Orman v GEICO Gen. Ins. Co.

[*1] Orman v GEICO Gen. Ins. Co. 2012 NY Slip Op 52205(U) Decided on November 30, 2012 Supreme Court, Kings County Schmidt, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on November 30, 2012
Supreme Court, Kings County

Sarah H. Orman and Gidon Orman, Plaintiffs,

against

GEICO General Insurance Company, Defendant.



21836/11



Plaintiff Attorney: Lester Herzog, 1729 E. 15th Street, Brooklyn, NY 11229

Defendant Attorney: Smith Mezure Director Wilkins Young & Yagerman, PC, 111 John Street, New York, NY 10038

David Schmidt, J.

The following papers numbered 1 to 11 read on these motions:

Papers Numbered

Notice of Motion/Order to Show Cause/

Petition/Cross Motion and

Affidavits (Affirmations) Annexed1-2, 3-4, 5-6

Opposing Affidavits (Affirmations)7-9

Reply Affidavits (Affirmations)10-11

Affidavit (Affirmation)

Other Papers

Upon the foregoing papers in this action seeking supplementary uninsured/underinsured motorist (SUM) coverage under a policy of insurance issued by defendant Geico General Insurance Company (Geico or defendant), plaintiffs Sarah H. Orman and Gidon Orman (plaintiffs) move, pursuant to CPLR 3211 (b), to dismiss four of Geico's affirmative defenses. By order to show cause, Geico moves to vacate plaintiffs' note of issue and [*2]certificate of readiness, and to strike this matter from the trial calendar. Geico separately cross-moves, pursuant to CPLR 3211 (a) (7),

to dismiss plaintiffs' second cause of action alleging that it breached its implied covenant of good faith and fair dealing.

Background

Plaintiff Sarah Orman (plaintiff) was involved in a car accident which took place on October 23, 2007 in Woodmere, New York. While plaintiff was making a left turn, plaintiffs' vehicle was struck in the rear by the vehicle owned and operated by Maximino Luna. According to the police report and the deposition testimony of plaintiff in the underlying action (Orman v Luna, Index No. 12108/09), Mr. Luna attempted to stop before the collision but was unable to do so. At the time of the accident, Mr. Luna had an Allstate automobile insurance policy with limits of $25,000 per person and $50,000 per accident. Plaintiffs held a policy with Geico which included SUM coverage with $50,000/$100,000 policy limits. It is not disputed that plaintiff is a "covered person" under the terms of the policy.

In August, 2008, Geico was awarded 100% in arbitration and plaintiffs' deductible of $500 was refunded to them.

In October, 2009, plaintiffs sent Geico a formal notice of their intention to make a claim, with accompanying correspondence. Geico acknowledged receipt of the claim by letter dated November 5, 2009, and advised plaintiffs to notify it if they received a policy limit settlement offer from Allstate that was less than their "UIM" limit. Plaintiffs' counsel advised Geico, by letter dated November 13, 2009, that Allstate had not yet tendered its policy and that the underlying action was being litigated, although it had not been placed on the trial calender.

On October 6, 2010, plaintiff was deposed in the underlying action.

In March, 2011, Allstate advised plaintiffs' counsel that it was offering the $25,000 policy limits for settlement of the bodily injury claim for plaintiff as a result of the accident.

By letter dated June 20, 2011, plaintiffs' counsel advised Geico that Allstate had tendered its policy of $25,000. In addition, counsel attached a copy of Allstate's tender, a copy of the declaration pages of the policy and an affidavit of "no excess" coverage, signed by Mr. Luna. Counsel also requested Geico's permission, in writing, to accept Allstate's tender.

By letter dated June 21, 2011, plaintiffs' counsel provided Geico with a package of medicals, photos and other documents, and again requested Geico's permission to accept Allstate's tender.

By letter dated June 23, 2011, Geico advised plaintiffs' counsel that "you have GEICO's permission to settle your client's Bodily Injury claim with the adverse tort carrier, Allstate, insurer of Maximino Luna." Geico also advised plaintiffs' counsel that in order to evaluate an underinsured motorist bodily injury claim, it required "medical specials" documenting plaintiff's injuries and a written authorization to obtain a copy of plaintiff's no-fault file.

By letter dated June 25, 2011, Allstate advised plaintiff and her attorney that a settlement check was issued to plaintiff in the amount of $25,000.

On August 30, 2011, referring to his August 15, 2011 conversation with Geico's claims examiner, plaintiffs' counsel advised Geico that plaintiffs would not accept anything less than [*3]the full $25,000 SUM coverage limits; that as of that date, Geico had not contacted him; and that he was in the process of drafting pleadings to commence a direct action against Geico. Counsel also stated that plaintiffs would be including a cause of action for bad faith, "in view of the fact that Geico refused to pay $25,000, where the economic damages alone, exceed one million dollars - without even considering the personal injuries and pain and suffering."

By letter dated September 15, 2011, Geico advised plaintiffs' counsel that plaintiffs' SUM policy limit was $50,000/$100,000; that it was "always willing to negotiate any claim in good faith;" and that, based upon alleged economic damages, it requested all medical authorizations, MRI films, the no-fault file and employment records so that it could properly evaluate plaintiffs' claim. Geico further stated that it would contact counsel upon completion of its review.

By letter dated September 26, 2011, plaintiffs' counsel again advised Geico that plaintiffs would not accept anything less than the full $25,000 SUM coverage limits, and that in response, "[the claims examiner] ... stated that Geico, at present, is unwilling to tender same." Plaintiffs' counsel further stated that in view of the above, he enclosed six authorizations and informed Geico that an action against Geico had been commenced.[FN1]

On that same date, (September 26, 2011) plaintiff commenced this action, alleging a cause of action for breach of contract, a cause of action alleging bad faith, and a cause of action for loss of consortioum. As relevant here, the second cause of action states:

"That defendant's refusal and/or neglect to pay its policy limits when requested to do so, was not made in good faith in view of all relevant circumstances.

That in refusing and/or neglecting to pay its policy limits, defendants considered only its own interests, without also taking into consideration the interests of its insured.

That the defendant's refusal and/or neglect to pay plaintiff amounted to gross disregard for its insured's interests; by failing to place the interests of its insured on equal footing with its own interests."

Plaintiffs' seek $100,000 in damages each for the first and second causes of action, and unspecified damages for the third cause of action.

On October 25, 2011, Geico answered the complaint and asserted various affirmative defenses including, as relevant here, that plaintiff did not sustain serious injury or non-economic loss under Insurance Law §§ 5102 and 5014.

Subsequently, plaintiffs move to dismiss four of Geico's affirmative defenses, plaintiff cross-moved to dismiss Geico's serious injury affirmative defense, and Geico moved to vacate the note of issue and certificate of readiness. [*4]

Discussion

Plaintiffs

'

Motion to Dismiss Defendant

'

s Affirmative Defenses

Plaintiffs move, pursuant to CPLR 3211 (b), to dismiss four of defendant's affirmative defenses. "A party may move for judgment dismissing one or more defenses, on the ground that a defense is not stated or has no merit" (Mazzei v Kyriacou, 98 AD3d 1088, 1088-1089 [2012], quoting CPLR 3211 [b]). "When moving to dismiss or strike an affirmative defense, the plaintiff bears the burden of demonstrating that the affirmative defense is without merit as a matter of law" (id., [internal quotation marks and citations omitted]). "In reviewing a motion to dismiss an affirmative defense, the court must liberally construe the pleadings in favor of the party asserting the defense and give that party the benefit of every reasonable inference" (id., [internal quotation marks and citations omitted]). "However, where affirmative defenses merely plead conclusions of law without any supporting facts,' the affirmative defenses should be dismissed pursuant to CPLR 3211 (b)" (Bank of Am., N.A. v 414 Midland Ave. Assoc., LLC, 78 AD3d 746, 750 [2010], quoting Fireman's Fund Ins. Co. v Farrell, 57 AD3d 721, 723 [2008]).

Here, with respect to defendant's second affirmative defense, plaintiffs have established that they obtained personal jurisdiction over defendant through documentary evidence. In this regard, plaintiffs have annexed the proof of service, a fee receipt and an acknowledgment from the New York State Insurance Department, confirming that defendant was served with the plaintiffs' summons and verified complaint on September 27, 2011 pursuant to Insurance Law § 1212. Further, defendant does not oppose this branch of plaintiffs' motion.

With respect to defendant's seventh affirmative defense - that plaintiffs' failed to properly notify defendant of their intent to make an "UM/UIM claim" - as indicated above, plaintiffs sent a Notice of Intention to Make Claim and accompanying correspondence to defendant by letter dated November 30, 2009. Thus, plaintiffs have sustained their burden of demonstrating that this defense is without merit as a matter law because it does not apply under the factual circumstances of this case (Tenore v Kantrowitz, Goldhamer & Graifman, P.C., 76 AD3d 556, 557-558 [2010]). Moreover, defendant does not oppose this branch of plaintiffs' motion.

Based upon the foregoing, these branches of plaintiffs' motion to dismiss defendant's second and seventh affirmative defenses are granted.

As to that branch of plaintiffs' motion to dismiss defendant's sixth affirmative defense - asserting that plaintiffs failed to meet conditions precedent to warrant "UM/UIM" benefits - plaintiffs argue that defendant fails to elaborate which conditions precedent they failed to meet. In particular, plaintiffs contend that they fulfilled the three condition precedents necessary to receive UIM/SUM benefits, namely: (1) they sent defendant a Notice of Intention to Make a Claim, (2) defendant admitted exhaustion of Mr. Luna's policy limits, and (3) that in its June 23, 2011 letter, defendant granted plaintiffs permission to settle with Allstate for its policy limits, set forth two requirements to pursue the underinsured claim, and never stated that plaintiffs failed to meet any conditions precedent.

In opposition to this branch of plaintiffs' motion, defendant argues that it did not admit [*5]that Mr. Luna's policy limits were exhausted, but only conceded that Allstate tendered an insurance policy with limits of $25,000 to the plaintiffs.[FN2] Specifically, defendant argues that there "may have been other applicable insurance policies that plaintiff did not attempt to reach," and essentially argues that the "affidavit of excess" signed by Mr. Luna is incompetent because it does not reference the accident date and makes "sweeping statements with nothing to support the claims." Further, defendant asserts that it should be given the opportunity "to explore whether Mr. Luna had other applicable insurance at the time of the accident [and that] [] [i]f so, plaintiff would have failed to meet a pre-condition of bringing this supplementary underinsured motorist claim."

As plaintiffs' state in their reply, defendant's contention that Mr. Luna may have additional coverage is speculative. Moreover, defendant does not dispute that it had the opportunity to determine whether Mr. Luna had any applicable insurance at the time of the accident. Further, defendant has failed to demonstrate that Mr. Luna's sworn affidavit of excess is incompetent. As noted above, Mr. Luna affirmed that he was not covered under another applicable insurance policy. Although his affidavit does not contain the date of the accident, it contains his policy number, which corresponds to the policy number on the copy of his policy/declaration pages showing the coverages that were on the policy at the time of loss of "10[-]23[-]2007," as affirmed by an Allstate Claim Support representative in a notarized statement (Plaintiff's Notice of Motion, Exh. G).

In addition, Mr. Luna's affidavit was provided to defendant by plaintiffs' counsel on June 20, 2011 - before defendant gave plaintiffs permission to settle plaintiff's bodily injury claim with Allstate - which contains the name of the underlying action as well as the claim number for the accident. Finally, as noted immediately above, defendant gave plaintiffs permission to settle with Allstate, and the record does not indicate that defendant advised plaintiffs at any time that it failed to comply with any conditions precedent. Where, as here, an affirmative defense merely pleads conclusions of law without any supporting facts, it should be dismissed.Based on the foregoing, this branch of plaintiffs' motion to dismiss defendant's sixth affirmative defense is granted.

Plaintiffs also move to dismiss defendant's third affirmative defense that plaintiffs did not sustain a serious injury under Insurance Law § 5102 or sustain economic loss under Insurance Law § 5104. Plaintiffs argue that the serious injury threshold does not apply in this action for two reasons. First, plaintiffs contend that is not an action "against another covered person," since Geico, the defendant, does not qualify as a "covered person" under Insurance Law § 5012 (j). In this regard, section j of Insurance Law § 5102, entitled "Definitions," provides that:

" Covered person' means any pedestrian injured through the use or operation of, or any owner, operator or occupant of, a motor vehicle which has in effect the financial security required by article six or eight of the vehicle and traffic law or which is referred to in subdivision two of section three hundred twenty-one of such law; or any other person entitled to first party benefits." [*6]

Second, plaintiffs assert that this is not an action for "personal injuries" to which the "serious injury" threshold requirement applies under Insurance Law § 5104 (a); rather it is a breach of contract action in which the serious injury threshold is not applicable. Stated otherwise, plaintiff argues that she is not alleging that defendant was negligent in the use or operation of a motor vehicle; rather she contends that this action relates strictly to defendant's contractual liability based on its "SUM/UIM endorsements." In this regard, Insurance Law § 5104 (a), entitled "Causes of action for personal injury," provides, in pertinent part, that:

"(a) Notwithstanding any other law, in any action by or on behalf of a covered person against another covered person for personal injuries arising out of negligence in the use or operation of a motor vehicle in this state, there shall be no right of recovery for non-economic loss, except in the case of a serious injury, or for basic economic loss..." (emphasis added).

Despite the foregoing arguments, plaintiffs concede that "[f]or the sake of full disclosure . . . in Raffellini (v State Farm Mutual Automobile Insurance, 9 NY3d 196 [2007]), the Court of Appeals sided with the Fourth Department (against the Second Department) and found that the serious injury' [no] [f]ault threshold does apply in the SUM/UIM context." Nevertheless, plaintiffs go on to state that Raffellini "was strictly predicated on the proper interpretation of two implicitly contradictory provisions of Insurance Law § 3420, that the court "did not consider [their] legal arguments predicated on §§ 5102 and 5104," and "[t]herefore, notwithstanding the holding in Raffellini, the courts are not foreclosed from considering the same issue on alternate grounds."

Plaintiffs also contend that even assuming that they are required to demonstrate that they sustained serious injury in order to obtain their SUM coverage, they have already done so do by demonstrating that they sustained over a million dollars in economic damages,[FN3] and that plaintiff has a "medically determined injury or impairment" which prevented her from "performing substantially all of the material acts that constituted her usual and customary daily activities for not less than ninety days during the one hundred eighty days immediately following the accident."

This branch of the plaintiffs' motion must be denied. In Raffellini (9 NY3d at 205), the Court of Appeals held that in an action by an insured against its insurer for supplementary uninsured/underinsured motorist coverage, the plaintiff must prove that he or she sustained a serious injury. The court held that Insurance Law § 3420 (f) (2), which "addresses additional optional personal injury coverage that can be purchased by a policyholder [i.e. SUM coverage]," is an extension of Insurance Law § 3420 (f) (1), the statute which "mandates that insurers provide uninsured motorist coverage in every New York motor vehicle liability policy," and which conditions payment of mandatory uninsured motorist benefits on a finding that the insured suffered a serious injury as defined in Insurance Law § 5102 (d) (emphasis added) (id. at 200). Thus, the court ruled that the serious injury exclusion of Insurance Law § 3420 (f) (1) applies to supplementary benefits (Insurance Law [*7]§ 3420 [f] [2]), and that therefore an insured must prove serious injury in order to receive supplementary benefits (id. at 204).

Plaintiffs nevertheless argue that the Court of Appeals in Raffellini did not consider their arguments under Insurance Law § 5104 and 5012 (j), and thus may consider them now. This argument must be rejected. As an initial matter, these arguments were raised before the Supreme Court and the Appellate Division, Second Department. Although these courts granted plaintiffs' motion to strike the insurance company's serious injury defense, in part, on these grounds, the Court of Appeals came to the opposite conclusion based upon the same facts.

Moreover, the claim that the Court of Appeals did not consider plaintiffs' arguments under Insurance Law §§ 5104 (a) and 5102 (d) must be rejected since the court relied upon Insurance Law § 5104 in coming to its conclusion. Specifically, the court was unpersuaded that the placement of the serious injury exclusion in Insurance Law § 3420 (f) (1) but not in 3420 (f) (2) reflected a "legislative determination to restrict the serious injury exclusion to mandatory benefits." In this regard, the court held that:

"such a distinction would not be consistent with the policy underlying supplementary benefits, which are designed to give insureds the same level of protection that would have been available to others under the policy if the insureds were the tortfeasors who caused personal injuries. When an insured injures someone in a motor vehicle accident, the injured party is subject to the serious injury requirement in the No-Fault Law and cannot sue for noneconomic loss unless the serious injury threshold is met (see Insurance Law § 5104 [a]). Since the purpose of supplementary coverage is to extend to the insured the same level of coverage provided to an injured third party under the policy, the insured must also meet the serious injury requirement before entitlement to supplementary benefits. If this were not the case, the insured would receive coverage more comprehensive than that available to a third party injured by the insured (emphasis added).

It is evident from the facts of this case that the application of the serious injury exclusion is consistent with the policy supporting supplementary benefits. Here, plaintiff received payment for his basic economic loss through no-fault benefits. When he sued the negligent party who caused the collision, he was seeking recovery for noneconomic loss. Having obtained the $ 25,000 limit of coverage from the negligent driver's insurer, he then sought additional noneconomic loss damages under the SUM endorsement to his State Farm insurance policy. Since a third party injured as a result of plaintiff's negligence would have had to demonstrate serious injury to obtain noneconomic loss damages under plaintiff's policy, it follows that plaintiff himself must prove serious injury to recover under his SUM endorsementas Regulation 35-D requires. State Farm is therefore entitled to pursue its serious injury defense" (Raffellini, 9 NY3d at 205).

In any event, based upon the precedent of Raffellini, this court may not entertain plaintiffs' arguments since, as indicated above, the Court of Appeals has conclusively held that an insurer is entitled to pursue a serious injury defense when sued by its insured for supplementary underinsured motorist benefits. Accordingly, this branch of plaintiffs' motion [*8]to dismiss defendant's third affirmative defense is denied.

Cross Motion of Defendant

Defendant cross-moves to dismiss plaintiffs' second cause of action alleging a breach of the implied covenant of good faith and fair dealing. Defendant argues that plaintiffs cannot recover damages premised upon this cause of action because they have not pled and cannot prove the necessary allegations for bad faith. Defendant also contends that this cause of action seeks punitive damages, which are not available because breach of the implied covenant of good faith and fair dealing is not an independent tort, and because plaintiffs have not alleged that its conduct was egregious and that it was directed toward the public generally (New York Univ. v Cont'l Ins. Co., 87 NY2d 308, 316 [1995]).

In opposition, plaintiffs argue that although this state has not explicitly recognized a bad faith cause of action against a SUM insurer by its insured, the law with respect to SUM coverage is evolving in this state; that defendant has incorrectly characterized this cause of action as one solely for punitive damages so that it could argue that such a claim is not actionable; and that their complaint explicitly alleges "bad faith" as a separate cause of action.

In reply, defendant argues that plaintiffs rely upon the very case law that it had already distinguished in its cross motion; that, contrary to plaintiffs' claim, it has cited a case which has rejected the application of general principles relating to a bad faith claim in a SUM context (Grinshpun v Travelers Cas. Co. of Conn., 23 Misc 3d 1111A, 2009 NY Slip Op 50706[U] [2009]); and that plaintiffs have conceded that they are seeking punitive damages because their counsel asserts that it is necessary to warn insurance carriers of the potential for "severe consequences" if they do not immediately tender their full SUM coverage upon request.

"In determining a motion to dismiss a cause of action pursuant to CPLR 3211 (a) (7) . . . the pleading is afforded a liberal construction, the facts alleged are accepted as true, and the proponent of the pleading is accorded the benefit of every favorable inference" (J & D Evans Constr. Corp. v Iannucci, 84 AD3d 1171, 1171 [2011]). However, "bare legal conclusions as well as factual claims flatly contradicted by the record are not entitled to any such consideration" (Lutz v Caracappa, 35 AD3d 673, 674 [2006]). Moreover, "[i]f the facts as alleged do not fit within any cognizable legal theory, the cause of action must be dismissed" (Meltzer v Meltzer, 41 AD3d 558, 558 [2007]).

"Implicit in every contract is a covenant of good faith and fair dealing" (Elmhurst Dairy, Inc. v Bartlett Dairy, Inc., 97 AD3d 781, 784 [2012]). "This covenant embraces a pledge that neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract" (511 W. 232nd Owners Corp. v Jennifer Realty Co., 98 NY2d 144, 153 [2002] [internal quotation marks and citations omitted]). Further, "[w]hile the duties of good faith and fair dealing do not imply obligations inconsistent with other terms of the contractual relationship, they do encompass any promises which a reasonable person in the position of the promisee would be justified in understanding were included" (id.).

"[C]onsequential damages resulting from a breach of the covenant of good faith and fair dealing may be asserted in an insurance contract context, so long as the damages were [*9] "within the contemplation of the parties as the probable result of a breach at the time of or prior to contracting'"'(Panasia Estates, Inc. v Hudson Ins. Co., 10 NY3d 200, 203 [2008], quoting Bi-Econony Mkt., Inc. v Harleysville Ins. Co. of N.Y, 10 NY3d 187, 192 [2008], quoting Kenford Co. v County of Erie, 73 NY2d 312, 319 [1989]; see also Stein, LLC v Lawyers Tit. Ins. Corp.,AD3d, 2012 NY Slip Op 7291, *2 [2d Dept 2012]; Hoffman v Unionmutual Stock Life Ins. Co. of NY, 51 AD3d 633, 634 [2d Dept 2008]; Meegan v Progressive Ins. Co., 43 AD3d 182, 186-187 [4th Dept 2007]; Acquista v NY Life Ins. Co., 285 AD2d 73, 80 [1st Dept 2001]; TADCO Constr. Corp. v Allstate Ins. Co., 2011 NY Slip Op 33621[U], *5 [2011]). "Courts also look at what liability the defendant fairly may be supposed to have assumed consciously, or to have warranted the plaintiff reasonably to suppose that it assumed, when the contract was made...'" (TADCO Constr. Corp., 2011 NY Slip Op 33621 [U], *5, quoting Kenford Co., Inc., 73 NY2d at 319). In addition, "[t]he nature, purpose and particular circumstances of the contract are some of the factors to be considered in determining what was in the reasonable contemplation of the parties at the time of the execution of the contract" (id., citing Rose Lee Mfg., Inc. v Chemical Bank, 186 AD2d 548, 551 [1992]). Finally, "[p]roof of consequential damages cannot be speculative or conjectural" (id., citing Ashland Mgt. Inc. v Janien, 82 NY2d 395, 403 [1993]).

Here, plaintiffs' second cause of action seeks damages for defendant's alleged bad faith in refusing to pay its policy limits when requested to do so, which "amounted to gross disregard for [their] . . . interests." However, the cause of action fails to state a viable claim for breach of the covenant of good faith and fair dealing. As an initial matter, as indicated above, defendant's assertion of a serious injury defense does not constitute bad fath. In any event, plaintiffs fail to allege that the damages they allegedly sustained were contemplated by the parties "as the probable result of a breach at the time of or prior to contracting" (Panasia Estates, Inc., 10 NY3d at 203 [internal quotation marks omitted]), nor does the record reflect that such consequential damages were reasonably contemplated by the parties (see Third Equities Corp. v Commonwealth Land Tit. Ins. Co., 2010 NY Slip Op 33462 [U], *15 [2010]). In addition, plaintiffs do not make this claim in their verified bill of particulars nor do they make this argument in opposition to defendant's cross motion.

Further, extra-contractual damages have been awarded in cases involving insurance contracts different than the type of insurance contract involved here. For example, Bi-Economy involved a policy that included business interruption insurance which was designed to ensure that the insured had the financial support necessary to sustain its business operation in the event disaster occurred. The court held that plaintiff was entitled to extra contractual damages as a result of the defendant's bad faith handling of plaintiff's claim (failing to promptly adjust and pay the loss, resulting in the collapse of the business), because "the very purpose of business interruption coverage would have made [the insurer] aware that if it breached its obligations under the contract to investigate in good faith and pay covered claims it would have to respond in damages to [the insured] for the loss of its business as a result of the breach" (Bi-Economy, 10 NY3d at 195). Similarly, PanasiaEstates, Inc. involved a commercial property insurance policy covering damage to property while undergoing renovation. Rain had entered into the insured's building resulting in extensive damage, the insurer did not investigate until several weeks later, and then denied the claim [*10]three months afterward. The court held that the insured's claim for consequential damages based upon the insurer's alleged failure to promptly investigate the claim was viable because such a claim could be asserted in an insurance context so long as the damages were contemplated by the parties as a probable result of the breach when they entered into the contract (see also Rodriguez v Allstate Ins. Co., 33 Misc 3d 827, 831 [Sup Ct, Kings County, 2011] [plaintiff-insured's claim for consequential damages, namely car payments she made on a car that she was unable to use but for the defendant insurer's alleged breach of contract, was a foreseeable consequenceof defendant's alleged breach of contract];Carden v Allstate Ins. Co., 30 Misc 3d 479, 482 [2010] [under "Deluxe Homeowner's Policy," plaintiffs submitted evidence in admissible form that they suffered damages due to the delay in reconstruction of house because of defendant's bad faith delay in settling their claim - after fire to house and damage to roof, mold developed, and plaintiffs were forced to remain out of dwelling and incur living expenses]; Handy & Harman v American International Group, Inc., 2008 NY Slip Op 32366 [U], *11 [2008] [plaintiff insured sufficiently alleged a claim for consequential damages for breach of the covenant of good faith based on insurer's alleged failure to fully investigate its claims where purpose of environmental pollution liability policy was to "protect [the insured] from the calamity of unforseen and monumental environmental clean-up costs, and avert risk with regard to such costs and liabilities"]). Thus, in light of the nature of the contract involved here - an automobile liability insurance policy -it cannot reasonably be argued that plaintiffs contemplated receiving consequential damages as a result of defendant's breach of its implied covenant of good faith and fair dealing

Finally, plaintiffs do not allege that they suffered any damages as a consequence of defendant's alleged bad faith refusal to pay their claims (Grinshpun, 2009 NY Slip Op 50706[U],*4). In this regard, plaintiffs do not claim that defendant's refusal to pay them their SUM benefits required them to incur any extra-contractual damages or prevented them from paying for needed medical and/or other living expenses. Thus, this cause of action merely alleges a denial of benefits promised under a policy of insurance (cf. Acquista, 285 AD2d at 80). As such, it is duplicative of plaintiffs' first cause of action for breach of contract (see Jackson v AXA Equitable Life Ins. Co., 2011 NY Slip Op 32461[U], *3 [2011] [plaintiff's third cause of action for breach of the covenant of good faith and fair dealing under a disability insurance policy duplicates plaintiff's breach of contract claim; both claims arise from a dispute over the policy's obligations and defendants' satisfaction of them];Authelet v Nationwide Mutual Insurance Company, 2008 NY Slip Op 32929 [U], *3-4 [2008] [the plaintiff-insured's cause of action alleging breach of the implied covenant of good faith and fair dealing under a homeowner's policy pled the same conduct which was the predicate of breach of contract cause of action, i.e. the insurer's failure to pay the full amount of the insured's claim, and thus was duplicative of insured's breach of contract claim]). Based upon the foregoing, plaintiffs' second cause of action fails to state a claim for breach of the implied covenant of good faith and fair dealing. Accordingly, defendant's motion to dismiss this cause of action is granted.

Defendant

'

s

Order to Show Cause

Defendant moves by order to show cause to vacate the note of issue and certificate of [*11]readiness and to strike this matter from the trial calendar. In support of its motion, defendant argues, among other things, that this action is in its inception, that only preliminary documentary discovery has been exchanged, that there have been no depositions, court conferences, or an independent medical examination of the plaintiff; and that further discovery with respect to plaintiffs' claim for lost wages is required.

In opposition, plaintiffs assert, among other things, that discovery has already been conducted in the underlying action by Allstate and that additional discovery would be redundant.

In view of the court's determination denying plaintiffs' motion to dismiss defendant's serious injury affirmative defense - requiring further discovery of plaintiffs' injuries (alleged to be both continuing and permanent) - and in light of the fact that further discovery is required to address the issues set forth by defendant above, the court grants defendant's motion only to the extent of directing that discovery will continue and that defendant will be permitted to move for summary judgment within 60 days after discovery is complete.

In sum, plaintiffs' motion to dismiss defendant's second, sixth, and seventh affirmative defenses is granted, and the motion is otherwise denied. Defendant's cross motion to dismiss plaintiffs' second cause of action is granted. Defendant's application to vacate the note of issue and certificate of readiness is granted only to the extent of directing discovery to continue and to permit defendant to move for summary judgment within 60 days after discovery is complete.

This constitutes the decision and order of the court.

E N T E R

J. S. C. Footnotes

Footnote 1:Plaintiffs' counsel represents that "[a]ccording to the GEICO adjustor, there was a determination' made by the carrier that the claim did not meet the No Fault threshold, and that the claim was probably not even worth $ 25G, and that ALLSTATE had overpaid" (Aff. in Opposition to Defendant's Cross Motion to Dismiss Plaintiffs' Second Cause of Action, ¶ 7).

Footnote 2:As indicated above, defendant advised plaintiffs' counsel that plaintiffs "have GEICO's permission to settle your client's Bodily Injury claim with the adverse tort carrier."

Footnote 3:Plaintiffs have annexed an "Analysis of Economic Loss" prepared by Leonard R. Freifelder, Ph.D., dated January 11, 2010, indicating that plaintiff's total loss of earnings for the rest of her work life expectancy is $1,095,454 (Plaintiffs' Notice of Motion, Exh. F).