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Keywords

lawsuitplaintiffdefendantdamagesattorneypunitive damages
plaintiffdefendantdamagesappealmotionsummary judgmentpunitive damages

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Dano v. Royal Globe Ins. Co., 59 N.Y.2d 827, 451 N.E.2d 488, 464 N.Y.S.2d 741

Facts

The insured brought a lawsuit against the fire insurer, its agents, and attorneys, alleging defamation and seeking punitive damages. The first cause of action was based on a disclaimer letter sent by the Andrews law firm, which represented the insurer. The court found that the letter was qualifiedly privileged and that the plaintiffs did not provide sufficient evidence to show malice on the part of the law firm. The third cause of action was dismissed due to a lack of evidentiary proof of a general business practice by the insurer.

Issue

Did the disclaimer letter from the law firm constitute defamation, and did the plaintiffs establish a cause of action for punitive damages under the Insurance Law?

The Court of Appeals held that: (1) disclaimer letter written by law firm was qualifiedly privileged, and absent showing that firm acted with malice, plaintiff could not recover for defamation, and (2) plaintiffs failed to state cause of action under Insurance Law for punitive damages against insurer.

Rule

A disclaimer letter is qualifiedly privileged, and to recover for defamation, the plaintiff must show that the defendant acted with malice. Additionally, a private cause of action under the Insurance Law requires evidentiary proof of a general business practice.

It was, therefore, plaintiffs' burden to show that defendant Andrews acted with malice and, there being nothing to establish that examination of Turnbull could reasonably be expected to result in evidence of malice on the part of the Andrews firm and no other examination having been requested, CPLR 3212 (subd. [f]) provided no basis for denial of the motion of defendants (other than Turnbull) for summary judgment.

Analysis

The court applied the rule of qualified privilege to the disclaimer letter, determining that the plaintiffs failed to provide evidence of malice necessary to support their defamation claim. Furthermore, the court found that the plaintiffs did not present admissible proof of a general business practice by the insurer, which is required to establish a cause of action for punitive damages under the Insurance Law.

Assuming that section 40–d of the Insurance Law can be read to create a private cause of action (see Hubbell v. Trans World Life Ins. Co. of N.Y., 50 N.Y.2d 899, 901, 430 N.Y.S.2d 589, 408 N.E.2d 918), we find in the papers no 'evidentiary proof in admissible form' of a 'general business practice' on the part of Royal Globe, as that section requires.

Conclusion

The court affirmed the Appellate Division's order, dismissing the defamation claim and the punitive damages claim, with costs awarded to the prevailing party.

Order affirmed, with costs, in a memorandum.

Who won?

Royal Globe and the Andrews law firm prevailed in the case because the court found that the disclaimer letter was qualifiedly privileged and that the plaintiffs failed to demonstrate malice or provide sufficient evidence for their claims.

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