Opinion
15744 Index No. 151810/17 Case No. 2021–02484
04-19-2022
INNOVATIVE RISK MANAGEMENT, INC., Plaintiff–Appellant, v. MORRIS DUFFY ALONSO & FALEY et al., Defendants–Respondents.
Andrew Lavoott Bluestone, New York, for appellant. Rivkin Radler LLP, New York (Deborah M. Isaacson of counsel), for respondents.
Andrew Lavoott Bluestone, New York, for appellant.
Rivkin Radler LLP, New York (Deborah M. Isaacson of counsel), for respondents.
Gische, J.P., Webber, Scarpulla, Rodriguez, Higgitt, JJ.
Order, Supreme Court, New York County (Paul A. Goetz, J.), entered July 2, 2021, which denied plaintiff's motion for summary judgment on its legal malpractice claim and granted defendants’ motion for summary judgment dismissing the complaint, unanimously affirmed, with costs.
Plaintiff alleges that defendants were negligent in failing to serve timely expert disclosures in an underlying personal injury action involving a motor vehicle accident. Arch Insurance Company provided the defendants in the underlying action (insureds) with defense and indemnification. Plaintiff, acting as third-party administrator for Arch, appointed defendants to represent the insureds. Plaintiff alleges that defendants’ negligence effectively compelled plaintiff to settle in the underlying action for an excessive sum, and that but for defendants’ negligence, plaintiff would not have incurred such a high settlement payment and legal fees. The complaint asserts claims for legal malpractice, breach of fiduciary duty, and breach of contract.
The motion court correctly determined that plaintiff was not Arch's assignee. Even assuming the evidence showed that Arch assigned its claims to Programs Plus, a segregated portfolio cell of First Employers Insurance Company, plaintiff failed to adduce evidence showing a subsequent assignment to it from Programs Plus or First Employers. To the extent plaintiff implies that it may assert Programs Plus or First Employers’ claims absent an assignment from those entities, the evidence does not support such a conclusion (see generally Alexander & Alexander of N.Y. Inc. v. Fritzen, 114 A.D.2d 814, 815, 495 N.Y.S.2d 386 [1st Dept. 1985], affd 68 N.Y.2d 968, 510 N.Y.S.2d 546, 503 N.E.2d 102 [1986] ).
The court also correctly determined that plaintiff lacked standing to maintain a legal malpractice claim on its own behalf. Plaintiff was not in privity with defendants because there was no attorney-client relationship between them. Plaintiff's reliance on "near privity" is misplaced, as its legal malpractice claim is not based on negligent misrepresentation (see Federal Ins. Co. v. North Am. Specialty Ins. Co., 47 A.D.3d 52, 59–60, 847 N.Y.S.2d 7 [1st Dept. 2007] ). Plaintiff's reliance on equitable subrogation is unavailing, because it did not insure the insureds; more specifically, the complaint does not allege, and the evidence does not show, that plaintiff had a contractual obligation to pay the claims in the underlying action (see Allianz Underwriters Ins. Co. v. Landmark Ins. Co., 13 A.D.3d 172, 174, 787 N.Y.S.2d 15 [1st Dept. 2004] ; Federal Ins. Co., 47 A.D.3d at 62, 847 N.Y.S.2d 7 ; Risk Control Assoc. Ins. Group v. Maloof, Lebowitz, Connahan & Oleske, P.C., 113 A.D.3d 522, 522, 978 N.Y.S.2d 843 [1st Dept. 2014] ).
The breach of fiduciary duty and breach of contract causes of action were correctly dismissed, because they were duplicative of the legal malpractice claim (see Weil, Gotshal & Manges, LLP v. Fashion Boutique of Short Hills, Inc., 10 A.D.3d 267, 271, 780 N.Y.S.2d 593 [1st Dept. 2004] ; Mamoon v. Dot Net Inc., 135 A.D.3d 656, 658, 25 N.Y.S.3d 85 [1st Dept. 2016] ), and no contract exists to sustain the claim for breach of contract (see Mandarin Trading Ltd. v. Wildenstein, 16 N.Y.3d 173, 181–182, 919 N.Y.S.2d 465, 944 N.E.2d 1104 [2011] ).