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ATTORNEYS’ FEES NOT AVAILABLE TO INSURED WHO BRINGS AFFIRMATIVE ACTION TO SETTLE RIGHTS UNDER A POLICY; CAUSE OF ACTION FOR BREACH OF COVENANT OF GOOD FAITH AND FAIR DEALING NOT DUPLICATIVE OF CAUSE OF ACTION FOR BREACH OF CONTRACT.

The Second Department, reversing Supreme Court, determined the insured's motion for summary judgment dismissing the demand for an attorney's fee should have been granted. When an insured brings an affirmative action to settle rights under an insurance policy, the insured cannot recover attorneys' fees. The court further held the action for breach of the covenant of good faith and fair dealing was not duplicative of the breach of contract cause of action and the insurer's motion for summary judgment on that ground was properly denied:

Implicit in every contract is a covenant of good faith and fair dealing which encompasses any promise that a reasonable promisee would understand to be included … . In the context of an insurance contract, “a reasonable insured would understand that the insurer promises to investigate in good faith and pay covered claims” … . Here, the defendant failed to eliminate all triable issues as to whether it investigated the loss in good faith and timely paid covered claims … . Further, contrary to the defendant's contention, the cause of action alleging breach of the covenant of good faith and fair dealing is not wholly duplicative of the cause of action alleging breach of contract … .

“[A]n insured may not recover the expenses incurred in bringing an affirmative action against an insurer to settle its rights under the policy” … . The defendant established its prima facie entitlement to judgment as a matter of law dismissing so much of the complaint as sought an award of an attorney's fee by demonstrating that the plaintiffs were insureds under the policy and that they commenced this action to settle their rights under the policy … . Doody v Liberty Mut. Group, Inc., 2016 NY Slip Op 01798, 2nd Dept 3-16-16

INSURANCE LAW (ATTORNEYS FEES, INSURED CANNOT RECOVER ATTORNEYS FEES IN AFFIRMATIVE ACTION TO SETTLE RIGHTS UNDER A POLICY)/ATTORNEYS FEES (INSURANCE LAW, INSURED CANNOT RECOVER ATTORNEYS FEES IN AFFIRMATIVE ACTION TO SETTLE RIGHTS UNDER A POLICY)/INSURANCE LAW (CAUSE OF ACTION FOR BREACH OF COVENANT OF GOOD FAITH AND FAIR DEALING NOT DUPLICATIVE OF CAUSE OF ACTION FOR BREACH OF CONTRACT)/CONTRACT LAW (INSURANCE LAW, CAUSE OF ACTION FOR BREACH OF COVENANT OF GOOD FAITH AND FAIR DEALING NOT DUPLICATIVE OF CAUSE OF ACTION FOR BREACH OF CONTRACT)/COVENANT OF GOOD FAITH AND FAIR DEALING (INSURANCE LAW, CAUSE OF ACTION FOR BREACH OF COVENANT OF GOOD FAITH AND FAIR DEALING NOT DUPLICATIVE OF CAUSE OF ACTION FOR BREACH OF CONTRACT)

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ONCE PLAINTIFF RELEASED THE MORTGAGE UPON PAYMENT OF LESS THAN THE VALUE OF... DEFENDANT DRIVER ENTITLED TO SUMMARY JUDGMENT UNDER THE EMERGENCY DOCTRINE.