McOwen v. Boccaccio

Order affirmed, without costs. Memorandum: Defendant Lumbermens Mutual Casualty Company (Lumbermens) appeals from so much of an order as granted plaintiffs’ motion for certification as a class action and denied its motion for summary judgment. Plaintiffs cross-appeal from that portion of the same order which limited their relief demanded as against Lumbermens to $100,000. Plaintiffs, members of the Empire State Businessmen’s Association (ESBA), commenced this action to recover premiums paid to ESBA for group health insurance, which allegedly were converted and appropriated by defendants, certain officers and employees of ESBA. Plaintiffs also sued Lumbermens directly on a blanket position bond, issued to ESBA as the named insured, in which it agreed to indemnify ESBA up to the amount of $100,000 for any loss of money or property it might sustain resulting directly from one or more fraudulent or dishonest acts of an employee. Lumbermens contends that its obligation to indemnify runs only to ESBA, the named insured, and that plaintiffs have no standing to sue it directly on the fidelity bond. This claim is without merit. Members of an association may bring an action on behalf of themselves and all other members of the association. Section 12 of the General Associations Law, providing that an action may be maintained by the president or treasurer of an unincorporated association does not contradict the common-law rule that a representative action may be brought in the names of all of the members of an association. House v Schwartz (18 Misc 2d 21) and Hogan v Williams (185 Misc 338, affd 270 App Div 789), where suit was brought by individual association members on behalf of themselves and all other members to enforce association rights, are on point, despite contrary assertions by the dissenters, as those cases reiterate the common-law rule: “[General Associations Law, § 12] is merely an alternative to the common-law rule that the action be brought in the name of all the members” (House v Schwartz, supra, p 37). “Certainly it cannot be seriously contended that [General Associations Law, § 12] deprived the members of an association from maintaining the action in their own names” (Hogan v Williams, supra, p 343). Lumbermens’ other contention, and plaintiffs’ claim on the cross appeal, are also without merit. All concur, except Simons and Hancock, Jr., JJ., who dissent and vote to reverse and grant summary judgment dismissing the complaint as against defendant Lumbermens, in the following memorandum.