DEZER PROPERTIES II LLC v. The State Insurance Fund, Defendant. (2007)

Order, Supreme Court, New York County (Barbara R. Kapnick, J.), entered on or about December 21, 2005, which, inter alia, granted defendant Kaye Insurance Associates, Inc. summary judgment dismissing the complaint as against it, unanimously affirmed, with costs.

Hartford Insurance Company (Hartford) brings this subrogation action in the name of its insured, plaintiff Dezer Properties II, LLC (Dezer), against defendant Kaye Insurance Associates, Inc. (Kaye), Dezer's insurance broker, for negligence and breach of contract with regard to Kaye's handling of a claim.   It is alleged that Kaye failed to timely notify Hartford of a personal injury claim, permitting a default judgment to be entered against Dezer.   However, notwithstanding the alleged negligence and late notice, Hartford defended Dezer, provided coverage, and indemnified its insured for the judgment.

 The complaint was properly dismissed.   Hartford, as subrogee of Dezer, has no claim against Kaye since Dezer suffered no loss as a result of Kaye's alleged negligence (see Federal Ins. Co. v. Spectrum Ins. Brokerage Serv., 304 A.D.2d 316, 758 N.Y.S.2d 21 [2003] ).   Moreover, Hartford itself has no claim against Kaye since Hartford is not in privity with Kaye and Kaye owed it no duty (see id.;  St. George v. W.J. Barney Corp., 270 A.D.2d 171, 172, 706 N.Y.S.2d 24 [2000];  American Ref-Fuel Co. of Hempstead v. Resource Recycling, Inc., 248 A.D.2d 420, 424, 671 N.Y.S.2d 93 [1998] ).   Even if Kaye had been negligent in its handling of the claim, there would be no basis for a subrogation action since Kaye is not the party “legally responsible” for the underlying loss (see e.g. Winkelmann v. Excelsior Ins. Co., 85 N.Y.2d 577, 581, 626 N.Y.S.2d 994, 650 N.E.2d 841 [1995] ).