Parkin v. Cornell University, 78 N.Y.2d 523 (1991)
In a defamation action involving a qualifiedly privileged statement, the plaintiff must present sufficient evidence to raise a triable issue of fact as to whether the defendant acted with malice.
Summary
This case addresses the standard of evidence required to defeat summary judgment in a defamation claim where the allegedly defamatory statement is protected by a qualified privilege. The plaintiffs sued Cornell University, its employees, and its attorneys for defamation and other causes of action related to the handling of an insurance claim. The Court of Appeals affirmed the dismissal of the defamation claim, holding that the plaintiffs failed to present sufficient evidence of malice to overcome the qualified privilege protecting a disclaimer letter written by the university’s attorneys. The Court also dismissed a claim based on an alleged violation of the Insurance Law, finding no evidence of a general business practice of bad faith.
Facts
Plaintiffs commenced an action against Cornell University, the Andrews law firm, Royal Globe Insurance, and Patrick DiDomenico (Royal’s manager). The defamation cause of action was based on a disclaimer letter from the Andrews law firm to the plaintiffs, their attorney, and their adjuster. The plaintiffs also asserted a cause of action alleging a violation of Section 40-d of the Insurance Law, claiming Royal Globe engaged in unfair claim settlement practices.
Procedural History
The Supreme Court initially denied the defendants’ motion for summary judgment. The Appellate Division reversed, granting summary judgment dismissing the complaint. The Court of Appeals granted leave to appeal and affirmed the Appellate Division’s order.
Issue(s)
1. Whether the plaintiffs presented sufficient evidence to raise a triable issue of fact as to publication of the defamatory statement by Royal Globe or DiDomenico.
2. Whether the plaintiffs presented sufficient evidence to raise a triable issue of fact as to whether the Andrews law firm acted with malice in publishing the disclaimer letter, thus overcoming the qualified privilege.
3. Whether the plaintiffs presented sufficient evidence of a “general business practice” on the part of Royal Globe to support a private cause of action under Section 40-d of the Insurance Law.
4. Whether the plaintiffs presented sufficient evidence of gross disregard of the insured’s rights to support a bad-faith claim against Royal Globe.
Holding
1. No, because nothing in the complaint or affidavits presented a triable issue as to publication by Royal Globe or DiDomenico.
2. No, because the plaintiffs failed to present evidence of malice on the part of the Andrews firm sufficient to overcome the qualified privilege. The court stated that “one opposing a motion for summary judgment must produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact on which he rests his claim.”
3. No, because the plaintiffs failed to present “evidentiary proof in admissible form” of a “general business practice” on the part of Royal Globe, as required by Section 40-d of the Insurance Law.
4. No, because plaintiffs failed to present evidentiary proof of gross disregard of the insured’s rights, an essential element of a bad-faith claim.
Court’s Reasoning
Regarding the defamation claim, the court emphasized that the disclaimer letter was qualifiedly privileged. Therefore, the plaintiffs bore the burden of proving that the Andrews firm acted with malice. The court found no evidence to suggest that further examination of a witness (Turnbull) would reasonably lead to evidence of malice. The court cited Zuckerman v City of New York, stating that a party opposing summary judgment must produce evidentiary proof in admissible form to require a trial or demonstrate an acceptable excuse for failing to do so. Mere conclusions or unsubstantiated allegations are insufficient.
Regarding the Insurance Law claim, the court assumed, without deciding, that Section 40-d could create a private cause of action. However, it found no admissible evidence of a “general business practice” of unfair claim settlement by Royal Globe, as required by the statute. Furthermore, even assuming that bad-faith principles applicable to liability insurance cases (failure to defend or settle third-party claims) extended to first-party claims under a fire insurance policy, the plaintiffs failed to demonstrate the gross disregard of the insured’s rights necessary to establish such a claim. The Court referenced Halpin v. Prudential Ins. Co. of Amer., highlighting the distinction between failure to settle a liability claim versus a first-party insurance claim.