AUGUST 2015 BAD FAITH CASES: IN FIRST PARTY ACTION, UNDER NEW JERSEY LAW, ATTORNEY’S FEES ONLY RECOVERABLE FOR BAD FAITH, NOT FOR SIMPLE BREACH OF CONTRACT (New Jersey Federal)

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In 213-15 76th Street Condominium Association v. Scottsdale Insurance Company, the insured sought attorney’s fees for a first party claim against its insurer.  Attorneys’ fees are only permitted in such circumstances, if the insured pleads a claim for bad faith.  However, where the claim is only for breach of the insurance contract, attorney’s fee awards are prohibited.  In this case, the plaintiff did not set out a bad faith claim, but at most asserted that future discovery may elucidate such a claim exists.  Thus, there was no basis for attorney’s fees, though the court dismissed the attorney’s fee claim without prejudice.

Date of Decision:  July 31, 2015

213-15 76th St. Condo Ass’n v. Scottsdale Ins. Co., Civil No. 14-7695 (NLH/JS),  2015 U.S. Dist. LEXIS 100212 (D.N.J. July 31, 2015) (Hillman, J.)

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