Monday, September 17, 2007

Is there a similar maritime rule?

The Appellate Division, Second Department last week declined to recognize a claim based on the negligent issuance of an insurance policy. Katchalova v. Perchikov, 2007 NY Slip Op 06640.

In their words:

The wrongful death and pain and suffering causes of action, premised upon
the alleged negligent issuance of life insurance policies, fail to state a
cause of action. New York does not presently recognize such a theory of
recovery based on the negligent issuance of an insurance policy (see Katchalova v Borger, 7 Misc 3d 966). Indeed, the circumstances of this case [Perchikov allegedly murdered the plaintiff's decedent in order to obtain the proceeds of the life insurance policies that she took out naming him as the beneficiary -ed.] do not even fall under any of the scenarios pursuant to which other jurisdictions have recognized such a theory of recovery (see Katchalova v Borger, supra; Bajwa v Metropolitan Life Ins. Co., 208 Ill 2d 414; Bacon v Federal Kemper Life Assur. Co., 400 Mass 850; Life Ins. Co. of Georgia v Lopez, 443 So 2d 947, 948 [Fla. 1983]; Burton v John Hancock
Mut. Life Ins. Co., 164 Ga App 592 [1982]; Ramey v Carolina Life Ins. Co., 135
SE 2d 362 [S.C. 1964]; Liberty Natl Life Ins. Co. v Weldon, 100 So 2d 696 [Ala.
1957]). Thus, the plaintiff seeks to recover pursuant to a theory of negligent issuance of an insurance policy under circumstances in which no other court has recognized such a claim. We decline to recognize such a claim in this case.

Wednesday, September 12, 2007

No duty to disclose contingent commissions?

The Appellate Division, First Department (the intermediate appellate state court in Manhattan) has just dismissed several (but not all) of the causes of action in a case against brokers DeWitt Stern, holding that contingent commission agreements between brokers and insurers are not illegal, and, in the absence of a special relationship between the parties, the defendant brokers had no duty to disclose the existence of the contingent commission agreement. The broker/client relationship, even though it had existed for some time, was not sufficient to impose a fiduciary duty on the brokers. (Plaintiff's allegations of negligence and breach of contract survived the motion to dismiss.)

See Hersch v. DeWitt Stern Group, 2007 NY Slip Op 06567 (1st Dept., Sept. 6, 2007).

I have no idea whether this decision will have any effect on whatever proceedings Marsh, Aon, and Willis are still involved in as a result of the Spitzer investigations. Be interesting to watch.