D.K. Property, Inc., Plaintiff,
National Union Fire Insurance Company of Pittsburgh, Pa., Defendant.
Plaintiff: D.K. Property, Inc. HOGUET NEWMAN REGAL &
KENNEY, LLP By: Andrew N. Bourne, Esq.
Defendant: National Union Fire Insurance Company of
Pittsburgh, PA, MOUND COTTON WOLLAN & GREENGRASS, LLP,
By: Constantino P. Suriano, Esq.
R. REED, J.
an action to recover first-party insurance proceeds for
alleged property damage to a building owned by plaintiff D.K.
Property, Inc. (plaintiff or D.K. Property). Defendant
National Union Fire Insurance Company of Pittsburgh, Pa.
(National Union) moves, pursuant to CPLR 3211 (a) (7), for
partial dismissal of the amended complaint.
ALLEGATIONS, CLAIMS AND PROCEDURAL HISTORY
is the owner of a building located at 40 Prince Street in
Manhattan that was allegedly damaged by a neighboring
construction project in or around October 2014. Plaintiff
alleges that the rear wall of the neighboring building
provided lateral support to the east exterior wall of
plaintiff's building, and when that rear wall was
demolished, plaintiff's building suffered structural
movement and damage.
National Union issued a property insurance policy, Policy No.
BB014917749-02 (Policy), providing coverage for "direct
physical loss of damage to" plaintiff's premises.
Plaintiff alleges that it made a claim for coverage under the
Policy and that it has otherwise complied with all of the
Policy's terms and conditions for coverage, but that
National Union has acted in bad faith by making unreasonable
and burdensome requests for information and by failing to
provide a coverage determination. Plaintiff alleges that
National Union's actions have forced it to incur
substantial costs and expenses, including attorneys'
original complaint alleged a cause of action for breach of
the Policy and a second cause of action for breach of the
covenant of good faith and fair dealing, by which plaintiff
sought to recover consequential damages
"including, without limitation, prejudgment interest on
the amount owed under the Policy, and the attorneys'
fees, costs and disbursements incurred by DK Property in
enforcing its rights as a consequence of National Union's
bad faith conduct"
(Cmplt., ¶ 36). National Union moved to dismiss the
second cause of action, arguing that it was duplicative of
the breach of contract claim. The carrier also argued that
the complaint contained insufficient allegations to support
plaintiff's demand for consequential damages,
particularly the request for attorney's fees, costs and
disbursements. By order dated June 16, 2017, this court
granted the motion. The dismissal, however, was "without
prejudice, specifically for plaintiff to replead allegations
that are specific in nature as to the consequential damages
being sought and the legal underpinning for bad faith claims
with respect to the insurer's investigation thus
filed an amended complaint on July 14, 2017. The amended
complaint retains the same two causes of action for breach of
contract and breach of the covenant of good faith and fair
dealing. However, the pleading provides much greater detail
regarding the efforts made by plaintiff to obtain coverage
for its alleged loss between October 2014 and the filing of
this action in February 2017, and details National
Union's handling of the claim. Plaintiff now alleges that
National Union undertook unreasonable claims handling in bad
faith, for the purpose of making the claim too expensive for
plaintiff to pursue and, thereby, allegedly, inducing
plaintiff to abandon its claim for coverage (Am. Cmplt.,
¶ 19). In a November 2016 meeting between the engineers
hired by both sides, National Union's engineer is alleged
to have "expressed agreement that the negligent
renovation design and construction" of the neighboring
building was the source of distress to plaintiff's
building (id., ¶ 31). Plaintiff says that it
has been "abandoned" by National Union, forcing it
to sue the tortfeasors in a separate action in this court
(id., ¶ 20).
amended complaint also alleges that National Union's
delay and unreasonable demands for information and
inspections of the premises has caused plaintiff to incur
certain other expenses. In this regard, the amended complaint
"37. What is more, DK Property expended significant
monies responding to National Union's requests for
information. Such expenses include: (a) legal fees amounting
to date to tens of thousands of dollars; and (b) engineering
and monitoring services in excess of $150, 000.
38. Additionally, because National Union has failed to
provide coverage, DK Property has incurred costs and
additional damages in temporarily fixing the 40 Prince
Building to prevent further damage, including: (a)
approximately $30, 000 to mitigate the water intrusion as a
result of the damage to the east wall of the 40 Prince
Building; (b) approximately $8, 500 in painting repairs; and
(c) continued loss of rents and inability to increase ...