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GLOBALNET FINANCIAL COM v. FRANK CRYSTAL & CO.

United States District Court, S.D. New York


July 22, 2004.

GLOBALNET FINANCIAL COM, INC., Plaintiff,
v.
FRANK CRYSTAL & CO., INC. and A.I. CREDIT CORP., Defendants.

The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge

OPINION

Defendant Frank Crystal & Co., Inc. ("Crystal") has moved pursuant to Federal Rule of Civil Procedure 56 for summary judgment, and/or Rule 12(c) for judgment on the pleadings dismissing the complaint of Globalnet Financial.com, Inc. ("Globalnet") alleging breach of contract, breach of fiduciary duty, and negligence on the part of Crystal as the insurance broker for Globalnet. Globalnet has cross-moved for partial summary judgment against Crystal. For the reasons set forth below, Crystal's motion is granted and Globalnet's motion is denied.

  Prior Proceedings

  This diversity action was initiated by the filing of Globalnet's complaint on January 31, 2003 in which it alleged that Crystal, its insurance broker, breached its contract duties, its fiduciary duty and was negligent in its performance, all arising out of the failure of Crystal to notify Globalnet that its directors and officers liability policy was to be cancelled for premium payment failure.

  Discovery proceeded and Crystal moved for summary judgment on February 4, 2004, and Globalnet cross-moved for partial summary judgment on March 4, 2004. Both motions were heard and marked fully submitted on March 24, 2004. Parties

  At all relevant times, Globalnet was in the business of providing on-line news and financial information to private investors around Europe and the United States, and providing on-line trading facilities.

  Crystal is a commercial insurance broker incorporated and headquartered in New York. Crystal is also licensed in the State of New York. Crystal also has offices in various locations in the United States, including two in Florida.

  The Facts

  The facts are set forth in the Local Rule 56.1 Statements of the parties and affidavits and deposition evidence and are undisputed except as noted below.

  Globalnet is a Delaware company and had an office in Boca Raton, Florida at the time the relationship with Crystal began. Globalnet was acquired by London-based investor/shareholder NewSparkMedia in a tender offer that was finally completed in or about the fall of 2001.

  Crystal as an insurance broker arranged for Globalnet to purchase directors and officers ("D&O") liability coverage for the period December 36, 1999 to December 30, 2001. The primary policy was issued by National Union Fire Insurance Company of PA ("National Union"), an excess D&O policy was issued by Lloyd's of London, and a second excess D&O policy was issued by Federal Insurance Company. Crystal also arranged for the financing of the payment of premiums by AI Credit Group Corp. ("AICCO"), an affiliated and member of American International Group, through an agreement between AICCO and Globalnet.

  Until about the summer of 2000, the premium payments on Globalnet's D&O insurance, coverage were handled out of the Globalnet Florida office, after which responsibility for the financial affairs of Globalnet shifted from Florida to London.

  In or about August 2001, AICCO sent a September 2001 Premium Finance Statement, which was dated August 1, 2001, to Globalnet at its 7284 West Palmetto Park Road, Boca Raton, Florida office which was returned. Globalnet had closed and vacated that address in late June or early July 2001. The envelope also contained a new address for Globalnet — 225 N.E. Mizner Boulevard, Boca Raton, Florida (the "Mizner address"). AICCO corrected its records for Globalnet's new address and resent the September statement to the Mizner address.

  On or about October 10, 2001, AICCO sent an Intent to cancel notice to Globalnet, indicating that Globalnet's D&O coverage would be cancelled effective October 22, 2001 for nonpayment of premiums if a premium of $25,052.73 plus a late fee of $1,252,64 was not paid. On or about October 22, 2001, AICCO mailed a cancellation notice to Globalnet informing it that its D&O policies would be canceled effective October 22, 2001 based upon Globalnet's failure to pay its premiums. Both the Intent to Cancel notice and the cancellation notice were mailed to the Mizner address.

  The Mizner address was occupied by a company called International Capital Growth ("ICG"), which was a spin-off from Globalnet prior to the completion of the tender offer, in approximately July or August 2001. Peter Wallis ("Wallis"), the associate general counsel for Globalnet, instructed the Boca Raton Post Office to forward all mail addressed to Globalnet at 7284 West Palmetto Park Road to the Mizner address. When shown the envelope which was returned to AICCO with the "Return to Sender" stamp and the Mizner address, Wallis testified that the Post Office was doing "exactly what I wanted it to do." Wallis Deposition at 97.

  According to Globalnet, "[m]ail intended for Globalnet was generally supposed to be forwarded to London," Globalnet Rule 56.1 Counter-statement of Material Facts at ¶ 22. Further, it was the "custom and practice" of someone at the Mizner address to forward mail addressed to Globalnet to someone in London. Deposition of Monique McClaren, at 81-82. However, the Intent to Cancel notice and the cancellation notice which were sent to the Mizner address were never received by the London office of Globalnet. Consequently, Globalnet did not become aware of either the cancellation or the missed premium payments which led to the cancellation until late February 2002.

  Crystal also received the notice of Intent to Cancel and the cancellation notice in October 2001 and received telephone calls from AICCO concerning the cancellation.

  The D&O policy was canceled on October 22, 2001 and could be reinstated only by the various insurance carriers, including National Union.

  On April 16, 2002, coverage counsel to National Union by letter to Globalnet reserved certain rights relating to the policy and on May 22, 2002 disclaimed coverage for three separate claims on the grounds of nonpayment of premium and other grounds as well.

  Choice of Law

  A federal district court sitting in diversity jurisdiction must apply the choice of law analysis of the forum state. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020 (1941); Gilbert v. Seton Hall University, 332 F.3d 105, 109 (2d Cir. 2003). The New York Court of Appeals has held that "[t]he first step in any case presenting a potential choice of law issue is to determine whether there is an actual conflict between the laws of the jurisdictions involved." Matter of Allstate Ins. Co., (Stolarz), 81 N.Y.2d 219, 223, 597 N.Y.S.2d 904 (1993); see also Zurich Insurance v. Shearson Lehman & Hutton, 84 N.Y.2d 309, 618 N.Y.S.2d 609 (1994).

  Globalnet has alleged three causes of action against Crystal for professional negligence, breach of fiduciary duty, and breach of contract arising from Crystal's alleged failure to notify Globalnet of AICCO's mailing a notice of intent to cancel and a notice of cancellation to Globalnet for nonpayment of premium regarding the policy.

  Globalnet contends that Florida law governs its complaint against Crystal. Under Florida law, according to Globalnet, a broker is in a fiduciary relationship with an insured, and may be held liable in theories of contract and in tort for violations of this fiduciary duty. See, e.g., Moss v. Appel, 718 So.2d 199, 201 (Fla. Dist. Ct. App. 1998); Nu-Air Manufacturing Company v. Frank B. Hall & Co. of New York, 822 F.2d 987, 997 (11th Cir. 1987), without the requirement that the insured demonstrate the existence of a course of dealing between the client and broker more extensive than an arm's length relationship, or a showing that the insured has made requests for specific services or coverages. See, e.g., Warehouse Foods Inc. v. Corporate Risk Management Services, 530 So.2d 422, 424 (Fla. Dist. Ct. App. 1988); Moss v. Appel, 718 So.2d at 201.

  Under New York substantive law, according to Crystal, it is entitled to a dismissal of Globalnet's complaint since a broker is not in a special relationship with an insured such that it owes the insured more than the common-law duty to procure the insurance coverage that the insured requests, Murphy v. Kuhn, 90 N.Y.2d 266 (1997), and Crystal contends that the instant record demonstrates no such special relationship.

  A. Contract Claims

  The New York Court of Appeals has held that in contraot cases, the "center of gravity" or "grouping of contacts" analysis as to be applied in choice of law situations. Matter of Allstate Ins. Co. (Stolarz), 81 N.Y.2d 219, 226, 597 N.Y.S.2d 904, 613 N.E.2d 936 (1993); Application of Travelers Indemnity Company, 195 A.D. 2d 35, 38-39, 606 N.Y.S.2d 167 (1st Dep't 1993). The "center of gravity" or "grouping of contacts" choice of law theory allows a court to consider a "spectrum of significant contacts," beyond the prior standard of the law of the place where the contract was made or was to be performed. Matter of Allstate (Stolarz), 81 N.Y.2d at 225-26. In Stolarz, the New York Court of Appeals listed several factors which should be considered in a conflict of law analysis in a contract case. These include the place of contracting, negotiation and performance; the location of the subject matter of the contract; and the domicile of the contracting parties." 81 N.Y.2d at 227 (citing Restatement (Second) of Conflict of Laws, § 188(2)).

  In conflict of law analyses in insurance litigation, "New York courts have looked principally to the following facts: location of the insured risk; the insured's principal place of business; where the policy was issued and delivered; the location of the broker or agent placing the policy; where the premiums were paid; and the insured's place of business." Olin Corp. v. Insurance Co. of North America, 743 F. Supp. 1044, 1049 (S.D.N.Y. 1991), aff'd, 966 F.2d 718 (2d Cir. 1992). Where the insured's interests include a "wide geographical range," New York courts have applied the law of the state where the policies were executed, issued and brokered, and where the insured had their principal place of business. See Avondale Industries, Inc. v. Travelers Indemnity Co., 774 F. Supp. 1416, 1422-23 (S.D.N.Y. 1991); Olin, 743 F. Supp. at 1049.

  Globalnet's causes of action for breach of contract and for breach of fiduciary duty are contractual in nature, and are therefore subject to the grouping of contacts choice of law analysis. Globalnet's complaint alleges that it is a Delaware corporation with its principal place of business in London, England Crystal is a New York corporation, that resided in and maintains its principal place of business in New York. The D&O liability policies obtained by Crystal for Globalnet were "brokered" in New York. The primary policy was issued by National Union Fire Insurance Company of PA, whose address on the Schedule of Policies Addendum to the AICCO-Globalnet Premium Finance Agreement, and on the Notice of Acceptance is listed as 175 Water Street, New York, New York. The Premium Finance Agreement between Globalnet and AICCO was executed in New York. Premium invoices were sent to Globalnet by AICCO, and the premium payments were sent by Globalnet to AICCO in Dallas, Texas.

  In Avondale Industries, it was held that New York law applied because the policies at issue were signed in New York, were "brokered by New York brokers" and covered Delaware corporations who had operations and insured interests in a wide range of locations. 774 F. Supp. at 1423. Likewise, in Olin, despite the fact that the risks covered were not confined to one location, balancing factors dictated that New York law applied, despite the fact that the insured had moved its office to Connecticut. 743 F. Supp. at 1049; see also International School Services, Inc. v. Northwestern National Insurance Co., 710 F. Supp. 86, 88-89 (S.D.N.Y. 1989); American Re-Insurance Co. v. Universal Builders Supply, Inc., 141 Misc.2d 375, 378-79. 522 N.Y.S.2d 712 (Sup.Ct. N.Y. Co. 1988) (New York law applicable where policy procured through New York agent, policy issued in New York and risk not limited to Massachusetts location). The language of the Policy provides coverage for "liability for any wrongful acts of the individual defendants in their capacity as directors and officers . . .," without limitation to one location. Because the risks covered by Globalnet's policy are not limited to one state, following Avondale Industries, the law of the state where the policies were executed, issued and brokered will be applied to the contract claims.

  Globalnet has contended that the present litigation does not involve an insurance dispute. However, Globalnet's D&O carrier issued both a reservation of rights letter and a disclaimer to Globalnet. Therefore, the scope of the insurance coverage is at issue here, and the application of the "grouping of contacts" test under New York law' is appropriate.

  B. Tort Actions

  The New York Court of Appeals has held that "the relevant analytical approach to choice of law in tort actions in New York" is the "interest analysis." Schultz v. Boy Scouts of America, Inc., 65 N.Y.2d 189, 197, 491 N.Y.S.2d 90 (1985). The New York Court of Appeals defined "interest analysis" as requiring that "the law of the jurisdiction having the greatest interest in the litigation will be applied and . . . the [only] facts or contracts which obtain significance in defining State interests are those which relate to the purpose of the particular law in conflict." Id. (quoting Miller v. Miller, 22 N.Y.2d 15, 16, 290 N.Y.S.2d 734 (1968)). "Under this formulation, significant contacts are almost exclusively, the parties' domiciles and locus of the tort . . ." 65 N.Y.2d at 197.

  Under the interest analysis test, torts are divided into two types,

those involving "the appropriate standards of conduct, rules of the road, for example" and those that relate to "allocating loses that result from admittedly tortious conduct . . . such as those limiting damages in wrongful death actions, vicarious liability rules, or immunities from suit."
Mascarella v. Brown, 813 F. Supp. 1015, 1019 (S.D.N.Y. 1993) (quoting Schultz v. Boy Scouts of America, 65 N.Y.2d at 198). New York has a greater interest than Florida in this litigation involving a tort that occurred here and in regulating the conduct of brokers, insurance agents, premium finance companies and insurers licensed within the state. "If conflicting conduct-regulating laws are at issue, the law of the jurisdiction where the tort allegedly occurred will generally apply because that jurisdiction has the greatest interest in regulating behavior within its orders." Cooney v. Osgood Machinery, Inc., 81 N.Y.2d 66, 72, 595 N.Y.S.2d 919 (1993); Northwestern Mutual Life Ins. Co. v. Wender, 40 F. Supp. 62, 66 (S.D.N.Y. 1996). Globalnet's cause of action for negligence alleges Crystal's failure to act in notifying Globalnet of the notice of intent to cancel and the notice of cancellation of the D&O liability policies, as well as Crystal's failure to obtain change of address endorsements for Globalnet. See, e.g., Northwestern Mutual, 940 F. Supp. at 66 (insurer's failure to honor claim interpreted as a conduct-regulating tort for choice of law test). As a conduct-regulating tort, the site of the tort is the controlling factor in the choice of law analysis. Crystal, a New York broker, failed to advise Globalnet of the notice of intent to cancel and notice of cancellation, a failure occurring in New York. Globalnet's professional negligence cause of action is therefore subject to the substantive law of New York.

  Gebhardt v. Allspect, Inc., 177 F. Supp.2d 267 (S.D.N.Y. 2001), relied upon by Globalnet, does not support its argument that Florida law should apply to the instant matter. Gebhardt involved a case where the grouping of contacts test was applied to an insured's third-party complaint asserting a cause of action against the broker for negligence, and a cause of action against the insurer for breach of contract. Second, under the application of New York's grouping of contact tests, the Gebhardt court considered such factors as the location of the insured risk, the residence of the parties, and where the contract was issued and negotiated — again the same quantitative factors considered in breach of contract — grouping of contacts analyses in insurance coverage disputes.

  In Gebhardt, the choice of law was not between New Jersey and California. As the Gebhardt court stated, "the instant action involves the interests of a number of states." 177 F. Supp.2d at 273. In fact, characteristics of four states were considered, including Florida, California, New York, and New Jersey. Instead of relying on any one factor, the court merely concluded that "although there are a number of states with an interest in this litigation, we find that New Jersey has the most significant contacts with disputed matters in the third-party complaint." Id.

  Summary Judgment Standards

  Summary judgment is granted only if there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 1986); Silver v. City Univ., 947 F.2d 1021, 1022 (2d Cir. 1991). see generally 11 James Wm. Moore, et al., Moore's Federal Practices § 56.11 (3d ed. 1997 & Supp. 2004). The court will not try issues of fact on a motion for summary judgment, but, rather, will determine "whether the evidence presents a sufficient disagreement to require submission to a factfinder] or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).

  "The party seeking summary judgment bears the burden of establishing that no genuine issue of material fact exists and that the undisputed facts establish her right to judgment as a matter of law." Rodriguez v. City of New York, 72 F.3d 1051, 1060-61 (2d Cir. 1995). In determining whether a genuine issue of material fact exists, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Gibbs-Alfano v. Burton, 281 F.3d 12, 18 (2d Cir. 2002). Thus, "[s]ummary judgment may be granted if, upon reviewing the evidence in the light most favorable to the non-movant, the court determines that there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law." Richardson v. Selsky, 5 F.3d 616, 621 (2d Cir. 1993).

  A material fact is one that would "affect the outcome of the suit under the governing law," and a dispute about a genuine issue of material fact occurs if the evidence is such that "a reasonable [factfinder] could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248; R.B. Ventures, Ltd. v. Shane, 112 F.3d 54, 57 (2d Cir. 1997). The Court is "to grant summary judgment where the nonmovant's evidence is merely colorable, conclusory, speculative or not significantly probative." Schwimmer v. Kaladjian, 988 F. Supp. 631, 638 (S.D.N.Y. 1997) (citing Anderson, 477 U.S. at 249-50).

  Globalnet Has Failed to State A Claim Against Crystal

  To defeat Globalnet's claims, Crystal relies on Murphy v. Kuhn, 90 N.Y.2d 266, 660 N.Y.S.2d 371 (1997). Murphy held that "insurance agents or brokers are not personal or financial counselors and risk managers, approaching guarantor status. . . . Insureds are in a better position to know their personal assets and abilities to protect themselves more so than general insurance agents or brokers, unless the latter are informed and asked to advise and act . . ." Id. at 273; see also Fredlund v. Nationwide Mutual Fire Ins. Co., 00-CV-1080E(M), 2000 WL 1773473, at *4 (W.D.N.Y. Nov. 30, 2000). Accordingly,

the insureds are the final decisionmakers in such risk management determinations. . . . The insurance agent-insured relationship is not a generally recognized professional relationship in which continuing obligations to advise might exist but, rather, is an ordinary commercial relationship which does not usually give rise to a duty to provide such ongoing guidance. Thus, an insurance agent's duty to its customer is generally defined by the nature of the customer's request for coverage.
M & E Manufacturing Company, Inc. v. Frank H. Reis, Inc., 258 A.D.2d at 9, 11 (2d Dep't 1999) (internal quotations and citations omitted). In Murphy, the Court of Appeals did not entirely preclude a finding of certain "high level" exceptional circumstances which might warrant the imposition of liability upon an insurance broker for breach of a continuing duty to advise. See Murphy, 96 N.Y.2d at 271. However, the Appellate Division, First Department has noted that "no court in this State has applied this special relationship analysis to add such continuing advisement duties to the agent-insured relationship." M & E Manufacturing, 258 A.D.2d at 12; see also Ambrosio v. Exchange Ins. Co., 258 A.D.2d 627, 627-28 (3d Dep't 1999). The First Department has also recently ruled that no claim for "professional malpractice" may be asserted against insurance brokers as they are not "professionals." Manes Organization, Inc. v. Meadowbrook Richman, Inc., 2 A.D.3d 292, 293, 770 N.Y.S.2d 27 (1st Dep't 2003).

  Globalnet argues conversely that while a broker may have no continuing duty to advise or direct its client about future needs, there is precedent in New York for the proposition that a broker has a duty to inform its client of an impending cancellation of the coverage which it obtained.

  In Erica Trading Corp. v. Nathan Butwin Co., Inc., 420 N.Y.S.2d 87, 100 Misc.2d 830 (N.Y.Sup.Ct. N.Y. Co. 1979), a client sued its insurance broker for defense costs and indemnification of a product liability action that the client claimed should have been covered. The claim against the broker was that it either improperly canceled the policy, or failed to notify the client of the cancellation. The court denied the broker's motion to dismiss for failure to state a cause of action, holding that the broker could be liable if the client could prove that the broker failed to properly maintain the policy or notify the client of its cancellation.

 

Assuming, as alleged, that the defendant failed to properly maintain the policy or notify the plaintiff of its cancellation, the defendant would be liable to provide for plaintiff's defense in the New Jersey action and to indemnify him for any judgment which would have been covered by the policy. Thus, the defendant bears the same liability as the insurer would bear had the policy been in force. Joseph, Inc. v. Alberti, Carleton & Co., Inc., 225 A.D. 115, 232, N.Y.S. 168, aff'd, 251 N.Y. 580, 168 N.E. 434 [1st Dep't 1928]; 16 Appelman, Insurance Law and Practice, Sections 8841, 8844.
Erica Trading, 420 N.Y.S.2d at 89. The appelman insurance treatise cited with approval by the court in Erica Trading similarly states that "[w]here the broker failed to notify the insured of a cancellation of the policy, he may be held liable for the loss of the property." 16 Appelman, Insurance Law and Practice § 8844 1979 Supp., p. 230).

  Erica Trading is distinguishable, however, because while crystal did not notify Globalnet of the cancellation, Crystal was not the cause of the cancellation. Further, and more importantly, notice of intent to cancel the D&O policies, as well an actual cancellation notice, were sent to Globalnet at the address that Globalnet had requested it be sent to, namely the Mizner address. Globalnet acknowledges that because of the confusion surrounding the completion of the tender offer, Globalnet "inadvertently . . . missed premium payments" on its D&O coverage. Affidavit of Charles Berry, ¶ 4.

  In a 1925 case from the First Department, the plaintiff brought a claim against his insurance broker, alleging that the broker was liable for damages sustained from a fire because the plaintiff's fire insurance was canceled and the "defendant did not transmit this notice to plaintiff." Holskin v. Hurwitz, 211 A.D. 731, 731, 208 N.Y.S. 38 (1st Dep't 1925). Although later in the opinion the court found that the complaint did not show that the policy was lawfully canceled, it first dismissed the claim against the broker because

 

The terms of the policy were always within the knowledge of the plaintiff, and if he failed to remember that the policy expired at a certain time before the fire, it was his own negligence, and not defendant's, which prevented plaintiff from renewing his policy.
Id. at 733. The instant case involves not the expiration of a policy but the failure to pay a premium.*fn1 However, the logic of the Holskin decision applies, if anything, more strongly to the present circumstances, because both notices were sent to Globalnet indicating that cancellation was imminent or had just occurred, and thus the information regarding cancellation was within the knowledge of Globalnet even if, through inadvertence, it was not brought to the attention of the employees responsible for payment.

  In another similar case against insurance brokers who were allegedly negligent for failing to advise the plaintiff insured that its fire insurance policies had been canceled, the First Department vacated a jury verdict and ordered a new trial, holding that

a recovery based on negligence must necessarily rest on a showing that plaintiff did not know of these cancellations; that defendants negligently failed to communicate their knowledge of the cancellations to plaintiff; and the fact plaintiff did not obtain other insurance was the product of such failure of communication without any concurring negligence by plaintiff.
Kamen Soap Products Co., Inc. v. Prusansky & Prusansky, Inc., 5 A.D.2d 620, 623, 173 N.Y.S.2d 706 (1st Dep't 1958).*fn2 Despite their age, neither Kamen Soap nor Holskin have been overruled, explicitly or otherwise, by subsequent, cases, including Murphy and Erica Trading. In fact, Crystal has submitted three unpublished opinions from the New York Supreme Court in Suffolk, Queens and Nassau Counties in which it has been held there is "no authority for imposing the duty to advise the insured that his policy has been canceled for non-payment when the insurance company has already sent such notice." Makawi v. Commercial Union Ins. Co., Ind. No. 7938/94 (N.Y.Sup.Ct. Queens Co. Mar. 23, 1998), slip op. at 2. Two of the opinions cite to Murphy for this proposition. See Vitrano v. Simon Cohen-Levin Co., Inc., Ind. No. 1704/02 (N.Y.Sup.Ct. Nassau Co. May 21, 2002), slip op. at 2 ("Cancellation due to non-payment of premiums does not impose any duty upon the broker."); Haddadin v. Troy Savings Bank, Ind. No. 95/19120 (N.Y.Sup.Ct. Suffolk Co. Mar. 2, 1998), slip op. at 2-3 (insurance broker found not to have breached duty to insured to obtain additional coverage where notice of cancellation sent both to broker and to address of insured listed on policy); see also Badio v. Liberty Mutual Fire Ins. Co., Ind. No. 602173/00, 2002 WL 32101993, at *7 (N.Y.Sup.Ct. N.Y. Co. Dec. 30, 2002) (insured did not have "special relationship" with insurance agent sufficient to impose a "continuing duty" to advise insured of impending cancellation). Further, Globalnet's reliance on Blonsky v. Allstate Ins. Co., 491 N.Y.S.2d 895, 128 Misc.2d 981 (N.Y.Sup.Ct. N.Y. Co. 1985) is misplaced, as that case holds that "an insurance broker, in his capacity as an insurance broker, may be sued only for failing to do what he is required to do" by the agreement between the broker and the insured, 491 N.Y.S.2d at 897, and Globalnet has not shown that Crystal agreed to advise it of non-payment of premiums or of imminent cancellation.

  While Globalnet has stated that it did not have actual notice of the cancellation and the missed premium payments until February 2002, it has not disputed that both notices were sent to the forwarding address requested by Globalnet's associate general counsel, and has stated that the notices were "directed to Globalnet in Florida." Berry Affidavit at ¶ 5. Globalnet has asserted claims against AICCO, the company that mailed out the notices, but they are statutory and contractual claims, and do not sound in negligence." See Complaint, ¶¶ 47-57. Finally, Globalnet has acknowledged that during the course of the tender offer, its bank accounts in the United States were closed or nearly emptied, which "inadvertently resulted in some missed premium payments on Globalnet's Directors and Officers liability insurance coverage." Id. at ¶ 4; see also Globalnet Rule 56.1 Counter-statement at ¶ 18 "Globalnet failed to make premium payments due to administrative confusion surrounding the completion of the NewSparkMedia tender offer.").

  Such conduct constitutes concurring negligence as a matter of law within the meaning of Kamen Soap and Holskin. Therefore, assuming without deciding that an insurance broker owes a duty to the insured to notify it of an imminent or recent cancellation, the broker's liability does not extend to circumstances in which the insured knew or should have known of the cancelled coverage. Accordingly, Crystal's motion for summary judgment is granted, and Globalnet's cross-motion for summary judgment is denied as moot.

  Conclusion

  For the reasons stated above, Crystal's motion for summary judgment is granted, and Globalnet's cross-motion for summary judgment is denied.

  It is so ordered.


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