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People v. Wells Fargo Insurance Services

NEW YORK SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT


May 5, 2009

THE PEOPLE OF THE STATE OF NEW YORK, BY ANDREW M. CUOMO, ETC., PLAINTIFF-APPELLANT,
v.
WELLS FARGO INSURANCE SERVICES, INC., ET AL., DEFENDANTS-RESPONDENTS.

Appeal from order, Supreme Court, New York County (Bernard J. Fried, J.), entered January 15, 2008, which, inter alia, granted defendants' motion to dismiss plaintiffs' causes of action for breach of fiduciary duty and fraud under Executive Law § 63(12), deemed to be an appeal from judgment, same court and Justice, entered March 17, 2008 (CPLR 5501[c]), dismissing, inter alia, the causes of action, and so considered, said judgment unanimously affirmed, without costs.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Gonzalez, P.J., Buckley, Catterson, McGuire, Renwick, JJ.

405326/06

The complaint failed to state a cause of action for breach of fiduciary duty and we decline plaintiff's request that we not follow our decision in People v Liberty Mut. Ins. Co. (52 AD3d 378 [2008]), where we held, among other things, that an insurance broker may not be liable to its client for breach of fiduciary duty absent a special relationship, which does not exist here (id. at 380; see also Loevner v Sullivan & Strauss Agency, Inc., 35 AD3d 392, 393 [2006], lv denied 8 NY3d 808 [2007]). Nor has plaintiff pleaded a cause of action for breach of fiduciary duty based merely on the existence of contingent commissions (see Hersch v DeWitt Stern Group, Inc., 43 AD3d 644, 645 [2007]).

The motion court also appropriately determined that the complaint failed to state a cause of action for fraud under Executive Law § 63(12) with sufficient particularity (see e.g. People v Katz, 84 AD2d 381, 384-385 [1982]). The complaint fails to allege wrongdoing within the meaning of the statute as contingent commissions are not illegal in this State and disclosure of the commissions was not required as of the time of the conduct alleged in the complaint (see People v Liberty Mut. Ins. Co., 52 AD3d at 379; Hersch, 43 AD3d at 645). We need not determine whether disclosure is required as a result of a circular letter issued by the Department of Insurance in 2008.

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

20090505

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