{"id":895691,"date":"2019-04-04T10:16:31","date_gmt":"2019-04-04T16:16:31","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=895691"},"modified":"2019-04-04T10:16:38","modified_gmt":"2019-04-04T16:16:38","slug":"breach-of-contract-bad-faith-consequential-damages","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/breach-of-contract-bad-faith-consequential-damages\/","title":{"rendered":"Insured’s Complaint for Breach of Contract and Bad Faith Adequately Pleads Consequential Damages"},"content":{"rendered":"\n

Tred R. Eyerly | Insurance Law Hawaii<\/a> | March 4, 2019<\/p>\n\n\n\n

    The appellate court overturned the trial court’s dismissal of the insured’s complaint seeking consequential damages. D.K. Prop. Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh v, Pa., 2019 N.Y. App. Div. LEXIS 329 (N.Y. App. Div. Jan. 17, 2019). <\/p>\n\n\n\n

    The insured’s building began to shift and exhibit structural damage, including cracks, after construction began in an adjoining building. The insured submitted a claim under its commercial insurance policy. The insurer did not pay the claim, nor did it disclaim coverage. <\/p>\n\n\n\n

    The insured sued, alleging breach of contract for failure to pay covered losses under the policy. The second cause of action was for breach of the implied covenant of good faith and fair dealing. The complaint also requested consequential damages in connection with each cause of action. The trial court granted the insurer’s motion to dismiss the claim for consequential damages.<\/p>\n\n\n\n

    The issue was whether, at the pleading stage, a claim for consequential damages arising from the insurer’s processing of the claim, required a detailed factual description or explanation for why such damages, which did not directly flow from the breach, were also recoverable. The complaint alleged that rather than pay the claim, the insurer made unreasonable and increasingly burdensome demands for three years. The insured alleged that this was a tactic to make the claim so expensive to pursue that the insured would abandon it. The investigatory process had taken so long that the structural damage to the building worsened. Among the consequential damages alleged were engineering costs, painting, repairs, monitoring equipment and moisture abatement to address water intrusion, loss of rents, and other expenses attributable to mitigating further damage to the property. <\/p>\n\n\n\n

    An insured could sue for consequential damages resulting from an insurer’s failure to provide coverage if such damages were foreseen or should have been foreseen when the contract was made. At the pleading stage, the question was whether the plaintiff had stated a claim, not whether the plaintiff was able to establish its claim. Here, the insured met the pleading requirements with respect to consequential damages. Despite the insurer’s call for a heightened pleading standard, an insured’s obligation to “take all reasonable steps to protect the covered property from further damage by a covered cause of loss” supported plaintiff’s allegation that some or all of the alleged damages were foreseeable. <\/p>\n","protected":false},"excerpt":{"rendered":"

Tred R. Eyerly | Insurance Law Hawaii | March 4, 2019     The appellate court overturned the trial court’s dismissal of the insured’s complaint seeking consequential damages. D.K. Prop. Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh v, Pa., 2019 N.Y. App. Div. LEXIS 329 (N.Y. App. Div. Jan. 17, 2019).      The… Continue reading Insured’s Complaint for Breach of Contract and Bad Faith Adequately Pleads Consequential Damages<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[10720],"tags":[9895,158,9099,10758],"class_list":["post-895691","post","type-post","status-publish","format-standard","hentry","category-bad-faith-insurance-coverage","tag-advise-consult","tag-breach-of-contract","tag-consequential-damages","tag-insurance-coverage-bad-faith","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nInsured's Complaint for Breach of Contract and Bad Faith Adequately Pleads Consequential Damages - 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