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FOR PUBLICATION

FILED
Mar 06 2008, 9:05 am
of the supreme court, court of appeals and tax court

CLERK

ATTORNEYS FOR APPELLANTS: GEORGE M. PLEWS TODD J. JANZEN Plews Shadley Racher & Braun LLP Indianapolis, Indiana

ATTORNEYS FOR APPELLEES: KARL L. MULVANEY DENNIS F. CANTRELL TARA STAPLETON LUTES Bingham McHale LLP Indianapolis, Indiana

IN THE COURT OF APPEALS OF INDIANA
JERRY and BECKY FRENCH, Appellants-Plaintiffs, vs. STATE FARM FIRE & CASUALTY COMPANY and JANE HODSON, Appellees-Defendants. ) ) ) ) ) ) ) ) ) )

No. 18A02-0612-CV-1161

APPEAL FROM THE DELAWARE CIRCUIT COURT The Honorable Robert L. Barnet, Judge Cause No. 18C03-0411-PL-18

March 6, 2008

OPINION - FOR PUBLICATION

NAJAM, Judge

STATEMENT OF THE CASE Jerry and Becky French (the "Frenches") appeal from the trial court's order granting summary judgment in favor of Jane Hodson on the Frenches' claim of negligent advice and procurement of insurance. The Frenches raise three issues for our review, which we restate as whether the trial court erred in granting summary judgment in favor of Hodson. We affirm.1 FACTS AND PROCEDURAL HISTORY On June 11, 2002, Jerry entered into a purchase agreement with Delaware County Mobile Home Sales for a manufactured home (the "Manufactured Home"). The

purchase price of the Manufactured Home was $76,950. The Manufactured Home was to be delivered to real property owned by the Frenches in Delaware County. Shortly after purchasing the Manufactured Home, Jerry sought homeowner's insurance. He called Hodson, his insurance agent of nineteen years and from whom Jerry had purchased "three or four" homeowner's policies and "[a] lot" of automobile policies.2 Appellant's App. at 121. Hodson was an independent insurance agent who sold only State Farm Fire and Casualty Company's ("State Farm's") policies. State Farm paid Hodson "a commission per policy that [she] s[o]ld." Id. at 108. The amount of the insurance premium determined the amount of her commission.

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We heard oral argument in this case on November 30, 2007.

The record does not indicate whether the Frenches had ever filed a claim with State Farm on any of their prior insurance policies.

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In his telephone call, Jerry "explained to Ms. Hodson's office" that he and Becky "had purchased a manufactured home." Id. at 80. Jerry then stated that the

Manufactured Home would be "delivered" to his property sometime in July of 2002 and that he "needed coverage before it was delivered." Id. Hodson's office consisted of Hodson and one employee. A few days later, Jerry and Hodson met to discuss Jerry's insurance needs. Hodson asked Jerry various questions about his new home, and she entered his responses into the Insurance-to-Value ("IV") calculator. The IV calculator is an

electronic tool insurance agents use to determine a "reasonably accurate estimate of current replacement cost" coverage, although Jerry never specified the type of coverage he desired. Id. at 131. The questions Hodson asked Jerry for the IV calculations pertained only to the characteristics of the new home. State Farm offered different insurance policies "determined by the type of home you have." Id. at 104. Specifically, according to Hodson, State Farm offered "renter[']s insurance, . . . mobile home insurance, [and] . . . homeowner[']s." Id. at 108. And according to State Farm, there are significant differences between a manufactured home and a stick-built3 home: All manufactured homes are built entirely in the factory under a federal building code administered by the U.S. Dept. of Housing and Urban Development ("HUD"). The Federal Manufactured Home Construction and Safety Standards went into effect June 15, 1976 ("HUD Code"). The purpose of the HUD Code is, in part, "to facilitate the availability of affordable manufactured homes and to increase homeownership for all Americans," as well as "to encourage innovative and cost-effective construction techniques for manufactured homes." (Emphasis added[.])
A stick-built home is one that is built piece-by-piece at the construction site, as opposed to a factory-built home.
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Other purposes include to provide federal standards for the construction of manufactured homes and "to ensure that the public interest in, and the need for, affordable manufactured housing is duly considered in all determinations relating to the federal standards and their enforcement." 42 U.S.C. 5401. (Emphasis added[.]) The HUD Code regulates the design and construction of manufactured housing. A "manufactured" home is defined, in part, as: . . . a structure, transportable in one or more sections, which in the traveling mode, is eight body feet or more in width or forty body feet or more in length, or when erected on site, is three hundred twenty or more square feet, and which is built on a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air conditioning, and electrical systems contained therein . . . 24 CFR 3280.2. No manufactured home may be shipped from the factory unless it has a special label affixed to the exterior of the home indicating that the home passed inspection by HUD. 24 CFR 3280.11. . . . The HUD Code also has a series of requirements for the design and construction of the home. 24 CFR 3280.103 et. seq. Every manufactured home must be designed and constructed according [to] the federal standards, and are not required to comply with any local building codes that would be applicable to a stick-built home. *** [A] manufactured home is also known as a "mobile home" or "double wide" trailer. . . . Id. at 241-43. Despite those apparent differences, Hodson did not ask Jerry whether his new home was a manufactured or stick-built home, nor did she ask him about the purchase price of his new home. Once Hodson entered Jerry's responses into the IV calculator, the program indicated that the "estimate[d] replacement cost" of the home was $173,200. Id. at 144.
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After an estimate was generated by the IV calculator, it was Hodson's normal practice to review that estimate with the insurance applicant and to ask the applicant if he or she felt that the calculator's estimate suggested enough coverage. Hodson understood that

customers seeking insurance from her relied on her advice and assistance when they were meeting to place coverage. And once Hodson gave the insurance estimate to Jerry, Jerry "trusted her judgment and expertise in arriving at this figure and signed off on the application." Id. at 81. At some point in her interaction with Jerry, Hodson concluded that the Frenches needed additional coverage during construction of the home, even though the Frenches had purchased a manufactured home. Based on that conclusion, Hodson issued a

"dwelling under construction" endorsement to the homeowner's insurance policy ("Policy"). Id. at 332. And because of that endorsement, State Farm's underwriting department did not require Hodson to inspect or take pictures of Jerry's new home, which it normally would have done, before issuing the Policy. An internal State Farm document later noted that the Frenches' home had a "[c]onstruction completion date" of October 25, 2002. Id. at 119. The twelve-month Policy became effective on July 9, 2002, with $173,200 in coverage for the home. The Policy provides, in relevant part,4 that:

The Frenches also purchased coverage under section C of the Policy, regarding coverage for loss of use. However, while the Frenches dispute damages recovered under Coverage C of the Policy, as well as prejudgment interest, as discussed below neither of those issues are properly before this court on appeal. We therefore do not address them.

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SECTION I

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