DEBORAH ADAMS PLAINTIFF v. MICHAEL BLODGETT ET AL DEFENDANTS (2026)

MEMORANDUM AND ORDER

It is hereby ORDERED that the order so appealed from is unanimously affirmed without costs.

Memorandum: Defendant-third-party plaintiff Michael K. Blodgett (Blodgett) purchased commercial real property (property) in his individual capacity, and he and his future wife, nonparty optician Marcey Blodgett (Marcey), also jointly purchased an optical business that operated out of a duplex building on the property. According to Blodgett and Marcey, they subsequently had direct interactions with an insurance broker from third-party defendant, The Cesar Group, Inc. (Cesar), during which they specifically requested that the broker secure insurance for both the optical business and the property. However, the policy received and purchased by Marcey, and subsequently renewed in several forms, named the optical business as an insured but did not name Blodgett, as owner of the property, as an insured.

Plaintiff commenced the primary action against Blodgett, among others, alleging that she fell in the parking lot on the property and sustained injuries after leaving an appointment with a chiropractor who also operated out of the duplex building on the property. Following a claim investigation, the insurance company ultimately denied coverage to Blodgett on the ground that he was not named as an insured under the policy then in effect. Blodgett, along with an entity that is no longer a party, thereafter commenced this third-party action against Cesar, alleging in a single cause of action that, as relevant to this appeal, Cesar was negligent in failing to procure insurance coverage on the property naming Blodgett as an insured in light of Blodgett's specific request for that coverage and in breaching its continuing duty to advise, guide, and direct Blodgett to obtain proper or additional coverage in light of Blodgett's special relationship with Cesar. Cesar appeals and Blodgett cross-appeals from an order that, among other things, denied Cesar's motion for summary judgment seeking to dismiss the third-party complaint and denied that part of the motion of, inter alia, Blodgett seeking summary judgment on the third-party complaint. We now affirm.

“As a general principle, insurance brokers have a common-law duty to obtain requested coverage for their clients within a reasonable time or inform the client of the inability to do so; however, they have no continuing duty to advise, guide or direct a client to obtain additional coverage” (Voss v Netherlands Ins. Co., 22 NY3d 728, 734 [2014] [internal quotation marks omitted]; see American Bldg. Supply Corp. v Petrocelli Group, Inc., 19 NY3d 730, 735 [2012], rearg denied 20 NY3d 1044 [2013]; Murphy v Kuhn, 90 NY2d 266, 270 [1997]). “Hence, in the ordinary broker-client setting, the client may prevail in a negligence action only where it can establish that it made a particular request to the broker and the requested coverage was not procured” (Voss, 22 NY3d at 734; see American Bldg. Supply Corp., 19 NY3d at 735; Hoffend & Sons, Inc. v Rose & Kiernan, Inc., 7 NY3d 152, 155 [2006]). “ ‘A general request for coverage will not satisfy the requirement of a specific request for a certain type of coverage’ ” (American Bldg. Supply Corp., 19 NY3d at 735).

Nevertheless, “[w]here a special relationship develops between the broker and client, ․ the broker may be liable, even in the absence of a specific request, for failing to advise or direct the client to obtain additional coverage” (Voss, 22 NY3d at 735). Indeed, “[e]xceptional and particularized situations may arise in which insurance agents, through their conduct or by express or implied contract with customers and clients, may assume or acquire duties in addition to those fixed at common law” (Murphy, 90 NY2d at 272; see Voss, 22 NY3d at 735). Such a special relationship may arise where “(1) the agent receives compensation for consultation apart from payment of the premiums; (2) there was some interaction regarding a question of coverage, with the insured relying on the expertise of the agent; or (3) there is a course of dealing over an extended period of time which would have put objectively reasonable insurance agents on notice that their advice was being sought and specially relied on” (Voss, 22 NY3d at 735 [internal quotation marks omitted]; see Murphy, 90 NY2d at 272).

With respect to potential defenses to a negligence cause of action against an insurance broker, the Court of Appeals has expressly rejected the view that an insured “who ha[d] received an insurance policy and had an opportunity to read it and had not requested any changes is [per se] barred from recovery” (American Bldg. Supply Corp., 19 NY3d at 736). Instead, “[w]hile it is certainly the better practice for an insured to read its policy, an insured should have a right to ‘look to the expertise of its broker with respect to insurance matters,’ ” and thus “[t]he failure to read the policy, at most, may give rise to a defense of comparative negligence but should not bar, altogether, an action against a broker” (id. at 736-737).

Cesar contends on its appeal, in essence, that it owed no duty to Blodgett as a matter of law because Blodgett was a non-client with whom Cesar was not in privity. In response, Blodgett first raises a procedural objection by likening Cesar's contention to an assertion of the affirmative defense of lack of capacity, which Cesar purportedly waived by failing to raise it in its answer. We conclude that Blodgett's procedural objection is misplaced. Inasmuch as the duty owed by Cesar to Blodgett, if any, is an essential element of Blodgett's negligence cause of action, “the negative or nonexistence thereof [is] not an affirmative defense to be pleaded or proved by [Cesar]” (Archambault v Knost, 132 AD2d 909, 910 [3d Dept 1987]). “[A] mere denial of one or more elements of the cause of action”—as Cesar has done here in its answer to the third-party complaint—“will suffice to place them in issue, and ‘there is no reason to [additionally] assert as an affirmative defense the opposite of what the pleading party is [already] required to prove’ ” (US Bank N.A. v Nelson, 169 AD3d 110, 113 [2d Dept 2019], affd 36 NY3d 998 [2020]).

We nonetheless agree with Blodgett on the merits that, contrary to Cesar's contention, the evidence establishes that Blodgett was a client of Cesar. Blodgett was a longstanding client of Cesar and procured insurance through the broker for another business and property prior to his acquisition of the property at issue here. According to Blodgett's deposition testimony, he directly contacted the broker again to secure insurance for both the optical business and the property. It is undisputed that Blodgett arranged the meeting between the broker and Marcey, who was in charge of obtaining insurance for the optical business that was jointly owned by Blodgett and Marcey, and that the broker ultimately procured an insurance policy as a result of those communications. The evidence thus indisputably establishes that Blodgett was a client of Cesar (cf. Gatto v Allstate Indem. Co., 173 AD3d 1711, 1712 [4th Dept 2019], lv denied 34 NY3d 904 [2019]).

The more pertinent question is whether Blodgett, as a client of Cesar, made a specific request for an insurance policy covering him in his individual capacity as owner of the property and thus whether Cesar, through the broker, breached its duty to procure that coverage. In that regard, Cesar contends on its appeal that it established as a matter of law that Blodgett did not make a specific request. Even assuming, arguendo, that Cesar met its initial burden on its motion in that regard, we agree with Blodgett that his submissions are sufficient to defeat Cesar's motion. Blodgett and Marcey each testified at points during their respective depositions that they specifically requested that the broker procure insurance for both the jointly owned optical business and the property individually owned by Blodgett. Although the broker could not fully recall the substance of his conversations with Blodgett and Marcey and although Cesar lost the notes that the broker took during the meeting with Marcey, the broker also testified, during a portion of his deposition that was submitted by Blodgett, that the optical business that was jointly owned by Blodgett and Marcey was responsible for an oversight by not letting Cesar know that Blodgett separately owned the property on which the optical business operated. In light of the conflicting testimony as to whether Blodgett and Marcey informed the broker that Blodgett separately owned the property and thus needed coverage under the requested insurance policy, we conclude that “issues of fact exist as to whether [Blodgett] specifically requested coverage [in his individual capacity as owner of the property] in case of accidental injury and [whether Cesar], being aware of such request, failed to procure the requested coverage” (American Bldg. Supply Corp., 19 NY3d at 736; see Crosby v AJA Turnpike Props., 224 AD3d 538, 539-540 [1st Dept 2024]; Gibraltar Contr., Inc. v P.F. Northeast Brokerage, Inc., 189 AD3d 432, 433 [1st Dept 2020]; Petri Baking Prods., Inc. v Hatch Leonard Naples, Inc., 151 AD3d 1902, 1905 [4th Dept 2017]). The conflict in the evidence submitted by Cesar and Blodgett regarding whether the broker was specifically asked to provide coverage for Blodgett in his individual capacity as owner of the property “raises a question of credibility to be resolved at trial ․, and it is not the function of a court deciding a summary judgment motion to make credibility determinations or findings of fact” (Smith v NGM Ins. Co., 221 AD3d 1450, 1454 [4th Dept 2023] [internal quotation marks omitted]; see Vega v Restani Constr. Corp., 18 NY3d 499, 505 [2012]). Relatedly, we also conclude that “[Cesar's] contention[ ] that [Marcey, on behalf of Blodgett,] failed to timely read and understand the polic[ies] go[es] to comparative negligence, but do[es] not bar the action altogether” and thus does not warrant summary judgment in Cesar's favor (Crosby, 224 AD3d at 540; see American Bldg. Supply Corp., 19 NY3d at 736-737; Gibraltar Contr., Inc., 189 AD3d at 433).

Contrary to Cesar's further contention on its appeal, we agree with Blodgett that there are triable issues of fact with respect to his other theory of liability against Cesar, i.e., that Cesar had an ongoing duty to advise and direct Blodgett to obtain additional coverage even in the absence of a specific request. Even assuming, arguendo, that Cesar met its initial burden with respect to that issue, upon viewing the evidence in the light most favorable to Blodgett as the nonmoving party on Cesar's motion for summary judgment, we conclude that there are “material issue[s] of fact as to the existence of a special relationship” (Voss, 22 NY3d at 735). In particular, the evidence suggests that there was some interaction between Blodgett and Marcey and the broker regarding the question of insuring Blodgett as owner of the property on the policy, and thereafter Blodgett and Marcey relied upon the broker's expertise as an agent of Cesar to effect the same (see Voss, 22 NY3d at 735-736; Lincoln Life & Annuity Co. of N.Y. v Wittmeyer, 211 AD3d 1564, 1570 [4th Dept 2022]; Finch v Steve Cardell Agency, 136 AD3d 1198, 1201-1202 [3d Dept 2016]). Additionally, issues of fact exist whether there was “a course of dealing over an extended period of time which would have put objectively reasonable insurance agents on notice that their advice was being sought and specially relied on” (Voss, 22 NY3d at 735 [internal quotation marks omitted]; see Lincoln Life & Annuity Co. of N.Y., 211 AD3d at 1570). Both before and after the initial policy was put in place for the optical business, Blodgett engaged in a course of dealing with the broker to secure insurance on similarly structured businesses and properties, and yet the underlying policy here, even upon several subsequent forms of renewal, did not insure both the business and the property, despite Blodgett's expectation based on his previous reliance on the broker. We thus conclude that there are issues of fact with respect to Blodgett's special relationship theory of liability against Cesar (see Voss, 22 NY3d at 735-736; Lincoln Life & Annuity Co. of N.Y., 211 AD3d at 1570; Finch, 136 AD3d at 1201-1202).

Finally, for the same reasons, given the issues of fact previously discussed, we conclude that there is no merit to Blodgett's contention on his cross-appeal that he is entitled to summary judgment as a matter of law on the third-party complaint against Cesar.

Entered: July 24, 2026

Ann Dillon Flynn

Clerk of the Court