IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING COUNT DUPLICATIVE OF BREACH OF CONTRACT COUNT; NO CFA CLAIM FOR BENEFIT DENIAL (New Jersey Federal)
In this property damage insurance coverage case, the insured brought claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and Consumer Fraud Act claims. The insured apparently did not bring a claim framed as insurance “bad faith”. Thus, the court analyzed the complaint solely under cases generally concerning the breach of the covenant of good faith and fair dealing, and not under insurance bad faith case law.
Good Faith and Fair Dealing Count Redundant
The court found the same allegations made in both the breach of contract count and the good faith and fair dealing count. District Judge Martinotti dismissed the good faith and fair dealing count “[b]ecause Plaintiff’s claim for breach of the implied covenant of good faith and fair dealing is duplicative of his breach of contract claim….”
It is interesting to compare this case to Judge Hillman’s September 1, 2021 801 Asbury Avenue opinion, summarized here, where he dismissed the covenant of good faith and fair dealing count as duplicative, but found a separate insurance bad faith claim adequately pleaded.
No Consumer Fraud Act Claim for Benefit Denial Only
The court then dismissed the insured’s Consumer Fraud Act (CFA) claim because the CFA does not apply to denial of insurance benefits. “Since Plaintiff is seeking damages under the CFA arising from [a] denial of Plaintiff’s appraisal benefit … the CFA is not applicable.” Even if applicable, the insured failed to plead the elements of a CFA action.