tag:blogger.com,1999:blog-4754540220266106237.post6647030890554136284..comments2024-03-17T16:43:50.668-04:00Comments on Coverage Counsel: 3-2 Majority of 4th Department Affirms Summary Judgment Dismissing Third-Party Bad Faith Action Against Personal Auto InsurerRoy A. Murahttp://www.blogger.com/profile/06367888044845855898noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-4754540220266106237.post-85252322922619390052010-06-22T13:02:48.340-04:002010-06-22T13:02:48.340-04:00This was the bad faith action on the insured's...This was the bad faith action on the insured's assignment, following the personal injury action and its excess judgment, Larry. The plaintiffs did not combine both their personal injury action and a bad faith claim (which wouldn't have been ripe yet anyway) into a single action, so there was only the bad faith defense and no need to sever anything. <br /><br />With approximately $450K in excess of the remaining coverage limit at stake, I'm not surprised Merchants didn't pay the entire judgment, even with statutory interest on the unpaid amount running at approximately $110 per day. It appears Merchants continued to believe, even through four days of trial, that this was a non-surgical plaintiff. <br /><br />What I was somewhat surprised to see was that this appeal was from an order of Supreme Court granting Merchants' summary judgment motion, rather than the other way around. To me, it is significant that the facts and points in Merchants' favor apparently were sufficient to convince Justice Wolfgang to take this case away from a jury and dismiss the bad faith action on an SJ motion. <br /><br />There is only a "bullet" to dodge when there is a lost settlement opportunity within policy limits, clear liability AND a <b>probability</b>, rather than just a potential or possibility, that the insured will be found personally liable for a large judgment. Close call or not, trial and appellate judges are the gatekeepers who get to decide what cases reach juries and what cases do not. The third-party bad faith standard in New York should not be watered down simply because a certain case is a close call.Roy A. Murahttps://www.blogger.com/profile/06367888044845855898noreply@blogger.comtag:blogger.com,1999:blog-4754540220266106237.post-86771811895662736242010-06-20T15:51:46.511-04:002010-06-20T15:51:46.511-04:00I am a bit surprised that (1) Merchants did not mo...I am a bit surprised that (1) Merchants did not move to sever, rather than dismiss, the bad faith action, since it would be prejudicial to the insurer to have to defend itself from a bad faith claim in the same trial as it is defending its insured on liability and damages; and (2) that Merchants, having gambled and then been hit with a verdict above the policy limits, did not simply pay the judgment (known colloquially as 'buying a policy'). In any event, the dismissal of the bad faith action under this set of facts was a close call, as the 3-2 decision shows, and I think Merchants dodged a bullet.Larry Rogakhttp://www.newyorknofaultanswers.comnoreply@blogger.com