DiBlasi v. Aetna Life and Cas. Ins. Co.
| Decision Date | 22 May 1989 |
| Citation | 147 A.D.2d 93,542 N.Y.S.2d 187 |
| Parties | Virginia DiBLASI, Plaintiff, Joseph P. Caldara, et al., Respondents-Appellants, v. AETNA LIFE AND CASUALTY INSURANCE COMPANY, Appellant-Respondent. |
| Court | New York Supreme Court — Appellate Division |
J. Russell Clune, P.C., Harrison (Vincent J. Aceste, Kevin Conklin and Sharon A. Scanlan, of counsel), for appellant-respondent.
Jack Strauss, New City, for respondents-appellants.
Before MOLLEN, P.J., THOMPSON, RUBIN and SPATT, JJ.
The measure of damages in a "bad faith" case involving a solvent insured against whom a judgment in an amount in excess of the policy limits has been rendered is the amount of the judgment in excess of the policy limits plus interest. Accordingly, in this case, the plaintiffs Joseph Caldara and Denise Castiello (now Denise Caldara) are not entitled to consequential damages for emotional distress or punitive damages. Nor are they entitled to consequential damages relating to their credit standing or the loss of an opportunity to obtain a mortgage to finance the prospective purchase of a home.
On July 3, 1982, the plaintiff Virginia DiBlasi was a passenger in a motor vehicle operated by Joseph Caldara and owned by Denise Castiello (now Denise Caldara), which crossed a double yellow line and struck another vehicle, causing personal injuries to DiBlasi.
The vehicle owned by Mrs. Caldara was insured with Aetna Casualty Company (hereinafter Aetna) with maximum coverage of $25,000 for any one person. DiBlasi commenced a negligence action against the Caldaras in the Supreme Court, Rockland County. (The record does not reveal if the owner and operator of the second vehicle were also joined in that action.)
After a jury was selected before Justice Stolarik in the Supreme Court, Rockland County, on April 23, 1985, DiBlasi's counsel agreed to accept $23,000 in settlement of the action, and Aetna's attorney made a top offer of $17,500. The case went to trial, the jury verdict was for $42,000 and, on May 30, 1985, a judgment was entered in favor of DiBlasi against the Caldaras in the total sum of $42,390, including costs and disbursements. Aetna then paid $25,390, the maximum amount under its policy, leaving a balance of $17,000 as an outstanding judgment against the Caldaras.
On November 19, 1986, the Caldaras executed two assignments of their "bad faith" cause of action against Aetna to DiBlasi. The first was an unqualified assignment of "any and all rights or causes of action for damages we may have against Aetna * * * based on its failure to negotiate * * * in good faith". The second and superseding assignment is more restrictive and provides as follows:
(emphasis supplied).
A fair interpretation of this restricted assignment is that it purports to assign to DiBlasi only a portion of the Caldaras' "bad faith" cause of action, namely, the sum of $17,000 (the excess sum over the policy limits), representing the amount of the original judgment against the Caldaras in the sum of $42,350, less the sum paid by Aetna in the amount of $25,390. By implication, the execution of this restricted assignment of the Caldaras' "bad faith" cause of action against Aetna retained for the Caldaras any other claim for damages resulting from the failure of Aetna to settle the DiBlasi claim within the policy limits. Although the partial assignment of the bad faith cause of action to the plaintiff DiBlasi may appear at first glance to be an improper splitting of a cause of action (see, 930 Fifth Corp. v. King, 42 N.Y.2d 886, 397 N.Y.S.2d 788, 366 N.E.2d 875; Kelly v Champlain Studios, 223 App.Div. 240, 241, 228 N.Y.S. 5), in fact, there was no split since all parties to the assignment were joined as plaintiffs in the instant action ( see, Farmers' Reliance Mut. Ins. Co. v. Lane Constr. Corp., 212 App.Div. 528, 209 N.Y.S. 54, affd. 244 N.Y. 523, 155 N.E. 881).
The plaintiffs in the instant action commenced in January 1987 are Virginia DiBlasi, as assignee of Joseph and Denise Caldara and also Denise and Joseph Caldara, individually. The amended complaint is divided into three purported causes of action. The first cause of action states that it is on behalf of DiBlasi only and seeks damages in the sum of the $17,000, which was the amount then due and payable over the policy limits on the judgment in the underlying action.
The second cause of action and the third cause of action are brought on behalf of Joseph P. Caldara and Denise Caldara, respectively, and allege that on May 24, 1986, approximately one year after the entry of the judgment in the underlying action, the Caldaras executed a binder to purchase a one-family residence in Rock Tavern, New York, for the sum of $94,500. They further allege that when the recorded judgment in the underlying personal injury action was "uncovered", it caused them to lose a mortgage commitment and the prospective purchase of the house.
In the second cause of action, Mr. Caldara contends that, as a result of Aetna's "bad faith" in refusing to settle the underlying personal injury action, he sustained a plethora of consequential damages. These include damages to his credit standing and reputation, emotional distress and embarrassment, the loss of a potential home and miscellaneous inconveniences and future expenses and losses attendant to the inability of him and his wife to purchase that home (i.e., rent, loss of appreciation of the value of the home, greater cost of another home, higher interest rates for a future mortgage on a home and discomfort of living in a small apartment), and punitive damages. For the above myriad elements of damages, Mr. Caldara requests $250,000.
In the third cause of action, Mrs. Caldara repeats the identical items of consequential damages sought by Mr. Caldara in the second cause of action, and also asks for $250,000.
On June 18, 1987, DiBlasi settled the first cause of action for $8,000. The stipulation of discontinuance is drawn in favor of Virginia DiBlasi "only". A satisfaction of judgment in favor of the Caldaras was executed by DiBlasi on June 18, 1987. The release given by DiBlasi to Aetna states as follows:
"This release is specifically intended to release only those claims made by VIRGINIA DiBLASI, and is not to be construed as a release of any other claims by JOSEPH P. CALDARA and DENISE CASTIELLO (CALDARA)."
The defendant Aetna then moved for summary judgment dismissing the amended complaint insofar as it is asserted on behalf of the remaining plaintiffs, the Caldaras, upon the grounds that (1) the Caldaras assigned their claims to DiBlasi who settled for the sum of $8,000 and, therefore, they have no standing in this case, and (2) the remaining damages sought by the Caldaras "are not damages recognized in New York" in "bad faith" cases.
The order appealed from awarded summary judgment to Aetna as against the Caldaras and (1) dismissed the first cause of action to recover for the amount of the judgment in excess of the policy limits on the ground that it had been settled and was discontinued, (2) struck the punitive damage demands, and (3) struck the demands for damages for emotional distress which included the specific claims for damages listed by the Caldaras as humiliation and embarrassment, emotional upset and disappointment in not being able to purchase a one-family house. However, the Supreme Court, Rockland County, declined to strike the other demands for damages involving the alleged impairment of the Caldaras' credit standing, reputation, the loss of the mortgage commitment, delay in expanding their family and loss of their prospective home with the resultant increase in the price and mortgage interest rates for a comparable home.
On appeal, in addition to its contentions raised on the motion for summary judgment, Aetna further contends that the Caldaras have not established, prima facie, a bad faith refusal to settle the underlying action within the policy limits.
A review of the record reveals that the major injury sustained by the plaintiff DiBlasi was a dislocation of the right elbow with a chip fracture of the coronoid process of the right elbow. This has resulted in collateral ligament laxity, calcification in the joint capsule and post-traumatic changes in the right elbow joint which may lead to symptomatic arthritis. Dr. Howard A. Levin, the plaintiff DiBlasi's physician, testified at the trial that the bones of the forearm were displaced from the elbow joint about one and one-half inches to the rear and also about one inch to the side. He stated that when such a dislocation occurs, all the ligaments which normally hold the elbow joint in place are torn. Dr. Levin further testified that there is calcification in the ligaments surrounding the plaintiff's elbow joint which constitutes post-traumatic arthritis which is not only permanent but is progressive.
It is significant to note that the defendant did not produce its examining...
To continue reading
Request your trial
-
Delancy v. St. Paul Fire & Marine Ins. Co.
...Gen. Agents, Inc., 661 P.2d 1196, 1199 (Colo.App.1983) (recovery for emotional distress) with DiBlasi v. Aetna Life & Casualty Ins. Co., 147 A.D.2d 93, 542 N.Y.S.2d 187, 194-95 (1989) (no recovery for emotional distress), and for a wrongful death that is proximately caused by an insurer's b......
-
Medical Mut. Liability Ins. Soc. of Maryland v. Evans
...Cal.Rptr. 524 (1984); Wolfberg v. Prudence Mut. Casualty Co., 98 Ill.App.2d 190, 240 N.E.2d 176 (1968); DiBlasi v. Aetna Life & Casualty Ins. Co., 147 A.D.2d 93, 542 N.Y.S.2d 187 (1989); Carter v. Pioneer Mut. Casualty Co., 67 Ohio St.2d 146, 423 N.E.2d 188 (1981); Stumpf v. Continental Cas......
-
J. Kokolakis Contracting Corp. v. Evolution Piping Corp.
...see Pavia v. State Farm Mut. Auto. Ins. Co., 82 N.Y.2d 445, 605 N.Y.S.2d 208, 626 N.E.2d 24 [1993] ; DiBlasi v. Aetna Life and Cas. Ins. Co., 147 A.D.2d 93, 542 N.Y.S.2d 187 [2d Dept.1989] ).In Rocanova v. Equitable Life Assur. Socy. of U.S., 83 N.Y.2d 603, 612 N.Y.S.2d 339, 634 N.E.2d 940 ......
-
New England Ins. v. Healthcare Underwriters Mut.
...about the insured's liability were removed (St. Paul, supra, 43 N.Y.2d at 978, 404 N.Y.S.2d 552, 375 N.E.2d 733; DiBlasi, supra, 147 A.D.2d at 98-99, 542 N.Y.S.2d 187). Bad faith is established only "where the liability is clear and the potential recovery far exceeds the insurance coverage"......