MAY 2018 BAD FAITH CASES: ALLEGED POST-CLAIM MISREPRESENTATIONS BY INSURER NOT RELEVANT TO ISSUE OF REASONABLE BASIS TO DENY CLAIM (New Jersey Federal)

Print Friendly, PDF & Email

The insured commenced this coverage action after the insurer denied coverage for property damage. The insurer argued no coverage was owed because the water damage derived from either freezing pipes or wear and tear. The insured argued the insurer acted in bad faith by “willfully and intentionally” misrepresenting the communications between the parties, and by falsely accusing the insured of failing to preserve evidence relevant to the claim. The insurer moved for judgment on the pleadings as to the bad faith claim.

The Court held the bad faith claim “may only be supported by factual allegations concerning whether [the insurer] lacked a reasonable basis for denying coverage[,]” not whether insurer deliberately misrepresented communications between the parties months after coverage had already been denied. The Court reasoned, “[i]t is of no moment what alleged mischaracterizations or misrepresentations [the insurer] made . . . because such allegations have no bearing on whether [the] policy . . . covered the water damage from the accident.”

As such, the Court granted the insurer’s motion for judgment on the pleadings, but also granted the insured leave to amend the complaint.

Date of Decision: May 10, 2018

Olirei Investments, LLC v. Liberty Mutual Insurance Co., United States District Court, District of New Jersey, Civil Action No. 18-524, 2018 U.S. Dist. LEXIS 78949 (D.N.J. May 10, 2018) (Chesler, J.)

 

0 Responses to “MAY 2018 BAD FAITH CASES: ALLEGED POST-CLAIM MISREPRESENTATIONS BY INSURER NOT RELEVANT TO ISSUE OF REASONABLE BASIS TO DENY CLAIM (New Jersey Federal)”


Comments are currently closed.