Port Authority of New York and New Jersey v. Evergreen Intern. Aviation, Inc.

Decision Date22 January 1999
Citation179 Misc.2d 674,686 N.Y.S.2d 269
Parties, 1999 N.Y. Slip Op. 99,074 PORT AUTHORITY OF NEW YORK AND NEW JERSEY, Plaintiff, v. EVERGREEN INTERNATIONAL AVIATION, INC., Doing Business as Evergreen International Airlines, Inc., et al., Defendants.
CourtNew York Supreme Court

Lustig & Brown, L.L.P., New York City (Ellen Nimaroff of counsel), for Aon Risk Services of Oregon, Inc., defendant.

Martinez & Ritorto, P.C., New York City (Louis R. Martinez of counsel), for United States Aviation Underwriters, Inc., and another, defendants.

Cozen & O'Connor, New York City (Edward Hayum of counsel), for Evergreen International Aviation, Inc., defendant.

Milton H. Pachter, New York City, for plaintiff.

SIMEON GOLAR, J.

This is an application by defendant Aon Risk Services of Oregon, Inc., an insurance agent and broker (hereinafter "Aon"), to dismiss the complaint insofar as asserted against it on the ground that the three-year statute of limitations applicable in professional malpractice cases has run. Plaintiff asserts that the six-year statute of limitations for breach of contract actions is applicable and therefore the action is timely. It appears that this is an issue of first impression with respect to whether insurance agents and brokers are professionals within the meaning of the malpractice statute CPLR 214(6) as amended, covering professional malpractice actions. [See, CPLR 214(6) .]

Pursuant to a written agreement, defendant Evergreen International Aviation (hereinafter "Evergreen") leased space from plaintiff at John F. Kennedy International Airport to operate its airline. The agreement required Evergreen to obtain insurance in its own name, and to name plaintiff as an additional insured. Defendant Aon, an insurance agent and broker, issued an insurance certificate to plaintiff on March 30, 1995, certifying that such insurance was obtained and effective as of April 1, 1995.

Subsequently, on April 17, 1995, a sprinkler valve in the leased space ruptured, flooding the area. Another insurance company, Affiliated FM, compensated Evergreen for its loss arising from the incident and then commenced a subrogation action against plaintiff in the United States District Court for the Eastern District of New York. On April 21, 1998, plaintiff commenced the instant action seeking a declaration that defendants are required to defend, indemnify and hold it harmless under the Certificate of Insurance and with respect to any judgment recovered in the federal action. Defendant Aon now moves to dismiss the complaint on the ground that the action is time-barred under the three-year statute of limitations.

In support of its motion, defendant Aon asserts that, under CPLR 214(6), a party has three years to commence a claim for professional malpractice. According to defendant Aon, any negligence on its part occurred no later than March 30, 1995, when it issued the Certificate of Insurance. Aon contends that since plaintiff did not commence the instant action until April 21, 1998, it is untimely and must be dismissed.

In opposition to the motion to dismiss, plaintiff asserts that its action is timely as it is governed by the six-year contracts statute of limitations. Plaintiff contends that the three-year statute of limitations for professional malpractice contained in CPLR 214(6) is inapplicable to the instant case since an insurance broker is not considered a member of a profession.

When a motion is made pursuant to CPLR 3211, the court assumes the truth of the allegations of the complaint. (O'Henry's Film Works, Inc. v. Nabisco, Inc., 112 A.D.2d 825, 492 N.Y.S.2d 744; Harkin v. Culleton, 144 Misc.2d 656, 657, 544 N.Y.S.2d 432.) Moreover, when a party moves to dismiss a cause of action on the ground that it is barred by the statute of limitations, the movant bears the initial burden of establishing the affirmative defense by prima facie proof that the time in which to sue has run. (Assad v. City of New York, 238 A.D.2d 456, 656 N.Y.S.2d 669; Siegel v. Wank, 183 A.D.2d 158, 589 N.Y.S.2d 934.) Once this burden is satisfied, the burden shifts to the plaintiff to aver evidentiary facts establishing that the case falls within an exception to the statute of limitations. (Assad v. City of New York, supra, 238 A.D.2d, at 456, 656 N.Y.S.2d 669; Siegel v. Wank, supra, 183 A.D.2d, at 158, 589 N.Y.S.2d 934.)

CPLR 214(6), as amended in September 1996, provides that actions to recover damages for malpractice, other than medical, dental or podiatric malpractice, must be commenced within three years, regardless of whether the underlying theory is based in tort or contract. The amendment has repealed the principle set forth by the Court of Appeals in Santulli v. Englert, Reilly & McHugh, P.C., 78 N.Y.2d 700, 579 N.Y.S.2d 324, 586 N.E.2d 1014, and Sears, Roebuck & Co. v. Enco Assocs., 43 N.Y.2d 389, 401 N.Y.S.2d 767, 372 N.E.2d 555, that applied the six-year contract statute of limitations to claims of professional malpractice on a theory of negligent performance of a contract. A malpractice cause of action generally accrues when an injury occurs, even if the aggrieved party is ignorant of the wrong or injury. (Ackerman v. Price Waterhouse, 84 N.Y.2d 535, 541, 620 N.Y.S.2d 318, 644 N.E.2d 1009.) The courts have applied CPLR 214(6) to various non-medical professionals, such as attorneys, Weiss v. Manfredi, 83 N.Y.2d 974, 616 N.Y.S.2d 325, 639 N.E.2d 1122, accountants, Meinhard-Commercial Corp. v. Sydney, 109 A.D.2d 678, 487 N.Y.S.2d 7, architects, Board of Mgrs. of Yardarm Beach Condominium v. Vector Yardarm Corp., 109 A.D.2d 684, 487 N.Y.S.2d 17, and engineers. (Tambrands, Inc. v. Lockwood Greene Engrs., Inc., 178 A.D.2d 406, 576 N.Y.S.2d 883.) However, there is no authority which specifically addresses the issue of whether CPLR 214(6) is applicable to an insurance broker or agent. It is necessary for the court to make this determination because, should it find that an insurance broker or agent is a member of a profession covered by CPLR 214(6), then plaintiff's claim as to defendant Aon will be time-barred.

The starting point of the court's analysis of this issue must be the plain language of the statute involved. (Roth v. Michelson, 55 N.Y.2d 278, 283, 449 N.Y.S.2d 159, 434 N.E.2d 228.) CPLR 214(6) or CPLR 105, the definitions section, does not define the term "malpractice." Black's Law Dictionary defines malpractice as "professional misconduct or unreasonable lack of skill." It also defines malpractice as the "failure of one rendering professional services to exercise that degree of skill and learning commonly applied under all circumstances in the community by the average prudent reputable member of the profession ..." (Black's Law Dictionary 959 [6th ed. 1990] [emphasis added]; see also, Cubito v. Kreisberg, 69 A.D.2d 738, 742, 419 N.Y.S.2d 578, affd. 51 N.Y.2d 900, 434 N.Y.S.2d 991, 415 N.E.2d 979 ["malpractice means the negligence of a member of a profession in his relations with his client or patient."] ). Thus, the court must determine whether an insurance agent or broker can properly be considered a member of a profession within the meaning and intent of CPLR 214(6).

Recently, in People v. Island Wide Ins. Brokerage, Inc., 177 Misc.2d 668, 676 N.Y.S.2d 860, the District Court of Nassau County found that an insurance broker was not a professional person within the meaning of the Town of Oyster Bay Code of Ordinances. The issue in Island Wide was whether an insurance broker could maintain a home office in a residentially zoned area. The Oyster Bay Ordinance restricted such home offices in "D" residential districts to physicians, lawyers, architects, musicians, teachers or other professionals. In reaching its decision, the court noted that another section of the Town Code specifically permitted insurance agents to maintain an office in "R-O" districts. The court reasoned that this indicated that the Town intended to include insurance offices in R-O districts but not D districts. Though the court did note that licensing by the State and municipalities is an insufficient standard by which to determine whether an occupation is a profession, People v. Island Wide Ins. Brokerage Inc., 177 Misc.2d 668, 670, 676 N.Y.S.2d 860, the court did not discuss what constitutes a professional. Thus, the holding in Island Wide must be limited to its facts.

Also instructive is Flora's Card Shop, Inc. v. Paul Krantz & Co., 111 Misc.2d 907, 445 N.Y.S.2d 392, affd. 91 A.D.2d 938, 458 N.Y.S.2d 880, where plaintiff alleged that defendant insurance broker failed to obtain the requested insurance coverage. After defendant moved to dismiss the complaint on the ground that the statute of limitations had expired, plaintiff asserted that the continuous treatment doctrine applied to insurance brokers and, thus, the statute of limitations was tolled during the broker-client relationship. In rejecting plaintiff's novel argument, the court distinguished doctors, lawyers, accountants and architects, to whom the continuous treatment doctrine has been applied, from insurance brokers. The court stated that "[t]he trust reposed in the insurance broker is a business trust as contrasted with a professional trust." (Flora's Card Shop v. Paul Krantz & Co., supra, 111 Misc.2d, at 908, 445 N.Y.S.2d 392.) The court noted that an insurance policy is in English and following up on a claim is not an "arcane art" that a businessman is incapable of doing. (Flora's Card Shop v. Paul Krantz & Co., supra, 111 Misc.2d, at 908, 445 N.Y.S.2d 392.) The court did not set forth, though, what is necessary to be considered a professional under New York State Law. In People v. State Tax Commn., 282 N.Y. 407, 26 N.E.2d 955, the Court of Appeals was faced with the issue of whether a customhouse broker was a...

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