| Gauthier v Countryway Ins. Co. |
| 2012 NY Slip Op 07240 [100 AD3d 1062] |
| November 1, 2012 |
| Appellate Division, Third Department |
| Henry F. Gauthier et al., Respondents, v CountrywayInsurance Company, Appellant. |
—[*1] Law Office of John A. Piasecki, Malone (John A. Piasecki of counsel), forrespondents.
Malone Jr., J. Appeal from an order of the Supreme Court (Muller, J.), entered July 12, 2011in Clinton County, which denied defendant's motion for, among other things, partial summaryjudgment.
Plaintiffs commenced this action seeking to recover damages based upon defendant's allegedbreach of contract and bad faith in settling plaintiffs' insurance claim for fire damage to theirhouse. Following joinder of issue and discovery, defendant moved for partial summary judgmentdismissing certain claims, including plaintiffs' claim for consequential damages, and also soughtto preclude plaintiffs' expert from testifying at trial. Supreme Court denied the motion in itsentirety. Defendant now appeals.
Initially, we note that defendant's statute of limitations argument was waived by defendant'sfailure to raise it in the answer or amended answer, or in a pre-answer motion to dismiss(see CPLR 3211 [e]; Dougherty v City of Rye, 63 NY2d 989, 991-992 [1984]).
As to the merits, we are unpersuaded by defendant's argument that plaintiffs' claims forconsequential damages, replacement cost damages for personal property, damages to theresidence, and additional living costs should be dismissed because they failed to comply withdefendant's discovery demands and with a November 24, 2010 discovery order issued bySupreme Court. We note that Supreme Court implicitly rejected that argument and, instead, in[*2]the order presently on appeal, enlarged the time for plaintiffsto itemize and particularize all damages alleged. "Trial courts have broad discretion insupervising the discovery process" (Mary Imogene Bassett Hosp. v Cannon Design, Inc., 84 AD3d1543, 1544 [2011]), and we find no abuse of discretion here.[FN*]
With respect to defendant's claim that plaintiffs are precluded from recovering thereplacement cost of their residence, defendant first contends that the replacement cost terms ofthe insurance contract do not apply when the insured residence is replaced by a mobile home, aswas done in this case. We do not agree. As relevant here, the loss settlement provisions specifythat replacement cost terms apply to a "building[ ] covered under Coverage[ ] A . . .that [has] a permanent foundation and roof," but not to a mobile home whether or not it has apermanent foundation. Importantly, Coverage A describes the insured residence locatedon the premises, not the replacement residence. Because the insured residence at issuehere was not a mobile home, defendant's argument fails.
With respect to defendant's further contention that replacement cost is unavailable becauseplaintiffs did not repair or replace the residence within 180 days—which they concededlydid not—we agree with Supreme Court that fact questions exist regarding whether CharlesMason, defendant's claims adjustor, directed plaintiffs to leave the premises and their personalproperty untouched until further notice and, if so, whether they justifiably relied to theirdetriment on that purported directive (see Fundamental Portfolio Advisors, Inc. v Tocqueville Asset Mgt.,L.P., 7 NY3d 96, 106 [2006]; Nassau Trust Co. v Montrose Concrete Prods.Corp., 56 NY2d 175, 184 [1982]).
Similarly, fact questions exist regarding plaintiffs' claim for consequential damages."[C]onsequential damages resulting from a breach of the covenant of good faith and fair dealingmay be asserted in an insurance contract context, so long as the damages were within thecontemplation of the parties" (PanasiaEstates, Inc. v Hudson Ins. Co., 10 NY3d 200, 203 [2008] [internal quotation marks andcitations omitted]; see Bi-EconomyMkt., Inc. v Harleysville Ins. Co. of N.Y., 10 NY3d 187, 192 [2008]; Gruenspecht v Balboa Ins. Co., 93AD3d 482, 482 [2012]). Here, plaintiffs allege that defendant failed to investigate and paytheir claim in a timely and good faith manner, which resulted in increased damage to the insuredproperty, necessary code upgrades, their purchase of the double-wide mobile home so they wouldhave a place to live, and counsel fees. Such additional damages should be considered to be withincontemplation of the parties as foreseeable consequences of an insurer's bad faith delay inperforming its obligations under the contract. With respect to whether defendant did, in fact, actin bad faith, plaintiffs have submitted the affidavit of insurance adjuster William Hathaway,which opines that the actions and manner of defendant's adjuster in handling plaintiffs' insuranceclaim deviated from accepted adjusting practices and standards in numerous respects. Althoughdefendant's expert submitted a contrary affidavit, the question of defendant's bad faith in settlingthe insurance claim remains open, as does the issue of whether plaintiffs can, upon completion ofdiscovery, prove damages resulting from defendant's alleged injurious conduct.
Finally, we find no abuse of discretion in Supreme Court's denial, at this stage in the action,of defendant's request to preclude Hathaway from testifying (see Robinson v Bartlett, 95 AD3d 1531, 1536 [2012]).
Lahtinen, J.P., Stein, McCarthy and Garry, JJ., concur. Ordered that the order is affirmed,with costs.
Footnote *: Insofar as defendant contendsthat plaintiffs have failed to comply with the order presently on appeal, that issue is not properlybefore us. Moreover, because any material submitted by plaintiffs in response to that order is dehors the record, it will not be considered on this appeal.