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Standard Funding Corp. v. Lewitt

Citations: 225 A.D.2d 608; 639 N.Y.2d 137; 639 N.Y.S.2d 137; 1996 N.Y. App. Div. LEXIS 2155

Court: Appellate Division of the Supreme Court of the State of New York; March 10, 1996; New York; State Appellate Court

Narrative Opinion Summary

The case involves a dispute between a New York corporation that provided premium financing and Public Service Mutual Insurance Company (PSM) concerning the fraudulent acts of Lewitt Agency, Inc., an intermediary agent. The plaintiff, having verified Lewitt's agency status with PSM, entered into agreements based on Lewitt's representations that PSM had issued insurance policies and received a portion of the premiums. Upon discovering that no such policies existed, the plaintiff sought recovery from both Lewitt, which defaulted and filed for bankruptcy, and PSM. The court held PSM liable under the doctrine of apparent authority, as Lewitt was acting within the scope of authority that PSM had confirmed. The court dismissed PSM's argument for applying New Jersey law, noting the consistency of agency law across the involved jurisdictions. The court awarded the plaintiff the principal amount of $227,325 plus interest from the date the cause of action accrued, reflecting the court's agreement with the plaintiff's entitlement to recovery under the established agency principles.

Legal Issues Addressed

Accrual of Interest on Judgments

Application: The court awarded interest from the date the cause of action accrued, ensuring the plaintiff was compensated for the time value of money.

Reasoning: The court also awarded interest from the date the cause of action accrued, and all judges concurred in the decision.

Apparent Authority in Agency Law

Application: The court found that Public Service Mutual Insurance Company (PSM) was liable for the actions of Lewitt Agency, Inc. because Lewitt acted within the scope of apparent authority, which had been confirmed by PSM.

Reasoning: The Supreme Court ruled in favor of the plaintiff, determining that PSM was responsible for Lewitt's conduct, as Lewitt acted within the scope of apparent authority confirmed by PSM.

Choice of Law in Agency Disputes

Application: The court ruled that the choice of law was irrelevant in this case as the principles of agency law were consistent between New York and New Jersey.

Reasoning: PSM's claim that New Jersey law should apply was deemed irrelevant, as agency law is consistent across New York and New Jersey.