Calendar Date: June 4, 2018Before: McCarthy, J.P., Egan Jr., Lynch, Devine andAarons, JJ.__________Pemberton and Briggs, Schenectady (Paul Briggs of counsel),for appellant.Ludemann, McMorris & Silvestri, PC, Glens Falls (John M.Silvestri of counsel), for respondent.__________Egan Jr., J.Appeal from an order of the Supreme Court (Auffredou, J.),entered February 10, 2017 in Warren County, which, among otherthings, partially denied defendant’s motion for partial summaryjudgment.In March 2010, a fire destroyed plaintiff’s residencelocated at 1 Braley Point in the Hamlet of Bolton Landing, WarrenCounty. Plaintiff’s residence was one of two structures on theparcel of property (hereinafter the property), the otherconsisting of a lodge that plaintiff used as a rentalaccommodation during the summer tourist season. The homeownersinsurance policy for the property was procured through defendantand plaintiff was listed as the named insured. Following thefire, plaintiff promptly notified defendant of the loss and aninvestigation ensued. The parties’ subsequent attempts to reacha settlement with respect to the amount of loss provedunsuccessful, and plaintiff thereafter initiated the appraisalprocess as set forth in defendant’s insurance policy. Althoughthe independent appraisers hired by the parties ultimately agreedupon the amount of loss in June 2011, no payment was subsequentlyforthcoming from defendant. Rather, on July 1, 2011, defendantissued plaintiff a written disclaimer of coverage, determiningthat plaintiff lacked an insurable interest in the property, asthe titled owner of the property was Roe Management andDevelopment, Inc. and not plaintiff.1Plaintiff thereafter commenced this action seeking adeclaratory judgment that he had an insurable interest in theproperty, that he is entitled to the agreed-upon settlementoffer, that the disclaimer of coverage was improper and wrongfuland that defendant acted in bad faith. Following joinder ofissue, defendant moved for partial summary judgment seekingdismissal of plaintiff’s claims for consequential damages, aswell as plaintiff’s claim alleging that defendant failed to actin good faith in adjusting plaintiff’s insurance claim. SupremeCourt partially granted defendant’s motion by dismissingplaintiff’s claim for counsel fees, but otherwise denied themotion, finding that defendant’s alleged conduct created aquestion of fact as to whether it breached the covenant of goodfaith and fair dealing. Defendant now appeals.As the proponent of the motion for summary judgment, it wasdefendant’s burden to establish its prima facie entitlement tojudgment as a matter of law by submitting admissible evidencedemonstrating the absence of a triable issue of fact (see Alvarezv Prospect Hosp., 68 NY2d 320, 324 [1986]; Winegrad v New YorkUniv. Med. Ctr., 64 NY2d 851, 853 [1985]; Smero v City ofSaratoga Springs, 160 AD3d 1169, 1170 [2018]). “Only when themovant satisfies its obligation does the burden shift to thenonmovant to present evidence demonstrating the existence of atriable issue of fact” (Lacasse v Sorbello, 121 AD3d 1241, 1241-1242 [2014] [citations omitted]; see De Lourdes Torres v Jones,26 NY3d 742, 763 [2016]). In reviewing such a motion, the factsmust be viewed in the light most favorable to the nonmovingparty, and every available inference must be drawn in favor ofthe nonmoving party (see De Lourdes Torres v Jones, 26 NY3d at763).A covenant of good faith and fair dealing is implicit inevery insurance contract and encompasses not only any promisethat a reasonable promisee would understand to be included, butalso that “a reasonable insured would understand that the insurerpromises to investigate in good faith and pay covered claims”(New York Univ. v Continental Ins. Co., 87 NY2d 308, 318 [1995];accord Bi-Economy Mkt., Inc. v Harleysville Ins. Co. of N.Y., 10NY3d 187, 194 [2008]; see Gutierrez v Government Empls. Ins. Co.,136 AD3d 975, 976 [2016]). In turn, “consequential damagesresulting from a breach of the covenant of good faith and fairdealing may be asserted in an insurance contract context, so longas the damages were within the contemplation of the parties asthe probable result of a breach at the time of or prior tocontracting” (Panasia Estates, Inc. v Hudson Ins. Co., 10 NY3d200, 203 [2008] [internal quotation marks and citations omitted];accord Yar-Lo, Inc. v Travelers Indem. Co., 130 AD3d 1402, 1403[2015]). As relevant here, to establish a prima facie case ofbad faith, it must be established “that the insurer’s conductconstituted a gross disregard of the insured’s interests — thatis, a deliberate or reckless failure to place on equal footingthe interests of its insured with its own interests whenconsidering a settlement offer” (Pavia v State Farm Mut. Auto.Ins. Co., 82 NY2d 445, 453 [1993]; see Smith v General Acc. Ins.Co., 91 NY2d 648, 653 [1998]). In establishing a claim for badfaith, although not an exhaustive list, “the courts will considerthe facts and circumstances surrounding the case, includingwhether liability is clear, whether the potential damages farexceed the insurance coverage and any other evidence which tendsto establish or negate the insurer’s bad faith in refusing tosettle” (Redcross v Aetna Cas. & Sur. Co., 260 AD2d 908, 911[1999] [internal quotation marks and citation omitted]; see Paviav State Farm Mut. Auto. Ins. Co., 82 NY2d at 455; see alsoInsurance Law § 2601 [a] [4]).Defendant contends that there is no evidence in the recorddemonstrating that it acted in bad faith or engaged in conductconstituting a gross disregard of its insured’s interests suchthat it established its entitlement to summary judgmentdismissing the complaint. We disagree. In support of itsmotion, defendant submitted, among other things, a copy ofplaintiff’s summons and complaint and plaintiff’s verified billof particulars. A review of the insurance claim process as setforth therein demonstrates that, the day after plaintiff’sresidence was destroyed by fire, plaintiff submitted a standardfire claim form notifying defendant of the loss and defendantthereafter commenced an investigation. While the investigationwas pending, defendant advanced plaintiff $5,000 for the removalof debris from the property pursuant to its insurance policy.The Warren County Fire Investigation Office subsequentlydetermined that the cause of the fire was accidental such thatthere appears to be no dispute that the accident is covered bythe insurance policy. Additionally, for the following 12 months,defendant paid plaintiff for additional living expenses inaccordance with the terms and coverage limits provided for in itsinsurance policy. When initial settlement negotiationsthereafter proved unsuccessful, plaintiff commenced the appraisalprocess pursuant to the terms of the insurance policy, and eachparty thereafter hired their own independent appraiser todetermine the amount of loss. In June 2011, the appraisersmutually agreed upon the amount of loss; however, on July 1, 2011– 16 months after plaintiff’s residence was destroyed by fire –defendant unexpectedly disclaimed coverage on the basis thatplaintiff did not have insurable interest in the property.We find that defendant failed to present any admissibleevidence in support of its motion to explain why, after 16 monthsof investigation (see generally Insurance Law § 2601 [a] [4]), itonly disclaimed coverage after the parties’ independentappraisers had reached a mutual agreement as to the amount ofloss incurred. At no point prior to paying plaintiff variousbenefits to which he was otherwise entitled under the insurancepolicy, or during settlement negotiations or the appraisalprocess, did defendant ever indicate to plaintiff that coveragemight ultimately be denied because he was apparently not thetitled owner of the property — a fact of which plaintiff avers hemade his insurance agent aware prior to purchasing the subjectpolicy.Although defendant submitted the affirmation of its counselin support of its motion, said affirmation was not based oncounsel’s personal knowledge and, therefore, it lacked anyprobative value (see CPLR 3212 [b]; Hill v Country Club Acres,Inc., 134 AD3d 1267, 1268 [2015]) as to whether defendant’sconduct in investigating and ultimately delaying its denial ofcoverage constituted bad faith. Thus, viewing the evidence in alight most favorable to plaintiff, we find that defendant failedto establish its prima facie entitlement to judgment as a matterof law by eliminating all triable issues of fact as to whether itinvestigated the loss in good faith (see Bi–Economy Mkt., Inc. vHarleysville Ins. Co. of N.Y., 10 NY3d at 192-194; Gauthier vCountryway Ins. Co., 100 AD3d 1062, 1063-1064 [2012]; Gruenspechtv Balboa Ins. Co., 93 AD3d 482, 482 [2012]; compare Miller vAllstate Indem. Co., 132 AD3d 1306, 1307-1308 [2015]).Therefore, we need not determine whether the papers submitted byplaintiff in opposition were sufficient to raise a triable issueof fact (see Winegrad v New York Univ. Med. Ctr., 64 NY2d at 853;Doody v Liberty Mut. Group, Inc., 137 AD3d 959, 960 [2016]).Accordingly, we find that Supreme Court properly denieddefendant’s motion for partial summary judgment dismissing thatpart of plaintiff’s claim alleging that he failed to act in goodfaith.McCarthy, J.P., Lynch, Devine and Aarons, JJ., concur.ORDERED that the order is affirmed, with costs.
