SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
116
CA 11-01127
PRESENT: SCUDDER, P.J., CENTRA, PERADOTTO, LINDLEY, AND MARTOCHE, JJ.
ANN M. SAWYER AND JEFFREY M. SAWYER,
PLAINTIFFS-APPELLANTS,
V MEMORANDUM AND ORDER
VICTOR RUTECKI, THE RUTECKI AGENCY AND WNY
AGENTS GROUP, INC., DEFENDANTS-RESPONDENTS.
(APPEAL NO. 2.)
HODGSON RUSS LLP, BUFFALO (HEATHER K. ZIMMERMAN OF COUNSEL), FOR
PLAINTIFFS-APPELLANTS.
KEIDEL, WELDON & CUNNINGHAM, LLP, SYRACUSE (CHRISTOPHER B. WELDON OF
COUNSEL), FOR DEFENDANTS-RESPONDENTS.
Appeal from a judgment of the Supreme Court, Erie County (Joseph
R. Glownia, J.), entered April 14, 2011. The judgment dismissed
plaintiffs’ complaint on the merits.
It is hereby ORDERED that the judgment so appealed from is
unanimously affirmed without costs.
Memorandum: Plaintiffs, the owners of an apartment building in
Buffalo that was damaged in a fire, commenced this action asserting
causes of action for breach of contract, breach of fiduciary duty and
negligence premised upon defendants’ alleged failure to notify
plaintiffs that their insurance policy for the premises had been
cancelled prior to the fire and their failure to procure new coverage.
Victor Rutecki (defendant) was plaintiffs’ insurance agent, and the
remaining defendants are his associated business entities. At
plaintiffs’ request, defendant procured insurance for the premises
from Allegany Co-Op Insurance Company (Allegany). Shortly after the
subject policy was issued, Allegany sent an inspector to examine the
property for underwriting purposes. Following that inspection, which
revealed problems related to the condition of the property, Allegany
cancelled the insurance policy. In support of their motion,
defendants submitted evidence that Allegany sent a letter to
plaintiffs by certified mail notifying them of the cancellation, and
plaintiffs thereafter failed to obtain new coverage. Less than eight
months later, the subject fire caused extensive damage to the
uninsured property.
We conclude that Supreme Court properly granted defendants’
motion for summary judgment dismissing the complaint. Although
-2- 116
CA 11-01127
“insurance agents 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[,] . . . they have no continuing duty to advise,
guide or direct a client to obtain additional coverage” (Murphy v
Kuhn, 90 NY2d 266, 270). “Exceptional and particularized situations
may arise in which insurance agents, through their conduct or by
express or implied contract with customers and clients, may assume or
acquire duties in addition to those fixed at common law” (id. at 272).
For instance, where a “special relationship” develops between an agent
and the insured, the agent may be held to have assumed duties in
addition to merely “obtain[ing] requested coverage” (id. at 270).
Such a special relationship may arise where “(1) the agent receives
compensation for consultation apart from payment of the premiums . . .
(2) there was some interaction regarding a question of coverage, with
the insured relying on the expertise of the agent . . .; or (3) there
is a course of dealing over an extended period of time which would
have put objectively reasonable insurance agents on notice that their
advice was being sought and specially relied on” (id. at 272).
Here, defendants met their initial burden on the motion, and
plaintiffs failed to raise a triable issue of fact to defeat it (see
generally Zuckerman v City of New York, 49 NY2d 557, 562).
Specifically, defendants established that defendant did not have a
special relationship with plaintiffs by submitting evidence that
defendant received no compensation from plaintiffs over and above the
commissions he received for the insurance policies he had procured,
that plaintiffs did not use defendant as their exclusive agent, and
that Jeffrey M. Sawyer (plaintiff) retained final decision-making
authority over what coverage to obtain. Even accepting as true
plaintiffs’ allegations that they informed defendant that plaintiff
had health issues and that plaintiff referred to defendant as his
“insurance guy,” we conclude that the uncontroverted evidence
establishes that the interactions between the parties “would [not]
have put [an] objectively reasonable insurance agent[] on notice that
[his or her] advice was being sought and specially relied on” (Murphy,
90 NY2d at 272). We note that plaintiffs had known defendant for only
three years prior to the fire, and that defendant had obtained
insurance coverage for only three of the six rental properties owned
by plaintiffs.
We also reject plaintiffs’ contention that defendant was
negligent in failing to inform them that the policy had been
cancelled. Defendant satisfied his duty to plaintiffs by procuring
the Allegany policy, and no further duty was imposed on defendant
based on the subsequent cancellation of the policy (see Thompson &
Bailey, LLC v Whitmore Group, Ltd., 34 AD3d 1001, 1002-1003, lv denied
8 NY3d 807). Moreover, as noted, defendants submitted evidence that
Allegany notified plaintiffs of the policy cancellation by certified
mail, and plaintiffs failed to overcome the presumption of receipt
that attaches to such mailing (see generally Nassau Ins. Co. v Murray,
46 NY2d 828, 829-830).
Entered: February 10, 2012 Frances E. Cafarell
Clerk of the Court