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(FILED: KINGS COUNTY CLERK 06/05/2014) INDEX NO. 508378/2013
NYSCEF DOC. NO. 30 RECEIVED NYSCEF: 06/05/2014
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS
manne nnn ence ene nnn nen nn ene ane nina! x
1015 70 STREET LLC Index No.: — 508378/13
Plaintiff,
DEFENDANT M&S
~ against - INSURANCE AGENCY,
INC.’S MEMORANDUM OF
M&S INSURANCE AGENCY, INC., LEADING LAW IN OPPOSITION TO
INSURANCE GROUP INSURANCE CO., LTD. INTERNATIONAL
LEADING INSURANCE SERVICES, INC, and UNDERWRITING AGENCY,
INTERNATIONAL UNDERWRITING AGENCY, INC, INC.’S MOTION TO
DISMISS
Defendants
nen nee ne nen nen nnnnnnnennnnninnnnnnnnnnnennennmnananeset x
Defendant M&S Insurance Agency, Inc. (“M&S”) submits this memorandum of law in
opposition to Defendant International Underwriting Agency, Inc.’s (“IUA”) motion to dismiss.
PRELIMINARY STATEMENT
For the reasons set forth in more detail below, the Court should deny IUA’s motion to
dismiss. First, M&S has amended its answer with cross-claims as of right pursuant to CPLR Rule
3025(a), and thus, that portion of IUA’s motion secking dismissal of M&S’ cross-claims is now
moot. Secondly, Plaintiffs Complaint properly states legally viable claims against IUA for
failure to procure insurance under well-established New York law. Moreover, the uncertain
nature of the relationship between IUA and LIG/LIS counsels against granting IUA dismissal.
STATEMENT OF FACTS
Counsel respectfully refers the Court to the recitation of facts contained in the
accompanying Affirmation of Stephen C, Cunningham, Esq. (“Cunningham Affirmation”) and
incorporates the same as if fully set forth herein.ARGUMENT
L M&S Has Amended its Answer with Cross-Claims as of Right Pursuant to CPLR
Rule 3025(a), and thus, that portion of IUA’s Motion Seeking Dismissal of M&S’
Cross-Claims Is Now Moot
CPLR Rule 3025(a) provides that “[a] party may amend his pleading once without leave
of court within twenty days after its service, or at any time before the period for responding to it
expires, or within twenty days after service of a pleading responding to it.”
In this case, M&S served its Answer on April 8, 2014. Suben Affirmation, Exhibit “F”,
Thereafter, on April 17, 2014, M&S served an Amended Answer with amended cross-claims
against, infer alia, TUA. Cunningham Affirmation, Exhibit “A”. Because M&S’ filing of an
amended pleading fell within the twenty-day period contemplated by CPLR Rule 3025(a), it had
the right to do so without leave of Court under the CPLR. Under these circumstances, IUA’s
motion is, at a minimum, moot with respect to M&S’ cross-claims.
Moreover, M&S’ amended cross-claims articulate specific facts which, if accepted as
true for the purpose of this motion, clearly entitle M&S to legal relief from TUA. Specifically, the
amended cross-claims articulate the following specific facts: (a) on or about October 16, 2013,
Plaintiff engaged M&S to assist Plaintiff with procuring insurance for the Property
(Cunningham Affirmation, Exhibit “A”, 195); (b) that same day, M&S requested that IUA, a
wholesale broker and/or agent of LIG and/or LIS, provide a quote for insurance coverage for the
Property (Cunningham Affirmation, Exhibit “A”, 496); (c) on October 18, 2013, M&S
informed IVA that Plaintiff wanted to bind coverage for the Property with LIG for the period
from October 17, 2013 to October 17, 2014 (Cunningham Affirmation, Exhibit “A”, 997); (d)
on October 18, 2013, IUA agreed to bind coverage but was unsure whether the LIG Policy couldbe backdated one day so as to be effective from October 17, 2013 to October 17, 2014
(Cunningham Affirmation, Exhibit “A”, 998); (ec) M&S quickly responded that same day by
instructing TUA to bind coverage effective from October 18, 2013 to October 18, 2014 if its
underwriter could not approve the one-day backdating (Cunningham Affirmation, Exhibit
“A”, 999); (f) later on October 18, 2013, IUA sent written confirmation to M&S that coverage
was approved (Cunningham Affirmation, Exhibit “A”, 7100); (g) on or about October 20,
2013, the Property allegedly sustained fire damage, thereby causing the Loss (Cunningham
Affirmation, Exhibit “A”, 101); (h) on or about November 15, 2013, LIG disclaimed coverage
for the Loss on the grounds that the LIG Policy’s first effective date was October 25, 2013
(Cunningham Affirmation, Exhibit “A”, 9102); and (i) by Complaint dated February 19, 2014
and based on LIG’s denial of coverage, Plaintiff instituted this action against, among others,
M&S (Cunningham Affirmation, Exhibit “A”, 4103). Based on these particularized factual
underpinnings, M&S’ amended cross-claims state causes of action against IUA for negligence,
negligent misrepresentation, breach of contract, contribution and indemnity.
For these reasons, the Court should deny IUA’s motion to the extent it seeks dismissal of
M&S’ cross-claims.
Tl. Plaintiff's Complaint Properly States Legally Viable Claims Against IUA for
Failure to Procure Insurance
If the Court considers all the facts alleged in Plaintiff's Complaint as true for the
purposes of this motion (See, Palo v. Cronin & Byczek, LLP, 43 A.D.3d 1127, 1127 (2™ Dept.
2007)), then it should deny IUA’s motion because the Complaint states legally cognizable claims
against IUA for failing to procure requested insurance.A. Plaintiff Requested Insurance From IUA, Which IUA Failed to Procure
In New York, “[aJn insurance broker has a common-law duty either to obtain the
coverage that a customer specifically requests within a reasonable period of time or to inform the
customer of an inability to do so”. Core-Mark Int'l. v. Swett & Crawford Inc., 71 A.D.3d 1072,
1073 (2™ Dept. 2010); Verbert v. Garcia, 63 A.D.3d 1149, 1149 (2 Dept. 2009). Additionally,
it is hornbook law in New York that an insurance broker is an agent of the policyholder. New
York Ins. Law §2101; U.S. Underwriters Ins. Co, v. Manhattan Demolition Co., 250 A.D.2d 600,
600 (2! Dept. 1998); Incorporated Village of Pleasantville v. Calvert Ins. Co., 204 A.D.2d 689,
689 (2 Dept. 1994). Thus, where an insurance broker makes a request in its capacity as an agent
of the policyholder, then the policyholder has, as a matter of law, itself made that request. See,
e.g., Time Warner City Cable v, Adelphi University, 27 A.D.3d 551, 552-553 (2"! Dept. 2006)
(under fundamental agency principles, an agent’s acts are attributable to the principal when
carried out within the scope of an agency relationship).
In light of the foregoing, and when considering the facts as alleged in the Complaint as
true, Plaintiff properly states a negligence cause of action against IUA for failing to procure
insurance. Specifically, the Complaint avers that IUA “undertook to underwrite and/or procure a
policy of insurance for Plaintiff that would be effective on... October 20, 2013.” Suben
Affirmation, Exhibit “C”, 44. Plaintiff also alleges that, before the loss, [UA confirmed that
the LIG Policy was in effect as of October 17, 2013, which IUA arguably would not have done
absent previously undertaking a duty to procure Plaintiff's insurance. Suben Affirmation,
Exhibit “C”, 426. That the subject insurance request came from M&S as opposed to Plaintiff
directly is inapposite where, as here, M&S was acting as Plaintiff's representative, a fact clearlyknown to IUA. In other words, when reading the Complaint as a whole, the Court and/or fact-
finder can infer that [UA assumed a specific duty to procure insurance in response to a request
from Plaintiff's representative, and thus, Plaintiff itself. Moreover, by failing to procure the
policy as requested, Plaintiff was left uninsured for the October 20, 2013 fire loss. All elements
of a negligence cause of action for failure to procure insurance are satisfied.
B. IUA Relies on Wholly Inapplicable Case Law
Moreover, the authority cited by TUA is irrelevant and unpersuasive, For example, in
Sinclair's Deli v. Associated Mutual Ins, Co., 196 A.D.2d 644 (2™ Dept. 1993) and Glynn v.
United House of Prayer for All People, 292 A.D.2d 319 (1 Dept. 2002), the Second Department
merely held that a plaintiff could not sustain a negligent misrepresentation claim against a
wholesale broker because the parties lacked privity or a privity-like relationship. Sinclair’s Deli,
196 A.D.2d at 644; Glynn, 292 A.D.2d at 323, Here, the Complaint advances a negligence cause
of action against IUA for failing to procure insurance, not a negligent misrepresentation claim.
Suben Affirmation, Exhibit “C”, 943-51. Under New York law, to maintain a negligence
cause of action, plaintiff must establish, inter alia, that the defendant breached a duty, Akins v.
Glen Falls City School Dist., 53 N.Y.2d 325, 333 (1981). However, to maintain a negligent
misrepresentation claim, the plaintiff must establish a special or privity-like relationship between
the parties, an element not required to establish a negligence cause of action. Ramsarup v.
Rutgers Cas. Ins. Co., 98 A.D.3d 494, 496 (2™ Dept. 2012). Accordingly, IUA’s reliance on case
law dismissing negligent misrepresentation claims based on the absence of a special relationship
has no bearing on Plaintiff's negligence claims against IUA for failing to procure insurance.
Moreover, that IUA made representations about Plaintiff's coverage is not the focus of Plaintiff'scause of action against FUA, but rather, is circumstantial proof that JUA had previously assumed
a duty to procure specifically-requested insurance, which it failed to discharge.
IUA’s reliance on Levi v, Utica First Ins. Co., 12 A.D.3d 256 (1" Dept. 2004) is similarly
unavailing. In Levi, the First Department found that a wholesale broker did not have a “special
relationship” with a policyholder such that the wholesale broker was obligated to affirmatively
advise the policyholder respecting its policy. Levi, 12 A.D.3d at 257. However, Levi has no
impact on Plaintiff's claims against IUA herein because Plaintiff's claims are premised not on a
“special relationship” theory, but rather, on a specific insurance request made to IUA. In other
words, Plaintiff's claims against IUA are based on IUA’s failure to procure requested insurance,
not on IUA’s negligent failure to advise Plaintiff. Moreover, IUA’s citation to Manes Org., Inc.
v. Meadowbrook-Richman, Inc., 2. A.D.3d 292 (1 Dept. 2003), also provides no support for
dismissal. In Manes, the plaintiff did not premise its entitlement to relief on a specific insurance
request, instead, the Manes plaintiff relied on a purported special relationship of trust and
confidence between it and an insurance broker such that the broker had an affirmative duty to
render advice. Manes, 2 A.D.3d at 293-294. Here, Plaintiff does not contend that TUA failed to
provide advice despite owing a duty to do so, but rather, contends that IUA failed to procure
specifically requested insurance. If Plaintiff is correct that (a) it specifically requested insurance
from IUA, and that (b) IUA failed to procure that insurance, then Plaintiff has a negligence cause
of action against IUA regardless of whether the parties had a special relationship.
Cc. TUA’s Contention That It Owed No Duty to Plaintiff Because the Parties Were
Not in Direct Contact Contravenes Fundamental New York Tort Law
The Court of Appeals held nearly one hundred years ago that, in the context of
negligence actions, “[t]he risk reasonably to be perceived defines the duty to be obeyed...”Palsgraf v, Long Island R. Co., 248 N.Y. 339, 344 (1928). In other words, “[t]he ‘scope and
extent’ of a defendant's duty to a plaintiff is ‘defined by the risk of harm reasonably to be
perceived’”. Mays v. City of Middletown, 70 A.D.3d 900, 902 (2™ Dept. 2005) (quoting Vetrone
y. Ha Di Corp., 22 A.D.3d 835, 837 (2% Dept. 2005). Cases involving wholesale insurance
brokers are no different: where a policyholder sustains harm that was within the risk created by a
broker’s conduct, then that broker, whether retail, wholesale or otherwise, cannot escape liability
on the grounds that it owed no duty to the plaintiff.
For example, in East 115" Street Realty Corp. v. Focus & Struga Bldg. Developers LLC,
30 Misc.3d 1213(A) (Sup. Ct., New York County 2011), a building owner sued, inter alia, a
wholesale insurance broker after its building collapsed and its property insurer denied coverage.
East 115" Street Realty, 30 Mise.3d 1213(A), *2-3. As here, the wholesale broker moved to
dismiss the claims against it based on two undisputed factual underpinnings: (a) the building
owner hired the retail broker, not the wholesale broker, and (b) the building owner had no direct
dealings with the wholesale broker. Jd. at *5. Notwithstanding its acknowledgement of these
facts, the court denied the wholesale broker’s motion, holding that the “question as to how [the
wholesale broker] processed the application, a question that would show if [the wholesale
broker] failed to properly process the application of insurance and obtain coverage for Plaintiff”,
precluded dismissal. fd. Underlying the Hast 115% Street Realty Court’s analysis is simple
common sense: where a wholesale broker undertakes to process a policyholder’s insurance but
does so negligently, it is patently foreseeable that such negligence could create the precise risk of
harm complained of, i.e., a plaintiffs lack of coverage.Plaintiff's claims against TUA in this matter are indistinguishable from the building
owner’s claims against the wholesale broker in Zast 115” Street Realty. Plaintiff alleges that, in
response to an insurance request, UA assumed the duty to procure Plaintiff's insurance such that
the effective dates of the policy would have included the date of loss. Suben Affirmation,
Exhibit “C”, 944. Certainly the risk that, should IUA not procure Plaintiffs insurance as
requested, the Property would not be insured at the appropriate times, was well within IUA’s
reasonable perception. Moreover, the harm eventually allegedly suffered by Plaintiff (i.e. not
having insurance on the Property at the time of the loss) was not only a foreseeable consequence
of IUA’s conduct, but was arguably the only consequence of that conduct. Under these
circumstances, TUA owed a duty to Plaintiff regardless of the amount of direct contact (or lack
thereof) between the two.
As a result of the foregoing, Plaintiff has properly stated claims against IUA upon which
relief can be granted. Accordingly, this Court should deny [UA motion.
Il. The Uncertain Nature of the Relationship Between TUA and LIG/LIS Counsels
Against Granting IUA Dismissal
Further belying IUA’s motion to dismiss is the unanswered yet crucial question of IUA’s
relationship with the carrier, LIG and/or LIS, in this insurance transaction, This same question
was vital to the court’s holding in DW Group, LLC v. Levine Ins. Risk Mgmt. Servs., Inc., 40
Misc.3d 368 (Sup Ct., New York County 2009), which IUA relies heavily yet misguidedly upon,
In DW Group, a retail broker failed to properly forward a policyholder’s premium payment to a
wholesale broker “that served as a program administrator for [the carrier]. DW Group, LLC, 40
Misc. 3d at 372-373. In dismissing, inter alia, the plaintiffs negligence claims against the
wholesale broker, the Court found that in its role as program administrator, the wholesale broker“was merely standing in the shoes of Liberty and had no duties to IDW other than to issue a
policy upon receipt of the premium payment.” Jd. at 378. Thus, contrary to IUA’s description of
IDW Group, the Court therein did not espouse the blunderbuss notion that all wholesale agents
have no duty to a policyholder other than issuing a policy upon receipt of payment. Rather, the
IDW Court held that a wholesale broker acting solely as a carrier’s agent need only issue the
policy to the policyholder upon payment (i.e., because that is the duty the carrier owes to the
policyholder).
In light of the foregoing, whether or not IUA was or was not acting as LIG/LIS’ agent
bears directly on the scope of the duty owed to the policyholder. If IUA was solely acting as an
agent of LIG/LIS, then its duty to the policyholder would mimic the duty owed by LIG/LIS. If,
however, IUA was not acting as LIG/LIS’ agent, then its duties were much broader.
Because neither Plaintiffs Complaint nor IUA’s motion resolves this issue, IUA’s
motion should be denied.
WHEREFORE, Defendant M&S Insurance Agency, Inc. hereby respectfully requests
that the Court deny Defendant International Underwriting Agency, Inc.’s motion to dismiss.
Dated: White Plains, NY
June 5, 2014
KEIDEL, CUNNINGHAM, LLP
John J. Iacobucci, Esq.
Attorneys for Defendant
M&S Insurance Agency, Inc.
925 Westchester Avenue, Suite 400
White Plains, NY 10604
Tel: (914) 948-7000
Fax: (914) 948-7010TO;
Steven A. Weg, Esq.
Goldberg & Rimberg, PLLC
Attorneys for Plaintiffs,
1015 70" Street LLC
115 Broadway, 3rd Floor
New York, NY 11201
Tel: (212) 697-3250
Fax: (212) 227-4533
Richard J. Ahn, Esq.
Goldberg Segalla, LLP
Attorneys for Defendants,
Leading Insurance Group Insurance Co., Ltd.
and Leading insurance Services, Inc.
600 Lexington Avenue, Suite 900
New York, NY 10022
Tel: (646) 292-8715
Fax: (646) 292-8701
Meryl R. Lieberman, Esq.
Eric D, Suben, Esq.
Traub Lieberman Strauss & Shrewsberry, LLP
Attorneys for Defendant,
Iniernational Underwriting Agency, Inc.
Mid-Westchester Executive Park
Seven Skyline Drive
Hawthorne, NY 10532
Tel: (914) 347-2600
Fax: (914) 347-8898
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(FILED: KINGS COUNTY CLERK 06/05/2014) INDEX NO. 508378/2013 NYSCEF DOC. NO. 30 RECEIVED NYSCEF: 06/05/2014 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS manne nnn ence ene nnn nen nn ene ane nina! x 1015 70 STREET LLC Index No.: — 508378/13 Plaintiff, DEFENDANT M&S ~ against - INSURANCE AGENCY, INC.’S MEMORANDUM OF M&S INSURANCE AGENCY, INC., LEADING LAW IN OPPOSITION TO INSURANCE GROUP INSURANCE CO., LTD. INTERNATIONAL LEADING INSURANCE SERVICES, INC, and UNDERWRITING AGENCY, INTERNATIONAL UNDERWRITING AGENCY, INC, INC.’S MOTION TO DISMISS Defendants nen nee ne nen nen nnnnnnnennnnninnnnnnnnnnnennennmnananeset x Defendant M&S Insurance Agency, Inc. (“M&S”) submits this memorandum of law in opposition to Defendant International Underwriting Agency, Inc.’s (“IUA”) motion to dismiss. PRELIMINARY STATEMENT For the reasons set forth in more detail below, the Court should deny IUA’s motion to dismiss. First, M&S has amended its answer with cross-claims as of right pursuant to CPLR Rule 3025(a), and thus, that portion of IUA’s motion secking dismissal of M&S’ cross-claims is now moot. Secondly, Plaintiffs Complaint properly states legally viable claims against IUA for failure to procure insurance under well-established New York law. Moreover, the uncertain nature of the relationship between IUA and LIG/LIS counsels against granting IUA dismissal. STATEMENT OF FACTS Counsel respectfully refers the Court to the recitation of facts contained in the accompanying Affirmation of Stephen C, Cunningham, Esq. (“Cunningham Affirmation”) and incorporates the same as if fully set forth herein.ARGUMENT L M&S Has Amended its Answer with Cross-Claims as of Right Pursuant to CPLR Rule 3025(a), and thus, that portion of IUA’s Motion Seeking Dismissal of M&S’ Cross-Claims Is Now Moot CPLR Rule 3025(a) provides that “[a] party may amend his pleading once without leave of court within twenty days after its service, or at any time before the period for responding to it expires, or within twenty days after service of a pleading responding to it.” In this case, M&S served its Answer on April 8, 2014. Suben Affirmation, Exhibit “F”, Thereafter, on April 17, 2014, M&S served an Amended Answer with amended cross-claims against, infer alia, TUA. Cunningham Affirmation, Exhibit “A”. Because M&S’ filing of an amended pleading fell within the twenty-day period contemplated by CPLR Rule 3025(a), it had the right to do so without leave of Court under the CPLR. Under these circumstances, IUA’s motion is, at a minimum, moot with respect to M&S’ cross-claims. Moreover, M&S’ amended cross-claims articulate specific facts which, if accepted as true for the purpose of this motion, clearly entitle M&S to legal relief from TUA. Specifically, the amended cross-claims articulate the following specific facts: (a) on or about October 16, 2013, Plaintiff engaged M&S to assist Plaintiff with procuring insurance for the Property (Cunningham Affirmation, Exhibit “A”, 195); (b) that same day, M&S requested that IUA, a wholesale broker and/or agent of LIG and/or LIS, provide a quote for insurance coverage for the Property (Cunningham Affirmation, Exhibit “A”, 496); (c) on October 18, 2013, M&S informed IVA that Plaintiff wanted to bind coverage for the Property with LIG for the period from October 17, 2013 to October 17, 2014 (Cunningham Affirmation, Exhibit “A”, 997); (d) on October 18, 2013, IUA agreed to bind coverage but was unsure whether the LIG Policy couldbe backdated one day so as to be effective from October 17, 2013 to October 17, 2014 (Cunningham Affirmation, Exhibit “A”, 998); (ec) M&S quickly responded that same day by instructing TUA to bind coverage effective from October 18, 2013 to October 18, 2014 if its underwriter could not approve the one-day backdating (Cunningham Affirmation, Exhibit “A”, 999); (f) later on October 18, 2013, IUA sent written confirmation to M&S that coverage was approved (Cunningham Affirmation, Exhibit “A”, 7100); (g) on or about October 20, 2013, the Property allegedly sustained fire damage, thereby causing the Loss (Cunningham Affirmation, Exhibit “A”, 101); (h) on or about November 15, 2013, LIG disclaimed coverage for the Loss on the grounds that the LIG Policy’s first effective date was October 25, 2013 (Cunningham Affirmation, Exhibit “A”, 9102); and (i) by Complaint dated February 19, 2014 and based on LIG’s denial of coverage, Plaintiff instituted this action against, among others, M&S (Cunningham Affirmation, Exhibit “A”, 4103). Based on these particularized factual underpinnings, M&S’ amended cross-claims state causes of action against IUA for negligence, negligent misrepresentation, breach of contract, contribution and indemnity. For these reasons, the Court should deny IUA’s motion to the extent it seeks dismissal of M&S’ cross-claims. Tl. Plaintiff's Complaint Properly States Legally Viable Claims Against IUA for Failure to Procure Insurance If the Court considers all the facts alleged in Plaintiff's Complaint as true for the purposes of this motion (See, Palo v. Cronin & Byczek, LLP, 43 A.D.3d 1127, 1127 (2™ Dept. 2007)), then it should deny IUA’s motion because the Complaint states legally cognizable claims against IUA for failing to procure requested insurance.A. Plaintiff Requested Insurance From IUA, Which IUA Failed to Procure In New York, “[aJn insurance broker has a common-law duty either to obtain the coverage that a customer specifically requests within a reasonable period of time or to inform the customer of an inability to do so”. Core-Mark Int'l. v. Swett & Crawford Inc., 71 A.D.3d 1072, 1073 (2™ Dept. 2010); Verbert v. Garcia, 63 A.D.3d 1149, 1149 (2 Dept. 2009). Additionally, it is hornbook law in New York that an insurance broker is an agent of the policyholder. New York Ins. Law §2101; U.S. Underwriters Ins. Co, v. Manhattan Demolition Co., 250 A.D.2d 600, 600 (2! Dept. 1998); Incorporated Village of Pleasantville v. Calvert Ins. Co., 204 A.D.2d 689, 689 (2 Dept. 1994). Thus, where an insurance broker makes a request in its capacity as an agent of the policyholder, then the policyholder has, as a matter of law, itself made that request. See, e.g., Time Warner City Cable v, Adelphi University, 27 A.D.3d 551, 552-553 (2"! Dept. 2006) (under fundamental agency principles, an agent’s acts are attributable to the principal when carried out within the scope of an agency relationship). In light of the foregoing, and when considering the facts as alleged in the Complaint as true, Plaintiff properly states a negligence cause of action against IUA for failing to procure insurance. Specifically, the Complaint avers that IUA “undertook to underwrite and/or procure a policy of insurance for Plaintiff that would be effective on... October 20, 2013.” Suben Affirmation, Exhibit “C”, 44. Plaintiff also alleges that, before the loss, [UA confirmed that the LIG Policy was in effect as of October 17, 2013, which IUA arguably would not have done absent previously undertaking a duty to procure Plaintiff's insurance. Suben Affirmation, Exhibit “C”, 426. That the subject insurance request came from M&S as opposed to Plaintiff directly is inapposite where, as here, M&S was acting as Plaintiff's representative, a fact clearlyknown to IUA. In other words, when reading the Complaint as a whole, the Court and/or fact- finder can infer that [UA assumed a specific duty to procure insurance in response to a request from Plaintiff's representative, and thus, Plaintiff itself. Moreover, by failing to procure the policy as requested, Plaintiff was left uninsured for the October 20, 2013 fire loss. All elements of a negligence cause of action for failure to procure insurance are satisfied. B. IUA Relies on Wholly Inapplicable Case Law Moreover, the authority cited by TUA is irrelevant and unpersuasive, For example, in Sinclair's Deli v. Associated Mutual Ins, Co., 196 A.D.2d 644 (2™ Dept. 1993) and Glynn v. United House of Prayer for All People, 292 A.D.2d 319 (1 Dept. 2002), the Second Department merely held that a plaintiff could not sustain a negligent misrepresentation claim against a wholesale broker because the parties lacked privity or a privity-like relationship. Sinclair’s Deli, 196 A.D.2d at 644; Glynn, 292 A.D.2d at 323, Here, the Complaint advances a negligence cause of action against IUA for failing to procure insurance, not a negligent misrepresentation claim. Suben Affirmation, Exhibit “C”, 943-51. Under New York law, to maintain a negligence cause of action, plaintiff must establish, inter alia, that the defendant breached a duty, Akins v. Glen Falls City School Dist., 53 N.Y.2d 325, 333 (1981). However, to maintain a negligent misrepresentation claim, the plaintiff must establish a special or privity-like relationship between the parties, an element not required to establish a negligence cause of action. Ramsarup v. Rutgers Cas. Ins. Co., 98 A.D.3d 494, 496 (2™ Dept. 2012). Accordingly, IUA’s reliance on case law dismissing negligent misrepresentation claims based on the absence of a special relationship has no bearing on Plaintiff's negligence claims against IUA for failing to procure insurance. Moreover, that IUA made representations about Plaintiff's coverage is not the focus of Plaintiff'scause of action against FUA, but rather, is circumstantial proof that JUA had previously assumed a duty to procure specifically-requested insurance, which it failed to discharge. IUA’s reliance on Levi v, Utica First Ins. Co., 12 A.D.3d 256 (1" Dept. 2004) is similarly unavailing. In Levi, the First Department found that a wholesale broker did not have a “special relationship” with a policyholder such that the wholesale broker was obligated to affirmatively advise the policyholder respecting its policy. Levi, 12 A.D.3d at 257. However, Levi has no impact on Plaintiff's claims against IUA herein because Plaintiff's claims are premised not on a “special relationship” theory, but rather, on a specific insurance request made to IUA. In other words, Plaintiff's claims against IUA are based on IUA’s failure to procure requested insurance, not on IUA’s negligent failure to advise Plaintiff. Moreover, IUA’s citation to Manes Org., Inc. v. Meadowbrook-Richman, Inc., 2. A.D.3d 292 (1 Dept. 2003), also provides no support for dismissal. In Manes, the plaintiff did not premise its entitlement to relief on a specific insurance request, instead, the Manes plaintiff relied on a purported special relationship of trust and confidence between it and an insurance broker such that the broker had an affirmative duty to render advice. Manes, 2 A.D.3d at 293-294. Here, Plaintiff does not contend that TUA failed to provide advice despite owing a duty to do so, but rather, contends that IUA failed to procure specifically requested insurance. If Plaintiff is correct that (a) it specifically requested insurance from IUA, and that (b) IUA failed to procure that insurance, then Plaintiff has a negligence cause of action against IUA regardless of whether the parties had a special relationship. Cc. TUA’s Contention That It Owed No Duty to Plaintiff Because the Parties Were Not in Direct Contact Contravenes Fundamental New York Tort Law The Court of Appeals held nearly one hundred years ago that, in the context of negligence actions, “[t]he risk reasonably to be perceived defines the duty to be obeyed...”Palsgraf v, Long Island R. Co., 248 N.Y. 339, 344 (1928). In other words, “[t]he ‘scope and extent’ of a defendant's duty to a plaintiff is ‘defined by the risk of harm reasonably to be perceived’”. Mays v. City of Middletown, 70 A.D.3d 900, 902 (2™ Dept. 2005) (quoting Vetrone y. Ha Di Corp., 22 A.D.3d 835, 837 (2% Dept. 2005). Cases involving wholesale insurance brokers are no different: where a policyholder sustains harm that was within the risk created by a broker’s conduct, then that broker, whether retail, wholesale or otherwise, cannot escape liability on the grounds that it owed no duty to the plaintiff. For example, in East 115" Street Realty Corp. v. Focus & Struga Bldg. Developers LLC, 30 Misc.3d 1213(A) (Sup. Ct., New York County 2011), a building owner sued, inter alia, a wholesale insurance broker after its building collapsed and its property insurer denied coverage. East 115" Street Realty, 30 Mise.3d 1213(A), *2-3. As here, the wholesale broker moved to dismiss the claims against it based on two undisputed factual underpinnings: (a) the building owner hired the retail broker, not the wholesale broker, and (b) the building owner had no direct dealings with the wholesale broker. Jd. at *5. Notwithstanding its acknowledgement of these facts, the court denied the wholesale broker’s motion, holding that the “question as to how [the wholesale broker] processed the application, a question that would show if [the wholesale broker] failed to properly process the application of insurance and obtain coverage for Plaintiff”, precluded dismissal. fd. Underlying the Hast 115% Street Realty Court’s analysis is simple common sense: where a wholesale broker undertakes to process a policyholder’s insurance but does so negligently, it is patently foreseeable that such negligence could create the precise risk of harm complained of, i.e., a plaintiffs lack of coverage.Plaintiff's claims against TUA in this matter are indistinguishable from the building owner’s claims against the wholesale broker in Zast 115” Street Realty. Plaintiff alleges that, in response to an insurance request, UA assumed the duty to procure Plaintiff's insurance such that the effective dates of the policy would have included the date of loss. Suben Affirmation, Exhibit “C”, 944. Certainly the risk that, should IUA not procure Plaintiffs insurance as requested, the Property would not be insured at the appropriate times, was well within IUA’s reasonable perception. Moreover, the harm eventually allegedly suffered by Plaintiff (i.e. not having insurance on the Property at the time of the loss) was not only a foreseeable consequence of IUA’s conduct, but was arguably the only consequence of that conduct. Under these circumstances, TUA owed a duty to Plaintiff regardless of the amount of direct contact (or lack thereof) between the two. As a result of the foregoing, Plaintiff has properly stated claims against IUA upon which relief can be granted. Accordingly, this Court should deny [UA motion. Il. The Uncertain Nature of the Relationship Between TUA and LIG/LIS Counsels Against Granting IUA Dismissal Further belying IUA’s motion to dismiss is the unanswered yet crucial question of IUA’s relationship with the carrier, LIG and/or LIS, in this insurance transaction, This same question was vital to the court’s holding in DW Group, LLC v. Levine Ins. Risk Mgmt. Servs., Inc., 40 Misc.3d 368 (Sup Ct., New York County 2009), which IUA relies heavily yet misguidedly upon, In DW Group, a retail broker failed to properly forward a policyholder’s premium payment to a wholesale broker “that served as a program administrator for [the carrier]. DW Group, LLC, 40 Misc. 3d at 372-373. In dismissing, inter alia, the plaintiffs negligence claims against the wholesale broker, the Court found that in its role as program administrator, the wholesale broker“was merely standing in the shoes of Liberty and had no duties to IDW other than to issue a policy upon receipt of the premium payment.” Jd. at 378. Thus, contrary to IUA’s description of IDW Group, the Court therein did not espouse the blunderbuss notion that all wholesale agents have no duty to a policyholder other than issuing a policy upon receipt of payment. Rather, the IDW Court held that a wholesale broker acting solely as a carrier’s agent need only issue the policy to the policyholder upon payment (i.e., because that is the duty the carrier owes to the policyholder). In light of the foregoing, whether or not IUA was or was not acting as LIG/LIS’ agent bears directly on the scope of the duty owed to the policyholder. If IUA was solely acting as an agent of LIG/LIS, then its duty to the policyholder would mimic the duty owed by LIG/LIS. If, however, IUA was not acting as LIG/LIS’ agent, then its duties were much broader. Because neither Plaintiffs Complaint nor IUA’s motion resolves this issue, IUA’s motion should be denied. WHEREFORE, Defendant M&S Insurance Agency, Inc. hereby respectfully requests that the Court deny Defendant International Underwriting Agency, Inc.’s motion to dismiss. Dated: White Plains, NY June 5, 2014 KEIDEL, CUNNINGHAM, LLP John J. Iacobucci, Esq. Attorneys for Defendant M&S Insurance Agency, Inc. 925 Westchester Avenue, Suite 400 White Plains, NY 10604 Tel: (914) 948-7000 Fax: (914) 948-7010TO; Steven A. Weg, Esq. Goldberg & Rimberg, PLLC Attorneys for Plaintiffs, 1015 70" Street LLC 115 Broadway, 3rd Floor New York, NY 11201 Tel: (212) 697-3250 Fax: (212) 227-4533 Richard J. Ahn, Esq. Goldberg Segalla, LLP Attorneys for Defendants, Leading Insurance Group Insurance Co., Ltd. and Leading insurance Services, Inc. 600 Lexington Avenue, Suite 900 New York, NY 10022 Tel: (646) 292-8715 Fax: (646) 292-8701 Meryl R. Lieberman, Esq. Eric D, Suben, Esq. Traub Lieberman Strauss & Shrewsberry, LLP Attorneys for Defendant, Iniernational Underwriting Agency, Inc. Mid-Westchester Executive Park Seven Skyline Drive Hawthorne, NY 10532 Tel: (914) 347-2600 Fax: (914) 347-8898 10