Romar v. Alli

• Decision Date: 20 May 1986
• Citation: 120 A.D.2d 420,501 N.Y.S.2d 877
• Parties: Robert J. ROMAR, Plaintiff-Appellant, v. Gerald ALLI, etc., et al., Defendants-Respondents.
• Court: New York Supreme Court — Appellate Division

Page 877

501 N.Y.S.2d 877

120 A.D.2d 420

Robert J. ROMAR, Plaintiff-Appellant, v. Gerald ALLI, etc., et al., Defendants-Respondents.

Supreme Court, Appellate Division,

First Department.

May 20, 1986.

K. Meiselas, for plaintiff-appellant.

T.J. Lynch, New York City, for defendants-respondents.

Before KUPFERMAN, J.P., and SULLIVAN, CARRO, ASCH and FEIN, JJ.

MEMORANDUM DECISION.

Order, Supreme Court, New York County (R. Wallach, J.), entered July 1, 1985, which granted defendants' motion to dismiss the second and third causes of action of the amended complaint pursuant to CPLR 3211(a)(7) and the demands for punitive damages contained in the sixth and seventh causes of action and otherwise denied the motion, affirmed without costs.

Plaintiff appeals only from the dismissal of the second and third causes of action.

The amended complaint alleges that in May 1983 defendant Alli, both individually and as an agent of co-defendant The Guardian Life Insurance Company of America, solicited plaintiff to purchase a disability policy of insurance, which was issued in July 1983. Plaintiff alleges he became totally disabled within the meaning of the policy approximately one year later but that defendant insurance company wrongfully denied plaintiff's claim and repudiated the contract.

The first cause of action is to recover for payments due from the date of the claim to the date of the institution of the action. The second cause of action seeks a judgment ordering defendant to pay plaintiff $1,000 per month during plaintiff's disability until the age of 65. The third cause of action seeks to recover the present value of the policy.

The second and third causes of action are premised upon the theory that the defendant has repudiated the contract of insurance by failure and refusal to pay, and is therefore liable by reason of anticipatory breach to pay the current value of the policy.

Special Term dismissed the second and third causes of action of the amended complaint under CPLR 3211(a)(7) for failure to state a cause of action because they sought disability payments due in the future. Special Term concluded that recovery was sought upon the theory of anticipatory breach and ruled that New York does not apply the doctrine of anticipatory breach to contracts for the periodic payment of money, citing Gordon v. Continental Casualty Co., 91 A.D.2d 987, 457 N.Y.S.2d 844, Apostolou v. Mutual of Omaha Insurance Co., 72 A.D.2d 781, 421 N.Y.S.2d 600, and McCann v. John Hancock Mutual Life Insurance Co., 48 Misc.2d 325, 264 N.Y.S.2d 728.

Although there is authority to the contrary in special circumstances, these cases represent the New York rule that in an action on a disability policy, the insured is not entitled to a lump sum money judgment for future payments, nor to a declaration to that effect with respect to the insurer's future obligations. (Cf. Bell v. Mutual Benefit Health & Accident Assoc. of Omaha, 19 Misc.2d 754, 192 N.Y.S.2d 854, where the insured arbitrarily stopped payments and thus repudiated the policy.)

Absent special circumstances, it is plain, as Special Term held, that New York does not apply the doctrine of anticipatory breach where there is an alleged repudiation of an executory contract for the payment of money only. On the facts of our case, there is no basis for a cause of action premised upon anticipatory breach.

Although there is nothing in the amended complaint raising this issue, defendants' moving papers on this CPLR 3211(a)(7) motion show that the defense of the insurer is that it was induced to issue the policy on the basis of fraudulent representations as to the nature of plaintiff's employment and duties. The record contains an answer and correspondence making it plain that this is the...