Ruddy v. Lexington Insurance Company

• Decision Date: 08 May 2007
• Docket Number: 2005-05487.
• Citation: 835 N.Y.S.2d 440,40 A.D.3d 733,2007 NY Slip Op 04100
• Parties: HARRY RUDDY et al., Plaintiffs, v. LEXINGTON INSURANCE COMPANY et al., Defendants, and TREIBER GROUP, Defendant and Third-Party Plaintiff-Respondent. AFG PARTNERS, Third-Party Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

40 A.D.3d 733

835 N.Y.S.2d 440

2007 NY Slip Op 04100

HARRY RUDDY et al., Plaintiffs, v. LEXINGTON INSURANCE COMPANY et al., Defendants, and TREIBER GROUP, Defendant and Third-Party Plaintiff-Respondent AFG PARTNERS, Third-Party Defendant-Appellant.

2005-05487.

Appellate Division of the Supreme Court of the State of New York, Second Department.

Decided May 8, 2007.

In an action, inter alia, to recover damages for breach of

contract, the third-party defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Suffolk County (Burke, J.), dated April 27, 2005, as denied its cross motion for summary judgment dismissing the third-party complaint.

Ordered that the order is affirmed insofar as appealed from, with costs.

In 1996 the plaintiffs, through their retail insurance broker Treiber Group, LLC, sued herein as Treiber Group (hereinafter Treiber), procured a homeowners' insurance policy covering their house and other structures on their property. The policy was issued by the defendant Lexington Insurance Company (hereinafter Lexington), through its agent, the third-party defendant, AFG Partners (hereinafter AFG), a wholesale insurance broker. The coverage limits of the original policy were $364,000 for the dwelling and $36,400 for the "other structures," namely a three-car garage which also contained guest quarters. In 1997, after an inspection of the plaintiffs' property, the policy was renewed and the coverage limits were increased to $384,000 for the dwelling and $68,300 for the garage. Following a subsequent renewal of the policy in 1999, AFG issued a declaration page reflecting the same coverage limit ($384,000) for the dwelling, but a limit of only $38,400 for the garage. Neither the plaintiffs nor any employee of Treiber noticed the change in the coverage limit.

In April 2001 a fire broke out in the plaintiffs' garage, completely destroying it. Lexington paid the plaintiffs the sum of $38,400, the full amount of the coverage provided on the declaration page of the homeowners' policy, which allegedly was insufficient to cover the loss they sustained.

As a result, the plaintiffs commenced an action against, inter alia, Treiber and Lexington. Treiber commenced a third-party action against AFG, seeking indemnification and contribution. After discovery, all of the parties to the main action moved for summary judgment, and AFG cross-moved for summary judgment dismissing the third-party complaint. The Supreme Court,...