Daloisio v. Liberty Mutual Fire Insurance
754 F. Supp. 2d 707
D.N.J.2010Background
- Liberty Mutual issued a homeowners policy to Louis Daloisio for his insured premises.
- On April 11, 2008, the insured premises suffered direct physical loss from a fire; the policy was in force.
- Daloisio promptly notified Liberty Mutual and complied with all policy duties.
- Liberty Mutual refused to pay benefits due under the policy.
- Daloisio filed suit; after removal, he amended, asserting three counts: (1) breach of contract for failure to pay benefits, (2) bad faith and unfair dealing, and (3) CFA misrepresentation claims.
- The court granted in part and denied in part, dismissing the CFA claim, and denying dismissal of punitive damages claim without prejudice, while dismissing attorney's fees and the Third Count, with leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the CFA claim is sufficiently pleaded | Daloisio | Liberty Mutual | CFA claim dismissed for failure to plead with 9(b) specificity. |
| Whether punitive damages survive against insurer | Daloisio seeks punitive damages for bad-faith conduct | Liberty Mutual argues punitive damages require egregious conduct | Punitive damages claim survives to be determined on the merits, denied with prejudice. |
| Whether attorney's fees are recoverable in insured-vs-insurer dispute | Plaintiff seeks attorney's fees under the contract | Fees are not recoverable in insured-vs-insurer enforcement actions | Attorney's fees dismissed. |
Key Cases Cited
- Van Holt v. Liberty Mut. Fire Ins. Co., 163 F.3d 161 (3d Cir. 1998) (mere denial of benefits not a CFA violation)
- Eagle Fire Prot. Corp. v. First Indem. of Am. Ins. Co., 145 N.J. 345 (N.J. 1996) (precedes attorney's fees in insurer enforcement actions)
- Enright v. Lubow, 215 N.J. Super. 306 (App. Div. 1987) (attorney's fees not generally available in insured-vs-insurer actions)
- Kuhnel v. CNA Ins. Co., 322 N.J. Super. 568 (App. Div. 1999) (insurer's duty and CFA scope; no-fee principle not universal)
- Pierzga v. Ohio Cas. Group of Ins. Companies, 208 N.J. Super. 40 (App. Div. 1986) (receiving benefits; CFA scope limitations)
- Seville Industrial Machinery Corp. v. Southmost Machinery Corp., 742 F.2d 786 (3d Cir. 1984) (Rule 9(b) pleading standard for CFA claims)
- In re Advanta Corp. Sec. Litig., 180 F.3d 525 (3d Cir. 1999) (9(b) particularity requirement for fraud pleadings)
- Phillips v. County of Allegheny, 515 F.3d 224 (3d Cir. 2008) (pleading standards in the Third Circuit)
- Richardson v. Standard Guar. Ins. Co., 371 N.J. Super. 449 (App. Div. 2004) (breach of contract not a CFA violation)