Arizona Court of Appeals Division One Holds That A.R.S. § 20-259.01(B) Does Not Foreclose Professional Negligence Claim Against Insurance Agent for Failure to Procure Underinsured Motorist Coverage.

This case concerns a professional negligence claim brought against an insurance agent (“Manobianco” and his agency) for failing to obtain the underinsured motorist coverage requested by the insured (“Wilks”).  The superior court granted summary judgment in favor of Manobianco, finding that because he had complied with A.R.S. § 20-259.01(B) by offering UIM coverage on a DOI form, he had fulfilled his duties to Wilks and breached no duty owed.  Wilks filed a timely appeal.

The Court of Appeals reversed and remanded the case.  The Court found that there was a genuine dispute of material fact as to whether Manobianco breached the applicable standard of care by failing to procure the UIM coverage for Wilks.  In addition, the Court held that Manobianco’s compliance with A.R.S. § 20-259.01(B) did not bar the Wilks’ professional negligence claim.  Section 20-259.01(B) requires insurers to offer UIM coverage by written notice to the insured, providing that “[e]very insurer writing automobile liability or motor vehicle liability policies shall also make available to the named insured thereunder and shall by written notice offer the insured and at the request of the insured shall include within the policy underinsured motorist coverage . . . .”  Because the statutory language only mentions insurers, and because the legislative history demonstrates an intent to limit the scope of the statute to insurers, the Court concluded that statute offers no protection to agents.  Even if A.R.S. § 20-259.01(B) offered some protection for Manobianco and his agency, the Court noted that the professional negligence claim at issue is not the type of claim addressed by the statutory requirements—the Wilks’ professional negligence claim rests on an alleged failure to procure the UIM coverage requested and not on an alleged failure to offer or explain the UIM coverage. 

Judge Cattani specially concurred, explaining his view that A.R.S. § 20-259.01 could be read to protect both insurers and agents.  But he agreed with the Majority that the professional negligence claim in this matter related to a duty different from that addressed by the statute. 

Judge Norris authored the opinion, in which Judge Thumma joined and Judge Cattani specially concurred.