Dupuis v. Van Natten , 61 A.D.2d 293 ( 1978 )

OPINION OF THE COURT

Greenblott, J. P.

This action arises out of an automobile accident which occurred on February 5, 1970. The action was not commenced until April 18, 1973, more than three years later. The complaint contains several negligence causes of action against the defendant Donald Van Natten and additional causes of action against the defendant Van Natten’s insurer and its employees. These latter causes of action allege fraudulent misrepresentations by the insurer and its agents, deceiving plaintiffs through repeated promises of settlement, indicating to plaintiffs that they could settle at any time and that they would be fully compensated for their injuries without commencing an action within the period of limitation.

Plaintiffs’ purpose in adding the causes of action for fraudulent misrepresentations is, of course, to avoid the three-year negligence Statute of Limitations (CPLR 214). Where failure to commence an action before the expiration of the negligence Statute of Limitations is due to fraud practiced upon the plaintiff, a cause of action will lie for the loss sustained in consequence thereof (35 NY Jur, Limitations and Laches, § 12; cf. Brick v Cohn-Hall-Marx Co., 276 NY 259).

Defendants contend that there are no triable issues of fact raised by the misrepresentation causes of action. After examining the pretrial depositions of the plaintiffs, we agree with the conclusion reached by Special Term that there are bona fide issues of fact concerning the alleged misrepresentations which resulted in plaintiffs’ failure to institute a timely action. We therefore affirm the denial of the defendants’ motion. Although Special Term in its decision states that "[i]t is not disputed by defendants that the insurer and its employees were agents for the insured defendant”, this is contested by the defendant insured in his brief. We conclude that the insurer and its agents were in fact agents of the defendant insured, and were at the least clothed with apparent authority to make settlement promises (Hover v Claverack Grange No. 934, 46 Misc 2d 113). Under the circumstances, the motion was properly denied. Questions of fact are present which must be resolved by the trier of the facts. Thus in addition to the usual negligence questions, the trier of the facts will be called upon to consider the cause of action in fraud and misrepresentation.

Furthermore, since the defendants raise the affirmative defense of the Statute of Limitations in their answer, the doctrine of equitable estoppel must also be considered by the trier of the facts. If the representations or conduct of the defendants misled the plaintiffs, even innocently, this is enough. "Under these circumstances, the doctrine of equitable estoppel will be applied to prevent defendant from gaining an unconscionable advantage if he were permitted to plead the statute; and it is immaterial that defendant intended no wrong. (See 21 N.Y. Jur., Estoppel, §24; C.J.S., Estoppel, § 69, and cases cited; Ann. 130 A.L.R. 49, supra; 24 ALR 2d 1435, and cases cited.)” (Robinson v City of New York, 24 AD2d 260, 263.)

The order should be affirmed, with costs.