Somnus Mattress Corporation d/b/a Posturecraft Mattress Company
Stephen Hilson and Crutchfield & Graves Insurance Agency, LLC
from Winston Circuit Court (CV-15-900038)
Mattress Corporation d/b/a Posturecraft Mattress Company
("Somnus") appeals from a summary judgment entered
by the Winston Circuit Court in favor of Stephen Hilson and
Crutchfield & Graves Insurance Agency, LLC
("CGIA"), on Somnus's claim that Hilson and
CGIA were negligent in advising Somnus not to purchase
insurance coverage for business interruption and loss of
profits (hereinafter collectively referred to as
"business-income coverage"). We affirm.
manufactured mattresses at a facility in Winston County.
Charles Jones founded Somnus, served as its president, and
made all the consequential business decisions for Somnus --
including decisions concerning business property insurance.
Jones opened his first mattress store in 1981. By 1987, Jones
had grown his business to include 15 stores, a warehouse in
Ashridge, and his own mattress-manufacturing factory
("the factory") located in Double Springs. In 2006,
a fire at the Ashridge warehouse facility resulted in a total
loss of that property. Jones testified that the property was
"severely underinsured" but that he had completely
relied upon his insurance agent at the time "to keep me
on behalf of CGIA, first contacted Jones in 2009 about
providing property-insurance coverage for the factory. Jones
testified that during 2009 Hilson came out to the factory to
inspect it and to talk to Jones about insurance coverage.
Jones stated that during one of those trips the two men
discussed business-income coverage.
"[Jones:] ... I remember Stephen [Hilson] and I, we used
to -- we would walk out into the factory, and we'd just
"And he would kind of look and see what all --what it
looked like make sure that wasn't nobody smoking, no
cigarette butts and stuff like that that, you know -- and I
remember we were -- and I remember we were standing near the
foundation department near a couple some overhead doors. And
from what I remember, the subject did come up. I asked -- I
asked Stephen -- 'What do you think about it?'
"And, Stephen, you -- you told me that 'It's
pretty expensive, and it's hard to get because you've
got to come up with a lot of records to verify whatever
you're claiming; and so I don't think you need
testified that their discussion about business-income
coverage occurred during his first telephone call with Jones.
Hilson testified that he told Jones that he needed such
"Q. Did you think Mr. Jones needed business income
"A. [Hilson:] Yes.
"Q. Did you advise him that?
"Q. All right. So you advised Mr. Jones to buy business
insurance but he declined?
"Q. Do you have anything in writing on that?
"A. No, I did not. Other than he purchased and paid
premiums on the amount without business income."
noted in his testimony that the proposal he submitted to
Jones for insurance coverage of the mattress factory in 2009
included a quote with business-income coverage and a quote
without business-income coverage because Jones asked for both
"Q. Now, I notice that this one has -- in your quotes,
you have two quotes. See if I can find what page they're
on. It would be on the page that's called premium
summary, which would be the --
"Q. The fourth page. Sure, Crutchfield Graves [exhibit]
7. Is that what it is?
"A. [Hilson:] Yes.
"Q. And there are two premium quotes. Why are there two
"A. We had quoted -- we had quoted the [policy] with
business income coverage, and then Mr. Jones wasn't sure
if he wanted it. He asked to quote it with and without."
testified that ultimately Jones elected not to pay for
business-income coverage because he stated it was too
Hilson and Jones agree that each year after 2009 when the
insurance policy for the mattress factory came up for
renewal, Hilson would visit Jones to discuss Somnus's
insurance needs. Hilson testified that he told Jones at every
renewal period that Somnus needed business-income coverage
but that Jones always declined the business-income coverage
because "[i]t was too expensive." Jones testified
that he could not recall any discussion about business-income
coverage at the renewal meetings between him and Hilson; the
only conversation he remembered about business-income
coverage was the one in 2009. It is undisputed that the
written proposals for insurance Hilson submitted on behalf of
CGIA to Jones for Somnus in 2010, 2011, and 2012 did not
include business-income coverage.
April 12, 2013, a fire occurred at the factory. The fire
rendered the factory a total loss. Somnus was forced to move
its operation to a location in Mississippi in an attempt to
stay in business. Somnus stayed in business for two more
years. Ultimately, Somnus went out of business in 2015.
the period after the fire while Somnus remained in business,
Somnus continued to get its insurance through Hilson and
CGIA. Hilson testified that he continued to recommend
business-income coverage to Jones but that Jones still
declined it because he said it was too expensive.
"Q. Okay. And is that also true even after the fire
[Jones] still declined the business interruption insurance?
"A. [Hilson:] We offered him $1 million in business
income the last year he was in business, and he made us take
it off because it was too expensive."
testified that his decision not to purchase business-income
coverage even after the fire at the factory was based on what
Hilson had told him in 2009 about it being expensive and
difficult to obtain.
"Q. So during that time, you never had business income
insurance? Even after this fire?
"A. [Jones:] I don't believe I ...