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PLAINTIFF, AFTER A SUBSTANTIAL VERDICT IN A TRAFFIC ACCIDENT CASE, WAS ASSIGNED DEFENDANT’S RIGHT TO SUE DEFENDANT’S INSURER ALLEGING A BAD FAITH FAILURE TO SETTLE, THE INSURER’S MOTION TO DISMISS WAS PROPERLY DENIED (SECOND DEPT).

The Second Department determined there was no basis for the dismissal of Rios’s complaint alleging defendant insurer’s (Tri State’s) bad faith refusal to settle the underlying traffic-accident action for the policy limit of $100,000. Rios had collided with Weathers, who sued Rios. Weathers won a substantial verdict which was reduced by the Second Department. The Second Department ordered a new trial unless Weathers stipulated to the reduced award (which remained substantial and well above the policy limit). Weathers stipulated to most of the reduced award, but not the award for future physical therapy and medical costs. Rios then assigned his “bad faith” action against defendant insurer (Tri State) to Weathers. In moving to dismiss the Rios complaint, the insurer argued that because Weathers did not stipulate to all of the reduced award, his only remedy was a new trial:

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Weathers, as assignee of Rios’s rights, … commenced this action alleging that Tri State acted in bad faith by refusing to settle this case before the trial for the policy limit of $100,000 and breached the implied covenant of good faith and fair dealing in handling the defense of the personal injury action on behalf of Rios. Tri State moved, in effect, pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against it. Tri State argued that this Court’s decision and order in the personal injury action did not permit Weathers, the personal injury plaintiff, to pick and choose which modified awards he would accept and which awards he would reject. Tri State contended that, because Weathers did not “unconditionally accept” the reduced awards set forth in this Court’s decision and order within 30 days, he “has the right to a new trial, nothing else.” Tri State argued that the instant “bad faith” action is premature “because there is no jury verdict on damages at this stage,” and therefore, it cannot be said “that Tri State acted in bad faith for refusing to settle [the personal injury] case.” The Supreme Court denied the motion.

Under the particular circumstances of this case, Tri State has failed to establish any ground to dismiss the complaint insofar as asserted against it. Although there are outstanding questions as to the total award of damages in the personal injury action, Tri State has failed to demonstrate why that prevents Weathers from maintaining an action against Tri State alleging bad faith refusal to settle and breach of the implied covenant of good faith and fair dealing … . Weathers v Tri State Consumer Ins. Co., 2017 NY Slip Op 06099, Second Dept 8-9-17

 

INSURANCE LAW (BAD FAITH, PLAINTIFF, AFTER A SUBSTANTIAL VERDICT IN A TRAFFIC ACCIDENT CASE, WAS ASSIGNED DEFENDANT’S RIGHT TO SUE DEFENDANT’S INSURER ALLEGING A BAD FAITH FAILURE TO SETTLE, THE INSURER’S MOTION TO DISMISS WAS PROPERLY DENIED (SECOND DEPT))/TRAFFIC ACCIDENTS (INSURANCE LAW, BAD FAITH,  PLAINTIFF, AFTER A SUBSTANTIAL VERDICT IN A TRAFFIC ACCIDENT CASE, WAS ASSIGNED DEFENDANT’S RIGHT TO SUE DEFENDANT’S INSURER ALLEGING A BAD FAITH FAILURE TO SETTLE, THE INSURER’S MOTION TO DISMISS WAS PROPERLY DENIED (SECOND DEPT))/BAD FAITH (INSURANCE LAW, TRAFFIC ACCIDENTS,  PLAINTIFF, AFTER A SUBSTANTIAL VERDICT IN A TRAFFIC ACCIDENT CASE, WAS ASSIGNED DEFENDANT’S RIGHT TO SUE DEFENDANT’S INSURER ALLEGING A BAD FAITH FAILURE TO SETTLE, THE INSURER’S MOTION TO DISMISS WAS PROPERLY DENIED (SECOND DEPT))

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