Settlement: New York Implied Covenant Requires Demand Within Policy Limits.

   In a recently released decision in a Third-Party Insurance Case, a New York Appellate Court analyzed a single-Count Complaint under New York's "cause of action for breach of the covenant of good faith and fair dealing implied in the insurance contract."  CBLPath, Inc. v. Lexington Insurance Co.,  900 N.Y.S.2d 462, 464, 2010 N.Y. Slip Op. 04128 (N.Y. App. Div. 2d Dep't 2010).  In that case, the Second Department of New York's Appellate Division was confronted in particular with an alleged failure to settle under a "medical malpractice insurance policy.  CBLPath, id. at 464.

   The New York Appellate Court held that the absence of a presuit settlement demand within policy limits was fatal to the cause of action against the Liability Insurer in that case.  Id. at 465.

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