Unlike most states, New Yorks definition of insurer bad faith is very specific and sets a relatively high bar for claimants. There are two different sets of standards: one for liability claims, and one for first party claims. This case involved first party claims.

Plaintiff sued to recover damages for breach of an insurance contract. Allstate appealed from an order of the Supreme Court, Nassau County (Brennan, J.), which granted the plaintiffs cross motion for leave to serve an amended complaint to add another cause of action for malicious and wanton disregard of plaintiffs rights under the policy. The Appellate Division reversed.

The first cause of action in the original complaint sought compensatory damages of $5,000,000 for breach of an insurance policy, and the second cause of action sought compensatory and punitive damages in the sum of $5,000,000 for malicious intent, undue hardship, and bad faith refusal to honor the plaintiffs rights and remedies under the insurance policy.

Allstate moved to dismiss the second cause of action and the plaintiff cross-moved for leave to amend that cause of action to allege an intentional refusal to pay benefits maliciously and[in] wanton disregard of the rights of the plaintiffs.

The court granted the cross motion for leave to serve an amended complaint on the ground that there was no prejudice to the defendant.

Since the cross motion was made in response to a motion to dismiss pursuant to CPLR former 3211(e), the plaintiffs were required to establish a good ground for granting leave to re-plead.

The amended second cause of action is duplicative of the first cause of action. There is no separate tort for bad faith refusal to comply with an insurance contract. Thus, both the first cause of action and the amended second cause of action sound in breach of contract (see Zawahir v Berkshire Life Ins. Co., 22 AD3d 841; Continental Cas. Co. v Nationwide Indem. Co., 16 AD3d 353). Further, to recover punitive damages, conduct must be alleged which is part of a pattern directed at the public generally, which was not alleged here (see New York Univ. v Continental Ins. Co., 87 NY2d 308, 316).

Accordingly, the proposed amendment failed to state a cause of action and the plaintiffs cross motion should have been denied.

Carolyn Johnson et al. v Allstate Ins. Co., (2006 NY Slip Op 07324) (App. Term, 2 Dept.)