From Casetext: Smarter Legal Research

Oathout v. Johnson

Appellate Division of the Supreme Court of New York, Third Department
Jun 3, 1982
88 A.D.2d 1010 (N.Y. App. Div. 1982)

Summary

In Johnson, the court held that the duty to the victims arose from the contract between the tortfeasor driver and his broker, and since the amount the victims were seeking was well within the amount of coverage required by state statute, the victims could sue the broker directly.

Summary of this case from Estavien v. Progressive Casualty Insurance Co.

Opinion

June 3, 1982


Appeal from an order of the Supreme Court at Special Term (Ford, J.), entered July 7, 1981 in Fulton County, which granted defendant's motion and dismissed the complaint for failure to state a cause of action. Giving full credence to plaintiff's pleadings and other papers, the following facts must be deemed as established: On July 9, 1976, the owner of a Gloversville taxicab company telephoned defendant insurance agent to advise of the purchase of a 1967 Chevrolet taxicab to replace another vehicle and to request a corresponding change of vehicles on its insurance policy. Defendant undertook the responsibility to effect the change, but negligently omitted to notify the insurance carrier until July 12, 1976. Unfortunately, the newly acquired vehicle was involved in an accident on July 9, in which plaintiff Cameron Oathout was seriously injured. The insurance carrier disclaimed coverage in the action commenced by plaintiff against the cab company, and plaintiff obtained judgment by default. Plaintiff thereafter successfully made a claim against the Hartford Accident and Indemnity Co. (Hartford) under the uninsured motorist coverage of his father's automobile insurance policy and, upon receiving a settlement recovery of $9,000, executed an uninsured motorist release and trust agreement to Hartford. The instant action, while nominally that of plaintiff Oathout and his father, is in actuality one for recoupment of Hartford's payment. Special Term properly dismissed the complaint. It is true that defendant's negligent omission to have the policy changed would give rise to liability in favor of her client, the cab company, for the damages occasioned by the absence of insurance coverage ( Joseph, Inc. v Alberti, Carleton Co., 225 App. Div. 115, affd 251 N.Y. 580). The promised performance, however, clearly was only intended to benefit the insured, and not the general public. Under New York law, a duty directly assumed to benefit one person does not extend to third parties who are not intended beneficiaries of the undertaking to perform, even if it is foreseeable that someone else might be damaged by the nonfeasance ( Moch Co. v Rensselaer Water Co., 247 N.Y. 160, 167-169; 2 Harper and James, The Law of Torts, § 18.6, pp 1050-1051). Even when the negligence consists of malfeasance in the promised performance, rather than nonfeasance, there is no liability for injuries thereby sustained by members of the general public at large or of an indeterminate class ( Ultramares Corp. v Touche, 255 N.Y. 170, 179-181; Beck v FMC Corp., 53 A.D.2d 118, 120-121, affd 42 N.Y.2d 1027; cf. White v Guarente, 43 N.Y.2d 356, 361). Defendant owed no statutory duty, and did not assume any other duty, to the nominal plaintiff here, and there is no good reason to shift the burden of loss from plaintiffs' insurance carrier to this defendant. Order affirmed, with costs. Mahoney, P.J., Sweeney, Kane, Mikoll and Levine, JJ., concur.


Summaries of

Oathout v. Johnson

Appellate Division of the Supreme Court of New York, Third Department
Jun 3, 1982
88 A.D.2d 1010 (N.Y. App. Div. 1982)

In Johnson, the court held that the duty to the victims arose from the contract between the tortfeasor driver and his broker, and since the amount the victims were seeking was well within the amount of coverage required by state statute, the victims could sue the broker directly.

Summary of this case from Estavien v. Progressive Casualty Insurance Co.
Case details for

Oathout v. Johnson

Case Details

Full title:CAMERON OATHOUT, an Infant, by ROLAND OATHOUT, JR., His Parent, et al.…

Court:Appellate Division of the Supreme Court of New York, Third Department

Date published: Jun 3, 1982

Citations

88 A.D.2d 1010 (N.Y. App. Div. 1982)

Citing Cases

Werrmann v. Aratusa, Ltd.

See also Baldwin v. Mortimer, 403 Mass. 142, 526 N.E.2d 776, 777 (1988) (foreseeable reliance on the promised…

Henry v. Guastella Assoc

Other cases are in accord (Johnson v Smith, 58 N.C. App. 390, 293 S.E.2d 644; Rae v Air-Speed, Inc., 386…