Alpha/Omega Concrete Corp. v Ovation Risk Planners, Inc.  2021 NY Slip Op 05113  Decided on September 29, 2021  Appellate Division, Second Department is a textbook of causes of actions in insurance law and negligent underwiring.

“In July 2015, Alpha/Omega Building Consulting Corp. (hereinafter Consulting) was awarded a contract to perform concrete work on a construction project involving a residential high-rise apartment building being constructed in Long Island City. Before beginning work on the project, Consulting, via its principal, Anthony Frascone, contacted the second third-party defendant Michael Villano, the principal of the defendant/third-party plaintiff/second third-party defendant, Ovation Risk Planners, Inc., a retail insurance broker (hereinafter Ovation; together with Villano, the Ovation defendants), to obtain liability insurance for Consulting with respect to its work on the subject project. Villano, on behalf of Consulting, submitted a commercial insurance application to the defendant/third-party defendant/second third-party plaintiff, Scottish American Insurance General Agency, Inc. (hereinafter Scottish American), a wholesale insurance broker, which transmitted the application to nonparty Prime Specialty, Inc. (hereinafter Prime), for underwriting. Prime, in turn, placed the commercial general liability policy with the defendant State National Insurance Company (hereinafter SNIC), an insurance carrier. To pay for the policy, Consulting obtained a loan from nonparty Capital Premium Financing, Inc. (hereinafter CPF). The policy was to remain in effect from July 13, 2015, until the earlier of July 13, 2017, or the end of the project.”

“In general, “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” (AB Oil Servs., Ltd. v TCE Ins. Servs., Inc., 188 AD3d 624, 626 [internal quotation marks omitted]; see Murphy v Kuhn, 90 NY2d 266, 270; MAAD Constr., Inc. v Cavallino Risk Mgt., Inc., 178 AD3d 816, 818). The scope of the broker’s duty is “‘defined by the nature of the client’s request'” (Maxwell Plumb Mech. Corp. v Nationwide Prop. & Cas. Ins. Co., 116 AD3d 740, 741, quoting Loevner v Sullivan & Strauss Agency, Inc., 35 AD3d 392, 393). A claim of liability for a violation of this duty may sound in either contract or tort (see Broecker v Conklin Prop., LLC, 189 AD3d 751, 753; Gagliardi v Preferred Mut. Ins. Co., 102 AD3d 741, 741). To state a claim based upon violation of the insurance broker’s common-law duty, the client must demonstrate that the broker failed to discharge its duty either by breaching the agreement with the client by failing to obtain the requested coverage or by failing to exercise due care in obtaining insurance on the client’s behalf (see MAAD Constr., Inc. v Cavallino Risk Mgt., Inc., 178 AD3d at 818; Gagliardi v Preferred Mut. Ins. Co., 102 AD3d at 741).

Here, the Ovation defendants failed to establish, prima facie, that Ovation did not breach its common-law or contractual duty to Concrete. Even assuming that Campbell requested that Concrete be added to the existing policy, as the Ovation defendants argue, the deposition testimony submitted by the Ovation defendants in support of their motion demonstrated that Ovation agreed to obtain insurance for Concrete and then represented that it had done so without verifying this fact. In light of this evidence, the Ovation defendants failed to establish, prima facie, the absence of a triable issue of fact as to whether Ovation undertook a duty to Concrete which it then failed to discharge.

Whether Campbell had apparent authority to act on behalf of Consulting to request that Concrete be added to Consulting’s policy or requested a new policy for Concrete presents a triable issue of fact. However, it is a separate issue as to whether Ovation failed to verify that coverage on behalf of Concrete was in place before advising Campbell that it was. Moreover, the statement of Consulting’s principal that Campbell was “running the men, the job” for Consulting cannot be characterized as words which “[gave] rise to the appearance and belief that [Campbell] possesse[d] authority to enter into a transaction” on behalf of Consulting (Marshall v Marshall, 73 AD3d 870, 871 [internal quotation marks omitted]; see 150 Beach 120th St., Inc. v Washington Brooklyn Ltd. Partnership, 39 AD3d 722, 723). Likewise, Villano could not rely on Campbell’s own actions or statements since an agent “cannot by his [or her] own acts imbue himself [or herself] with apparent authority” (Marshall v Marshall, 73 AD3d at 871 [internal quotation marks omitted]; see 150 Beach 120th St., Inc. v Washington Brooklyn Ltd. Partnership, 39 AD3d at 723; Lexow & Jenkins v Hertz Commercial Leasing Corp., 122 AD2d 25, 26). Villano admitted that he never contacted Consulting’s principal to obtain authorization to add Concrete to Consulting’s policy or to confirm whether Campbell had authority to act on behalf of Consulting. Accordingly, the Supreme Court properly denied that branch of the Ovation defendants’ motion which was for summary judgment dismissing Concrete’s first cause of action, alleging breach of contract, regardless of the sufficiency of the opposing papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).”

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Andrew Lavoott Bluestone

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened…

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened his private law office and took his first legal malpractice case.

Since 1989, Bluestone has become a leader in the New York Plaintiff’s Legal Malpractice bar, handling a wide array of plaintiff’s legal malpractice cases arising from catastrophic personal injury, contracts, patents, commercial litigation, securities, matrimonial and custody issues, medical malpractice, insurance, product liability, real estate, landlord-tenant, foreclosures and has defended attorneys in a limited number of legal malpractice cases.

Bluestone also took an academic role in field, publishing the New York Attorney Malpractice Report from 2002-2004.  He started the “New York Attorney Malpractice Blog” in 2004, where he has published more than 4500 entries.

Mr. Bluestone has written 38 scholarly peer-reviewed articles concerning legal malpractice, many in the Outside Counsel column of the New York Law Journal. He has appeared as an Expert witness in multiple legal malpractice litigations.

Mr. Bluestone is an adjunct professor of law at St. John’s University College of Law, teaching Legal Malpractice.  Mr. Bluestone has argued legal malpractice cases in the Second Circuit, in the New York State Court of Appeals, each of the four New York Appellate Divisions, in all four of  the U.S. District Courts of New York and in Supreme Courts all over the state.  He has also been admitted pro haec vice in the states of Connecticut, New Jersey and Florida and was formally admitted to the US District Court of Connecticut and to its Bankruptcy Court all for legal malpractice matters. He has been retained by U.S. Trustees in legal malpractice cases from Bankruptcy Courts, and has represented municipalities, insurance companies, hedge funds, communications companies and international manufacturing firms. Mr. Bluestone regularly lectures in CLEs on legal malpractice.

Based upon his professional experience Bluestone was named a Diplomate and was Board Certified by the American Board of Professional Liability Attorneys in 2008 in Legal Malpractice. He remains Board Certified.  He was admitted to The Best Lawyers in America from 2012-2019.  He has been featured in Who’s Who in Law since 1993.

In the last years, Mr. Bluestone has been featured for two particularly noteworthy legal malpractice cases.  The first was a settlement of an $11.9 million dollar default legal malpractice case of Yeo v. Kasowitz, Benson, Torres & Friedman which was reported in the NYLJ on August 15, 2016. Most recently, Mr. Bluestone obtained a rare plaintiff’s verdict in a legal malpractice case on behalf of the City of White Plains v. Joseph Maria, reported in the NYLJ on February 14, 2017. It was the sole legal malpractice jury verdict in the State of New York for 2017.

Bluestone has been at the forefront of the development of legal malpractice principles and has contributed case law decisions, writing and lecturing which have been recognized by his peers.  He is regularly mentioned in academic writing, and his past cases are often cited in current legal malpractice decisions. He is recognized for his ample writings on Judiciary Law § 487, a 850 year old statute deriving from England which relates to attorney deceit.