Federal Court Victory Quickly Dismisses Third-Party Complaint Against Insurance Broker
Colleen M. Murphy of Goldberg Segalla’s Global Insurance Services Practice Group achieved the quick dismissal in the U.S. District Court for the Western District of New York of a third-party complaint against a Washington-based insurance broker client. The victory highlights the firm’s ability to resolve disputes early on, benefiting insurers and agents/brokers alike, and sparing them the cost of prolonged litigation.
In this case, the insured, a Seattle-based manufacturer of prop rock formations, accused our client, an insurance broker also based in Washington state, of failing to acquire additional insurance coverage in relation to a personal injury that occurred to a worker during the construction of an exhibit at the Zoological Gardens in Buffalo, New York. After the worker sued the Zoo and the prop manufacturer, the prop manufacturer’s insurer denied coverage for the defense of the case on the ground that there was no written endorsement naming either the subcontractor or the Zoo as an additional insureds. The manufacturer subsequently filed a third-party complaint in the Western District of New York against its Washington-based insurance broker based on a theory of negligent failure to procure the insurance coverage required by the subcontract.
Drawing upon her experience handling hundreds of similar cases, Colleen was able to quickly diagnose the issues at hand and succeeded in a motion to dismiss the case prior to discovery — at the earliest possible stage. The court agreed with our argument that the broker did not transact business in New York and therefore is not subject to personal jurisdiction under the provisions of New York’s long-arm statute, N.Y.C.P.L.R. §§ 301 and 302, and on October 12, 2011, the court issued its decision dismissing the case against our client.