103 A.D.2d 790 | N.Y. App. Div. | 1984
— In an action to recover damages, inter alia, for breach of a covenant of good faith under an insurance contract, the appeal is from an order of the Supreme Court, Kings County (Kramer, J.), dated April 21, 1983, which, inter alia, denied appellants’ motion for summary judgment dismissing the action as against them. 11 Order reversed, on the law, with costs, appellants’ motion for summary judgment granted and action dismissed as against them. 11 On October 24, 1981, a boat owned by plaintiff was destroyed by fire. Plaintiff claims that the fire originated in another vessel, owned by defendant Charles Baron, which spread to his boat, and that the fire was caused by Baron’s negligence. 1i Appellants issued a policy covering plaintiff’s boat for $25,000, with a $250 deductible. In accordance with the terms of the policy, appellants paid plaintiff the sum of $24,750, representing full payment less the deductible, and, in exchange therefor, plaintiff signed a loan receipt in which he granted them subrogation rights. 11 Appellants chose not to commence a subrogation action. Some three and one-half months after execution of the loan receipt, plaintiff commenced this action, alleging damage to the boat in excess of the $24,750 paid and claiming $30,000 for loss of personal property not covered by the insurance policy. Plaintiff contends that appellants “failed and refused to subrogate, adjust and/or otherwise attend to the claim so as to protect plaintiff’s interests with regard to the value of said vessel over and above the sum of $25,000.00 policy of insurance herein, prejudicing the plaintiff and breaching its contract of insurance with the plaintiff”. The claim for personal property damage of $30,000 is based solely on the alleged negligence of defendant Baron. $ Special Term denied appellants’ motion, inter alia, for summary judgment dismissing the action as against them. In a wide-ranging opinion, Special Term concluded that appellants may have breached an “obligation of good faith” (Faraino v Centennial Ins. Co., 117 Misc 2d 297, 301-302). We reverse. 11 The loan receipt device employed in this case “is not a banking or financial operation but a device for the payment