Court Opinion

ID: 5775813
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:40:49.997244+00
Date Added: 2024-06-11T08:41:53.050169
License: Public Domain

Hopkins, J. (concurring in the result).
I distinguish between the rights of the plaintiffs and the rights of the appellant Empire. As this case reaches us, only the rights of Empire concern us, since the plaintiffs did not appeal.
Initially, Hartford was bound by the acts of Smith, its producer. True, by error of Smith, Hartford never knew that the *411producer had issued an FS-1 form which certified Hartford as the insurer of Johnson (Vehicle and Traffic Law, § 312). But by permitting Smith as a matter of practice to issue the FS-1 form, upon which its name was imprinted as insurer and which had been furnished to Smith by it, Hartford made Smith its agent for that limited purpose. Thus, Hartford could be held responsible for the error of Smith, since it could reasonably be foreseen that errors might occur in the issuance of the form.
In the ordinary course of events, neither the plaintiffs nor Empire could take advantage of Hartford’s responsibility (cf. Perry v. New York Life Ins. Co., 22 N. Y. S. 2d 696). But Hartford’s responsibility under the events at bar is not ordinary, for it is engaged in business which the State has declared to be of high public importance — “ that motorists shall be financially able to respond in damages for their negligent acts,” a purpose which ‘ ‘ can best be served * * * by private enterprise operating in a competitive market to provide proof of financial security through methods prescribed herein ” (Vehicle and Traffic Law, § 310, subd. [2]). Hartford, operating in a competitive market, chose to permit Smith to issue the form which certified it as the insurer of Johnson (Vehicle and Traffic Law, § 311, subd. 5). Without the FS-1 form, Johnson could not have obtained the registration of his automobile or the license plates by which he could drive in New York. New York relied on the certificate that insurance had been issued; and, under the statute, any person injured by Johnson’s negligence in driving his automobile likewise relied (Teeter v. Allstate Ins. Co., 9 A D 2d 176, affd. 9 N Y 2d 655; Tomala v. Peerless Ins. Co., 20 A D 2d 206, affd. 14 N Y 2d 862; Downing v. Allstate Ins. Co., 43 Misc 2d 215).
Under this analysis, the plaintiffs might well have succeeded against Hartford. But Empire stands in a different position. Empire is not an injured person; nor does it represent an injured person. Its status is that of an insurer whose liability arises as an uninsured motorist carrier (Insurance Law, § 167, subd. 2-a), a liability under an indorsement which exists independently of the main policy to which it is annexed and for which an additional premium was collected (Matter of Knickerbocker Ins. Co. [Faison], 22 N Y 2d 554). Hartford’s liability to the plaintiffs rests on principles of estoppel arising out of the State’s solicitude for persons injured by the negligent operation of automobiles. That, however, does not mean that a policy of insurance issued by Hartford to Johnson in fact existed.
The negligence of Smith traceable to Hartford through the theory of agency creates the fiction of insurance by the application of the equitable doctrine of estoppel. That is to say, Hart*412ford is liable to an injured party as if a policy of insurance had duly been issued to Johnson. The fiction of insurance is employed to carry out the public policy of the State. Yet the public policy clothes only the injured party and not the public generally (cf. People’s Trust Co. v. Smith, 215 N. Y. 488, 491). There is no privity between Empire and the plaintiffs that would allow the fiction of insurance to benefit Empire (cf. Meeder v. Provident Sav. Life Assur. Soc. of N. Y., 171 N. Y. 432). Hence, Empire may not say that it is not liable to the plaintiffs because insurance is in existence which covers them.
Aside from a consideration of these aspects of the principle of estoppel, other reasons appear which bar a reversal of the judgment. As between Empire and Hartford, both insurance carriers, the equities favor Hartford. Empire has been paid for the coverage which it assumed; Hartford has not. Hartford’s negligence at best is vicarious; and even its liability to the plaintiffs would not have come into being if, upon the notice of the termination of insurance by .¿Etna filed with the Commissioner of Motor Vehicles, the registration of Johnson’s automobile had been canceled and the license plates surrendered (Vehicle and Traffic Law, § 313).
Accordingly, I concur in the result.
Christ, P. J., and Martuscello, J., concur with Munder, J.; Hopkins, J., concurs in result, in an opinion, in which Babin, J., concurs.
Judgment of the Supreme Court, Kings County, entered February 18, 1970, affirmed, with costs to respondent Hartford Accident and Indemnity Co.