469_C325
LAW BARS
SUIT AGAINST PUBLIC ADJUSTER
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Homeowner
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Law of Agency
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Public Adjuster
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Preservation of Property
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In January 2007, Stefo and Adele Gubic’s home and personal property were damaged in a fire.
The Gubics were insured by Meridian Security Insurance
Company. The construction and repair claim for the residence was settled for
approximately $200,000; however, the parties disagreed as to the value of the
personal property, most of which had been stored in a nearby barn since the
fire.
Meridian’s adjuster, Jim Baugues,
inventoried the damaged property soon after the fire. Meridian believed that most of the Gubics' property was salvageable and made plans to have it
transported for cleaning. The Gubics hired public
adjuster Joe Hoffman to assist them with their personal property claim. Their
agreement with Hoffman provided that he would be paid 10% of the amount the Gubics recovered, “regardless of who effect[ed] the adjustment or recovery.”
After the Gubics entered into the
agreement with Hoffman, the company that Meridian
hired to clean the Gubics' damaged property was told
not to transport the property for cleaning. At Meridian’s
request, the Gubics provided an inventory of the
personal property, and Meridian
responded that it needed more information. Hoffman sent a letter to Meridian stating that the inventory complied with Meridian’s requirements. Meridian offered to settle
the claim for $32,247.25, but the Gubics rejected the
offer and requested an appraisal. Meridian
refused to conduct an appraisal and stopped paying the fees to store the Gubics’ personal property.
On July 23, 2007, the Gubics filed
a Petition for Umpire. Meridian
scheduled an inspection of the property, but neither the Gubics
nor Hoffman appeared at the inspection. Eventually the property was
photographed and disposed of.
Meridian responded to the Gubics’ petition and filed a counterclaim for declaratory
judgment. The Gubics amended their complaint,
alleging various claims against Meridian.
Meridian
responded to these allegations by asking the court to find that the Gubics had engaged in fraudulent behavior.
Meridian’s response also contained several
allegations against Joe Hoffman. The insurer alleged that Hoffman had breached
terms in the insurance policy, failed to act in good faith, engaged in
spoliation of evidence and fraud, committed unauthorized practice of law, and tortiously interfered with Meridian’s business and contractual
relationship with the Gubics. Meridian
also alleged that Hoffman should be required to indemnify Meridian for its damages. Hoffman responded
by asking the court to dismiss all allegations against him. The trial court
granted Hoffman’s request; Meridian
appealed.
On appeal, Hoffman argued that Meridian’s
claims against him were not actionable under Indiana law. The Court of Appeals of Indiana agreed. The
court stated that the role of a public adjuster was defined by statute and that
the Gubics had employed Hoffman to act as their
agent. The court then noted that the law provides that “a principal is bound by
the acts of an...agent if the agent acted within the
usual and ordinary scope of the business” and “[a]n agent is not liable for
harm to a person other than his principal because of his failure adequately to
perform his duties to his principal, unless physical harm results from reliance
upon performance of the duties by the agent, or unless the agent has taken
control of land or other tangible things.”
Applying these principles of agency law, the court found
that Meridian’s claims against Hoffman were not
actionable under Indiana law because Hoffman
had no contractual relationship with Meridian.
The court noted that Meridian’s claims were
“simply coverage defenses,” which Meridian could
raise against the Gubics, and that Meridian had not alleged any compensable damages.
The decision of the lower court in favor of Hoffman was
affirmed.
Meridian Security Insurance Company
vs. Hoffman Adjustment Company-No. 45A03-0911-CV-538-Court of Appeals of Indiana-August 18,
2010-2010 Westlaw 3250173