Summary
This New York Appellate Division decision addresses an insurance broker's appeal from an order denying its motion to dismiss a claim for breach of the implied covenant of good faith and fair dealing. The court held that the plaintiff's complaint adequately alleged facts demonstrating the broker sought to withhold contractual benefits, thereby stating a cognizable claim. Furthermore, the court determined the claim was timely filed within the applicable six-year statute of limitations. The lower court's order was affirmed with costs.
Topics
Practice areas
Questions Presented
- Whether the Supreme Court properly denied Alliant's motion to dismiss the breach of the implied covenant of good faith and fair dealing under CPLR 3211(a).
- Whether the claim was timely filed within the six‑year statute of limitations for the implied covenant claim.
Holdings
- The order denying dismissal is affirmed; the complaint sufficiently alleges facts showing the defendant sought to prevent performance or withhold benefits, and the claim is viable.
- The claim was timely because it was filed in September 2022, less than six years after the alleged breach.
Key quotations
“For a complaint to state a cause of action alleging breach of an implied covenant of good faith and fair dealing, the plaintiff must allege facts which tend to show that the defendant sought to prevent performance of the contract or to withhold its benefits from the plaintiff”
Factual background
Jacob Frydman paid for an insurance policy that was never delivered. Alliant Insurance Services, Inc., successor to broker Crystal & Co., was alleged to have failed to obtain the policy from Endurance American Insurance Co. Frydman sued for breach of contract and breach of the implied covenant of good faith and fair dealing.
Procedural history
The Supreme Court, Dutchess County denied Alliant Insurance Services' motion to dismiss the breach of implied covenant claim. Alliant appealed that denial.