Gallagher, Magner & Solomento, Inc. v. Aetna Casualty and Surety Co.

Gallagher, Magner & Solomento, Inc. (Gallagher) (plaintiff) was an insurance-brokerage firm. Gallagher sold to its client, P. Agnes, Inc. (Agnes), insurance from Aetna Casualty and Surety Co. (Aetna) (defendant). Agnes, a construction company, caused damage to a building and filed a claim with Aetna. Aetna accepted coverage and then denied coverage. Agnes’s repair of the damage cost $2,900, and Gallagher paid Agnes $2,300 as a compromise. Gallagher then filed an action in assumpsit seeking reimbursement from Aetna. Aetna argued that because Gallagher was under no legal obligation to pay Agnes, Gallagher was a volunteer, and Aetna had no obligation to reimburse Gallagher. Gallagher countered that it was not a volunteer, because it was liable to Agnes as Agnes’s insurance broker. Nothing in the record supported that Gallagher had guaranteed Aetna’s coverage to Agnes, nor did anything in the record support that Gallagher had negligently obtained coverage for Agnes. No evidence of Agnes’s assignment of its claim against Aetna to Gallagher existed either. A jury found in Gallagher’s favor and awarded Gallagher $2,300. Aetna’s motion for judgment notwithstanding the verdict was denied, and Aetna appealed. On appeal, in addition to its argument regarding its own liability to Agnes, Gallagher also argued that it had to pay Agnes to avoid damage to its goodwill.