TLSS Partner Eric D. Suben Obtains Summary Judgment for Broker on Professional Liability Claims

TLSS Partner Eric D. Suben successfully defended professional liability claims against a wholesale insurance broker, resulting in an Order issued by Justice Knipel of New York Supreme Court, Kings County, granting TLSS’ summary judgment motion in full and dismissing all direct claims and cross-claims against the broker. The insured sued the insurer, the wholesaler, and the retail agent after the insurer denied coverage for a fire at an apartment building the insured owned. Coverage was denied on the basis that there was no policy in effect on the date of loss. The insured alleged that it relied to its detriment on representations that coverage was in place at the time it closed on the property three days before the fire. All defendants asserted cross-claims for contribution and indemnity.

In discovery, Mr. Suben established that when the retailer asked for the policy to be backdated to the date of the closing, the wholesaler clearly advised that such would require a “no loss” letter to the present date. No such letter was provided. After the fire, the retailer (without disclosing the fire) continued to press for a backdated policy. The retailer did not provide the “no loss” letter for several more days, however, and the letter submitted did not certify no losses to the present date. Accordingly, the policy was issued with an inception date four days after the fire.

In the motion for summary judgment, Mr. Suben argued that plaintiff’s direct claims should be dismissed based on the absence of privity or a “special relationship” between the insured and the wholesaler, which New York law requires for a policyholder to state a claim against a wholesaler. With respect to the cross-claims, he argued that the wholesaler made no misrepresentations that the retailer relied on in unilaterally issuing a binder and paid receipt for plaintiff to present at closing.

By order dated May 17, 2018, Justice Knipel granted TLSS’ motion for summary judgment in full based on Mr. Suben’s arguments, dismissing all claims and cross-claims against the wholesaler and finding the retail agent the sole liable party.

1015 70th Street, LLC v. M&S Insurance Agency, Inc., et al., Index No. 508378/13, Supreme Court of the State of New York, Kings County, slip op. May 17, 2018.