The opinion of the court was delivered by: Scullin, Senior Judge
MEMORANDUM-DECISION AND ORDER
Plaintiffs Albert and Deborah Chaffee brought this action against Defendant Farmers New Century Insurance Company under New York's contract law and its General Business Law § 349 in relation to a Homeowners Insurance Policy that Defendant sold to Plaintiffs. Plaintiffs contend that Defendant failed to satisfy its obligation under the policy and, therefore, breached the contract between them and violated New York's General Business Law.*fn1 As a result, Plaintiffs contend that they have been damaged in an amount exceeding $150,000.
Currently before the Court are Defendant's motion to dismiss Plaintiffs' complaint and proposed amended complaint in their entirety pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure and Plaintiffs' cross-motion for leave to amend their complaint pursuant to Rule 15(a) of the Federal Rules of Civil Procedure.
Defendant is an insurance company licensed by the New York Department of Insurance to conduct the business of insurance in New York State and regularly does so in Tompkins County, New York.*fn3 Plaintiffs are residents of Tompkins County, New York.
On August 24, 2003, Plaintiffs entered into a Homeowners Insurance agreement (the "insurance agreement" or "contract") with Defendant.*fn4 Under the terms of the insurance agreement, Defendant agreed to pay Plaintiffs a certain amount of money, calculated in accord with the insurance agreement's terms, in the event of a loss to Plaintiffs' property.
On December 28, 2003, Plaintiffs suffered a loss to their insured property.*fn5 Thereafter, they submitted a claim to Defendant for those losses. The parties failed to reach an agreement as to the actual value of Plaintiffs' claim. As a result, on December 28, 2004, Plaintiffs commenced this action against Defendant for breach of contract and for a violation of New York General Business Law § 349. On October 14, 2005, in response to Defendant's motion to dismiss, Plaintiffs sought leave to amend their complaint.
Rule 15(a) requires that "leave [to amend] shall be freely given when justice so requires." See Fed. R. Civ. P. 15(a). In this Circuit, a court should grant leave to amend unless the party seeking leave has acted in bad faith or the nonmoving party will be prejudiced by the amendment. See Shade v. Hous. Auth. of City of New Haven, No. 3:94-CV-00774, 1998 WL 351473, *1 (D. Conn. June 12, 1998) (citations omitted). However, "the Court shall not permit amendment where the new claim cannot withstand a motion to dismiss." Riordan v. Nationwide Mut. Fire Ins. Co., 756 F. Supp. 732, 737 (S.D.N.Y. 1990) (citing Forman v. Davis, 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed. 2d 222 (1962)).
Plaintiffs' proposed amended complaint contains claims for (1) breach of contract and (2) a General Business Law § 349 violation. Defendant does not argue that it would suffer prejudice from the timing of the proposed amendment, and there is none apparent. Moreover, Defendant does not allege that Plaintiffs are acting in bad faith. Against this backdrop, the Court will "consider the amended claims' ability to survive defendant's motion to ...