Insured's Complaint for Breach of Contract and Bad Faith Adequately Pleads Consequential Damages

Two businessmen sitting at table over contracts

Tred R. Eyerly analyzes the case D.K. Prop. Inc. v. Nat'l Union Fire Ins. Co. of Pittsburgh.

March 27, 2019
Tred R. Eyerly - Insurance Law Hawaii

The appellate court overturned the trial court's dismissal of the insured's complaint seeking consequential damages. D.K. Prop. Inc. v. Nat'l Union Fire Ins. Co. of Pittsburgh v, Pa., 2019 N.Y. App. Div. LEXIS 329 (N.Y. App. Div. Jan. 17, 2019).

The insured's building began to shift and exhibit structural damage, including cracks, after construction began in an adjoining building. The insured submitted a claim under its commercial insurance policy. The insurer did not pay the claim, nor did it disclaim coverage.

The insured sued, alleging breach of contract for failure to pay covered losses under the policy. The second cause of action was for breach of the implied covenant of good faith and fair dealing. The complaint also requested consequential damages in connection with each cause of action. The trial court granted the insurer's motion to dismiss the claim for consequential damages.

Mr. Eyerly may be contacted at te@hawaiilawyer.com



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