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.)

 

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