| Bicounty Brokerage Corp. v Burlington Ins. Co. |
| 2011 NY Slip Op 07388 [88 AD3d 833] |
| October 18, 2011 |
| Appellate Division, Second Department |
| Bicounty Brokerage Corp., Respondent, v BurlingtonInsurance Company, Appellant, and Buckingham Badler Associates, Respondent, et al.,Defendants. |
—[*1] Torino & Bernstein, P.C., Mineola, N.Y. (Eva J. Tompkins of counsel), forplaintiff-respondent. Traub Lieberman Straus & Shrewsberry LLP, Hawthorne, N.Y. (Christopher Russo ofcounsel), for defendant-respondent.
In an action, inter alia, for a judgment declaring that the defendant Burlington InsuranceCompany is obligated to defend and indemnify the plaintiff's client, nonparty P&T ContractingCorp., in certain underlying personal injury actions, the defendant Burlington InsuranceCompany appeals, as limited by its brief, from so much of an order of the Supreme Court,Suffolk County (Whelan, J.), dated March 5, 2010, as denied those branches of its motion whichwere, in effect, for summary judgment dismissing the complaint insofar as asserted against it forlack of capacity and lack of standing to sue, for summary judgment declaring that it has noobligation to defend and indemnify P&T Contracting Corp. in three of the underlying actions,and for summary judgment on its cross claim for indemnification asserted against the defendantBuckingham Badler Associates.
Ordered that the order is affirmed insofar as appealed from, with one bill of costs.
The defendant Buckingham Badler Associates (hereinafter Buckingham) was a surplus lineswholesale insurance broker with whom the defendant Burlington Insurance Company(hereinafter Burlington) had contracted to act as a general managing agent. In or aroundNovember 2001, nonparty P&T Contracting Corp. (hereinafter P&T) retained the plaintiff,Bicounty Brokerage Corp. (hereinafter Bicounty), to procure commercial general liabilityinsurance. To procure the requested coverage, Bicounty contacted Buckingham, dealing withBuckingham employee Frank Scotto. Bicounty submitted an application for insurance directly toScotto, who issued what purported to be a document binding an insurance policy on behalf ofBurlington providing coverage to P&T for the period of November 30, 2001, through November2002 (hereinafter the alleged binder).
Subsequently, numerous personal injury actions (hereinafter collectively the underlyingactions), were commenced against P&T for accidents that occurred in P&T's work area.Burlington denied coverage with respect to the underlying actions on the ground that it had neverissued an insurance policy to P&T. Upon denial of coverage, Bicounty allegedly provideddefense [*2]and indemnification in the underlying actions.
Bicounty commenced this action seeking, inter alia, a judgment declaring that Burlingtonwas obligated to defend and indemnify P&T in the underlying actions and, as againstBuckingham, to recover damages for negligence and breach of contract. Burlington moved, ineffect, for summary judgment dismissing the complaint insofar as asserted against it for lack ofcapacity or lack of standing to sue, for summary judgment declaring that it had no obligation todefend and indemnify P&T in the underlying actions, and for summary judgment on its crossclaim for indemnification against Buckingham. The Supreme Court granted those branches ofBurlington's motion which were, in effect, for summary judgment declaring that it was notobligated to defend and indemnify P&T in eight of the underlying actions because Burlingtonwas provided with late notice of those claims. However, the Supreme Court denied the remainingbranches of Burlington's motion. Burlington appeals, and we affirm the order insofar as appealedfrom.
Burlington concedes that it waived the defense of lack of capacity to sue based on Bicounty'sprior dissolution as a corporation by failing to raise that defense in its answer or in a motion todismiss made prior to answering (see CPLR 3211 [a] [3]). We decline Burlington'srequest to grant it leave to amend its answer to include that affirmative defense at this stage,because Bicounty has shown that it would be prejudiced by such amendment at this time.
Nor is there merit to Burlington's contention that Bicounty lacks standing to bring this action,since Bicounty is not the party insured under the subject policy. Bicounty allegedly provided theintended insured, P&T, with a defense and indemnification in the underlying cases whenBurlington refused to defend and indemnify P&T. As such, Bicounty has standing to bring thisaction (see Bedessee Imports, Inc. vCook, Hall & Hyde, Inc., 45 AD3d 792, 795 [2007]; Tiffany at Westbury Condominium v Marelli Dev. Corp., 40 AD3d1073, 1077 [2007]).
Moreover, the Supreme Court properly denied those branches of Burlington's motion whichwere, in effect, for summary judgment declaring that it was not obligated to defend andindemnify P&T in three of the underlying actions. Burlington failed to meet its initial burden ofestablishing, prima facie (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986];Zuckerman v City of New York, 49 NY2d 557, 562 [1980]), that Buckingham lackedactual authority to act on behalf of Burlington. There are triable issues of fact as to whetherScotto, as Buckingham's employee, had the actual authority to act on behalf of Burlington ingiving a binding insurance policy to Bicounty.
In addition, Burlington failed to establish, prima facie, that Buckingham lacked apparentauthority to act on behalf of Burlington. " 'It is fundamental to the principal/agent relationshipthat an insurance company is liable to a third person for the wrongful or negligent acts andmisrepresentations of its agent when made within the general or apparent scope of the agent'sauthority, although the acts or statements exceeded the agent's actual authority or disobeyed theprincipal's general or express instructions to the agent' " (Bedessee Imports, Inc. v Cook, Hall& Hyde, 45 AD3d at 795, quoting Gleason v Temple Hill Assoc., 159 AD2d 682,683 [1990]; see Tucci v Hartford Cas. Ins. Co., 167 AD2d 387, 388 [1990]). " 'Onlywhen the agent is acting for his own purposes is the general rule of vicarious liabilityinapplicable' " (Bedessee Imports, Inc. v Cook, Hall & Hyde, 45 AD3d at 795, quotingGleason v Temple Hill Assoc., 159 AD2d at 684). Burlington failed to offer any evidencethat Scotto was acting "for his own purposes" in sending Bicounty the quote sheet and thenindicating that the insurance policy had been obtained. Rather, notwithstanding that Scotto's "actsor statements [may have] exceeded [his] actual authority or disobeyed [Burlington's] general orexpress instructions," in, inter alia, processing, or partially processing, an incomplete application,Burlington failed to establish, prime facie, that Scotto was not acting, or did not appear to beacting, "within the general scope of [Buckingham's] actual authority under the agency agreement"(Bedessee Imports, Inc. v Cook, Hall & Hyde, 45 AD3d at 795 [internal quotation marksomitted]). Scotto's deposition testimony that it was his usual practice to obtain coverage fromBurlington based on the same type of application and alleged binder as was used in the instantmatter was not insufficient to create a triable issue of fact as to Buckingham's authority torepresent the insurer (see WarnockCapital Corp. v Hermitage Ins. Co., 21 AD3d 1091, 1094 [2005]; Rendeiro v State-Wide Ins. Co., 8AD3d 253 [2004]; U.S. Delivery Sys. v National Union Fire Ins. Co. of Pittsburgh,Pa, 265 AD2d 402 [1999]).
Moreover, Burlington failed to establish its prima facie entitlement to judgment as [*3]a matter of law on its cross claim for indemnification againstBuckingham. Burlington contends that it is entitled to indemnification from Buckingham becauseBuckingham breached agreements between Buckingham and Burlington. "[A] a principal that isvicariously cast in damages as the result of its agent's negligence may be entitled to fullindemnification from the agent, who was the actual wrongdoer" (Neil Plumbing & HeatingConstr. Corp. v Providence Washington Ins. Co., 125 AD2d 295, 297 [1986]). However,contrary to Burlington's contention, it failed eliminate all triable issues of fact as to whetherBuckingham acted negligently by allegedly violating the agreements between it and Burlington.Similarly, Burlington failed to eliminate all triable issues of fact as to whether Buckinghamexceeded the scope of its authority in issuing the subject alleged binders (cf. General Acc.Ins. Co. v Smith. & Assoc., 184 AD2d 616 [1992]).
Buckingham's remaining contention is not properly before this Court. Skelos, J.P.,Dickerson, Leventhal and Lott, JJ., concur. [Prior Case History: 2010 NY Slip Op30541(U).]