Lawrence v. Houston

• Decision Date: 04 April 1991
• Citation: 172 A.D.2d 923,567 N.Y.S.2d 962
• Parties: Donald H. LAWRENCE, III, et al., Appellants, v. Marlin J. HOUSTON, et al., Defendants, and Dryden Mutual Insurance Company, formerly known as Dryden Groton Cooperative Fire Insurance Company, et al., Respondents.
• Court: New York Supreme Court — Appellate Division

Page 962

567 N.Y.S.2d 962

172 A.D.2d 923

Donald H. LAWRENCE, III, et al., Appellants, v. Marlin J. HOUSTON, et al., Defendants and Dryden Mutual Insurance Company, formerly known as Dryden Groton Cooperative Fire Insurance Company, et al Respondents.

Supreme Court, Appellate Division Third Department.

April 4, 1991.

Schickel Law Office (Norbert H. Schickel III, of counsel), Ithaca, for appellants.

Williamson, Clune & Stevens (Robert J. Clune, of counsel), Ithaca, for defendants and respondents.

Before WEISS, J.P., and MIKOLL, YESAWICH, LEVINE and MERCURE, JJ.

WEISS, Justice Presiding.

Appeal from an order of the Supreme Court (Rose, J.), entered January 29, 1990 in Tompkins County, which, inter alia, granted defendants' motion for partial summary judgment dismissing certain causes of action in the complaint.

On May 1, 1982, 15-year-old plaintiff Donald H. Lawrence, III (hereinafter plaintiff) sustained serious personal injuries when he was run over by a tractor owned by defendant Marlin J. Houston and operated by defendant Scott Smith. Defendant Dryden Mutual Insurance Company was Houston's liability insurance carrier and at the times pertinent herein, defendant Robert J. Lawery was general manager of Dryden as well as Dryden's predecessor (Dryden-Groton Cooperative Fire Insurance Company). Plaintiffs commenced a negligence action against defendants which included causes of action against Dryden and Lawery alleging, inter alia, fraud and negligent misrepresentation. They contended that Lawery advised them against getting a lawyer and told them that Dryden would settle directly with them, and to wait until plaintiff reached the age of 21 at which time Dryden would evaluate his injuries and make a fair settlement. Lawery concedes only that he advised plaintiffs to wait until plaintiff reached 21 years of age to resolve the claim. During the intervening years, Dryden paid certain medical bills and portions of others incurred for treatment of plaintiff's injuries. After plaintiff reached 21 Dryden offered $4,000 in full settlement, which plaintiffs rejected and retained counsel to institute this lawsuit seeking damages against Houston and Smith for personal injuries and seeking compensatory and punitive damages against Dryden and Lawery for fraud, negligent misrepresentation and other causes of action.

In their answer, defendants did not assert the Statute of Limitations which, by that time, barred the action and Dryden otherwise acknowledged its obligation to defend and to indemnify its insured. Defendants moved for partial summary judgment dismissing all causes of action against Dryden and Lawery and plaintiffs cross-moved for partial summary judgment on the same causes of action, plus sanctions, and for discovery. Supreme Court held that plaintiffs had failed to demonstrate that they sustained pecuniary loss as a result of their reliance upon the representations made by Dryden and Lawery and granted judgment dismissing the complaint against these defendants. The court denied plaintiffs' cross motion for partial summary judgment and sanctions but did order disclosure against Houston and Smith. Plaintiffs have appealed.

Initially we agree, albeit for different reasons, that the 6th and 16th causes of action which seek recovery for bad faith and unfair dealing were properly dismissed. Bad faith does not provide an independent basis for recovery (see, Quail Ridge Assocs. v. Chemical Bank, 162 A.D.2d 917, 558 N.Y.S.2d 655, lv. dismissed 76 N.Y.2d 936, 563 N.Y.S.2d 64, 564 N.E.2d 674). Nor has any evidence been offered to support the 7th and 17th causes of action seeking recovery for the unlawful practice of law. Moreover, Judiciary Law § 476-a provides that only the Attorney-General or a bar association formed in accordance with the laws of this State are authorized to enforce the statute in civil actions ( see also, El Gemayel v. Seaman, 72 N.Y.2d 701, 706, 536 N.Y.S.2d 406, 533 N.E.2d 245). We also find that the 8th and 18th causes of action for intentional or reckless infliction of emotional distress were properly dismissed against Dryden and Lawery in the absence of any factual allegations in the complaint which would support such causes against them.

We further agree that the 4th and 14th causes of action, alleging that Dryden and Lawery made fraudulent representations and misrepresentations for the purpose of inducing plaintiffs to forego and forfeit legal remedies for plaintiff's injuries, were properly dismissed. Since defendants waived the defense of the Statute of Limitations, this action can properly proceed against Houston and Smith since plaintiffs have neither forgone nor forfeited their right to sue.

Turning to the dismissal of the remaining causes against Dryden and Lawery, we first find that the 3d and 13th causes of action in the complaint adequately apprised them of the conduct alleged to have been fraudulent and deceitful. A claim of fraud requires allegations of a "misrepresentation of a material existing fact, falsity, scienter, deception and injury" (Callahan v. Callahan, 127 A.D.2d 298, 300, 514 N.Y.S.2d 819; see, Hutchins v. Utica Mut. Ins. Co., 107 A.D.2d 871, 872, 484 N.Y.S.2d...