Opinion
01 Civ. 8210 (LAK), 02 Civ. 0008 (LAK), 02 Civ. 1190 (LAK), 02 Civ. 2196 (LAK)
August 7, 2002
ORDER
In No. 02 Civ. 1190, the Greenwich action, plaintiff seeks a declaration that the claims asserted against Scientech by Metro-North in No. 01 Civ. 8210 and by American International in No. 02 Civ. 2196 are not covered by a policy of insurance issued by it to Scientech. Scientech has interposed a counterclaim that purports to assert four claims for relief. The first three seek damages for alleged (1) breach of the contract of insurance, (2) breach of the policy's implied covenant of good faith and fair dealing, and (3) bad faith breach of the insurance contract. The fourth seeks a declaration that the carrier has breached the contract of insurance in the respects set forth in the first three. Greenwich now moves to dismiss the second and third claims for relief, so much of the fourth claim as is premised on the second and third, and Scientech's claim for punitive damages. Scientech opposes the motion and moves in the alternative for leave to serve amended counterclaims.
The Motion to Dismiss
1. Greenwich first contends that the claims for breach of the implied covenant of good faith and fair dealing and for bad faith breach of the policy (second and third claims) should be dismissed as duplicative of the claim for breach of contract (first claim). It relies on New York University v. Continental Insurance Co., 87 N.Y.2d 308, 319-20, 639 N.Y.S.2d 283, 289-90 (1995) ("NYU"). Scientech does not concede the point, although it well might have done so, but contends that the matter is academic in light of its proposed amended complaint, which would combine all three theories in a single breach of contract claim. Although nothing much turns on it, the second and third claims for relief are dismissed on the ground that they are duplicative of the first. It follows also that so much of the fourth claim for relief as seeks a declaratory judgment premised on the second and third claims for relief also is duplicative.
This moots Scientech's contention that the third claim is insufficient on the alternative ground that New York does not recognize an independent tort for bad faith of an insurance contract.
2. Greenwich seeks dismissal also of Scientech's punitive damage claim, an application as to which Scientech's papers are silent. As is implicit in Scientech's silence, the counterclaim does not even approach satisfaction of the standard reiterated in NYU. 87 N.Y.2d at 316, 639 N.Y.S.2d at 287.
The Motion for Leave to Amend
As the Court grants Greenwich's motion to dismiss, it turns to Scientech's alternative motion for leave to file an amended counterclaim, the central feature of which is the combination of what were the first three claims for relief in the original counterclaim into a single claim for breach of contract. Greenwich opposes the motion to the extent that the proposed amended complaint (a) contains a prayer for punitive damages, and (b) alleges bad faith and breach of the implied covenant of good faith and fair dealing claims in the context of the broader breach of contract claim The first point is well taken, as is implicit in Scientech's studied silence on the punitive damage issue. As the claim for punitive damages on this counterclaim is legally insufficient, leave to amend to assert that claim would be futile and will be denied.
Greenwich's second point raises issues more practical than legal. It ought to go without saying, of course, that a complaint or counterclaim may not be dismissed under Rule 12(b)(6) or, by parity of reasoning, rejected as a futile pleading amendment, unless it is clear that the claimant could prove no facts under the challenged pleading that would entitle it to relief. E.g., Conley v. Gibson, 355 U.S. 41, 45-46 (1957). As Greenwich effectively concedes that the breach of contract claim in the proposed amended counterclaim alleges facts which, if proven, would entitle Scientech to relief, there is no basis for dismissal of that claim, and it must appreciate that fact. Rather, it seeks a determination at the pleading stage that certain of the alternative legal theories under which Scientech might be entitled to relief on that claim will not fly, a determination that probably is sought more for its potential impact on settlement discussions than anything else.
Whatever might be the case at the summary judgment stage, the Court sees no basis for making such a determination on a motion for leave to amend. It suffices for present purposes to say that the contract claim in the proposed amended counterclaim, if proved, would entitle Scientech to some relief. Its assertion therefore would not be futile.
Conclusion
For the foregoing reasons, Greenwich's motion to dismiss in No. 02 Civ. 1190, which is docket item 41 recorded on the docket in No. 01 Civ. 8210, is granted. Scientech's alternative motion for leave to amend in the same action, recorded as docket item 43 in No. 01 Civ. 8210, is granted in all respects save that it is denied insofar as Scientech purports to assert a claim for punitive damages.
SO ORDERED.