The Rogak Report: 03 May 2005 ** Declaratory Judgment - Coverage **
- PLAINTIFF HAS NO STANDING TO BRING DJ ACTION AGAINST DEFENDANT'S
INSURER UNTIL AFTER HE OBTAINS A JUDGMENT AGAINST DEFENDANT
Murphy v. Federal Insurance Co., NYLJ 5/03/05 (USDC - SDNY 2005)
Plaintiffs brought this DJ action against Federal Insurance Company,
The Chubb Corporation and Guilford Mills, Inc. seeking a declaratory
judgment that the claims which plaintiff brought against Guilford in
an underlying lawsuit are covered by a policy which Federal issued to
In the underlying action, Plaintiffs claimed that as a result of
misinformation provided to Plaintiff Kevin Murphy through Guilford's
negligence, Murphy delayed seeking treatment for prostate cancer, and
as a result, has suffered injuries. Plaintiffs alleged that Defendant
Federal issued an insurance policy that covers Defendant Guilford's
"The key question presented," stated the Court, "is whether
Plaintiffs have standing under New York State Insurance Law §3420 to
seek a declaratory judgment against an insurer prior to obtaining a
judgment against the alleged insured."
"The New York Court of Appeals resolved this issue in Lang v. Hanover
Ins. Co., 820 N.E.2d 855. The court there held that a plaintiff suing
an insured lacks standing under Section 3420 to seek a declaratory
judgment under CPLR §3001, the New York statute governing declaratory
relief, against the defendant's insurer regarding coverage until the
plaintiff has obtained a judgment in the underlying action against
the defendant insured."
"Plaintiff has no common-law right to seek relief directly from a
tortfeasor's insurer, and the statutory right created in Insurance
Law §3420 arises only after plaintiff has obtained a judgment in the
underlying personal injury action."
"Under Section 3420, as interpreted by the New York Court of Appeals,
this Court concludes that Plaintiffs' claims are premature. Having
failed to obtain a judgment in the underlying action, Plaintiffs lack
standing to seek a declaratory judgment against Defendant Federal
Insurance Company as to the insurance policy at issue."
The Complaint was dismissed.