Key Takeaway
Court case highlights attorney malpractice risks in SUM claims when settling without insurer consent, emphasizing professional duty requirements.
This article is part of our ongoing 5102(d) issues coverage, with 89 published articles analyzing 5102(d) issues issues across New York State. Attorney Jason Tenenbaum brings 24+ years of hands-on experience to this analysis, drawing from his work on more than 1,000 appeals, over 100,000 no-fault cases, and recovery of over $100 million for clients throughout Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, and the Bronx. For personalized legal advice about how these principles apply to your specific situation, contact our Long Island office at (516) 750-0595 for a free consultation.
Matter of Travelers Indem. Co. of Am. v McGloin, 2017 NY Slip Op 08643 (1st Dept. 2017)
I put this on my facebook page because it was both funny and sad. Call this is a lesson on what not to do when dealing with an SUM claim. Poor guy now has a legal malpractice claim hanging over his head.
Respondent was injured in an automobile accident while driving a vehicle owned and insured by her employers. Through counsel she notified petitioner, the insurer of the vehicle, of her intent to seek underinsured motorist benefits and she commenced an action against the driver of the other vehicle involved in the crash. She subsequently settled the action against the other driver for the limits of his insurance policy without seeking petitioner’s consent. Petitioner disclaimed coverage on the ground of the settlement of the action without its consent, in violation of the Supplementary Uninsured/Underinsured Motorists (SUM) endorsement of the policy, impaired its right to subrogation.
Respondent’s assertion that she could not have been aware of provisions of the policy that were never provided to her is unavailing. The SUM endorsement is mandated by regulation (see 11 NYCRR 60-2.3; see also New York Cent. Mut. Fire Ins. Co. v Danaher , 290 AD2d 783 ), and Rules of Professional Conduct (22 NYCRR 1200.0) rule 1.1 requires an attorney to possess the requisite legal knowledge and skill reasonably necessary to represent a client. Moreover, at the framed-issue hearing before the Referee on the issue of whether respondent should have had knowledge of such provisions, petitioner’s technical specialist who handled the claim testified, inter alia, that on claims he has handled in the past, attorneys would call and seek consent before settling cases at the limits of an adverse driver’s insurance policy.
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However, respondent’s counsel who handled her underinsurance claim and lawsuit against the adverse driver did not testify, despite being present at the hearing. Accordingly, the Referee did not err in drawing an adverse inference against respondent on the factual issue of whether her attorney/agent had actual knowledge of the provisions of the SUM endorsement (see generally People v Gonzalez , 68 NY2d 424, 427 ), or in determining that her attorney/agent should have and actually did have such knowledge.
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Why This Matters for Your Case
New York law is among the most complex and nuanced in the country, with distinct procedural rules, substantive doctrines, and court systems that differ significantly from other jurisdictions. The Civil Practice Law and Rules (CPLR) governs every stage of civil litigation, from service of process through trial and appeal. The Appellate Division, Appellate Term, and Court of Appeals create a rich and ever-evolving body of case law that practitioners must follow.
Attorney Jason Tenenbaum has practiced across these areas for over 24 years, writing more than 1,000 appellate briefs and publishing over 2,353 legal articles that attorneys and clients rely on for guidance. The analysis in this article reflects real courtroom experience — from motion practice in Civil Court and Supreme Court to oral arguments before the Appellate Division — and a deep understanding of how New York courts actually apply the law in practice.
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Disclaimer: This article is published by the Law Office of Jason Tenenbaum, P.C. for informational and educational purposes only. It does not constitute legal advice, and no attorney-client relationship is formed by reading this content. The legal principles discussed may not apply to your specific situation, and the law may have changed since this article was last updated.
New York law varies by jurisdiction — court decisions in one Appellate Division department may not be followed in another, and local court rules in Nassau County Supreme Court differ from those in Suffolk County Supreme Court, Kings County Civil Court, or Queens County Supreme Court. The Appellate Division, Second Department (which covers Long Island, Brooklyn, Queens, and Staten Island) and the Appellate Term (which hears appeals from lower courts) each have distinct procedural requirements and precedents that affect litigation strategy.
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