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Murphy v. Kuhn

Court of Appeals of New York

June 4, 1997, Argued ; June 27, 1997, Decided

No. 138


 [*268]   [**973]   [***372]  Bellacosa, J.

The question for this case is whether an insurance agent should be liable to a former customer for tortious misrepresentation and breach of implied contract. The alleged wrongdoing is a failure of the defendant insurance agent to advise plaintiff Thomas Murphy as to possible additional insurance coverage needs. The theory of the lawsuit and the asserted duty is a special relationship and special level of advisory responsibility.

The Appellate Division affirmed an order of Supreme Court, which granted defendants' motion for summary judgment and dismissed the complaint. Plaintiffs appeal pursuant to leave granted by this Court. We affirm the order of the Appellate Division because no special relationship was established on this record.

Plaintiffs Thomas Murphy [****5]  and Webster Golf Course, Inc. sued defendants Donald C. Kuhn, Kuhn & Pedulla Agency, Inc., and its predecessor Roman A. Kuhn Agency, alleging professional negligence and breach of implied contract. This dispute originates in a 1991 automobile accident in Florida involving Murphy's son. One person died and several others suffered serious injuries as a result of the accident. At that time, the title to the son's car was in his father's name and the personal insurance was placed under the commercial automobile policy covering Murphy's business, Webster Golf Course, Inc. After exhausting the $ 500,000 policy limit to settle the car  [*269]  accident claims, Thomas Murphy assertedly paid an additional $ 194,429.50 plus $ 7,500 in attorneys' fees. Then, he sued these defendants to recover the additional sums he had to pay personally.

Defendants began providing the property, casualty and liability insurance to plaintiffs in 1973 in connection with their golf business. Beginning in 1977, defendant Donald Kuhn also handled all of Murphy's personal insurance needs, providing him with both homeowners insurance and personal automobile coverage. In 1979, plaintiff Thomas Murphy and [****6]  his partner, Edward Rieflin, completed their purchase of the Happy Acres Golf Course and formed Webster Golf Course, Inc. Happy Acres had been a client of the Roman A. Kuhn Agency since 1957.

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90 N.Y.2d 266 *; 682 N.E.2d 972 **; 660 N.Y.S.2d 371 ***; 1997 N.Y. LEXIS 1385 ****

Thomas Murphy et al., Appellants, v. Donald C. Kuhn et al., Respondents.

Prior History:  [****1]   Appeal, by permission of the Court of Appeals, from an order of the Appellate Division of the Supreme Court in the Fourth Judicial Department, entered September 27, 1996, which affirmed an order of the Supreme Court (Robert J. Lunn, J.), entered in Monroe County, granting a motion by defendants for summary judgment and dismissing the complaint.

 Murphy v Kuhn, 231 AD2d 865, affirmed.

Disposition: Order affirmed, with costs.


special relationship, insurance agent, coverage, advise, golf course, customer, limitation of liability, additional coverage, misrepresentation, insureds, brokers, parties

Insurance Law, Contract Formation, Torts, Fraud & Misrepresentation, Negligent Misrepresentation, Elements, General Overview, Claim, Contract & Practice Issues, Premiums, Agent & Broker Premiums, Fiduciary Responsibilities, Liability & Performance Standards, Notice to Insurers, Reasonableness, Insurance Company Operations, Company Representatives, Agents