Chase Scientific Research5/15/2000
OPINION & ORDER
Submitted-December 8, 1999
APPEALS by the plaintiff, in an action against insurance brokers to recover damages for malpractice in procuring an insurance policy, from (1) an order of the Supreme Court (D. Denis Donovan, J.), entered May 13, 1999, in Westchester County, granting the defendants' motion to dismiss the complaint as time-barred, and (2) a judgment of the same court, dated June 16, 1999, dismissing the complaint. The notice of appeal from the order is also deemed a notice of appeal from the judgment (see, CPLR 5501 ).
0368B
On the instant appeal, we must determine whether the three-year Statute of Limitations set forth in CPLR 214(6), as amended in 1996 (L 1996, ch 623, ยง 1), which governs certain malpractice actions, applies to bar the instant action against insurance brokers to recover damages arising out of their alleged failure to procure appropriate insurance for their client, or whether the action is governed by the six-year Statute of Limitations applicable to breach of contract actions (see, CPLR 213). Stated differently, we must determine whether insurance brokers are capable of committing_malpractice within the meaning of CPLR 214(6). We hold that insurance brokers are capable of committing malpractice and, therefore, that the instant action is governed by the three-year Statute of Limitations set forth in CPLR 214(6).
In May 1995, the plaintiff Chase Scientific Research, Inc. (hereinafter Chase), retained the defendant insurance brokers to obtain commercial property insurance for its business. On May 31, 1995, the defendants procured such a policy for Chase. In or about January 1996, while that policy was in effect, a storm damaged Chase's warehouse, causing Chase to suffer a loss. Chase filed a claim with its insurance carriers, which acknowledged that the incident was a "covered occurrence" under the policy. Although Chase demanded the policy limits ($550,000) on claimed losses of over $1,000,000, its insurance carriers offered only $50,000. Chase eventually settled an action which it brought against its insurance carriers for $275,000.
On January 7, 1999, Chase commenced the instant action against the defendants, alleging, in relevant part, that the insurance policy which the defendants had procured for it had been inappropriate to its particular business and property. The complaint asserted two causes of action sounding in negligence and breach of contract, alleging that the defendants failed to recognize the nature of Chase's business and products; that they failed to secure an adequate appraisal of its property; that they had failed to procure an insurance policy which would fully indemnify it in the event of a loss; and that they failed to properly administrate its claim.
The defendants moved to dismiss the action as time-barred, asserting that the three-year Statute of Limitations applicable to certain malpractice actions (CPLR 214 ) governed, and that the Statute of Limitations accrued when they procured the policy in May 1995. In opposition to the defendants' motion, Chase argued that the six-year Statute of Limitations applicable to contract actions (CPLR 213) applied, and that the Statute of Limitations began to run on January 19, 1996, the date of its loss. By order entered May 13, 1999, the Supreme Court, Westchester County, granted the defendants' motion to dismiss. The court concluded that the action was time-barred because (1) Chase's action sounded in malpractice and, therefore, was subject to the three-year Statute of Limitations of CPLR 214(6), as amended in 1996, and (2) the action accrued in May 1995, when the defendants procured the subject insurance policy.
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