Conclusory Allegations Will Not Survive a Motion to Dismiss for Failure to State a Cause of Action—Punitive Damages Must Be Connected to a Substantive Cause of Action—Late Disclaimer in Property Damage Action Is Valid Absent Prejudice

The Fourth Department determined plaintiff’s cause of action alleging bad faith on the part of the insurer should have been dismissed for failure to state a cause of action. The court explained that conclusory, as opposed to fact-based, allegations will not survive a motion to dismiss. The court noted that a claim for punitive damages must be tied to a specific cause of action and cannot be based upon conclusory allegations.  The court further held that even an unreasonable delay in disclaiming a property damage claim is valid absent prejudice:

Our role is thus to “determine only whether the facts as alleged fit within any cognizable legal theory . . . and the criterion is whether the proponent of the pleading has a cause of action, not whether he [or she] has stated one’ ” … . Nevertheless, ” [w]hile it is axiomatic that a court must assume the truth of the complaint’s allegations, such an assumption must fail where there are conclusory allegations lacking factual support’ ” … . Indeed, ” a cause of action cannot be predicated solely on mere conclusory statements . . . unsupported by factual allegations’ ” … . …

… [W]e note that, “in order to establish a prima facie case of bad faith, the plaintiff must establish that the insurer’s conduct constituted a gross disregard’ of the insured’s interests” … . We conclude … the fourth and sixth causes of action “should have been dismissed because they do not allege [any] conduct by [Allstate] constituting the requisite gross disregard of the insured’s interests’ necessary to support such causes of action” … . Moreover, the “[a]llegations that [Allstate] had no good faith basis for denying coverage are redundant to [plaintiffs’] cause[s] of action for breach of contract based on the denial of coverage, and do not give rise to an independent tort cause of action, regardless of the insertion of tort language into the pleading” … .

… “A demand or request for punitive damages is parasitic and possesses no viability absent its attachment to a substantive cause of action” … . Here, the complaint fails to set forth “the pleading elements required to state a claim for punitive damages” … ; plaintiffs’ “conclusory allegation[s] as to [Allstate’s] motive for [its] refusal [to pay the claim are] an insufficient premise for a demand for punitive damages” … . …

Where, as here, the underlying claim does not arise out of an accident involving bodily injury or death, the notice of disclaimer provisions set forth in Insurance Law § 3420 (d) are inapplicable and, [u]nder the common-law rule, delay in giving notice of disclaimer of coverage, even if unreasonable, will not estop the insurer to disclaim unless the insured has suffered prejudice from the delay’ ” … . Contrary to plaintiffs’ contention, their conclusory allegation that they were “damaged and prejudiced” by the untimely disclaimer is insufficient to withstand this CPLR 3211 (a) (7) motion to dismiss … . Miller v Allstate Indem. Co., 2015 NY Slip Op 07134, 4th Dept 10-2-15