In Bello v. Merrimack Mut. Fire Ins. Co., the appellate court heard an appeal from a jury verdict that awarded an insured damages for bad faith stemming from its carrier’s denial of benefits under a policy covering a retaining wall on the insured’s multi-unit residential property.
Following a wind storm in 2008, the insured’s property sustained damages to its roof, retaining wall, and backyard. An adjuster for the carrier determined that damage to the roof was covered, but that damage to the wall was excluded. The insured challenged this claim, eventually filing a coverage action that also sought bad faith damages. The judge dismissed the insured’s coverage and bad faith claims with respect to the insured’s roof, but submitted to the jury all claims related to the insured’s damaged wall and yard.
The jury awarded the insured $624,023.20, representing the cost of the wall and landscaping the plaintiff’s yard. The carrier moved for a new trial or, in the alternative, for entry of a judgment notwithstanding the verdict. The judge denied the carrier’s requests, adding $195,583.34 in attorney’s fees and $31,346.41, representing costs of the suit.
On appeal, the carrier argued that (1) the trial court erred in denying its post-trial motions; (2) that it relied upon its adjuster’s findings in its denial of coverage for the insured’s roof; (3) that the judge improperly treated the insured’s claim for bad faith as if the claim was also based on bad faith delay in payment; and (4) that the evidence showed that its denial was fairly debatable and not grounded in bad faith.
The Appellate Division rejected these arguments, upholding the award. Specifically, it ruled that the evidence was sufficient to support the jury’s finding. The question of bad faith “was squarely presented to the jury” and “sufficient evidence was offered and apparently accepted by the jury as credible, supporting its finding of bad faith.” The court also reasoned that its award of attorney’s fees was proper. Such an award was “foreseeable because [the insured’s] damages resulted from defendant’s bad faith denial of plaintiff’s claim.”
Date of Decision: July 12, 2012
Bello v. Merrimack Mut. Fire Ins. Co., No. A-4750-10T4, 2012 N.J. Super. Unpub. LEXIS 1654, New Jersey Superior Court – Appellate Division (App.Div. July 12, 2012) (Cuff, Lihotz and St. John)