[*1]

Hinman, Howard & Kattell, LLP, Binghamton (Jeanette N. Warren of counsel), for appellant.

Mura Law Group, PLLC, Buffalo (Brendan S. Byrne of counsel), for respondent.

Pritzker, J. Appeal from an order of the Supreme Court (Oliver N. Blaise III, J.), entered June 16, 2022, in Broome County, which denied plaintiff’s motion for, among other things, a declaration that defendant is required to pay plaintiff’s medical expenses up to her policy limit.

In September 2020, the vehicle plaintiff was driving was rear-ended by a vehicle driven by Jane Mei and owned by Tak-Wing Tam, causing plaintiff multiple injuries and requiring her to undergo cervical fusion. Plaintiff is insured by defendant and had no-fault coverage up to $50,000 and additional personal injury protection (hereinafter APIP) coverage up to $50,000. Plaintiff thereafter settled with both Tam’s and Mei’s insurance carriers for $100,000 each, the maximum each policy permitted, and defendant paid plaintiff’s medical expenses up to the policy limit of her no-fault coverage. In addition, defendant paid plaintiff $7,292.85 of her APIP coverage, but refused to pay out any additional money under the APIP coverage and informed plaintiff that it had placed a lien on the $7,292.85 that had been paid out. On February 28, 2022, plaintiff commenced the instant action alleging that her settlement was not sufficient to compensate her for the injuries she sustained and, therefore, seeking a declaratory judgment that defendant was required to pay the remainder of her APIP coverage for her medical expenses and that defendant had no right to a lien on the $7,292.85 APIP already paid to plaintiff. Only two days later, plaintiff filed an order to show cause seeking the same relief sought in the complaint. Defendant subsequently filed an answer as well as opposition to the order to show cause arguing, among other things, that the evidence did not support the sought-after declaratory relief. After a brief oral argument, Supreme Court, apparently treating plaintiff’s order to show cause as a motion for summary judgment, denied plaintiff’s request for declaratory judgment in both respects, finding that she had failed to show that she was entitled to further APIP benefits and that defendant was not precluded from asserting a lien on the APIP benefits already paid to plaintiff, and dismissed the complaint. Plaintiff appeals.

Initially, we discern no error with Supreme Court treating plaintiff’s order to show cause, filed two days after commencement of the action, essentially as a motion for summary judgment seeking ultimate relief (see Matter of Estate of Jason v Herdman, 70 AD3d 1382, 1382 [4th Dept 2010]; Matter of Rine v Higgins, 244 AD2d 963, 964 [4th Dept 1997]). However, “[a] motion for summary judgment may not be made before issue is joined and the requirement is strictly adhered to” (Ward v Guardian Indus. Corp., 17 AD3d 1100, 1101 [4th Dept 2005] [internal quotation marks and citations omitted]; see Gerster’s Triple E. Towing & Repair, Inc. v Pishon Trucking, LLC, 167 AD3d 1353, 1354 [3d Dept 2018]; Peterson v State of New York, 130 AD2d 813, 814 [3d Dept 1987]). “Particularly in an [*2]action for declaratory judgment, all of the material facts and circumstances should be fully developed before the respective rights of the parties may be adjudicated” (Matter of Rine v Higgins, 244 AD2d at 964 [internal quotation marks, brackets and citation omitted]). Accordingly, rather than reaching the merits, Supreme Court should have determined that plaintiff was barred from seeking summary judgment at the time and denied the motion as premature (see Gerster’s Triple E. Towing & Repair, Inc. v Pishon Trucking, LLC, 167 AD3d at 1354-1355; Lindbergh v SHLO 54, LLC, 128 AD3d 642, 644 [2d Dept 2015]). That defendant answered and issue was joined prior to the return date of the order to show cause does not change this determination (see generally Matter of Rine v Higgins, 244 AD2d at 964). Indeed, a review of the record reveals that there are issues to be adjudicated in this action, particularly as to defendant’s right to subrogration, what portion of plaintiff’s settlement is for pain and suffering—and thus not subject to subrogation—and whether plaintiff has been made whole. Thus, while denial of plaintiff’s motion was warranted, the basis should have been that the motion was premature. Accordingly, the complaint must be reinstated and the matter remitted for further proceedings.

Garry, P.J., Aarons, Ceresia and Fisher, JJ., concur. Ordered that the order is modified, on the law, without costs, by reversing so much thereof as dismissed the complaint; complaint reinstated; and, as so modified, affirmed.

[*1]

Sobo & Sobo, LLP, Middletown (Mark P. Cambareri of counsel), for appellant.

Brand & Tapply, LLC, New York City (Courtney J. Lyons of counsel), for respondent.

Reynolds Fitzgerald, J. Appeal from an order of the Supreme Court (Burns, J.), entered February 19, 2019 in Chenango County, which, among other things, granted plaintiff’s motion for a default judgment.

On October 28, 2017, defendant Jonathan DiLorenzo (hereinafter defendant) was a passenger in a vehicle when the vehicle was involved in an accident. As a result of the accident, defendant sought medical treatment for lower back pain and injuries to his knees and teeth. Once defendant informed plaintiff, the vehicle owner’s insurer, of his intent to submit a claim for supplemental uninsured/underinsured motorist coverage, plaintiff commenced an investigation pursuant to the terms of its insurance policy. As part of the investigation, defendant participated in an examination under oath, wherein he admitted that, prior to the accident, he sought medical treatment for an injury to his right knee and chiropractic adjustment for back pain, and that he participated in mixed martial arts competitions. Despite numerous requests, defendant failed to produce medical records and to authorize plaintiff access to his preaccident medical and dental records. Ultimately, plaintiff denied defendant’s claim for no-fault benefits as a result of defendant’s breach of the duty to cooperate in the investigation and material misrepresentations regarding the nature and extent of defendant’s injuries, and because his injuries did not arise from the use or operation of the motor vehicle.

In October 2018, plaintiff commenced this action against, among others, defendant, asserting causes of action for breach of contract, fraud and a declaratory judgment, and seeking compensation for the costs involved in investigating the claim. Defendant was served, by way of CPLR 308 (2), on November 27, 2018 and plaintiff filed an affidavit of service on November 30, 2018. Shortly after filing the summons and complaint, plaintiff moved, by order to show cause, for a preliminary injunction and a temporary restraining order, enjoining all current or future litigation and arbitration proceedings concerning requests for no-fault benefits arising from the accident. In November 2018, Supreme Court granted plaintiff’s motion. In doing so, it declined to consider defendant’s opposition papers, on the ground that they were neither properly nor timely filed in the court electronic filing (hereinafter e-filing) system.

On January 4, 2019, plaintiff moved for a default judgment against all defendants. On January 17, 2019, one week past his 30-day allowance to do so,^[FN*] defendant filed his answer. Defendant opposed plaintiff’s motion and cross-moved to dismiss the complaint against him for lack of personal jurisdiction. He also sought leave to renew and vacate Supreme Court’s November 2018 order granting plaintiff’s motion for the preliminary injunction. Supreme Court granted plaintiff’s motion for a default judgment, finding that plaintiff effected proper service upon defendant, that defendant did not timely answer and defendant failed to demonstrate a valid reason for the late filing. The court also summarily denied defendant’s cross motion to renew and vacate the November 2018 order, finding that it was not made within 30 days of entry of that order. Defendant appeals.

Defendant contends that Supreme Court did not have personal jurisdiction over him to render a default judgment since plaintiff failed to sufficiently prove service of process. Service of process upon a natural person must be made in strict compliance with the methods set forth in CPLR 308. Failure to serve process leaves the court without personal jurisdiction over a defendant. “As a general proposition, a process server’s affidavit of service establishes a prima facie case as to the method of service and, therefore, gives rise to a presumption of proper service” (Carver Fed. Sav. Bank v Shaker Gardens, Inc., 135 AD3d 1212, 1213 [2016] [internal quotations and citations omitted]). The affidavit of service reflects that the Orange County Sheriff left the summons and complaint with defendant’s grandmother at 16 Strack Road in the Town of Goshen, Orange County, followed by mailing, that same day, a copy of the summons to the same address. Defendant does not deny that his grandmother was served nor does he claim that the address was not proper or that he did in fact receive the pleadings. Instead, in a conclusory fashion, defendant states that he “currently resides in Middletown, NY” without specifying an address or providing any proof of his residence. Defendant “failed to adequately rebut the presumption of proper service created by the affidavit[ ] of service” (Christiana Bank & Trust Co. v Eichler, 94 AD3d 1170, 1170 [2012]), as this “bare claim . . . is not a detailed and specific contradiction of the allegations in the process server’s affidavit” (id. at 1171 [internal quotation marks and citations omitted]). We therefore agree with Supreme Court that service was proper, and the court acquired jurisdiction over defendant.

Next, defendant alleges that plaintiff’s motion for a default judgment should have been denied because plaintiff failed to provide the requisite notice pursuant to CPLR 3215 (g) (1) and (3), the delay in serving the answer was short and plaintiff did not suffer any prejudice. Initially, we find that plaintiff complied with the requisite notice pursuant to CPLR 3215 (g) (1). The statute requires that any defendant who has appeared is entitled to at least five days’ notice of the time and place of the application. Plaintiff served counsel with notice of the default judgment on January 4, 2019, 21 days prior to the application being heard. Further, defendant’s contention that additional notice was required pursuant to CPLR 3215 (g) (3) is without merit. As provided in the statute, notice is required if the “action [is] based upon nonpayment of a contractual obligation” (CPLR 3215 [g] [3]). The instant action is one for breach of contract, fraud and a declaratory judgment, and plaintiff seeks compensation for fees involved in investigating the claim. As this is not an action for nonpayment of a contractual obligation, such additional notice was not required (see Basile v Mulholland, 73 AD3d 597, 597 [2010]).

Plaintiff demonstrated entitlement to a default judgment by submitting proof of service upon defendant, the facts supporting its claim and defendant’s default (see Dayco Mech. Servs., Inc. v Toscani, 94 AD3d 1214, 1214 [2012]). However, under the circumstances, Supreme Court abused its discretion in granting plaintiff’s motion for a default judgment. Although defendant’s motion papers lacked specific details of the underlying circumstances for the delay, the delay herein was de minimis—one week—and should be excused (see Bank of N.Y. Mellon v Jinks, 127 AD3d 1367,1368-1369 [2015]; Heinrichs v City of Albany, 239 AD2d 639, 640 [1997]). Defendant timely opposed the motion, offering a meritorious defense. There is no indication that the default was willful or that plaintiff was prejudiced as a result of the late answer. Moreover, defendant appeared in the action when he opposed plaintiff’s motion for a preliminary injunction and temporary restraining order. Public policy favors the resolution of cases on the merits (see Watson v Pollacchi, 32 AD3d 565, 565 [2006]; BPS Mgt. Corp. v New York Tit. Ins. Co., 115 AD2d 921, 922 [1985]).

Lastly, defendant contends that Supreme Court erred in denying his cross motion to renew as untimely. We agree. Supreme Court confused the cross motion to renew with a motion to reargue and summarily denied it since it was not made within 30 days. This time period applies solely to motions to reargue (see CPLR 2221 [d] [3]; Redeye v Progressive Ins. Co., 158 AD3d 1208, 1208 [2018]). Defendant argues that his opposition papers to plaintiff’s order to show cause seeking the preliminary injunction should have been considered by the court as he had not consented to e-filing, he timely mailed the documents pursuant to the instructions set forth in the order to show cause and he recently obtained his medical records, which were not available at the time of the return date on the order to show cause. “A motion for leave to renew . . . shall be based upon new facts not offered on the prior motion that would change the prior determination . . . [and] shall contain reasonable justification for the failure to present such facts on the prior motion” (CPLR 2221 [e] [2], [3]; see Matter of Karnofsky [New York State Dept. of Corr. & Community Supervision], 125 AD3d 1198, 1200 [2015]). Pursuant to Rules of the Chief Administrator of the Courts (22 NYCRR) § 202.5-bb (a) (1), mandatory e-filing may only be imposed “in such classes of actions and such counties as shall be specified by [O]rder of the Chief Administrator of the Courts.” On October 12, 2017, the Chief Administrative Judge issued Administrative Order of the Chief Administrative Judge of the Courts AO/294/18, which stated that Chenango County—the county in which this action was commenced—was a “consensual or voluntary e-filing county only.” As such, it did not impose mandatory e-filing in any type of case.

Moreover, in all cases, “[a] clerk shall not refuse to accept for filing any paper presented for that purpose except where specifically directed to do so by statute or rules promulgated by the [C]hief [A]dministrator of the [C]ourts” (CPLR 2102 [c]). Under the consensual e-filing rules, which applied in this case, a party that has not consented to e-filing must serve their papers via a hard copy (see Rules of Chief Admin of Cts [22 NYCRR] § 202.5-b [b] [2] [i]). Defendant diligently attempted to file his opposition in a timely manner. However, those papers were not considered by Supreme Court. Additionally, counsel averred that defendant’s medical records were not available at the time of plaintiff’s order to show cause and, as they demonstrate evidence of defendant’s injuries, they were pertinent thereto. Defendant has provided reasonable justification for failing to submit the additional facts in his opposition to plaintiff’s order to show cause (see Mula v Mula, 151 AD3d 1326, 1327 [2017]; Premo v Rosa, 93 AD3d 919, 921 [2012]). In view of the foregoing, Supreme Court abused its discretion in granting plaintiff’s motion for default judgment and denying defendant’s cross motion to renew and vacate the November 28, 2018 order.

Egan Jr., J.P., Lynch and Aarons, JJ., concur. Ordered that the order is reversed, on the law, without costs, plaintiff’s motion for a default judgment denied, defendant Jonathan DiLorenzo’s cross motion to renew/vacate granted, the preliminary injunction stayed and matter remitted to the Supreme Court to consider said defendant’s opposition papers with respect to plaintiff’s motion for a preliminary injunction.

Footnotes

Footnote *:As defendant was served pursuant to CPLR 308 (2), service is not complete until 10 days after the filing of proof of service. As plaintiff filed the affidavit of service on November 30, 2018, service was complete on December 10, 2018, giving him 30 days after that date to answer.

[*1]

Thuillez, Ford, Gold, Butler & Monroe, LLP, Albany (Daisy Ford Paglia of counsel), for appellant.

Basch & Keegan, Kingston (Derek J. Spada of counsel), for respondent.

Devine, J. Appeal from an order of the Supreme Court (Gilpatric, J.), entered November 16, 2016 in Ulster County, which denied defendant’s motion for summary judgment dismissing the complaint.

After he was injured in a motor vehicle accident, plaintiff commenced this action to recover no-fault benefits for lost wages that he allegedly would have received from a new job that he had been offered but not yet started. Supreme Court denied defendant’s motion for summary judgment dismissing the complaint. This Court reversed, granted the motion and dismissed the complaint (152 AD3d 1145 [2017]). The Court of Appeals reversed, finding “[t]riable issues of fact . . . as to plaintiff’s claim for lost wages,” and remitted the matter so that this Court could address any issue “raised but not determined” on the initial appeal (30 NY3d 1044, 1045 [2017]).

The remaining issue is whether defendant was provided with proper verification of plaintiff’s claim for lost wages. “[A]n insurer must pay or deny only a verified claim” (Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294, 299 [2007]; see 11 NYCRR 65-3.8 [a] [1]), which ordinarily requires “its receipt of verification of all of the relevant information requested” (11 NYCRR 65-3.8 [b] [3]; see Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d at 299). As is relevant here, the insurer must “accept proof of claim submitted on a form other than a prescribed form if it contains substantially the same information as the prescribed [*2]form” (11 NYCRR 65-3.5 [f]; see Sound Shore Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 106 AD3d 157, 162 [2013]). The regulations therefore ensure that the insurer is provided with the necessary information to verify a claim but do not, in most instances, require that the information be provided on a particular form (see 11 NYCRR 65-3.5 [f]).

Defendant complains, and the record indicates, that it did not receive a completed NF-6 form (employer’s wage verification report) from VW Parts, Inc., the intended employer. The principal of VW Parts testified, however, that he did not believe that he ever received an NF-6 form to complete. Counsel for plaintiff confirmed as much in a letter responding to defendant’s demand for the completed form, requesting a copy that he could provide to VW Parts. In any event, counsel for plaintiff had already provided defendant with plaintiff’s employment application to VW Parts and a signed employment offer providing details of the proffered work. To the extent that those documents did not provide all of the information contained on a completed NF-6 form, defendant further connected with the principal of VW Parts “for an interview and verification of employment” that could have been used to obtain the remainder. Thus, inasmuch as triable questions of fact exist as to whether plaintiff’s claim was properly verified, defendant is not entitled to summary judgment dismissing the complaint on that basis.

Egan Jr., Clark and Mulvey, JJ., concur; McCarthy, J.P., not taking part. Ordered that the order is affirmed, without costs.

[*1]

E. Stewart Jones Hacker Murphy, LLP, Troy (Ryan M. Finn of counsel), for appellant.

Rivkin Radler LLP, Uniondale (Henry Mascia of counsel), for respondent.

Rumsey, J. Appeal from an order of the Supreme Court (Ferreira, J.), entered April 11, 2016 in Albany County, which partially granted defendant’s motion to partially dismiss the complaint.

Plaintiff alleged that she became permanently disabled as a result of injuries that she sustained in an automobile accident in March 2012. Following an independent medical examination (hereinafter IME), defendant denied no-fault insurance benefits on the basis that plaintiff’s injuries were preexisting and were not causally related to the accident. In December 2014, plaintiff commenced this action asserting causes of action for breach of contract, violation of General Business Law §§ 349 and 350 and intentional infliction of emotional distress, based on allegations that defendant pressured the physicians that it employed to conduct IMEs to attribute injuries to preexisting conditions and thereby facilitate the denial of claims, and seeking, among other relief, damages for emotional distress and punitive damages. In October 2015, defendant moved to dismiss the second and third causes of action—for violation of General Business Law §§ 349 and 350 and intentional infliction of emotional distress, respectively—and plaintiff’s claims for consequential damages, emotional distress damages and punitive damages. Supreme Court partially granted defendant’s motion by dismissing the second and third causes of action and plaintiff’s claims for emotional distress damages and punitive damages, but held that plaintiff had adequately stated a claim for consequential damages for economic loss and pain and [*2]suffering. Plaintiff now appeals.^[FN1]

“On a motion to dismiss for failure to state a claim, the court must afford the complaint a liberal construction, accept as true the allegations contained therein, accord the plaintiff the benefit of every favorable inference and determine only whether the facts alleged fit within any cognizable legal theory” (Shebar v Metropolitan Life Ins. Co., 25 AD3d 858, 859 [2006] [internal quotation marks, brackets and citations omitted]). “A cause of action to recover damages pursuant to General Business Law § 349 has three elements: first, that the challenged act or practice was consumer-oriented; second, that it was misleading in a material way; and third, that the plaintiff suffered injury as a result of the deceptive act” (Benetech, Inc. v Omni Fin. Group, Inc., 116 AD3d 1190, 1190 [2014] [internal quotation marks and citations omitted], lv denied 23 NY3d 909 [2014]). In that regard, allegations that an insurer engaged in a practice of failing to investigate claims in good faith, or of denying claims without regard to their viability, are sufficient to state a cognizable claim for deceptive practices pursuant to General Business Law § 349 (see Ural v Encompass Ins. Co. of Am., 97 AD3d 562, 564-565 [2012]; Shebar v Metropolitan Life Ins. Co., 25 AD3d at 858-859; Joannou v Blue Ridge Ins. Co., 289 AD2d 531, 532 [2001]; Acquista v New York Life Ins. Co., 285 AD2d 73, 78, 82 [2001]). Moreover, “[t]he battle over whether [a] plaintiff can meet [his or] her obligation of a threshold showing that [his or] her claim was predicated upon a deceptive act or practice that was consumer oriented is best reserved for a motion for summary judgment after discovery” (Skibinsky v State Farm Fire & Cas. Co., 6 AD3d 975, 976 [2004] [internal quotation marks and citations omitted]).

In her complaint, plaintiff alleged that defendant engaged in a consumer-oriented pattern and practice aimed at the public at large of wrongfully denying claims for no-fault benefits by pressuring the physicians it hired to perform IMEs to provide medical reports that would support the denial of benefits and, further, that she suffered injury as a result of that practice. Such allegations are sufficient to plead a cause of action pursuant to General Business Law § 349 “ ’at this early prediscovery phase’ ” (Shebar v Metropolitan Life Ins. Co., 25 AD3d at 859 [brackets omitted], quoting Skibinsky v State Farm Fire & Cas. Co., 6 AD3d at 976).^[FN2] Thus, Supreme Court erred in granting defendant’s motion to dismiss plaintiff’s General Business Law § 349 cause of action.

[*3] In her breach of contract claim, plaintiff seeks consequential damages, including damages for emotional distress. Supreme Court dismissed plaintiff’s claim for emotional distress damages and held that plaintiff had otherwise adequately pleaded a claim for consequential damages. We agree. It has long been the rule that “absent a duty upon which liability can be based, there is no right of recovery for mental distress resulting from the breach of a contract-related duty” (Wehringer v Standard Sec. Life Ins. Co. of N.Y., 57 NY2d 757, 759 [1982]; accord Johnson v Jamaica Hosp., 62 NY2d 523, 528-529 [1984]; see Hess v Nationwide Mut. Ins. Co., 273 AD2d 689, 690-691 [2000]; Klein v Empire Blue Cross & Blue Shield, 173 AD2d 1006, 1008 [1991], lv denied 78 NY2d 863 [1991]; Sweazey v Merchants Mut. Ins. Co., 169 AD2d 43, 45 [1991], lv dismissed 78 NY2d 1072 [1991]). As Supreme Court noted, plaintiff failed to satisfy this standard because she did not allege the existence of any relationship or duty between the parties separate from the contractual obligation.

We reject plaintiff’s argument that she may seek damages for emotional distress in light of Bi-Economy Mkt., Inc. v Harleysville Ins. Co. of N.Y. (10 NY3d 187 [2008]) and Panasia Estates, Inc. v Hudson Ins. Co. (10 NY3d 200 [2008]), in which the Court of Appeals held, for the first time, that “consequential damages resulting from a breach of the covenant of good faith and fair dealing may be asserted in an insurance contract context, so long as the damages were ‘within the contemplation of the parties as the probable result of a breach at the time of or prior to contracting’ ” (Panasia Estates, Inc. v Hudson Ins. Co., 10 NY3d at 203, quoting Bi-Economy Mkt., Inc. v Harleysville Ins. Co. of N.Y., 10 NY3d at 192 [internal quotation marks and citations omitted]). Although the Court of Appeals did not specifically consider the issue of whether damages were available for emotional distress when it decided Bi-Economy and Panasia, we conclude that it did not implicitly abandon the long-standing rule that damages for emotional distress for breach of contract are available only in certain limited circumstances, such as a willful breach accompanied by egregious and abusive behavior (see Johnson v Jamaica Hosp., 62 NY2d at 528-529).

In that regard, we note that the Second Department has continued to apply the rule of Wehringer v Standard Sec. Life Ins. Co. of N.Y. (supra) following Bi-Economy and Panasia (see Curtis-Shanley v Bank of Am., 109 AD3d 634, 635 [2013], appeal dismissed and lv denied 22 NY3d 1133 [2014]; Rakylar v Washington Mut. Bank, 51 AD3d 995, 996 [2008]). The Second Department has also held, based on a rule that existed prior to Bi-Economy and Panasia, that the scope of consequential damages permitted by Bi-Economy and Panasia does not include the expenses incurred when an insured commences affirmative litigation to enforce its rights under an insurance policy (see Santoro v GEICO, 117 AD3d 1026, 1028 [2014]; Stein, LLC v Lawyers Tit. Ins. Corp., 100 AD3d 622, 622-623 [2012]).^[FN3] We agree that nothing in Bi-Economy or Panasia implicitly altered or abrogated previous rules limiting recovery of damages for breach of a contract-related duty. Rather, Bi-Economy and Panasia announced a new rule that extended the ability to recover consequential damages for breach of the covenant of good faith and fair dealing in the context of an insurance contract—a circumstance where they had not previously been available—subject to the same rules that otherwise limit recovery of damages for any breach of contract. Thus, Supreme Court properly dismissed plaintiff’s claim seeking damages for [*4]emotional distress.^[FN4]

Plaintiff’s claim for punitive damages was likewise properly dismissed. Punitive damages may be recovered for breach of contract “only where a defendant’s conduct was (1) actionable as an independent tort, (2) egregious, (3) directed toward the plaintiff and (4) part of a pattern directed at the public” (Dinstber v Allstate Ins. Co., 110 AD3d 1410, 1411 [2013]). Plaintiff’s allegations that defendant engaged in unfair claim settlement practices do not allege a tort independent of the parties’ contract sufficient to state a claim for recovery of punitive damages (see id.; Cunningham v Security Mut. Ins. Co., 260 AD2d 983, 984-985 [1999], lv dismissed 94 NY2d 796 [1999]).

McCarthy, J.P., and Rose, J., concur.

Lynch, J. (concurring in part and dissenting in part). We concur in the majority statement, except insofar as the majority has determined that damages for emotional distress are not recoverable on plaintiff’s breach of contract claim. The majority correctly states the governing rule for consequential loss as defined by the Court of Appeals in Panasia Estates, Inc. v Hudson Ins. Co. (10 NY3d 200 [2008]) and Bi-Economy Mkt., Inc. v Harleysville Ins. Co. of N.Y. (10 NY3d 187 [2008]). Those cases involved claims for consequential damages for breach of a commercial property insurance policy and in the context of business interruption insurance coverage (Panasia Estates, Inc. v Hudson Ins. Co., 10 NY3d at 202-203; Bi-Economy Mkt., Inc. v Harleysville Ins. Co. of N.Y., 10 NY3d at 190-191). Neither case addressed damages for emotional distress, but confirmed that consequential damages are recoverable for a breach of the covenant of good faith and fair dealing “so long as the damages were within the contemplation of the parties as the probable result of a breach at the time of or prior to contracting” (Panasia Estates, Inc. v Hudson Ins. Co., 10 NY3d at 203 [internal quotation marks and citations omitted]). Given the nature and purpose of no-fault coverage, it is our view that the insured bargains for not only the monetary benefits, but also the intangible peace of mind that prompt payment will be made for medical expenses and lost wages emanating from injuries sustained in an automobile accident (see Bi-Economy Mkt., Inc. v Harleysville Ins. Co. of N.Y., 10 NY3d at 193-194). Certainly, such a benefit is within the contemplation of the parties as an integral component of the contract (see Connolly v Peerless Ins. Co., 873 F Supp 2d 493, 506-507 [ED NY 2012]; Chernish v Massachusetts Mut. Life Ins. Co., 2009 WL 385418, *4, 2009 US Dist LEXIS 9617, *16-19 [ND NY, Feb. 10, 2009, No. 5:08-CV-0957 (GHL)]; Acquista v New York Life Ins. Co., 285 AD2d 73, 78-82 [2001]). For this reason, it is our view that plaintiff is entitled to seek damages for emotional distress on her breach of contract claim.

Egan Jr., J., concurs. Ordered that the order is modified, on the law, without costs, by reversing so much [*5]thereof as granted defendant’s motion to dismiss the General Business Law § 349 cause of action; motion denied to said extent; and, as so modified, affirmed.

Footnotes

Footnote 1:Plaintiff abandoned any arguments with respect to the General Business Law § 350 and intentional infliction of emotional distress claims by failing to address the dismissal of those claims in her brief on appeal (see McConnell v Wright, 151 AD3d 1525, 1526 n [2017]; Miller v Genoa AG Ctr., Inc., 124 AD3d 1113, 1114 n [2015]).

Footnote 2:Where, as here, the complaint asserts the material elements of a cause of action, the complaint may be amplified by allegations made in a bill of particulars (see ADC Chattels v Atlantic Dental Co., 169 AD2d 903, 903-904 [1991]; Lewis v Village of Deposit, 40 AD2d 730, 730 [1972], affd 33 NY2d 532 [1973]; see e.g. Ural v Encompass Ins. Co. of Am., 97 AD3d at 564). In her bill of particulars, plaintiff averred that defendant pressured IME physicians to issue medical reports that would wrongfully support the denial of claims specifically in instances where an insured had a preexisting injury.

Footnote 3:We decline to follow Acquista v New York Life Ins. Co. (285 AD2d 73 [2001]), which was decided prior to Bi-Economy and Panasia, to the extent that it suggests that damages for emotional distress are recoverable for breach of the covenant of good faith and fair dealing with respect to insurance contracts.

Footnote 4:In light of our determination that damages for emotional distress are not available in this action, as a matter of law, we need not consider whether such damages may have been foreseeable.

[*1]

Thuillez, Ford, Gold, Butler & Monroe, LLP, Albany (Daisy Ford Paglia of counsel), for appellant.

Basch & Keegan, Kingston (Derek J. Spada of counsel), for respondent.

McCarthy, J.P. Appeal from an order of the Supreme Court (Gilpatric, J.), entered November 16, 2016 in Ulster County, which denied defendant’s motion for summary judgment dismissing the complaint.

On December 23, 2012, plaintiff allegedly sustained various injuries when the vehicle that he was operating was rear-ended by another vehicle. At the time of the accident, plaintiff, who had worked in the automotive parts and repair industry for a number of years, had been unemployed for approximately seven months. In January 2013, plaintiff submitted an application for no-fault benefits to defendant, his insurance carrier. With respect to the lost wages portion of the application, plaintiff indicated that he “was due to start [a] new job” but had been unable to work since December 23, 2012 as a result of the injuries that he had sustained in the accident. Plaintiff further indicated that details regarding his position, including his salary and the employer’s name and address, would be provided.

Plaintiff thereafter provided defendant with a copy of his employment application dated December 15, 2012, which reflected that plaintiff had been offered a job at VW Parts, Inc. (hereinafter the parts business) commencing on January 1, 2013 and at a salary of $2,000 per week, with benefits. Defendant requested additional documentation in support of plaintiff’s claim and, when such claim remained unpaid, plaintiff commenced this action seeking to recover no-fault benefits for the lost wages allegedly sustained. Defendant answered and raised plaintiff’s failure to provide proper verification of his claim as an affirmative defense. Following discovery, defendant moved for summary judgment dismissing the complaint—citing plaintiff’s [*2]failure to provide proper verification of his claim and asserting that the claim for lost wages was speculative. Supreme Court denied defendant’s motion, prompting this appeal. We reverse.

Insurance Law § 5102 (a) (2) provides that an individual who makes a claim under the no-fault law must be compensated for “[l]oss of earnings from work which the person would have performed had he [or she] not been injured” (see Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451, 458 [1980]). The statutory and regulatory provisions that govern the recovery of lost earnings “contemplate[ ] a degree of certainty in the calculation of lost wages” (Sharpe v Allstate Ins. Co., 14 AD3d 774, 775 [2005]). With respect to the recovery of lost earnings, the Legislature did not intend for plaintiffs to receive windfall recoveries or for insurance carriers to suffer undue financial hardship (see Kurcsics v Merchants Mut. Ins. Co., 49 NY2d at 457). Instead, the Legislature intended “to compensate the accident victim for the earnings he or she would have, in fact, realized” (id.). Consistent with this principle, a plaintiff is entitled to “demonstrated future earnings reasonably projected” (11 NYCRR 65-3.16 [b] [3]).

As an initial matter, we agree with plaintiff and our dissenting colleagues that, on this motion for summary judgment, we must treat as credible plaintiff’s testimony and the testimony of William Hrazanek, who was the sole shareholder of the parts business and who allegedly offered plaintiff employment (see Coyle v Bommarito, 106 AD3d 1324, 1327 [2013]; Tenkate v Tops Mkts., LLC, 38 AD3d 987, 989 [2007]). Thus, we credit Hrazanek’s claims, despite the fact that he admitted, among other things, that (1) he had previously pleaded guilty to the crimes of insurance fraud and offering a false instrument, (2) he had made false sworn statements in regard to the bankruptcy proceeding of a corporation, (3) he had initiated that bankruptcy proceeding as a “ruse” to forestall creditors and (4) he had paid his wife a salary from the parts business while she was a student at Columbia University for her “learning purposes.” Even while crediting Hrazanek’s and plaintiff’s claims, however, the record reveals that their contentions are immaterial to the issue of the reasonableness of plaintiff’s alleged projected future earnings as an employee of the parts business. Regardless of the genuineness of Hrazanek’s offer of employment, uncontested evidence regarding the parts business and its finances during the relevant time period establish as a matter of law that it is unreasonable to project that, but for plaintiff’s accident, the parts business would have actually employed plaintiff at a salary of $2,000 a week.

Here, the uncontested evidence established that the parts business was in physical and financial disrepair after Hurricane Irene struck in 2011 and that it remained in such a state at the time that plaintiff allegedly received a job offer and thereafter. Hrazanek testified that the parts business conducted its operations from three different locations—a warehouse, operating offices that were attached to garage bays and a junkyard. According to Hrazanek, the hurricane severely flooded the warehouse and destroyed $4.8 million of inventory held therein. The parts business never resumed operations at the warehouse. At the operating offices, the hurricane flooded cars that were in the yard, washing some away, and destroyed the inventory in the bays. Hrazanek explained that the actual offices and the parts inventory that were stored therein remained unaffected by the hurricane.

Further, Hrazanek testified that he had hired plaintiff because they had plans to open an automobile repair shop. Defendant made a Freedom of Information Law request to the Town of Middletown, Delaware County—where the parts business was located—in regard to any information indicating that Hrazanek or the parts business had made efforts to open an automobile repair shop. The Town’s response established that, between November 2012 and January 2013—the month that plaintiff was supposed to begin working—neither Hrazanek nor [*3]the parts business had submitted any applications for any relevant licences or certificates in regard to operating an automobile repair shop. Thus, despite Hrazanek’s claim that the parts business was “basing [its] future on [plaintiff]” in regard to their “plans to open up the [automobile] repair shop,” the uncontested evidence established that plaintiff would not have had any automobile repair shop to run in January 2013.^[FN1] Hrazanek further acknowledged that he never opened such a repair shop.

Moreover, as additional evidence of the financial distress of the parts business, Hrazanek acknowledged that it was obligated to pay the lease on the warehouse and the operating offices, and that it ceased to do so after Hurricane Irene. In addition, the parts business’s financial records established that it paid three employees in December 2012, the month before plaintiff was allegedly intended to become an employee; Larissa Guselnikova, Hrazanek’s wife, was paid $1,442.31 per week, Bruce Hoornbeek was paid approximately $500 per week and Eric Preisendorfer was paid $1,325 per week. The records further indicate that as of January 2013, Preisendorfer was the only employee that remained on the payroll, and that the parts business did not pay him or any other employees after that month. A member of defendant’s special investigation unit visited the operating offices of the parts business in October 2013 and found the building padlocked and without any employees present. Finally, Hrazanek acknowledged that he sold the parts business in 2014 for $40,000.^[FN2] Notably, this transaction indicates that the entire value of the parts business was equal to the value of 20 weeks of plaintiff’s projected salary, excluding the costs of plaintiff’s benefits and other employer obligations. Therefore, uncontested proof establishes that the parts business was in financial distress at the time that plaintiff was allegedly offered a job and that it ceased operations, at the latest, shortly after plaintiff’s anticipated start date.

Moreover, defendant provided proof that discounted the possibility that, had plaintiff been able to contribute his efforts to the parts business, it would not have failed and he would have received his alleged proposed salary. Defendant submitted evidence regarding plaintiff’s demonstrated ability to run an automobile repair business by submitting plaintiff’s deposition and certain of his tax returns. According to plaintiff, his most recent employment was owning and operating an automobile repair shop and gas station, which plaintiff explained went out of business due to the “economy.” Plaintiff’s tax returns provided objective evidence of his lack of success in owning and operating such a business; in 2012—the last year in which he owned and operated that business—he reported that it had a net loss of $6,923.

[*4] Considering the foregoing, Hrazanek’s and plaintiff’s subjective beliefs about the financial health of the parts business and/or their subjective beliefs about plaintiff’s skills are immaterial to the resolution of whether it is reasonable to project that the parts business would have employed plaintiff at a salary of $2,000 a week. In contrast, the uncontradicted evidence that the parts business was failing, that it had not made any efforts to acquire or open an automobile repair shop, and that, even if it had, plaintiff had a demonstrated history of being unable to run a profitable automobile repair shop all bear on the reasonableness of such a projection. That material evidence established as a matter of law that the projection that plaintiff would have received $2,000 a week from the parts business is unreasonable (see Sharpe v Allstate Ins. Co., 14 AD3d at 775; see generally Bailey v Jamaica Buses Co., 210 AD2d 192, 192 [1994]). Accordingly, defendant’s motion for summary judgment dismissing the complaint should have been granted. This determination renders academic defendant’s alternative argument for dismissal, that plaintiff failed to provide proper verification of his claim.

Rose and Devine, JJ., concur.

Egan Jr., J. (dissenting). The crux of defendant’s argument upon appeal is that, as of the filing of plaintiff’s application for no-fault benefits, his alleged future employer, VW Parts, Inc. (hereinafter the parts business), “was a defunct business” and, therefore, “there was no actual employment available to plaintiff.” Absent a legitimate job opportunity, defendant’s argument—and the majority’s premise—continues, plaintiff’s claim for lost wages is entirely speculative, thereby warranting dismissal thereof. We disagree and, therefore, respectfully dissent.

To our analysis, the majority has engaged in an unduly narrow reading of the record—seizing upon those facts that would militate in favor of dismissing plaintiff’s claim while discounting any proof that could reasonably be construed as supporting plaintiff’s contention that he had a legitimate job offer and, hence, that his future earnings were in fact reasonably projected. In this regard, it bears repeating that, on a motion for summary judgment, we must view the evidence “in the light most favorable to the nonmoving party, who is afforded the benefit of every reasonable inference” to be drawn therefrom (Hall v Queensbury Union Free Sch. Dist., 147 AD3d 1249, 1250 [2017]; see Giglio v Saratoga Care, Inc., 117 AD3d 1143, 1145 [2014]). Applying that standard to the record before this Court, we find questions of fact as to whether plaintiff indeed had a bona fide position with the parts business effective January 1, 2013 and, further, whether plaintiff would have been able to begin work at the stated salary but for the intervening motor vehicle accident.

As the majority has recounted at length, there indeed is no question that the parts business and its sole shareholder, William Hrazanek, had—in the wake of Hurricane Irene—fallen on hard times. Against this backdrop, however, the record nevertheless reflects that, on or about December 15, 2012, Hrazanek offered plaintiff, whom he had known for approximately 15 years, a position as a parts specialist and warehouse manager; plaintiff’s employment in that capacity was to commence on January 1, 2013, and his salary was slated to be $2,000 per week (including benefits). Although plaintiff’s projected salary exceeded the salaries paid to other employees of the parts business, Hrazanek testified that no one else possessed plaintiff’s qualifications and that he was effectively “basing [the] future” of his business upon plaintiff’s expertise. Hrazanek further testified that plaintiff “had worked at numerous Audi dealers and had been to all of the schools and so forth,” leading Hrazanek to conclude that plaintiff was the [*5]person he needed to “expand the business and get back on track after the flood.”^[FN1] Plaintiff’s affidavit in opposition to defendant’s motion largely echoed Hrazanek’s account of plaintiff’s hiring—with plaintiff averring that he was offered and accepted a position with the parts business eight days before the accident occurred, that he was scheduled to begin work in January 2013 and that, as a result of the accident, he was unable to do so. According to plaintiff, who had more than 25 years of experience in the automotive parts industry, his new position with the parts business would consist of dismantling vehicles and warehousing the individual parts, and he would utilize his extensive knowledge and experience regarding “which parts fit which vehicles and which parts [were] interchangeable” to “facilitate the sale of vehicle parts.” As of December 2012, plaintiff averred, the parts business had “about 1,500 to 2,000 intact cars awaiting to have [their] parts stripped, labeled and warehoused.”^[FN2] In light of such proof, we agree with Supreme Court that, as noted previously, the record as a whole contains questions of fact as to whether plaintiff indeed had a bona fide position with the parts business effective January 1, 2013 and, further, whether plaintiff would have been able to begin work at the stated salary but for the intervening motor vehicle accident.

In reaching a contrary conclusion, the majority relies upon, among other things, the fact that, after plaintiff’s anticipated start date came and went, the parts business ceased operations altogether and ultimately was sold. This salient fact, however, cuts both ways. In other words, while the majority cites the eventual failure of the parts business as support for the proposition that it was a defunct operation from the very beginning, the failure of such business also lends credence to Hrazanek’s claim that the entire future of his overall business hinged upon hiring someone with plaintiff’s particular and demonstrated skill set.

The majority’s reliance upon plaintiff’s purported lack of success in running his own business is, to our analysis, similarly misplaced. Even assuming, without deciding, that the majority’s interpretation of plaintiff’s tax returns indeed leads to the inevitable conclusion that he would be unable to singlehandedly operate a successful automobile repair business, the fact remains that plaintiff was offered a position as a parts specialist and warehouse manager, that—as noted previously—plaintiff had more than 25 years of experience in the automotive parts industry and that, whatever other inventory Hrazanek may have lost in the hurricane or whatever other financial setbacks he may have suffered, the parts business had—as of December 2012—[*6]between 1,500 and 2,000 vehicles waiting to be dismantled and sold for parts. As for the majority’s conclusion that “the actual value of the parts business, which would include those vehicles and their parts, was $40,000,” we do not subscribe to the implicit assumption that the eventual “fire sale” value of the business necessarily was indicative of the value of the underlying inventory as of January 2013. Nor are we persuaded that the ultimate sale price obtained by Hrazanek—once plaintiff was injured—somehow bears upon whether Hrazanek could have met plaintiff’s promised salary had their business relationship gone forward.

Finally, our conclusions in this regard are not, as the majority suggests, predicated upon Hrazanek’s and plaintiff’s subjective beliefs as to either the financial viability of the parts business, the success of the planned repair shop or the breadth of plaintiff’s automotive skills. Rather, the issue distills to—and our analysis is focused upon—whether, based upon a review of the record as a whole and construing all of the proof contained therein in the light most favorable to plaintiff, plaintiff’s future earnings were reasonably projected. In reversing and granting defendant summary judgment, the majority does what is not ours to do—judge the credibility of the witnesses. Given the conflicting proof, we think that Supreme Court was right to let a jury judge plaintiff’s account.

Mulvey, J., concurs. Ordered that the order is reversed, on the law, with costs, motion granted and complaint dismissed.

Footnotes

Footnote 1:When Hrazanek claimed that the future of the business depended on plaintiff, he was referring to his plan to have plaintiff operate an automobile repair shop. Despite being deposed twice, Hrazanek never stated that he had any plans for plaintiff to dismantle vehicles for parts, let alone that plaintiff dismantling vehicles and selling parts—the work that the parts business was already engaged in—was the future of the parts business.

Footnote 2:Plaintiff claimed that the parts business had 1,500 to 2,000 vehicles waiting to be dismantled and sold for parts. Nonetheless, the uncontradicted evidence remains that the actual value of the parts business, which would include those vehicles and their parts, was $40,000.

Footnote 1:According to the majority, “[w]hen Hrazanek claimed that the future of the business depended on plaintiff, he was referring to his plan to have plaintiff operate an automobile repair shop.” While that is one possible interpretation of Hrazanek’s testimony, we read Hrazanek’s testimony in a more neutral fashion—leading to the conclusion that Hrazanek generally viewed plaintiff as an asset to building and/or rebuilding the various components of the business.

Footnote 2:While the majority makes much of the fact that Hrazanek did not expressly state that plaintiff’s job would include dismantling vehicles and selling their parts, plaintiff’s affidavit makes clear that he understood that such tasks would be part of his new position—a fact born out by the employment application that plaintiff completed and Hrazanek signed, which reflects that plaintiff was being hired as a parts specialist and warehouse manager.

[*1]

Carroll McNulty & Kull, LLC, New York City (Ann Odelson of counsel), for appellant.

Craig T. Bumgarner, Carmel, for respondent.

Devine, J. Appeal from an order of the Supreme Court (Schick, J.), entered May 29, 2015 in Sullivan County, which, among other things, granted plaintiff’s motion for summary judgment declaring that defendant has a duty to defend and/or indemnify plaintiff in an underlying action.

Defendant issued a commercial general liability insurance policy to plaintiff, a construction firm, effective from October 2008 to October 2009. Plaintiff was the general contractor at a construction site where, in February 2009, Allan Speirs was injured in the course of his work for a subcontractor. Defendant was notified of the occurrence in March 2009. Plaintiff then learned that Speirs had allegedly sustained serious injuries in the accident and had retained counsel and, in January 2010, that information was promptly forwarded to defendant.

Speirs commenced an action against plaintiff and the owner of the construction site in August 2011, alleging violations of Labor Law §§ 200 and 241 (6), as well as common-law negligence. In November 2011, plaintiff was served with the summons and complaint pursuant to Business Corporation Law § 306 but, because its registered agent was the defunct law firm that handled its 1965 incorporation, it did not receive those documents. Plaintiff accordingly defaulted, and neither it nor defendant became aware of the personal injury action until counsel for Speirs alerted defendant to that fact in March 2012. Defendant disclaimed coverage because, among other things, plaintiff had failed to give it notice of the personal injury action as required by the liability policy.

Plaintiff thereafter commenced this action seeking a declaration that defendant is required to defend and indemnify it in the personal injury action. Following joinder of issue, plaintiff moved, and defendant cross-moved, for summary judgment. Supreme Court granted [*2]summary judgment to plaintiff, and defendant now appeals.

We reverse. The liability insurance policy at issue here “contain[s] clauses requiring [plaintiff] to provide prompt notice of [both] an occurrence implicating coverage” and any ensuing legal action (American Home Assur. Co. v International Ins. Co., 90 NY2d 433, 440 [1997]; see American Tr. Ins. Co. v Sartor, 3 NY3d 71, 75-76 [2004]). “The insurer’s receipt of such notice is therefore a condition precedent to its liability under the policy,” and a failure to give that notice “may allow an insurer to disclaim its duty to provide coverage” (American Tr. Ins. Co. v Sartor, 3 NY3d at 76; see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 743 [2005]; Argo Corp. v Greater N.Y. Mut. Ins. Co., 4 NY3d 332, 339 [2005]). At the time the policy here was issued, “[n]o showing of prejudice [was] required” to justify a disclaimer (Argo Corp. v Greater N.Y. Mut. Ins. Co., 4 NY3d at 339).^[FN1] The absence of a need to demonstrate prejudice represented “a limited exception to th[e] general rule,” and was justified by a primary “insurer’s need to protect itself from fraud by investigating claims soon after the underlying events; to set reserves; and to take an active, early role in settlement discussions” (Matter of Brandon [Nationwide Mut. Ins. Co.], 97 NY2d 491, 496 [2002]; see Rekemeyer v State Farm Mut. Auto. Ins. Co., 4 NY3d 468, 475 [2005]; Argo Corp. v Greater N.Y. Mut. Ins. Co., 4 NY3d at 339).

There is no dispute that plaintiff provided timely notice of the underlying accident, but it is equally clear that plaintiff failed to “[n]otify [defendant] as soon as practicable” that the personal injury action had been commenced. Indeed, plaintiff never gave notice to defendant, although counsel for Speirs did so approximately four months after papers had been served (see Insurance Law § 3420 [a] [3]; American Tr. Ins. Co. v Sartor, 3 NY3d at 76; Kalthoff v Arrowood Indem. Co., 95 AD3d 1413, 1415 [2012], lv denied 19 NY3d 815 [2012]). That delay, “in the absence of an excuse or mitigating factors, is unreasonable as a matter of law” (233 E. 17th St., LLC v L.G.B. Dev., Inc., 78 AD3d 930, 932 [2010]). Plaintiff never gave notice because it did not receive the summons and complaint but, inasmuch as its nonreceipt flowed from its failure to appoint a new registered agent for service to replace a defunct one that had been named decades earlier, that explanation was “insufficient as a matter of law” (Kalthoff v Arrowood Indem. Co., 95 AD3d at 1415; see Briggs Ave. LLC v Insurance Corp. of Hannover, 11 NY3d 377, 381 [2008]; AH Prop., LLC v New Hampshire Ins. Co., 95 AD3d 1243, 1244-1245 [2012]).

Plaintiff nevertheless argues that it is entitled to summary judgment because defendant was not prejudiced by the lack of timely notice of suit, pointing to analogous cases involving supplemental uninsured and underinsured motorists coverage where timely notice of an occurrence, but not of the ensuing legal action, was given (see Rekemeyer v State Farm Mut. Auto. Ins. Co., 4 NY3d at 475; Matter of Brandon [Nationwide Mut. Ins. Co.], 97 NY2d at 496-498). The Court of Appeals observed in those cases, however, that the “no-prejudice” rule had less potency in the context of such coverage because an insurer was able to protect its interests due to its receipt of the separate no-fault claim (see Matter of Brandon [Nationwide Mut. Ins. Co.], 97 NY2d at 496-498). In contrast, “[t]he rationale of the no-prejudice rule is clearly applicable to a late notice of lawsuit under a liability insurance policy,” as a liability insurer is [*3]unlikely to obtain pertinent information through other means, impairing its ability “to take an active, early role in the litigation process and in any settlement discussions and to set adequate reserves” (Argo Corp. v Greater N.Y. Mut. Ins. Co., 4 NY3d at 340). The “no-prejudice” rule accordingly applies to the case before us, and the failure of defendant to affirmatively establish prejudice is of no moment (see id.; Liberty Moving & Stor. Co., Inc. v Westport Ins. Corp., 55 AD3d 1014, 1016-1017 [2008], lv denied 12 NY3d 709 [2009]; 1700 Broadway Co. v Greater N.Y. Mut. Ins. Co., 54 AD3d 593, 593-594 [2008]).^[FN2] Thus, defendant should have been awarded summary judgment dismissing the complaint.

McCarthy, J.P., Egan Jr. and Lynch, JJ., concur. Ordered that the order is reversed, on the law, with costs, plaintiff’s motion denied, defendant’s cross motion granted, summary judgment awarded to defendant and complaint dismissed, and it is declared that defendant has no duty to defend or indemnify plaintiff in the underlying action.

Footnotes

Footnote 1:Amendments to Insurance Law § 3420 subsequently took effect that prevented an insurer from disclaiming coverage “unless the failure to provide timely notice has prejudiced” it (Insurance Law § 3420 [a] [5]; [c] [2], as added by L 2008, ch 388; see Rosier v Stoeckeler, 101 AD3d 1310, 1312 [2012]).

Footnote 2:Regardless of the fact that defendant was not required to show prejudice, plaintiff is far from persuasive in asserting that defendant could not have been prejudiced by the absence of timely notice of suit. As a result of the lack of notice, defendant lost the opportunity to “appear and interpose an answer” on plaintiff’s behalf as of right, although counsel for Speirs was apparently willing to show leniency in that regard (American Tr. Ins. Co. v Rechev of Brooklyn, Inc., 57 AD3d 257, 257 [2008]).

—[*1] George C. Dinstber III, Cincinnatus, appellant pro se.

Goldberg & Segalla, LLP, Buffalo (Bryan D. Richmond of counsel), for respondent.

Stein, J. Appeal from an order of the Supreme Court (Rumsey, J.), entered December 28, 2011 in Cortland County, which, among other things, granted defendant’s motion for partial summary judgment.

In January 2002, plaintiff notified defendant, his no-fault insurance carrier, that he had been injured in a motor vehicle accident. Defendant thereafter denied his no-fault claim, prompting plaintiff to commence this action in which he asserted claims of breach of contract and tort, with a concomitant request for punitive damages. After joinder of issue, and various motions brought by each party and appeals related thereto (96 AD3d 1198 [2012]; 75 AD3d 957 [2010]), defendant moved for summary judgment dismissing plaintiff’s tort claim and accompanying demand for punitive damages, alleging that the claim failed to state a cause of action (see CPLR 3211 [a] [7]). Plaintiff cross-moved for, among other things, leave to amend the complaint. In a December 2011 order, Supreme Court granted defendant’s motion, dismissed the tort claim and denied plaintiff’s cross motion. On plaintiff’s appeal, we now affirm.

Although “damages arising from the breach of a contract will ordinarily be limited to the contract damages necessary to redress the private wrong, . . . punitive damages may be recoverable if necessary to vindicate a public right” (New York Univ. v Continental Ins. Co., 87 NY2d 308, 315 [1995]), but only where a defendant’s conduct was (1) actionable as an independent tort, (2) egregious, (3) directed toward the plaintiff and (4) part of a pattern directed at the public (see id. at 316; Rocanova v Equitable Life Assur. Socy. of U.S., 83 NY2d 603, 613[*2][1994]). Thus, “[w]here a lawsuit has its genesis in the contractual relationship between the parties, the threshold task for a court considering [a] defendant’s motion to dismiss a cause of action for punitive damages is to identify a tort independent of the contract” (New York Univ. v Continental Ins. Co., 87 NY2d at 316). In this regard, a “defendant may be liable in tort when it has breached a duty of reasonable care distinct from its contractual obligations, or when it has engaged in tortious conduct separate and apart from its failure to fulfill its contractual obligations” (id.). Nonetheless, “where a party is merely seeking to enforce its bargain, a tort claim will not lie” (id.).

Here, plaintiff seeks an award of punitive damages based upon his allegation that defendant engaged in “bad faith tactics” by failing to promptly investigate his no-fault claim and failing to renew his insurance policy. Such claim does not allege a breach of duty distinct from defendant’s contractual obligations. Further, while plaintiff alleged a violation of Insurance Law § 2601 based upon defendant’s purported failure to timely investigate his no-fault claim, New York does not recognize a private cause of action under that statute (see New York Univ. v Continental Ins. Co., 87 NY2d at 317-318; Rocanova v Equitable Life Assur. Socy. of U.S., 83 NY2d at 604; Kantrowitz v Allstate Indem. Co., 48 AD3d 753, 754 [2008]). In light of the foregoing, even if we construe the complaint liberally, accept as true the facts as alleged and accord plaintiff the benefit of every favorable inference (see Leon v Martinez, 84 NY2d 83, 87-88 [1994]; Murray Bresky Consultants, Ltd v New York Compensation Manager’s Inc., 106 AD3d 1255, 1258 [2013]; Mesiti v Mongiello, 84 AD3d 1547, 1549 [2011]), we concur with Supreme Court that the complaint does not allege a tort existing independently from the parties’ contract (see New York Univ. v Continental Ins. Co., 87 NY2d at 320; Alexander v GEICO Ins. Co., 35 AD3d 989, 990 [2006]) and, therefore, fails to state a cause of action for punitive damages based upon tortious conduct.

Nor did Supreme Court abuse its discretion in denying plaintiff’s cross motion for leave to amend the complaint, as plaintiff failed to establish that the proposed amendment is not plainly without merit (see Matter of Greece Town Mall, L.P. v New York State, 105 AD3d 1298, 1299-1300 [2013]; Vermont Mut. Ins. Co. v Mowery Constr., Inc., 96 AD3d 1218, 1219 [2012]; see also Vectron Intl., Inc. v Corning Oak Holding, Inc., 106 AD3d 1164, 1168 [2013]). Here, plaintiff failed to submit a copy of the proposed amended pleading, and his conclusory allegations in support of his motion were insufficient to make any evidentiary showing that the proposed amendments have merit (see Chang v First Am. Tit. Ins. Co. of N.Y., 20 AD3d 502, 502 [2005]). Thus, plaintiff’s cross motion was properly denied (see Putney v People, 94 AD3d 1193, 1194-1195 [2012], appeal dismissed 19 NY3d 1020 [2012], lv denied and dismissed 21 NY3d 909 [2013]; McColgan v Brewer, 75 AD3d 876, 878 [2010]).

Rose, J.P., McCarthy and Garry, JJ., concur. Ordered that the order is affirmed, without costs.[*3]

—[*1] Law Office of Brian D. Richardson, Albany (James D. Taylor of counsel), for appellant.

Law Offices of Craig Meyerson, Latham (Craig Meyerson of counsel), for respondent.

Egan Jr., J. Appeals (1) from an order of the Supreme Court (Platkin, J.), entered February 1, 2012 in Albany County, which, among other things, granted plaintiff’s motion for a turnover order, and (2) from an order of said court, entered March 6, 2012 in Albany County, which ordered defendant to pay $5,254.02 to satisfy a judgment in favor of plaintiff.

This appeal has its genesis in defendant’s attempt to recoup $825.55 to which it claims entitlement as a credit against a judgment entered in favor of plaintiff. By way of background, plaintiff provided psychological services to certain of defendant’s insureds who had suffered injuries arising out of no-fault automobile accidents and, in May 2009, plaintiff commenced this action against defendant seeking reimbursement for those services. Following joinder of issue, various motions ensued and, in February 2011, Supreme Court, among other things, granted plaintiff partial summary judgment and entered a judgment in favor of plaintiff for $80,187.27, plus interest, counsel fees and costs. There is no indication in the record that defendant appealed from the order awarding partial summary judgment to plaintiff, moved for reconsideration thereof or sought to vacate the resulting judgment. Instead, defendant only partially satisfied the judgment, contending that it was entitled to various credits against the sum due and owing.

Faced with defendant’s refusal to tender the full amount due, plaintiff thereafter moved for—insofar as is relevant here—a turnover order pursuant to CPLR 5225 seeking to recover the [*2]outstanding balance. Defendant opposed the requested relief, contending that it had paid the judgment in full, and submitted checks purportedly reflecting payments made on the outstanding claims. By order entered February 1, 2012, Supreme Court granted plaintiff the requested relief, suggesting that defendant’s proffer of the canceled checks was untimely and, in any event, finding such proof to be insufficient to demonstrate full satisfaction of the judgment. Thereafter, by order entered March 6, 2012, Supreme Court awarded plaintiff $5,254.02, representing the outstanding amount due and owing in full satisfaction of the prior judgment. Defendant now appeals, contending that it is entitled to a credit of $825.55 for payments previously made.^[FN1]

We affirm. Initially, we reject defendant’s assertion that Supreme Court erred in summarily granting plaintiff’s application. A summary judgment analysis may be employed where, as here, a party is seeking a turnover order pursuant to CPLR 5225 (a) (cf. Matter of Centerpointe Corporate Park Partnership 350 v MONY, 96 AD3d 1401, 1402 [2012], lv dismissed 19 NY3d 1097 [2012]; Matter of TNT Petroleum, Inc. v Sea Petroleum, Inc., 72 AD3d 694, 695 [2010]; Estate of Giustino v Estate of DelPizzo, 21 AD3d 523, 523 [2005]), and plaintiff made a prima facie showing that—at that point in time—the underlying judgment had not been paid in full. Although defendant tendered various canceled checks in opposition to plaintiff’s application and the record indeed reflects a history of partial payments, we agree with Supreme Court that defendant’s submissions in this regard failed to correlate with the dates or amounts of the outstanding claims at issue and, for that reason, were insufficient to raise a question of fact as to its satisfaction of the judgment. Accordingly, Supreme Court properly granted plaintiff’s request for a turnover order and directed that defendant pay plaintiff $5,254.02 in full satisfaction of the underlying judgment.

We also are persuaded that defendant’s pursuit of this appeal is frivolous within the meaning of 22 NYCRR 130-1.1 (c) (2) and, therefore, plaintiff is entitled to an award of reasonable counsel fees incurred in responding thereto.^[FN2] To our analysis, once plaintiff was awarded partial summary judgment in February 2011 and secured a judgment in its favor, defendant had several permissible options, such as appealing the underlying order and judgment or paying—in full—the amount awarded to plaintiff. Instead, defendant continued to dispute the sum due by delaying payment, thereby compelling plaintiff to move for the turnover order and, ultimately, to expend resources responding to the instant appeal seeking $825.55. Such conduct, in our view, warrants an award of reasonable counsel fees incurred in responding to this appeal, and this matter is remitted to Supreme Court for a determination of the amount of such fees (see Matter of Manufacturers & Traders Trust Co. v Myers, 38 AD3d 965, 966 [2007], appeal dismissed 8 NY3d 1019 [2007]; Hansen v Werther, 2 AD3d 923, 924 [2003]). Defendant’s remaining arguments, to the extent not specifically addressed, have been considered and found to be lacking in merit. [*3]

Peters, P.J., Spain and Garry, JJ., concur. Ordered that the orders are affirmed, with costs, plaintiff’s request for counsel fees granted and matter remitted to the Supreme Court for a determination of the amount of reasonable counsel fees incurred in responding to this appeal.

Footnotes

Footnote 1: In the interim, according to plaintiff, defendant satisfied the underlying judgment.

Footnote 2: Plaintiff’s request in this regard, which is set forth in its appellate brief, “constitute[s] sufficient notice [to defendant] that such relief would be considered” (Matter of Levin v Axelrod, 168 AD2d 178, 181 [1991]; see Hansen v Werther, 2 AD3d 923, 924 [2003]).

—[*1] Basch & Keegan, L.L.P., Kingston (Derek J. Spada of counsel), for appellant.

Goldberg Segalla, L.L.P., Albany (Matthew S. Lerner of counsel), for respondent.

Rose, J. Appeal from an order of the Supreme Court (O’Connor, J.), entered June 29, 2010 in Ulster County, which granted defendant’s motion for summary judgment dismissing the complaint.

Plaintiff was injured while driving a vehicle insured by defendant. Defendant initially paid no-fault insurance benefits for her chiropractic treatment, but ceased doing so after an independent medical examination found no further treatment to be necessary. Plaintiff nevertheless received further treatment and commenced this action to recover benefits in 2005. After joinder of issue and discovery, defendant moved for dismissal of the complaint, asserting for the first time that plaintiff had assigned her right to payment for no-fault benefits to her chiropractor and did not have standing to bring the present action. Supreme Court agreed that plaintiff lacked the capacity to sue and dismissed the complaint, and plaintiff appeals.

Defendant asserted that plaintiff lacked standing to maintain this action but, as that defense was not raised in a pre-answer motion to dismiss or in defendant’s answer, it was waived and cannot [*2]now be advanced (see CPLR 3211 [a] [3]; [e]; McHale v Anthony, 70 AD3d 466, 467 [2010]; Todaro v GEICO Gen. Ins. Co., 46 AD3d 1086, 1087 [2007]). Contrary to defendant’s contention, the standing issue does not implicate the jurisdiction of Supreme Court such as to render it nonwaivable. Supreme Court is empowered to determine whether defendant is liable to pay no-fault benefits (see Marangiello v Kamak, 64 AD2d 624, 625 [1978]), and whether plaintiff is a proper person to pursue that claim “is an issue separate from the subject matter of the action or proceeding, and does not affect the court’s power to entertain the case before it” (Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239, 243 [2007]; see Matter of Renee XX. v John ZZ., 51 AD3d 1090, 1092-1093 [2008]). Accordingly, defendant waived its right to assert lack of standing as an affirmative defense.

Peters, J.P., Lahtinen, Kavanagh and Egan Jr., JJ., concur. Ordered that the order is reversed, on the law, with costs, and motion denied.

—[*1] Abdella Law Offices, Gloversville (J. David Burke of counsel), for appellant.

Law Office of Taylor & Associates, Albany (Sean A. Tomko of counsel), for respondent.

Cardona, P.J. Appeal from an order of the Supreme Court (Aulisi, J.), entered October 20, 2009 in Fulton County, which granted petitioner’s application pursuant to CPLR 7503 to stay arbitration between the parties.

While respondent Marcia Malatino (hereinafter respondent) was returning to work after taking a break in the employer’s parking lot, she walked into a piece of sheet metal extending approximately five feet beyond the tailgate of a coworker’s parked pickup truck,^[FN1] sustaining facial lacerations and a broken nose. According to the record, the coworker had torn the sheet metal off a building on his property and planned to deliver it to a junkyard after work. [*2]

Thereafter, respondent settled with the coworker’s automobile liability insurer for $25,000—the policy limit—and received a lump-sum workers’ compensation award. Seeking additional compensation, respondent subsequently demanded arbitration as a named insured under the supplemental underinsured motorists provisions of an insurance policy issued by petitioner. Petitioner sought to stay arbitration on the grounds that respondent’s injuries did not, as required by the policy, arise out of the “ownership, maintenance or use” of the coworker’s motor vehicle and, alternatively, because respondent was injured as a result of the alleged negligence of a coworker, workers’ compensation was her exclusive remedy (see Workers’ Compensation Law § 29 [6]). Supreme Court, finding, among other things, that there was no use or operation of the vehicle, granted petitioner’s application, and this appeal ensued.

Initially, we note that the issue herein involves the right to arbitration under the specific terms of the parties’ supplemental underinsured motorists policy and not the application of any statutory no-fault provisions.^[FN2] A court may grant an application to stay arbitration “where ‘the particular claim sought to be arbitrated is outside [the] scope’ of the agreement to arbitrate” (Matter of Farm Family Cas. Ins. Co. [Trapani], 301 AD2d 740, 741 [2003], quoting Matter of County of Rockland [Primiano Constr. Co.], 51 NY2d 1, 7 [1980]). Generally, “policies of insurance are to be construed liberally in favor of the insured and strictly against the insurer” (Penna v Federal Ins. Co., 28 AD3d 731, 731 [2006]; see Government Empls. Ins. Co. v Kligler, 42 NY2d 863, 864 [1977]; see generally Turkow v Erie Ins. Co., 20 AD3d 649, 650 [2005]). Where ambiguity exists as to coverage, doubt should be resolved in favor of the insured (see Handelsman v Sea Ins. Co., 85 NY2d 96, 101 [1994]; Penna v Federal Ins. Co., 28 AD3d at 731). Supplemental underinsured motorists coverage policies, such as the one at issue herein, apply only when an insured’s injuries are “caused by an accident arising out of such [underinsured] motor vehicle’s ownership, maintenance or use” (11 NYCRR 60-2.3 [f] [II]; see Matter of Farm Family Cas. Ins. Co. [Trapani], 301 AD2d at 741). “Use” of a vehicle encompasses more than just driving, and extends to other incidental activities (see Rowell v Utica Mut. Ins. Co., 77 NY2d 636, 639 [1991]). Furthermore, the use of the underinsured vehicle must be a proximate cause of the injuries for which coverage is sought (see Matter of Farm Family Cas. Ins. Co. [Trapani], 301 AD2d at 741).

Clearly, the pickup truck was not being operated at the time of the accident—having been parked in the employer’s lot when the coworker arrived at work. The focus herein, however, is whether the vehicle was in use so as to fall within the scope of the terms of the supplemental underinsured motorists policy. Here, at the time of respondent’s injury, the pickup truck was being used by the coworker to transport the sheet metal to the junkyard after work. Construing the language of the supplemental underinsured motorists policy liberally “in favor of the insured and strictly against the insurer” (Penna v Federal Ins. Co., 28 AD3d at 731), and given the causal connection between the use of the pickup truck to transport the sheet metal and respondent’s injuries, we find that respondent’s request for arbitration falls within the scope of the parties’ agreement. Accordingly, under the particular circumstances herein, the application for a stay of arbitration should have been denied.

Furthermore, the record is clear that the use of the pickup truck to transport the sheet [*3]metal was unrelated to the coworker’s employment and, therefore, the exclusive remedy provision of Workers’ Compensation Law § 29 (6) is inapplicable and cannot form the basis for granting the stay of arbitration.

Spain, Stein and Egan Jr., JJ., concur.

McCarthy, J. (dissenting). Because respondent Marcia Malatino (hereinafter respondent) did not sustain injuries arising out of the ownership, maintenance or use of a motor vehicle, petitioner was entitled to a stay of arbitration.^[FN1] Respondent’s coworker parked his pickup truck in the employer’s parking lot in the morning and apparently intended to leave the vehicle there for his entire eight-hour shift. If respondent had walked into the parked truck itself, her injuries would not have arisen out of the use of the vehicle (see Wooster v Soriano, 167 AD2d 233, 234 [1990]; McConnell v Fireman’s Fund Am. Ins. Co., 49 AD2d 676, 677 [1975]). The same result should follow when she walked into materials protruding from the bed of the truck.

While “use” of a motor vehicle encompasses more than just driving and extends to other incidental activities (see Rowell v Utica Mut. Ins. Co., 77 NY2d 636, 639 [1991]), there are limits to that term and the corresponding insurance coverage.^[FN2] The majority holds that the truck here was being used to contain sheet metal until the coworker could transport it, rendering the vehicle in “use.” This broad finding places no parameters on the use of a vehicle. It is unclear if the majority considered that the truck was in use while containing the sheet metal only because the coworker intended to transport the sheet metal to the junkyard that same day, or if the truck would be considered in use as a vehicle if the sheet metal was placed there a year earlier and the coworker regularly parked his truck with metal protruding from his tailgate. Conversely, if the truck was never moved from the parking lot but was regularly utilized to store different materials in the same location, would the parked truck constantly be in use as a vehicle? Rather than [*4]expanding the application of the statute and regulation requiring coverage for injuries arising out of a “motor vehicle’s ownership, maintenance or use” (11 NYCRR 60-2.3 [f] [II]; see Insurance Law § 3420 [f] [1]), we should adhere to the current rule that looks to whether the “circumstances constituted an ‘on-going activity relating to the vehicle’ which would necessitate a conclusion that the vehicle was in use” (Trentini v Metropolitan Prop. & Cas. Ins. Co., 2 AD3d 957, 958 [2003], lv dismissed 2 NY3d 823 [2004], quoting Matter of Celona v Royal Globe Ins. Co., 85 AD2d 635, 636 [1981]; see Zaccari v Progressive Northwestern Ins. Co., 35 AD3d 597, 599-600 [2006]; Wooster v Soriano, 167 AD2d at 234).

In Sullivan v Barry Scott Agency, Inc. (23 AD3d 889 [2005]), this Court held that a plaintiff’s back injury caused by lifting a heavy box was not related to the use of a motor vehicle, even though he was standing in a delivery van when unloading the box. We found the proximity to the vehicle “wholly incidental,” “[a]s plaintiff’s injuries would have occurred even if he had been standing on the ground and lifting the box” (id. at 890; see Sochinski v Bankers & Shippers Ins. Co., 221 AD2d 889, 889 [1995]; United Servs. Auto. Assn. v Aetna Cas. & Sur. Co., 75 AD2d 1022, 1022 [1980]; cf. Walton v Lumbermens Mut. Cas. Co., 88 NY2d 211, 215 [1996]). Similarly, respondent here would have received the same injuries had the sheet metal she walked into been protruding from any object other than a vehicle. Under the circumstances, there was no ongoing activity related to the parked truck—in its capacity as a motor vehicle, rather than as a storage bin for sheet metal—so as to necessitate a conclusion that the vehicle was in use when respondent was injured (see Sullivan v Barry Scott Agency, Inc., 23 AD3d at 890; Matter of New York Cent. Mut. Fire Ins. Co. [Hayden—Allstate Ins. Co.], 209 AD2d 927, 928 [1994] [staying arbitration where “accident did not arise out of the inherent nature of the automobile as such”]; Reisinger v Allstate Ins. Co., 58 AD2d 1028, 1028 [1977], affd 44 NY2d 881 [1978]; McConnell v Fireman’s Fund Am. Ins. Co., 49 AD2d at 677). Accordingly, petitioner was entitled to a stay of arbitration because its insurance policy does not provide coverage for respondent’s injuries.

Ordered that the order is reversed, on the law, with costs, and application denied.

Footnotes

Footnote 1: No red flag was placed on the sheet metal in accordance with Vehicle and Traffic Law § 375 (27) despite the fact that it protruded more than four feet beyond the tailgate of the pickup.

Footnote 2: Thus, we do not find the dissent’s reference to cases interpreting no-fault provisions in insurance policies to be applicable.

Footnote 1: The parties do not contend that respondent’s accident arose from ownership or maintenance of a motor vehicle, so we likewise focus on whether her injuries arose from the vehicle’s use.

Footnote 2: The majority asserts that case law requires us to strictly construe the insurance policy against the insurer (see Penna v Federal Ins. Co., 28 AD3d 731, 731 [2006]). While that is the general rule—based upon a canon of contract interpretation that courts construe terms against the drafter (see Guardian Life Ins. Co. of Am. v Schaefer, 70 NY2d 888, 890 [1987])—it is unfair to apply that rule where, as here, the provision at issue was not written by the insurer, but was drafted by the Insurance Department, and its inclusion was mandated by law (see Insurance Law § 3420 [f] [1]; 11 NYCRR 60-2.3 [f]; see generally Walton v Lumbermens Mut. Cas. Co., 88 NY2d 211, 214 [1996]). I therefore find cases interpreting mandatory no-fault provisions more pertinent.