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Woodson v. American Transit Insurance Co.10/11/2005
, Isserlis, Sullivan & Kurtz, 240 AD2d 1997]). Defendant's related argument that Dansby failed to mitigate his damages by extinguishing his liability through a release when presented with the opportunity is simply an attempt to circumvent the state's policy with respect to the assignment or other transfer of malpractice and bad faith claims. Any action Dansby took to eliminate his liability to plaintiff would render his claims worthless for the purpose of assignment.
Finally, insofar as the claims against the Attorney Defendants have been dismissed, plaintiff may not pursue claims against ATIC on a theory that the insurer is liable for its counsel's conduct on a theory of respondeat superior or otherwise (see, Karaduman v Newsday, Inc., 51 NY2d 531 ).
PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT
Plaintiff is not entitled to summary judgment on its claim that ATIC failed to settle the Bronx Action against Dansby within the policy limits. "To establish a prima facie case of bad faith refusal to settle, a plaintiff must demonstrate that the insurance carrier's conduct constituted a gross disregard of the policyholder's interests-that is, a deliberate or reckless failure to place on an equal footing its own interests and those of the policyholder when considering a settlement offer" (Vecchione v Amica Mut. Ins. Co., 274 AD2d 576, 578 [2d Dept 2000]). The gross disregard standard requires a showing that the insurer "engaged in a pattern of behavior evincing a conscious or knowing indifference to the probability that an insured would be held personally accountable for a large judgment if a settlement offer within the policy limits were not accepted" (Pavia v State Farm Mut. Auto. Ins. Co., 82 NY2d 445, 453-454 ). Among the factors to be considered in determining bad faith are "the likelihood of success on the liability issue in the underlying action, the potential magnitude of damages and resulting financial burden each party may be exposed to as a result of a refusal to settle, and the information available to the insurance carrier at the time the demand for settlement is made" (Vecchione, supra at 578-79). Moreover, "proof that a demand for settlement was made is a prerequisite to a bad-faith action for failure to settle" (Pavia, supra at 454). The plaintiff must show that at the time of the demand "all serious doubts about the insured's liability were removed" (id. at 454).
Serious questions of fact preclude summary judgment on the issue of bad faith. Plaintiff's evidence that an actual demand for settlement was made is far from conclusive. It rests primarily on a new affidavit from one of plaintiff's attorneys, who offers the uncorroborated recollection that he made a $1 million demand to an unnamed defense attorney "sometime either during the Inquest or soon after its completion." The allegation was first raised in interrogatory responses served earlier this year. No mention was made of this purported offer in that attorney's 1998 deposition, or in the examination of plaintiff's counsel of record. Moreover, the offer is inconsistent with plaintiff's efforts, shortly after the completion of the inquest, to increase the ad damnum clause from $5 million to $8 million. Further issues of credibility are raised by plaintiff's claim that the offer remained open until early 1996, a full year after the final $4 million judgment was entered.
The documentary evidence regarding offers in the insurer's file is also ambiguous. Although one document contains the notation "Demand $1,000,000," defendant contends that it was ATIC's procedure to declare the limits of the policy as the "demand" whenever the liability exceeded the limits. This interpretation is supported by a S
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