Tiffany Tower Condominium LLC sustained damages during Superstorm Sandy. In November 2012, the insured filed a claim with their insurer, Insurance Company of Greater New York, for damages sustained during the storm. Greater New York paid the claim out in December 2012. In September 2014, Tiffany Tower submitted a supplemental claim to Greater New York for additional losses which it asserted were caused by the storm. Their insurer denied coverage for the supplemental claim.
Tiffany Tower filed suit for breach of contract and for consequential damages for breach of the implied covenant of good faith and fair dealing.1 Citing to Bi-Economy Market, Inc. v. Harleysville Insurance Company of N.Y., the court stated, “[a]s in all contracts, implicit in contracts of insurance is a covenant of good faith and fair dealing, such that a reasonable insured would understand that the insurer promises to investigate in good faith and pay covered claims.”2 Also, “[s]uch a cause of action is not duplicative of a cause of action sounding in breach of contract to recover the amount of the claim”3
The court went on to note that the plaintiffs stated a viable cause of action to recover consequential damages based on the defendant’s refusal to pay the supplemental claim by alleging, among other things, they did not have the financial resources to repair the damage to the building and the defendant’s delay in paying the supplemental claim caused the building to continue to deteriorate. Plaintiffs specifically identified the consequential damages allegedly suffered, including damage to fire proofing and additional water damage.
I leave you with a quote from the recently deceased Senator John McCain:
“Our shared values define us more than our differences. And acknowledging those shared values can see us through our challenges today if we have the wisdom to trust in them again.”
1 Tiffany Tower Condo., LLC v. Insurance Co. of the Greater New York, 2018 N.Y. Slip Op. 05886 (N.Y. Aug. 22, 2018).
2 Bi-Economy Mkt., Inc. v. Harleysville Ins. Co. of N.Y., 10 NY3d 187, 194 (N.Y. 2008), quoting New York Univ. v. Continental Ins. Co., 87 NY2d 308, 318 (N.Y. 1995).
3 Gutierrez v. Government Empls. Ins. Co., 136 AD3d 975, 977 (N.y. App. 2d Dept. 2016).