Friday, November 29, 2013

Acquista v. New York Life Insurance Company case brief

Acquista v. New York Life Insurance Company case brief summary
730 N.Y.S.2d 272 (2001)

Plaintiff physician sued defendants, insurance carrier and its agents, alleging, inter alia, breach of contract, bad faith, fraud, and negligent infliction of emotional distress arising from the denial of the physician's claims for benefits under his disability insurance policies. The Supreme Court, New York County (New York) granted the defendants' motion to dismiss all but one of the physician's causes of action. The physician appealed.

  • Acquista (P) was a physician who was specializing in internal and pulmonary medicine. 
  • In November 1995, Acquista became ill.
  • Acquista was instructed by his treating physicians to avoid exposure to radiation. 
  • His illness caused him to continually suffer from fatigue, headaches, as well as muscle and joint pain. \Acquista was insured under three disability insurance policies issued by New York Life Insurance Company (D). 
  • After delaying its decision on the merits of Acquista’s claim, New York Life denied insurance covered to Acquista under all three of the policies on the ground that Acquista could still perform some of “the substantial and material duties” of his regular job an, as such, was not “totally disabled.” 
  • Acquista then brought suit in NY state court against New York Life, alleging claims for breach of contract, bad faith and unfair practices, fraud and fraudulent misrepresentation, and negligent infliction of emotional distress. 
  • The trial court granted New York Life’s motion to dismiss all of Acquista’s claims except for his claim based upon the provision in his insurance policy for residual and partial disability benefits. 
  • Acquista then appealed.

The physician contracted a disease, which, he alleged, disabled him from practicing medicine. The insurance carrier denied his claim for disability benefits. The trial court found, based on documents filed by the defendants, that the physician was still able to practice medicine in certain areas and was not entitled to disability benefits.


  • The appellate court held that in the context of a motion to dismiss, the court was required to accept as true the complaint's allegations and where the complaint stated a cause of action, documentary evidence may result in dismissal only where it showed that a material fact pleaded was not a fact at all. 
  • Documents filed by the defendants did not show this, and the determination of whether the physician could still perform his regular job was not proper for a determination as a matter of law. 
  • New York did not recognize a tort of bad faith denial of insurance claims. 
  • However, the appellate court ruled that in a suit against an insurer, damages were not limited to the amount specified in the policy, but could include consequential money damages beyond the policy limits, such as damages for mental distress, or aggravation and inconvenience.

The order was modified to deny the motion to dismiss with respect to plaintiff's first, second, third, fifth, and sixth causes of action and to reinstate those causes of action, and otherwise affirmed.

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