Prosight Specialty Mgt. Co., Inc. v. Altruis Group, LLC

2024 NY Slip Op 30329(U)

• Court: New York Supreme Court, New York County
• Decided: January 26, 2024
• Status: Unpublished

Opinion

Prosight Specialty Mgt. Co., Inc. v Altruis Group, LLC 2024 NY Slip Op 30329(U) January 26, 2024 Supreme Court, New York County Docket Number: Index No. 653775/2023 Judge: Andrew Borrok Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. INDEX NO. 653775/2023 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 01/26/2024

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 53 ----------------------------------------------------------------------------------- X

PROSIGHT SPECIAL TY MANAGEMENT COMPANY, INDEX NO. 653775/2023 INC.,NEW YORK MARINE AND GENERAL INSURANCE COMPANY,GOTHAMINSURANCECOMPANY MOTION DATE 09/27/2023 Plaintiff, MOTION SEQ. NO. 001 - V -

ALTRUIS GROUP, LLC, DECISION+ ORDER ON MOTION Defendant.

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HON. ANDREW BORROK:

The following e-filed documents, listed by NYSCEF document number (Motion 001) 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 20, 21, 22, 23, 24 were read on this motion to/for DISMISS

Upon the foregoing documents, Prosight Specialty Management Company, Inc., New York

Marine and General Insurance Company, and Gotham Insurance Company (collectively, the

Plaintiffs)'s motion (Mtn. Seq. No. 001) is granted and Altruis Group, LLC (the Defendant)'s

counterclaims for breach of the implied covenant of good faith and fair dealing and the

declaratory judgment counterclaims are dismissed.

Much of what is at issue in this motion was addressed by the court (Vyskocil, J.) in a prior

decision (the SDNY Decision; NYSCEF Doc. No. 14) issued in a related action (the SDNY

Action) captionedAltruis Grp. v. Prosight Specialty Mgmt. Co., 1:21-cv-10757 (SD NY Feb. 27,

2023).

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Reference is made to a certain Niche Management Agreement (the Original Agreement;

NYSCEF Doc. No. 9), dated February 4, 2020, as amended by a certain Amendment to Niche

Management Agreement (the Amendment; the Original Agreement together with the

Amendment, hereinafter, collectively, the Agreement; NYSCEF Doc. No. 10), dated May 4,

2020, by and among the Defendant, ProSight Specialty Management Company, Inc., and New

York Marine and General Insurance Company, pursuant to which the Defendant agreed to

provide certain insurance-related services to the Plaintiffs. When the Defendant allegedly failed

to provide the agreed upon services, the Plaintiffs terminated the Agreement and sued in this

court. In response in this action, the Defendant asserts three counterclaims - all of which amount

to claiming that in fact it was the Plaintiffs who breached by improperly terminating the

Agreement. Separately, in the United States District Court for the Southern District of New

York, the Defendant in this case brought suit - the SDNY Action. That case is now dismissed for

lack of subject matter jurisdiction.

The Defendant's counterclaim (the Counterclaim; NYSCEF Doc. No. 4) for breach of the

covenant of good faith and fair dealing is dismissed. It is entirely duplicative of the breach of

contract counterclaim (Amcan Holdings, Inc. v Can. Imperial Bank of Commerce, 70 AD3d 423,

426 [1st Dept 2010]). For example, (i) Counterclaim paragraphs 68 & 77 allege improper

termination and improper invocation of Agreement Section 21(B)(3), (ii) paragraph 78 alleges

failure to pay commissions due under the Agreement, (iii) paragraph 80 alleges improper early

termination of the Agreement, (iv) paragraphs 81-82 allege refusal to pay monies due under the

Agreement, and (v) paragraph 87 alleges deprivation of benefits the Defendant is "entitled to

under the Agreement." Thus, it is dismissed. The additional allegation before this Court that

653775/2023 PROSIGHT SPECIAL TY MANAGEMENT COMPANY, INC. ET AL vs. AL TRUIS Page 2 of 4 GROUP, LLC Motion No. 001

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one of the Plaintiffs' representatives admitted in his deposition that the Defendant may be

entitled to some money for services rendered amounts to nothing more than a potential admission

that Plaintiffs breached the Agreement, not a separate cause of action. As discussed (1.26.24),

this is manifestly different than allegations of a course of dealings involving inconsistent

communications as to the basis for certain denials (cf Truetox Laboratories, LLC v. Healthjirst

PHSP, Inc., 68 Misc 3d 1209(A) [Sup Ct 2020]). As such, and as the SDNY court held (see

NYSCEF Doc. No. 14 at 3-4), the breach of the covenant of good faith and fair dealing

counterclaim is dismissed as duplicative.

The Defendant's counterclaim for a declaratory judgment is also dismissed. In case of an

improper termination (one that does not fall under any of the specific categories enumerated in

Section 22[A]-[D]), the Agreement provides that the non-terminating party retains all rights in

the relevant intellectual property:

In the event of any other termination by either party, such termination shall be deemed an abandonment by the terminating party and transfer to the non-terminating party of the terminating party's rights, title to and interest in the Captive Capabilities Niche Intellectual Property and the non-terminating party shall retain the sole undivided interest in the Captive Capabilities Niche Intellectual Property.

(NYSCEF Doc. No. 9 § 22[E].) Thus, as the SDNY court held (NYSCEF Doc. No. 14 at 6-7),

this claim too is dismissed as duplicative and the Defendant has an adequate, alternative remedy

if it proves its breach of contract counterclaim (Ithilien Realty Corp. v 180 Ludlow Dev. LLC,

140 AD3d 621, 622 [1st Dept 2016]).

The Court has considered the Defendant's other argument and finds them unavailing.

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Accordingly, it is hereby

ORDERED that the counterclaims for breach of the covenant of good faith and fair dealing and

for declaratory judgment are dismissed; and it is further

ORDERED that the parties are directed to meet and confer as to what remains to be done in the

way of discovery and to provide a proposed schedule no later than February 19, 2024.

SC: February 19, 2024@ 11:30 am

1/26/2024 DATE ANDREW BORROK, J.S.C. CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION

GRANTED □ DENIED GRANTED IN PART □ OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE

653775/2023 PROSIGHT SPECIAL TY MANAGEMENT COMPANY, INC. ET AL vs. ALTRUIS Page4 of 4 GROUP, LLC Motion No. 001

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