Feliberty v. Damon

In Feliberty v. Damon, 72 NY2d 112, 117, 527 NE2d 261, 531 NYS2d 778 (1988) the plaintiff physician sued his malpractice insurer, alleging that the insurer was vicariously liable for the alleged negligence of the independent counsel it retained to defend the plaintiff. Although the insurer's duty to defend was undoubtedly contractual, we ultimately refused to impose vicarious liability. The Court relied on several policy considerations: namely, the duty to defend an insured is by its very nature delegable, because the Judiciary Law prohibits an insurance company from practicing law; the insurer is precluded from interfering with retained counsel's independent professional judgments; and the insured could obtain relief in a direct action against independent counsel. Moreover, "a contractual obligation, standing alone, will . . . not give rise to tort liability in favor of a third party" absent certain exceptions not applicable here (Espinal v. Melville Snow Contrs., 98 NY2d 136, 138, 773 NE2d 485, 746 NYS2d 120 [2002]; see also Church v. Callanan Indus., 99 NY2d 104, 111-112, 782 NE2d 50, 752 NYS2d 254 [2002]).