I think that came out wrong.
Panasia Estates, Inc. v Hudson Ins. Co., 2009 NY Slip Op 09284 (App. Div., 1st, 2009)
Plaintiff is correct in arguing that the motion court erred by stating that consequential damages do not lie for breach of an insurance contract absent bad faith, since the determinative issue is whether such damages were “within the contemplation of the parties as the probable result of a breach at the time of or prior to contracting” (Bi-Economy Mkt., Inc. v Harleysville Ins. Co. of N.Y., 10 NY3d 187, 192 [2008] [internal quotation marks and citation omitted]; see Panasia Estates, Inc. v Hudson Ins. Co., 10 NY3d 200, 203 [2008]). However, the motion to amend the complaint should not have been granted since the breach of contract claim that plaintiff sought to add was duplicative of its existing claim for breach of the implied covenant of good faith (see Canstar v Jones Constr. Co., 212 AD2d 452, 453 [1995]). Furthermore, contrary to defendants’ contention, plaintiff’s claim for consequential damages in its cause of action for breach of the implied covenant of good faith was not insufficiently pled. The reference to such damages as “special” in Bi-Economy Mkt. (10 NY3d at 192) was not intended to establish a requirement of specificity in pleading.
Roy Mura has a far more detailed post, go check it out. I’m going to post more on this issue later on in the week, maybe even today. For now, I’ll just say that I believe that a bad-faith cause of action, properly pleaded, can survive a motion to dismiss and will allow for discovery on that issue. Those that would attempt to pursue this issue should however make sure that they understand the issue. Only a few do. Everyone else seems hell-bent on screwing it up.
Of course we know who the biggest “hell bent[er]” is.
David David David. You have taught us well. There are those that do but don’t know how to do. And there are those who say they know how to do but don’t do. If we could only combine forces something productive will get done.
I can see it now. Another Idiot’s Symposium. The whole cast of characters including the hell benter. We can add Slick and A.J. and the rest of the usual suspects. Everyone will give their slant. And we’ll have Fox; MSNBC and CNN on the web.
Bad Faith — there is no first party bad faith cause of action in New York. What to do?
Incrementally create one over years i.e. emotional damages.
Consequential damages get us part the way there — but nothing has changed. It never took a showing of bad faith to get consequential damages. Just extreme foreseeability — even probability — that a breach will have negative consequences. It just so happens that when a negative outcome is that likely the breaching party must have done something bad in breaching. Judge Lebedeff wrote a decision on this years ago involving the bumping of an airline passenger — she awarded consequential damages.
The answer is punitive damages. Easy to understand. Hard to get. And very Court specific as in discretion. I have seen pleadings that are of about the same detail and specificity as a no fault complaint wherein a court has said “bad faith.”
Call me dumb. Call me a counter to reason type person. Call me a counter culture McGovernite — But when a court attacks you for the use of the split infinitive and the Court worked with the insurance department in the past life — you must have done something right.