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February 27, 2025
For a Suit to Survive There Must be Facts

Dismissal for Failure to Allege Facts to Establish Breach of Contract

Post 5005

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Boat Owner Only Gets Insurance he Asked the Broker to Obtain

After a boating accident in Greece the boat owner, Nicholas Galakatos (“plaintiff” or “Galakatos”), made claims against defendants, Marsh & McLennan Companies, Inc. and others (collectively, “defendants”) for negligence, breach of contract and breach of fiduciary duty. The case arose from a boating accident in Greece involving Galakatos’ boat, “Galani,” which collided with another vessel in September 2018. This resulted in damage to both vessels and personal injuries to some passengers.

Nicholas Galakatos v. Marsh & McLennan Companies, et al., Civil Action No. 24-11259-NMG, United States District Court, D. Massachusetts (February 24, 2025)

Court’s Decision

The court granted the defendants’ motion to dismiss. The court found that Galakatos failed to state a viable claim for breach of contract because he did not allege any specific provision of the purported agreement that the defendants allegedly breached.

Background

Plaintiff is a resident of Massachusetts and Vermont and owns property in Greece. In 2015, he purchased a boat (“Galani”) to use in Greece. Defendants are associated entities that offer professional services including insurance brokerage. Plaintiff retained defendants’ insurance brokerage services for the first time in 2006 and have purportedly relied since then on their advice to procure insurance.

Plaintiff purchased a one-year, $10,000,000 excess coverage liability policy from American International Group (“AIG”). The AIG policy was to provide coverage for losses sustained “anywhere in the world.” Plaintiff also purchased third party liability insurance for Galani from Groupama Insurances (“Groupama”) in May, 2018. He contends that he disclosed his ownership of Galani and his Groupama insurance policy to defendants that same month.

In September, 2018, Galani collided with another vessel off the coast of Greece, resulting in damage to both vessels, as well as personal injuries to some passengers aboard the other vessel. Plaintiff informed defendants of the accident, and they requested information concerning all of his property and liability exposures, even those for which it may not be providing coverage.

The collision spawned litigation as a result of which plaintiff paid an undisclosed amount in settlement of claims against him. He then made a claim on his AIG policy, which was denied, allegedly because defendants failed to add the Groupama policy to the AIG policy.

Plaintiff sued claiming defendants failed to place and procure adequate liability insurance coverage for Galani.

Legal Standard

Under Massachusetts law, breach of contract claim requires a plaintiff to demonstrate that 1) a valid, binding contract existed, 2) the defendant breached the terms of the contract and 3) the plaintiffs sustained damages as a result of the breach. Similarly, a breach of contract claim under New York law requires a plaintiff to allege 1) the existence of a contract, 2) the defendant’s breach of his or her contractual obligations and 3) damages resulting from the breach.

Galakatos failed to state a viable claim for breach of contract because his complaint does not allege any specific provision of the purported agreement between plaintiff and defendants that defendants allegedly breached.

Plaintiff’s negligence claim is deficient because he does not allege that defendant was duty-bound to procure insurance in the manner he asserted. According to the complaint, defendant had a duty of care to plaintiff to procure adequate third party liability insurance for Galani up to $20 million.
Breach of Fiduciary Duty

Finally, defendant contends that plaintiff’s breach of fiduciary duty claim is not actionable because the complaint does not allege sufficient facts to show that a fiduciary relationship existed between plaintiff and defendants. A fiduciary duty between a broker and an insured arises only in the narrow instance where there is a “special circumstance” or “special relationship” between them which, ordinarily, is a question of fact. Because, Plaintiff failed to state a claim for breach of fiduciary duty he did not adequately allege a fiduciary relationship existed between him and defendants.

ZALMA OPINION

Galakatos’ complaint was that he received the insurance he asked Marsh to acquire rather than the insurance coverage he needed. Insurance brokers, like Marsh, owe a duty to buy the insurance requested by the insured. The facts alleged revealed that they did so and that there was no allegation of a special relationship requiring that Marsh deal with the insured as a fiduciary. Insurance brokers are not required to be clairvoyant and purchase the coverage the insured, like Galakatos, needed rather than what he ordered.

(c) 2025 Barry Zalma & ClaimSchool, Inc.

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00:08:50
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Hiscox Insurance Company (“Hiscox”) moved the USDC to Dismiss a suit for failure to state a claim because the insured reported its claim more than 60 days after expiration of the policy.

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Plaintiff, the operator of a massage spa franchise, entered into a commercial insurance agreement with Hiscox that provided liability insurance coverage from July 25, 2019, to July 25, 2020. On or about June 03, 2019, a customer alleged that one of Plaintiff’s employees engaged in tortious ...

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Zalma’s Insurance Fraud Letter – June 1, 2025

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Posted on June 2, 2025 by Barry Zalma

Post 5087

See the full video at and at

Read the full article and the full issue of ZIFL June 1, 2025 at https://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-06-01-2025.pdf

Zalma’s Insurance Fraud Letter – June 1, 2025

See the full video at https://lnkd.in/gw-Hgww9 and at https://lnkd.in/gF8QAq4d, and at https://zalma.com/blog plus more than 5050 posts.

ZIFL – Volume 29, Issue 11

The Source for the Insurance Fraud Professional

Read the full article and the full issue of ZIFL June 1, 2025 at https://lnkd.in/gTWZUnnF

Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at ...

00:08:42
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May 30, 2025
Plain Language of Policy Enforced

No Coverage if Home Vacant for More Than 60 Days

Failure to Respond To Counterclaim is an Admission of All Allegations

Post 5085

See the full video at https://lnkd.in/gbWPjHub and at https://lnkd.in/gZ9ztA-P, and at https://zalma.com/blog plus more than 5050 posts.

In Nationwide Mutual Insurance Company v. Rebecca Massey, Civil Action No. 2:25-cv-00124, United States District Court, S.D. West Virginia, Charleston Division (May 22, 2025) Defendant Nationwide Mutual Insurance Company's (“Nationwide”) motion for Default Judgment against Plaintiff Rebecca Massey (“Plaintiff”) for failure to respond to a counterclaim and because the claim was excluded by the policy.

BACKGROUND

On February 26, 2022, Plaintiff's home was destroyed by a fire. At the time of this accident, Plaintiff had a home insurance policy with Nationwide. Plaintiff reported the fire loss to Nationwide, which refused to pay for the damages under the policy because the home had been vacant for more than 60 days.

Plaintiff filed suit ...

00:06:50
May 15, 2025
Zalma's Insurance Fraud Letter - May 15, 2025

ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional

See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.

Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:

Health Care Fraud Trial Results in Murder for Hire of Witness

To Avoid Conviction for Insurance Fraud Defendants Murder Witness

In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...

May 15, 2025
CGL Is Not a Medical Malpractice Policy

Professional Health Care Services Exclusion Effective

Post 5073

See the full video at https://lnkd.in/g-f6Tjm5 and at https://lnkd.in/gx3agRzi, and at https://zalma.com/blog plus more than 5050 posts.

This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.

In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:

Insurance Coverage Dispute:

Travelers issued a Commercial General Liability ...

April 30, 2025
The Devil’s in The Details

A Heads I Win, Tails You Lose Story
Post 5062

Posted on April 30, 2025 by Barry Zalma

"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators than any Other Crime."

Immigrant Criminals Attempt to Profit From Insurance Fraud

People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.

The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...

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