Opinion
06-30-2017
PETRI BAKING PRODUCTS, INC., Plaintiff–Appellant–Respondent, v. HATCH LEONARD NAPLES, INC., now known as First Niagara Risk Management, Inc., and First Niagara Risk Management, Inc., Defendants–Respondents–Appellants.
Lippes Mathias Wexler Friedman LLP, Buffalo (Thomas J. Gaffney of Counsel), for Plaintiff–Appellant–Respondent. Hodgson Russ LLP, Buffalo (Ryan K. Cummings of Counsel), for Defendants–Respondents–Appellants.
Lippes Mathias Wexler Friedman LLP, Buffalo (Thomas J. Gaffney of Counsel), for Plaintiff–Appellant–Respondent.
Hodgson Russ LLP, Buffalo (Ryan K. Cummings of Counsel), for Defendants–Respondents–Appellants.
PRESENT: SMITH, J.P., LINDLEY, DeJOSEPH, NEMOYER, AND CURRAN, JJ.
MEMORANDUM:
Plaintiff, a commercial food baking and production business, commenced this action asserting causes of action for breach of contract, fraud, and negligence/negligent misrepresentation premised upon the alleged failure of defendants (hereafter, First Niagara) to procure flood insurance coverage prior to the flood that damaged its business operations. In September 2003, Brian Conlogue, an insurance broker employed by First Niagara, summarized the coverage specifications for plaintiff's projected insurance policy, which was provided to him by plaintiff's existing insurance provider. His written summary indicated that plaintiff carried flood insurance. Unbeknownst to Conlogue, and apparently to plaintiff, plaintiff did not in fact carry flood insurance coverage, and the specifications were erroneous in that regard. The error was neither brought to plaintiff's attention by Conlogue nor discovered by plaintiff.
Plaintiff hired First Niagara in September 2003 as its insurance broker, and it authorized First Niagara to procure its business insurance for several years. Each annual policy contained a flood insurance exclusion provision. On September 18, 2006, Walter McFarlane, the brother of plaintiff's chief financial officer at the time, called Conlogue to discuss the flood insurance provisions in the existing policy. McFarlane expressed some confusion and asked, " ‘We have flood insurance, right? Because we want it.’ " Conlogue indicated that he would "get back to him," but there is no evidence that he did so. On August 10, 2009, a flood event caused damage to plaintiff's business operations. After making a claim, plaintiff was informed that flood coverage was excluded from its policy.
First Niagara moved for summary judgment to dismiss the complaint or, in the alternative, to dismiss plaintiff's claim for lost profit damages. Plaintiff cross-moved for partial summary judgment on its causes of action for breach of contract and negligence/negligent misrepresentation. Supreme Court granted First Niagara's motion in part insofar as it dismissed plaintiff's fraud cause of action, and it determined that no "special relationship" existed between the parties. The court denied the motion in all other respects and denied plaintiff's cross motion. Plaintiff appeals, and First Niagara cross-appeals, from the order.
On its appeal, plaintiff challenges only those parts of the order that granted First Niagara's motion with respect to the issue whether a "special relationship" existed and that denied its cross motion. We therefore deem abandoned any contention by plaintiff with respect to the order insofar as it granted that part of First Niagara's motion for summary judgment seeking dismissal of the fraud cause of action against it (see Logan–Baldwin v. L.S.M. Gen. Contrs., Inc., 94 A.D.3d 1466, 1467, 942 N.Y.S.2d 718 ; Ciesinski v. Town of Aurora, 202 A.D.2d 984, 984, 609 N.Y.S.2d 745 ).
We conclude that the court properly granted First Niagara's motion insofar as it asserted that no special relationship existed between the parties. "As a general principle, insurance brokers have a common-law duty to obtain requested coverage for their clients within a reasonable time or inform the client of the inability to do so" ( Nicotera v. Allstate Ins. Co., 147 A.D.3d 1474, 1476, 47 N.Y.S.3d 830, lv. denied 29 N.Y.3d 907, 2017 WL 1843337 [internal quotation marks omitted]; see Voss v. Netherlands Ins. Co., 22 N.Y.3d 728, 734, 985 N.Y.S.2d 448, 8 N.E.3d 823 ). " Absent a specific request for coverage not already in a client's policy or the existence of a special relationship with the client, an insurance agent or broker has no continuing duty to advise, guide[ ] or direct a client to obtain additional coverage" ( 5 Awnings Plus, Inc. v. Moses Ins. Group, Inc., 108 A.D.3d 1198, 1200, 970 N.Y.S.2d 158 [internal quotation marks omitted]; see American Bldg. Supply Corp. v. Petrocelli Group, Inc., 19 N.Y.3d 730, 735, 955 N.Y.S.2d 854, 979 N.E.2d 1181 ). "[A] special relationship may arise where ‘(1) the agent receives compensation for consultation apart from payment of the premiums ... (2) there was some interaction regarding a question of coverage, with the insured relying on the expertise of the agent ...; or (3) there is a course of dealing over an extended period of time which would have put objectively reasonable insurance agents on notice that their advice was being sought and specially relied on’ " ( Sawyer v. Rutecki, 92 A.D.3d 1237, 1237–1238, 937 N.Y.S.2d 811, lv. denied 19 N.Y.3d 804, 2012 WL 1988705, quoting Murphy v. Kuhn, 90 N.Y.2d 266, 272, 660 N.Y.S.2d 371, 682 N.E.2d 972 ).Here, First Niagara met its initial burden of establishing that no special relationship existed, and plaintiff failed to raise a triable issue of fact (see generally Zuckerman v. City of New York, 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 ). Specifically, First Niagara submitted evidence that it received no compensation from plaintiff over and above the commissions it received for the insurance policies it had procured, that plaintiff did not use First Niagara as its exclusive agent, and that plaintiff retained final decision-making authority over what coverage to obtain (see Hoffend & Sons, Inc. v. Rose & Kiernan, Inc., 7 N.Y.3d 152, 158, 818 N.Y.S.2d 798, 851 N.E.2d 1149 ; Sawyer, 92 A.D.3d at 1238, 937 N.Y.S.2d 811 ). Thus, even accepting plaintiff's allegations as true, we conclude that "the record in the instant case presents only the standard consumer-agent insurance placement relationship" ( Murphy, 90 N.Y.2d at 271, 660 N.Y.S.2d 371, 682 N.E.2d 972 ; see Hoffend & Sons, Inc., 7 N.Y.3d at 158, 818 N.Y.S.2d 798, 851 N.E.2d 1149 ).
We further conclude, however, that First Niagara failed to tender "sufficient evidence to eliminate any material issues of fact from the case" relating to plaintiff's specific request for flood insurance coverage ( Winegrad v. N.Y. Univ. Med. Ctr., 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 476 N.E.2d 642 ). Although "[a] general request for coverage will not satisfy the requirement of a specific request for a certain type of coverage" ( Hoffend & Sons, Inc., 7 N.Y.3d at 158, 818 N.Y.S.2d 798, 851 N.E.2d 1149 ), McFarlane testified that he specifically requested Conlogue to clarify whether plaintiff carried flood insurance coverage, "[b]ecause we want it." Notably, the First Niagara employee in charge of "obtain[ing] flood insurance certificates for client[ ] properties" retrieved plaintiff's certificate the very next day, upon Conlogue's request. We conclude that there are triable issues of fact concerning whether plaintiff made a specific request for flood insurance coverage prior to the flood event (cf. 5 Awnings Plus, Inc., 108 A.D.3d at 1201, 970 N.Y.S.2d 158 ; Catalanotto v. Commercial Mut. Ins. Co., 285 A.D.2d 788, 790, 729 N.Y.S.2d 199, lv. denied 97 N.Y.2d 604, 736 N.Y.S.2d 308, 761 N.E.2d 1035 ; see generally Hersch v. DeWitt Stern Group, Inc., 43 A.D.3d 644, 644–645, 841 N.Y.S.2d 516 ).
We have considered First Niagara's remaining contention regarding plaintiff's claim for lost profit damages, and we conclude that it is without merit.
It is hereby ORDERED that the order so appealed from is unanimously affirmed without costs.