The opinion
SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
1525
CA 10-01439
PRESENT: SMITH, J.P., PERADOTTO, CARNI, LINDLEY, AND SCONIERS, JJ.
PAGE ONE AUTO SALES, INC., PLAINTIFF-APPELLANT,
V MEMORANDUM AND ORDER
BROWN & BROWN OF NEW YORK, INC., DOING BUSINESS
AS BROWN & BROWN, SUCCESSOR IN INTEREST TO
RIEDMAN CORPORATION, DOING BUSINESS AS RIEDMAN
INSURANCE, DEFENDANT-RESPONDENT.
BOYLAN, BROWN, CODE, VIGDOR & WILSON, LLP, ROCHESTER (DAVID K. HOU OF
COUNSEL), FOR PLAINTIFF-APPELLANT.
HURWITZ & FINE, P.C., BUFFALO (KATHERINE A. FIJAL OF COUNSEL), FOR
DEFENDANT-RESPONDENT.
Appeal from an order of the Supreme Court, Monroe County (Ann
Marie Taddeo, J.), entered April 6, 2010. The order denied the motion
of plaintiff for summary judgment and granted the cross motion of
defendant for summary judgment.
It is hereby ORDERED that the order so appealed from is modified
on the law by denying defendant’s cross motion and reinstating the
complaint and as modified the order is affirmed without costs.
Memorandum: Plaintiff, an automobile dealership, commenced this
action seeking damages for the alleged breach by defendant,
plaintiff’s insurance broker, of its duty to procure an insurance
policy containing “false pretense coverage,” which is intended to
cover losses in the event that plaintiff purchased automobiles with
defective titles. We agree with plaintiff that Supreme Court erred in
granting defendant’s cross motion for summary judgment dismissing the
complaint, and we therefore modify the order accordingly. “ ‘In New
York, the duty owed by an insurance agent to an insurance customer is
ordinarily defined by the nature of the request a customer makes to
the agent’ ” (Chase’s Cigar Store v Stam Agency, 281 AD2d 911, 912;
see Wied v New York Cent. Mut. Fire Ins. Co., 208 AD2d 1132, 1133).
“Where . . . there is a specific request for insurance, the agent has
a duty to obtain the requested coverage or to inform the client of his
or her inability to do so” (Herdendorf v Geico Ins. Co., 77 AD3d 1461,
1463; see Murphy v Kuhn, 90 NY2d 266, 270; Twin Tiers Eye Care Assoc.
v First Unum Life Ins. Co., 270 AD2d 918, lv denied 95 NY2d 758). “In
such a case, it must be demonstrated that the coverage could have been
procured prior to the occurrence of the insured event” (Herdendorf, 77
AD3d at 1463; see American Motorists Ins. Co. v Salvatore, 102 AD2d
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CA 10-01439
342, 346).
Viewing the evidence in the light most favorable to the nonmoving
party, as we must (see Russo v YMCA of Greater Buffalo, 12 AD3d 1089,
lv dismissed 5 NY3d 746), we conclude that there are triable issues of
fact whether defendant breached its duty to procure the insurance
coverage requested by plaintiff (see generally Zuckerman v City of New
York, 49 NY2d 557, 562). Further, although the insured’s receipt of
the insurance policy at issue may in some cases provide a complete
defense to the insured’s action against an agent or broker for failing
to procure certain coverage (see e.g. Hoffend & Sons, Inc. v Rose &
Kiernan, Inc., 19 AD3d 1056, 1057-1058, affd on other grounds 7 NY3d
152; Laconte v Bashwinger Ins. Agency, 305 AD2d 845, 846), it does not
provide such a defense in this case. Where, as here, there is
evidence establishing that the insured made requests for the missing
coverage subsequent to receipt of the policy, the broker has a renewed
“duty to obtain the requested coverage or to inform the client of
[its] inability to do so” (Herdendorf, 77 AD3d at 1463).
We further conclude, however, that the court properly denied
plaintiff’s motion for, inter alia, summary judgment on the complaint
inasmuch as the record demonstrates that triable issues of fact exist
with respect to both defendant’s liability and the amount of damages
recoverable by plaintiff (see generally Zuckerman, 49 NY2d at 562).
All concur except PERADOTTO, J., who dissents and votes to affirm
in the following Memorandum: I respectfully dissent because, in my
view, Supreme Court properly granted defendant’s cross motion for
summary judgment dismissing the complaint. Plaintiff, an automobile
dealership, commenced this action seeking damages for the alleged
breach by defendant, plaintiff’s insurance broker, of its duty to
procure an insurance policy containing “false pretense coverage,”
which is intended to cover losses in the event that plaintiff
purchased automobiles with defective titles. Plaintiff subsequently
moved for summary judgment on the complaint, and defendant cross-moved
for summary judgment dismissing the complaint.
“It is now well settled ‘that insurance agents have a common-law
duty to obtain requested coverage for their clients within a
reasonable time or [to] inform the client of the inability to do so’ ”
(Arthur Glick Truck Sales v Spadaccia-Ryan-Haas, Inc., 290 AD2d 780,
781, quoting Murphy v Kuhn, 90 NY2d 266, 270). It is equally well
settled, however, that “an insured is conclusively presumed to know
the contents of an insurance policy concededly received, even though
the insured did not read or review it” (Laconte v Bashwinger Ins.
Agency, 305 AD2d 845, 846; see Chase’s Cigar Store v Stam Agency, 281
AD2d 911, 912; Nicholas J. Masterpol, Inc. v Travelers Ins. Cos., 273
AD2d 817). Here, plaintiff submitted evidence in support of its
motion establishing that it requested false pretense coverage for the
1999-2000 policy period and that its insurance broker advised
plaintiff that he would procure such coverage. Plaintiff’s
submissions demonstrate that, in November or December 1999, the broker
informed plaintiff’s office manager that coverage “had been procured”
-3- 1525
CA 10-01439
and that “the endorsements were coming.” The office manager
thereafter continued to contact the broker periodically to inquire
about the endorsements, and she was repeatedly advised that the
endorsements were on the way. The office manager acknowledged,
however, that defendant had not provided documentary proof that it had
obtained false pretense coverage by the time she left plaintiff’s
employ in April 2000, and plaintiff’s general manager conceded that
plaintiff never received the requested endorsements.
Notably, all of the losses at issue appear to have been sustained
during the 2000-2001 policy period. Although the record indicates
that plaintiff may not have received the new policy for that period
before the losses occurred, the prior policy specifically excluded
false pretense coverage, and the only policy change plaintiff
discussed with defendant when the policy came up for renewal in June
2000 was a possible increase in limits for the coverage it already
possessed. At his deposition, plaintiff’s general manager suggested
that plaintiff may not have made a specific request for false pretense
coverage at the time of renewal because plaintiff “assumed” it had
such coverage. In my view, however, any such assumption was
unreasonable as a matter of law in light of the plain language of the
policy in plaintiff’s possession at that time, i.e., the 1999-2000
policy, and the fact that plaintiff had never received documentation
confirming the false pretense coverage, despite numerous requests for
it over a period of at least 10 months (see Laconte, 305 AD2d at 846;
see also Chase’s Cigar Store, 281 AD2d at 912-913; Nicholas J.
Masterpol, Inc., 273 AD2d at 818). Moreover, it is undisputed that
plaintiff never paid for such coverage. I therefore conclude that,
notwithstanding the broker’s assurances in November or December 1999
that plaintiff had false pretense coverage, plaintiff knew or should
have known that it did not have such coverage at the time plaintiff’s
office manager left in April 2000, if not sooner. Thus, in the
absence of any evidence sufficient to overcome plaintiff’s presumptive
knowledge of the contents of the policy, it is my view that the court
properly granted defendant’s cross motion for summary judgment
dismissing the complaint. I would therefore affirm the order.
Entered: April 1, 2011 Patricia L. Morgan
Clerk of the Court