CBLPath, Inc., Appellants, v Lexington Insurance Company, Respondent. (Index No. 14362/08), 73 A.D.3d 829

Summary

The underlying plaintiff alleged that the insureds negligently switched her biopsy specimen with a biopsy specimen from another individual, which resulted in the underlying plaintiff being erroneously diagnosed with breast cancer, and subsequently undergoing an unnecessary double mastectomy. The insured timely reported the claim to the insurer, which referred the matter for handling on its behalf to a subsidiary. The underlying action was settled several months later, with the insurer paying its policy limit and the insured paying the balance. The appellate court found, inter alia, that the insurer established that the insured's bad faith claim could not stand, as the insured failed to raise a triable issue of fact as to whether the underlying plaintiff made a pre-litigation settlement demand within the policy limit. In addition, the insured could not show that, because of the insurer's conduct, it lost an actual opportunity to settle. Consequently, because any damages the insured ...