Goode v Charter Oak Fire Ins. Co.
Annotate this CaseDecided on June 30, 2005
Supreme Court, Nassau County
JOHN GOODE, Plaintiff,
against
CHARTER OAK FIRE INSURANCE COMPANY, a subsidiary of ST. PAUL TRAVELERS INSURANCE COMPANY, ST. PAUL TRAVELERS INSURANCE COMPANY and THE ST. PAUL TRAVELERS COMPANIES, INC., Defendants.
12996/2004
Troisi & Markowitz
Keith A. LaVallee, Esq. P.C.
Thomas Feinman, J.
The defendants, The Charter Oak Fire Insurance Company, sued incorrectly as "Charter Oak Fire Insurance Company, a subsidiary of St. Paul Travelers Insurance Company, St. Paul's Travelers Insurance Company and the St. Paul Travelers Companies, Inc.", (hereinafter referred to as
"Charter Oak"), move for an order (1) pursuant to CPLR §3211(a)(7), dismissing that portion of the plaintiff's complaint seeking damages for bad faith on the grounds that those portions of the plaintiff's complaint fail to state a cause of action as a matter of law, and/or (2) pursuant to CPLR §3211(a)(7), dismissing that portion of the plaintiff's complaint seeking punitive and/or extra-contractual damages on the grounds that those portions of the plaintiff's complaint fail to state a cause of action as a matter of law, and/or (3) pursuant to CPLR §3211(a)(7), dismissing that portion of plaintiff's complaint seeking recovery for attorney's fees on the grounds that it fails to state a cause of action as a matter of law, and/or (4) pursuant to CPLR §3211(a)(7), dismissing the causes of action against all defendants other than Charter Oak as they did not issue the policy of insurance.
The plaintiff submits an affirmation in opposition.
The plaintiff initiated a first-party claim for reimbursement and payment under his insurance policy whereby the plaintiff claims that the insurer has improperly denied coverage and payment. The plaintiff's claims include breach of contract, bad faith, punitive damages and attorney fees. The [*2]plaintiff was issued a homeowner's policy of insurance with effective dates of August 1, 2002 through August 1, 2003 for the premises located at 2 Woodtree Drive, Woodbury, New York. The policy provided coverage for personal property up to $40,000.00, and its terms provided insurance for theft. The plaintiff has claimed that on February 27, 2003, the plaintiff's residence was robbed by unknown assailants and the plaintiff reported numerous items missing to the Nassau County Police Department and the defendant carrier.
The defendant carrier has not provided coverage for such theft and therefore has not provided the plaintiff with payment under the policy. The defendants assert affirmative defenses including that the plaintiff violated the policy provisions relating to concealment or fraud. The defendants claim that the plaintiff's sworn statement in proof of loss contained "willful concealments and misrepresentations of material facts and circumstances and fraud and false swearing", all of which were allegedly committed intentionally by the plaintiff. The defendants claim that the plaintiff, in connection with his claim, gave testimony under oath, and at such examination under oath, the plaintiff made "willful concealments and misrepresentations of material facts and circumstances and fraud and false swearing" including that a burglary occurred, and various jewelry items and other valuables were stolen.
Standard of Review
It is well settled that on a motion to dismiss pursuant to CPLR §3211, the complaint is to be afforded a liberal construction. (Leon v. Martinez, 84 NY2d 83). The issue on a motion pursuant to CPLR §3211(a)(7) is limited to ascertaining whether the pleading states any cause of action, and not whether there is evidentiary support for the complaint. (Holly v. Pennysaver Corp., 98 AD2d 570). All factual allegations must be accepted as true. (Guggenheimer v. Ginzberg, 43 NY2d 268). The criterion is whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law. (Guggenheimer v. Ginzberg, 43 NY2d 268).
Where a complaint fails to state a cause of action upon which relief can be granted, a motion to dismiss pursuant to CPLR §3211(a)(7) is appropriate. (Carletta v. Albini, 14 AD2d 813). Conclusory allegations are generally insufficient to sustain a claim. (Fowler v. American Lawyer Media, Inc., 306 AD2d 113; DiMauroa v. Metropolitan Surburban Bus Authority, 105 AD2d 236). The Court need not, and should not, accept legal conclusions, unwarranted inferences, unwarranted deductions, baseless conclusions of law, or sweeping legal conclusions cast in the form of factual allegations. (Ullmann v. Norma Kamali, Inc., 207 AD2d 691, Mark Hampton, Inc. v. Bergreen, 173 AD2d 220).
Bad Faith Causes of Action
The plaintiff's first cause of action alleges that the defendants failed to reimburse the plaintiff and have therefore acted in bad faith and have not provided coverage to the plaintiff, even though his premium was paid in full and the plaintiff met the terms and conditions of his policy. The plaintiff's fifth cause of action alleges that as a result of the defendants' failure to settle the plaintiff's [*3]claim in and of itself, the defendants have acted in a bad faith manner. The plaintiffs plead that the defendants' "disregard for their insured's interest were reckless and intentional and their actions constitute breach of contract, good faith and fair dealing and the defendants have failed to keep the insured's interests paramount to their own."
A claim for bad faith against an insurer cannot be predicated upon mere conclusory allegations that there was no good faith basis on which to deny a claim. Allegations that an insurer has no good faith basis for denying coverage are redundant to a cause of action for breach of contract based on the denial of coverage, and do not give rise to an independent tort cause of action, regardless of the tort language placed into the pleading. (Royal Indemnity Company v. Salomon Smith Barney, Inc., 308 AD2d 349). A cause of action alleging bad faith in an action for nonpayment of an insurance claim does not set forth an independent cause of action. "The use of familiar tort language to support a claim for breach of the implied covenant of good faith and fair dealing does not change the cause of action to a tort claim in the absence of an underlying tort duty sufficient to support a claim for punitive damages." (Drepaul v. Allstate Insurance Co., 299 AD2d 391; Bettan v. Geico General Insurance Co., 296 AD2d 496).
In this action by the plaintiff insured against its insurer, who denied payment to the insured under a homeowner's insurance policy, the plaintiff's cause of action for bad faith is an attempt to relate the insurer's conduct as a violation of Insurance Law §2601, which provides that an insurer shall not engage in unfair claim settlement practices. The provision provides that insurers must deal fairly with their insureds and the public at large, and are viewed as measures regulating the insurer's performance of its contractual obligations, "as an adjunct to the contract, not as a legislative imposition of a separate duty of reasonable care" and "does not give rise to a private cause of action" and "cannot be construed to impose a tort duty of care flowing to the insured separate and apart from the insurance contract." (New York University v. Continental Insurance Company, 87 NY2d 308). The Court of Appeals in Rocanova v. Equitable Life Assurance Society of the United States, 83 NY2d 603, and in New York University v. Continental, supra, have held that an alleged breach of the implied covenant of good faith and fair dealing, and the use of familiar tort language in the pleading, does not change a cause of action to a tort claim in the absence of an underlying tort sufficient to support a claim for punitive damages.
Therefore, the plaintiff's first and fifth causes of action alleging bad faith are hereby dismissed.
Punitive Damages
The plaintiff's seventh cause of action alleges that the defendants, in failing to abide by the contractual terms of the subject policy of insurance, in denying insurance coverage to the plaintiff based upon "willfully and wrongfully withholding monetary benefits to the plaintiff is guilty of malice and wantonness and oppression equivalent to malice and in willful disregard of plaintiff's rights." The plaintiff alleges that the defendants have "engaged in such a heinous course of conduct in failing to issue, failing to honor and failing to pay a claim" to the plaintiff "so as to warrant the [*4]award of exemplary or punitive damages."
The Court of Appeals in New York University v. Continental Insurance Company, supra, has succinctly laid out the "pleading elements required to state a claim for punitive damages as an additional and exemplary remedy when the claim arises from breach of contract." They are: (1) that the defendant's conduct must be actionable as an independent tort; (2) the tortious conduct must be of an egregious nature; (3) the egregious conduct must be directed to the plaintiff; and (4) it must be a part of a pattern directed at the public, generally. The Court of Appeals had directed that " where a lawsuit has its genesis in the contractual relationship between the parties, the threshold task for a court considering the defendant's motion to dismiss a cause of action for punitive damages is to identify a tort independent of the contract", and that a tort obligation is a duty separate and apart from the independent promises made. (Id).
Here, the plaintiff has failed to allege any independent tort for which the defendants may be liable for, and has not alleged a duty of the defendant except for its contractual duties as described in the insurance contract. The allegations asserted by the plaintiff do not give rise to a separate and distinct duty owed by the defendants apart from the relationship as insurer/insured, and thus, the allegations are insufficient.
The plaintiff has also failed to demonstrate, through specific evidentiary allegations, that the alleged conduct was of an egregious nature, and aimed not solely at this plaintiff, but at the public, generally. An insured cannot seek punitive damages for an insurer's wrongful conduct where the conduct was focused upon the insured, and not aimed systematically at the general public. (American Transitions. Co. v. Associated International Ins. Co., 261 AD2d 251). A claim for punitive damages against an insurer is cognizable only in circumstances where plaintiff has made sufficient evidentiary allegations of ultimate facts of fraudulent and deceitful scheme in dealing with general public as to imply criminal indifference to civil obligations. (Porter v. Allstate Inc. Co., 184 AD2d 685).
Accordingly, the plaintiff's seventh cause of action seeking punitive damages is hereby dismissed.
Attorney Fees
The plaintiff also seeks the recovery of attorney fees. The Court of Appeals has held that an insured may not recover the expenses incurred in bringing an affirmative action against an insurer to settle its rights under the policy. (New York University v. Continental Insurance Company, supra; Mighty Midgets, Inc. v. Centennial Insurance Company, 47 NY2d 12). The Court of Appeals has stated that in New York, there can be no recovery of attorney's fees, except where such recovery is authorized by an agreement between the parties, a statutory provision, or by the rules of the Court. (Chapell v. Mitchell, 84 NY2d 345). The plaintiff's submission that further discovery is necessary to further plaintiff's claim for punitive damages is unavailing. [*5]
Here, as it is clear that the insured has brought this action to settle its rights under the policy, the insured is not entitled to seek the recovery of attorney fees, and therefore, those portions of the complaint which seek attorney's fees are dismissed.
Causes of Action asserted against all Defendants
That branch of the defendants' motion seeking a dismissal against all defendants other than Charter Oak, as they did not issue the policy of insurance is denied with leave to renew. In support of its motion, the defendants submit an affidavit of Lorrayne Roman, team leader for the defendants, who avers that as set forth in the declaration page annexed as Exhibit "C", the subject policy of insurance was issued by Charter Oak and none of the other defendants named in this lawsuit. However, absent from the court's papers is such declaration page and an Exhibit "C".
Conclusion
The plaintiff's bad faith causes of action, cause of action for punitive damages, and those portions of the complaint which seek attorney's fees are dismissed. Therefore, the plaintiff's first, fifth and seventh causes of action are dismissed, as well as plaintiff's claims for attorney fees. That branch of the defendants' motion seeking dismissal against all defendants other than Charter Oak as they did not issue the policy of insurance is denied with leave to renew. E N T E R :
________________________________
J.S.C.
Dated:June 30, 2005
cc:
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