A Capehart Scatchard Blog

Insurer Not Liable for Attorneys Fees for Failure to Pay Homeowners’ Insurance Claim

By on October 16, 2014 in Blog with 0 Comments

Plaintiffs Alfio and Jennifer Leone filed a lawsuit against Lantana Insurance Ltd., relating to their claims for coverage under their Homeowners Insurance policy. They claimed that Lantana wrongfully denied their claim for wind damage to their home incurred during Hurricane Sandy. In Leone v. Lantana Insurance Ltd., 2014 U.S. Dist. LEXIS 121873 (D.Ct. Sept. 2, 2014), they brought suit in federal court for claims of breach of contract, breach of the duty of good faith and fair dealing, and a declaratory judgment. They sought attorneys fees for each count.

The District Court noted that this lawsuit was subject to the American Rule in which “the prevailing litigant is ordinarily not entitled to collect a reasonable attorneys fee from the loser.” There are 3 exceptions to the rule: (1) where counsel fees are permitted by court rule or statute; (2) pursuant to a contract; and (3) where counsel fees are a traditional element of damages in a particular cause of action.

There is a New Jersey court rule, R. 4:42-9(1)(6), which does permit the award of attorneys fees in an action upon a liability or indemnity policy of insurance in favor of a successful claimant. However, the District Court found that New Jersey case law is clear in that this rule does not extend to permit counsel fees to an insured on a direct suit against the insurer to enforce a casualty or other first-party direct coverage.

Here, this lawsuit was based upon a first party property damage claim under their policy. Thus, the rule does not permit the award of attorneys fees. Because the plaintiffs provided no other grounds of statutory authorization, agreement, or other established exception for which they could receive counsel fees, the court dismissed all claims for attorneys fees.

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About the Author

About the Author:

Ms. Ramos is an Executive Committee Member and Co-Chair of the Litigation Department at Capehart Scatchard, P.A. located in Mount Laurel, New Jersey. She is an experienced litigator with over 25 years experience handling diverse matters. Practice areas include tort defense, business litigation, estate litigation, tort claims and civil rights defense, construction litigation, insurance coverage, employment litigation, shareholder disputes, and general litigation.

For the years 2020 and 2021, Ms. Ramos was selected for inclusion in The Best Lawyers in America© in the practice area of Litigation - Insurance. The attorneys on this list are selected based upon the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same geographical area and legal practice area. A complete description of The Best Lawyers in America© methodology can be viewed via their website at: https://www.bestlawyers.com/methodology.

In 2021, Capehart Scatchard and Ms. Ramos received the “Best Law Firm” ranking in the area of Litigation – Insurance (Metro, Tier 3) published by U.S. News & World Report and Best Lawyers®. Law firms included on the list are recognized for professional excellence with consistently impressive ratings from clients and peers. To be eligible for a ranking, a firm must have at least one attorney who has been included in the current edition of Best Lawyers in America, which recognizes the top five percent of practicing lawyers in the United States. Betsy Ramos (Litigation – Insurance) was recognized for this prestigious award in the 2021 edition. For a description of the “Best Law Firm” selection methodology please visit: https://bestlawfirms.usnews.com/methodology.aspx.

“Best Law Firms” is published by Best Lawyers in partnership with U.S. News & World Report. For a description of the selection methodology please visit: https://bestlawfirms.usnews.com/methodology.aspx.

*No aspect of this advertisement has been submitted to or approved by the Supreme Court of New Jersey.

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