Opinion
Docket No. 60929.
Decided July 7, 1983.
Stanley, Davidoff Gray, P.C. (by L.W. Gray), for plaintiffs.
Piatt Doyle (by John D. Doyle), for Auto-Owners Insurance Company.
Biringer, Jacox Hutchinson, P.C. (by Richard F. Biringer), for Hathaway Agency, Inc., and Robert B. Kirkpatrick.
Plaintiffs appeal as of right from the trial court's judgment of no cause of action rendered after a bench trial.
Plaintiff Robert Mayer is a professional farmer of gladiolus. On April 9, 1979, one of plaintiffs' farms suffered a devastating fire. Plaintiffs had been insured with defendant Hathaway Agency since 1974. Defendant Robert Kirkpatrick purchased the agency in 1976. Plaintiffs were insured through defendant Auto-Owners. After the fire Auto-Owners paid plaintiffs $301,000 and later authorized an additional $13,657 to cover loss of irrigation equipment. However, a loss of $180,000 was not covered by plaintiffs' policy.
Plaintiffs raise three issues on appeal.
First, plaintiffs claim that the trial court erred in finding that Kirkpatrick was the agent of Auto-Owners and erred in finding that he was not negligent in handling plaintiffs' insurance program. We cannot disturb these findings unless they are clearly erroneous. GCR 1963, 517.1.
At trial, Kirkpatrick testified that he was an independent insurance agent and had the power to place insurance with various companies. An independent insurance agent, or insurance broker, is ordinarily the agent of the insured, not the insurer, 16 Appleman, Insurance Law Practice, § 8722, pp 322-324. Kirkpatrick testified that he acted as the agent of the insured. Thus, we conclude that the trial court clearly erred in finding that Kirkpatrick was the agent of Auto-Owners.
The court, however, did not clearly err in holding that Kirkpatrick was not negligent in handling plaintiffs' insurance program. This issue may be analyzed under agency principles. Whether an agent has negligently dealt with the affairs of the principal depends upon the agreement with the principal, since the agreement defines the scope of the agent's undertaking. 2 Restatement 2d, Agency, § 376, comment a, p 173. Plaintiffs alleged that Kirkpatrick failed to valuate properly plaintiffs' buildings, personal property and commodities, resulting in inadequate insurance coverage. Kirkpatrick testified, however, that he never agreed to assume responsibility for assessing the value of these items. The testimony also shows, and the court so found, that Donald Mayer is an experienced businessman who would not assign the task of valuating his property to someone else. In light of this evidence, we cannot conclude that the trial court clearly erred in finding that Kirkpatrick was not negligent in handling plaintiffs' insurance program.
Second, the plaintiffs maintain that the trial court clearly erred in finding that Kirkpatrick had not misrepresented the nature of the fluctuating value coverage program. Donald Mayer testified that Kirkpatrick told him that this program would provide "blanket coverage" for items that fluctuate. Kirkpatrick steadfastly maintained that Donald Mayer was aware that he had specific commodity coverage. Resolution of this factual issue depended upon the trial court's assessment of the witnesses' credibility. We give great weight to the trial court's assessment of credibility and, on this record, perceive no reason for disturbing the court's decision to believe Kirkpatrick's testimony.
Finally, plaintiffs argue that the trial court erred in finding that the language of the fluctuating value coverage endorsement was not ambiguous. Although ambiguous language in an insurance contract is always construed against the insurance company, Zurich Ins Co v Rombough, 384 Mich. 228; 180 N.W.2d 775 (1970), the question of whether an ambiguity exists is for the court, which may consider extrinsic facts. 17A CJS, Contracts, § 617, pp 1254-1256; Dykema v Muskegon Piston Ring Co, 348 Mich. 129; 82 N.W.2d 467 (1957).
The only evidence tending to show ambiguity was Donald Mayer's own testimony that he believed fluctuating value coverage to be nothing more than blanket coverage for fluctuating items. Against this testimony must be weighed Donald Mayer's evident business acumen, his facility in adjusting his insurance needs periodically over the years in question, the specific language of the policy, the language of the endorsements referring to fluctuating inventory, Donald Mayer's periodic alterations of his fluctuating value coverage, and Kirkpatrick's own testimony that Donald Mayer knew exactly what he was getting. On this record, we cannot find that the trial court erred in ruling that the endorsement in question was not ambiguous.
Affirmed. Costs to appellees.