Claim Against Broker Eviscerated by Plaintiffs’ Settlement with Insurer, N.Y. State Judge Rules

MINEOLA, N.Y. — Negligence claims asserted against a broker in a Superstorm Sandy coverage case are barred by a settlement and release executed between the plaintiffs and the insurer before the insurer answered the complaint, a New York state judge has ruled, explaining that the claims against the broker were tied to the insurer’s potential defense to the claims.

In a June 23 order, Judge Daniel Palmieri of the Nassau County Supreme Court explained that the plaintiffs' claim against the broker depended on the insurer’s assertion that the policy did not provide the coverage they wanted. Because the insurer never …