Court Opinion

ID: 5487350
Source: CourtListenerOpinion
Date Created: 2022-01-10 02:17:52.501063+00
Date Added: 2024-06-11T08:33:42.450007
License: Public Domain

Pigott, J. (dissenting).
It seems to me elementary that before you can complain about the contents of any contract, you should at least have read it. Nearly 100 years ago we held that when an insured receives an insurance contract, he or she has a duty to read and examine its contents (see Metzger v Aetna Ins. Co., 227 NY 411, 416 [1920]). There, we held that the insured is “conclusively presumed” to know the contents of the insurance contract and assent to it, when he or she signs or accepts the contract (id.).
While it is true that, until now, this Court had yet to decide whether the presumption applies to protect an insurance broker that has allegedly failed to obtain requested coverage, several appellate courts have considered the issue and appropriately applied the presumption (see McGarr v Guardian Life Ins. Co. of Am., 19 AD3d 254, 256 [1st Dept 2005]; Laconte v Bashwinger Ins. Agency, 305 AD2d 845 [3d Dept 2003]; Busker on Roof Ltd. Partnership Co. v Warrington, 283 AD2d 376 [1st Dept 2001]).
The majority offers no compelling reason why this basic requirement, i.e. that you read the thing, should not obtain in cases involving an insurance broker. Although an insured may claim to have relied upon the broker’s experience and knowledge in certain circumstances, we have made clear that insureds are in a better position to know both their own assets and ability to protect themselves than agents or brokers (Murphy v Kuhn, 90 NY2d 266, 273 [1997]). Agents and brokers are not “personal financial counselors and risk managers, approaching guarantor status” (id.). The relationship between a broker and an insured is not one in which continuing obligations to advise might exist but, rather, is an ordinary commercial relationship that does not give rise to a duty to provide such ongoing guidance *738(see id. at 270-271; see also Kimmell v Schaefer, 89 NY2d 257, 263-264 [1996]).
There are, of course, limitations on the presumption rule. For example, the presumption is overcome when a broker fails to correct a clear misimpression created by a binder (see Arthur Glick Truck Sales v Spadaccia-Ryan-Haas, Inc., 290 AD2d 780 [2002]), or when a broker makes an affirmative misrepresentation regarding coverage in response to questioning by the client after reviewing the policy (Kyes v Northbrook Prop. & Cas. Ins. Co., 278 AD2d 736 [2000]). Those limitations are not alleged here.
By permitting ABS to evade the conclusive presumption rule, the majority in essence allows an insured, months and possibly years after a policy is procured, to complain, following a loss, that it made a request of its broker for the relevant coverage but it was not forthcoming. This will almost always result in a “he said-she said” battle of what occurred during coverage discussions between the insured and broker.
In short, I agree with the Appellate Division that Petrocelli demonstrated its prima facie entitlement to judgment as a matter of law. It submitted the renewal policy to ABS and ABS concedes that it received it. Thus, ABS was conclusively presumed to know the contents, including the exclusions, of the policy. In opposition, ABS failed to raise a triable issue of fact. Had ABS read the policy, and claimed not to have understood the cross-liability exclusion and that Petrocelli misled it with respect to the meaning thereof, a clear question of fact would have been presented. However, ABS does not dispute receipt of the policy and admitted that it did not review it; and, as the Appellate Division noted, the record failed to demonstrate any exception to the presumption that ABS assented to the policy terms.
Chief Judge Lippman and Judges Read and Smith concur with Judge Ciparick; Judge Pigott dissents and votes to affirm in a separate opinion in which Judge Graffeo concurs.
Order reversed, etc.