Summary
holding that, absent any additional communications, no additional duty arose to advise insured of a policy's expiration date, tell insured that the policy expired at a particular time, or to try and help the insured keep the policy alive
Summary of this case from Wiener v. AXA Equitable Life Ins. Co.Opinion
February 6, 1925.
Appeal from Supreme Court of New York County.
Horowitz, Riedler Hurwitz [ William Macy of counsel], for the appellant.
Simon N. Gazan, for the respondent.
Plaintiff claims he gave defendant, an insurance broker, a fire policy for the sole purpose of having a rate reduction made; that the insurance company instead, canceled the policy, and so notified defendant, but defendant did not transmit this notice to plaintiff. A fire occurred some time after the cancellation, and plaintiff sues for damages sustained by the fire, asserting that the proximate cause of the loss was defendant's failure to notify plaintiff of the cancellation of the policy.
The allegations of the complaint are as follows: That on July 21, 1923, plaintiff had a fire policy in a Pennsylvania company; that on that day defendant notified plaintiff that the rate on the policy had been reduced, and requested plaintiff to deliver the policy to him for the purpose of obtaining the rate reduction. Plaintiff accordingly did so, and received a receipt on July 21, 1923, stating that defendant had received the policy "for rate reduction." Plaintiff alleges that he assumed that defendant kept the policy in his possession; that in fact the policy was canceled in August, 1923, notification thereof having been given by the insurance company to defendant; that plaintiff knew nothing of the cancellation until about January 1, 1924, when a fire occurred in plaintiff's premises and he discovered when he went to defendant that the policy had been canceled in August.
The theory of liability advanced in the complaint is, that it was defendant's duty "under the circumstances" to have notified plaintiff of the cancellation, so that plaintiff could have protected himself by obtaining other insurance, and that the "direct and proximate cause of his loss was the negligence and breach of duty of defendant in not informing him of the cancellation, or attempted cancellation."
The answer admits the receipt of the policy for purpose of obtaining a rate reduction but otherwise denies generally.
After joinder of issue defendant moved for judgment upon the pleadings. This motion was denied. The learned court below, in its opinion, sets forth plaintiff's claim as being based on defendant's neglect to "keep alive" or to "replace" the policy. On the contrary, the basis of the complaint is defendant's failure to notify plaintiff of the cancellation of a policy which he had received for the sole purpose of rate reduction.
Plaintiff not only failed to annex a copy of the policy to the complaint, but failed even to allege the terms of the policy. He fails to state when the policy was issued, or for what number of years it was to run. In other words, it is impossible to ascertain from the complaint what the expiration date of the policy was, so that, for all that appears in the complaint the policy would have expired, in any event, some time before the fire occurred. If this be so, there is no connection between defendant's failure to notify plaintiff of the cancellation, and the subsequent loss by fire. If the policy by its terms expired in 1923, the plaintiff would not have been able to recover under the policy whether it had been canceled or not.
It is not claimed or alleged that defendant undertook to keep the policy alive or to obtain a renewal thereof, and if, by its terms, the policy expired before January 1, 1924, it was plaintiff's duty to inform himself of the expiration date and to take steps to renew the policy, if he cared to do so. It was not defendant's duty to renew the policy, nor does plaintiff claim that the loss was sustained by reason of defendant's failure to obtain a renewal.
Defendant did not obligate himself to advise plaintiff of the expiration date of the policy nor was it defendant's duty, either under the allegations of the complaint or as matter of law, to advise plaintiff that the policy expired at any particular time. ( Fries-Breslin Co. v. Bergen, 176 Fed. 76; S.C., 215 U.S. 609.)
The terms of the policy were always within the knowledge of the plaintiff, and if he failed to remember that the policy expired at a certain time before the fire, it was his own negligence, and not defendant's, which prevented plaintiff from renewing his policy.
The complaint does not show that the policy was lawfully canceled and that consequently plaintiff's right of action against the insurance company was lost by reason of defendant's negligence. In the absence of anything to the contrary appearing in the complaint, it is to be presumed that the policy contained the standard provision permitting cancellation only on five days' notice to the assured. ( Eckert Co. v. Pathe Freres, 174 N Y Supp. 740.)
A notice not sent within five days is ineffective, and it does not appear from the complaint that a five-day notice was sent. The notice, furthermore, must be sent to the assured. A notice sent to a broker who has received only a special instruction and not a general agency is of no avail, and if plaintiff had sued the insurance company on the policy, the sending of the cancellation notice to defendant would have been no defense. ( Healy v. Ins. Co., 50 App. Div. 327; Hermann v. Niagara Fire Ins. Co., 100 N.Y. 411.)
It follows that plaintiff has not shown that the policy was rightfully and lawfully canceled by the company; and, therefore, for aught that appears in the complaint, plaintiff's rights under the policy still exist, and defendant's neglect to inform plaintiff of the cancellation would not give rise to any cause of action for damages.
Assuming that the policy would have been in force at the time of the fire, the complaint still fails to show that plaintiff had complied with the terms of the policy.
Plaintiff also alleges that the loss which he sustained was the amount which plaintiff would have received under the policy, $2,500. If plaintiff claims that he would have been able to recover upon his policy but for defendant's neglect, there are not sufficient or proper allegations in the complaint upon which to base a recovery, because plaintiff fails to allege that he had performed the conditions of the policy so as to place himself in a position to claim insurance — he does not allege that he had an insurable interest in the goods either at the time the policy was issued or at the time of the fire; and further, he does not allege that the loss occurred through a hazard provided against in the policy. ( Todd v. Union Casualty Surety Co., 70 App. Div. 52.) The complaint fails to state facts sufficient to constitute a cause of action.
The order appealed from should be reversed, with ten dollars costs and disbursements, and defendant's motion to dismiss the complaint granted, with ten dollars costs, with leave to plaintiff to plead over on payment of said costs within twenty days after entry of order herein.
CLARKE, P.J., DOWLING, FINCH and MARTIN, JJ., concur.
Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs, with leave to plaintiff to serve an amended complaint within twenty days from service of order upon payment of said costs.