Successes

Insurer Prevails on Appeal in No-Fault Bad Faith Case October 31, 2013

Goldberg Segalla partner Paul D. McCormick, of the firm’s Appellate and Global Insurance Services Practice Groups, won an appeal before the New York State Appellate Division, Third Department, for an insurance carrier in a no-fault bad faith case stemming from a motor vehicle accident.

The insured was injured in an accident in January 2002, and the carrier denied his no-fault claim. The insured challenged the denial and sought, in addition to breach of contract damages, punitive damages based on an allegation that the carrier engaged in “bad faith tactics” by failing to promptly investigate his claim and failing to renew his policy. In 2011, the Supreme Court of New York dismissed the insured’s claims for bad faith punitive damages and denied his cross-motion to amend his complaint to adequately plead those claims. The insured appealed.

The Third Department agreed with our argument, affirming the Supreme Court’s ruling. On the issue of bad faith punitive damages, the court, forced by the standard on appeal to accept as true the facts as alleged, still held that the insured failed to allege a breach of duty distinct from the carrier’s contractual obligations. On the cross-motion to amend the complaint, the court held that the insured failed to establish that the proposed amendment was not plainly without merit.