Ural v. Encompass Insurance Co. of America

97 A.D.3d 562, 948 N.Y.2d 621

This text of 97 A.D.3d 562 (Ural v. Encompass Insurance Co. of America) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ural v. Encompass Insurance Co. of America, 97 A.D.3d 562, 948 N.Y.2d 621 (N.Y. Ct. App. 2012).

Opinion

[564]*564On February 10, 2006, a water pipe burst in the second floor of the plaintiff’s house, causing extensive water damage. The home was covered by a homeowners’ insurance policy issued by the defendants Encompass Insurance Company of America and Encompass Insurance Company (hereinafter together Encompass). Following the occurrence, the plaintiff filed an insurance claim with Encompass. However, after a year of attempting to negotiate a settlement, and after receiving what he considered inadequate offers and improper mold remediation efforts from Encompass, the plaintiff commenced this action alleging, inter alia, that Encompass breached the insurance policy in the manner in which it handled his claim, and engaged in deceptive business practices through a general policy of denying, delaying, and defending against such claims with respect to him and other similarly situated policy holders, in order to force him and other policy holders into woefully inadequate claim settlements. Encompass moved, inter alia, pursuant to CPLR 3211 (a) (7) to dismiss the complaint insofar as asserted against it. The Supreme Court, inter alia, partially granted Encompass’s motion. The plaintiff appeals, and we modify.

“On a motion to dismiss the complaint pursuant to CPLR 3211 (a) (7) for failure to state a cause of action, the court must afford the pleading a liberal construction, accept all facts as alleged in the pleading to be true, accord the plaintiff the benefit of every possible inference, and determine only whether the facts as alleged fit within any cognizable legal theory” (Breytman v Olinville Realty, LLC, 54 AD3d 703, 703-704 [2008]; see Leon v Martinez, 84 NY2d 83, 87 [1994]).

To state a cause of action under General Business Law § 349, the complaint must allege that the defendant engaged in a deceptive act or practice, that the challenged act or practice was consumer-oriented, and that the plaintiff suffered an injury as a result of the deceptive act or practice (see Stutman v Chemical Bank, 95 NY2d 24, 29 [2000]; Oswego Laborers’ Local 214 Pension Fund v Marine Midland Bank, 85 NY2d 20, 25 [1995]). Contrary to the Supreme Court’s determination, the plaintiff s third cause of action, as amplified by the affidavit and documents he submits in opposition to the motion, states a cogni[565]*565zable cause of action to recover damages for unfair practices under General Business Law § 349, including a general practice of inordinately delaying the settlement of insurance claims against policyholders (see Wilner v Allstate Ins. Co., 71 AD3d 155, 161 [2010]; Acquista v New York Life Ins. Co., 285 AD2d 73, 82 [2001]). Accordingly, the Supreme Court erred in granting that branch of Encompass’s motion which was pursuant to CPLR 3211 (a) (7) to dismiss the third cause of action insofar as asserted against it. In addition, contrary to Encompass’s contention, a claim for punitive damages may be asserted in the context of a cause of action predicated upon an alleged violation of General Business Law § 349 (see Wilner v Allstate Ins. Co., 71 AD3d at 167).

Encompass also moved for summary judgment dismissing the third cause of action insofar as asserted against it. However, the Supreme Court did not decide that branch of Encompass’s motion. In the interest of judicial economy, we hold that the branch of Encompass’s motion which was for summary judgment dismissing the third cause of action insofar as asserted against it must be denied. Not only was that branch of the motion premature, having been made in the earliest phase of discovery in this action (see Elbaz v New York City Hous. Auth., 90 AD3d 986 [2011]), but Encompass’s attorney’s affirmation and exhibits were insufficient to establish its prima facie entitlement to judgment as a matter of law with respect to that cause of action (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Sellino v Kirtane, 73 AD3d 728 [2010]; Lampkin v Chan, 68 AD3d 727 [2009]).

The Supreme Court also erred in granting that branch of Encompass’s motion which was pursuant to CPLR 3211 (a) (7) to dismiss the first cause of action to the extent it sought to recover damages for violations of Insurance Law § 2601. Contrary to the Supreme Court’s determination and Encompass’s contention, the plaintiff did not seek to add a separate cause of action alleging violations of Insurance Law § 2601 but, rather, sought to amplify his cause of action to recover damages for breach of contract with allegations of such violations (see Bristol Harbour Assoc. v Home Ins. Co., 244 AD2d 885 [1997]).

Contrary to the plaintiff’s contention, the Supreme Court correctly granted that branch of Encompass’s motion which was pursuant to CPLR 3211 (a) (7) to dismiss the eighth and ninth causes of action insofar as asserted against it alleging intentional and negligent infliction of emotional distress, respectively. Accepting the allegations of the complaint as true, and affording [566]*566the plaintiff the benefit of every favorable inference, the complained of conduct did not so transcend the bounds of decency as to be regarded as atrocious and intolerable in a civilized society (see Tartaro v Allstate Indent. Co., 56 AD3d 758 [2008]; Rohrlich v Consolidated Bus Tr., Inc., 15 AD3d 561, 562 [2005]).

With respect to the parties’ discovery issues, CPLR 3101 (a) broadly mandates “full disclosure of all matter material and necessary in the prosecution or defense of an action.” This provision is liberally interpreted in favor of disclosure (see Kavanagh v Ogden Allied Maintenance Corp., 92 NY2d 952, 954 [1998]; Allen v Crowell-Collier Publ. Co., 21 NY2d 403, 406 [1968]; Matter of Skolinsky, 70 AD3d 845 [2010]; Riverside Capital Advisors v First Secured Capital Corp., 292 AD2d 515 [2002]). However, the discovery sought must be relevant to the issues at bar, with the test employed being “usefulness and reason” (Allen v Crowell-Collier Publ. Co., 21 NY2d at 406). Regarding an entire set of discovery demands which are “palpably improper in that they are overbroad, lack specificity, or seek irrelevant or confidential information, the appropriate remedy is to vacate the entire demand rather than to prune it” (Bell v Cobble Hill Health Ctr., Inc., 22 AD3d 620, 621 [2005]). “The burden of serving a proper demand is upon counsel, and it is not for the courts to correct a palpably bad one” (id. at 621 [internal quotation marks omitted]).

Here, the plaintiff’s discovery demands included production of Encompass’s entire claim file for the subject water damage. The plaintiff asserts that Encompass only produced part of the claim file. In response, Encompass asserts that it withheld only those parts of the claim file that were produced in anticipation of litigation and thus were protected by work product privilege (see Veras Inv. Partners, LLC v Akin Gump Strauss Hauer & Feld LLP, 52 AD3d 370 [2008]). However, the party asserting the privilege that material sought through discovery was prepared exclusively in anticipation of litigation or constitutes attorney work product bears the burden of demonstrating that the material it seeks to withhold is immune from discovery (see Koump v Smith, 25 NY2d 287, 294 [1969]) by identifying the particular material with respect to which the privilege is asserted and establishing with specificity that the material was prepared exclusively in anticipation of litigation (see Chakmakjian v NYRAC, Inc.,

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Kavanagh v. Ogden Allied Maintenance Corp.
705 N.E.2d 1197 (New York Court of Appeals, 1998)
Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, N. A.
647 N.E.2d 741 (New York Court of Appeals, 1995)
Leon v. Martinez
638 N.E.2d 511 (New York Court of Appeals, 1994)
Stutman v. Chemical Bank
731 N.E.2d 608 (New York Court of Appeals, 2000)
Allen v. Crowell-Collier Publishing Co.
235 N.E.2d 430 (New York Court of Appeals, 1968)
Koump v. Smith
250 N.E.2d 857 (New York Court of Appeals, 1969)
Winegrad v. New York University Medical Center
476 N.E.2d 642 (New York Court of Appeals, 1985)
Alvarez v. Prospect Hospital
501 N.E.2d 572 (New York Court of Appeals, 1986)
Bombard v. Amica Mutual Insurance
11 A.D.3d 647 (Appellate Division of the Supreme Court of New York, 2004)
Rohrlich v. Consolidated Bus Transit, Inc.
15 A.D.3d 561 (Appellate Division of the Supreme Court of New York, 2005)
Bell v. Cobble Hill Health Center, Inc.
22 A.D.3d 620 (Appellate Division of the Supreme Court of New York, 2005)
Hunt v. Odd Job Trading
44 A.D.3d 714 (Appellate Division of the Supreme Court of New York, 2007)
Veras Investment Partners, LLC v. Akin Gump Strauss Hauer & Feld LLP
52 A.D.3d 370 (Appellate Division of the Supreme Court of New York, 2008)
Breytman v. Olinville Realty, LLC
54 A.D.3d 703 (Appellate Division of the Supreme Court of New York, 2008)
Lampkin v. Chan
68 A.D.3d 727 (Appellate Division of the Supreme Court of New York, 2009)
In re the Estate of Skolinsky
70 A.D.3d 845 (Appellate Division of the Supreme Court of New York, 2010)
Wilner v. Allstate Insurance
71 A.D.3d 155 (Appellate Division of the Supreme Court of New York, 2010)
Sellino v. Kirtane
73 A.D.3d 728 (Appellate Division of the Supreme Court of New York, 2010)
Elbaz v. New York City Housing Authority
90 A.D.3d 986 (Appellate Division of the Supreme Court of New York, 2011)
Clark v. Clark
93 A.D.3d 812 (Appellate Division of the Supreme Court of New York, 2012)

Cite This Page — Counsel Stack

Bluebook (online)
97 A.D.3d 562, 948 N.Y.2d 621, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ural-v-encompass-insurance-co-of-america-nyappdiv-2012.