The broker's motion to dismiss the insured complaint for negligence based upon collateral estoppel was unsuccessful. Gjonaj Realty & Mgt. Corp. v. Capacity Group of NY LLC, 2019 N.Y. App. Div. LEXIS 4880 (N.Y. App. Div. June 18, 2019).
The insured was sued in a personal injury action. A default judgment was entered against the insured. On appeal, the court noted that the insured's excuse that they relied upon their agent's representations that the complaint had been forwarded to the insurer, when in fact the broker had failed to do so, was not reasonable.
The insured then sued the broker for its negligently misrepresenting that they forwarded the complaint to the insurer. The broker moved to dismiss, contending that the insured should be collaterally estopped from relitigating in this action the issue of reasonableness of their reliance on the broker's representations. The trial court denied the broker's motion to dismiss.
The appellate division affirmed. The insureds were not collaterally estopped from litigating the reasonableness of their reliance on the broker's representations because the requisite identity of issue which was necessarily been decided in the prior action and is decisive of the present action was lacking.
