Why Was This Case Brought?
We've read and re-read the decision in Risk Control Assoc. Ins. Group v Maloof, Lebowitz, Connahan & Oleske, P.C. 2014 NY Slip Op 00419 Decided on January 23, 2014 Appellate Division, First Department and we still cannot see how plaintiff thought it could proceed. It was not the insurance company which hired defense attorneys, nor a re-insurer who became liable after the underlying case ended; it was not even the defendant itself. In this case the "claims administrator" for the insurer sued. Why?
"Plaintiff, a claims administrator for an insurer, commenced this action alleging legal malpractice against defendants, who were retained to represent the insurer in a personal injury action. Acknowledging that it is not in privity with defendants, plaintiff contends that it may bring the cause of action by virtue of its relationship of near privity with them (see Federal Ins. Co. v North Am. Specialty Ins. Co., 47 AD3d 52, 59, 60-61 [1st Dept 2007]). However, plaintiff does not allege that it had a contractual obligation to pay for the loss in the personal injury action (compare Allianz Underwriters Ins. Co. v Landmark Ins. Co., 13 AD3d 172 [1st Dept 2004] [excess insurer alleged relationship of near privity with counsel hired by primary carrier to represent defendant in underlying action]). Nor does it allege that it sustained actual damages because of this obligation (see AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 434 ). Similarly, plaintiff's factual allegations do not suffice to state an equitable subrogation cause of action against defendants (see Winkelmann v Excelsior Ins. Co., 85 NY2d 577, 581 ). "