Markel Ins. Co. v. Am. Guarantee & Liab. Ins. Co.

• Citation: 2013 N.Y. Slip Op. 07455,974 N.Y.S.2d 569,111 A.D.3d 678
• Court: New York Supreme Court — Appellate Division
• Decision Date: 13 November 2013
• Parties: MARKEL INSURANCE COMPANY, as assignee of American Gardens Owners Corp., American Gardens Management, LLC, and American Gardens Management Corp., and as subrogee of New Empire Group, Ltd., et al., appellants, v. AMERICAN GUARANTEE AND LIABILITY INSURANCE COMPANY, et al., defendants, Rebore Thorpe & Pisarello, P.C., respondent.

111 A.D.3d 678
974 N.Y.S.2d 569
2013 N.Y. Slip Op. 07455

MARKEL INSURANCE COMPANY, as assignee of American Gardens Owners Corp., American Gardens Management, LLC, and American Gardens Management Corp., and as subrogee of New Empire Group, Ltd., et al., appellants,
v.
AMERICAN GUARANTEE AND LIABILITY INSURANCE COMPANY, et al., defendants,
Rebore Thorpe & Pisarello, P.C., respondent.

Supreme Court, Appellate Division, Second Department, New York.

Nov. 13, 2013.

[974 N.Y.S.2d 570]

The Sullivan Law Group, LLP, New York, N.Y. (Robert Sullivan and Sojee Kim of counsel), for appellants.

L'Abbate, Balkan, Colavita & Contini, LLP, Garden City, N.Y. (Amy M. Monahan and Michael J. Testa of counsel), for respondents.

WILLIAM F. MASTRO, J.P., RUTH C. BALKIN, JOHN M. LEVENTHAL, and PLUMMER E. LOTT, JJ.

In an action, inter alia, to recover damages for legal malpractice, the plaintiffs appeal from an order of the Supreme Court, Nassau County (Parga, J.), entered March 8, 2012, which granted the motion of the defendant Rebore Thorpe & Pisarello, P.C., pursuant to CPLR 3211(a)(7) to dismiss the complaint insofar as asserted against it for failure to state a cause of action.

ORDERED that the order is affirmed, with costs.

[974 N.Y.S.2d 571]

In September 2005, a construction worker was injured on premises owned by American Gardens Owners Corp. In November 2005, the worker commenced a personal injury action (hereinafter the underlying action) against American Gardens Owners Corp., and later joined, as defendants, the property's managing agent, American Gardens Management, LLC, and the managing agent's affiliate, American Gardens Management Corp. (hereinafter collectively the American Gardens defendants). The American Gardens defendants' primary insurer was Chartis Insurance Company (hereinafter Chartis), but the American Gardens defendants also carried an umbrella excess liability policy issued by American Guarantee and Liability Insurance Company (hereinafter AGLIC). The AGLIC policy (hereinafter the Policy) contained an endorsement requiring the insured, or someone on its behalf, to provide notice to AGLIC of any claims or lawsuits against the insured as soon as practicable. The endorsement also provided that notice to any agent of AGLIC would constitute notice to AGLIC. New Empire Group, Ltd. (hereinafter NEG), was a managing general agent for AGLIC and a program administrator for the Policy. A Program Administrator Agreement between NEG and AGLIC delegated authority to NEG to act as AGLIC's agent, inter alia, for underwriting excess liability insurance policies and to accept notices of claim or suit on its behalf. NEG itself carried an Insurance Agents & Brokers Errors and Omissions policy with Markel Insurance Company (hereinafter Markel).

Shortly after the commencement of the underlying action, the American Gardens defendants gave notice thereof to their retail insurance broker, which, in turn, notified NEG of the underlying action within one month after the commencement of the underlying action. AGLIC nonetheless disclaimed coverage, alleging lack of timely notice. Rebore Thorpe & Pisarello, P.C. (hereinafter Rebore) represented the American Gardens defendants in the underlying action.

Thereafter, the underlying action was settled, and the settlement agreement provided that Chartis, as the primary insurer of the American Gardens defendants, would pay the plaintiffs in the underlying action the sum of $1,000,000, and Markel, on behalf of NEG, would pay the sum of $2,000,000....