Jonas v. New York Cent. Mut. Fire Ins. Co.

• Decision Date: 19 November 1997
• Citation: Jonas v. New York Cent. Mut. Fire Ins. Co., 665 N.Y.S.2d 189, 244 A.D.2d 916 (N.Y. App. Div. 1997)
• Parties: , 1997 N.Y. Slip Op. 9723 Marc JONAS and Donna Jonas, Respondents, v. NEW YORK CENTRAL MUTUAL FIRE INSURANCE COMPANY, Appellant.
• Court: New York Supreme Court — Appellate Division

Page 189

665 N.Y.S.2d 189

244 A.D.2d 916, 1997 N.Y. Slip Op. 9723

Marc JONAS and Donna Jonas, Respondents, v. NEW YORK CENTRAL MUTUAL FIRE INSURANCE COMPANY, Appellant.

Supreme Court, Appellate Division Fourth Department.

Nov. 19, 1997.

O'Connor, Gacioch, Pope & Tait, L.L.P. by Hugh Leonard, Binghamton, for Defendant-Appellant.

Julian & Pertz, P.C. by Richard Pertz, Utica, for Plaintiffs-Respondents.

Before GREEN, J.P., and LAWTON, HAYES, CALLAHAN and FALLON, JJ.

MEMORANDUM:

Supreme Court should have granted in its entirety defendant's motion for summary judgment dismissing the complaint. On November 24, 1989, Donna Jonas (plaintiff) was driving a vehicle in which her two children and her in-laws were passengers. Plaintiff's vehicle collided with a vehicle driven by a third party, who was not insured. Plaintiff's vehicle was insured by defendant with liability limits of $300,000 and uninsured motorist coverage limits of $100,000.

The passengers in plaintiff's vehicle filed claims with defendant for injuries that they sustained as a result of the accident. Plaintiff filed a claim with defendant under the uninsured motorist provisions of the policy. In investigating the accident, defendant's agents reviewed the police report and interviewed witnesses, including an individual who was in the vehicle directly behind the vehicle driven by the third party. That witness substantiated the third party's account that the traffic light facing the third party was green when the third party entered the intersection where the accident occurred. Based on that information, defendant determined that plaintiff's negligence was the cause of the accident and denied plaintiff's claim for uninsured motorist benefits. The passengers in plaintiff's vehicle commenced an action against plaintiff, asserting that her negligence caused the accident and their injuries. Defendant provided a defense for plaintiff and ultimately settled that action for $195,000. At the same time, plaintiff demanded arbitration of defendant's denial of her uninsured motorist claim. After a hearing, the arbitrator awarded plaintiff $68,817.95 on her uninsured motorist claim. Plaintiffs then executed a release with respect to any and all claims for injuries sustained by plaintiffs relating to plaintiff's claim for uninsured motorist benefits under the insurance policy.

Plaintiffs thereafter commenced this action, asserting causes of action for breach of contract and negligence. Plaintiffs state in the complaint that defendant "breached its contract with the plaintiffs, more specifically its implied duty of good faith dealing, when it arbitrarily and capriciously determined" that plaintiff was at fault in the accident. Defendant moved for summary judgment, and plaintiffs cross-moved to amend the complaint to add causes of action for prima facie tort and a violation of General Business Law § 349(a). The court granted defendant's motion to the extent of dismissing the negligence cause of action and granted plaintiffs' cross motion. The court should have granted defendant's motion in its entirety and denied plaintiffs' cross motion.

To sustain a cause of action based on the breach of an insurer's implied duty of good faith, the insured must present proof that the insurer's conduct was in gross disregard of the insured's interests (see, Pavia v. State Farm Mut. Auto. Ins. Co., 82 N.Y.2d 445, 452-454, 605 N.Y.S.2d 208, 626 N.E.2d 24, rearg. denied 83 N.Y.2d 779, 611 N.Y.S.2d 126, 633 N.E.2d 480; Dano v. Royal Globe Ins. Co., 59 N.Y.2d 827, 829-830, 464 N.Y.S.2d 741, 451 N.E.2d 488; see also, Gordon v. Nationwide Mut. Ins. Co., 30 N.Y.2d 427, 437, 334 N.Y.S.2d 601, 285 N.E.2d 849, rearg. denied 31 N.Y.2d 709, 337 N.Y.S.2d 1029, 289 N.E.2d 569, cert. denied 410 U.S. 931, 93 S.Ct. 1374, 35...