Issue

Punitive damages—insurance application—material misrepresentations by agent—willful and wanton conduct

Summary

In a real property insurance dispute arising from an insurer's cancellation of plaintiff's homeowners policy and refusal to cover plaintiff's losses from hurricane damage, plaintiff's claim against his insurance agent for punitive damages based on gross negligence–for submitting an application for insurance that contained material misrepresentations, which was the basis for the insurer's actions–was not subject to dismissal at the pleading stage. Plaintiff's allegations were sufficient to support punitive damages based on willful and wanton conduct and to put the agent on notice of that aggravating factor, where the details of the agent's conduct were averred with particularity, including that the agent: induced plaintiff to apply for a policy with a new insurer by promising the same coverage at a lower premium; knowingly misrepresented basic information about plaintiff's property on the application for insurance (by failing to disclose the existence of a pond on the property and understating the size of the property by several acres); and realized a financial gain by obtaining issuance of the new policy.

Summary from the North Carolina Reports digest (official subject index). Read the opinion →