789 F.2d 172 (2nd Cir. 1986), 292, Beacon Industries, Inc. v. Walter Kaye Associates, Inc.

Docket Nº:292, Docket 85-7083.
Citation:789 F.2d 172
Party Name:BEACON INDUSTRIES, INC. and Harvard Precision Components, Inc., Plaintiffs-Appellees, v. WALTER KAYE ASSOCIATES, INC., Walter Kaye, Larry Kamerman, Carol Varveris and Lumbermens Mutual Casualty Company, Defendants. Appeal of WALTER KAYE ASSOCIATES, INC., Defendant-Appellant.
Case Date:April 30, 1986
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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Page 172

789 F.2d 172 (2nd Cir. 1986)

BEACON INDUSTRIES, INC. and Harvard Precision Components,

Inc., Plaintiffs-Appellees,

v.

WALTER KAYE ASSOCIATES, INC., Walter Kaye, Larry Kamerman,

Carol Varveris and Lumbermens Mutual Casualty

Company, Defendants.

Appeal of WALTER KAYE ASSOCIATES, INC., Defendant-Appellant.

No. 292, Docket 85-7083.

United States Court of Appeals, Second Circuit

April 30, 1986

Argued Oct. 21, 1985.

Page 173

John W. Breen, Jr., Chabot, Breen & DuBorg, Hamden, Conn., for defendant-appellant.

Sally S. King, Robinson & Cole, Hartford, Conn., for plaintiffs-appellees.

Before OAKES, NEWMAN and KEARSE, Circuit Judges.

PER CURIAM:

This appeal in a diversity case concerns the duty of an insurance broker to obtain favorable rates for its client. Defendant-appellant Walter Kaye Associates, Inc. ("Kaye"), an insurance broker, appeals from the judgment of the District Court for the District of Connecticut (M. Joseph Blumenfeld, Judge) awarding $26,086.11 to plaintiff-appellee Beacon Industries, Inc. ("Beacon"), the insured. The amount awarded, less prejudgment interest, represents what the District Court concluded was an overpayment of approximately $17,000 charged to Beacon for its workers' compensation insurance due to the failure of Kaye to obtain a more favorable premium rate. Since we conclude that in the circumstances of this case no duty existed to obtain the more favorable rate, even if it was available, we reverse.

Rates for workers' compensation insurance are set by determining into which of several hundred classifications the employer's jobs fall and then rating the employer's claims history within the appropriate classification. The classifications are defined in a manual published and periodically revised by the National Council on Compensation Insurance. The Northeast Council on Compensation Insurance, a regional office of the National Council, issues opinions on the proper classification of particular employees at the request of insurance companies, insurance brokers, and insureds.

Kaye acted as the broker for Beacon's workers' compensation insurance for several years prior to April 10, 1979, at which time Beacon shifted its workers' compensation coverage to another broker, the Frank B. Hall Agency ("Hall"). During the years that Kaye handled Beacon's account, Beacon's machinists were classified under...

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