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In Absence of a “Special Relationship” Insurer Not Liable for Agent’s Negligent Misrepresentation

The Fourth Department determined the insurance carrier was entitled to summary judgment because it did not have a “special relationship” with the insured.  Plaintiff’s insurance had been cancelled for lack of payment.  After a loss, the plaintiff sued the insurer alleged that he had relied on the agent’s representation that his insurance premium had been paid.  Absent a “special relationship” suit can not be premised on such reliance:

We agree with defendant that the court erred in denying its motion for summary judgment dismissing the complaint, the gravamen of which is a claim for negligent misrepresentation. An essential element of such a claim is the “duty to use reasonable care to impart correct information due to a special relationship between the parties” … . A special relationship may arise from “a course of dealing over an extended period of time which would have put objectively reasonable insurance agents on notice that their advice was being sought and specially relied on” … . According to plaintiff, he had a special relationship with defendant based on a course of dealing. We conclude that defendant met its burden on the motion, and plaintiff failed to raise an issue of fact concerning the existence of a special relationship … . The interactions between plaintiff and defendant on which plaintiff relies ” would [not] have put [an] objectively reasonable insurance agent[] on notice that [his or her advice] was being sought and specially relied on’ ” … , such that a special relationship was formed based on a course of conduct. Defendant therefore cannot be held liable for negligent misrepresentation based on its agent’s response to an inquiry from plaintiff concerning whether his policy premium had been paid. In view of our determination, we do not consider defendant’s remaining contentions. Majtan v Urbanke Assoc Inc, 2014 NY Slip Op 04631, 4th Dept 6-20-14

 

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