The Appellate Group

Drew v. Pacific Life Ins. Co.

Drew v. Pacific Life Ins. Co., 2021 UT 55

Insurance; Agency

Plaintiffs sued a business with a focus on marketing insurance products (RSN), including claiming that employees of RSN used intentional and negligent misrepresentations to induce them to purchase a policy they could not afford from an insurance company (Pacific). The district court granted summary judgment to Pacific, reasoning that nothing RSN did was in the actual or apparent authority Pacific granted to RSN. The court of appeals reversed, holding that RSN was Pacific’s agent and that its actions were within the scope of its authority. The Utah Supreme Court granted certiorari and rejected the holding of the court of appeals, but reversed and remanded to the district court:

  • RSN was not an agent of Pacific, but it was Pacific’s “appointed licensee.” Under Utah Code § 3A-23a-405(2), although RSN lacked express or implied actual authority, RSN acted with apparent authority when it made representations about Pacific’s products to sell a policy to Plaintiffs.
  • Justice Lee (dissenting) would have asked for supplemental briefing on whether Utah Code § 3A-23a-405 applies to an insurer’s vicarious liability in tort or is limited to whether an insurer is contractually bound to provide insurance coverage.

Read the full court opinion