Levin v Leon G. Silver & Assoc., Ltd.
Annotate this CaseDecided on April 22, 2005
Supreme Court, Nassau County
Neil D. Levin, as SUPERINTENDENT OF INSURANCE OF THE STATE OF NEW YORK, as LIQUIDATOR OF FIRST CENTRAL INSURANCE COMPANY, Plaintiff,
against
Leon G. Silver & Associates, Ltd. and LEON G. SILVER, Defendants.
7867-99
COUNSEL FOR PLAINTIFF
Mait, Wang & Simmons, Esqs.
217 Broadway
New York, New York 10007
COUNSEL FOR DEFENDANT
Hauser & Associates, P.C.
591 Broadway - Suite 3A
New York, New York 10012
Leonard B. Austin, J.
Plaintiff moves for summary judgment for breach of contract against Defendant, Leon G. Silver & Associates, Ltd. ("Associates"), in the amount of $252,803.52, and for summary judgment against Defendant, Leon G. Silver ("Silver") in the same amount based on a personal guarantee.
Defendants both cross-move for summary judgment dismissing the complaint.
BACKGROUND
After First Central Insurance Company ("the Company") became insolvent, by order dated April 27, 1998, Plaintiff was appointed the liquidator of the Company's assets and causes of action. Associates is the agent for the Company pursuant to a General Agent's Agreement ("the Agency Agreement"). Defendant Silver signed a Personal Performance Guarantee of Corporate Producer ("the Personal Guarantee") whereby he guaranteed performance of all terms and conditions of the Agency Agreement and all premium payments.
Pursuant to the Agency Agreement, Associates agreed to collect insurance premiums for the Company and to deduct its commissions from the premiums. The Agency Agreement spelled out a time frame for remitting premiums to the Company and for reporting to the Company all non-payments which would result in cancellations. Section III of the Agency Agreement provides as follows:
(8) The Agent agrees that it will be responsible for and will remit to the Company on request the earned premium on any policy not reported for cancellation in accordance with the foregoing provisions of this Agreement.
(9) Commissions will not be paid on premiums where the Company is required to go direct for collection, either by its staff, outside collection agency or legal efforts.
Section VIII of the Agency Agreement further provides:
This Agreement supercedes all previous agreements, whether oral or written, between the Company and the General Agent and may not be altered, changed or amended by either party, except in writing.
In the complaint, Plaintiff alleges eight causes of action against Associates for damages in the amount of $317,106.40. Plaintiff alleges that this was the amount of the premiums that Associates failed to remit to the Company. After discovery and collection [*2]efforts, the amount in dispute has been reduced to $252,803.52. Plaintiff has documented the policies at issue and then summarized them. Of the 22 policies at issue, more than half were canceled in 1995 or earlier; years before entry of the Order of Liquidation.
On this motion, Plaintiff seeks summary judgment against Associates pursuant to its first cause of action for breach of its contractual agreement to collect and remit premiums to the Company within the contractually agreed-upon time frame. Plaintiff further seeks summary judgment against Silver, for the same amount of $252,803.52, based upon his Personal Guarantee.
In their answer, Defendants assert a collective affirmative defense of "laches, waiver, release, accord and satisfaction, estoppel, unclean hands and/or the applicable Statute of Limitations." In opposition to the Plaintiff's motion, and in support of their cross-motion seeking summary judgment dismissing the complaint in its entirety, Defendants claim that it was the "custom and practice" between it and the Company for the Company to waive the time frames set forth in the Agreement because compliance was "literally impossible".
Defendants further argue that the policies at issue were the ones with respect to which they had advised the Company to "go direct." According to Silver, "'Go Direct' is a term commonly used in the insurance industry to mean that the policy is cancelled, that the collection of the earned premium will be collected by the insurance company itself and that the insurance agent forfeits its commission but is no longer responsible for the premium". Silver insists that, from the time Associates became the agent for the Company until the Company went into liquidation, Associates "bound over 3,000 insurance policies," and in all that time the Company never held Associates, or him personally, responsible for earned premiums once the Company was notified to "go direct".
In support of their contentions, Defendants submit the deposition testimony of Robert DeRose, an employee of the Company and Assistant Vice-President in charge of collection of premium cancellations from November, 1989 to March 1998. DeRose's testimony "confirmed" the "go direct" arrangement, and that Associates was never held responsible for the premiums once the Company was advised to "go direct".
DISCUSSION
Summary judgment is the procedural equivalent of a trial. Capelin Assoc. v. Globe Mfg. Corp., 34 NY2d 338, 341 (1974). It will only be granted when no triable issues of fact are presented. Sillman v. Twentieth Century-Fox Film Corp., 3 NY2d 395, 404 (1957). The proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, offering sufficient evidence to demonstrate the absence of any material issues of fact. Alvarez v. Prospect Hosp., 68 NY2d 320 (1986); Zuckerman v. City of New York, 49 NY2d 557 (1980). One opposing summary judgment must produce evidentiary proof sufficient to require a trial of material questions of fact. Alvarez v. Prospect Hosp., supra; Zuckerman v. City of New York, supra.
On a summary judgment motion, the court should refrain from making credibility determinations. (Ferrante v. American Lung Assn., 90 NY2d 623, 631 [1997]; and Capelin Assoc. v. Globe Mfg. Corp., supra) and when credibility issues arise, summary [*3]judgment is precluded. See, Treger v. Ford Credit Titling Trust, 11 AD3d 676 (2nd Dept. 2004).
The Court should decide only whether triable issues of fact exist. Matter of Suffolk County Dept. Of Social Services v. James M., 83 NY2d 178 (1994); and Sillman v. Twentieth Century-Fox Corp., supra. Any doubt as to the existence of triable issue of fact must be resolved in favor of denial of the motion. Freese v. Schwartz, 203 AD2d 513 (2nd Dept. 1994); and Miceli v. Purex Corp., 84 AD2d 562 (2nd Dept. 1984).
A contractual prohibition against oral modification may itself be waived. Rose v. Spa Realty Assoc., 42 NY2d 338, 343 (1977). A waiver is the voluntary and intentional abandonment of a known right. See, Nassau Trust Co. v. Montrose Concrete Prods. Corp., 56 NY2d 175, 184 (1982). To the extent it has been executed, a waiver cannot be expunged or recalled. Id.
Under New York law, oral directions or the general course of conduct between the parties may modify or eliminate contractual provisions. Barsotti's Inc. v Consolidated Edison Co. of NY, 254 AD2d 211 (1st Dept.1998). See, Austin v. Barber, 227 AD2d 826 (3rd Dept.1996). Furthermore, when the oral agreement to modify has been acted upon to completion, the parol evidence rule is not applicable and past oral discussions may be relied upon to test the alleged modification Rose v. Spa Realty Assoc., supra; and T&N West Galla Pizzeria, Inc. v. CF White Plains Assoc., 185 AD2d 270 (2nd Dept. 1992). See also, J&R Landscaping v. Damianos, 1 AD3d 563 (2nd Dept. 2003).
Here, Plaintiff has presented a prima facie case of breach of the Agency Agreement by Associates, for which both Associates and Silver, individually, would be liable. However, in opposition, Defendants have raised triable issues of fact including whether the Company waived compliance with the time frames and enforcement of liability against Associates as set forth in the Agency Agreement and whether the procedure to "go direct" as implemented by the parties' course of conduct constituted a modification of the Agency Agreement. As it appears that the alleged modification has been completely performed the Company was notified to "go direct" and apparently did so without repercussions to Associates except for the forfeiture of commissions, the parol evidence offered by Defendants is admissible to test the alleged modification. Based on the foregoing, both the motion and the cross-motion for summary judgment should be denied and this action should be set down for trial.
Accordingly, it is,
ORDERED, that Plaintiff's motion for summary judgment for breach of contract against Defendant Leon G. Silver & Associates Ltd. in the amount of $252,803.52, and for summary judgment against Defendant Leon G. Silver in the same amount for breach of the Personal Guarantee, is denied, and it is further,
ORDERED, that Defendants' cross-motion for summary judgment dismissing the complaint is denied; and it is further,
ORDERED, that counsel for the parties shall appear on May 20, 2005 at 9:30 a.m. to certify this matter ready for trial, as scheduled on June 27, 2005.
This constitutes the decision and Order of the Court.
______________________________ [*4]
HON. LEONARD B. AUSTIN, J.S.C.
Dated: Mineola, NY
April 22, 2005
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