Archive for the 'NJ – Removal & Remand' Category

NOVEMBER 2018 BAD FAITH CASES: FEDERAL COURT WILL NOT REMAND BAD FAITH CLAIM SIMPLY BECAUSE INSURED INCLUDED A CLAIM FOR DECLARATORY RELIEF (New Jersey Federal)

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The insured brought claims for declaratory relief, breach of contract and bad faith. The carrier removed to federal court, and the insured moved to remand.

The insured agreed that diversity jurisdiction existed, but asked the court to make a discretionary remand on the basis that the case sought declaratory relief, which should be deemed to encompass all claims in the case. The court disagreed because the breach of contract and bad faith claims were independent of the declaratory relief claim, and there was jurisdiction over those independent claims.

The test is whether the claims for non-declaratory relief would continue to exist even if the declaratory judgment claim were dropped. It is obvious that if the insured never sought declaratory relief he still could have sued for damages under the contract and bad faith theories.

Date of Decision: November 19, 2018

Vitale v. State Farm Fire & Cas. Co., U. S. District Court District of New Jersey Civil Action No. 18-8988 (MAS) (LHG), 2018 U.S. Dist. LEXIS 197043 (D.N.J. Nov. 19, 2018) (Shipp, J.)

 

MAY 2014 BAD FAITH CASES: DISTRICT COURT DENIES MOTION TO REMAND WHERE BAD FAITH CLAIMS COULD RESULT IN PUNITIVE DAMAGES AWARD THAT WOULD EXCEED $75,000 (New Jersey Federal)

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In Carevel, LCC v. Aspen American Insurance Company, a Super Storm Sandy coverage case, the court addressed the issue of whether to remand the matter to state court for failure to meet the federal jurisdictional minimum of $75,000.

The complaint asserted claims for breach of contract; failure to promptly effectuate a settlement to conduct an investigation to justify its refusal, forcing the insured to seek resolution through litigation; and gross misconduct, bad faith and a breach of defendants’ duty of good faith and fair dealing owed to Plaintiff as established by New Jersey’s Unfair Settlement Practices Act, N.J.S.A. 17:29B-1 et seq., N.J.S.A. 17B:30-13.1 and N.J.A.C. 11:2-17.1 et seq. The insured sought damages, interest and costs of suit, attorney’s fees and punitive damages.

Under New Jersey statutory law, where punitive damages are permitted, there may be an award that is up to 5 times compensatory damages. The court found a claim had been stated that could provide for punitive damages. The record included an invoice for $23,130 that could constitute compensatory damages. Under the case law and the punitive damages statute, punitive damages could rise as high as five times that sum; and therefore a jury could return punitive damages of as much as $115,650.

Thus, the jurisdictional minimum was met as the insured plaintiff could not demonstrate to a “legal certainty” that the damages would not exceed $75,000.

Date of Decision: May 14, 2014

Carevel, LLC v. Aspen Am. Ins. Co., No. 2:13-cv-7581 (WHW), 2014 U.S. Dist. LEXIS 65928 (D.N.J. May 14, 2014) (Walls, J.)

NOVEMBER 2012 BAD FAITH CASES: COURT RULES THAT SERVICE UPON CARRIER’S STATUTORY AGENT DOES NOT COMMENCE THIRTY-DAY PERIOD FOR REMOVAL (New Jersey Federal)

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In Tucci v. Hartford Fin. Servs. Group, Inc., the court heard an insured’s motion to remand a coverage dispute with its carrier to state court.

The insured had served its complaint upon the carrier’s statutory agent in New Jersey, the Commissioner of Banking and Insurance. The Commissioner subsequently mailed the complaint to the carrier. The carrier filed a notice of removal and brought the case to federal court. However, its notice of removal was filed thirty-five days after the insured’s initial service upon the Commissioner. The insured argued that this was ground for remand because 28 U.S.C. 1446(b) requires a party to remove within thirty-days.

The court disagreed with the insured and denied the motion for remand, ruling that the carrier’s notice of removal was in fact timely. The court reasoned that a carrier’s statutory agent was not an agent in-fact, meaning that the Commissioner was merely a medium for service.

Date of Decision: February 25, 2009

Tucci v. Hartford Fin. Servs. Group, Inc., 600 F. Supp. 2d 630, U.S. District Court for the District of New Jersey (D.N.J. 2009) (Simandle, J.)