dissenting:
In February 1971, a medical malpractice action against Brookdale Hospital was reached for trial in New York State Supreme Court. The suit had been brought on behalf of Steven Slotkin, an infant, who allegedly sustained permanent brain damage at the time of his birth because of the improperly controlled toxemia of his diabetic mother.
The hospital had $1,200,000 of liability insurance, $200,000 of primary coverage written by Citizens Casualty Co. and a $1,000,000 umbrella policy written by Lloyds of London. The hospital’s attorneys had nothing to gain by hiding from plaintiffs the existence of the umbrella policy. The insurance was there to be used; that is why the hospital purchased it.1 If the attorneys fraudulently concealed its existence, they exposed themselves to personal liability which might not be covered by their own malpractice policy.2 They would *319be liable to the plaintiffs and would also be required to indemnify all of the hospital’s carriers held derivatively liable because of their wrongdoing. Oceanic Steam Navigation Co. v. Compania Transatlantica Espanola, 134 N.Y. 461, 467, 31 N.E. 987 (1892); Opper v. Tripp Lake Estates, Inc., 274 App. Div. 422, 423-24, 84 N.Y.S.2d 461 (1948), aff’d, 300 N.Y. 572, 89 N.E.2d 527 (1949); 42 C.J.S. Indemnity § 21 at 597-98.
Notwithstanding the foregoing, the existence of the Lloyds policy was not disclosed, and, as a result, the attorneys and claim representative Ratner have been sued for fraud and misrepresentation. Although the personal liability to which these men are thus exposed is in no way determinative of the issues on this appeal, it precludes us from comfortably rationalizing that this litigation involves merely the shifting of liability from one insurance carrier to another. It also highlights what I believe to be the basic weakness in plaintiffs’ case.
The fundamental issue on this appeal is whether plaintiffs could reject Lloyds’ offer to make $1,000,000 in coverage available if the trial were recommenced, successfully importune the state judge to approve settlement for $185,000, and thereafter recover substantial damages from appellees because the settlement approved at plaintiff’s insistence did not represent their claim’s true settlement value. I believe that the district court was correct in concluding that they could not.
I disagree at the outset with the majority’s interpretation of the New York law governing infants’ settlements. Prior to court approval, the settlement herein was not, as the majority would have it, only “technically” inchoate. Until the compromise was approved by the court in the manner prescribed by the New York statutes, it was not a legal settlement, and it could not be enforced by either the plaintiffs or the defendants.
Two former New York State Supreme Court Justices, one of whom is now a Judge of the New York Court of Appeals, testified as experts on the trial below. They were in agreement that Judge Williams could have, and should have, declined to sign the order approving the $185,000 settlement, in which event the stipulation of compromise would have had no binding effect. Plaintiffs’ trial counsel in the state court action also testified that “Judge Williams had a right to refuse to sign the compromise papers, which would have nullified the entire settlement proceedings” and that “if he didn’t sign the papers I did know that the settlement is a nullity.” These were correct statements of the New York law.
Infant plaintiffs are wards of the court, Glogowski v. Rapson, 20 Misc.2d 96, 97, 198 N.Y.S.2d 87 (1959), and New York’s “rules of practice abound in provisions of ancient origin designed to safeguard their legal rights.” Greenburg v. New York Central and H. R. R. R. Co., 210 N.Y. 505, 509, 104 N.E. 931, 932 (1914). Today’s rules, as embodied in CPLR 1207 and 1208, require that applications for approval of an infant settlement be made upon motion supported by affidavits of the infant’s representative and attorney setting forth certain specified facts.3 The order entered on such a motion has the effect of a judgment. CPLR 1207; Krichmar v. Krichmar, 42 N.Y.2d 858, 860, 397 N.Y.S.2d 775, 366 N.E.2d 863 (1977).
Until the requirements of CPLR 1207 and 1208 are complied with, there cán be no binding compromise agreement. Ferraro v. Stripekis, 60 A.D.2d 861, 401 N.Y.S.2d 252 (1978); Caglioti v. Medi-Cab, Inc., 52 A.D.2d 544, 382 N.Y.S.2d 311 (1976); Valdimer v. Mount Vernon Hebrew Camps, Inc., 9 *320A.D.2d 900, 195 N.Y.S.2d 24, aff’d, 9 N.Y.2d 21, 210 N.Y.S.2d 520, 172 N.E.2d 283 (1961); 28 N.Y.Jur. Infants § 63. Any compromise reached in anticipation of a court-approved settlement is unenforceable, because the statutes prescribe the only method by which a defendant may secure a binding release from an infant. 2 Weinstein, Korn & Miller, New York Practice § 1207.06.4
It is undisputed that plaintiffs had full knowledge of the amount of Brookdale’s insurance coverage some three months before they succeeded in securing court approval. It is also undisputed that plaintiffs importuned Judge Williams to approve the $185,000 settlement in order that they might bring suit against appellees for fraud. In so doing, they completely removed from the case one of the requisite elements for a claim in fraud, i. e., reliance. To recover for misrepresentation, a plaintiff must establish that he relied upon the misrepresentation and that the damages for which recovery is sought flowed from the reliance. Ochs v. Woods, 221 N.Y. 335, 338, 340-41, 117 N.E. 305 (1917); Karscher v. Dewald, 246 App.Div. 21, 22-23, 284 N.Y.S. 213 (1935); 24 N.Y.Jur. Fraud and Deceit § 25 at 224.5
Contrary to Judge Oakes’ assertion, the damages which are the basis of plaintiffs’ claim for recovery did not occur at the time the state action was discontinued and the jury dismissed. Although plaintiffs did agree to a discontinuance in reliance upon appellees’ misstatements, and, as a result, undoubtedly sustained some damage, this was not the damage for which they sued. The jury’s verdict was based upon the allegedly inadequate settlement which plaintiffs insisted the Court approve after they had full knowledge of the facts. Under the doctrine of volenti non fit injuria, recovery cannot be had where an agreement has been consummated in this manner. Oleet v. Pennsylvania Exchange Bank, 285 App.Div. 411, 137 N.Y.S.2d 779 (1955); Kelly v. Otis Elevator Co., 283 App.Div. 363, 128 N.Y.S.2d 39 (1954), aff’d, 308 N.Y. 805, 125 N.E.2d 864 (1955); General Valuations Co. v. City of Niagara Falls, 253 App.Div. 156, 1 N.Y.S.2d 880, aff’d on this point, 278 N.Y. 273, 15 N.E.2d 802 (1938); Commodity Credit Corp. v. Rosenberg Bros. & Co., 243 F.2d 504 (9th Cir.), cert. denied, 355 U.S. 837, 78 S.Ct. 62, 2 L.Ed.2d 48 (1957).
The rationale of the foregoing cases is not confined to commercial contracts. The proper measure of damages is inseparably connected with the right of action, Chesapeake & Ohio Ry. v. Kelly, 241 U.S. 485, 491, 36 S.Ct. 630, 60 L.Ed. 1117 (1915), and two basic and closely related doctrines of the law of damages are (1) that a wrongdoer is responsible only for the natural and proximate consequences of his misconduct, Steitz v. Gifford, 280 N.Y. 15, 20, 19 N.E.2d 661 (1939), and (2) that an injured person must take reasonable steps to minimize his losses. Pearlstein v. Scudder & German, 527 F.2d 1141, 1145 (2d Cir. 1975); Industrial Sugars, Inc. v. Standard Accident Insurance Co., 338 F.2d 673, 676 (7th Cir. 1964). Under the doctrine of “avoidable consequences”, a plaintiff cannot recover damages resulting from consequences he could reasonably have avoided. Restatement of Torts § 918. Put another way, if a plaintiff could reasonably have avoided the consequences, the defendant’s wrongdoing is not the proximate cause of their occurrence. McClelland v. Climax Hosiery Mills, 252 N.Y. 347, 358-59, 169 N.E. 605 (1930) (Cardozo, C. J., concurring); W. B. Moses & Sons v. Lockwood, 54 App.D.C. 115, 295 F. 936, 941 (D.C. Cir. 1924).
*321Here, the plaintiffs deliberately and knowingly rejected $1,000,000 in available insurance in order that they might impose liability upon appellees. In view of this conduct, I am at a loss to understand the majority’s statement that “[pjlaintiff’s here never had the opportunity to avoid any injury.” Plaintiffs had every opportunity to avoid the injury for which they now seek recovery. It is no answer to say that, if they wanted to take advantage of Lloyds’ umbrella policy, they would have to present their proof a second time. They would have to do this in any event in their fraud action against appellees.6 It is likewise no answer to say that plaintiffs would have to rescind their settlement and give up $185,-000. Until court approval was obtained, plaintiffs had no binding settlement, no $185,000, and no right to demand payment of it. Moreover, there is nothing in the record to indicate that appellee insurers would have withdrawn their settlement offer if the case were ordered retried. Indeed, because appellees’ entire $200,000 would have to be expended before the $1,000,000 in umbrella coverage became available, appellees would almost certainly have offered the full amount of their policies in order that plaintiffs would not be denied the benefit of the umbrella coverage.
“To err is human” is a phrase inscribed in the records of antiquity. Where, as here, defendants have erred, the law does not impose upon plaintiffs the divine obligation of forgiveness. Justice will not be served, however, if this Court accepts financially motivated retaliation as an alternative. Because I believe this is what my colleagues are doing in the instant case, I respectfully dissent.
Assuming, for the argument only, that the district judge erred in dismissing the complaint as to the individual defendants, he was nonetheless correct in dismissing as against the reinsurers. The sole obligation of the seven reinsurers was the contractual duty to indemnify Citizens Casualty Co. for the amount of its policy loss in excess of $50,000, the share of reinsurance as between carriers varying from five percent to fifteen percent. Although settlement of plaintiffs’ case for $185,000 resulted in a saving for the five percent reinsurer of only $750, my colleagues hold nonetheless that a jury could find that Ratner was acting as this carrier’s agent when he fraudulently concealed the existence of Lloyds $1,000,000 policy. They say that the “evidence could support a finding that Ratner’s agency relationship with Citizens and with the reinsurers was the same.” With all due respect for my brothers’ perspicacity, I do not find this to be so.
Ratner was a paid employee of Citizens, the company whose policy was issued to Brookdale and whose duty it was to handle all liability claims against the hospital. The reinsurers’ sole obligation was to Citizens, i. e., the obligation to indemnify. Greenman v. Genera] Reinsurance Corp., 237 App.Div. 648, 649, 262 N.Y.S. 569 (1933).
“Reinsurance, to an insurance lawyer, means one thing only — the ceding by one insurance company to another of all or a portion of its risk for a stipulated portion of the premium, in which the liability of the reinsurer is solely to the reinsured which is the ceding company, and in which contract the ceding company re*322tains all contact with the original insured, and handles all matters prior to and subsequent to loss.”
13 Appleman, Insurance Law and Practice § 7681 at 479-80.
Giving plaintiffs the benefit of the broadest reading of all the testimony concerning the in-court and out-of-court statements of Ratner,7 his sole contact with the reinsurers was through telephone conversations with their “claims people” in which either he or his subordinates at Citizens attempted to “sell them”, to “push them”, to “get them to up the offer”. This, my brothers say, is sufficient to permit a finding that Ratner was acting as the agent for all seven “pushees”.8 I disagree.
Agency is a fiduciary relationship which arises when one acts on behalf of another and is subject to his control. Northern v. McGraw-Edison Co., 542 F.2d 1336, 1343 (8th Cir. 1976), cert. denied, 429 U.S. 1097, 97 S.Ct. 1115, 51 L.Ed.2d 544 (1977); Aetna Insurance Co. v. Glens Falls Insurance Co., 453 F.2d 687, 690-91 (5th Cir. 1972); Globemaster Midwest, Inc. v. United States, 337 F.Supp. 465, 470 (Cust.Ct.1971); Restatement (Second) of Agency § 1. The purported agent must have been assigned and instructed by the purported principal to carry out the task he was performing. Paroutian v. United States, 370 F.2d 631, 632 (2d Cir.), cert. denied, 387 U.S. 943, 87 S.Ct. 2077, 18 L.Ed.2d 1331 (1967).
There is not one iota of evidence to establish that Ratner, the Assistant Vice President of Citizens, was under the control and supervision of the reinsurers.9 He denied categorically that he was or that he acted on their behalf. Moreover, the testimony that Ratner attempted to “sell” and “push” these companies, the only testimony offered to establish agency, is completely at odds with the fiduciary obligation that Ratner, as an agent, would owe.
In today’s world of high verdicts, where substantial insurance coverage is a must, it is rare indeed that the entire risk on a policy is carried by the named insurer. Reinsurance is the rule rather than the exception. Under my colleagues’ version of the law, a reinsuring carrier would not dare discuss settlement of a case with the primary carrier’s claim representative for fear that it would be making him its agent. This is not, and should not be, the law. See Aetna Insurance Co. v. Glens Falls Insurance Co., supra, 453 F.2d at 690-91. Where, as here, plaintiffs failed completely to establish the existence of a principal-agent relationship, the district court had no alternative but to dismiss the complaint as to the reinsuring carriers. Cramer v. Hoffman, 390 F.2d 19, 23 (2d Cir. 1968); Hedeman v. Fairbanks, Morse and Co., 286 N.Y. 240, 248, 36 N.E.2d 129 (1941).
CONCLUSION
In dismissing the infant’s claim against the reinsurers and in setting aside the verdict against the remaining defendants, *323Judge Pollack was performing a most unpleasant task. He was, however, carrying out his duties in accordance with the highest traditions of his office. I have written at some length in a losing cause because I want to make clear that, in the opinion of one appellate judge, the law of New York gave Judge Pollack no happier choice.
I would affirm.
. Ratner and appellee carriers likewise had little if anything to gain by concealing the existence of the umbrella policy. The maximum exposure of Citizens Casualty Co., Ratner’s employer, was $50,000, all of which was on the table when the several settlement offers were made. Fraudulent settlement for $185,000 would save the seven reinsurance carriers a total of $15,000. In the case of one carrier, which carried only five percent of the reinsurance, the saving would amount to $750.
. As a general rule, malpractice policies do not insure against fraudulent acts or omissions. See, e. g., St. Paul Fire & Marine Insurance Co. v. Clarence-Rainess & Co., 70 Misc.2d 1082, 1083, 335 N.Y.S.2d 169 (1972), aff’d, 41 A.D.2d 604, 340 N.Y.S.2d 587 (1973). The McGraths’ policy so provides, and they are being defended by their insurance carrier pursuant to a stipulation that the carrier will not be responsible for *319the payment of any judgment against them which sounds in fraud.
. The applicable Rules of Practice of the Appellate Division, First Department, also required that an application for court approval of a settlement of a claim or cause of action belonging to an infant be made as provided in CPLR 1207 and 1208. See 22 Codes, Rules and Regulations of the State of New York § 603.8. If the procedures mandated by these sections were not complied with, the application for approval of the settlement had to be denied. Speights v. Motor Vehicle Accident Indemnification Corp., 75 Misc.2d 937, 348 N.Y.S.2d 691 (1973); Bittner v. Motor Vehicle Accident Indemnification Corp., 45 Misc.2d 584, 257 N.Y.S.2d 521 (1965).
. If the state court judge had indicated that he would not sign the order of settlement, one wonders how much either of my learned colleagues would have been willing to pay for an assignment of plaintiffs’ rights under the “technically inchoate” agreement.
. “A false representation is not cognizable by the law as deceit unless it is believed and relied upon as an inducement to action.” Ochs v. Woods, supra, 221 N.Y. at 338, 117 N.E. at 306.
“The maker of a fraudulent misrepresentation is not liable to one who does not rely upon its truth but upon the expectation that the maker will be held liable in damages for its falsity.”
3 Restatement of Torts § 548.
. The majority opinion would lead one to believe that the retrial of an action is such a rare occurrence as to justify drastic sanctions for the party causing it. This simply is not so. Retrials are constantly being ordered with no greater sanctions imposed than the liability for additional costs and disbursements. See, e. g., Dunbar v. Ingraham, 275 App.Div. 898, 89 N.Y.S.2d 841 (1949).
I am not impressed by the argument that appellants’ doctors could not have been compelled to give opinion testimony if the state court action had been retried. The doctors could have been subpoenaed and required to testify as to all of their factual observations. Had they then refused to repeat the expert testimony they had given on the prior trial, it could have been read into evidence. CPLR 4517. It is inconceivable that any doctor, sitting on the witness stand, would forego a lucrative fee for testifying as an expert, and at the same time put the medical profession and his own standing in disrepute, by repeating his factual observations but refusing to reiterate his opinion based thereon.
. The only testimony given by Ratner was by deposition, in which he said that he obtained the consent of the reinsurers to settle for $185,-000. I disagree with the majority’s holding that this established an agency relationship with the reinsurers and opened the floodgates to any hearsay statements of Ratner that plaintiffs were thereafter prepared to offer. See O. A. Skutt, Inc. v. J. & H. Goodwin Ltd., 251 App.Div. 84, 86, 295 N.Y.S. 772 (1937); United States v. Consolidated Laundries Corp., 291 F.2d 563, 576 (2d Cir. 1961). However, for purposes of this opinion, I need not enter the dispute between my colleagues and Judge Pollack concerning out-of-court declarations. Accepting all of the testimony offered by plaintiffs, it is nonetheless insufficient to establish that Ratner was the agent of the seven reinsuring carriers.
. My brothers do not say whether Ratner’s subordinates at Citizens were also acting as agents for the reinsurers.
. The securing of consent is not the equivalent of submission to control. For example, the approval of at least one other judge is required every time an opinion is filed in this Court. If this were sufficient to make the writing judge the agent of his concurring brothers, this Court might at one time have lost several of its most able and distinguished members. See United States v. Manton, 107 F.2d 834, 846 (2d Cir. 1939), cert. denied, 309 U.S. 664, 60 S.Ct. 590, 84 L.Ed. 1012 (1940).