Paro Mgmt. Co., Inc. v. Willis of N.J., Inc.

• Court: Court of Appeals for the Second Circuit
• Decided: November 5, 2025
• Docket: 25-872
• Status: Unpublished

Opinion

25-872-cv Paro Mgmt. Co., Inc. v. Willis of N.J., Inc.

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 5th day of November, two thousand twenty-five.

PRESENT: JOSÉ A. CABRANES, MICHAEL H. PARK, STEVEN J. MENASHI, Circuit Judges. __________________________________________

PARO MANAGEMENT CO., INC., J&N REALTY ASSOCIATES, LLC, Plaintiffs-Appellants.

v. 25-872-cv

WILLIS OF NEW JERSEY, INC., Defendant-Appellee. * __________________________________________

FOR PLAINTIFFS-APPELLANTS: EVAN S. SCHWARTZ (Matthew J. Conroy, on the brief), Schwartz, Conroy & Hack, P.C., Garden City, NY

FOR DEFENDANT-APPELLEE: KYMBERLY KOCHIS (Alexander P. Fuchs, on the brief), Eversheds Sutherland (US) LLP, New York, NY

* The Clerk of Court is respectfully directed to amend the caption accordingly. Appeal from a judgment of the United States District Court for the Southern District of

New York (Vyskocil, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the judgment of the district court is AFFIRMED in part, REVERSED in part,

and REMANDED for further proceedings consistent with this order.

Appellants Paro Management Co., Inc. and J&N Realty Associates, LLC (collectively,

“Paro”) sued their insurance broker, Appellee Willis of New Jersey, Inc. (“Willis”), 1 for failing

to deliver to Paro’s insurer a notice regarding the presence of lead paint on Paro’s residential

property in Queens, New York. Paro alleges that it instructed Willis to convey the notice to its

insurer and Willis promised to do so but did not follow through. Former tenants later sued Paro

for damages arising from exposure to lead paint, and Paro’s insurer disclaimed coverage on the

ground that it had not been timely notified of the lead-paint issue. Paro then sued the insurer,

seeking a declaration of coverage. Both the former tenants’ lawsuit and the coverage action are

pending in New York Supreme Court. Paro subsequently brought this action against Willis,

asserting claims under New York law for negligence and negligent misrepresentation. 2 The

district court dismissed the Complaint without prejudice as unripe and, in the alternative, for failure

1 Willis of New Jersey, Inc. has merged into Willis Towers Watson Northeast, Inc. and has ceased to operate. Consistent with the parties’ briefing, we refer to Appellee as Willis. 2 Paro commenced this action in New York Supreme Court, and Willis removed it to federal court based on diversity jurisdiction. But Paro’s complaint did not allege the citizenship of the members of J&N Realty Associates, LLC and thus “left some question as to whether the federal courts have diversity jurisdiction in this case.” Wiener v. AXA Equitable Life Ins. Co., 113 F.4th 201, 212 n.8 (2d Cir. 2024). We asked the parties to file supplemental briefs addressing whether there is complete diversity of citizenship between the adverse parties. Having reviewed the briefing, we are satisfied that the adverse parties are completely diverse, and we “deem the pleadings amended pursuant to 28 U.S.C. § 1653 and conclude that [Paro] has alleged sufficient facts to support diversity jurisdiction.” Id.

2 to state a claim. We assume the parties’ familiarity with the underlying facts, the procedural

history, and the issues on appeal.

“We review de novo a district court’s determination that it lacks subject-matter jurisdiction

on ripeness grounds.” Nat’l Org. for Marriage, Inc. v. Walsh, 714 F.3d 682, 687 (2d Cir. 2013).

“We [also] review de novo a district court’s dismissal of a complaint for failure to state a claim.”

Ark. Pub. Emps. Ret. Sys. v. Bristol-Myers Squibb Co., 28 F.4th 343, 351 (2d Cir. 2022) (cleaned

up).

I. Ripeness

The district court held that Paro’s claims against Willis are not ripe. Referencing the two

pending state-court cases, the district court reasoned that Paro seeks “relief against Willis because

[Paro] may be found liable for exposing [the] tenants to lead paint, and [Paro’s] insurer may

succeed in denying coverage on the ground that it was never notified of the presence of the lead

paint.” App’x at 67. “[A]ny real, substantial controversy” between Paro and Willis, the district

court concluded, “depends upon contingent future events that may not occur as anticipated, or

indeed may not occur at all.” Id. (quotation marks omitted). We disagree.

“To be justiciable, a cause of action must be ripe—it must present a real, substantial

controversy, not a mere hypothetical question.” Vill. Green at Sayville, LLC v. Town of Islip, 43

F.4th 287, 293 (2d Cir. 2022) (quotation marks omitted). “A claim is not ripe for adjudication if

it rests upon contingent future events that may not occur as anticipated, or indeed may not occur

at all.” Texas v. United States, 523 U.S. 296, 300 (1998) (quotation marks omitted). “Often, the

best way to think of constitutional ripeness is as a specific application of the actual injury aspect

of Article III standing.” Walsh, 714 F.3d at 688. “[I]n other words,” “to say a plaintiff’s claim

3 is constitutionally unripe is to say the plaintiff’s claimed injury, if any, is not actual or imminent,

but instead conjectural or hypothetical.” Id. (quotation marks omitted).

The U.S. Supreme Court has previously identified a ripeness doctrine based on “prudential

reasons for refusing to exercise jurisdiction.” Nat’l Park Hosp. Ass’n v. Dep’t of Interior, 538

U.S. 803, 808 (2003) (quoting Reno v. Cath. Soc. Servs., Inc., 509 U.S. 43, 57 n.18 (1993)). More

recently, however, it has cast doubt on “the continuing vitality of the prudential ripeness doctrine.”

Susan B. Anthony List v. Driehaus, 573 U.S. 149, 167 (2014). Our own court has “not directly

addressed whether the prudential ripeness doctrine remains good law,” but we have emphasized

that “the Supreme Court’s cautious approach to prudential ripeness is a reminder that the doctrine

constitutes a narrow exception to the strong principle of mandatory exercise of jurisdiction.”

Revitalizing Auto Cmtys. Env’t Response Tr. v. Nat’l Grid USA, 10 F.4th 87, 102 (2d Cir. 2021).

Assuming that such an exception is available, we will evaluate prudential ripeness by asking

“whether the claim is fit for judicial resolution and whether and to what extent the parties will

endure hardship if decision is withheld.” Variscite NY Four, LLC v. N.Y. State Cannabis Control

Bd., 152 F.4th 47, 58 (2d Cir. 2025) (quotation marks omitted). “In general, the more the matter

to be placed before the court involves a pure issue of law, unaffected by factual considerations, the

less the concern that judicial review might be premature.” Id. (quotation marks omitted).

Paro’s claims against Willis are constitutionally ripe. Paro alleges that the insurance

policy covered “claims for loss arising out of a pollution incident occurring at” the Queens property

up to the $10,000,000 policy limit. App’x at 8. Willis’s failure to convey the lead-paint notice

to the insurer allegedly caused the insurer to disclaim coverage for the damages sought in the lead-

paint lawsuit, prompting Paro to sue the insurer for a declaration of coverage. Id. at 7, 10-11.

The costs Paro has incurred in litigating the coverage action constitute a “pocketbook injury”

4 allegedly caused by Willis’s negligence. Tyler v. Hennepin County, 598 U.S. 631, 636 (2023);

see Mental Disability L. Clinic, Touro L. Ctr. v. Hogan, 519 F. App’x 714, 717 (2d Cir. 2013)

(summary order) (“This Court has explicitly rejected the argument that litigation expenses are

insufficient to demonstrate an injury in fact for purposes of Article III standing.”) (citing Nnebe v.

Daus, 644 F.3d 147, 157 (2d Cir. 2011)). Paro’s alleged injury, moreover, does not depend on

how the insurance lawsuit will be resolved. Even if Paro prevails in that case, it likely could not

recover its litigation costs from its insurer because “[i]t is well established that an insured may not

recover [from an insurer] the expenses incurred in bringing an affirmative action against an insurer

to settle its rights under the policy.” N.Y. Univ. v. Cont’l Ins. Co., 87 N.Y.2d 308, 324 (1995). 3

Paro’s asserted pocketbook injury is thus “actual,” not “conjectural or hypothetical,” and it suffices

to make this case constitutionally ripe. Walsh, 714 F.3d at 688 (quotation marks omitted). 4

To the extent that Willis “would have us deem [Paro’s] claims nonjusticiable on grounds

that are prudential, rather than constitutional, that request is in some tension with . . . the principle

that a federal court’s obligation to hear and decide cases within its jurisdiction is virtually

3 Paro may, however, be able to recoup its coverage-action costs from Willis if Paro prevails in this case. “[U]nder New York law, where the litigation is caused by the wrongful act of a third party, the person is entitled to recover from the third party the reasonable value of attorneys’ fees and other expenses thereby suffered or incurred.” Goldberg v. Mallinckrodt, Inc., 792 F.2d 305, 309 (2d Cir. 1986) (cleaned up); see also Coopers & Lybrand v. Levitt, 52 A.D.2d 493, 496 (1st Dep’t 1976) (“If, through the wrongful act of his present adversary, a person is involved in earlier litigation with a third person in bringing or defending an action to protect his interests, he is entitled to recover the reasonable value of attorneys’ fees and other expenses thereby suffered or incurred.”) (quotation marks omitted). 4 Our analysis does not change merely because Paro’s total litigation costs from the pending coverage action cannot yet be calculated. The amount of damages a plaintiff suffers due to a defendant’s conduct is a separate issue from whether the plaintiff suffers “an ongoing and tangible financial harm” that supports Article III standing. Moreira v. Société Générale, S.A., 125 F.4th 371, 385 (2d Cir. 2025) (quotation marks omitted); see Amato v. City of Saratoga Springs, 170 F.3d 311, 318 (2d Cir. 1999) (distinguishing between “injury,” which is “a substantive element of the cause of action” for most torts, and “the amount of damages awardable,” which “is decided by the amount of injury caused”). In light of our conclusion that Paro’s coverage-action litigation costs make this action ripe, we do not address Paro’s arguments that its litigation costs in the lead-paint lawsuit and in this case also make its claims ripe.

5 unflagging.” Susan B. Anthony List, 573 U.S. at 167 (cleaned up). Even so, Paro’s claims are

prudentially ripe. First, the issue presented is whether the Complaint alleges sufficient facts to

state a claim for negligence or negligent misrepresentation, and that inquiry is a question of law.

See Anderson News, L.L.C. v. Am. Media, Inc., 680 F.3d 162, 185 (2d Cir. 2012). Second, the

“hardship” factor supports deciding this legal issue now. Variscite, 152 F.4th at 58 (quotation

marks omitted). Paro’s coverage-action litigation costs will continue to accrue. And “rendering

an answer” to the “legal question” of whether the Complaint states a claim “would impose no

hardship on [Willis], which has an interest in judicial efficiency and clarification of the law.” Id.

at 59 (quotation marks omitted). 5

II. Negligence and Negligent Misrepresentation

We turn to the merits and decide whether the district court erred in its alternative holding

that the Complaint fails to state a claim for negligence or negligent misrepresentation.

“To survive a motion to dismiss, a complaint must contain sufficient factual matter,

accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S.

662, 678 (2009) (quotation marks omitted). “A claim has facial plausibility when the plaintiff

pleads factual content that allows the court to draw the reasonable inference that the defendant is

liable for the misconduct alleged.” Id. The complaint must present “more than an unadorned,

the-defendant-unlawfully-harmed-me accusation,” but it need not include “detailed factual

allegations.” Id. (quotation marks omitted).

5 We note that the date of accrual of Paro’s claims turns on state law. Under New York law, “a claim against an insurance . . . broker relating to the failure of insurance coverage” that “sounds in tort” accrues “when coverage was denied”—not, as in other states, when litigation between an insured and insurer comes to an end. Bonded Waterproofing Servs., Inc. v. Anderson-Bernard Agency, Inc., 86 A.D.3d 527, 530 (2d Dep’t 2011) (quotation marks omitted); see Stephens v. Worden Ins. Agency, LLC, 859 N.W.2d 723, 733 (Mich. Ct. App. 2014) (surveying cases). Under New York’s rule, Paro’s claims ripened when its insurer denied coverage in 2021.

6 A. Negligence

“Under New York law, the elements of a negligence claim are: (i) a duty owed to the

plaintiff by the defendant; (ii) breach of that duty; and (iii) injury substantially caused by that

breach.” Lombard v. Booz-Allen & Hamilton, Inc., 280 F.3d 209, 215 (2d Cir. 2002); see Klein

v. Cath. Health Sys. of Long Island, Inc., 231 A.D.3d 797, 799 (2d Dep’t 2024). The district court

concluded that the Complaint fails to state a claim for negligence because it does not adequately

allege that Willis owed a duty to Paro to give the lead-paint notice to the insurer. We disagree.

“Under New York law, . . . a broker . . . generally owes the insured no more than the

common-law duty to procure the insurance coverage that the insured requests.” GlobalNet

Financial.com, Inc. v. Frank Crystal & Co., Inc., 449 F.3d 377, 383 (2d Cir. 2006) (citing Murphy

v. Kuhn, 90 N.Y.2d 266, 269-70 (1997)). “Nevertheless, if an insured asks the broker to take on

additional responsibilities above and beyond procuring specifically requested coverage, and the

broker agrees to do so, a duty is created that the broker must execute with reasonable care.”

Martin Assocs., Inc. v. Ill. Nat’l Ins. Co., 188 A.D.3d 572, 573 (1st Dep’t 2020); see also Wied v.

N.Y. Cent. Mut. Fire Ins. Co., 208 A.D.2d 1132, 1133 (3d Dep’t 1994) (“In New York, the duty

owed by an insurance agent to an insurance customer is ordinarily defined by the nature of the

request a customer makes to the agent.”).

Applying these principles here, we hold that the Complaint adequately alleges that Willis

had a duty to transmit the lead-paint notice to the insurer. The Complaint alleges that Paro

instructed Willis to convey the notice to the insurer and that Willis and its employees made

“representations . . . that notice would be provided.” App’x at 12; see also id. (“[Willis] asserted

it would take care of [Paro’s] insurance needs, including notifying [the insurer] of the claim made

in 2014 for lead paint exposure.”). These representations, the Complaint alleges, gave rise to a

7 duty on Willis’s part to convey the notice to the insurer. 6 Paro’s allegations, if true, would

establish that Paro asked Willis to “take on [an] additional responsibilit[y] above and beyond

procuring” coverage and that Willis “agree[d] to do so.” Martin, 188 A.D.3d at 573. That

agreement imposed on Willis a duty to notify the insurer, a duty Willis had to “execute with

reasonable care.” Id.

Willis contends that Paro’s allegations “do not establish the specific agreements or routine

course of business [between Paro and Willis] that courts have found can create a special

relationship” giving rise to a duty to notify the insurer. Appellee’s Br. at 19. But the Complaint

alleges that Willis agreed to give the lead-paint notice to the insurer. The Complaint need not

include “detailed factual allegations” about the agreement, Iqbal, 556 U.S. at 678 (quotation marks

omitted), and Willis does not identify caselaw holding that allegations like Paro’s are too vague.

Nor does Willis identify authorities holding that an insured that sues its broker for negligently

failing to transmit one notice to its insurer must allege that the broker referred notices to the insurer

as a matter of routine. Under New York law, the Complaint adequately alleges that Willis owed

Paro a duty to give the lead-paint notice to the insurer based on Paro’s instruction to convey the

notice and Willis’s representations that it would do so.

Paro adequately alleges the remaining elements of its negligence claim. Paro alleges that

Willis breached its duty by not sending the notice to the insurer. And Paro alleges injury

substantially caused by that breach. As detailed above, Paro asserts that Willis’s failure to notify

6 The Complaint alleges that Willis’s duty to Paro arose from other factors as well, including their “business relationship,” “the verbal and written agreements and understandings, and the standards of the industry.” App’x at 11-12. We conclude that the Complaint adequately alleges the existence of a duty based on Paro’s instruction to Willis to notify the insurer and Willis’s representations that it would do so. We thus need not consider Paro’s other allegations regarding the source of the duty.

8 the insurer caused the insurer to decline coverage in connection with the lead-paint lawsuit, forcing

Paro to litigate a costly coverage action. Paro thus states a claim for negligence. 7

B. Negligent Misrepresentation

Under New York law, a plaintiff seeking to hold a defendant liable for negligent

misrepresentation must prove that “the defendant made a false representation that he or she should

have known was incorrect.” Hydro Invs., Inc. v. Trafalgar Power Inc., 227 F.3d 8, 20 (2d Cir.

2000) (citing, inter alia, Eiseman v. State, 70 N.Y.2d 175, 187 (1987)). Willis’s alleged promise

to convey the lead-paint notice to the insurer is not actionable as a negligent misrepresentation.

To support a claim for negligent misrepresentation, the statement at issue ordinarily “must

be factual in nature and not promissory or relating to future events that might never come to

fruition.” Hydro, 227 F.3d at 20-21; see Capricorn Invs. III, L.P. v. CoolBrands Int’l, Inc., 66

A.D.3d 409, 409 (1st Dep’t 2009) (“The court correctly dismissed the claim of negligent

misrepresentation because it is predicated upon promises of future conduct, rather than statements

as to existing material fact.”) (quotation marks omitted). “[A]n alleged misrepresentation related

to promised future conduct” may be actionable, though, if there is an “indication that the party that

allegedly made the misrepresentation did not intend to honor its commitment at the time the alleged

misrepresentation was made.” Transit Mgmt., LLC v. Watson Indus., Inc., 23 A.D.3d 1152, 1155

(4th Dep’t 2005) (cleaned up).

The Complaint does not state a plausible claim for negligent misrepresentation based on

Willis’s promise to convey the notice to the insurer. The Complaint alleges that Willis “never

provided the notice it represented that it would provide.” App’x at 12. But the Complaint does

7 The district court concluded that the negligence claim, to the extent it relies on Willis’s representations that it would notify the insurer, “must be dismissed as duplicative of [Paro’s] negligent misrepresentation claim.” App’x at 68. We uphold the district court’s dismissal of the negligent- misrepresentation claim, so we need not consider whether the two claims are duplicative.

9 not allege that Willis made these representations with the intention of never conveying the notice

to the insurer. Willis’s promissory statements are thus not actionable as a negligent

misrepresentation. Paro contends that the representations “constituted a material fact” rather than

mere promissory statements. Appellants’ Br. at 27. Paro cites no authority for this argument,

which runs counter to the caselaw distinguishing between “promises of future conduct” and

“statements as to existing material fact.” Capricorn, 66 A.D.3d at 409 (quotation marks omitted).

Willis’s representations were plainly the former, and the district court properly dismissed Paro’s

negligent-misrepresentation claim based on those statements.

* * *

For the foregoing reasons, the judgment of the district court is AFFIRMED as to its

dismissal of the negligent-misrepresentation cause of action for failure to state a claim,

REVERSED as to its dismissal of the Complaint as unripe and its dismissal of the negligence

cause of action for failure to state a claim, and REMANDED for further proceedings consistent

with this order.

FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court