in the chain, and thus it owed them a duty of reasonable care in procuring the insurance, which Norman‐ Spencer Agency breached by failing to point out obvious signs that the ultimate provider of the insurance was dishonest. But according to Norman‐Spencer Agency, it was never asked and it never agreed to procure insurance for plaintiffs‐appellants, and thus it owed them no duty. The district court agreed with Norman‐Spencer Agency, and in separate orders, granted summary judgment in its favor, against each plaintiff‐appellant. We agree with the district court and affirm both orders.

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.