Liberty Mutual Ins. Co. v. Land
App. Div. NJ, January 14, 2010
In this declaratory judgment action, the plaintiff insurer filed a declaratory judgment action against the defendant policyholders alleging that the policyholders committed fraud to inflate the property loss incurred to their home when a tree fell and hit the roof. The insurer sought treble damages for the cost of investigation, various fees and costs, and counsel fees under the New Jersey Insurance Fraud Prevention Act (“IFPA”) and also sought a ruling that it was not required to pay its policyholders’ claim of loss. The case was initially tried with a ruling in the insurer’s favor, appealed, and revered by the Supreme Court and a remanded for a new trial.
After the second trial, the jury again ruled in the insurer’s favor and found that the policyholders had violated the IFPA. Based on the jury verdict, the trial judge then awarded the insurer a total of $175,302.88, largely due to the trebling effect of the IFPA, for compensatory damages.
The policyholders appealed the award of damages and the appellate court affirmed the trial court’s ruling holding that the IFPA expressly authorizes recovery of compensatory damages, including reasonable investigation costs and attorneys’ fees to insurance companies who have been damaged as a result of the statutory violations. A successful insurance company shall also recover treble damages if the court determines that a defendant engaged in a pattern of the enumerated statutory violations. The statutory framework provides that it is left to the court to measure the compensatory damages and then determine whether the defendant has engaged in a pattern of violating this act for purposes of imposing treble damages. In this case, there was enough factual evidence to support the judge’s findings with regards to damages and award of treble damages under the statute.
A copy of the decision can be found here
Sarah Fang, Jonathan Kuller and Anthony Golowski
https://www.goldbergsegalla.com/attorneys/Fang.html
https://www.goldbergsegalla.com/attorneys/Kuller.html
https://www.goldbergsegalla.com/attorneys/Golowski.html
Case provided courtesy of Lexis.