United States District Court, S.D. New York
[Copyrighted Material Omitted]
Paul Scott Hugel, Clayman & Rosenberg, New York, NY, for Plaintiff.
Joseph K. Powers, J. Gregory Lahr, Sedgwick LLP, Thomas Robert Orofino, Sedgwick, Detert, Moran & Arnold LLP, New York, NY, for Defendant.
OPINION & ORDER
HAROLD BAER, JR., District Judge.
Maclaren Europe Limited (" MEL" ) and ACE American Insurance Company (" ACE" ) each move for summary judgment. The principal issues before the Court are whether MEL's prepayment of the 2006 renewal premium to its retail broker, Indebir Sahni, is in fact payment to ACE, and, if not, whether ACE properly canceled the 2006 policy for nonpayment. Under English law, there is no dispute that ACE would prevail. Under New York law, the parties dispute nearly every section of New York insurance law applicable to the facts here. For the following reasons, New York law applies, and ACE is charged with receipt of the premium.
In April 2006, ACE renewed the insurance policy it had previously issued to MEL and Maclaren Hong Kong, a related entity. The renewal was procured by a New York retail insurance broker, Sahni, who used a New York wholesale broker (or sub-broker), Program Brokerage Corporation (" PBC" ), to negotiate and obtain the renewal from ACE. ACE delivered the renewal policy to PBC in New York, which in turn delivered it to Sahni in New York. Before the then-existing policy expired (but before ACE issued the 2006 renewal), MEL wired an anticipated renewal premium to Sahni's bank account in New York. Sahni never remitted the premium to PBC or ACE. ACE subsequently mailed a cancellation notice to MEL at Maclaren USA's address in Connecticut.
A district court may not grant summary judgment if there exists a genuine issue of material fact. See Cotarelo v. Vill. of Sleepy Hollow Police Dep't, 460 F.3d 247, 251 (2d Cir.2006) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). " For summary judgment purposes, a ‘ genuine issue’ exists where the evidence is such that a reasonable jury could decide in the non-moving party's favor." Cambridge Realty Co., LLC v. St. Paul Fire & Marine Ins. Co., 421 Fed.Appx. 52, 53 (2d Cir.2011) (internal citations omitted). The parties point to no disputed issues of material fact, and the Court finds none. Below, I begin with a discussion of the prepayment of the premium under New York law. I find that MEL is entitled to summary judgment, and, because this conflicts with English law, I end with a choice-of-law analysis and determine that New York law controls.
I. Under New York Law, MEL's Prepayment of the Renewal Premium to Sahni was Charged to ACE at the Moment PBC Delivered the Policy to Sahni
A. Insurance Agents and Brokers
It is common for an insured and an insurer to negotiate and enter into a contract of insurance through intermediaries. A " broker" is the representative of the insured, and an " agent" of the insurer.  See Bohlinger v. Zanger, 306 N.Y. 228, 117 N.E.2d 338, 339 (1954). While agency principles are bound up with each type of relationship, the law of agency and the duties of an insurance agent are not necessarily identical. In the instant case, Sahni and PBC are both brokers acting on behalf of MEL. Therefore, neither Sahni nor PBC have the authority to represent ACE, unless there is some other reason to treat them as agents of ACE. See 3 COUCH ON INS. § 45.5 (revised 3d ed. 2011) (" [Absent] the existence of special circumstances ... a broker may not be converted into an agent for the insurer without some action on the part of the insurer or the existence of some facts that indicate that the broker has the authority to represent the insurer." ).
B. New York Insurance Law Section 2121
Section 2121 of the New York Insurance Law contains such an exception to the general rule that an insurance broker ...