State of New York

Supreme Court, Appellate Division

Third Judicial Department

Decided and Entered: December 8, 2016 522314 

________________________________

FRANK MAKI,

Appellant,

v MEMORANDUM AND ORDER

THE TRAVELERS COMPANIES, INC.,

et al.,

Respondents,

et al.,

Defendant.

________________________________

Calendar Date: October 13, 2016

Before: Garry, J.P., Egan Jr., Rose, Devine and Mulvey, JJ.

__________

Frank Maki, Walton, appellant pro se.

Kenney Shelton Liptak Nowak, LLP, Buffalo (Judith Treger

Shelton of counsel), for The Travelers Companies, Inc. and

others, respondents.

__________

Devine, J.

Appeal from an order of the Supreme Court (Lambert, J.),

entered December 11, 2015 in Delaware County, which, among other

things, granted certain defendants' motion to dismiss the

complaint.

Pursuant to an arrangement in which he agreed to lease his

tractor truck to, and work as an independent contractor for, a

transportation company, plaintiff was obliged to obtain

commercial automobile liability insurance. He accordingly

reached out to defendant Mang Insurance Agency, LLC, a retail

insurance broker, which consulted with defendant LoVullo
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Associates, Inc., an insurance wholesaler. The result was

plaintiff purchasing a policy issued by defendant Northland

Insurance, allegedly a wholly-owned subsidiary of defendant The

Travelers Companies, Inc., for the period August 7, 2008 to

August 7, 2009. Plaintiff was issued proof of insurance so that

he could enter into the lease agreement, but was instructed to

then provide Mang with a complete copy of the lease agreement and

his vehicle registration. 

Plaintiff alleges that he provided that documentation to

Mang on August 28, 2008. Mang advised plaintiff that it did not

have a complete copy of the lease agreement, however, and

notified him in writing that he must provide the full

documentation by September 18, 2008 "in order for [his] coverage

to remain in force." Northland then gave written notice to

plaintiff, as required by the insurance contract, that it

intended to cancel the policy as of October 11, 2008. Plaintiff

alleges that the missing pages of the lease agreement were

provided to Mang prior to that date but that, despite assurances

from employees of Mang that the problem had been resolved,

Northland proceeded with the promised cancellation. In December

2008, plaintiff was involved in a motor vehicle accident that

left him injured and his tractor truck damaged (see Maki v

Bassett Healthcare, 141 AD3d 979, 979-980 [2016]). Plaintiff

then attempted to make an insurance claim, at which point he

learned that the policy had been canceled.

Plaintiff commenced this action in September 2014,

asserting claims for breach of contract and fraud against

Travelers, Northland, LoVullo and Mang, as well as certain

individuals employed by those entities.1 A motion to dismiss the

complaint in part was filed by Travelers, Northland and LoVullo,

as well as individuals who worked for one or more of those

entities, defendants William Halpin, Dawn Varga and Michelle

Meschke (hereinafter collectively referred to as the individual

defendants). The motion sought dismissal of the fraud claim

1 Upon a motion by Mang and its defendant employees,

Supreme Court dismissed the complaint insofar as it was asserted

against Mang's employees. 
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against Northland and the complaint in its entirety against

Travelers, LoVullo and the individual defendants. Plaintiff

cross-moved for summary judgment on his breach of contract claim

against Northland – despite the fact that Northland had not yet

served an answer – and to substitute Travelers Indemnity Company

as a party defendant in the place of Travelers. Supreme Court

granted the motion and denied the cross motion, and plaintiff now

appeals. 

In considering a "pre-answer motion[] to dismiss the

complaint for failure to state a cause of action, we must give

the pleadings a liberal construction, accept the allegations as

true and accord the plaintiff[] every possible favorable

inference" (Chanko v American Broadcasting Cos. Inc., 27 NY3d 46,

52 [2016]; see Loch Sheldrake Beach & Tennis Inc. v Akulich, 141

AD3d 809, 814 [2016]). Any affidavits submitted by plaintiff may

be used to cure any deficiencies in the pleadings (see Chanko v

American Broadcasting Cos. Inc., 27 NY3d at 52), but the

"affidavit" submitted by plaintiff in support of his cross motion

is unsworn and of no probative value (see CPLR 3211 [c]; 3212

[b]; Enos v Werlatone, Inc., 68 AD3d 713, 714 [2009]). After

considering the allegations in the complaint, we affirm.

Dealing first with the claims against the individual

defendants, "[a] review of the record fails to reveal any factual

allegations that [they] acted either outside the scope of their

employment or for personal profit" in a manner that would open

them to personal liability (Freyne v Xerox Corp., 98 AD2d 965,

965 [1983]; see American-European Art Assoc. v Trend Galleries,

227 AD2d 170, 171-172 [1996]). Plaintiff instead takes issue

with the individual defendants because they performed their work

duties in acting upon the representations of Mang that plaintiff

had not provided complete copies of the needed documents. 

Supreme Court therefore correctly dismissed the complaint against

them (see Lewiarz v Travco Ins. Co., 82 AD3d 1464, 1468 [2011];

Freyne v Xerox Corp., 98 AD2d at 965). 

Turning to the breach of contract claims against Travelers

and LoVullo, neither had a contractual relationship with

plaintiff, as Northland was the corporate entity that issued the

insurance policy at issue. Plaintiff gave no reason to believe
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that LoVullo, an insurance wholesaler with which he had no direct

dealings, could be held liable for a breach in the terms of an

insurance policy issued to him by Northland (see e.g. Gauert v

Chris-Leef General Agency, Inc., 123 SW3d 270, 273-274 [Mo Ct App

2003]). As for Travelers, plaintiff alleges that Northland is

its "wholly owned subsidiary," but "[a] parent corporation may

not be held liable for the contracts [and other acts] of its

subsidiary solely because of stock ownership" (A.W. Fiur Co. v

Ataka & Co., 71 AD2d 370, 374 [1979]). The exception is where

"[a] subsidiary corporation over which a parent corporation

exercises control in everyday operations may be deemed an

instrumentality or agent of the parent, and '[t]he determinative

factor is whether the subsidiary corporation is a dummy for the

parent corporation'" (Pritchard Servs. [NY] v First Winthrop

Props., 172 AD2d 394, 395 [1991], quoting A.W. Fiur Co. v Ataka &

Co., 71 AD2d at 374). Plaintiff failed to make any specific

allegations of that sort in the complaint. As such, Supreme

Court was right to dismiss the breach of contract claims against

Travelers and LoVullo.

Our review of the complaint also reveals that the fraud

claims against Northland, Travelers and LoVullo were properly

dismissed. The complaint asserts that Meng committed fraud by

not turning over a complete copy of the lease agreement, with

defendants limited to "aid[ing] and abett[ing]" that fraud. The

alleged fraud committed by Northland, Travelers and LoVullo,

however, amounted to acting upon the purported misrepresentations

made by Mang as to what documents had been provided by plaintiff

instead of ferreting out any misdeeds on their own initiative. 

Inasmuch as that thin gruel does not constitute a sufficient

allegation "that [those] defendants were aware of a fraud and

intended to aid in the commission of the fraud," the fraud claims

against them fail (Agostini v Sobol, 304 AD2d 395, 396 [2003];

see National Westminster Bank v Weksel, 124 AD2d 144, 147-148

[1987], lv denied 70 NY2d 604 [1987]). 

We have examined the remaining issues raised by the parties

and found them to be without merit.
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Garry, J.P., Egan Jr., Rose and Mulvey, JJ., concur.

ORDERED that the order is affirmed, without costs.

ENTER:

Robert D. Mayberger

Clerk of the Court