`NYSCEF DOC. NO. 136
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`INDEX NO. 609083/2018
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`RECEIVED NYSCEF: 07/08/2019
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`6GiNAL
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`SHORT FORM ORDER
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`SUPREME COURT - STATE OF NEW YORK - COUNTY OF NASSAU
`PRESENT: HONORABLE JOHN M. GALASSO, J.S.C.
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`MARC A. PERGMENT, ESQ., AS CHAPTER 7
`TRUSTEE OF THE ESTATE OF MELISSA GACE
`BRYANT,
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`Plaintiff,
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`- against -
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`GOVERNMENT EMPLOYEE INSURANCE
`COMPANY ("GEICO"), PICCIANO & SCAHILL,
`LLP, and GILBERT J. HARDY, ESQ.,
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`Defendant.
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`Notices of Motion (cid:9)
`Notice of Cross-Motion (cid:9)
`Memorandum of Law (cid:9)
`Reply Affidavit (cid:9)
`Exhibits in Support of Affirmation in Opposition (cid:9)
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`Index No. 609083/2018
`Sequence #s 001, 002, 003
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`mer CO/: in)
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`Part 16
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`4/18/19 Mer 002-t Alb
`'nor 003 Pt)
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`7-14
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`Upon the foregoing papers, the motion of the defendants Picciano & Scahill, LLP and Gilbert J.
`Hardy, Esq. (Seq. #00I), seeking an Order granting dismissal of the complaint of plaintiff, Marc Pergment,
`Esq., as Chapter 7 Trustee of the Estate of Melissa Gace Bryant, in its entirety, pursuant to CPLR
`321I(a)(1),(3) and (7) is denied; the motion of defendant, Government Employees Insurance Company
`("GEICO") (Seq. #002), seeking an Order granting dismissal of the First, Second and Third causes of action
`in plaintiff's complaint, for failure to state a claim upon which relief may be granted, pursuant to CPLR
`3211(a)(1) and (7) is denied; and the cross-motion of the plaintiff (Seq. #003), seeking summary judgment
`against the defendants pursuant to CPLR 3211(a), is denied, as set forth below.
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`In this action, plaintiff, Marc Pergment, Esq., as Chapter 7 Trustee of the Estate of Melissa Gace
`Bryant (hereinafter "plaintiff Trustee"), asserts four causes of action as follows: bad faith (First Cause of
`Action), breach of implied warranty (Second Cause of Action) and punitive damages (Third Cause of
`Action) as and against defendant, GEICO; and legal malpractice (fourth Cause of Action) as and against
`defendants Picciano & Scahill, LLP and Gilbert J. Hardy, Esq., concerning these defendants' representation
`of Melissa Gace Bryant (hereinafter "Bryant") against claims arising from a motor vehicle accident in
`which she was involved on December 7, 2009, in which she was a defendant in the matter entitled Anna
`Bedard v. Melissa Gace, Nassau Count Supreme Court Index No. 17555/2011 (hereinafter "underlying
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`NYSCEF DOC. NO. 136
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`INDEX NO. 609083/2018
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`RECEIVED NYSCEF: 07/08/2019
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`action"). The verified complaint alleges that GEICO failed to inform Bryant of all the facts and/or explain
`the impact and importance of the likelihood that plaintiff in the underlying action would win a verdict in
`excess of GEICO' s maximum policy amount of $300,000.00, and hold the insured (Bryant) personally
`liable for any damages that exceeded the policy. The verified complaint alleges, inter al/a, that defendant
`GEICO breached its settlement obligations to Bryant and encouraged and advised her in bad faith to file a
`petition for federal bankruptcy protection to discharge any excess judgment debts entered against her. As
`to defendants, Picciano & Scahill and Gilbert J. Hardy, Esq., the complaint sets forth allegations, inter al/a,
`that these defendants breached their duty to represent Bryant's interests in the underlying action,
`competently and ethically, and above the financial and business of the interests of GEICO.
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`By way of background, by the Order of United States Bankruptcy Judge, Robert E. Grossman,
`dated December 6,2018, did not restrict or limit the authority of the plaintiff Trustee to have commenced,
`filed and prosecute the instant matter while denying this Trustee's retention of counsel. Accordingly, it has
`been determined that plaintiff herein has legal capacity and standing to maintain the instant action.
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`Defendants in Seq. #001, Picciano & Scahill, LLP and Gilbert J. Hardy, Esq., contend that the
`instant action must be dismissed because plaintiff has failed to set forth the requisite proof required to allege
`a legal malpractice claim and fails to state a cause of action. Specifically, these defendants contend that the
`although plaintiff alleges that the law firm failed to advise GEICO to offer the full policy limit to settle the
`motor vehicle action before trial, the complaint also contains allegations that the decision to settle the
`underlying action rested solely and exclusively with defendant GEICO. These defendants contend that
`documentary evidence exists, in the form of two letters it sent to Bryant on November 24, 2014 and
`November 9,2015, advising her that plaintiff in the underlying action demanded the entire policy amount
`of $300,000, that GEICO did not believe the injuries properly valued at $300,000, and recommending that
`she retain her own personal counsel to advise with regard to her rights, responsibilities and personal
`exposure to any possible excess verdicts and/or judgment.
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`Defendant in Seq. #002, GEICO, contends that documentary evidence demonstrates that the
`underlying action was defensible on the issue of damages; that bad faith cannot be demonstrated because
`plaintiff in the underlying action continually maintained that the settlement demand was in excess of
`GEICO's applicable policy limits prior to the commencement of trial; that a difference of opinion as to case
`value exits precluding a 'bad faith' action against the insurer;
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`and that GEICO offered plaintiff in the underlying action a 'high/low' trial agreement, guaranteeing said
`plaintiff the full policy limits if awarded prior to trial.
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`In opposition and by cross-motion in Seq. #003, plaintiff Trustee, contends that GEICO failed to
`take into account all of the information it possessed, or information it lacked but should have had, and lost
`an actual opportunity to settle the case within its contract of insurance and save its insured from the verdict
`obtained against Bryant. Plaintiff Trustee contends that GEICO' s assertion of damages being defensible at
`trial is not supported by their own doctors, nurses, experts and lawyers of which the documentary evidence
`provided by plaintiff Trustee alleges to show otherwise. With regard to defendants Picciano & Scahill
`LLP and Gilbert J. Hardy, Esq., plaintiff Trustee contends that these defendants failed to properly represent
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`FILED: NASSAU COUNTY CLERK 07/08/2019 03:05 PM
`NYSCEF DOC. NO. 136
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`INDEX NO. 609083/2018
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`RECEIVED NYSCEF: 07/08/2019
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`their interests by not advising GEICO to settle the underlying action for the policy limits, and violated their
`obligations which were primarily to the insured and not the carrier. Plaintiff Trustee asserts that the actions
`of Picciano & Scahill, LLP and Gilbert J. Hardy, Esq., post-trial/verdict on the underlying action, and after
`being disqualified by the trial court post-trial/verdict, and these defendants' selection of the replacement
`firm that Bryant should seek counsel prior to filing a petition for federal bankruptcy were improper.
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`A motion to dismiss pursuant to CPLR 3211(a)(1) "may appropriately be granted only where the
`documentary evidence utterly refutes plaintiffs factual allegations, conclusively establishing a defense as
`a matter of law " (Goshen v. Mutual Life Ins. Ca ofN.Y., 98 N.Y.2d 314, 326, 7461V.Y.S.2d 858, 774 N.E.2d
`1190; see Leon v. Martinez, 84 NY.2d 83, 88, 614 NY.S.2d 972, 638 1V.E.2d 511; Shaya B. Pac., LLC v.
`Wilson, Elser, Moskowitz, Edelman &Dicker, LLP, 38 A.D.3d 34, 38, 827 NY.S.2d 231). Cervini v. Zononi,
`95 A.D.3d 919, 944 NY.S.2d 574 [2d Dept 2012]. "[T]o be considered 'documentary,' evidence must be
`unambiguous and of undisputed authenticity" Fontanetta v. John Doe I, 73 A.D.3d 78, 86, 898 N.Y.S.2d
`569 [2d Dept. 2010].
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`In reviewing a motion pursuant to CPLR 3211(a)(7) to dismiss a complaint for failure to state a
`cause of action, the facts as alleged in the complaint must be accepted as true, the plaintiff is accorded the
`benefit of every possible favorable inference, and the court's function is to determine only whether the facts
`as alleged fit within any cognizable legal theory (see Leon v. Martinez, 84 N.Y.2d 83, 87-88, 614 N.Y.S.2d
`972, 638 N.E.2d 511; Morone v. Morone, 50 1V.Y.2d 481, 484, 429 IV.Y.S.2d 592, 413 1V.E.2d 1154;
`Rochdale ViL v. Zimmerman, 2 A.D.3d 827, 769 N.Y.S.2d 386). "[T]he criterion is whether the proponent
`of the pleading has a cause of action, not whether he [or she] has stated one" (Guggenheimer v. Ginzburg,
`43 N.Y.2d 268, 275, 401 1V.Y.S.2d 182, 372 N.E.2d 17). Lupski v. County of Nassau, 32 A.D.3D 997, 822
`1V.Y.S.2d 112 [2d Dept 2006]. In addition, "[a] court is, of course, permitted to consider evidentiary
`material.. in support
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`of a motion to dismiss pursuant to CPLR 3211(a)(7)" and "the criterion then becomes 'whether the
`proponent of the pleading has a cause of action, not whether he has stated one' See, Nasca v. Sgro, 130
`A.D.3d 588, 13 NY.S.3d 188 [2d Dept. 2015], citing Sokol v. Leader, 74 A.D.3d 1180, 904 NY.S.2d 153.).
`"Indeed, a motion to dismiss pursuant to CPLR 3211(a) (7) must be denied unless it has been shown that
`a material fact as claimed by the pleader to be one is not a fact at all and unless it can be said that no
`significant dispute exists regarding it" Id. [citations omitted].
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`The facts alleged in the complaint and the affidavits in opposition to the motion to dismiss are
`deemed true and must be construed in the light most favorable to the plaintiff, with all doubts resolved in
`the plaintiffs favor (Global Marine Power, Inc. v Kuston Engines & Performance Engineering, LLC, 108
`AD3d 501) [2d Dept 2013]; Weitz v Weitz, 85 AD3d 1153 [2d Dept 2011]; Comely v Dynamic HVAC
`Supply, LLC, 44 AD3d [2d Dept 2007]; Brandt v Toraby, 273 AD2d 429, 430 [2d Dept 2000]).
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`To establish a prima facie case of bad faith, the plaintiff must establish that the insurer's conduct
`constituted a "gross disregard of the insured's interests—that is, a deliberate or reckless failure to place on
`equal footing the interests of its insureds with its own interests when considering a settlement offer. " See,
`Pavia v. State Farm Mut. Auto. Ins. Co., 82 NY.2d 445, 453-454, 605 NY S. 2d 208, 626 NE. 2d 24 (1993)
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`FILED: NASSAU COUNTY CLERK 07/08/2019 03:05 PM
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`INDEX NO. 609083/2018
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`RECEIVED NYSCEF: 07/08/2019
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`Regarding a claim for breach of implied warranty, even if a party is not in breach of its express
`contractual obligations, it may be in breach of the implied covenant of good faith and fair dealing when it
`exercises a contractual right as part of a scheme to deprive the other party of the benefit of its bargain and
`technically complying with the terms of a contract while depriving the plaintiff of the benefit of the bargain
`may constitute a breach of the covenant of good faith and fair dealing. See, Ahmed Elkoulily, MD., P.C. v.
`NY.S. Catholic Healthplan, Inc., 153 A.D.3d 768, 61 NY.S.3d 83 (2d Dep't 2017) (citations omitted).
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`"To establish a cause of action to recover damages for legal malpractice, a plaintiff must prove (1)
`that the defendant attorney failed to exercise that degree of care, skill, and diligence commonly possessed
`by a member of the legal community, (2) proximate cause, (3) damages, and (4) that the plaintiff would
`have been successful in the underlying action had the attorney exercised due care (see Rudolf v. Shayne,
`Dachs, Stanisci, Corker & Sauer, 8 NY.3d 438, 442, 835 NY.S.2d 534, 867 N.E.2d 385; Siracusa v. Sager,
`105 A.D.3d 937, 938, 963 NY.S.2d 364; Markowitz v. Kurzman Eisenberg Corbin Lever & Goodman, LLP,
`82 A.D.3d 719, 917 N.Y.S.2d 683). To establish proximate cause, it must be demonstrated that a plaintiff
`would have prevailed in the underlying action but for the attorney's negligence (see Rudolf v. Shayne,
`Dachs, Stanisci, Corker & Sauer, 8 NY.3d at 442, 835 NY.S.2d 534, 867 N.E.2d 385)." Grant v. La Trace,
`119 A:D.3d 646, 990 NY.S.2d 227 [2d Dept. 2014].
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`Upon this Court's review of the relevant submissions and affidavits associated therewith, plaintiff
`Trustee has sufficiently stated a cause of action for bad faith, breach of implied warranty and legal
`malpractice. In as much as the allegations contained in the complaint allege that defendant/Bryant in the
`underlying action may have been able to settle the underlying action prior to verdict and without necessity
`of filing a petition for federal bankruptcy, there exists allegations that Bryant was able to obtain a favorable
`outcome but for the actions of the instant defendants.
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`Applied herein, the documentary evidence submitted by all movants herein does not utterly refute
`the allegations contained in plaintiff Trustee's complaint nor does it qualify for summary judgment as a
`matter of law. Issues of fact exist as to the action § of the moving defendants prior to and post-verdict of
`the underlying action that require further discovery including completion of all depositions and other
`relevant discovery in this matter.
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`Accordingly, motion Seq. #001 #002 and #003 are denied.
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`This constitutes the decision and Order of the Court. Any relief not expressly granted herein is
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`denied.
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`Dated: June 28, 2019
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`ohn M. Galasso, J.S.C.
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`ENTERED
`JUL 0 8 2019
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`NASSAU COUNTY
`COUNTY CLERK'S OFFICE
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