Greenaway v. Tri-State Consumer Ins. Co.

• Decision Date: 15 September 2014
• Docket Number: INDEX NO. 600260/2014
• Citation: 2014 NY Slip Op 33926 (U)
• Parties: ELBERT GREENAWAY and AUGUSTINA GREENAWAY, on behalf of themselves and all other persons similarly situated, Plaintiffs, v. TRI-STATE CONSUMER INSURANCE COMPANY, Defendant.
• Court: New York Supreme Court

2014 NY Slip Op 33926(U)

ELBERT GREENAWAY and AUGUSTINA GREENAWAY,on behalf of themselves and all other persons similarly situated, Plaintiffs, v. TRI-STATE CONSUMER INSURANCE COMPANY, Defendant.

INDEX NO. 600260/2014

SUPREME COURT OF THE STATE OF NEW YORK NASSAU COUNTY TRIAL/IAS PART 34

RECEIVED: September 16, 2014

September 15, 2014

NYSCEF DOC. NO. 30

SHORT FORM ORDER

PRESENT: HON. DENISE L. SHER Acting Supreme Court Justice

Motion Seq. No.: 01

Motion Date: 04/17/14

The following papers have been read on this motion:

Papers Numbered

Notice of Motion, Affirmation and Exhibit, Affidavit and Exhibit and

Memorandum of Law

Memorandum of Law in Opposition, Affirmation in Opposition, Affidavit

Reply Memorandum of Law

Upon the foregoing papers, it is ordered that the motion is decided as follows:

Defendant moves, pursuant to CPLR § 3211(a)(1), for an order dismissing plaintiffs' Verified Complaint on the grounds that the causes of action are refuted by documentary evidence; and moves, pursuant to CPLR § 3211(a)(7), for an order dismissing plaintiffs' Verified Complaint on the grounds that said Verified Complaint fails to state causes of action. Plaintiffs oppose the motion.

On January 17, 2014, plaintiffs Elbert Greenaway and Augustina Greenaway ("the named plaintiffs") electronically filed a Summons and Verified Class Action Complaint on behalf of themselves and all other persons similarly situated. The Verified Complaint alleges that defendant engaged in deceptive acts and practices and defrauded its policyholders by routinely deducting contractors' overhead and profit from all of its repair or replacement cost estimates, by routinely obtaining several contractors' estimates and cherry-picking the lowest one to utilize in adjusting policyholders' claims and otherwise disregarding estimates it arbitrarily believes to be too expensive, and by cancelling payments made to policyholders, as well as stalling and delaying the investigation of claims as punishment when policyholders retain representation. See Defendant's Affirmation in Support Exhibit A ¶ 3.

Defendant issued a homeowners insurance policy on 33 Glover Avenue, Yonkers, New York ("the Premises") to the named plaintiffs, covering the period February 6, 2012 to February 6, 2013. See Defendant's Affidavit in Support Exhibit 1. The Verified Complaint alleges that, on or about January 27, 2013, a pipe break at the Premises caused water damage and the named plaintiffs made a claim under their homeowners insurance policy with defendant. See id. at ¶¶ 25-27. At defendant's request, Prism General Services estimated the replacement cost value of the loss at the Premises as $56,642.56, which included overhead and profit of $9,295.68. See id. at ¶¶ 30-31. Defendant obtained a second estimate of $20,165.50 from Metro Claims Mgmt NYC Inc., which excluded overhead and profit, and issued payment to the named plaintiffs in that amount. See id. at ¶¶ 33-37. After the named plaintiffs retained counsel and disputed the amount defendant paid for their loss, defendant cancelled the check for $20,165.50 and allegedly threatened to delay investigation of their claim. See Defendant's Affirmation in Support Exhibit A ¶ 38.

The named plaintiffs seek to bring this class action pursuant to CPLR Article 9, on behalf of themselves and all current and former owners of insurance policies issued by defendant, for the period beginning six (6) years before commencement of this action to the present, who suffered an insurance loss and reported it to defendant. See id. at ¶ 12.

The Verified Complaint asserts five causes of action. The first cause of action asserts a claim for breach of contract on behalf of the named plaintiffs. The second cause of action asserts a claim for violation of General Business Law § 349 on behalf of the named plaintiffs. The third cause of action asserts a claim for breach of contract on behalf of the class members. The fourth cause of action asserts a claim for violation of General Business Law § 349 on behalf of the class members. The fifth cause of action seeks a declaratory judgment on behalf of the named plaintiffs and all others similarly situated. See id.

Defendant moves to dismiss plaintiffs' Verified Class Action Complaint arguing that it sets forth only conclusory allegations and fails to adequately allege each of the requirements for a class action under CPLR § 901(a).

CPLR § 901(a) provides that:

"One or more members of a class may sue or be sued as representative parties on behalf of all if:

1. the class is so numerous that joinder of all members, whether otherwise required or permitted, is impracticable;

2. there are questions of law or fact common to the class which predominate over any questions affecting only individual members;

3. the claims or defenses of the representative parties are typical of the claims or defenses of the class;

4. the representative parties will fairly and adequately protect the interests of the class; and

5. a class action is superior to other available methods for the fair and efficient adjudication of the controversy."

CPLR Article 9 is to be liberally construed and any error should be resolved in favor of allowing the class action. See Smilewicz v. Sears Roebuck & Co., 82 A.D.3d 744, 917 N.Y.S.2d 904 (2d Dept. 2011); Beller v. William Penn Life Ins. Co. of N.Y., 37 A.D.3d 747, 830 N.Y.S.2d 759 (2d Dept. 2007).

Moreover, when deciding a motion to dismiss pursuant to CPLR § 3211, the pleading is to be afforded a liberal construction and the court is obliged to accept the facts as alleged in plaintiffs' complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory. On a motion to dismiss pursuant to CPLR § 3211(a)(1), on the ground that a defense is founded upon documentary evidence, dismissal of plaintiffs' complaint is warranted only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law. In assessing a motion to dismiss pursuant to CPLR § 3211(a)(7), for failure to state a cause of action, the Court may also consider affidavits submitted by plaintiffs to remedy any defects in the complaint and the criterion is whether plaintiffs have a cause of action, not whether they have stated one. See Leon v. Martinez, 84 N.Y.2d 83, 614 N.,Y.S.2d 972 (1994).

While a decision as to the propriety of a class would ordinarily follow a motion and hearing pursuant to CPLR § 902, dismissal pursuant to CPLR §3211(a)(7) may be proper if it appears conclusively from the complaint and from the affidavits that there is, as a matter of law, no basis for class action relief. See Wojciechowski v. Republic Steel Corp., 67 A.D.2d 830, 413 N.Y.S.2d 70 (4^th Dept. 1979). However, if the prerequisites for declaring a class action are at least arguably present, it would be premature for the Court to dismiss the plaintiffs' class action before an answer has been served. See Bernstein v. Kelso & Co., 231 A.D.2d 314, 659 N.Y.S.2d 276 (1^st Dept. 1997).

It should be noted that the standard on a motion to dismiss for failure to state a cause of action pursuant to CPLR § 3211(a)(7) differs from the standard applicable to a motion seeking class certification, in which the plaintiff seeking certification bears the initial burden of establishing by competent evidence in admissible form that the prerequisites of CPLR § 901(a) have been met. See Cooper v. Sleepy's, LLC, 120 A.D.3d 742, ___ N.Y.S.2d ___ (2d Dept. 2014); Osarczuk v. Associated Univs., Inc., 82 A.D.3d 853, 918 N.Y.S.2d 538 (2d Dept. 2011); Rallis v. City of New York, 3 A.D.3d 525, 770 N.Y.S.2d 736 (2d Dept. 2004); Feder v. Staten Is. Hosp., 304 A.D.2d 470, 758 N.Y.S.2d 314 (1^st Dept. 2003).

Defendant takes the position that the Verified Complaint sets forth only conclusory allegations which fail to allege common questions of law or fact that predominate over individual issues as required by CPLR § 901(a)(2) and that the named plaintiffs' claims do not meet the typicality requirement of CPLR § 901(a)(3) because the only allegations of fact in the Verified Complaint relate solely and exclusively to the named plaintiffs Elbert and Augustina Greenaway.

Commonality cannot be determined by any mechanical test and the fact that questions peculiar to each individual may remain after resolution of the common questions is not fatal to a class action. Predominance, not identity or unanimity, is the linchpin of commonality. See City of New York v. Maul, 14 N.Y.3d 499, 903 N.Y.S.2d 304 (2010). Factual questions peculiar to class representatives do not defeat commonality. See Dugan v. London Terrace Gardens, LP, 986 N.Y.S.2d 740 (Sup. Ct, New York County 2013).

Typicality requires not only that the representative party have an individual cause of action, but that the interest of the representative must be closely identified with the interests of all other members of the class. However, the named plaintiffs' claims need not be identical to those of the class. See Krebs v. Canyon Club, Inc., 22 Misc.3d 1125(A), 880 N.Y.S.2d 873 (Sup. Ct,Westchester County 2009). The requirement of typicality is satisfied if the plaintiffs' claims derive from the same practice or course of conduct that gave rise to the remaining claims of other class members and are based upon the same legal theory. See Friar v. Vanguard Holding Corp., 78 A.D.2d 83, 434 N.Y.S.2d 698 (2d Dept. 1980).

Moreover, a trial judge has discretion to sever particular issues for class determination and to divide the class into subclasses. See CPLR § 906; Emilio v. Robison Oil Corp., 63 A.D.3d 667, 880 N.Y.S.2d 177 (2d Dept. 2009).

While the Verified Complaint only contains specific allegations regarding the claims of the named plaintiffs against defendant, the attorney's affirmation offered in opposition to defendant's motion to dismiss makes reference to additional Tri-State policy holders who made...