DECEMBER 2014 BAD FAITH CASES: INSURED LIABLE UNDER NEW JERSEY’S INSURANCE FRAUD PREVENTION ACT (IFPA) (New Jersey Federal)
In Federal Insurance company v. Von Windherburg-Cordeiro, the insurer had denied a disability claim. The insured pursued the matter in a AAA arbitration, where the insurer counterclaimed for fraud. The insurer successfully defeated the insured’s affirmative claims, and prevailed on its counterclaim, and was awarded attorney’s fees. The arbitrator had concluded that the insured’s injuries were largely or entirely feigned.
The insurer then brought a claim in federal court for violation of the IFPA. The court rendered judgment on the pleadings in the insurer’s favor.