Broker Can be Sued Directly by Injured Third-Partyshoke2013
IL Federal Court finds injured 3rd party hockey player can sue league’s broker for failure to procure correct coverage.
Plaintiff Kyler Moje (“Moje”) filed suit against the Federal Hockey League (“FHL” or “League”), the National Casualty Company (“National Casualty”) and the David Agency Insurance (“David Agency”) seeking a declaratory judgment regarding coverage under an insurance policy between the League and National Casualty brokered by the David Agency. Moje alleged that the David Agency failed to procure insurance that the League requested in order to insure its players for the type of injuries sustained by Moje.
Moje was a Danville Dasher hockey player, blinded by an opposing player who poked him in the eye with his stick. In the underlying action, Moje filed suit against the FHL and Oakley Inc. (“Oakley”). Oakley made Moje’s protective visor. Oakley settled, but the FHL failed to answer the complaint and a default judgment of $800,000 was entered against it. The FHL attempted to have the default judgment vacated based on its attorney’s tardiness, but the Seventh Circuit declined.
FHL’s insurer, National Casualty, refused to pay the default judgment. Moje then filed the instant suit. Moje alleged that David Agency, FHL’s broker, mislead the League to believe that the policy covered injuries such as his. David Agency sought to be dismissed.
The court found that Moje could sustain a declaratory judgment action against David Agency to determine its liability for negligence, because there was an actual controversy between Moje and David Agency. In denying the motion, U.S. District Judge Joan Gottschall reasoned that “(A)n insurance producer’s duty to exercise ordinary care and skill in renewing, procuring, binding, or placing the coverage requested by the insured or proposed insured extends to a foreseeable plaintiff, like Moje, harmed by the insured’s tortious conduct.” “As soon as National Casualty denied coverage, Moje and the David Agency were placed at odds with one another. Although Moje could have brought an ordinary negligence claim, a declaratory judgment claim is not defeated by the ‘existence of another adequate remedy’ (citation omitted). Further, inclusion of the David Agency in this suit will allow this Court to determine the potential liabilities of all parties together and avoid inconsistent results since both National Casualty’s and the David Agency’s potential liability depend on the coverage of the insurance policy. Therefore, a declaratory judgment action is appropriate.”
The court reasoned that Moje had plead sufficient facts to sustain the declaratory judgment action by alleging that David Agency was the producer of the insurance policy between the League and National Casualty and the League had requested David Agency to be insured against the type of loss sustained by Moje. “The League’s request to be covered for the type of injury sustained by Moje may be specific enough to trigger the David Agency’s duty to exercise ordinary care and skill to obtain the coverage requested by the League. Moje will need to prove with more specificity whether such request was actually made, and whether it was sufficient to trigger the David Agency’s duty. At this stage, however, Moje has sufficiently alleged that the David Agency had a duty to exercise ordinary care towards him.” Moje v. Federal Hockey League LLC et al., Case No. 1:15-cv-08929 (N.D. Ill. _____, 2016).