An appellate court in New York has affirmed a trial court'sdecision dismissing negligence and breach of contract actionsbrought by an insured against its insurance agent, finding that theagent could not be held liable in this Superstorm Sandy case forany negligence or contract breach that may have been committed byhis agency (a corporation).

The Case

Lido Beach Towers, a condominium building in Lido Beach, on theSouth Shore of Long Island, New York, suffered extensive damagefrom Superstorm Sandy. The Towers went to court seeking to recoverdamages for breach of contract, injury to property, and grossnegligence against, among others, Denis A. Miller, individually,and Denis A. Miller Insurance Agency, Inc. ("DMA"). The Towersalleged that the defendants had failed to procure and maintainsufficient flood coverage insurance limits on the building.

Mr. Miller moved for summary judgment dismissing the third causeof action (alleging negligence) and the fourth cause of action(alleging breach of contract). The trial court granted Mr. Miller'smotion, and the Towers appealed.

The Appellate Court's Decision

The appellate court affirmed.

In its decision, the appellate court first explained thatcorporate officers may not be held personally liable on contractsof their corporations, provided that they had not purported to bindthemselves individually under such contracts. The appellate courtadded, however, that corporate officers "may be held personallyliable for torts committed in the performance of their corporateduties."

In this case, the appellate court found, Mr. Miller hadestablished his prima facie entitlementto judgment as a matter of law dismissing the third cause of actionby demonstrating that he had not engaged in any independenttortious conduct with respect to the handling of Towers' insurancepolicy. According to the appellate court, at all relevant times,Mr. Miller "was acting within the course and scope of hisemployment with DMA" and any alleged negligence in failing toadvise the Towers of a change to the coverage provided by itsinsurance policy "was due to a failure on the part of DMA." Theappellate court ruled that the Towers had not raised a triableissue of fact in opposition to Mr. Miller's showing.

The appellate court reached the same conclusion with respect tothe fourth cause of action. It noted that when an agent acted onbehalf of a disclosed principal, the agent would "not be personallyliable for a breach of contract" unless there was "clear andexplicit evidence of the agent's intention to be personally bound."It then decided that Mr. Miller had establishedhis prima facie entitlement to judgmentas a matter of law dismissing this cause of action by demonstratingthat there was "no evidence of his intent to be personally bound."Again, the appellate court found that the Towers had not raised atriable issue of fact.

The case is LidoBeach Towers v. Denis A. Miller Ins. Agency, Inc., No.601220/13 (N.Y. App.Div. 2d Dep't May 27, 2015). Attorneysinvolved include: Wilkofsky, Friedman, Karel & Cummins, NewYork, N.Y. (Mark L. Friedman of counsel), forplaintiffs-appellants; Goldberg Segalla LLP, New York, N.Y. (PeterJ. Biging and Jennifer H. Feldscher of counsel), fordefendant-appellant; Keidel, Weldon & Cunningham, LLP, WhitePlains, N.Y. (Debra M. Krebs of counsel), for respondent.