Kuzmier v. New Amsterdam Cas. Co.
| Decision Date | 06 June 1956 |
| Citation | 155 N.Y.S.2d 301 |
| Parties | Robert X. KUZMIER, Plaintiff, v. NEW AMSTERDAM CASUALTY COMPANY, Defendant. |
| Court | New York Supreme Court |
Kuzmier, Zweibel, McKeon & Schmitt, New York City, for plaintiff.
C. E. Mellen, New York City, for defendant.
The plaintiff, an attorney, has brought this action on a 'Lawyers Protective Policy' issued to him by the defendant. By the insuring agreements the defendant undertook: 'To pay on behalf of the insured all sums which the insured shall become obligated to pay by reason of the liability imposed upon him by law for damages resulting from any claim made against the insured arising out of the performance of professional services for others in the insured's capacity as a lawyer and caused by any negligent act, error or omission of the insured or any other person for whose acts the insured is legally liable.' The defendant further agreed to defend any suit against the plaintiff 'alleging such negligent act, error or omission * * * even if such suit is groundless, false or fraudulent'.
This action springs from the following situation: The plaintiff, as attorney for one Quigley brought suit on his behalf against the Third Avenue Transit Corporation, to recover damages for personal injuries. After trial judgment was entered in Quigley's favor against the Third Avenue Transit Corporation for $6,673.60. This judgment was satisfied by the delivery to the plaintiff on April 27, 1949, of a check of the Third Avenue Transit Corporation for $5,571.51, payable jointly to him and to Quigley; the plaintiff disbursed the proceeds in accordance with the retainer agreement between him and Quigley. Thereafter, the trustees, appointed by the United States District Court for the Southern District of New York in a proceeding for the reorganization of the Third Avenue Transit Corporation under the provisions of the Bankruptcy Act, instituted an action against the plaintiff and Quigley to recover the $5,571.51 payment of April 27, 1949, on the ground that the payment was made after filing of the petition in the bankruptcy proceeding and was not for an equivalent present value.
The plaintiff gave the defendant notice of the institution of the trustees' action, but the defendant refused to assume the defense. The plaintiff thereupon retained counsel to defend him. The trustees were successful on the trial of the action and on January 8, 1953, recovered a judgment for $6,992.19 against the plaintiff and Quigley. After service of a notice of appeal, the plaintiff offered a settlement with the trustees for $3,750 which they accepted in full satisfaction of the larger judgment against him and Quigley. The plaintiff himself paid the entire $3,750 which was in excess of the net fee he had received from Quigley and thereby satisfied any claims which his client Quigley may have had against him by reason of the prosecution of Quigley's action in this court. Beside making the payment of $3,750, the plaintiff incurred expense in defending the action brought by the trustees.
The complaint in this action after setting out paragraph 70 of the Bankruptcy Act, 11 U.S.C.A. § 110, on which the suit of the trustees was founded, alleges that the plaintiff did not search the records of the office of the clerk of the United States District Court from which he would have discovered the filing of the petition against the Third Avenue Transit Corporation. The complaint also annexes as exhibits the complaint in the trustees' action and the decision of the trial justice in favor of the trustees.
The plaintiff moves for summary judgment and for a reference to determine the amount of the damages. The defendant, without interposing any answering affidavits, by way of cross motion, asks for judgment on the pleadings, dismissing the complaint.
The defendant's main contention is that it was not obliged to defend the plaintiff in the trustees' suit; it argues further that since, as will be...
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...(citing Allstate Ins. Co. v. Mugavero, 79 N.Y.2d 153, 162–63, 581 N.Y.S.2d 142, 589 N.E.2d 365 (1992)); Kuzmier v. New Amsterdam Cas. Co., 155 N.Y.S.2d 301, 304 (Sup.Ct.1956)("It would be utterly illogical to hold that the vague form in which the trustees saw fit to cast their complaint rel......
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