FRYDMAN v. Alliant Insurance Services, Inc., appellant. (2025)

DECISION & ORDER

In an action to recover damages for breach of contract and breach of the implied covenant of good faith and fair dealing, the defendant Alliant Insurance Services, Inc., appeals from an order of the Supreme Court, Dutchess County (Thomas R. Davis, J.), dated May 23, 2023.  The order, insofar as appealed from, denied that branch of that defendant's motion which was pursuant to CPLR 3211(a) to dismiss the cause of action alleging breach of the implied covenant of good faith and fair dealing insofar as asserted against it.

ORDERED that the order is affirmed insofar as appealed from, with costs.

The plaintiff commenced this action to recover amounts due and payable under an insurance policy.  The plaintiff alleged that the policy was fully paid for, but never delivered to him.  The defendant Alliant Insurance Services, Inc. (hereinafter Alliant), is the successor to Crystal & Company, the insurance broker that allegedly was supposed to obtain a policy from the defendant Endurance American Insurance Co. The plaintiff asserted causes of action to recover damages for breach of contract and breach of the implied covenant of good faith and fair dealing.  Alliant moved, inter alia, pursuant to CPLR 3211(a)(5) and (7) to dismiss the cause of action alleging breach of the implied covenant of good faith and fair dealing insofar as asserted against it.  In an order dated May 23, 2023, the Supreme Court, among other things, denied that branch of Alliant's motion.  Alliant appeals.

The Supreme Court properly denied dismissal of the cause of action alleging breach of the implied covenant of good faith and fair dealing insofar as asserted against Alliant pursuant to CPLR 3211(a)(7).  The implied covenant of good faith and fair dealing embraces a pledge that neither party shall do anything that will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract and is breached when a party acts in a manner that deprives the other party of the benefits of the contract (see Parlux Fragrances, LLC v. S. Carter Enters., LLC, 204 A.D.3d 72, 164 N.Y.S.3d 108;  Singh v. City of New York, 189 A.D.3d 1697, 1700, 139 N.Y.S.3d 307, affd 40 N.Y.3d 138, 195 N.Y.S.3d 429, 217 N.E.3d 1).  “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” (Aventine Inv. Mgt., Inc. v. Canadian Imperial Bank of Commerce, 265 A.D.2d 513, 514, 697 N.Y.S.2d 128).  Here, the plaintiff alleged facts tending to show that Alliant's predecessor sought to prevent performance of an agreement with the plaintiff or to withhold the benefits of that agreement from the plaintiff.

Furthermore, the Supreme Court properly determined that the cause of action alleging a breach of the implied covenant of good faith and fair dealing was timely insofar as asserted against Alliant.  Any claim for breach of contract or breach of the covenant of good faith and fair dealing accrued on the date of the breach (see Demian v. Calmenson, 156 A.D.3d 422, 423, 66 N.Y.S.3d 462).  Accepting the allegations in the amended complaint as true, the plaintiff requested a copy of the operative policy by email on October 23, 2016.  He alleged that he did not receive a response to that email.  The statute of limitations for the breach of the covenant of good faith and fair dealing is six years (see id.;  CPLR 213[2]).  The plaintiff first asserted its claims against Alliant in September 2022, less than six years after the alleged breach.

Accordingly, the Supreme Court properly denied that branch of Alliant's motion which was pursuant to CPLR 3211(a)(5) and (7) to dismiss the cause of action alleging breach of the implied covenant of good faith and fair dealing insofar as asserted against it.

DILLON, J.P., MILLER, WARHIT and TAYLOR, JJ., concur.