In early 2019, the First Department provided policyholders an arrow in the quiver for their oft-repeated battle to securing coverage from intransigent insurance companies. In D.K. Property v. National Union Fire Insurance Company of Pittsburgh, Pa., 168 A.D.3d 505 (1st Dept. 2019), the First Department issued a clear decision that policyholders may recover the consequential damages, including attorney fees, caused by the bad-faith dilatory practices all too often employed by insurance companies. In so doing, the First Department offered New York policyholders a roadmap for pleading such damages.
Court of Appeals Expressly Permitted Recovery of Consequential Damages in Insurance Actions. For over a decade, New York law recognized that aggrieved policyholders injured at the hands of their unscrupulous insurance company could pursue claims for consequential damages that were reasonably contemplated by the parties at the time of contracting. In the companion cases of Bi-Economy Market v. Harleysville Insurance, 10 N.Y.3d 187 (2008) and Panasia Estates v. Hudson Insurance, 10 N.Y.3d 200 (2008), the Court of Appeals expressly condoned the recovery of consequential damages in such situations.
