Vissas v Simon Agency N.Y. Inc.

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Vissas v Simon Agency N.Y. Inc. 2012 NY Slip Op 31391(U) May 21, 2012 Supreme Court, New York County Docket Number: 112704/2011 Judge: Louis B. York Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] SUPREME COURT O F THE STATE OF NEW YORK NEW YORK COUNTY PART . . "s- Justice .V- MOTION SEQ. NO. The following papers, numbered 1 to , were read on this motlon tolfor Notice of MotionlOrder to Show Cause - Affldavlts Answerlng Affldavlts Replylng Aildavits . ,o a / - Exhlblts IW a ) . INO(d. INo(4. - Exhibb Upon the foregolng papem, It Is ordered that thls motlon is FILED I ' MAY 2 3 2012 N ¬W YOHK COUNTY CLERK'S OFFICE I . CHECK ONE:..................................................................... CASE DISPOSED 0 ........................... MOTION IS: @GRANTED , CHECK IF APPROPRIATE: ................................................ 0SETTLE ORDER 2. CHECK AS APPROPRIATE: 3. DO NOT POST DENIED 0SUBMIT ORDER FIDUCIARY APPOINTMENT REFERENCE I [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: IAS PART 2 ------______________l_r_lr______________------- ------------------- -- X JAMES VISSAS, 14-33/35 ASTORIA BLVD, LLC, AND PARMA TILE MOSAIC & MARBLE CO. INC., Index No.: 112704/2011 Plaintiffs, -against- DECISION/ORDER SIMON AGENCY N.Y. INC., HERMITAGE INSURANCE COMPANY, SOUTHWEST MARINE AND GENERAL INSURANCE COMPANY and ST. PAUL FIRE AND MARINE INSURANCE COMPANY a/k/a TRAVELERS, FILED MAY 2 3 2012 In this action, which arises out of the various defendant insurance companies and insurance broker s allegedly wrongful decisions to decline insurance coverage to plaintiff, co-defendant Simon Agency N.Y., Inc. ( Simon or movant ) moves to dismiss under CPLR § 321 1(a)(7). Plaintiff opposes the motion. For the reasons below, the Court grants the motion. According to the Complaint, which this Court accepts in its entirety for the purposes of the motion, plaintiff James Vissas ( Vissas ) owns plaintiffs 14-33/35 Astoria Blvd, LLC ( Astoria LLC ) and Parma Tile Mosaic & Marble Co. Inc. ( Parma Tile ). Around December 7, 2008, construction work was being performed at Astoria LLC, under the direction of general contractor George s Home Improvement Corporation ( George s ). On this date, Astoria held an insurance policy with U.S. 1 [* 3] Underwriters Insurance Company, LLC ( Underwriters ). In addition, Astoria LLC and Parma Tile entered into an oral agreement for the project a few months prior to the start date, and as part of that oral agreement George s allegedly was to insure the project, listing Astoria LLC and Parma Tile as additional insured parties. According to the Complaint, George s obtained an insurance policy through movant Simon. The policy, with defendant Hermitage Insurance Company ( Hermitage ), was effective on the date in question, The complaint also notes that Hermitage was acquired by Tower Group Companies ( Tower ) . George s began work on an exterior wall of the building in October 2008, and subcontracted some of the work to Papas Iron Works, Incorporated ( Papas ). Astoria LLC and Parma Tile also entered into a contract with Papas regarding the work in question. The complaint states that Papas also was obliged to obtain insurance and list Astoria LLC and Parma Tile as additional insureds. Papas allegedly obtained a policy through defendant Southwest Marine and General Insurance Company ( Southwest ). On December 7, an exterior wall of the building allegedly collapsed onto a neighboring building. As a result of the collapse, numerous lawsuits were filed, and Astoria LLC and Parma Tile were named as defendants in I O of them. Underwriters, Astoria s carrier, sought indemnification and coverage from Hermitage and Tower on Astoria s behalf. Hermitage and Tower refused on the ground that Astoria LLC was not an additional insured on the pertinent policy. In addition, Underwriters sought indemnification and coverage from Southwest, which also rejected the request. However, Southwest s determination is not relevant to the current motion. As is relevant here, the complaint contains four causes of action against Simon. 2 [* 4] First, the complaint alleges that Simon materially breached its agreement when it failed to obtain coverage for Astoria, LLC as an additional insured and that Simon is liable to Astoria, LLC as it is a third-party beneficiary of the contract. Second, the complaint alleges that Simon tortiously intelfered with the insurance procurement by failing to include Astoria LLC and Parma Tile as additional insureds yet issuing George s a certificate. Third, the complaint alleges that Simon was negligent in its failure to procure a policy which named Astoria LLC and Parma Tile as additional insureds, and thus breached a duty to these two plaintiffs. Fourth, the complaint explains that the certificate to which it referred in the second cause of action certified that Astoria LLC and Parma Tile were additional insureds OR the policy. Accordingly, this cause of action alleges, Simon i guilty of fraud. s In the current motion to dismiss, Simon first alleges the causes of action have no merit because Surrey Agency, not Simon, was the insurance broker for George. Simon alleges it was a general insurance which was contacted by either Surrey or Hermitage to procure insurance. Simon alleges it worked with Surrey directly, and thus had no privity with George or with any of the plaintiffs. This argument must fail on a CPLR 5 321 1 motion, however, as it raises factual issues as to the relationship between Surrey and Simon. Simon also seeks an order dismissing any cross-claims which have been or might be asserted. As Simon had not received the answers at the time of this motion, it notes that it did not know whether any cross-claims have been or will be asserted. The Court does not issue advisory orders, m, Osfrover v. Citv Qf New York, 192 A.D.2d 115, 118-19, 600 N.Y.S.2d 243, 245 (Iat 1993), or, with rare exceptions, issue Dept. 3 [* 5] orders which bar a party from asserting any claims it deems appropriate. Therefore, the Court denies this part of the motioh without further consideration of its substance. If and when cross-claims are asserted, Simon can bring a motion to dismiss them. As for the remainder of the motion, the Court concludes that, as Simon argues, the first two causes of action must fail. An insurance broker s duty runs to its customer and not to any additional insureds . . . . Arredondo v. Citv of New Yo rk, 6 A.D.3d 328, 329, 775 N.y.S.2d 150, 151 (IBt 2004). The broker, having had no contractual Dept. relationship with [plaintiffs], and not having otherwise been in privity with [them,] was under no duty , , . that might serve as a predicate for [their] claims. Glvnn v. United House of Prayer, 292 A.D.2d 319, 322, 741 N.Y.S.2d 499, 503 (Iat Dept. 2002); see Federal Ins. Co. v. $ n a Ins. Brokeraqe Serv., Inc., 304 A.D.2d 316, 317, 758 N.Y.S.2d 21, 22 (Ist Dept. 2003). In addition, Simon moves to dismiss claims based on its alleged fraud with respect to the certificate of insurance. The certificate of insurance is annexed to the complaint. Thus Simon may rely on it in this CPLR 5 321 1 motion. See Jacobs v. Haber, 133 A.D.2d 739, 740, 520 N.Y.S.2d 28, 29 (2ndDept. 1987); see a Is0 Mondeffiore v. Soia, 292 A.D.2d 241 , 242, 738 N.Y.S.2d 839, 839 (IstDept. 2002)(dismissal under 321 1 proper where documentary evidence annexed as exhibits to complaint flatly contradicted complaint s material allegations). Simon is correct that such certificates generally confer no rights upon the holder and/or named parties, and do not impact the provisions of the policy itself (the Court refers to this recitation as the disclaimer ). See Hargob Realty Aswciates. Inc. v. Fireman s Fund Ins. Co., 73 A.D.3d 856, 857-858, 901 N.Y.S.2d 657, 659 - 660 (2nd 4 [* 6] Dept. 2010). A certificate of insurance is only evidence of a carrier s intent to provide coverage but is not a contract to insure. .. [or] . .. concluside proof. . . that such a contract exists. Tribeca Broadwav Assoc., LLC v. Mount Vernon Fire Ins. Co, 5 A.D.3d 198, 200, 774 N.Y.S.2d 11, 13 (let Dept. 2004). This conclusion stems from language in the certificates, in particular the disclaimers that [the certificates] are for information only, they may not be used as predicates for a claim of negligent misrepresentation. The Beniamin Shapiro Realty Co. v. Kemnar National Ins, CQ,303 A.D.2d 245, 246, , 756 N.Y.S.2d 45, 46 (let Dept.)( Benjamin Shapiro Realty ), Iv dismissed in part. denied in part, I 0 0 N.Y.2d 573, 764 N.Y.S.2d 382 (2003). Thus, [rlegardless of whether the broker acted recklessly, the causes of action for fraud and negligent misrepresentation, based on the inaccurate certificates, were properly dismissed because it was unreasonable to rely on them for coverage in the face of their disclaimer language . , . .I n 7 A.D.3d 292, 293, , 776 N.Y.S.2d 257, 258 (IatDept. 2004)( White Knight Restoration ). The certificate here, which is annexed as an exhibit to the complaint, contains the following language: This certificate is issued as a matter of information only and confers no rights upon the certificate holders. This certificate does not amend, extend or alter the coverage afforded by the policies below. In the cases above and in numerous others, courts have rejected claims based on similar or identical language. Accordingly, based on the prevailing case law, plaintiffs cannot assert fraud or negligence against Simon, . . Beniamin Shaeiro Realty, 303 A.D.2d at 245-46, 756 . N.Y.S.2d at 46. It appears plaintiffs attempt to argue that fraud or negligent misrepresentation 5 [* 7] claims may still exist despite the lack of privity. In Binvan She1 Chessed, Inc. v. Goldberser Ins. BrQkeraq, 18 A.D.3d 590, 592, 795 N.Y.S.2d 619, 621 (2ndDept. 2OOS)("Binyan"), the Second Department found that summary judgment was premature against the insurance broker where the certificate of insurance, issued six months after the insurance policy allegedly became effective, incorrectly claimed that the policy had been paid for and issued. Id. If the plaintiffs could allege fraud, collusion or other applicable circumstances, the Second Department claimed, there could be a triable issue of fact. ld. However, not only is this a CPLR 5 321 Irather than CPLR 7 3212 motion, but - far more significantly -the First Department has made it clear that neither a fraud nor a negligent misrepresentation claim may lie in such circumstances. e.a, White Kniaht Restoratiqn, 7 A.D.3d at 293, 776 N.Y.S.2d at 258. See, The Court also does not see the basis for a tortious interference with contract claim, and plaintiffs have not pled an articulate or persuasive argument supporting this cause of action. The Court has considered plaintiffs' additional arguments and finds them similarly unpersuasive. The Court is not without sympathy for plaintiffs -who, if the allegations in the Complaint are true, are uninsured due to t h e negligent failure of one contractor or broker or insurer to obtain coverage for them as additional insured, and also due to the negligent failure of the subcontractor or broker or insurer to secure and maintain a valid insurance contract at all. Nonetheless, this does not alter the fact that, as to Simon, the law is not on plaintiffs' side - and plaintiffs have failed to provide a convincing argument to the contrary. Accordingly, it is ORDERED that the motion to dismiss is granted, and all claims asserted against Simon in the complaint are severed and dismissed; and it is further 6 [* 8] ORDERED that the portion of the motion seeking to preempt all possible cross claims is denied; and it is further ORDERED that the remainder of the action shall continue. As for plaintiffs' other arguments in opposition, they are not persuasive. Their arguments with respect to a defendant's potential liability to third parties do not involve insurance law, particularly not the type of scenario at hand. Moreover, the cases to which plaintiffs cite for this point are all over I 0 0 years old. Certainly they fail to carry any weight here, in light of the more recent, applicable, and abundant case law. Their arguments as to the duties of insurance agents relies on cases which either involve the' duties of agents to their clients or do not pertain to insurance law. ENTER: Louis BvYork, J.S.C. NEW YORK COUNV CLERK'S OFFICE 7

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