Aga Fishing Group Limited v. Brown & Brown, Inc.

Of the Ninth Circuit, sitting by designation. *
United States Court of Appeals
For the First Circuit
No. 07-2408
AGA FISHING GROUP LIMITED,
Plaintiff, Appellant,
v.
BROWN & BROWN, INC., ET AL.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Joseph L. Tauro, U.S. District Judge]
Before
Lynch, Chief Judge,
Tashima, Senior Circuit Judge, *
and Lipez, Circuit Judge.
Joseph G. Abromovitz with whom Marsha A. Morello and the Law
Office of Joseph G. Abromovitz, P.C. were on brief for appellant.
Michael J. Stone with whom Terri L. Pastori and Peabody &
Arnold LLP were on brief for appellees.
July 10, 2008

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AGA also contends that Flagship breached its contract 1
with AGA by failing adequately to evaluate AGA’s risk. Because AGA
raises this argument for the first time on appeal, we decline to
consider it. See United States v. Taylor, 511 F.3d 87, 91 (1st
Cir. 2007) (“Absent extraordinary circumstances, ‘[i]t is a bedrock
rule that when a party has not presented an argument to the
district court, [he] may not unveil it in the court of appeals.’”)
(alterations in original) (quoting United States v. Slade, 980 F.2d
27, 30 (1st Cir. 1992)).
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TASHIMA, Senior Circuit Judge. Plaintiff AGA Fishing
Group Limited (“AGA”) was forced to sell the Georgie J, a scallop
fishing vessel, and its scallop license to settle claims against
AGA after a crewman suffered debilitating injuries aboard the
vessel and recovered a substantial award under the Jones Act. AGA
was insured through Defendant Flagship Group, Limited (“Flagship”),
but the seaman’s award far exceeded the Protection & Indemnity (“P
& I”) coverage in AGA’s policy, which was sold to AGA by Flagship.
AGA sued Flagship and Defendant Brown & Brown, Inc., Flagship’s
parent company, contending that Flagship owed it a duty to
recommend an adequate level of P & I coverage and breached that
duty when it did not so recommend. The district court granted
Defendants’ motion for summary judgment on all claims. Because AGA
presents no facts evincing a duty on Defendants’ part to ensure
that AGA was adequately covered, we affirm.1
I. Background
Because AGA appeals from a grant of summary judgment, in
reciting the facts, we draw all reasonable inferences in favor of
AGA, the non-moving party. See Ramos-Santiago v. United Parcel

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Serv., 524 F.3d 120, 122 (1st Cir. 2008). George Jones (“Jones”)
started scallop fishing in New Bedford, Massachusetts, in the early
1960s, when he was fifteen years old. In 1987, he and his wife,
Antonette Jones, formed AGA and purchased a scallop boat, the
Victor, and an accompanying scallop license. Under the previous
owner, the Victor carried $1,000,000 in P & I insurance through
Neptune Mutual. After acquiring the vessel, AGA decided to stay
with the same insurance company and agent, Ronald Walsh (“Walsh”),
and continue the same level of coverage.
Some time later, AGA discontinued its insurance policy
with Neptune Mutual and purchased a policy from Mariners Insurance.
AGA continued the same level of P & I coverage after the switch.
Jones assumed that the new agent would tell him if he needed more
coverage. In the late 1990s, Jones discovered that his original
insurance agent, Walsh, had left Neptune Insurance and was now
working for Flagship. On its website, Flagship advertised itself
as having “the expertise necessary to offer the appropriate
insurance services for the maritime industry” and claimed to
“systematically and comprehensively examine [its clients’] maritime
exposures.” The Joneses, however, never viewed the website.
Rather, Jones liked Walsh and trusted him. Their personal
relationship and the fact that Walsh quoted a lower premium for the
same coverage precipitated AGA’s move from Mariners Insurance to
Flagship in 1999.

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Also during this time, the Joneses’ son was killed in an 2
unrelated incident and the Joneses renamed the Victor the Georgie
J in his honor.
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AGA kept the same level of P & I coverage on the vessel
after moving its insurance business to Flagship, again assuming
that its agent, now Walsh, would recommend additional coverage, if
necessary. According to Walsh, the Joneses “didn’t understand
insurance” and needed a lot of guidance due to their “naive[te].”
The Joneses were not highly educated. Jones left school after the
sixth grade and Antonette Jones did not complete high school,
although she received a GED years later. Although Walsh testified
that the Joneses required more assistance than his other clients,
Walsh and the Joneses never discussed the amount of P & I coverage
on the vessel or whether or not the coverage was sufficient. The
policy was renewed annually at the same level of coverage.2
In 2000, Walsh told Jones that he planned to leave
Flagship and that Flagship was closing its Massachusetts office.
Jones asked Walsh how to keep the Georgie J covered. Walsh
recommended that AGA stay with Flagship. AGA remained with
Flagship, and Flagship transferred the AGA account to agent John
Devnew (“Devnew”). Jones was concerned that Devnew would not be
able to give him the level of assistance he desired because he was
based in Virginia. Devnew reassured Jones that he would “take care
of them.” Devnew considered Jones “simple and unsophisticated” and
knew that the Joneses’ entire fortune was wrapped up in AGA. Yet

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during the time Devnew worked on the AGA account, he never
discussed P & I coverage levels for the Georgie J with the Joneses
and never recommended increasing the amount of P & I coverage on
the Georgie J.
In or around 2001, New Bedford experienced a boom in the
scallop fishing industry. Gross profits per fishing trip increased
dramatically, which translated into significant pay increases for
crewmen working aboard the scallop vessels. Compensation levels
for individual crew members reached and then exceeded $100,000 a
year. The Georgie J and other scallop vessels carried a five- to
seven-member crew. As a result, vessels that worked out of New
Bedford, including those insured by Flagship, commonly carried
$5,000,000 P & I coverage. It would have cost AGA approximately
$5,000 annually to increase P & I coverage for the Georgie J from
$1,000,000 to $5,000,000. AGA avers that it would have paid the
higher premium had Devnew recommended the higher level of coverage.
During a fishing trip in 2003, a crewman suffered
debilitating injuries while working aboard the Georgie J and
subsequently sued AGA. The $1,000,000 P & I coverage on the
Georgie J was grossly insufficient to cover the damages awarded to
the crewman. The U.S. Marshal seized the Georgie J and its scallop

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The Georgie J and the license together sold for 3
$1,700,000. The proceeds from the sale first went to pay off the
mortgage, and the remainder went to the injured crewman.
Nowhere in its briefs in this court does AGA challenge 4
the district court’s grant of summary judgment on Counts II through
VII. We therefore consider those arguments waived and do not
address those counts.
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license and sold it at auction in partial satisfaction of the
crewman’s judgment.3
AGA sued Flagship and Brown & Brown, Inc., its parent
company. AGA claimed that Flagship breached its duty of care
properly to advise AGA with regard to coverage needed for the
Georgie J (Count I). AGA also alleged negligent misrepresentation
(Count II), intentional misrepresentation (Count III), and
violations of Massachusetts’ unfair or deceptive trade practice
law, Mass. Gen. Laws ch. 93A §§ 2(a), 11 (Counts IV and V). AGA
further alleged that Brown & Brown was vicariously liable for
damages caused by Flagship (Count VI) and that Brown & Brown
negligently failed to supervise Flagship (Count VII).
Defendants moved for summary judgment, which the district
court granted as to all claims. AGA timely appealed. We have 4
jurisdiction over the final judgment under 28 U.S.C. § 1291. In
this diversity of citizenship case, we apply Massachusetts law,
which the parties implicitly agree governs.

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II. Discussion
We review a district court’s grant of summary judgment de
novo. Franceschi v. U.S. Dep’t of Veterans Affairs, 514 F.3d 81,
84 (1st Cir. 2008). Summary judgment “should be rendered if the
pleadings, the discovery and disclosure materials on file, and any
affidavits show that there is no genuine issue as to any material
fact and that the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(c).
“There is no general duty of an insurance agent to ensure
that the insurance policies procured by him provide coverage that
is adequate for the needs of the insured.” Martinonis v. Utica
Nat’l Ins. Group, 840 N.E.2d 994, 996 (Mass. App. Ct. 2006). Such
a duty only arises under “special circumstances of assertion,
representation and reliance.” Baldwin Crane & Equip. Corp. v.
Riley & Rielly Ins. Agency, Inc., 687 N.E.2d 1267, 1269 (Mass. App.
Ct. 1997) (quoting Rapp v. Lester L. Burdick, Inc., 146 N.E.2d 368,
371 (Mass. 1957)); see also Martinonis, 840 N.E.2d at 996 (“[I]n an
action against the agent for negligence, the insured may show that
special circumstances prevailed that gave rise to a duty on the
part of the agent to ensure that adequate insurance was obtained.”)
(citing Baldwin Crane, 687 N.E.2d at 1269).
AGA alleges special circumstances due to the Joneses’
lack of education, Walsh and Devnew’s knowledge of their
“naive[te]” and “lack of sophistication,” and testimony from the

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Joneses that they relied completely on Walsh and Devnew to tell
them how much coverage they needed for the Georgie J. AGA also
points to its long-term relationship with Walsh and his testimony
that he was aware of the Joneses’ reliance on him. Additionally,
Flagship presented itself to the public as an expert in the field
of maritime insurance and, through its website, attested that it
“systematically and comprehensively” examined its clients’
potential liabilities.
Courts have considered length of relationship a
significant factor when determining the existence of special
circumstances. See McCue v. Prudential Ins. Co., 358 N.E.2d 799,
801 (Mass. 1976) (determining that a jury could find special
circumstances where insurance agents visited the plaintiffs monthly
for twenty-eight years); Martinonis, 840 N.E.2d at 996 (noting the
plaintiff’s “long relationship” with her agent). An insurer’s
public representations of expertise or public promises to provide
specialized counseling, like those found on Flagship’s website,
could also support, based on other facts as well, a finding of
special circumstances. Baldwin Crane, 687 N.E.2d at 1269-70 (“‘An
expanded agency agreement, arrangement or relationship, sufficient
to require a greater duty from the agent than the general duty,
generally exists when the agent holds himself out as an insurance
specialist, consultant or counselor . . . .’”) (quoting Sandbulte
v. Farm Bureau Mut. Ins. Co., 343 N.W.2d 457, 464 (Iowa 1984)).

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AGA, however, has not presented facts sufficient to
support a finding of special circumstances because neither Walsh
nor Devnew made any representation or assertion that coverage was
sufficient or that AGA could rely on them to recommend sufficient
coverage. A plaintiff must be able to show a specific assertion
and subsequent reliance to establish special circumstances.
Assertions can come in the form of “frequent recommendations,” GE
HFS Holdings, Inc. v. Nat’l Union Fire Ins. Co., 520 F. Supp. 2d
231, 237 (D. Mass. 2007), a recommendation of coverage in a
particular amount, Bicknell, Inc. v. Havlin, 402 N.E.2d 116, 119
(Mass. App. Ct. 1980), or assurances that coverage is sufficient,
Martinonis, 840 N.E.2d at 996.
No agent made any such recommendation or representation
to AGA. Jones testified that Walsh and Devnew never discussed with
him the amount of P & I coverage the Georgie J had or should have
had. No agent even recommended the $1,000,000 P & I coverage. AGA
maintained the $1,000,000 P & I coverage from 1987 to 2003 simply
because that was the level of coverage in place when AGA first
purchased the vessel.
AGA avers that it relied on Walsh and Devnew to recommend
sufficient coverage for the Georgie J and that the agents knew that
they had to do so because the Joneses were “naive” and
“unsophisticated.” The Joneses, however, never asked Walsh or
Devnew if the P & I coverage on the Georgie J was sufficient, never

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asked if they would be told if coverage became insufficient, and
neither Walsh nor Devnew represented that the Joneses would be
informed if at some point the coverage became insufficient.
While Walsh testified that the Joneses relied on him
generally, special circumstances exist only where reliance is based
on an assertion or representation. Additionally, AGA did not rely
on Flagship’s public representations of expertise. The Joneses
never saw Flagship’s website; they chose Flagship because of price
and their relationship with Walsh.
Because AGA has adduced no facts showing the existence of
special circumstances that created a duty of care, the district
court did not err in granting summary judgment in favor of
Defendants on Count I of AGA’s complaint.
III. Conclusion
For the foregoing reasons, the district court’s grant of
summary judgment in favor of Defendants is AFFIRMED.

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