Acquista v.

New York Life Insurance (2001)

FACTS
- the plaintiff, a physician, was diagnosed with myelodysplasia, a disease
that could convert into leukemia
- He suffered generally from fatigue, headaches, and diffuse muscle and
joint plain
- The insurer rejected his application for disability benefits claiming he
was still able to due some of his substantial duties and was not totally
disabled
- Claims for breach of contract, bad faith & unfair practices, fraud and
fraudulent misrepresentation, and negligent infliction of emotional
distress.
PROCEDURAL POSTURE
Supreme Court granted dismissal under CPLR 3211 of all plaintiffs causes of
action except the one based upon the policy provision for residual and partial
disability benefits
ISSUE
Whether the plaintiff is entitled to recover under the 3 disability insurance
policies
ISSUE
Whether the plaintiff is entitled to damages that the trial court dismissed.
RULE STATEMENT
Traditional rule that an insurers failure to make payments or provide
benefits in accordance with policy constitutes merely a breach of contract
which is remedied by contract damages
Goal of contract damages place the plaintiff in the position he would have
been in had the contract performed
Breach of insurers duty of good faith when An insured demonstrates more
than merely a denial of benefits promised under a policy of insurance, but
instead, the insurers denial of the claim was deliberately made in bad faith
in handling a policyholders claim. [breach of duty of good faith]
COURT REASONING
dismissal of breach of contract an ERROR b/c it was factual and TC
determination was unwarranted
Bad Faith conduct: b/c they delayed and avoided payment o his campaign
while having determined already that his claim would be denied, but kept
transferring his claim to different employees who kept asking for more
documentation, & waited more than 2 yrs to schedule his medical
examination
-tort duties or expand the scope of contract remedies
-

HOLDING
- TC erred in dismissing b/c a plaintiff is allowed to recover additional
damages for breach of good faith
- no reason to limit damages recoverable for breach of duty
- to dismiss is to say reasonable to accept defendants assertions and
not the plaintiffs
DISSENT
- agrees there are questions of facts
- private contract, unique to these parties and not conduct that affects
the public at lare
NOTES