Petrosky v. Brasner , 718 N.Y.S.2d 340 ( 2001 )

OPINION OF THE COURT

Lerner, J.

The instant action is one of first impression in New York. At issue is whether an insurance carrier and its agents have a duty to disclose to a prospective insured medical conditions discovered during a pre-insurance physical examination.

On February 3, 1997, decedent Frank Petrosky filed an application for life insurance with defendant agent Steven Brasner (hereinafter Brasner) of Fabricant & Fabricant (hereinafter Fabricant). On February 11, 1997 technician John Jensen (hereinafter Jensen), an employee of Examination Management Services, Inc. (hereinafter EMSI), drew blood and urine, took a blood pressure reading and performed an electrocardiogram (hereinafter EKG) at the direction of The United States Life Insurance Company (hereinafter U.S. Life) as part of its application process. In the course of performing these tests necessary for U.S. Life’s determination as to whether Mr. Petrosky qualified for a life insurance policy, Jensen specifically advised Petrosky that the tests were not for the purpose of treatment or evaluation by Jensen. At U.S. Life’s further direction, Jensen forwarded the specimens to an independent laboratory for evaluation, and the EKG tape and questionnaire, filled out during the testing, to U.S. Life for evaluation by their underwriters. Although during the application process, Petrosky had asserted he was a non-smoker, the laboratory results revealed abnormal cholesterol blood levels as well as nicotine in the urine, from which U.S. Life concluded that Petrosky had materially- misrepresented his condition. U.S. Life therefore determined that Petrosky’s application would be rejected, but decided to offer him an alternative “tobacco users” policy at a lower face value and shorter term, which alternative was communicated to insurance agent Brasner of the brokerage firm of Fabricant & Fabricant. Although the EKG results were abnormal, this may or may not have been one of the bases on which the original application was denied by U.S. Life. There were phone messages exchanged between Petrosky and Brasner, but there was no communication to Petrosky as to the reason for offering an alternative policy. No premium was paid triggering an effective date of a policy, and no policy was in effect when Mr. Petrosky died.

Frank Petrosky died suddenly on April 11, 1997 from a myocardial infarction, brought on by a cardiac tamponade, after which an autopsy revealed severe and extensive atherosclerotic disease. Plaintiff, Mrs. Barbara Petrosky, was thereafter advised that there was no U.S. Life Insurance coverage in effect for her husband’s death.

Mrs. Petrosky brought two lawsuits. The first action against U.S. Life, Brasner and Fabricant alleged breach of contract in failing to timely process the original application or offer an alternative policy. That suit was dismissed as to U.S. Life, although Brasner’s and Fabricant’s cross motions for summary judgment were denied.

The instant action alleges that defendants were negligent in failing to disclose to decedent the results of his physical examination, namely the EKG results which revealed heart abnormalities. Defendants each moved to dismiss on the ground that they had no duty to obtain and no duty to reveal the results of the EKG. Jensen, EMSI, Brasner and Fabricant contended that they never possessed any knowledge of the test results. The IAS Court agreed, rejecting plaintiff’s argument that the defendants’ failure to disclose was tantamount to misrepresentation, and refused to extend the duty of care owed by employer to employee to Petrosky’s relationship with defendants, whose function it was to determine Petrosky’s insurability and perhaps sell an insurance policy. The IAS Court also reasoned that dismissal was warranted, insofar as plaintiff had failed to establish that Petrosky was a third-party beneficiary of the contract between EMSI and U.S. Life, so that therefore no duty was owed to Petrosky.

It is well settled that a duty of reasonable care owed by defendant to a plaintiff is elemental to any recovery in negligence (see, e.g., Pulka v Edelman, 40 NY2d 781, 782; Palsgraf v Long Is. R. R. Co., 248 NY 339, 344). Foreseeability of injury does not determine the existence of duty (Strauss v Belle Realty Co., 65 NY2d 399, 402). Unlike foreseeability and causation, both generally factual issues to be resolved on a case-by-case basis by the fact finder, the duty owed by one member of society to another is a legal issue for the courts (De Angelis v Lutheran Med. Ctr., 58 NY2d 1053, 1055).

The complaint, alleging that defendants, insurers and their agents, were under a duty to disclose to a prospective insured medical conditions discovered during a pre-insurance physical examination, was properly dismissed since, ordinarily, there is no such duty. Plaintiff acknowledges that no such duty exists and asks the Court to assume the role of the Legislature in creating such an obligation. This is neither our function nor mission. Without the existence of a duty, the action cannot stand.

While liability might have been imposed upon defendants if they had affirmatively misled the prospective insured or foreseeably induced him to forgo otherwise necessary treatment (see, Eiseman v State of New York, 70 NY2d 175, 187), we perceive no factual basis for such theories in this case. Petrosky was not examined by a physician. He was specifically advised that the tests were administered in the routine course of the application process and not for purposes of treatment. There is no indication that he relied on U.S. Life for anything other than approval for life insurance. Nothing in the nature of Petrosky’s relationship with this defendant could give rise to a reasonable reliance on it for health information despite the apparent abnormal EKG, the precise nature of which is not revealed. Indeed, U.S. Life certainly would not have offered an alternative “tobacco users” policy had it known that Petrosky had a life-threatening medical condition. Further, Petrosky could not rely on Jensen or EMSI for health information since the examination was for the sole purpose of aiding U.S. Life in determining Petrosky’s insurability.

We note, finally, that contrary to plaintiff’s argument, the broad duty of disclosure alleged did not arise by virtue of Insurance Law § 2611 (c), which applies only to the discovery of HIV-related tests. Had the Legislature intended to extend the duty to the within circumstances, it would have expressly done so.

Accordingly, the order of the Supreme Court, New York County (Jane Solomon, J.), entered on or about August 19, 1999, which, inter alia, granted defendants’ motion and cross motions for summary judgment dismissing the complaint, should be affirmed, without costs.