John and Donna Hohensee owned a bowling alley in Iron County. They insured the property through Nasser Insurance Agency. It was destroyed by fire in 2011, and the insurer paid only $236,000.00, despite the fact that the parties agreed that the total cost of reconstructing and re-equipping the building would be in excess of $1,000,000.00. The Hohensees argued that their agent negligently secured a policy with $500,000.00 limits that would only result in payment of that limit if the building was actually re-built. The agent testified that he didn't remember what he told the insureds about the conditions necessary for payment of the policy limit. Mr. Hohensee testified that he never read the actual policy language or discovered the limiting language.
The Court of Appeals affirmed the Circuit Court Judge's grant of summary disposition to the insurance agent. It held that the Hohensees could not argue that the agent misrepresented the insurance coverage limits, because the written terms available to the Hohensees explained the coverage limitations. It further held that they could not pursue a negligence claim against the agent--even if the agent owed them a fiduciary duty--because they had listed the property for sale at $235,000.00 and "could not afford" a policy with a higher limit. The insurance-oriented judges disputed the insureds' claim that the "agreed value" language in the policy was ambiguous and held that no genuine issue of material fact supported their lawsuit.