Maki v. The Travelers Companies, Inc. , 44 N.Y.S.3d 220 ( 2016 )

State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: December 8, 2016 522314
________________________________
FRANK MAKI,
Appellant,
v MEMORANDUM AND ORDER
THE TRAVELERS COMPANIES, INC.,
et al.,
Respondents,
et al.,
Defendant.
________________________________
Calendar Date: October 13, 2016
Before: Garry, J.P., Egan Jr., Rose, Devine and Mulvey, JJ.
__________
Frank Maki, Walton, appellant pro se.
Kenney Shelton Liptak Nowak, LLP, Buffalo (Judith Treger
Shelton of counsel), for The Travelers Companies, Inc. and
others, respondents.
__________
Devine, J.
Appeal from an order of the Supreme Court (Lambert, J.),
entered December 11, 2015 in Delaware County, which, among other
things, granted certain defendants' motion to dismiss the
complaint.
Pursuant to an arrangement in which he agreed to lease his
tractor truck to, and work as an independent contractor for, a
transportation company, plaintiff was obliged to obtain
commercial automobile liability insurance. He accordingly
reached out to defendant Mang Insurance Agency, LLC, a retail
insurance broker, which consulted with defendant LoVullo
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Associates, Inc., an insurance wholesaler. The result was
plaintiff purchasing a policy issued by defendant Northland
Insurance, allegedly a wholly-owned subsidiary of defendant The
Travelers Companies, Inc., for the period August 7, 2008 to
August 7, 2009. Plaintiff was issued proof of insurance so that
he could enter into the lease agreement, but was instructed to
then provide Mang with a complete copy of the lease agreement and
his vehicle registration.
Plaintiff alleges that he provided that documentation to
Mang on August 28, 2008. Mang advised plaintiff that it did not
have a complete copy of the lease agreement, however, and
notified him in writing that he must provide the full
documentation by September 18, 2008 "in order for [his] coverage
to remain in force." Northland then gave written notice to
plaintiff, as required by the insurance contract, that it
intended to cancel the policy as of October 11, 2008. Plaintiff
alleges that the missing pages of the lease agreement were
provided to Mang prior to that date but that, despite assurances
from employees of Mang that the problem had been resolved,
Northland proceeded with the promised cancellation. In December
2008, plaintiff was involved in a motor vehicle accident that
left him injured and his tractor truck damaged (see Maki v
Bassett Healthcare, 141 AD3d 979, 979-980 [2016]). Plaintiff
then attempted to make an insurance claim, at which point he
learned that the policy had been canceled.
Plaintiff commenced this action in September 2014,
asserting claims for breach of contract and fraud against
Travelers, Northland, LoVullo and Mang, as well as certain
individuals employed by those entities.1 A motion to dismiss the
complaint in part was filed by Travelers, Northland and LoVullo,
as well as individuals who worked for one or more of those
entities, defendants William Halpin, Dawn Varga and Michelle
Meschke (hereinafter collectively referred to as the individual
defendants). The motion sought dismissal of the fraud claim
1
Upon a motion by Mang and its defendant employees,
Supreme Court dismissed the complaint insofar as it was asserted
against Mang's employees.
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against Northland and the complaint in its entirety against
Travelers, LoVullo and the individual defendants. Plaintiff
cross-moved for summary judgment on his breach of contract claim
against Northland – despite the fact that Northland had not yet
served an answer – and to substitute Travelers Indemnity Company
as a party defendant in the place of Travelers. Supreme Court
granted the motion and denied the cross motion, and plaintiff now
appeals.
In considering a "pre-answer motion[] to dismiss the
complaint for failure to state a cause of action, we must give
the pleadings a liberal construction, accept the allegations as
true and accord the plaintiff[] every possible favorable
inference" (Chanko v American Broadcasting Cos. Inc., 27 NY3d 46,
52 [2016]; see Loch Sheldrake Beach & Tennis Inc. v Akulich, 141
AD3d 809, 814 [2016]). Any affidavits submitted by plaintiff may
be used to cure any deficiencies in the pleadings (see Chanko v
American Broadcasting Cos. Inc., 27 NY3d at 52), but the
"affidavit" submitted by plaintiff in support of his cross motion
is unsworn and of no probative value (see CPLR 3211 [c]; 3212
[b]; Enos v Werlatone, Inc., 68 AD3d 713, 714 [2009]). After
considering the allegations in the complaint, we affirm.
Dealing first with the claims against the individual
defendants, "[a] review of the record fails to reveal any factual
allegations that [they] acted either outside the scope of their
employment or for personal profit" in a manner that would open
them to personal liability (Freyne v Xerox Corp., 98 AD2d 965,
965 [1983]; see American-European Art Assoc. v Trend Galleries,
227 AD2d 170, 171-172 [1996]). Plaintiff instead takes issue
with the individual defendants because they performed their work
duties in acting upon the representations of Mang that plaintiff
had not provided complete copies of the needed documents.
Supreme Court therefore correctly dismissed the complaint against
them (see Lewiarz v Travco Ins. Co., 82 AD3d 1464, 1468 [2011];
Freyne v Xerox Corp., 98 AD2d at 965).
Turning to the breach of contract claims against Travelers
and LoVullo, neither had a contractual relationship with
plaintiff, as Northland was the corporate entity that issued the
insurance policy at issue. Plaintiff gave no reason to believe
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that LoVullo, an insurance wholesaler with which he had no direct
dealings, could be held liable for a breach in the terms of an
insurance policy issued to him by Northland (see e.g. Gauert v
Chris-Leef General Agency, Inc., 123 S.W.3d 270, 273-274 [Mo Ct App
2003]). As for Travelers, plaintiff alleges that Northland is
its "wholly owned subsidiary," but "[a] parent corporation may
not be held liable for the contracts [and other acts] of its
subsidiary solely because of stock ownership" (A.W. Fiur Co. v
Ataka & Co., 71 AD2d 370, 374 [1979]). The exception is where
"[a] subsidiary corporation over which a parent corporation
exercises control in everyday operations may be deemed an
instrumentality or agent of the parent, and '[t]he determinative
factor is whether the subsidiary corporation is a dummy for the
parent corporation'" (Pritchard Servs. [NY] v First Winthrop
Props., 172 AD2d 394, 395 [1991], quoting A.W. Fiur Co. v Ataka &
Co., 71 AD2d at 374). Plaintiff failed to make any specific
allegations of that sort in the complaint. As such, Supreme
Court was right to dismiss the breach of contract claims against
Travelers and LoVullo.
Our review of the complaint also reveals that the fraud
claims against Northland, Travelers and LoVullo were properly
dismissed. The complaint asserts that Meng committed fraud by
not turning over a complete copy of the lease agreement, with
defendants limited to "aid[ing] and abett[ing]" that fraud. The
alleged fraud committed by Northland, Travelers and LoVullo,
however, amounted to acting upon the purported misrepresentations
made by Mang as to what documents had been provided by plaintiff
instead of ferreting out any misdeeds on their own initiative.
Inasmuch as that thin gruel does not constitute a sufficient
allegation "that [those] defendants were aware of a fraud and
intended to aid in the commission of the fraud," the fraud claims
against them fail (Agostini v Sobol, 304 AD2d 395, 396 [2003];
see National Westminster Bank v Weksel, 124 AD2d 144, 147-148
[1987], lv denied 70 NY2d 604 [1987]).
We have examined the remaining issues raised by the parties
and found them to be without merit.
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Garry, J.P., Egan Jr., Rose and Mulvey, JJ., concur.
ORDERED that the order is affirmed, without costs.
ENTER:
Robert D. Mayberger
Clerk of the Court