Benson v. Boston Old Colony Ins. Co.

• Decision Date: 24 November 1987
• Parties: William BENSON, Plaintiff-Respondent, v. BOSTON OLD COLONY INSURANCE COMPANY, Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 14

521 N.Y.S.2d 14

134 A.D.2d 214

William BENSON, Plaintiff-Respondent, v. BOSTON OLD COLONY INSURANCE COMPANY, Defendant-Appellant.

Supreme Court, Appellate Division,

First Department.

Nov. 24, 1987.

T.T. Kilhenny, New York City, for plaintiff-respondent.

V.A. Malito, Smithtown, for defendant-appellant.

Before MURPHY, P.J., and ROSS, ASCH and SMITH, JJ.

MEMORANDUM DECISION.

Order of the Supreme Court, New York County (Walter M. Schackman, J.), dated August 14, 1986, is modified, on the law, to the extent of denying plaintiff's claims for additional first party benefits, upon the payment received by him in June 1976, as barred by the Statute of Limitations, and otherwise affirmed, without costs or disbursements.

On December 6, 1975, plaintiff, while a pedestrian, was struck by an automobile insured by defendant carrier. Plaintiff applied for, and he received, no-fault benefits. Payment for the period from December 6, 1975 through April 6, 1976 was received in June 1976 and payment for the period April 6, 1976 through February 6, 1977 was received October 27, 1977. A third claim for benefits is still pending.

Plaintiff had received $800 monthly, which was deemed the maximum benefit at that time for lost earnings. In 1980, the Court of Appeals, in Kurcsics v. Merchants Mutual Insurance Company, 49 N.Y.2d 451, 426 N.Y.S.2d 454, 403 N.E.2d 159, decided that under Insurance Law § 671 (now § 5102), a covered person who sustained lost earnings of more than $1,000 per month could recover as first party no-fault benefits 80% of actual lost earnings up to a maximum of $1,000 per month. In Gurnee v. Aetna Life and Casualty Company, 55 N.Y.2d 184, 448 N.Y.S.2d 145, 433 N.E.2d 128, the Court of Appeals held that Kurcsics should be accorded full retroactive effect as to all claims not barred by the Statute of Limitations.

This action was commenced by plaintiff on January 11, 1983 for the additional $200 per month plus interest, pursuant to statute.

The sole stipulated issue before the Supreme Court was whether plaintiff's action was barred by the six-year Statute of Limitations (CPLR 213). That court rejected defendant's contention that that statute began to run on the date of the accident December 6, 1975. It held that the cause of action accrued and the statute began to run on October 27, 1977, the date when the plaintiff received the last payment based on the $800 monthly. Accordingly, the Statute of Limitations did not bar the plaintiff's claims.

This is a breach of contract action for the carrier's failure to pay the full amount due and owing under section 671 of the Insurance Law. The applicable statute of limitations is, therefore, six years (CPLR 213[2] ). The general rule is that the statute of limitations in an action on a contract begins to run at the time of breach of the agreement (Garfield v. Lowy, 12 A.D.2d 936, 210 N.Y.S.2d 941, affd. 9 N.Y.2d 942, 217 N.Y.S.2d 100, 176 N.E.2d 107).

Insurance Law § 5106(a) (formerly § 675[1] ) sets forth defendant carrier's obligation to pay first party benefits:

Payments of first party benefits and additional first party benefits shall be made as the loss is incurred. Such benefits are overdue if not paid within...