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Murray v. Farmers Insurance Company
Arizona Court of Appeals, Division Two, January 19, 2016
Court of Appeals Addresses Insurance Agent Negligence Claim; Plain May Claim Emoonal Damages
For years, the Murrays bought minimum limits vehicle insurance, including minimum UM/UIM from agent Jones.
Then they gradually began increasing their limits. They tesed that when they discussed UM/UIM coverage
with Jones, he advised them they did not need increased UM/UIM limits because their family had health
insurance through Mr. Murray’s employer. Jones, however, denied telling the Murrays “that if they had health
insurance they d[id]n’t need to buy any UM/UIM or as much UM/UIM insurance.“
The Murrays’ daughter suered a traumac brain injury in a crash with an uninsured and an underinsured driver.
The parents sued Jones and Farmers and Foremost based on vicarious liability for Jones. Aer a four day trial, the
jury returned a seven to one verdict of $180,000 in favor of the Murrays. The trial court granted a new trial.
The court of appeals rst armed the new trial. The trial court was within its discreon in nding that the verdict
was either an improper compromise verdict or the result of sympathy or prejudice. A compromise verdict is one in
which some jurors believe there is no liability at all, but consent to a smaller verdict than the others vong for
liability wanted, in order to reach a verdict. In such cases, liability and damages are not separable.
The appellate court then made three important legal rulings. First, it held that plains could claim emoonal
damages due to the agent’s negligent failure to sell UM/UIM, because his conduct allegedly caused not just a
nancial loss, but an emoonal one too. Previously, Arizona law held that emoonal distress damages were allowed
only where the torous act directly harmed a plain and burdened a personal, as opposed to an economic
interest. For example, in a prior legal malpracce acon, a plain was not allowed to claim emoonal damages
for her allegaons that her aorneys had failed to adequately secure a promissory note given to her by her former
husband in connecon with their divorce, which put her nancial security at risk and consequently caused
her emoonal distress. But the Murray court said because “[t]he insured receives intangible benets from the
relaonship, such as peace of mind, the negligent failure to sell uninsured and underinsured coverage implicates
the insured’s well-being and “is the appropriate case for the “evoluon of the law.” So it reversed summary
judgment for defendants on that claim.
Second, the court held that the injured daughter, though not a party to the insurance transacon, had standing to
claim a violaon of the Arizona Consumer Fraud Act. “The broad language of the act would appear only to require
that a consumer have a relaonship to the transacon.” It therefore reversed summary judgment for the defense
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on that issue as well.
The court’s third legal issue related to the agent’s cross-appeal. The agent argued that because he complied with
Arizona’s “safe harbor” statute requiring the insured to accept/decline UM/UIM in wring, and the Murrays had
repeatedly declined to increase their UM/UIM limits to match their liability limits on forms approved by the DOI, he
was entled to summary judgment on the enre case. The court rejected that argument stang, “Here there is no
dispute that the Murrays were oered UM and UIM coverage on a DOI approved form, which they signed; the issue
is whether they were armavely misled into signing it. The statute would work an inequity if the DOI-approved
form could shield an agent from liability for having misled an insured to sign it, assuming arguendo that the
statute applies to agents under the facts here.” So, the trial court correctly denied the agent summary judgment
on that argument.
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IN THE
ARIZONA COURT OF APPEALS
DIVISION TWO
JESSYKA MURRAY, AN INCAPACITATED PERSON, THROUGH HER
GUARDIANS AND PARENTS, ROBERT MURRAY AND MARCIA MURRAY,
FORMERLY HUSBAND AND WIFE; AND ROBERT MURRAY AND MARCIA
MURRAY, FORMERLY HUSBAND AND WIFE,
Plaintiffs/Appellants/Cross-Appellees,
v.
FARMERS INSURANCE COMPANY OF ARIZONA; FOREMOST INSURANCE
COMPANY GRAND RAPIDS, MICHIGAN; RANDY JONES INSURANCE
AGENCY, INC., AN ARIZONA CORPORATION; AND RANDY JONES AND
DEANNA JONES, HUSBAND AND WIFE,
Defendants/Appellees/Cross-Appellants.
No. 2 CA-CV 2014-0123
Filed January 19, 2016
Appeal from the Superior Court in Pima County
No. CV20124962
The Honorable Carmine Cornelio, Judge
AFFIRMED IN PART; REVERSED IN PART
COUNSEL
Haralson, Miller, Pitt, Feldman & McAnally, P.L.C., Tucson
By Stanley G. Feldman and Thomas G. Cotter
Counsel for Plaintiffs/Appellants/Cross-Appellees
