Lab, LLC v Travelers Prop. Cas. Co.

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Lab, LLC v Travelers Prop. Cas. Co. 2020 NY Slip Op 34290(U) December 23, 2020 Supreme Court, New York County Docket Number: 650827/2014 Judge: O. Peter Sherwood Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [* FILED: 1] NEW YORK COUNTY CLERr 12 23 2020 04:52 PM INDEX NO. 650827/2014 NYSCEF DOC. NO. 61 RECEIVED NYSCEF: 12/23/2020 SUPREME COUR OF THE STATE OF NEW YORK NE YORK COUNTY PRESENT: HON. 0. PETER SHER PART 000 I IAS MOTION 49EFM Justice -------------------------------------------- ---------------------------)( INDEX No.: 65082712014 THE LAB, LLC, P aintiff, MOT. DATE: 9/9/2020 -against- MOT. SEQ. No.: 001 TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA and NATHAN BUTWIN COMPANY, INC., DECISION + ORDER ON MOTION defendants. --------------------------------------------.---- I -------------------------)( The following e-filed documents, listed by YSCEF document number (Motion 001) 48, 49, 50, 51, 52, 53, 54, 55, 56,57, 58 were read on this motion to/for SUMMARY JUDGMENT Defendant Nathan Bulwin Co pany, Inc. ("NBCI") moves for summary judgment pursuant to CPLR 3212(a) to dismiss e second claim asserted against it in the complaint on the ground that it breached no duty of car I owed to plaintiff, The Lab, LLC, as it procured the insurance coverage requested by plain iff. For the following reasons, defendant's motion (motion sequence number 00 l) is denied. I. BACKGROUND As plaintiff did not oppose this motion, the following facts arc taken exclusively from f defendant's Rule 19-a Fact Statement ooc. No. 50). NIK I was predominant Iy in the business of selling property and casualty insurancl, with Nathan Hutwin (Butwin) acting as NBCI's President and CEO (Fact Statement if'ir 1-2; Ex. F, at 6, 41 [Doc. No. 56]). Plaintiff was a client ofNBCI (Fact Statement ,13; Ex. G, al 17 rDoc. No. 571). On April 30, 2008, plaintiff leased a portion of a building at 637 West 27th Street, New York, New York (the "Premises"), occupying the 8th floor and using the basement f~r their communications systems (Fact Statement iii! 4-5; Ex. A, if 17 [Doc. No. 51 ]). Plaintiff Jlegcs that on October 29, 2012, plaintiff sustained an interruption and loss of business duet llurricane Sandy (Fact Statement ii 6; Ex. A, iJ,I 18. 19). Several years before Hurricane Sandy. Butwin and David Coopersmith (Coopersmith), an NBCI 1 j 1 of 7 [*FILED: 2] NEW YORK COUNTY CLER~ 12 23 2020 04:52 PM INDEX NO. 650827/2014 RECEIVED NYSCEF: 12/23/2020 NYSCEF DOC. NO. 61 account executive, met with Thomas onti (Conti), plaintiffs partial owner and CEO who handled procurement of plaintiff's ins ranee policies with NBCI, to discuss takeover of the plaintiffs existing insurance policies ilh Travelers and plaintiff's insurance needs (Fact Statement ~'ii 7, 11-12; Ex. F, at 22, 29l 30). During their initial meeting, plaintiff did not pursue or request coverage from NBCI (Fact ~tatcmcnt ii 8; Ex. E, at 24, 72). Two years after the initial meetling, in 2007 or 2008, NBCI took over plaintiff's existing policies with Travelers from plaintifrj prior insurance broker (Fact Statement 'ii 9; Ex. E, at 7273; Ex_ G, at 38). At that time, plaintits business interruption insurance coverage was already in place having been procured by the pref· ous insurance broker (Fact Statement 'ii IO; Ex. G, at 68). During the second meeting between N Cl and plaintiff: Conti advised But win and Coopersmith that plaintiff "needed to protect thems Ives in case anything went wrong" (Fact Statement 'ii 13; Ex. E, at 31 )- Conti could not recall w~cthcr this request for business interruption insurance was a general or specific request (Fact Stat ment i! 14; Ex. E, at 35). Conti further asked Coopersmith to go over plaintiffs policies to dctcrn ine if those in place would cover interruptions to plaintiffs business beyond its control Fact Statement ii 15; Ex. E, at 41 ). Conti requested that NBCI obtain business interruption cov rage for plaintiff to protect it from "anything that can happen" {Fact Statement ~ 16; Ex. E, 4 96). Plaintiff did not specifically request that NBCI obtain flood coverage. Similarly, the domplaint alleges that plaintiff "required insurance coverage for business interruption aris ng from any loss of use or occupancy of the Premises" (Fact Statement,[,] 17-18; Ex. A, 'ii 25; Ex. E, at 95; Ex. G, at 70). Conti testified that he performed only an "ancillary" review' fNBCI's policies (Fact Statement ii 19; Ex. E, at 86). Further, Conti testified that plaintiff di not have a separate written service contract with NBCI 1 and could not recal ! if plaintiff compe1 sated NBC! to provide insurance services or consultation (Fact Statement ii 20; Ex. E, at 91 ). 11. ARGUMENTS A. Defendant's Memorandum in u ort Defendant asserts that it fulfill d any common law duty owed to plaintiff by procuring the insurance specifically requested an , consequently, plaintiff's claim for failing to procure insurance must be dismissed (Def. Br. t 2 [Doc. No. 58J). To establish a prima facie negligence claim, plaintiff must demonstrate that BCI owed it a duty of due care, breached that duty, and the breach proximate Iy caused injury t p Iainti ff (id. ; Turcotte v Fell, 68 NY2d 4 3 2 f i 9 86] ). 2 2 of 7 [*FILED: 3] NEW YORK COUNTY CLERr 12 23 2020 04:52 PM INDEX NO. 650827/2014 RECEIVED NYSCEF: 12/23/2020 NYSCEF DOC. NO. 61 Defendant argues that while insurance rokers have a common law duty to obtain requested coverage for their clients, they have nol continuing duty to advise, guide or direct a client to obtain additional coverage (DeL Br. at 2; Murphy v Kuhn, 90 NY2d 266, 270 [l 997]; Voss v Netherland\' Ins. C.'o., 22 NY3d 728, 7~·4 L2014]). Defendant further argues that, in the ordinary broker-client setting, "the client may pfevail in a negligence action only where it can establish that it made a particular request to the broker and the requested coverage was not procured" (Def. Br. at 3; Voss v Netherlands Ins.,! Co .. 22 NY3d 728, 734 [2014]). I Defendant argues that, although NBCI took over administration of plaintiff's then existing insurance policies, the busine!Js interruption coverage under which plaintiff alleges its loss was first procured by plaintiffs p vious insurance broker, not NBCI (Def. Br. at 3-4; Ex. G, at 68). Conti, who handled the insu ance procurement, did not specifically request NBC! I procure flood insurance, testifying thatj: "I don't ... really don't remember a whole lot more ... with the exception of saying that, you fnow, we needed additional protection. We needed to protect ourselves in case anything went wrong'' (Arbitrio Aff. ~ 25; Ex. E, at 31, lines 11-19). Conti further testified that he requested coverage and understood that the plaintiff was protected for "some sort of disruption that was b yond [plaintiffs] control" (Arbitrio Aff. ii 27; Ex. E, at 41 ). Conti has admitted that he only re alls reviewing the limits of the insurance policies procured by NBCI for plaintift: that pl inti ff did not have a separate written contract with NBCI, and that he could not re cal I if p lai nti ff raid N BCI separate fees for insurance services or consulting (Arbitrio Aff., ~ 3 7; Ex. E, It 81, lines 1-8). Defendant argues that while it wed plaintiff a duty to obtain the specifically requested insurance covering plaintiff for busine s interruption, plaintiff did not specify which perils it sought to have covered by the insuranae (Def. Br. at 4 ). Defendant argues it is undisputed that plaintiff had business interruption insufance coverage and that NBCI obtained or continued to maintain plaintiffs business interruptitn insurance policy in accordance with plaintiff's general request (id.). Further, Conti admitted h could not recall whether his request for business interruption insurance coverage was g ncral or specific, however, his testimony shows that all of his requests to NBCI for insurance we e general in nature (id.). Defendant argues it is well settled that a general request for a typelof insurance docs not impart a duty on a broker or agent to obtain all potentially available typcsl of insurance (id.; Hrdfend & Sons, Inc. v Rose & Kiernan, . _._ 3 of 7 [*FILED: 4] NEW YORK COUNTY CLERK 12 23 2020 04:52 PM INDEX NO. 650827/2014 RECEIVED NYSCEF: 12/23/2020 NYSCEF DOC. NO. 61 Inc., 7 NY3d 152, 158 [1st Dept 20061: L. C.E.L. Collectibles. Inc. v Am. Ins. Co., 228 AD2d 196, 196-197 [ 19961). Conti further admitted receivin 7 the policies procured and maintained by NBCI before the loss, and that there is no indication in the record that he questioned the policy or made any complaint about the coverage provide before the loss (Def. Br. at 5; Nqfash v Allstate Ins. Co., 13 7 AD3d 1088, 1090 l2d Dept 2016] I["[A ]n insured is conclusively presumed to have read and assented to the terms of an insurance pf licy that he or she has received"]; see also Loevner v Sullivan & Strauss Agency, Inc., 35 A 3d 392 [2d Dept 20061; Busker on the Roof Ltd. Partnership Co. v Warr;nglon, 283 A 2d 376 [1st Dept 2001 I). Defendant argues that, in the absence of a specific request for cover ge, plaintiff's receipt and acceptance of the policies procured and maintained by NBCI pre ludcs plaintiff's purported negligence and breach of contract claim as a matter of law (Def. Br. at 5). Defendant next argues that plai 1tiff's claim for allegedly failing to procure insurance must be dismissed because plaintiff ha not made out a prima.facie claim based on a special relationship between plaintiff and NBC)] (id.). In the absence of a special request, plaintiff must show a special relationship existed be±ccn plaintiff and NBCI (id.; Voss v Netherland<; Ins. Co., 22 NY3d 728 l2014J). Three exccptio al relationships may give rise to a special relationship I creating an additional duty of advisemf nt: (i) the agent receives compensation for consultation apart from premium payments, (ii) the c was some interaction regarding a question of coverage, with the insured relying on the experti c of the agent, or (iii) there is a course of dealing over an extended period of time which would tlavc put objectively reasonable insurance agents on notice that their advice was being sought and !specially relied upon (Def. Br. at 5-6; Voss, 22 NY3d at 734). Insurance agents or brokers are ~~t personal financial counselors and risk managers (see Murphy v Kuhn, 90 NY2d 266, 273 [ 1t97]). Defendant argues that it is undi'sputcd that NBCI did not receive compensation for I consultation apart from the payment of premiums (Def. Br. at 6). While there were general interactions regarding plaintiff's policibs, there is no indication that plaintiff retained NBCI for a determination of questions of coveragd where plaintiff relied on NBCI's expertise after the policy was issued (id.). Fm1her, plainti~T has not established a course of dealing with NBCI over an extended period of time which woid put an objectively reasonable insurance agent on notice that the advice being sought was relic on (id.). 4 of 7 ·--+- [* FILED: 5] NEW YORK COUNTY CLERK 12 23 2020 04:52 PM NYSCEF DOC. NO. 61 INDEX NO. 650827/2014 RECEIVED NYSCEF: 12/23/2020 111. DISCUSSION The standards for summary jud ment arc well settled. Summary judgment is a drastic remedy which will be granted only wh n the party seeking summary judgment has eslablished that there are no triable issues of fact (. ·ee CPLR 3212 Ibl; Alvarez v Prmpect Hosp., 68 NY2d 329 [1986]; Sillman v Twentieth Centu -Fox Film Corporation. 3 NY2d 395 [1957]). To prevail, the party seeking summary ju gment has the burden to establish a prima facie showing of entitlement to judgment as a matter flaw tendering cvidentiary proof in admissible form, which may include deposition transcri~ts and other proof annexed to an attorney's affirmation (see Alvarez v Prospect Hosp., supra; City of New York, 49 NY2d 557 ~)fan v Farrell Unes. [1980~). motion without regard to the strength 64 NY2d 1092 [ 1985]; Zuckerman v Absent a sufficient showing, the court should deny the qr the opposing papers (see Winegrad v New Med. Cir., 64 N Y2d 851 [ 1985 ]). York Univ. I Once the initial showing has b en made, the burden shifts to the party opposing the motion for summary judgment to rcbu the prima facie showing by producing evidentiary proof in admissible form sufficient to requir a trial of material issues of fact (see Kaufman v Silver, 90 NY2d 204. 208 [ 1997]). Although thel court must carefully scrutinize the motion papers in a light most favorable to the party oppo~ing the motion and must give that party the benefit of every favorable inference (see Negri vlstop & Shop, 65 NY2d 625 [l 985]) and summary I judgment should be denied where therf is any doubt as to the existence of a triable issue of fact (see Rotuba Extruder.\·, v Ceppos. 46 iY2d 223, 231 119781). bald, conclusory assertions or speculation and "[a] shadowy semblan,ce of an issue" are insufficient to defeat a summary judgment motion (S..J. Capalin Assoc. I Iv Globe Mfg Corp., 34 NY2d 338, 341 I 1974 l; see Zuckerman v City r?f"New York. supra: Ehrlich v American Moninger Greenhouse Mfg. Corp., 26 NY2d 255. 259 [1970]). Lastly, "fal motion for summa· judgment should not be granted where the facts are in dispute, where conflicting inferences of credibility" (Ruiz v Gr~Oin, 71 J\D3 ay be drawn from the evidence, or where there are issues 1112 [2d Dept 20 I OJ, quoting Scoll v Long Is. Power Auth., 294 AD2d 348 [2d Dept 2002]) The elements of a negligence claim arc "'first the existence of a duty owing by the defendant to the plaintiff; second, dd ndant's failure to discharge that duty; third, injury to - - 5 of 7 ______.._ [* 6] FILED: NEW YORK COUNTY CLERK 12 23 2020 04:52 PM NYSCEF DOC. NO. 61 INDEX NO. 650827/2014 RECEIVED NYSCEF: 12/23/2020 plaintiff proximately resulting from su h failure" (Peresluha v City ofNew York, 60 AD2d 226, 230 [I st Dept 1977]). Here, defendant NBCI has fail d to carry its burden to show entitlement to summary judgment as a matter oflaw. NBCI haJ shown, through plaintiffs own testimony, that the requests made ofNBCI were general, on NBCI to search out every possible ~ot specific, in nature and did not impart a responsibility ~elcvant insurance (Arbitrio Aff., Ex E, at 35; Hqffi:nd & Sons, Inc. v Rose & Kiernan, Inc., 7 N 3d 152, 158 [!st Dept 2006]; L.CE.L Collectibles, Inc. v Am. Ins. Co., 228 AD2d 196, 196-19 [ 1996]). Even in the absence of such a specific request, however, a special relationship betwcc the parties can give rise to an additional duty of advisement (see Voss, 22 NY3d at 734 . As noted above, there arc three exceptional scenarios which would give rise lo said special r lationship: (i) the agent receives compensation for consultation apart from premium pay ents, (ii) there was some interaction regarding a question of coverage, with the insured relying 1n the expertise of the agent, or (iii) there is a course of dealing over ~n extendc~ peri~d of ti1c ~hich would have p.ut objc~tively re~onable insurance agents on notice that their advice was cmg sought and specially rehed upon {td). Jlcre,just as the court in Voss ound, Conti's testimony suggests, that there was some interaction regarding a question of coJcrage with plaintiff relying on NBCI (see id., at 735-736). Specifically, plaintiffs representative, Conti, asked Coopersmith, a representative ofNBCI, to look over plaintiiTs insurance policic, to see if plaintiff had coverage for disasters (Arbitrio Aff., Ex. E, at 41, lines 5-21 ). With regards;to this exceptional scenario, NHCI argues that the I inter~ctions were general, with no '.nd~·:cati~n that plaintiff retained NBC! for a determination of as issued (Fact Statement ,-i 15; Def. Br. at 6). questions of coverage after the policy Defendant's arguments, however, mis haraclerize Mr. Conti's testimony and misstate the applicable standard as nothing in Vos.tsuggests the interactions need be specific or that a separate retainer is required. Just as th court in Voss held, the complaint here cannot be dismissed on the basis that no special elationship arose between the parties. However, to prevail I on its claim, plaintiff must carry the uitimatc burden of proving the special relationship did arise (id., at 736). 6 6 of 7 [* FILED: 7] NEW YORK COUNTY CLERK 12 23 2020 04:52 PM NYSCEF DOC. NO. 61 INDEX NO. 650827/2014 RECEIVED NYSCEF: 12/23/2020 Accordingly, it is hereby ORDERED that defendant NB I's motion for summary judgment is DENIED. D_~~ ~ 1212312020 DATE CHECK ONE: CHECK IF APPROPRIATE: X RANTED lN PART ENIED UBMITORDER ETTLEORDER INCLUDES TRANSFE FIDUCIARY APPOINTMENT DEFERENCE REASSIGN 7 7 of 7 cf;1 ~8 X NON-FINAL DISPOSITION CASE DISPOSED RANTED APPLICATION: • O~RSQOD,J.S.C. /

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