Bradley Freight Lines, Inc. v. Pope, Flynn & Co.

CARLTON, Judge. Defendant first assigns as error the failure of the trial court to grant defendant’s motions for directed verdict made at the close of the plaintiff’s evidence and at the close of all the evidence. Procedurally, defendant contends that the statute of limitations bars plaintiff’s claim, as the voluntary dismissal taken by the plaintiff in the earlier action did not specifically refer to G.S. 1A-1, Rule 41(a) and thus the present claim is not “saved” by that statute. Defendant’s position is that the voluntary dismissal without prejudice must refer to Rule 41(a) in order to gain the rule’s benefit of a one year extension within which to file the same lawsuit. *289 Rule 41(a)(1) provides as follows: (a) Voluntary dismissal; effect thereof. — (1) By Plaintiff; by Stipulation. —Subject to the provisions of Rule 23(c) and of any statute of this State, an action or any claim therein may be dismissed by the plaintiff without order of court (i) by filing a notice of dismissal at any time before the plaintiff rests his case, or; (ii) by filing a stipulation of dismissal signed by all parties who have appeared in the action. Unless otherwise stated in the notice of dismissal or stipulation, the dismissal is without prejudice, except that a notice of dismissal operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in any court of this or any other state or of the United States, an action based on or including the same claim. If an action commenced with the time prescribed therefor, or any claim therein, is dismissed without prejudice under this subsection, a new action based on the same claim may be commenced within one year after such dismissal unless a stipulation filed under (ii) of this subsection shall specify a shorter time. (Emphasis added.) Neither our nor the appellant’s research discloses any authority for the defendant’s contention that to gain the benefit of Rule 41(a)’s “saving” provision, there must be a specific reference to Rule 41 in the dismissal. The fact that plaintiff’s notice of dismissal in this case did not refer to the specific rule of its origin would appear to have no legal significance. As Rule 41 is the only procedural rule which addresses voluntary dismissals, no confusion as to the effect of the dismissal could possibly have resulted from this omission. In analogous situations, other courts have emphasized that the content of a notice of dismissal controls, not a wrong label. See 5 Moore’s Federal Practice, ¶ 41.02[2], p. 41-21; Williams v. Ezell, 531 F. 2d 1261 (5th Cir. 1976); Neifeld v. Steinberg, 438 F. 2d 423 (3d Cir. 1971). We think this reasoning should be extended to encompass situations such as the case at bar where a label omission is the alleged error. The voluntary dismissal without prejudice entitled the plaintiff to reinstate his claim within one year from the date of the notice, that being 7 December 1976. Plaintiff filed his complaint in the present action on 13 July 1977, well within the one-year limitation extension *290 period. The present action is therefore not barred by the statute of limitations and defendant’s argument is without merit. The defendant appellant also contends that the present action is not the “same claim” as the earlier action within the meaning of Rule 41(a)(1), and therefore a directed verdict for defendant would have been proper. Defendant argues that the earlier action was an action for breach of contract and the present action is one which makes no reference to breach of contract, but is solely bottomed on the theory of negligent advice. However, the record discloses that recovery based on negligent advice was advanced as a theory in plaintiff’s complaint in the earlier action. This assignment of error is therefore overruled. Substantively, defendant argues that a cause of action based on negligent advice against an insurance agent has never been recognized in this State and should not now be recognized. While we agree with defendant that no North Carolina case basing recovery expressly on the theory of negligent advice of an insurance agent can be found, we do not agree that plaintiff’s claim falls short of a valid cause of action. As a general rule, an insurance agent who, with a view to compensation, undertakes to procure insurance for another owes the duty to his principal to exercise good faith and reasonable diligence, and any negligence or other breach of duty on his part which operates to defeat the insurance coverage procured or causes the principal to be underinsured will render the agent liable for the resulting loss. Anno: 72 A.L.R. 3d 747; Johnson v. George Tenuta and Co., 13 N.C. App. 375, 185 S.E. 2d 732 (1972); Elam v. Smithdeal Realty Ins. Co., 182 N.C. 599, 109 S.E. 632 (1921). In Wiles v. Mullinax, 267 N.C. 392, 395, 148 S.E. 2d 229, 232 (1966), Justice Sharp, now Chief Justice, writing for our Supreme Court stated: “Where an insurance broker becomes liable to his customer for failure to provide him with the promised insurance, the latter, at his election, may sue for breach of contract or for negligent default in the performance of a duty imposed by contract.” (Emphasis added.) Proceeding in tort against the insurer is therefore clearly actionable in North Carolina. In Johnson v. Tenuta and Co., supra, Judge Parker emphasized that insured’s remedies are not limited *291 to breach of contract, but can be based on actionable negligence as well. Cases from other jurisdictions characterize a cause of action for negligent advice as one for negligent misrepresentation. In Greenfield v. Insurance, Inc., 19 Cal. App. 3d 803, 97 Cal. Rptr. 164 (1971), the defendant insurance brokerage firm was held to have negligently misrepresented to the plaintiff insured the extent of policy coverage. The plaintiff scrap iron dealer specifically requested business interruption insurance covering mechanical breakdown of an automobile shredder from the defendant insurance brokerage firm which had handled the plaintiff’s insurance needs for 10 years. The brokerage firm informed the plaintiff, after contacting an insurance company, that it had obtained the type of coverage requested. The policy, however, specifically excluded loss caused by mechanical breakdown. The California court found that the defendant had violated its duty to exercise reasonable care in seeking coverage and that the plaintiff had justifiably relied on the firm’s representation of coverage. In the case sub judice, we hold that plaintiff alleged a valid cause of action in negligence against the defendant. Plaintiff’s evidence tended to show the relationshp between the parties and a resulting duty on the part of the defendant. The evidence tended to show a breach of that duty by the defendant in negligently conveying false assurances to the plaintiff concerning the extent of insurance coverage on substituted vehicles that were not specifically endorsed. Plaintiff’s evidence, taken in the light most favorable to the plaintiff and given the benefit of every reasonable inference which can be drawn therefrom, was sufficient to withstand defendant’s motions for directed verdict. See, 11 Strong, N.C. Index 3d, Rules of Civil Procedure, § 50, p. 326; Younts v. State Farm Insurance Co., 281 N.C. 582, 189 S.E. 2d 137 (1972). Defendant next assigns as error the trial court’s admission of a letter into evidence which had not been properly authenticated. The letter, dated 7 April 1971, was a reply from Carolina Casualty in response to a report sent by the plaintiff, wherein Carolina Casualty denied liability to the plaintiff on the insurance policy. A letter, received in due course which purports to be in response to a letter previously sent by the receiver, is prima facie *292 genuine and is admissible in evidence without other proof of its authenticity. 2 Stansbury, N.C. Evidence § 236, p. 216 (Brandis rev. ed. 1973); Echerd v. Viele, 164 N.C. 122, 80 S.E. 408 (1913). This assignment of error is overruled. We have reviewed defendant’s remaining assignments of error and find them to.be without merit. In the trial below, we find No error. Judges Clark and Erwin concur.