Summary
stating that the claim for consequential damages in that first-party bad faith case was properly dismissed because such damages were not "within the contemplations of the parties when the policy was issued"
Summary of this case from In re Eurospark Industries, Inc.Opinion
January 27, 1984
Appeal from the Supreme Court, Onondaga County, Tenney, J.
Present — Dillon, P.J., Doerr, Denman, O'Donnell and Moule, JJ.
Order unanimously affirmed, with costs. Memorandum: Special Term properly dismissed plaintiff's second cause of action which sought recovery for "consequential damages" arising from defendant's alleged failure promptly to pay plaintiff's actual damage claim. Such consequential damages neither arose from defendant's breach of the insurance contract, nor were they within the contemplations of the parties when the policy was issued (see Orester v Dayton Rubber Mfg. Co., 228 N.Y. 134, 137; Fifty States Mgt. Corp. v Niagara Permanent Sav. Loan Assn., 58 A.D.2d 177, 178; Motif Constr. Corp. v Buffalo Sav. Bank, 50 A.D.2d 718, 719, app. dsmd. 38 N.Y.2d 894; see, also, Cohen v New York Prop. Ins. Underwriting Assn., 65 A.D.2d 71). Plaintiff's third cause of action seeking punitive damages was also properly dismissed. "Inasmuch as plaintiff's action is grounded upon private breach of contract, and does not seek to vindicate a public right or deter morally culpable conduct, punitive damages are not recoverable" ( Halpin v Prudential Ins. Co., 48 N.Y.2d 906, 907; see Reifenstein v Allstate Ins. Co., 92 A.D.2d 715; Granato v Allstate Ins. Co., 70 A.D.2d 948, mot. for lv. to app den. 48 N.Y.2d 610). Nor may punitive damages be recovered for a claimed violation of subdivision 1 of section 40-d Ins. of the Insurance Law ( Dano v Royal Globe Ins. Co., 89 A.D.2d 817, 818, aff'd. 59 N.Y.2d 827).