Degennaro v. American Bankers Insurance Company of Florida et al

BRIEF in Opposition

D.N.J.December 5, 2016

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY Alfred DeGennaro : Plaintiff : vs. : Complaint for Civil Case Case No.3:16-cv-05274-MLC-DEA American Bankers Insurance Company : of Florida Government Employees Insurance : Company Motion Day December 19, 2016 Assurant Specialty Property : Defendant _____________________________________________________________________________ BREIF IN OPPOSITION TO AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA AND ASSURANT SPECIALTY PROPERTY’S (collectively the “ASSURANT DEFENDANTS”) MOTION TO DISMISS __________________________________________________________________ Plaintiff will rely this Brief, its Exhibits, the attached Certificate of Service, Form of Order and the Declaration of Alfred DeGennaro, Esquire, Plaintiff Pro Se Alfred DeGennaro, Esquire Plaintiff, Pro Se (Attorney Bar Admission #01175) On The Brief Alfred DeGennaro, Esquire Plaintiff Pro Se 621 Shrewsbury Ave, Suite 215 Shrewsbury, NJ 07702 alfred@damages22.com (P) 732-996-6681 Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 1 of 38 PageID: 419 TABLE OF CONTENTS STATEMENT OF THE CASE ……………………………………………...1 ARGUMENT AND AUTHORITY I. Standards for Dismissal………………………………………………….... 1 II. Plaintiff Has Alleged a Viable Cause of Action ………………………… 2 A. Plaintiff Suffered a Loss under Established Contract Principles of Compensatory Damages. ………………………..….. 2 B. There Was No Claim Necessary for the Underlying Funds To Establish Liability under the CFA…………………………….…8 C. The Measurement of the Value for Carrying Peril Through Time under the CFA and the Common-Law………….….11 D. The Value of Compensatory Damages Multiplied……………….....17 E Specific Arguments Refuting the Defendant’s Motion to Dismiss ……………………………………………….....21 F. Plaintiff Asserts His Due Process Rights………………………….. 29 G. Summation……………………………………………………….… 31 H. Conclusion…………………………………………………………. 32 i Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 2 of 38 PageID: 420 TABLE OF CASES and CITAIONS CASES Abbas v. Pennymac Corp. (Docket No. A-3466-13T2 - Decided July 2015 - 2015 WL 4275962) …….………………….…..…... 10, 11 Aktieselskabet AF 21 Nov. 2001 v. Fame Jeans Inc., 525 F.3d 8, 17 (D.C. Cir. 2008)……………………….…………..……… 1 Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009)………………………….. 1 Blazovic v. Andrich 124 NJ 90 (1991)…………………………………… 18 Boc Group v. Lummus Crest, 597 A. 2d 1109 - NJ: Superior Court, Law Div. 1990……………………………………………………………. 27 Bosland v. Warnock Dodge Inc. 197 N.J. 543, 964A.2d.741 (2009)... 9,10,11, 23 County of Essex v. First Union Nat’l Bank, 891 A.2d 600, 607 (N.J. 2006)………………………………………………………………… 21 Correa v. Maggiore, 196 N.J. Super. 273, (App. Div.1984)……………… 11, 12 D’Agostino v. Maldonado 216 N.J. 168, 78 A. 3d 527 (2013)………….... 10, 11 Ferguson v. Jonah 445 NJ Super 129, Docket L-5473-12 (2014)………… 15 Ferris v. Haymore, 967 F.2d 946, (4th Cir. 1992)…………………………. 18 Finder Mgmt. Co. Inc. v. Barrett 955 A. 2d 940 (NJ App Div. 2008)…….. 8 Fortunato v. Conte, 92 N.J.A.R.2d (INS) 17, 1992 WL 257727 (1992)…... 27 Furst v. Einstein Moomjy, 182 NJ 2 (2004)………………….7,8,12,13,15,17,19 Gallerstein v. Berkshire Life Ins. Co. of Am., No. 05-05661(JAG), 2006 WL 2594862 (D.N.J. 2006)………………………………………… 28 Gennari v. Weichert Co. Realtors, 148 NJ 582, 691 A.2d 350 (1997)…… 8 Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 3 of 38 PageID: 421 Hadley v. Baxendale, 156 Eng. Rep. 145 (Ex. Ch. 1854)………………… 3 Henderson v. Hertz Corp., No. L-6937-03, 2005 WL 4127090, at *5 (N.J. Super. Ct. App. Div. 2006)………………………………….………. 26 Kozlowski v. Kozlowski 80 N.J. 378, 388, 403 A.2d 902 (1979)………… 12 Lemelledo v. Beneficial Mgt. Corp. of Am. 150 NJ. 255 (1997)……………………………………….…………9, 17, 26, 27 Mason v. Okla. Turnpike Auth., 115 F.3d 1442 (10th Cir.1997) ……….… 19 Medina v. District of Columbia 643 F.3d 323 (D.C. Cir. 2011)…………… 19 Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234 (3rd Cir. 2008)..………. 1, 23 Randall v. Loftsgaarden, 478 US 647, 663 (1986)……….…………………. 21 Robertson Oil Co., Inc. v. Phillips Petroleum Co., 14 F. 3d 373 (8th Cir. 1993) …………………………………………………………….… 20 Rova Farms Resort, Inc. v. Investors Insurance Co. 65 N.J. 474, (1974).…8, 28 Saffer v. Willoughby, 143 N.J. 256, at 272, 670 A.2d 527 (1996)……….… 20 Scherer v. The Equitable Life Assurance Society of the United States, 347 F.3d 394,397 (2d Cir. 2003)………………………………………… ...2, 20 Sears vs. Cox 138 N.J. 2, 19 (1994)…………………………………..….…. 27 St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, (1938)…..…… 2 State Farm Mut. Automobile Ins. Co. v. Campbell 538 U.S. 408 (2003)…… 29 Thiedemann v. Mercedes-Benz USA 183 N.J. 234, 872 A.2d 783(2005)…..9,17 Viviano v. CBS, Inc., 251 N.J.Super. 113 (App Div. 1991) …………………12 Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 4 of 38 PageID: 422 Weiss v. First Unum Life Ins. Co., 482 F.3d 254, 266 (3d Cir. 2007)……17, 27 Wirig v. Kinney Shoe Corp., 461 N.W.2d 374 (Minn.1990)…………….…. 19 Zeliff v. Sabatino 15 N.J. 70, 74 (1954) …………………………………… 12 STATUTES and REGULATIONS: N.J.S.A. 56:8-1 et. seq. NJ Consumer Fraud Act……..1, 2, 7-11, 13, 15, 17, 18 N.J.S.A. 56:8-4……………………………………………….……………… 26 N.J.S.A. 56:8-19……………....…………………………….……..……..….. 18 L. 1971 c. 247 § 7, codified at N.J.S.A. 56:8-19. ……………….………….. 9 N.J.S.A. 2A:15-5.9 et seq. New Jersey Punitive Damage Act………………. 18 N.J.A.C. 11:1-20.2(i)………………………………………………………… 24 N.J.A.C. 11:1-22.2 (a) Prohibitions…………………………………………. 24 RULES AND RESTATEMENT Restatement (Second) of Contracts Sec. 347a 1988…………………………. 16 WEBSITES: www.geico.com/about/corporate/at-a-glance/....................................................31 www.judygarlandsrubyslippers.com................................................................... 4 Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 5 of 38 PageID: 423 1 STATEMENT OF THE CASE Plaintiff offered an extensive analysis of his Amount in Controversy in his complaint. Plaintiff will now focus his arguments by utilizing a traditional approach to compensatory damages under the common law and the New Jersey Consumer Fraud Act (the “CFA”). Plaintiff’s theory of damages was that compensatory damages were equivalent to the “value of the exposure which insurance resolves”. Plaintiff, filed his Complaint (Exhibit A) against Defendants’ bringing this action for relief arising from the Defendants’ alleged breach of contract and deceitful and surreptitious reduction of his insurance coverage leaving the Plaintiff with an unknowing gap of $200,000 per year in his liability coverage. For the reasons set forth herein, Defendants’ Motion should be denied in total. ARGUMENT AND AUTHORITY I. Standards for Dismissal On a motion to dismiss, the District Court was required to accept as true all factual allegations in the complaint and draw all inferences from the facts alleged in the light most favorable to the Plaintiff, Phillips v. Cnty. of Allegheny, 515 F.3d 224, 228 (3rd Cir. 2008), A Plaintiff must cross "the line from conceivable to plausible." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950-1951 (2009). Plausibility is not equated to likelihood of success and it is not the Court's role to weigh its subjective assessment of whether the pleader will ultimately be successful. Aktieselskabet AF 21 Nov. 2001 v. Fame Jeans Inc., 525 F.3d 8, 17 (D.C. Cir. 2008); Also when a Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 6 of 38 PageID: 424 2 plaintiff pleads, in good faith, a particular amount above the jurisdictional threshold, a court will recognize a rebuttable presumption that the amount-in- controversy requirement has been satisfied. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938). To overcome this rebuttable presumption, the defendant must show “to a legal certainty that the amount recoverable does not meet the jurisdictional threshold.” Scherer v. The Equitable Life Assurance Society of the United States, 347 F.3d 394, 397 (2d Cir. 2003). II. Plaintiff Has Alleged a Viable Cause of Action A. Plaintiff Suffered A Loss Under Established Contract Principles of Compensatory Damages. Plaintiff has argued that his damages are equal to “the value of being insured under the circumstances” even though no claim was ever necessary for the insurance proceeds. These damages are protected under established theories of tort and contract law besides the CFA. Defendant’s entire theory of this case completely ignores its most critical factor in analyzing damages and therefore misses an important value. In order to present that value Plaintiff will offer the following hypothetical: An executive is traveling to a dangerous Third World country for 4 days. In that country kidnappings have become rampant. He retains the assistance of a security company named Pro-Tect in order to obtain an armed bodyguard. When the executive arrives, Pro-Tect want to utilize that bodyguard for an important dignitary with which they already have a relationship. Pro-Tect wants to utilize the concept of an efficient breach by paying the executive Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 7 of 38 PageID: 425 3 for his damages which would be the amount necessary for him to hire another body guard. Therefore Pro-Tect needs to pay for a replacement bodyguard at least as qualified as their present one in order to compensate the executive. Therefore, they may have to pay “extra” if necessary to protect the executive from his exposure to danger. Pro-Tect may have to pay an even higher price if a riot breaks out. And an even higher price than that if a civil war breaks out. These increases are being driven by the exposure caused by the value of the executive “carrying peril through a period of time” which is part of the contractual equation. Therefore, these “extra” payments represent an undeniable measure of contract damages. These damages are not only foreseeable under the rule of Hadley v. Baxendale, 156 Eng. Rep. 145 (Ex. Ch. 1854) but they are at the heart of the meeting of the minds and form the basis of the exchange. Therefore the “value of carrying peril through time” is an established compensatory damage under traditional notions of contract contractual recovery. [Note: This value is in addition to the independent loss caused by the paying of premiums for deficient coverage] Another illustration: Consider a taxicab that breaches its contract forcing a consumer to carry his luggage 2 miles, obviously entitling him to compensatory damages. Compare that to a taxicab breach whose consumer has to carry an exposure to danger for 2 miles. What reasonable person would rather carry the danger for 2 miles instead of luggage? Isn’t carrying danger the greater damage? Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 8 of 38 PageID: 426 4 Does arriving at the destination safely nullify the intrusion into someone’s life because it expired? One could vary these facts with a consumer that doesn’t learn about the danger they were carrying until afterwards, and therefore they don’t “feel it” until afterwards. However, when they do learn about it will disturb them deeply and the feelings of the ingrained intrusion will probably last a lifetime. But when someone learns of the loss begs the question of the value that was at the heart of the bargained-for-exchange. The damage isn't the feeling, the damage is the “exposure to peril” which was breached. When someone learns of the loss is irrelevant. As to the interplay of timing and intangibles, Defendants should note that a jury can determine that future events have a present value, even if after the jury’s determination those future events never come true. As to the value of intangibles. Consider the Ruby Slippers from the Wizard of Oz. The Ruby Slippers presently have an estimated value of $3,000,000.00 (see: www.judygarlandsrubyslippers.com). Plaintiff cannot determine their original cost, but Plaintiff believes it is safe to guess that 99.99% of their present value represents the circumstances surrounding the physical slippers. In a contract for the Ruby Slippers someone certainly could not offer a “brand-new” replacement pair and claim that the rest of the value is merely in the other person’s mind or that a collector doesn’t want to resell anyway. There is a distinction between items that have an “intrinsic” value and those that have an “integrated” value. An original oil Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 9 of 38 PageID: 427 5 painting by Rembrandt has an “intrinsic” value, i.e. a value formed at the time of its creation. The Ruby Slippers have an “integrated” value, i.e. a value which was created when surrounding circumstances became integrated into them. The value of the Ruby Slippers is therefore essentially sheer circumstance. The simple fact is that “peril” is a “surrounding circumstance” regardless of whether the consumer and/or their family emerges from the period of peril otherwise unharmed. It is an undeniable value, completely cable of being assessed by a jury. Comparing the aforementioned hypothetical about a bodyguard, and a consumer purchasing insurance: Both consumers are purchasing “protection from peril”. The policy satisfies any physical property (if actually necessary) to attach the circumstances. Financial peril is obviously very dangerous, especially for a consumer and their family. Attempts to argue after-the-fact that since the consumer/family is safe, there never was a value to carrying danger through time misreads the theory of compensatory damages. This is particularly true with insurance because the consumer gave up the right to be protected by competitors who would have actually protected them (reliance and expectation damages). Defendants, as insurers, are a business for profit. They advertise and therefore asked Plaintiff to carry his danger through time with them (not their competitors) in order to acquire his premium payments in exchange for the protection. For the Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 10 of 38 PageID: 428 6 consumer the value of insurance is the exposure it resolves not the price of the premiums they pay and that protection is what they have bargained for. What is distracting from the analysis is the great disparity in price between the premiums paid and the coverage provided i.e. the nature of insurance. That view approaches the situation with an enormous sterility, forgetting that the peril is the about the health and welfare of the public. A bargain is being made for the assumption of obligations and responsibilities for profit. There is an inherent difference between price and value, especially when the government is highly regulating the item. For example: The polio vaccine was free, but its value was not zero. Most importantly, consider the consumer’s exposure when they breach for example, by not giving notification of the loss correctly. The consumer loses coverage and the resulting damage exceeds face value and encompasses all the consequential events i.e. the consumer’s damage is an amount equal to the “value of being insured”. If the consumer’s exposure is the “value of being insured” why shouldn’t that be the standard of damages for the insurance company when it breaches, given the intellectual/technological advantages it has. There should be no argument from the Defendants that such an application is financially burdensome on the industry because under this traditional contract damage application there would be no punitive aspects. Consequently, their only complaint would be that this happens a lot. But why would it be happening a lot? Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 11 of 38 PageID: 429 7 And if it is happening a lot what about the poor consumers who have gaps in, or lose their coverage. Are they really just suppose “trust” the company (especially when the company is looking at a $200,000 price or a million dollar price to pay)? Competence in providing insurance is crucial. Also, the insurance companies have the intellectually elite running their computer systems and are capable of checking and crosschecking and asking for verifications. If the importance of the scholastic aptitude tests for the entire student population of the United States can be run by computers efficiently, why can’t theirs? Defendant’s defense is that they closed the 2 year gap after Plaintiff complained. First, the risk for the company is minimal after they know no claim has been made is miniscule, and therefore Plaintiff paid the same premiums (also an ascertainable loss under the CFA) even though he was now in entirely different risk pool. Second, closing the gap after wards does nothing to extinguish the exposure Plaintiff carried during the two year period (a loss under both the CFA and, as explained above, established theories of compensatory damages under the common law). Third: Plaintiff was prevented from shopping for proper coverage (reliance damages - see discussion of Furst v. Einstein Moomjy, 182 NJ 2 (2004) infra) and a policy containing a “$200,000 argument” is worth far less than one without it. In addition the bargained for exchange was the value of being protected from danger (discussed further under the CFA). Therefore: There was no claim Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 12 of 38 PageID: 430 8 necessary for the underlying funds under traditional common law contractual theories of damages: Defendants admitted they cancelled his protection for a period of time and restoring it after the fact doesn’t remedy the exposure carried through that period of time. B. There Was No Claim Necessary for the Underlying Funds to Establish Lability Under The New Jersey Consumer Fraud Act. History evolves and the laws change in response to it. There are few states in this country in which a defendant will have a more difficult time arguing a defense about purposely compromising the protection it sold to a consumer then in New Jersey. The CFA is of the toughest consumer protection laws in the country, and that evolution has been directly codified by the New Jersey Supreme Court, see Gennari v. Weichert Co. Realtors, 148 NJ 58 2, at 604, 691 A.2d 350 (1997) “The history of the Act is one of constant expansion of consumer protection.” The CFA is also legislation in a State whose Supreme Court held in Rova Farms Resort, Inc. v. Investors Insurance Co. 65 N.J. 474, (1974) that an insurance company (a fiduciary) may have liability that exceeds face value when bad faith is involved. Also, see New Jersey Supreme Court in Furst v. Einstein Moomjy, 860 A. 2d 435 at 441, which held that the Consumer Fraud Act “is remedial legislation that we construe liberally to accomplish its broad purpose of safeguarding the public.” Insurance is certainly critical for safeguarding the public and it is covered by the CFA; see, Finderne Mgmt. Co. Inc. v. Barrett, 955 A. 2d 940 App. Div. 2008; Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 13 of 38 PageID: 431 9 Lemelledo v. Beneficial Mgmt. Corp. of Am., 150 N.J. 255, 265, 696 A.2d 546 (1997). It must also be emphasized that the CFA is an action by the Attorney General’s Office which, through the 1971 Amendment, is being enforced by a private attorney [L. 1971 c. 247 § 7, codified at N.J.S.A. 56:8-19] and therefore this is an action which is prosecutorial in nature and not the common law. In Bosland v. Warnock Dodge Inc. 197 N.J. 543, 964 A.2d. 741 at 750 (2009), the New Jersey Supreme Court stated: “The CFA does not demand that a plaintiff necessarily point to an actually suffered loss or to an incurred loss, but only to one that is "ascertainable”. Payment of premiums by this Plaintiff for the deficient coverage represented by the $200,000 gap in coverage certainly establishes an ascertainable loss under the CFA. Though, as to the actual full measure of damages, ascertainable loss merely “will set the stage for establishing the measure of damages”, see Thiedemann v. Mercedes-Benz USA 183 N.J. 234, 872 A. 2d 783 at 792 (2005). It is here that the “value of carrying danger” is applied as well the value of losing the ability continue to shop and secure proper insurance coverage (reliance as well as expectation damages). Ascertainable loss is also established by paying premiums for deficient coverage. Defendants are trying to utilize the fact that the underlying insurance proceeds never needed to be claimed by the Plaintiff. This is an after-the-fact analysis and contrary to the rulings of the highest courts of New Jersey which have Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 14 of 38 PageID: 432 10 held that the analysis of the damages of the CFA wrongdoing takes place “during the period” of the wrongdoing. There are two cases, both by the New Jersey Supreme Court, that must be noted in this regard, and also illustrate another important concept in this case which will also be discussed. The first is again Bosland in which the court ruled that it did not matter whether a consumer did or did not make a demand for a refund before bringing suit, the Court stated at page 750: “the fact that the Plaintiff could have secured complete relief in no way diminishes the fact that she sustained an immediate quantifiable loss when she paid the fee representing the over-charge”. Therefore, even securing complete relief (obtaining a refund) is not a bar to a CFA action. Plaintiff asserts that his realizing the wrongdoing about his insurance policies, and having the policies corrected is analogous to the refund situations in Bosland. In the second case, D’Agostino v. Maldonado 216 N.J. 168, 78 A. 3d 527 at 545 (2013). The New Jersey Supreme Court granted the Plaintiff access to all forms of CFA relief even though the Plaintiff had already achieved satisfaction through the lower court’s equitable powers and held: “the existence of an ascertainable loss should be determined on the basis of a plaintiff’s position following the defendant’s unlawful commercial practice”. Also, in Abbas v. Pennymac Corp. (Docket No. A-3466-13T2 - Decided July 2015 2015 WL 4275962) the New Jersey Appellate Division found that the defendant failed to forward the insurance proceeds to plaintiff in a timely fashion and Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 15 of 38 PageID: 433 11 therefore the funds became the ascertainable loss “the moment” the funds were wrongly withheld. The Abbas Court went on to say that the defendant’s arguments of later payment would leave the door ajar for unconscionable commercial practices as long as the merchant could close the door before the consumer initiated legal action. Therefore, the highest courts in New Jersey (Bosland, D’Agostino, and Abbas) have turned a very deaf ear to an “I got away with it defense” by the wrongdoer. Regardless of whether that correction occurred through the Plaintiff’s own actions (Bosland = refund), the Court’s remedy (D’Agostino = equitable relief), or defendant’s later attempts nullifying their conduct (Abbas = later payment). The door was shut upon them. Plaintiff asserts that his realizing the insurance scheme and demanding it be corrected, is analogous to the refunds, equitable relief and later payments in Bosland, D’Agostino and Abbas i.e. the resolution/ correction of the problem merely shuts the door and stops the time clock before valuation begins. C. The Measurement of the Value for Carrying Peril Through time Under the CFA and the Common Law. In Correa v. Maggiore, 196 N.J. Super. 273, 284 (App. Div.1984) The court stated that the appropriate measure of damages in a fraud or concealment case is a perplexing problem and has been the source of much litigation and concern. In terms of valuation, there are two basic theories. The court went on to explain the Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 16 of 38 PageID: 434 12 "out-of-pocket" principle, recovery is permitted for the difference between the price paid and the actual value of the property acquired, the "benefit-of-the- bargain" rule allows recovery for the difference between the price paid and the value of the property had the representations been true. Correa referred to the New Jersey Supreme Court decision in Zeliff v. Sabatino 15 N.J. 70, 74 (1954) in which the court ruled that “victims of fraud are entitled to compensation for every wrong which was the natural and proximate result of the fraud." As to sufficient certainty of damages see Viviano v. CBS, Inc., 251 N.J.Super. 113 (App. Div.) (1991): Where a wrong has been committed and damages have resulted, mere uncertainty as to the amount of damages will not preclude a recovery even though proof of the amount of damages is inexact. Kozlowski v. Kozlowski, 80 N.J. 378, 388, 403 A.2d 902 (1979). In Furst the New Jersey Supreme Court held that the innocent party has a right to damages “based on his expectation as measured by ……. The loss of value to him caused by the breaching party.” [Note: the Furst court specifically uses the language of value as “to him”]. Furst concerned a plaintiff who purchased a carpet on sale but was granted an award sufficient for him to go out on the market and purchase a replacement carpet (benefit of his bargain) rather than merely have a refund of the sale discount price (out-of-pocket). The Furst court looked to the fact that the consumer was led away from further shopping so refused to grant just a refund, Furst supra at 444. In the instant matter, Plaintiff was also unable to shop to purchase proper insurance from other companies and, had he not caught on, he Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 17 of 38 PageID: 435 13 would have continued without proper insurance year after year: All the time continuing to pay Defendants premiums for the fraudulent deficient insurance (year after year with the probabilities of a loss occurring increasing). Also, the $200,000 gap was falling in a very vulnerable location in terms of liability (Defendants are risk allocation experts). In a capitalist system, marketplace factors determine price/replacement values but they do not establish the actual value “to” the consumer [emphasis added] under Furst. Consider a blind person deceived by a merchant who misrepresents the training of a seeing-eye dog. A blind person’s seeing-eye dog’s value is not its purchase price or replacement value: It’s the value of having the dog function correctly so that they do not have to carry danger through a period of time: The value of an item of safety is a product of its function. It is an actual consumer value which is reasonable, legitimate and accurate, ignoring personal subjectivity and/or sentimentality. However, like the bodyguard in the first hypothetical, an accurate assessment of the “value deprived” from a blind person would not be solved without the value of carrying the danger/peril. Under the benefit-of-the-bargain" rule one would need to determine the value of the property had the representations been true. The representation made at the time of sale was that the insurance policy was suitable proper and complete (without a gap equaling Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 18 of 38 PageID: 436 14 a potential disaster). To measure the value correctly you must start at the true value of insurance: One buys insurance because one wants protection: Its value is equivalent to the exposure it resolves. Premium prices are not accurate for an analysis of value because insurance greatly effects public welfare and is an industry which, by necessity, is highly regulated by the government skewing purchase prices (again the polio vaccine was free, but its value was not zero). Therefore, they cannot simply be offered merely the cost in dollars necessary to purchase a replacement dog at a later time: Consider the following hypothetical: A consumer hires a tour guide who runs a business touring the desert and providing all supplies. The tour guide gets lost but is able to put in a call to rescuers. The tour guide, steals all the water and secludes himself waiting for signs of the rescuers. The rescuers eventually arrive in time and both survive. Hiding the water is an unconscionable practice (the CFA applies to acts “subsequent” to sale). The 2 cent value of a canteen of city water, is now a miniscule fraction of its actual value. That is because “the circumstances” have become “integrated” into the value of the article. There is no market value because there's are only two people.. The value is the value “to” the consumer under Furst. And, once again, the wrongdoer is unable to utilize a defense based upon the fact that resolution of the wrongdoing had been completed/corrected. This is because fortuitous intervening circumstances (rescuers) are no different the refunds, equitable relief, or late payment. Resolution merely shuts the door and stops the time clock before Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 19 of 38 PageID: 437 15 valuation begins. Also in terms of the amount of recovery, though emotional losses were generally not recoverable under the CFA, under the recent case of Ferguson v. Jonah 445 NJ Super 129 (Docket L-5473-12) (2014), emotional damages are recoverable if they arouse directly arose from the fraud. Using the blind person’s see-eye dog as an example, Defendants will probably want to enter evidence in the form of statistics that during the period of the danger an accident would “probably” not occur or if there was an accident it would be a broken knee and not a broken neck to reduce damages proportionately. To be focusing on a mathematical analysis would be so sterile as to turn its back on the consumer population in favor of protecting the wrongdoers and as to the CFA it is also contrary to New Jersey’s Supreme Court’s desire in Furst to safeguard the public. To allow this would be a little like allowing a defendant to force the consumer into a game of Russian roulette, and then arguing after-the-fact: “Well 5 out of 6 of the chambers were empty.” It also ignores that the consumer’s valuation is made from the point of view of that which is “to him” (Furst at 442). It is also against public policy because, particularly with insurance, it will motivate Defendant insurers to attempt such schemes because they are the statisticians planning them and will build in profit knowing there will be a few times when they get caught. This is not a case of overpaying for widgets. This is the public’s welfare. In Furst, supra at 442, after Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 20 of 38 PageID: 438 16 emphasizing public safety, the New Jersey Supreme Court held that the innocent party has a right to damages “based on his expectation as measured by ……. The loss of value to him caused by the breaching party” citing to the Restatement (Second) of Contracts Sec. 347a 1988. In terms of establishing a value, a “knowing” consumer might be willing to buy the diminished coverage at a reduced price because the automobile side of the equation with the umbrella was intact. But that analysis is meaningless because that consumer is “knowingly” buying the diminished coverage and can make adjustments for it. Under the benefit-of-the-bargain approach the Plaintiff’s recovery is set by measuring from a beginning point at the premiums paid and moving to the value of the property had the representations been true i.e. a suitable and complete policy. As to the “out-of-pocket theory”, the recovery is permitted for the difference between the price paid and the actual value of the property acquired. Actually, both the benefit-of-the-bargain and out-of-pocket theory produce essentially the same result if an imaginary line is not drawn at zero and one considers the negative value of a dangerous or perilous purchase. This is because under the "out-of-pocket" principle, the actual value of the property acquired actually has a negative value. i.e., a value less than zero. Negative valuation of assets is nothing new in accounting or in law and certainly anyone who purchases real estate and inherits Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 21 of 38 PageID: 439 17 environmental cleanup problems could easily find themselves with a “negative value”. Such an asset could easily be “less” than worthless. Another example of a negative value is the sale of a business with undisclosed legal claims outstanding. Both of these problems would be compounded if fraud were involved. In the instant matter plaintiff paid premiums and received an unknown gap in his insurance. Denying the negative value and drawing such an imaginary line violates the New Jersey Supremes Court’s holding in Furst that the CFA has a broad purpose of safeguarding the public. The CFA isn’t negligence, it is a prosecutorial action for deceit. Insurance was directly incorporated under the protections of the CFA, see Lemelledo, supra. In Weiss v. First Unum Life Ins. Co., 482 F.3d 254, 266 (3d Cir. 2007) the Third Circuit predicted that, the New Jersey Supreme Court would extend the NJCFA to an insurer's "performance in the providing of benefits." and not just marketing. Defendant argues there was no “ascertainable loss” (quantifiable or measurable) to Plaintiff, citing to Thiedemann v. Mercedes-Benz USA, however that case involved no diminution in value and it more importantly involved an independent warranty regarding any necessary repairs. D. The Value of the Compensatory Damages Multiplied As to the amount in controversy. It should be noted that at the present time there are three Defendants though Geico Insurance Agency will be added making Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 22 of 38 PageID: 440 18 four (4) and also Voyager Indemnity will make it 5 Defendants. But if deceit is found, the corporate veil will be pierced and the individual executives will also become individually liable multiplying all non-apportion able damage further. Plaintiff is entitled to treble damages under the CFA [N.J.S.A. 56:8-19]. Under The New Jersey Supreme Court ruling in Blazovic v. Andrich 124 NJ 90 (1991) the Defendants may only apportion the compensatory aspect of damages and not punitive damages the purpose of which is punishment. Since there are will be at least four defendants trebling results in a multiple of nine (9). There are also Federal courts that have ruled that all defendants must fully pay the compensatory as well as punitive and not apportion compensatory either. See, e.g., Ferris v. Haymore, 967 F.2d 946, 956-57 (4th Cir. 1992); CFA remedies are “in addition to” all other recovery. The common law counts have punitive damages under the New Jersey Punitive Damage Act (N.J.S.A. 2A:15-5.9 et seq.). This allow punitive damages up to $300,000 in punitive damages or 5 times actual damages whichever is greater. As to the value of being insured: Plaintiff plead such a $200,000 gap would cause conservatively at least $400,000 to the reasonable consumer. Consider what a loved one would pay to save someone trapped carrying an unknown exposure to peril? A “loved one” analysis can be said to be bias, but the purpose of a jury summation in a trial is to impart a sense of emotion to the jury. If not, what would Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 23 of 38 PageID: 441 19 a reasonable person take from the defendant to save another reasonable person trapped carrying an unknown exposure to peril. There are eight (8) polices sold with which exposed Plaintiff to the $200,000 gap. There are also various Counts alleged. The rule against double recovery is inapplicable when the damages awarded are punitive see also Medina v. District of Columbia 643 F.3d 323 (D.C. Cir. 2011). As to compensatory damages a plaintiff can only recover under one paralleling theory, unless the plaintiff can demonstrate, by a clear and convincing showing, that the ostensibly paralleling claims are actually "different in kind." citing Wirig v. Kinney Shoe Corp., 461 N.W.2d 374 (Minn.1990). See Mason v. Okla. Turnpike Auth., 115 F.3d 1442 (10th Cir.1997) which stated: “Mason’s discharge was “at the core” of all of his claims, but the discharge was motivated by two distinct, illegal factors: (1) political discrimination; and (2) retaliation for Mason’s refusal to violate state law” Consider the following hypothetical: Three separate local automobile merchants sell 3 separate electrical component parts for an automobile’s computerized system. They surreptitiously alter the parts so that they can be installed and linked to each other to eventually malfunction and damage the car’s computer system. The altered parts are installed by a local auto-mechanic who is in on the scheme and looking for the additional repair work and will split his profits with the auto merchants. The system is damaged and after the repairs are made the scheme is realized by the consumer. The separate sale of the altered component parts are "different in kind." So is the installation. There are 4 transactions, 4 compensatory awards and 4 punitive Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 24 of 38 PageID: 442 20 awards. These eight (8) insurance policies are “different in kind” and constitute separate/independent transactions which: (1) represent different types of coverage; (2) distinct time periods; (3) each were paid with different consideration i.e. premiums; and (4) each were subject to changes of terms if done legally. A full discussion of a claims being “different in kind” would require the full discovery into the Defendants’ actions, but at this point the following seems obvious: The count for Interference with Prospective Economic Advantage is dissimilar in both conduct and motive to the counts for fraudulent sale and/or intentional breach of contract. The Interference with Prospective Economic Advantage was motivated by an attempt to retain the consumer as a customer and collect premiums by making him believe he had the protection he wanted. As stated in Furst consumers stop shopping when they believe they have what they wanted. The Counts for Fraud and Breach of Good Faith of Contract (presently mis-pleaded as “Intentional Breach of Contract”) are different because one deals with sale and the other is motivated by fighting or denying a claims made by the consumer. See Robertson Oil Co., Inc. v. Phillips Petroleum Co., 14 F. 3d 373 (8th Cir. 1993) were the court stated: The actual damages are identical under each of the theories submitted to the jury. On the other hand, the nature, extent, and enormity of the wrong, the intent of the party committing it, and the general circumstances attending the particular transaction involved, differ with respect to each of the two punitive awards. Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 25 of 38 PageID: 443 21 The breach of a fiduciary relationship count is different in this case because of the importance of the trust regarding the public welfare. In New Jersey, an attorney client fiduciary relationship was treated differently in Saffer v. Willoughby, 143 N.J. 256, at 272, 670 A.2d 527 (1996). There is a breach of trust in addition to the breach of the contract. Even if full actual compensatory damages for carrying peril through time results in what could be argued to be a windfall (and it is not), a windfall to the Plaintiff is nothing new in the law (see The United States Supreme Court decision in Randall v. Loftsgaarden, 478 US 647, 663 (1986) and the New Jersey Supreme Court decision in County of Essex v. First Union Nat’l Bank, 891 A.2d 600, 607 (N.J. 2006) which permitted a plaintiff to recover disgorgement damages even where Plaintiff suffered no damage. Under the standard of review, the Defendants must show “to a legal certainty” that the amount recoverable does not meet the jurisdictional threshold. (see Scherer) E. Specifics Arguments Refuting the Assurant Defendants’ Motion to Dismiss. In Footnote # 1 Defendant American Banker’s Insurance Company of Florida (hereinafter “ABIC”) explains that Assurant, Inc. was doing business under their brand name Assurant Specialty Property. Therefore, Plaintiff will file an amended complaint naming Assurant Inc. as a defendant with ABIC. Defendant ABIC and Assurant Specialty Property have presently filed their Motion to Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 26 of 38 PageID: 444 22 Dismiss collectively as the “Assurant Defendants” Also the language at the bottom Confirmation of Coverage (see Ex B-14 and Exhibit C) of the renters insurance from Assuring Specialty Property sent for the 2015 - 2016 term, state that the policy seem to represent a contract between Plaintiff and Voyager Indemnity Those documents explain that they are issued as a matter of information only and confer no rights upon the holder, therefore depending upon what discovery reveals, Voyager Indemnity will most probably be added as a defendant as well. Note: These documents “for information only” further changes the personal liability coverage down to 100,000 without the per occurrence language (see discussion concerning changing terms below). Plaintiff has alleged both a breach of contract and a fraudulent scheme against the Defendants with great specificity in his complaint. In Defendant’s motion, Plaintiff has faced a barrage of denials of the facts and allegations clearly pleaded in his complaint. In the previous sections explaining compensatory damages, Plaintiff established his loss, and ascertainable loss under the CFA. Plaintiff will now elaborate on the Defendant’s intent and scheming aspect already clearly pleading in his complaint. What’s happening in this scheme is that different entities are using procedures and communications and sending different forms keeping themselves separate but the attempt is to try to characterize and change the meaning of the Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 27 of 38 PageID: 445 23 other forms and communication sent by the other entities. In this way they are all cooperating. This is part of a “pick and choose” risk scheme in which they can utilize the sufficiency of evidence coupled with financial leverage to deny consumers the right to the insurance for which they contracted. Closing the gap afterwards is meaningless because they know no claim has been made and there is virtually “no risk”. Contrast this “no risk” with a Plaintiff trying to resolve the gap once there was a $200,000 price for the Defendants to pay. The after-the-fact correction also fails for the reasons already cited and is also in violation of the New Jersey Supreme Court’s concern about refunds in Bosland at 752: “A merchant could rely on the pre-suit refund demand requirement, boldly imposing inflated charges at no risk, and planning to refund the overcharges only when asked”. Under the standard of review during a motion to dismiss the factual allegations of the Plaintiff are accepted as true (and so are all inferences of fact), see Phillips. Therefore Plaintiff’s allegation that he never received the letter which ABIC claimed it sent to inform him of a reduction of his liability coverage from $300,000 to 100,000 is accepted as true. A copy of this letter was obtained by the Plaintiff from the Department of Banking and Insurance (“DOBI”) and is attached as Exhibit B at Page 1 (hereinafter “Ex-B-1”, etc.). Note, this letter, supposedly sent to Plaintiff doesn’t even contain identifying information of the Plaintiff, nor policy #, nor the reasons why the change in coverage is being made. Also, the Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 28 of 38 PageID: 446 24 claim of a business operations problem is suspicious since business operations were excluded (Ex-B-3) (see Plaintiff’s Complaint Paragraph 38 hereinafter referred to as “PCP 38” etc.). It should also be noted that the critical missing letter was also sent in violation of the applicable NJAC regulations (PCP 58, 59, 62) which compounds the suspicious claim that Defendant’s actually sent the letter that was never received. The Defendant attempts to argue that the Notice of Cancellation and Nonrenewal regulations [N.J.A.C. 11:1 - 20.2 (i)] are not applicable. However, what they “supposedly” fail to understand is that once the policy was issued if they were going to change any terms of the coverage they had to cancel the policy with in the first 60 days by law then reissue, or wait until the end of term. Also, in proof of this fact is NJAC 11:1-22.2 (a) Prohibitions: NJAC - 11:1-22.2 (a) Prohibitions: Effecting or attempting to effect a mid- term premium increase and/or a reduction in the amount or type of coverage provided under the policy unless prior written approval therefor has been obtained from the Commissioner. NJAC - 11:1-22.2 (a) specifically prohibits changing the coverage of an insurance mid-term unless the permission of the Commissioner of Insurance has been obtained. Defendants offered no such documentation or claim to the Department of Banking and Insurance (“DOBI”) that such permission had been obtained. NJAC 11:1-22.2 Prohibitions is controlling law. Defendants’ only remedy for their own “claimed’ internal mistake after the policy had been issued was to cancel the policy Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 29 of 38 PageID: 447 25 and reissue it or get the permission from the Commissioner to change it. It is difficult to even imagine that insurance companies of this size are unaware of the necessary regulations. The key to the scheme was creating a dialogue with Plaintiff by sending a letter on January 21, 2014 (Ex-B-2) suggesting he “might have a problem” (PCP 8, 9) (a very odd approach of shifting the burden of understanding underwriting guidelines to the consumer without identifying them). Then 10 days later on January 31, 2016 they send an email (Ex B-4 to 5) forwarding the issued policy. The first three pages of the email consisted of 2 letters: one thanking him (Ex B-6) the other (Ex-B-7) discussing his “multi-policy discounts” and the third being a Declaration Page (Ex-B-8) listing the Personal Liability as the full $300,000 which Plaintiff purchased. Then even after getting a response from Plaintiff’s by FAX just to be sure, four (4) later (Ex- 11 to 12) (PCP 19, 20) explaining the policy had been issued and asking Defendants to let him know if there were any problems, they instead send an email on February 27, 2014 (over three weeks later) thanking him for his business and attach a Declaration Page with a very ambiguous “$100,000 per occurrence” language (Ex-B -13) (PCP 21) which could easily be confused with a $300,000 aggregate which had already been sold him ($300,000 per occurrence on the prior form). Once he was already in the frame of mind that he had what he wanted with no problems, there would be no need for Plaintiff to Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 30 of 38 PageID: 448 26 suspect anything was wrong, nor go back to his old files and start comparing all the languages. This was almost 4 weeks (from February 3, 2014) after Plaintiff sent the aforesaid Fax (PCP 21). It also disguised the fact that a $16 credit which was extremely well hidden within the other communications regarding receiving credits was supposedly significant to a reduction of $200,000 of coverage (PCP 22). GEICO also sent a very misleading declaration page for its umbrella policy (Ex-B- 9 to 10) in that it shows the $300,000 required limit but calls no attention that there is even the slightest problem any coverage implying everything is fine. The real danger from a scheme like this is that a consumer with a claim would be arguing with $200,000 worth of financial pressure on them and their families: As to the importance of regulations, the Assurant Defendants argue in its Motion to Dismiss that the notice regulations that the Plaintiff is relying on do not create a private right of action. Assurant Defendants cite to Henderson v. Hertz Corp., No. L-6937-03, 2005 WL 4127090, at *5 (N.J. Super. Ct. App. Div., 2006) and Lemelledo v. Beneficial Mgmt.Corp. of Am., 696 A.2d 546, 552-555 (N.J. 1997)), Defendants misread these cases which stand for the proposition that private citizens are not to file lawsuits which are based on the actions that only bear on the administration of insurance as opposed to conduct which directly impacts the consumer through fraud or bad faith i.e. acts that fall outside the scope of the regulation, such as the cooperation and scheming that occurred in this case. For Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 31 of 38 PageID: 449 27 example, the court in Lemelledo gave a detailed discussion of its concerns about under enforcement of fraud if conduct expressly regulated by statutes is not reachable by the CFA and that it should ordinarily be assumed that the CFA applies to the covered practice. A direct example applying the CFA to an insurance regulation (Insurance Producer Licensing Act) which does not allow a private right of action is found in Fortunato v. Conte, 92 N.J.A.R.2d (INS) 17, 1992 WL 257727 (1992). Also as to liability for violating regulations see Boc Group v. Lummus Crest, 597 A. 2d 1109 - NJ: Superior Court, Law Div. 1990 explaining that: Under N.J.S.A. 56:8-4, the Attorney General rules and regulations for the CFA the "general [definition] can be construed under the doctrine of ejusdem generis as a comprehensive definition intended to incorporate other products or services similar in nature to those enumerated [bold added]. Insurance was directly incorporated under the protections of the CFA, see Lemelledo, supra, and Weiss v. First Unum Life Ins. Co. supra. What regulations could be more important to a consumer and then protection against having their insurance coverage reduced or extinguished? Under Sears vs. Cox 138 N.J. 2, 19 (1994) strict liability can be found for violation of a regulation, the theory being that the company should be aware of the regulation. Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 32 of 38 PageID: 450 28 As to the other arguments Plaintiff will emphasize the following: the Assurant Defendants argue there was no “ascertainable loss” (quantifiable or measurable) to Plaintiff. However, see Plaintiff’s foregoing arguments as to damages. As to the Count for common law fraud all the necessary 5 elements of fraud were detailed in Plaintiff’s complaint. As to Plaintiffs count for Tortious Interference with Prospective Economic Advantage: (1) Defendants knew Plaintiff was in the market for the policies led him away from other carriers by explaining that they would provide the insurance (Note: Plaintiff’s complaint explains that he acquired the new coverage (PCP 80). As to the Count for Breach of Fiduciary Relationship: In Gallerstein v. Berkshire Life Ins. Co. of Am., No. 05- 05661(JAG), 2006 WL 2594862 (D.N.J. 2006), cited to Rova Farms Resort Incorporated v. Investors Insurance Company of America 65 N.J. 474 (1974) and stated: In Rova, however, the New Jersey Supreme Court addressed the duties of insurers to their insureds in unmistakably broad terms: “Good faith is a broad concept ... [which] imposes upon the insurer the duty to exercise good faith in settling claims.” In this case the defendants actually extinguished Plaintiff’s ability to settle third- party claims. Closing the gap after-the-fact is meaningless and part of the “pick and choose” rick scheme. Plaintiff concedes that in New Jersey law there is no action for intentional breach of contract. However, New Jersey does recognize an obligation of good- Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 33 of 38 PageID: 451 29 faith and its breach with punitive damages, and therefore Plaintiff will make the necessary correction during the amended complaint. All of the Defendants’ actions constitute an unconscionable commercial practice under the CFA. F. Plaintiff Asserts His Due Process Rights Plaintive understands that insurance is a contingency contract, i.e. “if” an accident happens “then” we will pay. But these Defendants’ have changed it. They have changed it to: “if” an accident happens “then” we will argue. And in that argument they have enormously superior financial power as well as the attorney’s, because a plaintiff’s attorney will only take a case and look to the other side for their fees (the CFA) if they think they can actually win. Once the evidence is manipulated prior to litigation by the companies that control the forms and communications, all the consumer has to negotiate with is a financial disaster. This whole scheme (and ones like it) completely undermines the concept of insurance which if done honestly revolves around risk allocation. Here, Defendants’ tried using a $16 hidden credit to put a $200,000 gap in a strategically located place in the policies. Then, once they got caught by a lawyer, the Defendants’ again tried to skew the risk allocation with an “after-the-fact” adjustment to the policy once they knew there were no claims. And now that they are in litigation they are analyzing damages in a manner that skews it value. First, Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 34 of 38 PageID: 452 30 the true measure of damages is the bargained for value of carrying peril through a period of time. Second, that value must be analyzed “during the period of time” it is carried, and from the point of view of an unknowing consumer that can’t escape. You cannot hire a demolition expert and reduce the fees for their services once you know they are safe. By the same token insurance companies solicit consumers to carry peril through time with them and cannot make adjustments to that value once they know the consumer is safe. Buyer or seller, company or consumer, these are opposite ends of the exact same thing. Plaintiff is now citing to State Farm Mut. Automobile Ins. Co. v. Campbell, 538 US 408 (2003) because the United States Supreme Court greatly reduced a punitive damage award of $175,000,000.00 against a large insurance company predicated upon “due process” considerations. But what happens when the reverse is true? What happens when the computer age allows intellectually sophisticated fiduciaries to unleash schemes against the populace denying coverage and/or access to fair litigation through the prior manipulation of evidence and the destruction of their financial resources? Why shouldn’t the full weight of the “actual compensatory damages” fall upon them i.e. the protection from “exposure” which the consumer has bargained for after being solicited by the seller? In actuality, wouldn’t this serve as a strong deterrent thereby decreasing litigation and conserving judicial resources? Wouldn’t holding executive liable for full value in Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 35 of 38 PageID: 453 31 the case of deceit prevent such schemes and also be an incentive to competence in such an important industry? The criminal side of the judicial system is probably more overburdened and has a higher standard of proof for deterrence. If allowed to, insurance companies can design forms, procedures and communications and distribute them throughout their millions of policies in order to deny the consumers right to the underlying proceeds or fair litigation. Merely 5 claims such as the present one with a $200,000 gap would result in the savings of $1 million. Geico insures more than thirteen (13) million auto policies alone (www.geico.com/about/corporate/at-a-glance/). Though the legal complexities of insurance are beyond the scope of this paper, Plaintiff asserts that, in a case such as this one, the balancing which occurs in a practical system of justice falls to his side, and a compromise of the full value of compensatory damages will result in a violation of his Due Process rights. G. Summation: Assume a collector of flowers purchases the only hybrid orchid in the world as a gift for a daughter living across the country for her birthday and it is never delivered. It then dies 4 months later due to its normal lifespan. Can he be said to have “no loss” because the situation has expired? Or no loss because he was not going to have the direct experience of the flower himself? Would the florist choose the experience of a flower over that of knowing his family was made safe through Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 36 of 38 PageID: 454 32 his acquisition of insurance? If said policy was issued with a gap in coverage would expiration of the policy period defeat the benefit of his bargain? Does “when” he learns he didn’t receive the benefit of his bargain matter? Will the knowledge and feelings of the situation (the flower or the insurance) require a present sense impression at the time of the breach, or does the fact that the experience and feelings will endure throughout the future satisfy the knowledge requirement? After assuming obligations for profit in the form of a solicited contract, these Defendants moved a value onto their side of the line, either in case, or because, they needed it. Odd how they could pick up and move something that wasn’t there. Actually, it was there, and that value is one of the most important commodities purchased by consumers. Consumers bargain for and purchase an established contractual value which is the “protection from peril”. It is a human value, and it is a value that is R priceless S. H. Conclusion. Based upon the foregoing, Plaintiff respectfully requests that the Court deny Defendants' Motion to Dismiss. I certify that the foregoing statements made by me are true and I am aware that if any of the foregoing statements are willfully false I am subject to punishment. s/ Alfred DeGennaro Dated 12/4/16 Alfred DeGennaro, Esquire Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 37 of 38 PageID: 455 33 Plaintiff, Pro Se 621 Shrewsbury Ave, Suite 215 Shrewsbury, NJ 07702 alfred@damages22.com (P) 732-996-6681 Case 3:16-cv-05274-BRM-DEA Document 23 Filed 12/05/16 Page 38 of 38 PageID: 456 Page 1 of 65 DeGennaro v. Geico, et al UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY Alfred DeGennaro : : Plaintiff : : : vs. : : Complaint for Civil Case Case No. _____________________ American Bankers Insurance Company of Florida : Government Employees Insurance Company : Complaint and Demand for Jury Trial Assurant Specialty Property : Defendants : I. THE PARTIES A) Plaintiff, Alfred DeGennaro, pro se, also an attorney at law in the State of New Jersey: Citizen of New Jersey, residing at 6 Mahoras Drive, Ocean Township, NJ 07712; Contact through: Alfred DeGennaro, Esquire, Suite 215, 621 Shrewsbury Avenue, Shrewsbury, New Jersey 07702 (Phone 732-996-6681) Email = alfred@damages22.com B) Defendant, Government Employees Insurance Company, One GEICO Plaza, Washington, D.C. 20076 (hereinafter referred to as “Geico”) has its principal place of business in the District of Columbia. C) Defendant, American Bankers Insurance Company of Florida, 11222 Quail Roost Drive, Miami, Florida 33157 ((hereinafter referred to as “ABIC”) has its principal place of business in Maimi, Florida. D) Defendant Assurant Specialty Property, 11222 Quail Roost Drive, Miami, FL 33157 Phone 800 -852-2244, has its principal place of business at the foregoing address in Miami Florida (hereinafter “Assurant”) and a principal place of business at 260 Interstate North Cir Se, Atlanta, GA 30339-2210, Phone 1-770-763-1000 Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 1 of 65 PageID: 1Case 3:16-cv 05274-BR -DEA Document 23-1 Filed 12/05/16 age 1 of 65 ageI : 457 Page 2 of 65 DeGennaro v. Geico, et al II. STATEMENT OF JURISDCITION AND VENUE Plaintiff asserts that the Federal District Court has jurisdiction over this case due to diversity of citizenship, as Defendants are citizens of Washington D.C., Florida and Florida respectively and Plaintiff, Alfred DeGennaro, presently is, and was a resident and citizen of the State of New Jersey, County of Monmouth, at all times relevant to this cause of action. Plaintiff asserts that the District of New Jersey, Trenton, New Jersey, is the venue because the events comprising this cause of action occurred concerning his insurance for his residence, car and their umbrella policy while he was residing at 6 Mahoras Drive, Ocean Township, NJ 07712 in Monmouth County. III. AMOUNT IN CONTROVERSEY The amount in controversy will be fully discussed after the Facts Common to All Counts of the Complaint, because those facts are necessary for its understanding. IV. STATEMENT OF THE CASE Plaintiff, pro se, also an attorney in the state of New Jersey, files this complaint against Defendants bringing this action for relief arising from the Defendants deceitful and surreptitious reduction of his insurance coverage leaving the Plaintiff with an unknowing gap of $200,000 per year in his liability coverage. Defendants’ actions were in violation of the New Jersey Consumer Fraud Act. (N.J.S.A. 56:8-1 et seq.) hereinafter, the “CFA” and were violations of the common law. In support thereof, Plaintiffs alleges as follows: V. FACTS COMMON TO ALL COUNTS OF THE COMPLAINT 1) Under the CFA - N.J.S.A. 56:8-2 provides: The act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 2 of 65 PageID: 2Case 3:16-cv 05274-BR -DEA Document 23-1 Filed 12/05/16 age 2 of 65 ageI : 458 Page 3 of 65 DeGennaro v. Geico, et al others rely upon such concealment, suppression or omission, in connection with the sale * * * or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby, is declared to be an unlawful practice. 2) The CFA applies to insurance (see Abbas v. Pennymac Corp. Docket No. A-3466- 13T2 - Decided July 2015 - no page reference - 2015 WL 4275962) 3) On or about the latter part of the year 2013, Plaintiff, who was insured by Geico auto insurance, entered into negotiations by phone with Geico for a comprehensive personal liability policy and an umbrella policy. 4) Plaintiff was told that in order to acquire the comprehensive personal liability coverage with an umbrella policy he would have to acquire a renter’s insurance policy with $10,000 contents and a minimum of $300,000 comprehensive personal liability coverage. 5) Plaintiff was also told if he purchased the aforesaid renters policy he would then qualify for a 1 million dollar umbrella coverage policy. 6) Plaintiff was also told if he purchased the aforesaid umbrella policy it would cover his auto insurance as well as his renters insurance. 7) Plaintiff purchased the aforesaid renters insurance (Policy #2659730) for coverage beginning on January 31, 2014, the aforesaid umbrella policy (Policy #P7129787) for coverage beginning on January 17, 2014, his auto insurance (Policy #4151150119) for the January 13, 2014 through July 13, 2014. 8) On or about January 21, 2014 plaintiff received a letter from Geico referencing his personal umbrella policy and thanking him for choosing Geico and which contain the following statement: “After careful review of your policy we have determined that you “may not ” [emphasis added] meet the required underlying liability limit of $300,000 for each property you own, rent or rent too own. If you are not carrying the Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 3 of 65 PageID: 3Case 3:16-cv 05274-BR -DEA Document 23-1 Filed 12/05/16 age 3 of 65 ageI : 459 Page 4 of 65 DeGennaro v. Geico, et al adequate limit, a gap of coverage could occur. In the case of a loss you would be personally responsible for the difference …………… “Failure to meet may result in the cancellation of your umbrella policy” 9) The letter of January 21, 2014, then continued by explaining that Plaintiff should take this opportunity to review his basic homeowner’s policy for compliance and that failure to meet the required underlying limits may result in the cancellation of his umbrella policy. The letter then further stated: “In order for us to continue your personal umbrella liability insurance policy please send a copy of your declaration page showing the required minimum limits. A return envelope has been enclosed for your convenience or you may fax a copy of the declaration page to 1-855-238-8055” 10) There was absolutely nothing wrong with the Plaintiff’s compliance nor the required limits nor would anything ever be wrong. 11) On or about January 30, 2014, nine (9) days after receiving the letter saying he should check his limits because there “may” be a problem, Plaintiff received an email from propertyquotes@geico.com thanking him for choosing ABIC for his rental needs and explaining that his coverage would become effective on January 31, 2014 and included $10,000 personal property and $300,000 personal liability. 12) On or about January 31, 2014 (the effective policy date) Plaintiff received another email from rentersmail@assurant.com stating they were glad he chose Assurant and transmitting the full copy of his renter’s insurance policy along with the Declaration Page. 13) The aforementioned Declaration Page, in fact, stated $300,000 “per occurrence” for the personal liability (though it did not provide an aggregate sum), and that coverage was beginning on January 31, 2014 and continuing through January 31, 2015. The premium for the $300,000 aspect of the coverage was $24.00, with a total premium $116.00 Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 4 of 65 PageID: 4Case 3:16-cv 05274-BR -DEA Document 23-1 Filed 12/05/16 age 4 of 65 ageI : 460 Page 5 of 65 DeGennaro v. Geico, et al 14) The policy and declaration page were accompanied by two cover letters each dated January 30, 2016. 15) The first letter was on the letterhead of Geico and Assurant Specialty Property stating: “Thank you for allowing GEICO Insurance Agency, Inc. to arrange for your new renters insurance protection. Assurant Specialty Property, a strategic partner with GEICO, will provide you with this valuable protection underwritten by American Bankers Insurance Company of Florida. 16) The second letter was on Geico letterhead explained that if Plaintiff also had Geico auto insurance a “multi-policy discount” would “automatically be applied” to the auto policy and that to review “all his discounts” on his Geico auto policy he could visit the website geico.com. Plaintiff never visited the website and did not want nor ever did set up an account on it. 17) On or about January 31, 2014 the premium charge of $116 was deducted from Plaintiff’s Chase Visa account completing the transaction. 18) On or about February 3, 2014 Plaintiff received an endorsement declaration for the Umbrella Policy with a cover page stating: “This endorsement declaration is the result of a recent change made to your umbrella policy. If payment is due, please remit before the due date. THE ATTACHED ENDORSEMENT REFLECTS THE FOLLOWING CHANGE (S): - Miscellaneous Change (s)” There was absolutely no explanation as to what change may have been made. The second page listed all of Plaintiff’s premiums classified by automobile, primary residence, and PLIGA surcharge for total premium of $166. In a separate column across from the premium charges it stated minimum limits. Across from primary residence it stated $300,000 under this minimum limits column. The minimum limits column had absolutely no reference to any gaps in coverage Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 5 of 65 PageID: 5Case 3:16-cv 05274-BR -DEA Document 23-1 Filed 12/05/16 age 5 of 65 ageI : 461 Page 6 of 65 DeGennaro v. Geico, et al thereby representing that all requirements had been met. Along with the PLIGA surcharge of $1.00, the second page listed the premium for the primary residence as $69. The Workers Compensation surcharge of $1.00 which was found on the Declaration Page dated January 31, 2014 was not on the endorsement declaration dated February 3, 2014 and did represent a “change”. 19) Since the Declaration Page that was being requested by the letter of January 21, 2014 had actually been issued and sent to Plaintiff ten (10) days after the letter requesting it, there seemed no reason to forward back Geico’s own Declaration Page. However, just to be cautious, on or about February 3, 2014, Plaintiff sent a Fax to Geico, at the number provided, referencing the letter of January 21, 2014, suggesting that he “may” not have the proper underlying liability coverage. 20) Said Fax contained the cover page dated January 30, 2014 which transmitted his full renter’s insurance policy which had, in fact, been issued. The FAX explained that the declaration page would not print out from the PDF file on Plaintiff’s computer and that “if this was not satisfactory to please contact him” [emphasis added]. That Fax specifically referenced: “Umbrella policy P7129787 - $300,000 Underlying Liability Geico rental insurance RIN2659730” And the Fax confirmation page confirmed that it had been received (“Result OK”). 21) On or about February 27, 2014, over three (3) weeks later, Plaintiff received the same form email from rentersmail@assurant.com that he had received on January 31, 2014 again stating they were glad he chose Assurant and claiming that they were transmitting the renter’s insurance policy. However no policy was attached. The only attachment to that email was a declaration page which stated $100,000 “per occurrence” and without explaining or listing any type of aggregate sum. The premium across from the total premium was $100. The premiums Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 6 of 65 PageID: 6Case 3:16-cv 05274-BR -DEA Document 23-1 Filed 12/05/16 age 6 of 65 ageI : 462 Page 7 of 65 DeGennaro v. Geico, et al included the PLIGA surcharge of $1.00 and the premium of $1.00 for Workmen’s Compensation. At the bottom of the form it reflects a change in the premium from $116 for a $16 credit bringing the new premium to $100. 22) This second set of correspondence which arrived approximately one month after the issued policy and declaration page had absolutely no mention that these minor changes in premiums were not the multi-discount premiums which Geico had boasted about earlier (see Paragraph 16) or regulatory changes such as a Workmen’s Compensation surcharge (Paragraph 18) or suggest that they have anything to do with gaps in coverage caused by any underlying problems with the insurance policy provided the Plaintiff on January 31, 2014 (again there were none nor did any problems ever occur). 23) The $100,000 “per occurrence” personal liability with “no” an aggregate sum was extremely misleading because it was in the context of the $300,000 personal liability policy already purchased and delivered to the plaintiff and Defendants’ implied representation was that they had the product he needed and they then sold it to him. 24) Also, Plaintiff as an attorney was familiar with his malpractice policies (and all his prior auto insurance policies, renters etc.) which, to the best of his knowledge, always included the aggregate sum so that the insured will know the extent of his coverage (i.e. the “per occurrence” language was always only meant as the upper limit on one event/accident, not the full amount of coverage). 25) All of the foregoing was also extremely misleading because there was never any explanation of the fact that coverage was being reduced or why (Note: such an explanation is required by law and in a manner required by law - See discussion infra). Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 7 of 65 PageID: 7Case 3:16-cv 05274-BR -DEA Document 23-1 Filed 12/05/16 age 7 of 65 ageI : 463 Page 8 of 65 DeGennaro v. Geico, et al 26) Geico never answered his FAX dated February 3, 2014 requesting a response if anything was wrong. 27) Consequently, Plaintiff had no reason to think that the Defendants would ever claim there was a gap in his coverage. 28). Without said explanation, in the context of insurance policies totaling approaching two (2) million dollars a few dollars of premiums savings or added, one way or the other, would not alert a reasonable consumer that anything significant was going on, and a reasonable consumer would not keep going back an rechecking all the paper work that had issued with his policy that had in fact been issued. 29) Plaintiff never received any mailings or communication of any type explaining clearly and unequivocally that his Renter’s Insurance Policy was alleged to not meet the $300,000 minimum liability requirements necessary to support the Geico umbrella policy. 30) When Plaintiff renewed his policy for the following year (January 31, 2015-16) the Declaration Page dated November 30, 2014 repeated the $100,000 per occurrence language without the aggregate and the premium total dropped from $100 to $99 because PLIGA surcharge of $1.00 was removed. 31) Payment was made on the premium of $99.00 on January 12, 2015 through Chase Visa. 32) On or about January 12, 2015 Plaintiff received an email from Assurant which was a confirmation of coverage but also stated it was “a matter of information only and conferred no rights on the holder”. It listed personal liability as $100,000 without the “per occurrence” language. However in the context of the Declaration Page which had recently issued and was Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 8 of 65 PageID: 8Case 3:16-cv 05274-BR -DEA Document 23-1 Filed 12/05/16 age 8 of 65 ageI : 464 Page 9 of 65 DeGennaro v. Geico, et al given him with the $100,000 per occurrence language in it, the absence in this document went unnoticed. 33) Since Plaintiff was renewing his policies he certainly did not expect any changes to significant terms nor did he notice any when the same type of documentations from the previous year arrived. 34) When Plaintiff renewed his policy for the following year (January 31, 2016-17) the Plaintiff received (December 10, 2015) the same type documentations: The Declaration Page with the $100,000 per occurrence with no the aggregate sum, and the email from Assurant which was a confirmation of coverage (but was a matter of information only and confer no rights on the holder) and which listed personal liability as $100,000 without the per occurrence language. [Note. The premium total rose back to $100 from $99 because PLIGA surcharge of $1.00 was added back]. 35) During the beginning of January 2016, Plaintiff was reviewing his paperwork on his insurance policies. He noticed the incongruities. Up until this time since he was merely renewing the policies which had already issued he had never considered a possible issue with his coverage. The policies issued were those Geico said were necessary to accomplish Plaintiff’s goal of the one (1) million dollar umbrella. 36) Plaintiff called and questioned the documents and was told that he had a $200,000 gap in coverage for which he would be personally liable. 37) Plaintiff complained and Defendants sent the following explanation by email from a customer service representative on January 19, 2016: Good Morning Mr. DeGennaro, Sorry it took so long for me to get back with you. The $300,000.00 liability was added, back when you purchased the policy. After the underwriters went over the Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 9 of 65 PageID: 9Case 3:16-cv 05274-BR -DEA Document 23-1 Filed 12/05/16 age 9 of 65 ageI : 465 Page 10 of 65 DeGennaro v. Geico, et al questionnaire and a business was ran on the premises the liability was canceled. At that time having a business on the premises where you live would have disqualified you from the liability of $300,000.00. That has since changed. You were refunded 16.00 back 02/24/14 and a new declarations page was sent. When we last spoke I’ve increase the liability to $300,000.00 and your new premium is 16.78. I apologize for any inconvenience 38) This was not true since at the time Plaintiff purchased the policy and up until the time he complained in January of 2016 any business activities would have been an exclusion to the policy under Section II thereof (and there were no business visitations on the premises in any event) . 39) Said email of January 19, 2016 from the customer service representative, is an admission that Plaintiff had gone 2 years without the coverage he purchased and had a $200,000 gap per year. 40) The $200,000 gap was to the Defendants advantage since it fell in a very vulnerable area (freeing them from liability) because the range between $100,000 and $300,000 is a likely place to have a claim in any serious accident. 41) The email also made no attempt to even claim that a notice of explanation concerning the change in coverage was sent to Plaintiff but instead it relies on an unexplained $16 credit to be the notice even after a previous letter explained discounts are given anyway. Therefore the email is also an admission that no other type of notice was sent (other than the ambiguous $100,000 “per occurrence” Declaration Page was sent after the original Declaration Page which did in fact confirm the necessary $300,000 coverage). 42) Also regulatory credits are also being given and/or added to the account which conceal and small credits give on the policy. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 10 of 65 PageID: 10Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 10 of 65 PageID: 466 Page 11 of 65 DeGennaro v. Geico, et al 43) Defendants actions prevented Plaintiff from seeking adequate coverage in the marketplace for that two-year period and instead he had deficient insurance coverage represented by a $200,000 gap in his liability coverage by the Defendants during that period of time. 44) Plaintiff’s deficient coverage would have continued year after year had he not realized what was going on. 45) Plaintiff filed a complaint with the New Jersey Department of Banking and Insurance (hereinafter referred to as “NJDOBI”) to address the reduction of his comprehensive personal liability coverage from $300,000 to $100,000 and the NJDOBI investigated the matter. (See Certification of No Other Actions at the end of this complaint). 46) During the resulting investigation to Plaintiff’s complaint referred to in Paragraph 45, the NJDOBI was informed by ABIC that a letter was emailed to Plaintiff explaining that his comprehensive personal liability coverage would be reduced from $300,000 to $100,000 and a updated declaration page would be sent under a separate cover. 47) During its investigation, The NJDOBI was informed by ABIC that its records show that the email referred to in Paragraph 46 was included in a bulk email that was also sent to multiple insures. 48) During its investigation, The NJDOBI was informed by ABIC that the letter referred to in Paragraph 46 was generic. 49) During its investigation, the NJDOBI received from ABIC a “Sample Letter”. 50) This “Sample Letter”, referred to in Paragraph 49 did not have any name or address nor policy number referenced. Nor did it explain anything about why the anonymous person receiving it was ineligible for the $300,000 liability coverage. It did not fill in the brackets of the Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 11 of 65 PageID: 11Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 1 of 65 PageID: 467 Page 12 of 65 DeGennaro v. Geico, et al ineligible field. It merely had the following language in the body of the sample letter which remained unfilled: “……..applicants who have [INELIGIBLE FIELD] are not eligible for the $300,000 liability coverage…………” Defendants did impute a date of February 24, 2014 to this blank anonymous form letter, a date which would suggest it was sent at that time of the declaration page to Plaintiff even though there was no information about the Plaintiff. 51) No letter of any type, regarding the change of terms of the renters policy already issued by ABIC, including this sample form letter referred to in Paragraph 49, was ever sent to Plaintiff by any means either in accordance with law or otherwise. 52) The NJDOBI was informed by ABIC that ABIC does not have confirmation of the email referred to in Paragraph 46. 53) Plaintiff did not receive the email transmitting the letter referred to in Paragraph 46. 54) Plaintiff did not receive the letter referred to in Paragraph 46. 55) The NJDOBI was informed by ABIC that they do not have a proof of mailing for the letter referred to in Paragraph 46. 56) The NJDOBI was informed by ABIC that they do not have a certificate of mailing for the letter referred to in Paragraph 46. 57) The comprehensive personal liability coverage policy had, in fact, been issued to Plaintiff beginning in January 2014 and was in full force. 58) Under the Uniform Electronic Transactions Act 12A:12-3 (e), electronic communications are subject to other applicable substantive law. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 12 of 65 PageID: 12Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 12 of 65 PageID: 468 Page 13 of 65 DeGennaro v. Geico, et al 59) Under Title 11 of the New Jersey Administrative Code there are notice requirements applicable to Renewal, Cancellation, And Nonrenewal of Commercial And Homeowners Insurance Policies. 60) ABIC is in violation of legal requirements regarding the reduction of Plaintiff’s comprehensive personal liability coverage from $300,000 to $100,000. 61) ABIC is in violation of legal requirements regarding notice concerning the reduction of the comprehensive personal liability coverage from $300,000 to $100,000. 62) Under Title 11 Subchapter 20, Section 11:1 - 20.2 (i) no notice of nonrenewal or cancellation shall be valid unless sent; 1. By certified mail; or 2. By first-class mail if at the time of the mailing the insurer has obtained from the post office department a date stamped proof of mailing showing the name and address of the insured and the insurer has retained a duplicate copy of the mail notice. 63) Violation of the notice requirements imposed by law and/or regulations, under Title 11 is sufficient to establish unlawful conduct under the CFA and intent need not be shown (i.e. strict liability, Sears vs. Cox 138 N.J. 2, 19 (1994)). 64) Paraphrasing Sections I and II Subsection 5 and Subsection 7, of the Renters Insurance Policy (which had in fact been issued) Cancellation and Nonrenewal must be done by: (1) Certified mail; or (2) First class mail if we have obtained, from the U.S. Post Office, a date stamped proof of mailing showing the insurer’s name (unless certain conditions occur, none of which are applicable to the instant matter) and there are no provisions for changing the terms. 65) There was no certified mailing nor a date stamped proof of mailing showing the name and address of the insured. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 13 of 65 PageID: 13Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 13 of 65 PageID: 469 Page 14 of 65 DeGennaro v. Geico, et al 66) ABIC is in violation of its own contractual requirements regarding the reduction of the comprehensive personal liability coverage from $300,000 to $100,000 67) Defendants Assurant and Geico cooperated with Defendant ABIC in the violation of applicable laws and/or regulations regarding changing the liability coverage of Plaintiff’s Renters Insurance Policy. 68) Per the aforesaid, Plaintiff alleges that at least the following actions establish the Defendants were scheming to place a $200,000 gap, per year, in his liability coverage which would keep being renewed year after year: (A) The forms used: (i) the non-aggregate Declarations Pages; and (ii) the Umbrella Policy’s endorsement declaration’s misleading reference across the page to the $300,000 minimum without a reference to any supposed gap which made it appear as though the minimum had been met. (B) The timing of the forms: (i) sending a letter stating Plaintiff “might have a problem” 9 days prior to issuing the policies with the Declaration Page stating $300,000 per occurrence; (ii) gradually changing $300,000 per occurrence to $100,000 per occurrence which appears to be an aggregate of $300,000 since the Plaintiff had already been told he was sold the necessary coverage; (iii) Never sending back a response to Plaintiff’s Fax asking if they needed anything other than the cover page issuing the policy; (C) Never sending any type of communication actually explaining there was a gap. (D) The violation of legal notice requirements even “if” they had sent the anonymous form letter which merely contained a date during the time period and no other identifying information concerning the Plaintiff, such as the policy number, or why he was supposedly ineligible for coverage (E) The improper claim that the reduction of coverage concerned business activity when any business activity was an exclusion under Section II anyway and no business persons ever visited the premises. 69) The aforesaid scheme was knowingly, purposefully, and maliciously planned prior to the selling of Plaintiff’s automobile, umbrella and renter’s policy. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 14 of 65 PageID: 14Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 14 of 65 PageID: 70 Page 15 of 65 DeGennaro v. Geico, et al 70) In the alternative to Paragraph 69, if the aforesaid scheme was not planned “prior” to the selling of Plaintiff’s automobile, umbrella and renter’s policy, it was knowingly, purposefully and maliciously planned and instituted “after’ the selling of said policies. 71) Plaintiff alleges that the aforesaid actions by Defendants explained in the preceding Paragraphs were: (A) a material misrepresentations of both presently existing facts and/or past facts; (B) done with knowledge or belief by the Defendants of their falsity; (C) done with the intention to deceive the Plaintiff so he would rely on the false facts, and (D) were malicious 72) The deceitful actions of the Defendants were trying to accomplish, among other things, the following: (a) Keeping Plaintiff as a customer and collecting premiums on all three policies even though they were deficient; and/or; (b) Creating a paper trail in order to fight a claim and/or deny a $200,000 worth of recovery or for a settlement for a lesser amount; and/or; (c) Allow an argument that even if they were in technical violation of the CFA through improper notice of change of terms, any damages were essentially insignificant because the Plaintiff was aware of the defect and chose to accept minor savings in premiums rather than full coverage; 73) Both the paying the aforesaid premiums for deficient coverage and also the loss of insurance protection constitute ascertainable losses proximately resulting from Defendants fraud, deceit and unconscionable commercial practices under the CFA, and violations under the common law. 74) Plaintiff did not know of the aforesaid false information and justifiably relied upon the aforesaid misrepresentations which proximately resulted in damage to him. 75) Defendants actions constituted fraud and deceit under the CFA as well as unconscionable commercial practices under the CFA. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 15 of 65 PageID: 15Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 15 of 65 PageID: 471 Page 16 of 65 DeGennaro v. Geico, et al 76) Under the common law Defendants actions constituted fraud and deceit, interference with prospective economic advantage, intentional breach of contracts, breach of a fiduciary duty, and breach of contract. 77) The Plaintiff would have never considered accepting such a $200,000 gap in his insurance in exchange for such a minor savings in his premiums. 78) Plaintiff paid a total of $2,356.30 in premiums during the two years of 2014 - 2015 and 2015 - 2016 itemized as follows: Automobile premiums (each of 6 months duration) January 13, 2014 to July 13, 2014 = $467.10; July 13, 2014 to January 13, 2015 = $455.20 January 13, 2015 to July 13, 2015 = $456.30; July 13, 2014 to January 13, 2016 = $471.70 Total Automobile Premiums = $ 1,850.30 Umbrella coverage: January 17, 2014 to January 17, 2015 = $166.00 January 17, 2015 to January 17, 2016 = $141.00 Total Umbrella Premiums = $ 307.00 Renters Insurance January 31, 2014 to January 31, 2015 = $ 100.00 January 31, 2015 to January 31, 2016 = $ 99.00 Total Renters Premiums = $ 199.00 __________ Total Premiums $ 2,356.30 79) Though the automobile policies were linked to the umbrella coverage without a gap in coverage, the automobile policies and the umbrella polices were deficient because the actual ramifications of these automobile policies and umbrella polices resulted in Plaintiff’s unknowingly being linked into the $200,000 gap on the renter’s side of the umbrella exposing him to severe liability and rendering the automobile and umbrella polices unsuitable in addition to the renters policies. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 16 of 65 PageID: 16Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 16 of 65 PageID: 472 Page 17 of 65 DeGennaro v. Geico, et al 80) Defendants corrected the gap in coverage when Plaintiff realized the situation and Plaintiff has now purchased insurance policies from a new company. 81) As a direct and proximate result of the Defendants conduct Plaintiff paid insurance premiums for deficient coverage, was exposed to financial vulnerabilities, and was prevented from seeking and acquiring adequate insurance in the marketplace. III. AMOUNT IN CONTROVERSY (Continued) Plaintiff begs the Court’s indulgence for this lengthy explanation of the Amount in Controversy. Plaintiff is anticipating that Defendants will file for removal based on the amount. Though it may not be readily obvious, Plaintiff’s theory of valuation greatly exceeds the jurisdictional amount. Plaintiff will frame his arguments to the New Jersey Consumer Fraud Act (the “CFA”) one of the strongest laws protecting consumers in the country and which also allows treble damages and attorney fees, and then will return to the common law at the end of the discussion. In that regard, it should also be noted that under the common law in New Jersey, the New Jersey Supreme Court held that an insured may recover “more” than the policy limit for a liability insurer's bad-faith, Rova Farms Resort, Inc. v. Investors Insurance Co., 65 N.J. 474, 323 A.2d 495 (1974), Under the CFA the New Jersey Supreme Court explained in Gennari v. Weichert Co. Realtors, 148 NJ 582, at 604, 691 A.2d 350 (1997) “The history of the Act is one of constant expansion of consumer protection.” Also, since this case deals with insurance, Plaintiffs arguments are consistent with the New Jersey Supreme Court in Furst v. Einstein Moomjy, 860 A. 2d 435 at 441, 182 NJ 2 (2004) which held that the Consumer Fraud Act “is remedial legislation that we construe liberally to accomplish its broad purpose of safeguarding the public.” Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 17 of 65 PageID: 17Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 17 of 65 PageID: 473 Page 18 of 65 DeGennaro v. Geico, et al Plaintiff is alleging that damages exceed the premium amounts paid for deficient coverage: That there is a “value to being insured”, which is equivalent to the danger the consumer was exposed to even though no claim was necessary for the underlying funds. This is similar to the expectation theory of contract damages, only in this case and other cases regarding the public welfare, it is not only much more important, but its application is part of the “constant expansion” of the CFA which the New Jersey Supreme Court explained in Gennari. Though the premiums paid for the deficient coverage are certainly an ascertainable loss, in cases of misrepresentation either the out-of-pocket loss or a demonstration of loss in value will suffice to meet the ascertainable loss hurdle which “will set the stage for establishing the measure of damages”. See Thiedemann v. Mercedes-Benz USA 183 N.J. 234, 872 A. 2d 783 at 792 (2005). The Defendants will undoubtedly argue that the damages are limited to the premiums that were paid because no claim for the underlying insurance proceeds were actually made. In response, Plaintiff points to the fact that under the rulings of the highest courts in New Jersey any such a claim for underlying proceeds is irrelevant to set the stage for the measure of damages under the CFA. There are two cases, both by the New Jersey Supreme Court, that must be noted in this regard, and also illustrate another important concept in this case which will also be discussed. The first is Bosland v. Warnock Dodge Inc. 197 N.J. 543, 964 A.2d. 741 at 750 (2009), in which the court ruled that it did not matter whether a consumer did or did not make a demand for a refund before bringing suit, the Court, stated: “the fact that the Plaintiff could have secured complete relief in no way diminishes the fact that she sustained an immediate quantifiable loss when she paid the fee representing the over-charge”. Therefore securing complete relief (obtaining a refund) is not a bar to a CFA action. The Bosland court went on to say: “The CFA does not demand that a plaintiff necessarily point to an actually Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 18 of 65 PageID: 18Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 18 of 65 PageID: 474 Page 19 of 65 DeGennaro v. Geico, et al suffered loss or to an incurred loss, but only to one that is ascertainable, supra at 750. Plaintiff asserts that his realizing the wrongdoing about his insurance policies, and having the policies corrected is analogous to the refund situations in Bosland. In the second case, D’Agostino v. Maldonado 216 N.J. 168, 78 A. 3d 527 at 545 (2013). The New Jersey Supreme Court granted the Plaintiff access to all forms of CFA relief even though the Plaintiff had already achieved satisfaction through the lower court’s equitable powers and held: “the existence of an ascertainable loss should be determined on the basis of a plaintiff’s position following the defendant’s unlawful commercial practice”. Also, in Abbas v. Pennymac Corp. (Docket No. A-3466-13T2 - Decided July 2015 - no page reference - 2015 WL 4275962) the New Jersey Appellate Division found that defendant failed to forward the insurance proceeds to plaintiff in a timely fashion and therefore the funds became the ascertainable loss the moment the funds were wrongly withheld. The Abbas Court went on to say that the defendant’s arguments of later payment would leave the door ajar for unconscionable commercial practices as long as the wrongdoer can close the door before the victimized consumer initiates legal action. Therefore, the highest courts in New Jersey (Bosland, D’Agostino and Abbas) have turned a very deaf ear to an “I got away with it defense” by the wrongdoer. In all of the aforementioned cases, by the highest courts in New Jersey, the wrongdoers are unable able to utilize a defense based upon the fact that resolution of the wrongdoing had been completed/corrected: Regardless of whether that correction occurred through the Plaintiff’s own actions (Bosland = refund), the Court’s remedy (D’Agostino = equitable relief), or defendant’s later attempts nullifying their conduct (Abbas = later payment). The door was shut upon them. Plaintiff asserts that random circumstances intervening i.e. Plaintiff realizing the insurance scheme and demanding it be corrected, is analogous to the refunds, equitable relief and later Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 19 of 65 PageID: 19Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 19 of 65 PageID: 475 Page 20 of 65 DeGennaro v. Geico, et al payments in Bosland, D’Agostino and Abbas. Plaintiff now offers the following hypothetical situation: A consumer hires a tour guide who runs a business touring the desert. The tour guide represents that he will provide all supplies as part of the purchase price. The tour guide gets lost but is able to put in a call to rescuers in a hope that they can find them. The tour guide, through deceit, steals all the water secludes himself waiting for signs of the rescuers. The rescuers eventually arrive in time and both survive. Hiding the water is an unconscionable practice (also note: the CFA applies to acts “subsequent” to sale). The value of the water is not the purchase price of a bottle of water (one dollar) but the value of water during the deception (under the circumstances). Once again, the wrongdoer is unable to utilize a defense based upon the fact that resolution of the wrongdoing had been completed/corrected. Fortuitous intervening circumstances (rescuers) are no different than a refund, equitable relief, later nullification (Bosland, D’Agostino and Abbas): Stealing someone’s insurance coverage is analogous to stealing someone’s water in the desert, and fact that fortunately neither was ultimately needed can’t help the wrongdoer under the CFA as the courts have ruled in Bosland, D’Agostino and Abbas. The other key to the evaluation is the fact that “value” can fluctuate enormously given the circumstances. The valuation of the wrongdoing is made “during” the period of wrongdoing, as in Bosland, D’Agostino and Abbas. The tour guide who stole the water can’t offer the plaintiff “one dollar” in compensatory damages (normal purchase price of a bottle of water) and an additional “two dollars” in punitive damages and claimed that he has satisfied the obligation under the CFA. The value of stolen water in the desert skyrockets. An analysis of “value” after- the-fact, once it is known that the rescuers have arrived, would violate the rulings of the highest courts in New Jersey. In Correa v. Maggiore, 196 N.J. Super. 273, 284 (App. Div.1984) The court stated that the appropriate measure of damages in a fraud or concealment case is a perplexing problem and Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 20 of 65 PageID: 20Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 20 of 65 PageID: 476 Page 21 of 65 DeGennaro v. Geico, et al has been the source of much litigation and concern. In terms of valuation, there are two basic theories. The court went on to explain "out-of-pocket" principle, recovery is permitted for the difference between the price paid and the actual value of the property acquired, the "benefit-of- the-bargain" rule allows recovery for the difference between the price paid and the value of the property had the representations been true. Plaintiff will first discuss the “benefit of the bargain” theory as it applies to the CFA. In Furst the court held that the innocent party has a right to damages “based on his expectation as measured by ……. The loss of value to him caused by the breaching party.” Furst concerned a plaintiff who purchased a carpet on sale but was granted an award sufficient for him to go out on the market and purchase a replacement carpet (benefit of his bargain) rather than merely have a refund of the sale discount price (out of pocket). The Furst court looked to the fact that the consumer was led away from further shopping so refused to grant just a refund, Furst supra at 444. In the instant matter Plaintiff was also unable to shop to purchase proper insurance from other companies and, had he not caught on, he would have continued without proper insurance year after year: All the time continuing to pay Defendants premiums for the fraudulent deficient insurance. In Furst the court explained the CFA is “construed liberally to accomplish its broad purpose of safeguarding the public.” This evaluation is about insurance which has an enormous societal importance. In a capitalist system, marketplace factors determine price/replacement values but they do not establish the actual value to the consumer. Consider a blind person deceived by a merchant who misrepresents the training of a seeing-eye dog. A blind person’s seeing-eye dog’s value is not its purchase price or replacement value: It’s the value of having the dog function correctly so that they do not have to carry danger through a period of time. This is an actual consumer value Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 21 of 65 PageID: 21Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 21 of 65 PageID: 477 Page 22 of 65 DeGennaro v. Geico, et al which is reasonable, legitimate and accurate, ignoring personal subjectivity and/or sentimentality. Under the benefit-of-the-bargain" rule one would need to determine the value of the property had the representations been true. The representation made at the time of sale was that the insurance policy was suitable proper and complete (without a gap equaling a potential disaster). To measure the value correctly you must start at the true value of insurance: The value of insurance is the value a reasonable person would attribute to having access to their funds in the case of an emergency. Premium prices are not accurate for an analysis of value because insurance greatly effects public welfare and is an industry which, by necessity, is highly regulated by the government skewing purchase prices. For example: The polio vaccine was free, but its value was not zero. Defendants will probably try to argue that forcing a consumer to carry a dangerous situation through a period of time represents no economic loss if the situation was resolved without the dangerous consequences coming into fruition. To look at a potential danger after-the- fact is only to say that the danger “no longer exists”. That is completely different from saying there was “never a value” to being free from the danger. This is illustrated by fact that people would be willing to pay a price to save themselves, or loved ones, or other citizens from such an “unknown” risk “during” the exposure. A “no longer exists” defense ignores the fact this is the CFA not the common law. This is an action by the Attorney General’s Office which through the 1971 Amendment, is being enforced by a private attorney [L. 1971 c. 247 § 7, codified at N.J.S.A. 56:8-19] and therefore this is an action which is prosecutorial in nature. A prosecution in which there is no “I got away with defense” and which the wrongdoing is valued “during” the period of wrongdoing not afterward and regardless of resolution, per the highest courts in New Jersey (Bosland, D’Agostino and Abbas). Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 22 of 65 PageID: 22Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 2 of 65 PageID: 478 Page 23 of 65 DeGennaro v. Geico, et al There is another consideration critical to this case: Due to the wrongdoing of Defendants, the Plaintiff was “unaware” that he had a $200,000 gap in his insurance (for each of two years) for which he would be was personally liable and would have kept renewing the dangerous polices increasing the odds that there would be a need for the protection. Also, the gap was falling in a very vulnerable location in terms of liability (Defendants are risk allocation experts). The average consumer could easily be financially crushed by unexpectedly learning they are having $200,000 worth of immediate debt thrust upon them due to lack of insurance resulting in everything from moving out of their home to bankruptcy In terms of safeguarding the public welfare, consider a consumer who is a security guard and buys a phony (therefore not a products liability issue) bullet proof vest, only to find several years later that is not bullet proof. Or the blind consumer who purchased the seeing-eye dog that was not trained as well as was represented. The security guard or the blind consumer might go a considerable time before realizing that he had been deceived. These consumers would have spent a period of time in danger though that would not constitute an action for personal injury (or even for emotional distress because once they learn of the problem they are no longer in danger and have no distress). However, an accurate assessment of the “value deprived” from them would not be solved by offering them merely the cost in dollars necessary to purchase a replacement vest or dog at a later time: The value of an item of safety is a product of its function. The court in Thiedemann, supra at 798, ruled out subjective value as it pertained to ascertainable loss, but that was only in terms of deciding whether an “ascertainable loss” had occurred. Once an ascertainable loss has been determined, it “sets the stage”, for valuing the loss, Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 23 of 65 PageID: 23Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 23 of 65 PageID: 479 Page 24 of 65 DeGennaro v. Geico, et al Thiedemann, supra at 798. In this case there are premiums paid which would directly satisfy the ascertainable loss requirement however that is a very small part of Plaintiff’s argument. There is a distinction between articles that have an “intrinsic” value and those that have an “integrated” value. An original oil painting by Rembrandt has an “intrinsic” value (a value formed at the time of its creation) but the Ruby Slippers from the Wizard of Oz have an integrated value (a value which has integrated the surrounding circumstances). It’s not subjective to analyze the value of something “under the circumstances”: Appraisals of artifacts are accurate from a reasonable objective point of view just as jury verdicts are. Both are intelligent assessments of situations under the circumstances but do not involved the subjective feeling of the victim. To go back to the water in the desert example in which surrounding circumstances determine value of needed water, there is simply an “integrated value” to having a bullet proof vest or a Seeing Eye dog “function” for the entire period of time of which it was purchased. This is independent of an emotional loss or a personal injury. Therefore, a proper evaluation of the value taken would be what the reasonable consumer would attribute to, for example: (a) having a functioning seeing-eye dog during the period of time it is needed; (b) a functioning bullet proof vest during the time it is needed; (c) access to water in the desert during the period of time it was needed; or as in this case (d) access to a proper insurance coverage during the term of the policy. Any analysis of the value deprived cannot ignore the time that the consumer was placed into danger without a properly functioning article. It is a question value under the surrounding circumstances. To the reasonably consumer the value of insurance is tantamount to the value of remaining solvent. This is not a case of overpaying for widgets. This is the public’s welfare. In Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 24 of 65 PageID: 24Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 24 of 65 PageID: 80 Page 25 of 65 DeGennaro v. Geico, et al Furst, supra at 442, after emphasizing public safety, the New Jersey Supreme Court held that the innocent party has a right to damages “based on his expectation as measured by ……. The loss of value to him caused by the breaching party” citing to the Restatement (Second) of Contracts Sec. 347a 1988. Note the language “to him” when referring to the loss of value. It must be viewed from the perspective of the value “to” the reasonable consumer whether blind or as in the instant matter, being forced to be uninsured. Plaintiff is now arguing that in administering the CFA’s broad purpose of safeguarding the public, as stated by the New Jersey Supreme Court in Furst, supra at 441, there are elements of value inherent in items and services that are offered to the public for their safety and welfare: A value that cannot be eradicated after-the-fact because the danger never actually resulted in personal/property injury. This is analogous to the tour guide that steals the water in the desert: Rescuers saving the consumer means only that water is “no longer” a problem, not that it never had a value: a value determined “under the circumstances”. In this case the inherent value of safety was the protection afforded by insurance. Under the highest courts in New Jersey (Bosland, D’Agostino and Abbas) resolution/ correction of the problem merely shuts the door and stops the time clock before valuation begins. Because of the “unknowing” condition of the consumer, this case contains a somewhat unique component, and that is the fact that Plaintiff actually received a “negative value” in exchange for his premium payments i.e. a value less than zero. Negative valuation of assets is nothing new in accounting or in law and certainly anyone who purchases real estate and inherits environmental cleanup problems through the fraudulent misrepresentations of the seller could easily find themselves with a “negative value”. Such an asset could easily be “less” than Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 25 of 65 PageID: 25Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 25 of 65 PageID: 481 Page 26 of 65 DeGennaro v. Geico, et al worthless. Another example of a negative value is the fraudulent sale of a business with undisclosed legal claims outstanding. In terms of establishing a value, a “knowing” consumer might be willing to buy the diminished coverage at a reduced price because the automobile side of the equation with the umbrella was intact. But that analysis is meaningless because that consumer is “knowingly” buying the diminished coverage. An unexpected $200,000 debt inserted into the unknowing consumer’s life could result in everything from moving out of their home to bankruptcy thereby rendering the value of such a policy beyond worthless and actually giving it a “negative value”. If the analysis ignores the negative value, it would draw an imaginary line at zero and protect wrongdoer which contravenes the New Jersey Supremes Court’s holding in Furst that the CFA has a broad purpose of safeguarding the public. To measure the negative value correctly the question becomes the value of a policy that “links” an “unknowing” innocent person to a potential disaster. Though emotional losses were generally not recoverable under the CFA because they were considered one step removed from the purchase of the merchandise, under the recent case of Ferguson v. Jonah (Docket L-5473-12) (2014) (a case concerning homosexual counseling), the court allowed emotional damages under the CFA because they were directly arising from the fraud. Therefore, Plaintiff argues emotional losses would be included because protection from emotional turmoil is precisely what the consumer is purchasing when they purchase insurance. Under the benefit-of-the-bargain approach the Plaintiff’s recovery is set by measuring from a beginning point at the premiums paid and moving to the value of the property had the representations been true i.e. a suitable and complete policy. The value of insurance is the value a reasonable person would attribute to having access to their funds in the case of an emergency Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 26 of 65 PageID: 26Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 26 of 65 PageID: 482 Page 27 of 65 DeGennaro v. Geico, et al which is not only the $200,000 but the preclusion of the financial calamity and disarray of having $200,000 worth of debt expectantly thrust into the consumer’s life. One buys insurance because one wants protection, and the protections certainly extends to all the financial consequences of “unknowingly” not having part or all of it, (including emotional losses). Protection is the commodity being purchased: Its value is the exposure it resolves. As to a jury determination, Plaintiff asserts that in actuality, a reasonable jury would not award an intermediary amount below the $200,000 gap in the value each year. What reasonable consumer would want “any gap” in their coverage (or be without water in the dessert) and what reasonable jury would force them to carry it? The fact of the matter is that in this case, the reasonable value of carrying such a gap in insurance is well beyond the $200,000 gap per year because of the financial disarray. The reasonable jury would value the award as the $200,000 gap in insurance plus all the financial consequences of the resulting calamity including emotional losses. This is particularly true when the consumer is unaware of the problem and therefore denied the ability to purchase proper coverage in the marketplace from other companies as the wrongdoers did in this case. As to the “out-of-pocket theory” under the CFA, under Correa, supra at 284, the recovery is permitted for the difference between the price paid and the actual value of the property acquired. This produces essentially the same result as discussed under the benefit-of-the-bargain discussion when you consider the negative value. A consumer purchases insurance for protection, not the calamity of the $200,000 gap per year, with its resulting consequences including emotional losses. The Defendants will undoubtedly argue that none of this actually resulted. However, these were eight (8) mature completed transactions with premiums paid and the evaluation under Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 27 of 65 PageID: 27Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 27 of 65 PageID: 483 Page 28 of 65 DeGennaro v. Geico, et al the CFA is not about out-of-pocket loss, but assigning a value to what the Plaintiff was denied regardless of resolution (Bosland, satisfaction through refund; D’Agostino, satisfaction through equitable remedy; and Abbas, satisfaction through Defendant insurer correcting its wrongdoing). Once the Defendants actions blocked access to the funds, they became like the tour guide who stole the water “in the desert”: The value of blocking access to the insurance proceeds was the value of all the financial losses that may have resulted from the funds being blocked plus emotional losses under Ferguson. Under the case law of the highest courts in New Jersey the CFA valuation is made “during” the period of wrongdoing regardless of resolution (Bosland, D’Agostino and Abbas). Defendants will probably want to enter evidence in the form of statistics that during the period of the wrongdoing an accident would “probably” not occur and therefore the any applicable value should be reduced proportionately. However, this isn’t negligence, it is deceit, and more importantly it is the CFA. Plaintiff asserts that as to articles of public safety, any proportionate reduction would be against public policy. The reasonable blind consumer wants and purchases his proper dog, not a mathematician explaining the odds of whether or not he would have broken his neck with the wrong one. Statistical probabilities presented after-the-fact are irrelevant to a consumer’s valuation of their item of safety. They also are beyond the scope of the consumer’s knowledge during the period of their ownership in question. To be focusing on a mathematical analysis would be so sterile as to turn its back on the consumer population in favor of protecting the wrongdoers and is contrary to New Jersey’s Supreme Court’s desire in Furst to safeguard the public. This is true whether it concerns, bullet proof vests, seeing-eye dogs, water in the desert, or insurance policies that expose the consumer to a financial calamity. Expert testimony offered concerning probabilities of an accident is against public policy because it will Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 28 of 65 PageID: 28Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 28 of 65 PageID: 484 Page 29 of 65 DeGennaro v. Geico, et al motivate Defendants to attempt such schemes because they are the statisticians planning them and will build in profit knowing there will be a few times when they get caught. To allow this would be a little like allowing a defendant to force the consumer into a game of Russian roulette, and then arguing after-the-fact: “Well 5 out of 6 of the chambers were empty.” The New Jersey Supreme Court specifically ruled that the consumer’s valuation is made from the point of view of that which is “to him” (Furst, supra at 442 citing to the Restatement (Second) of Contracts Sec. 347a 1988) This lead to one of the most important considerations whether it applies to the CFA or the common law. This is an age of computers. The entire student population of the United States relies on complete accuracy of data collection in the form of scanning answers to the Scholastic aptitude test with critical results. Sophisticated computers can easily accomplish such a goal when such a goal is desired. Crosschecking information is merely an electronic impulse which can be repeated to the point where mistakes are virtually nonexistent and those few mistakes could be solved through return verification by the consumer. What happens when the intellectual elite are armed with the most sophisticated computer technology and unleashed against the public? Insurance companies are risk allocation experts, and they also control the forms used and the communications which constitute the relationship: All of which can be manipulated from an evidentiary point of view prior to litigation. Even just five situations like the one in this case involving the Plaintiff would result in $1 million savings through denying claims. Geico insures more than thirteen (13) million auto policies alone (www.geico.com/about/corporate/at-a-glance/). Insurance companies are the most sophisticated companies at risk allocation and can determine where to create coverage gaps when they want. The gaps can be spread out across the country in between millions of policies and the victims Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 29 of 65 PageID: 29Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 29 of 65 PageID: 485 Page 30 of 65 DeGennaro v. Geico, et al would never know: For example, in State Farm Mut. Automobile Ins. Co. v. Campbell (01- 1289) 538 U.S. 408 (2003) 2001 WL 1246676, at *15, there was testimony indicating that “State Farm’s actions, because of their clandestine nature, will be punished at most in one out of every 50,000 cases as a matter of statistical probability,” Insurance companies can save millions upon millions of dollars being highly motivated to create such gaps. They can pick and choose when to fight and when to just say “sorry for the mistake” when they get caught. They have nothing to lose because if the valuation is not made from a “stealing water in the desert” perspective, because a premium orientation (even threefold) is miniscule compared to the profits to be gained through the overall scheme. Most of all, these betrayals are one of a fiduciary relationships. The aforesaid arguments concerning public safety and welfare are even more important when applied to insurance companies. An insurance company owes a duty of good faith to its insured in processing a first-party claim. Pickett v. Lloyd’s, 131 N.J.457, 467 (1993). Therefore extinguishing the right to recovery is a breach of the duty. The New Jersey Supreme Court held that an insured may recover more than the policy limit for a liability insurer's bad-faith, Rova Farms Resort, Inc. supra. This is not a sympathetic merchant situation, this is a premeditated arrangement of information orchestrated to deny Plaintiff access to his financial protection and it completely undermines public policy regarding safeguarding the public. The issue in this case is forcing Defendants to pay the “full actual value” in compensatory damages because of their deceit because they are insurance companies who make billions of dollars selling “protection” to the public. The number of mistakes made and their arrangement preclude a reasonable argument of it being an accident. Though this certainly does not meet the technical definitions of fraud upon the court, that is what is actually happening, in the sense that they are manipulating Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 30 of 65 PageID: 30Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 30 of 65 PageID: 486 Page 31 of 65 DeGennaro v. Geico, et al evidence before hand, enabling them to decide whether to settle cases prior to introducing it in litigation and deny or comprising a consumers access to the court. A consumer who makes a claim is going to have to settle it under the enormous duress of financial collapse and difficulty of successfully proving their case while facing evidence created against them by the truly sophisticated. Even a consumer who catches the scheme may not understand they have a cause of action once the guilty company merely apologizes and corrects the mistake. The court in Bosland stated at page 752; “Plainly, if we require plaintiffs, as a precondition to filing a complaint under the CFA, to first demand a refund, we will create a safe harbor for an offending merchant. A merchant could rely on the pre-suit refund demand requirement, boldly imposing inflated charges at no risk, and planning to refund the overcharges only when asked. Such an analysis of the CFA would limit relief by making it available only to those consumers who are alert enough to ask for a refund, while allowing the offending merchant to reap a windfall. Also, not sending the written notice allows pleading guilty to a “technical” CFA regulatory violation allowing an argument to shut off discovery which would uncover the overall scheme. There are eight (8) polices sold with which exposed Plaintiff to the $200,000 gap. There are also various Counts alleged. The rule against double recovery is inapplicable when the damages awarded are punitive. This is because punitive damages, unlike compensatory damages, are not aimed at making a plaintiff whole they are aimed at punishing the defendant. Medina v. District of Columbia 643 F.3d 323 (D.C. Cir. 2011). As to compensatory damages a plaintiff can only recover under one paralleling theory, unless the plaintiff can demonstrate, by a clear and convincing showing, that the ostensibly paralleling claims are actually "different in kind." citing Wirig v. Kinney Shoe Corp., 461 N.W.2d 374 (Minn.1990). Under Black v. Ryder/PIE Nationwide, Inc., 15 F. 3d 573 (1994) “If [two] claim[s] arise from the same operative facts, and Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 31 of 65 PageID: 31Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 31 of 65 PageID: 487 Page 32 of 65 DeGennaro v. Geico, et al seek identical relief, an award of damages under both theories will constitute double recovery”. But see Mason v. Okla. Turnpike Auth., 115 F.3d 1442 (10th Cir.1997) which stated: “Mason’s discharge was “at the core” of all of his claims, but the discharge was motivated by two distinct, illegal factors: (1) political discrimination; and (2) retaliation for Mason’s refusal to violate state law” Consider the following hypothetical: Three separate local automobile merchants sell 3 separate electrical component parts for an automobile’s computerized system. They surreptitiously alter the parts so that they can be installed and linked to each other to eventually malfunction and damage the car’s computer system. The altered parts are installed by a local auto-mechanic who is in on the scheme and looking for the additional repair work and will split his profits with the auto merchants. The system is damaged and after the repairs are made the scheme is realized by the consumer. The separate sale of the altered component parts are "different in kind." So is the installation. There are 4 transactions, 4 compensatory awards and 4 punitive awards. First, there are eight (8) policies and each of them are therefore not only “different in kind” but constitute separate and independent transactions which: (1) represent distinct time periods; (2) were paid with different consideration/premiums; and (3) were subject to changes of terms if done legally (Note: the eight (8) polices are separated when plead in the various counts). It is possible to lump the analysis of damages together and view them from a “time duration” i.e. the Plaintiff carried a $200,000 gap for two years. But this ignores the fact that there were eight deceitful transactions occurring and the rule against double recovery only applies to compensatory damages even if the claims are identical. Defendants can argue that the damages represent overlapping time periods, however if a $200,000 gap can actually cause compensatory damages equivalent to $400,000 worth of damage, viewing that exposure on a yearly basis is purely arbitrary. At minimum six months exposure of the automobile policies linked to carrying a $200,000 gap should trigger the full compensatory damages of $400,000 and therefore at least four of the policies are “different in kind” as far as resulting damages. But Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 32 of 65 PageID: 32Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 32 of 65 PageID: 488 Page 33 of 65 DeGennaro v. Geico, et al consider watching a loved one or a close friend with $200,000 gap in their insurance and bankruptcy threatening them and/or their family. Isn’t three months enough to trigger full compensatory? Are a loved ones’ analysis of damages always inaccurate? Especially given the inherent psychological need people have to believe that accidents won’t happen. Therefore viewing the analysis from the eight transactions allows the application of punitive damage figures according to law (Note: three month time periods would equate to eight transactions). Note also, in addition to the value of insurance, each of the eight (8) polices has a different premium to be added into the compensatory damage figures for each of the 8 transactions. A full discussion of a claims being “different in kind” would require the full discovery into the Defendants’ actions, but at this point the following seems obvious: The count for Interference with Prospective Economic Advantage is dissimilar in both conduct and motive to the counts for fraudulent sale and/or intentional breach of contract. The interference with Prospective Economic Advantage was motivated by an attempt to retain the consumer as a customer and collect premiums by making him believe he had the protection he wanted. As stated in Furst consumers stop shopping when they believe they have what they wanted. The fraudulent sale and intentional breach of contract are different from the interference count because they deal and are motivated by fighting or denying a claims made by the consumer. See Robertson Oil Co., Inc. v. Phillips Petroleum Co., 14 F. 3d 373 (8th Cir. 1993) were the court stated: The actual damages are identical under each of the theories submitted to the jury. On the other hand, the nature, extent, and enormity of the wrong, the intent of the party committing it, and the general circumstances attending the particular transaction involved, differ with respect to each of the two punitive awards. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 33 of 65 PageID: 33Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 3 of 65 PageID: 489 Page 34 of 65 DeGennaro v. Geico, et al The breach of a fiduciary relationship count is different in this case because of the importance of the trust regarding the public welfare. In New Jersey, an attorney client fiduciary relationship was treated differently in Saffer v. Willoughby, 143 N.J. 256, at 272, 670 A.2d 527 (1996) by holding that a client may recover reasonable expenses and attorneys' fees as consequential damages for attorney malpractice. There is a separate injury in the breach of a fiduciary count from the intentional breach of contract, and that is the breach of the trust (not just the agreement) in such an important setting which is being so heavily relied upon and for which the damage can be enormous. Plaintiff is not trying to inflate compensatory damages to punish the Defendants. To do so would thwart the purpose of the CFA which already has a punitive aspect (treble damages plus attorney fees). On the other hand there is no reason to deflate the actual compensatory damages just because the Defendants will also pay punitive damages. Under Abbas the valuation is made “the moment the insurance proceeds are wrongfully withheld” (or here, extinguished), and that value equates to the value of everything the consumer would have been protected from with proper policy. Though an award of this size may seem disproportionate to the premiums paid, consider the billions of dollars insurance companies make selling “protection” to the public. It also should be remembered that the CFA not the common law: The CFA is a prosecutorial action by the Attorney General’s Office which through the 1971 Amendment, is being enforced by a private attorney [L. 1971 c. 247 § 7, codified at N.J.S.A. 56:8-19]. A prosecution in which there is no “I got away with defense”. Plaintiff cannot repurchase insurance for the expired time period now. Receiving a monetary reward beyond a price orientation to premiums paid may appear as a “financial” Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 34 of 65 PageID: 34Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 34 of 65 PageID: 90 Page 35 of 65 DeGennaro v. Geico, et al windfall to the Plaintiff. It is not a windfall. It is a remedy for the misrepresentation in “value” caused by the fact the Plaintiff was forced to “carry” a financial danger even though he was fortunate enough not to have it fall upon him. Divorcing the concept of economic value from a consumer being freed from having a danger inserted into their lives is simply inaccurate. In any event, even if it were considered a windfall (and it is not), a windfall to the Plaintiff is nothing new in the law. The United States Supreme Court, citing Justice Cardoza, stated in Randall v. Loftsgaarden, 478 US 647, 663 (1986): "[i]t is more appropriate to give the defrauded party the benefit even of windfalls than to let the fraudulent party keep them." Janigan v. Taylor, 344 F. 2d 781, 786 (CA1), cert. denied, 382 U. S. 879 (1965), and Falk v. Hoffman, 233 N. Y. 199, 135 N. E. 243 (1922) (Cardozo, J.).” The New Jersey Supreme Court permitted a plaintiff to recover disgorgement damages even where Plaintiff suffered no damage. In County of Essex v. First Union Nat’l Bank, 891 A.2d 600, 607 (N.J. 2006). The Court stated: ‘‘the reasons for disgorgement are not related to whether the [plaintiff] suffered damages.’’ Instead, as the court explained, ‘‘[i]t is the evil of the wrongdoer retaining any of the fruits of its wrongful conduct that grounds the claim.’’ And “evil”, certainly is the basis of Defendants’ conduct in this case, considering that which they were willing to expose the consumer. As to the common law, in Correa, supra at 284, the court stated that the appropriate measure of damages in a fraud or concealment case is a perplexing problem and has been the source of much litigation and concern. In Zeliff v. Sabatino 15 N.J. 70, 74 (1954) the New Jersey Supreme Court addressed benefit-of-the-bargain damages for fraudulent misrepresentation, indicating that "flexibility" and "proximity" must be employed in developing an appropriate measure of damages in a fraud case. Also, for the Defendants to argue that the damages are Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 35 of 65 PageID: 35Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 35 of 65 PageID: 491 Page 36 of 65 DeGennaro v. Geico, et al illusory under the common law because no claim for the insurance proceeds was necessary, ignores the fact that it is illusory to assume that once evidence has been manipulated before the litigation, a financially devastated consumer can just hire a lawyer, pick up the pieces, and actually obtain compensation by chancing litigation, rather than settling for less and at least surviving because they cannot prove what happened. This was a mature complete transaction with purchase prices paid and the supposed value received which ended up representing a danger not a protection: A danger that was designed to continually be renewed, increasing the danger. Such a valuation of “being insured” seems particularly compelling in the common law Count for Interference with Prospective Economic Advantage when the consumer is prevented by the defendant from purchasing other protection in the form of insurance. Plaintiff is entitled to treble damages under the CFA [N.J.S.A. 56:8-19]. Under The New Jersey Supreme Court ruling in Blazovic v. Andrich 124 NJ 90 (1991) the three Defendants may only apportion the compensatory aspect of damages. In Blazovic the court held: “Because punitive damages are designed to punish the wrongdoer, not to compensate the injured party, they cannot be apportioned or subject to contribution among joint tort-feasors”. Since there are three defendants trebling results in a multiple of seven (7). Though it should also be noted that in Blazovic the court stated they saw no reason to change the rule of compensatory apportionment. Plaintiff alleges that the instant matter is a case in which apportionment should not be allowed due to the public welfare considerations of the CFA. There are also Federal courts that have ruled that all defendants must fully pay the compensatory as well as punitive and not apportion compensatory either. See, e.g., Ferris v. Haymore, 967 F.2d 946, 956-57 (4th Cir. 1992); Alley v. Chrysler Credit Corp., 767 F.2d 138, 141-42 (5th Cir. 1985); Saber v. Dileo, 723 F. Supp. 1167, 1167-68 (E.D. La. 1989); Mataya v. Behm Motors, Inc., 409 F. Supp. 65, 70 (E.D. Wis. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 36 of 65 PageID: 36Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 36 of 65 PageID: 492 Page 37 of 65 DeGennaro v. Geico, et al 1976); Majcher v. Laurel Motors, Inc., 680 N.E.2d 416, 428-29 (Ill. App. Ct. 1997). Those courts that have adopted that view focusing primarily on the language of the statute i.e. "[a]ny person" who fraudulently violates….” e.g. Ferris, supra at 956. That would result in a multiple of nine (9) times damages for trebling in this case. Plaintiff asserts that his damages equate to the “value of insurance” (the value of the protection from the exposure which insurance resolves) and that $400,000 is a reasonable figure representing all the danger exposed by the $200,000 gap in his coverage. There were also eight (8) separate transactions/policies involved to multiply those damages (each has separate premiums establishing ascertainable losses). There are treble damages and three Defendants. There may also be attorney fees (L. 1971 c. 247 § 7, codified at N.J.S.A. 56:8-19 - though presently, the Plaintiff is representing himself). There are also common law counts, and under the CFA, all other remedies are considered “in addition to” its own CFA remedies” (NJSA 56:8- 2, N.J.S.A. 56:8-19). The common law counts have punitive damages under the New Jersey Punitive Damage Act (N.J.S.A. 2A:15-5.9 et seq.). Each common law count is also supported by a direct loss of premiums paid and the New Jersey Punitive Damage Act allows up to $300,000 in punitive damages or 5 times actual damages whichever is greater. As to the common law: Past conduct which has not actually resulted in a direct personal or property injury is not consider a damage by the courts. Therefore, being forced to “carry” danger through a period of time is not considered an element in the calculation of damages. This results in a savings of judicial resources because, unlike the CFA, claims for problems resolved do not have to be adjudicated. Contract remedies are orientated to purchase prices and replacement values whether out-of-pocket or benefit-of- the-bargain. Having just cited to Justice Cardoza, Plaintiff has no quarrels with the practical limitations associated with the Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 37 of 65 PageID: 37Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 37 of 65 PageID: 493 Page 38 of 65 DeGennaro v. Geico, et al administration of law, because without them the system would collapse and Plaintiff couldn’t even be a plaintiff. However, as argued under the CFA, in a capitalist system, marketplace factors determine price/replacement values but they do not establish the actual value to the consumer. A blind person’s seeing-eye dog’s value, is not its purchase price or replacement value: It’s the value of having the dog function correctly so that they do not have to carry danger through a period of time. This is an actual consumer value which is reasonable, legitimate and accurate, and it ignores personal subjectivity and/or sentimentality. Therefore there is no question that a “value” is being left out of the equation under the common law. If there wasn’t a “value” to being protected from the exposure to danger, why would people purchase insurance in the first place? Why would they get a vaccine? A vaccine whose actual “value” dwarfs any consideration of market purchase price, and which exists regardless of whether the person denied the value ends up contracting the disease. After-the-fact evaluations may be necessary for judicial administration but they are inaccurate in accessing true values “to” a reasonable consumer. The next question is whether there are certain circumstances under the common law where the “full value” of the exchange should fall upon the defendant as damages even though the danger being carried by the consumer did not fall upon them? The common law evolves. What happens during the age of computers, when the intellectual elite utilize computers to: (1) Breach fiduciary relationships with the public on a vast scale: (2) Design and utilize their own misleading forms; (3) Control the communications which constitute the relationship; (4) Destroy the consumer’s financial ability to negotiate their claims; (5) Manipulate evidence which will either defeat a consumer’s claim or provide them with such tenuous proof that they have to compromise their claims for relief; (6) Launch the schemes in the context of supposedly protecting the welfare and safety of the public. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 38 of 65 PageID: 38Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 38 of 65 PageID: 494 Page 39 of 65 DeGennaro v. Geico, et al Plaintiff concedes that moving a damaged theory away from a price paid or replacement orientation to include the “full value” (danger carried) would be a giant step in the common law. However, of the foregoing outlined problems (1) through (6) in the previous paragraph, the most troublesome (particularly considering they are utilizing a fiduciary relationship) are the manipulation of evidence along with the ability to literally destroy the consumer’s financial resources prior to litigation. Plaintiff has advanced arguments regarding social policy and insurance companies from a compensatory damage point of view only and not regarding punitive damages. But for the sake of illustration, Plaintiff is now citing to State Farm versus Campbell because the United States Supreme Court greatly reduced a punitive damage award of 175 million dollars against a large insurance company predicated upon “due process” considerations. But what happens when the reverse is true? Regardless of punitive damages, what happens when the computer age allows the intellectually sophisticated to unleash schemes against the populace denying them access to fair litigation through the manipulation of evidence as well as the destruction of their financial resources prior to that litigation? Consider the factors listed in (1) through (6) above. Why grant such reprehensible defendants judicial constructs which limit compensatory damages so that the rest of system can remain practical? Why not merely allow the full weight of the “actual compensatory damages” to fall upon them? Does granting this class of defendant relief from full damages serve any constructive purpose to the practical administration of law? In actuality, wouldn’t allowing the weight of the full actual damages to fall upon these type of defendants serve as a strong deterrent thereby decreasing litigation and conserving judicial resources? The criminal side of the judicial system is probably more overburdened resulting in being forced not to prosecute cases or downgrading them, so relying on it (and its higher standard of proof) is a Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 39 of 65 PageID: 39Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 39 of 65 PageID: 495 Page 40 of 65 DeGennaro v. Geico, et al compromised solution to the proper deterrence necessary. Application of this theory of “full value” as to compensatory damages, would be similar to the doctrine of “clean hands” only instead of preventing recourse to the courts to unworthy plaintiffs, the courts would deny placing a limitation on the true value of damages to unworthy defendants. To carry this argument one step forward, in the context of the context of safeguarding the public and the factors outlined in 1 through 6 above, Plaintiff asserts that, in a case such as this one, imposing a judicial construct limiting the full measure of actual damages would deny the Plaintiff his due process rights. This is because there are no reasons to justify such a limitation in order to protect the administration of the overall system of justice. In addition, allowing the full weight of the damages to fall upon this type of Defendant would actually further the practical administration of law through proper deterrence and the resulting decrease in litigation conserving judicial resources. This argument becomes compounded because the deterrence factor directly provides its benefits to the public welfare through higher standards of safety throughout their market. The common law evolved in response to the Industrial Revolution: The age of computers is certainly having as much if not more of a profound historical impact. Due process arguments are magnified enormously when the values deprived concern the safety and welfare of the public. The Plaintiff’s demand is going to be extremely high but that is not going to be the product of the large punitive damage ratio as found in State Farm v Campbell. What has increased this Amount in Controversy is: (1) the fact that there are eight contracts which are independent as explained above, (2) the law is very clear that the punitive damages aspect is not considered a double recovery (3) the CFA is “in addition to all other damages” (4) there are three Defendants, and (5) under Blazovic the Defendants are not allowed to apportion the punitive Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 40 of 65 PageID: 40Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 40 of 65 PageID: 496 Page 41 of 65 DeGennaro v. Geico, et al award between them. Consistent with State Farm v Campbell the punitive damage multiples under the CFA are only three times compensatory and under the common law the multiple is five times compensatory. Therefore, it is the multiples of eight contracts times compensatory, times the three defendants, times the punitive damage multiples, that when added together cause such a large demand. In terms of due process it should be noted that in State Farm v Campbell though speaking about punitive damages the court addressed large awards stating; Nonetheless, because there are no rigid benchmarks that a punitive damages award may not surpass, ratios greater than those we have previously upheld may comport with due process where “a particularly egregious act” has resulted in only a small amount of economic damages. In this case, the Defendants conduct was abhorrent. The demand under the CFA is therefore $400,000 x 8 transactions = $3,200,000 x treble damages = $9,600,000 x three defendants = $28,800,000.00. Damages under the common law counts (which are “in addition to” the CFA, N.J.S.A. 56:8-2) would be either: (1) The amount of the premiums in each of the eight transactions $2,356.30 plus $300,000 punitive damages x eight transactions ($2,400,000) x three Defendants ($7,200,000) which totals to = $7,202,356.30; or (2) if the court will accept plaintiffs argument about allowing the full weight of compensatory damages to fall upon the defendants because of social policies and/or his due process rights, it will be the $400,000 times the eight transactions = $3,200,000, x five for the punitive damages= $16,000,000 x three common law counts = $48,000,000 x three defendants = $144,000,000. (Whether there is actually 4 independent common law counts is left for discovery). Therefore plaintiff is making a demand of $28,800,000 CFA + $144,000,000 common law, for a $172,800,000.00 total demand. Such a recovery would speak to those prior to Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 41 of 65 PageID: 41Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 41 of 65 PageID: 497 Page 42 of 65 DeGennaro v. Geico, et al State Farm v Campbell but this case is not about large punitive damages, it’s about eight transaction and the established law which is being argued in such a way to counter the fact that the Defendants believed they had nothing to worry about. In summation: There are no relationships that should be more stringently enforced than a fiduciary relationship for the health and welfare of the public. There is a “value” to carrying danger through a period of time which is evidenced by purchasing protection from it. When the intellectually elite utilize computer technology during a fiduciary relationship to deny the public its rights to full and fair litigation, they should have to pay full value as the actual compensatory damages including the value associated with carrying danger by the consumer. An insurance company’s liability can exceed face value when bad faith is involved (Rova Farms). The Plaintiff was denied his insurance protection and was also prevented from purchasing suitable insurance from other companies in the market place. In highly government regulated industries like insurance, valuations orientated toward market prices can be greatly skewed: The polio vaccine was free: Its value was not zero. To limit the Plaintiff’s full measure of his compensatory damages is a denial of his due process rights because there is no legitimate governmental policy to support that limitation. Additionally, granting the Plaintiff his full value of damages supports not only the practical administration of law through conservation of judicial resources by deterrence, but directly benefits the public’s welfare through higher safety standards throughout society. This case is primarily an action brought under the CFA and is therefore a prosecution by the Attorney General’s Office enforced by a private attorney. The New Jersey Supreme Court has ruled the purpose of the CFA is to constantly expand safeguarding the public and that when a resolution of a CFA violation eradicates the consumer’s loss, it does not constitute a valid Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 42 of 65 PageID: 42Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 42 of 65 PageID: 498 Page 43 of 65 DeGennaro v. Geico, et al defense to a CFA prosecution (Bosland, D’Agostino, Abbas): Under Abbas the valuation is made “the moment the insurance proceeds are wrongfully withheld” i.e. “during the period of wrongdoing”. The wrongdoing is transactional in nature and constitutes eight (8) separate violations. Under the CFA deceit cannot be irradiated after-the-fact. Cases involving the safety and welfare of the public are different than mere commercial exchanges. That value of insurance coverage is the exposure it resolves. This case is analogous to steeling water in the desert: Once the rescuers intervene, only the time clock stops: Then the valuation of the water “under the circumstances” begins. COUNT I PLAINTIFF vs. DEFENDANTS’ ABIC and ASSURANT STRICT LIABILITY AS TO CHANGING TERMS OF THE ISSUED POLICIES 82) Plaintiff, Alfred DeGennaro, incorporates by reference Paragraphs 1 through 81 of this complaint as if fully set forth here and further alleges as follows: 83) Plaintiff was told by Defendants that in order to acquire the comprehensive personal liability policy he requested with a 1 million dollar umbrella he would have to acquire a renter’s insurance policy with a minimum of $300,000 comprehensive personal liability coverage from Defendants ABIC and Assurant (said umbrella would then cover his auto insurance as well as his renter’s insurance coverage). 84) Plaintiff purchased and paid the premiums for the underlying renters insurance for the years of January 31, 2014 - 2015 and January 31, 2015 -16, Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 43 of 65 PageID: 43Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 43 of 65 PageID: 499 Page 44 of 65 DeGennaro v. Geico, et al 85) Defendants ABIC and Assurant represented that they were providing Plaintiff suitable, apt and proper underlying renter’s insurance coverage necessary to support the umbrella policy from Geico. 86) Defendants ABIC and Assurant decreased the $300,000 liability coverage to $100,000 liability coverage causing a gap of $200,000, between of the renters and umbrella policies during each of the two years, leaving Plaintiff personally liable for $200,000 for each of the policies for each of the two years. 87) Defendants ABIC and Assurant violated the applicable regulations and/or laws regarding notice, changing terms and/or cancellation of the aforesaid two renter’s policies. 88) Under the CFA violation of said applicable laws and/or regulations constitutes strict liability. 89) Plaintiff had no knowledge of the gaps in coverage. 90) WHEREFORE, Plaintiff respectfully asks the Court to find that the change in terms in violation of applicable laws and/or regulations of the two renter’s policies of January 31, 2014 to 2015 and January 31, 2015 to 2016 by Defendants ABIC and Assurant each constitute a separate violation of the CFA and grant the Plaintiff a judgment that the Defendants committed the aforesaid violations of the CFA and awarding Plaintiff treble damages, attorney fees, and all costs as to each separate violation. COUNT II PLAINTIFF vs. DEFENDANTS’ GEICO STRICT LIABILITY AS TO CHANGING TERMS OF ISSUED POLICIES 91) Plaintiff, Alfred DeGennaro, incorporates by reference Paragraphs 1 through 81 of this complaint as if fully set forth here and further alleges as follows: Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 44 of 65 PageID: 44Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 4 of 65 PageID: 500 Page 45 of 65 DeGennaro v. Geico, et al 92) Plaintiff was told by Defendants that in order to acquire the comprehensive personal liability policy he requested with a 1 million dollar umbrella he would have to acquire a renter’s insurance policy with a minimum of $300,000 comprehensive personal liability coverage from Defendants ABIC and Assurant (said umbrella would then cover his auto insurance as well as his renter’s insurance coverage). 93) Plaintiff purchased and paid the premiums for the underlying renters insurance for the years of January 31, 2014 - 2015 and January 31, 2015 -16. 94) Defendants ABIC and Assurant represented that they were providing Plaintiff suitable, apt and proper underlying renter’s insurance coverage necessary to support the umbrella policy from Geico. 95) Defendants ABIC and Assurant decreased the $300,000 liability coverage to $100,000 liability coverage causing a gap of $200,000, between of the renters and umbrella policies during each of the two years, leaving Plaintiff personally liable for $200,000 for each of the two polices for each of the two years. 96) Defendants ABIC and Assurant violated the applicable regulations and/or laws regarding notice, changing terms and/or and cancellation of the two renter’s policy. 97) Geico knew of and cooperated with Defendants Assurant and ABIC in the violation of applicable regulations and /or laws concerning notice, changing terms, and/or cancellation of the two renter’s policies causing the $200,000 gap between the renters policies and the umbrella policies each of the two years. 98) Under the CFA violation of applicable regulations and /or laws constitutes strict liability. 99) Geico is therefore strictly liable under the CFA. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 45 of 65 PageID: 45Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 45 of 65 PageID: 01 Page 46 of 65 DeGennaro v. Geico, et al 100) Plaintiff had no knowledge of aforementioned gaps in coverage. 101) WHEREFORE, Plaintiff respectfully asks the Court to find that Geico is strictly liable for the change in terms in violation of laws and/or regulations of the two renter’s policies of January 31, 2014 to 2015 and January 31, 2015 to 2016 and each constitutes a separate violation of the CFA and grant the Plaintiff a judgment that the Defendant Geico committed the aforesaid violations of the CFA and awarding Plaintiff treble damages, attorney fees, and all costs as to each separate violation. IN THE ALTERNATIVE COUNT III PLAINTIFF vs. DEFENDANTS’ GEICO STRICT LIABILITY AS TO CHANGING TERMS OF ISSUED POLICIES 102) Plaintiff, Alfred DeGennaro, incorporates by reference Paragraphs 1 through 81 of this complaint and Paragraphs 92 through 96 of the previous Count II, as if fully set forth here and further alleges as follows: 103) In the alternative, even if Geico was unaware that Defendants ABIC and Assurant violated the applicable regulations and/or laws regarding notice, changing terms and/or and cancellation of the two renter’s policy, due to Geico requiring the Plaintiff to purchase the polices through Defendants Assurant and ABIC and the strategic partnership between these 3 Defendants, Geico is also strictly liable under the CFA for the violation of applicable regulations and /or laws concerning notice, changing terms, and/or cancellation of the two renter’s policies. 104) Plaintiff had no knowledge of aforementioned gaps in coverage. 105) WHEREFORE, Plaintiff respectfully asks the Court to find that Geico is strictly liable for the change in terms in violation of laws and/or regulations of the two renter’s policies Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 46 of 65 PageID: 46Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 46 of 65 PageID: 502 Page 47 of 65 DeGennaro v. Geico, et al of January 31, 2014 to 2015 and January 31, 2015 to 2016 and that each constitute a separate violation of the CFA and grant the Plaintiff a judgment that the Defendant Geico committed the aforesaid violations of the CFA and awarding Plaintiff treble damages, attorney fees, and all costs as to each separate violation. COUNT IV PLAINTIFFs vs. DEFENDANTS’ ABIC AND ASSURANT DECEITFUL AND UNCONSCIONABLE VIOLATION OF THE CFA REGARDING SELLING OF THE RENTERS POLICIES 106) Plaintiff, Alfred DeGennaro, incorporates by reference Paragraphs 1 through 81 of this complaint as if fully set forth here and further alleges as follows: 107) Plaintiff was told by Defendants that in order to acquire the comprehensive personal liability policy he requested with a 1 million dollar umbrella he would have to acquire a renter’s insurance policy with a minimum of $300,000 comprehensive personal liability coverage from Defendants ABIC and Assurant (said umbrella would then cover his auto insurance as well as his renter’s insurance coverage). 108) Plaintiff purchased the underlying renters insurance, for the years of January 31, 2014 - 2015 and January 31, 2015 -16, from Defendants ABIC and Assurant. 109) Defendants ABIC and Assurant represented that they were providing Plaintiff with suitable, apt and proper underlying renter’s insurance coverage necessary to support said umbrella policy from Geico. 110) Defendants made the aforesaid representation to induce the Plaintiff to purchase the policies. 111) Plaintiff relied on this representation when he purchased the policies and paid the premiums. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 47 of 65 PageID: 47Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 47 of 65 PageID: 503 Page 48 of 65 DeGennaro v. Geico, et al 112) Defendants ABIC, and Assurant surreptitiously, improperly, knowingly, deceitfully, illegally and maliciously changed the terms of the renter’s policy by decreasing the $300,000 in liability coverage to $100,000 with the intent of leaving the Plaintiff without knowledge of a gap of $200,000 in each policy for each of the two years for which he was personally liable. 113) Defendants ABIC, and Assurant did this to retain him as a customer, collect further premiums and to relieve themselves from the liability of fully covering the Plaintiff. 114) Defendants ABIC, and Assurant planned that Plaintiff would continually renew the policies. 115) Plaintiff had no knowledge of aforementioned gaps in coverage and paid the premiums and received deficient coverage in exchange. 116) Paying the premiums for deficient coverage and being denied proper insurance coverage for a two year period of time both constitute a loss/damage. 117) WHEREFORE, Plaintiff respectfully asks the Court to find that Defendants ABIC and Assurant deceitfully sold, administered and committed unconscionable commercial practices regarding the two renter’s policies of January 31, 2014 to 2015 and January 31, 2015 -2016 and that each change of policy terms of the two renter’s policies constitute a separate violation of the CFA and grant the Plaintiff a judgment that the Defendants committed the aforesaid violations of the CFA awarding Plaintiff treble damages, attorney fees, and all costs as to each separate violation. COUNT V PLAINTIFF vs. DEFENDANT GEICO’S DECEITFUL AND UNCONCSIONABLE VIOLATION OF THE CFA REGARDING THE SELLING OF THE ABIC AND ASSURANT RENTERS POLICIES Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 48 of 65 PageID: 48Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 48 of 65 PageID: 504 Page 49 of 65 DeGennaro v. Geico, et al 118) Plaintiff, Alfred DeGennaro, incorporates by reference Paragraphs 1 through 81 of this complaint as if fully set forth here and further alleges as follows: 119) Plaintiff was told by Defendants that in order to acquire the comprehensive personal liability policy he requested with a 1 million dollar umbrella he would have to acquire a renter’s insurance policy with a minimum of $300,000 comprehensive personal liability coverage from Defendants ABIC and Assurant (said umbrella would then cover his auto insurance as well as his renter’s insurance coverage). 120) Plaintiff purchased and paid the premiums for the underlying renters insurance for the years of January 31, 2014 - 2015 and January 31, 2015 -16, from Defendants ABIC and Assurant. 121) Defendants ABIC and Assurant represented that were providing Plaintiff suitable renter’s insurance coverage necessary to support said umbrella policy from Geico. 122) Defendants ABIC and Assurant made the aforesaid representation to induce the Plaintiff to purchase the renter’s policies. 123) Plaintiff relied on the representations when he purchased the renter’s policies for each of the two years to his detriment. 124) Defendant Geico knew of and cooperated with Defendants ABIC and Assurant in surreptitiously, improperly, purposely, knowingly, deceitfully, maliciously, and illegally changing the terms of the renter’s policies by decreasing the $300,000 in liability coverage to $100,000, with the intent of leaving the Plaintiff without knowledge of a gap of $200,000 in each policy for each of the two years for which he was personally liable. 125) Geico, did this to retain him as a customer, collect further premiums, and to relieve their strategic partners Defendants Assurant and ABIC from the liability of fully covering the Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 49 of 65 PageID: 49Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 49 of 65 PageID: 505 Page 50 of 65 DeGennaro v. Geico, et al Plaintiff. 126) Plaintiff paid the premiums for deficient coverage and being denied proper insurance coverage for a two year period of time both constitute a loss/damage. 127) WHEREFORE, Plaintiff respectfully asks the Court to find that Geico is liable for deceitfully selling, administering and committing unconscionable commercial practices regarding the two renter’s policies of January 31, 2014 to 2015 and January 31, 2015 to 2016 and each constitute a separate violation of the CFA for which Geico is liable and grant the Plaintiff a judgment that Geico committed the aforesaid violations of the CFA awarding Plaintiff treble damages, attorney fees, and all costs as to each separate violation. IN THE ALTERNATIVE COUNT VI PLAINTIFF vs. DEFENDANT GEICO’S VIOLATION OF THE CFA REGARDING THE SELLING OF THE ABIC AND ASSURANT RENTERS POLICIES 128) Plaintiff, Alfred DeGennaro, incorporates by reference Paragraphs 1 through 81 of this complaint and Paragraphs 119 through 123 of the previous Count V as if fully set forth here and further alleges as follows: 129) (In the alternative) Even if Geico did not cooperate and was not aware that Defendants ABIC and Assurant were surreptitiously, improperly, knowingly, deceitfully, maliciously and illegally changing the terms of the renter’s policy, because Geico required that Plaintiff acquire his underlying coverage from Defendants Assurant and ABIC, and due to its relationship with these Defendants (i.e. strategic partners), Geico is also liable under the CFA for each of the violations regarding each of the policies for each of the two years. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 50 of 65 PageID: 50Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 50 of 65 PageID: 506 Page 51 of 65 DeGennaro v. Geico, et al 130) WHEREFORE, Plaintiff respectfully asks the Court to find that Defendant Geico is liable for the deceitfully selling, administering and committing unconscionable commercial practices by Defendants ABIC and Assurant regarding the two renter’s policies of January 31, 2014 to 2015 and January 31, 2015 to 2016 and each constitutes a separate violation of the CFA for which Geico is liable and grant the Plaintiff a judgment that Geico committed the aforesaid violations of the CFA and awarding Plaintiff treble damages, attorney fees, and all costs as to each separate violation. COUNT VII PLAINTIFF vs. DEFENDANTS DECEITFUL AND UNCONSCIONABLE VIOLATION OF THE CFA REGARDING THE SELLING OF THE GEICO UMBRELLA AND AUTOMOBILE INSURANCE POLICIES 131) Plaintiff, Alfred DeGennaro, incorporates by reference Paragraphs 1through 81 of this complaint as if fully set forth here and further alleges as follows: 132) Plaintiff was told by Defendants that in order to acquire the comprehensive personal liability policy he requested with a 1 million dollar umbrella he would have to acquire a renter’s insurance policy with a minimum of $300,000 comprehensive personal liability coverage from Defendants ABIC and Assurant (said umbrella would then cover his auto insurance as well as his renter’s insurance coverage). 133) Plaintiff purchased and paid the premiums for the underlying renters insurance for the years of January 31, 2014 - 2015 and January 31, 2015 - 16, from Defendants ABIC and Assurant. 134) Plaintiff had been insuring his automobile through Geico, prior to the time he purchased the Geico umbrella and the aforesaid renters policies in January of 2014. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 51 of 65 PageID: 51Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 51 of 65 PageID: 507 Page 52 of 65 DeGennaro v. Geico, et al 135) Beginning January 13, 2014 Defendant Geico, sold the Plaintiff and Plaintiff paid the premiums for four (4) automobile insurance policies (each of six month duration) during the two years the Plaintiff was covered by the renters/umbrella policies. 136) Plaintiff also purchased and paid the premiums for the Geico umbrella insurance for the years of January 17, 2014 - 2015 and January 17, 2015 - 16. 137) The umbrella and automobile polices were deceitfully and fraudulently sold because Defendants Geico, ABIC and Assurant were surreptitiously, purposely, knowingly, deceitfully, and maliciously creating (or allowing to be created) a $200,000 gap between the renters/umbrella side of the Plaintiff’s coverage rendering the automobile polices and umbrella polices deficient. 138) Though the Geico auto insurance policy still carried the umbrella coverage, the coverage was still flawed because to carry the auto and umbrella insurance, the Plaintiff was unknowingly forced to carry the $200,000 exposure of personal liability on the renters/umbrella side of the coverage. 139) Geico represented that it was providing Plaintiff proper and suitable insurance coverage to induce him to purchase the automobile and umbrella policies. 140) Plaintiff relied upon the aforesaid representation. 141) WHEREFORE, Plaintiff respectfully asks the Court to find that the sale of these four automobile and two umbrella insurance policies constitute misrepresentation, deceit and an unconscionable commercial practice and that each of these six (6) policies/transactions constitute a separate violation of the CFA for which the Defendants’ are liable and grant the Plaintiff a judgment that the Defendants are liable to the Plaintiff for treble damages, attorney fees, and all costs as to each separate violation. COUNT VIII Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 52 of 65 PageID: 52Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 52 of 65 PageID: 508 Page 53 of 65 DeGennaro v. Geico, et al PLAINTIFF vs. DEFENDANTS TORTOUS INTERFERENCE WITH PROSPECTIVE ECONONMIC ADVANTAGE 142) Plaintiff, Alfred DeGennaro, incorporates by reference Paragraphs 1 through 81 of this complaint as if fully set forth here and further alleges as follows: 143) Plaintiff was told by Defendants that in order to acquire the comprehensive personal liability policy he requested with a 1 million dollar umbrella he would have to acquire a renter’s insurance policy with a minimum of $300,000 comprehensive personal liability coverage from Defendants ABIC and Assurant (said umbrella would then cover his auto insurance as well as his renter’s insurance coverage). 144) Plaintiff purchased and paid the premiums for the underlying renters insurance, for the years of January 31, 2014 - 2015 and January 31, 2015 -16, after Defendants ABIC after Assurant represented that they were providing Plaintiff suitable, apt, and proper underlying renter’s insurance coverage necessary to support the umbrella policy from Geico. 145) All three Defendants surreptitiously, knowingly, intentionally, deceitfully, maliciously and illegally decreased the $300,000 comprehensive personal liability coverage to $100,000 liability coverage causing a gap of $200,000 between the liability coverage of the renters policy and the umbrella coverage during each of the two years, leaving the unknowing Plaintiff personally liable for $200,000 for each of the two years. 146) The Defendants did this to retain him as a customer, collect further premiums and to relieve Defendants Assurant and ABIC from the liability of fully covering the Plaintiff. 147) Though the Geico auto insurance policy still carried the umbrella coverage, the coverage was still flawed because to carry the auto insurance the Plaintiff was unknowingly forced to carry the $200,000 exposure of personal liability on the renters/umbrella side of his Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 53 of 65 PageID: 53Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 53 of 65 PageID: 509 Page 54 of 65 DeGennaro v. Geico, et al coverage for each policy for each of the two years rendering the automobile polices and umbrella polices deficient. 148) There were four (4) automobile polices, (each of six month duration beginning on January 13, 2014), two (2) umbrella polices (January 17, 2014 - 2015 and January 17, 2015 - 16) and the aforesaid two (2) renters policies, which the Plaintiff purchased from the Defendants during the years of January 2014 through January 2016. 149) The Defendants had represented that aforementioned insurance policies were full, complete, and without gaps in coverage, which induced the Plaintiff to purchase the policies to his detriment. 150) These representations were false, and known to be false by the Defendants and made with the intention that the Plaintiff rely on them. 151) Plaintiff was unaware of the reduction of his liability coverage and the resulting gap in coverage caused by Defendants knowing, deceitful, malicious and illegal conduct. 152) Due to the Defendants surreptitious, knowing, deceitful, malicious and illegal conduct, Plaintiff did not exercise his right to purchase suitable insurance policies (automobile, renters, and umbrella) from other companies for a two year period which would have provided him the proper protection. 153) Though no claim was ever needed to be made under the insurance, having proper insurance coverage protecting a person from economic loss for a two year period of time has an economic value. 154) Being denied said economic value constitutes a loss and therefore a damage. 155) Plaintiff had to pay premiums for deficient coverage also representing a loss. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 54 of 65 PageID: 54Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 54 of 65 PageID: 510 Page 55 of 65 DeGennaro v. Geico, et al 156) WHEREFORE, Plaintiff respectfully asks the Court to find that the Defendants surreptitiously, knowingly, deceitfully, maliciously and illegally sold and administered deficient insurance without Plaintiff’s knowledge thereby preventing him from purchasing suitable policies from other companies and that each of the eight transactions/policies constituted a separate tortious interference with prospective economic advantage and grant the Plaintiff a judgment that all three Defendants committed tortious interference with prospective economic advantage and award Plaintiff damages, punitive damages, attorney fees, and all costs as to each of the eight transactions/policies. COUNT IX PLAINTIFF vs. DEFENDANTS’ FRAUDUANT SALE OF AUTOMBILE, UMBRELLA AND RENTERS INSURANCE 157) Plaintiff, Alfred DeGennaro, incorporates by reference Paragraphs 1 through 81 of this complaint as if fully set forth here and further alleges as follows: 158) Plaintiff was told by Defendants that in order to acquire the comprehensive personal liability policy he requested with a 1 million dollar umbrella he would have to acquire a renter’s insurance policy with a minimum of $300,000 comprehensive personal liability coverage from Defendants ABIC and Assurant (said umbrella would then cover his auto insurance as well as his renter’s insurance coverage). 159) Plaintiff purchased and paid the premiums for the underlying renters insurance for the years of January 31, 2014 - 2015 and January 31, 2015 - 16, from Defendants ABIC and Assurant. 160) Plaintiff had been insuring his automobile through Geico, prior to the time he purchased the Geico umbrella and the aforesaid renters policies in January of 2014. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 55 of 65 PageID: 55Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 5 of 65 PageID: 11 Page 56 of 65 DeGennaro v. Geico, et al 161) Beginning January 13, 2014 Defendant Geico, sold the Plaintiff and Plaintiff paid the premiums for four (4) automobile insurance policies (each of six month duration) during the two years the Plaintiff was covered by the renters/umbrella policies. 162) Plaintiff also purchased and paid the premiums for two (2) Geico umbrella insurance (January 17, 2014 - 2015 and January 17, 2015 - 16). 163) Though the Geico auto insurance policy still carried the umbrella coverage, the coverage was still flawed because to carry the auto insurance, the Plaintiff was forced to unknowingly carry $200,000 exposure of personal liability on the renters/umbrella side of his coverage during each of the two years of coverage rendering the automobile polices and umbrella polices deficient. 164) In fact, these automobile, umbrella and renters polices were deceitfully sold because Defendants Geico, ABIC and Assurant were surreptitiously, purposely, knowingly, deceitfully, and maliciously creating a $200,000 gap in liability coverage between the renters policy and umbrella policy per year for the two years. 165) Defendants represented that they were providing Plaintiff proper, apt, and suitable insurance coverage to induce him to purchase the policies. 166) Plaintiff relied on the representation when he purchased the policies to his detriment. 167) WHEREFORE, Plaintiff respectfully asks the Court to find that the sale of these four automobile, two umbrella and two renters insurance policies constitute fraud, misrepresentation, and deceit and that each of these eight (8) policies/transactions constitute a separate fraudulent act for which the Defendants’ are liable and grant the Plaintiff a judgment Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 56 of 65 PageID: 56Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 56 of 65 PageID: 512 Page 57 of 65 DeGennaro v. Geico, et al that the Defendants are liable to the Plaintiff for damages, punitive damages, attorney fees, and all costs as to each separate fraudulent act. COUNT X PLAINTIFF vs. DEFENDANTS INTENTIONAL BREACH OF CONTRACT 168) Plaintiff, Alfred DeGennaro, incorporates by reference Paragraphs 1 through 81 of this complaint as if fully set forth here and further alleges as follows: 169) Plaintiff was told by Defendants that in order to acquire the comprehensive personal liability policy he requested with a 1 million dollar umbrella he would have to acquire a renter’s insurance policy with a minimum of $300,000 comprehensive personal liability coverage from Defendants ABIC and Assurant (said umbrella would then cover his auto insurance as well as his renter’s insurance coverage). 170) Plaintiff purchased and paid the premiums for the underlying renters insurance for the years of January 31, 2014 - 2015 and January 31, 2015 - 16, from Defendants ABIC and Assurant. 171) Plaintiff had been insuring his automobile through Geico, prior to the time he purchased the Geico umbrella and the aforesaid renters policies in January of 2014. 172) Beginning January 13, 2014 Defendant Geico, sold the Plaintiff and Plaintiff paid the premiums for four (4) automobile insurance policies (each of six month duration) during the two years the Plaintiff was covered by the renters/umbrella policies. 173) Plaintiff also purchased and paid the premiums for the Geico umbrella insurance for the years of January 17, 2014 - 2015 and January 17, 2015 - 16. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 57 of 65 PageID: 57Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 57 of 65 PageID: 513 Page 58 of 65 DeGennaro v. Geico, et al 174) Defendants Geico, ABIC and Assurant were surreptitiously, purposely, knowingly, deceitfully, and maliciously creating a $200,000 gap in liability coverage between the renters policy and umbrella policy per year for the two years. 175) Though the Geico auto insurance policy still carried the umbrella coverage, the coverage was still flawed because to carry the auto insurance, the Plaintiff was forced to unknowingly carry $200,000 exposure of personal liability due to a $200,000 gap in the liability coverage on the renters/umbrella side of his coverage per year for the two years rendering the automobile polices and umbrella polices deficient thereby intentionally breaching their obligations under the eight (8) contracts of insurance. 176) WHEREFORE, Plaintiff respectfully asks the Court to find that in selling and administering these four automobile, two umbrella and two renters insurance policies the Defendants committed an intentional breach of contract and that each of these eight (8) policies/transactions constitute a separate intentional breach of contract for which the Defendants’ are liable and grant the Plaintiff a judgment that the Defendants are liable to the Plaintiff for damages, punitive damages, attorney fees, and all costs as to each separate intentional breach of contract. COUNT XI PLAINTIFF vs. DEFENDANTS’ BREACH OF A FIDUCIARY DUTY 177) Plaintiff, Alfred DeGennaro, incorporates by reference Paragraphs 1 through 81 of this complaint and Paragraphs 169 through 175 of Count X of this complaint as if fully set forth here and further alleges as follows: 178) Defendants owed Plaintiff a fiduciary duty because they were insuring him. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 58 of 65 PageID: 58Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 58 of 65 PageID: 514 Page 59 of 65 DeGennaro v. Geico, et al 179) Defendants breached that duty by surreptitiously, purposely, knowingly, deceitfully, and maliciously creating a $200,000 gap in liability coverage between the renters policy and umbrella policy per year for the for the two years (affecting all eight contracts of insurance) thereby intentionally breaching their fiduciary obligations under each of the eight (8) contracts of insurance. 180) WHEREFORE, Plaintiff respectfully asks the Court to find that in selling and administering these four automobile, two umbrella and two renters insurance policies the Defendants committed a breach of their fiduciary duties and that each of these eight (8) policies/transactions constitute a separate breach of their fiduciary duties for which the Defendants’ are liable and grant the Plaintiff a judgment that the Defendants are liable to the Plaintiff for damages, punitive damages, attorney fees, and all costs as to each separate breach of their fiduciary duties. COUNT XII PLAINTIFF vs. DEFENDANTS BREACH OF CONTRACT 181) Plaintiff, Alfred DeGennaro, incorporates by reference Paragraphs 1 through 81 of this complaint and Paragraphs 169 through 174 of Count X of this complaint as if fully set forth here and further alleges as follows: 182) Defendants Geico, ABIC and Assurant created a $200,000 gap in liability coverage between the renters policy and umbrella policy per year for the two years thereby breaching their obligations under the contract. 183) Though the Geico auto insurance policy still carried the umbrella coverage, the coverage of the auto and umbrella policies were still flawed because to carry the auto insurance, the Plaintiff was forced to unknowingly carry $200,000 exposure of personal liability due to a Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 59 of 65 PageID: 59Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 59 of 65 PageID: 515 Page 60 of 65 DeGennaro v. Geico, et al $200,000 gap in the liability coverage on the renters/umbrella side of his coverage for each of the two years rendering the automobile polices and umbrella polices deficient. 184) In providing deficient and unsuitable insurance policies because of the $200,000 gap in coverage for the two successive years of January 2014 -15 and January 2015 - 2016, the Defendants committed breach of the eight contracts of insurance (4 automobile, 2 renters and 2 umbrella). 185) Plaintiff paid full premiums for the eight policies with deficient coverage and also was exposed to risk. 186) WHEREFORE, Plaintiff respectfully asks the Court to find that the Defendants breached the eight (8) contracts of insurance and that each policy constituted a separate breach and grant the Plaintiff a judgment that the Defendants breached the contracts and award Plaintiff damages, punitive damages, attorney fees, and all costs as to each of the eight insurance policies issued. COUNT XIII PLAINTIFF vs. DEFENDANTS’ STRICT LIABILITY UNDER THE CFA FOR CHANGING THE TERMS OF THE EIGHT POLICIES 187) Plaintiff, Alfred DeGennaro, incorporates by reference Paragraphs 1 through 81 of this complaint as if fully set forth here and further alleges as follows: 188) Plaintiff purchased eight (8) polices from the Defendants: four (4) automobile polices, (each of six month duration beginning on January 13, 2014) from Defendant Geico, two (2) umbrella polices for the two years of January 2014 through January 2016 from Defendant Geico; and two (2) renters policies for the two years of January 2014 through January 2016 from Defendants Assurant and ABIC. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 60 of 65 PageID: 60Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 60 of 65 PageID: 516 Page 61 of 65 DeGennaro v. Geico, et al 189) Defendants represented that they were providing Plaintiff suitable, apt and proper underlying insurance coverage and that which was necessary to support the $1 million dollar umbrella policy from Geico. 190) All Defendants knew of and/or planned and/or cooperated with changing the two renter’s policies causing the $200,000 gap between the renter’s policies and the umbrella policies each of the two years, leaving the Plaintiff personally liable for $200,000 gap. 191) Though the Geico auto insurance policy still carried the umbrella coverage, the coverage was still flawed and deficient because to carry the auto/umbrella insurance the Plaintiff was unknowingly forced to carry the $200,000 exposure of personal liability on the renters/umbrella side of his coverage for each policy for each of the two years also rendering the automobile polices and umbrella polices deficient. 192) There are applicable regulations and laws concerning notice, changing terms, and/or cancellation of insurance policies. 193) Under the CFA violation of applicable regulations and /or laws constitutes strict liability. 194) Though Defendants Assurant and ABIC directly created the $200,000 gap in the renters policies, all the Defendants knew of and/or planned and/or cooperated in the violation of applicable regulations and laws concerning notice, changing terms, and/or cancellation of the policies thereby affecting the eight (8) insurance policies. 195) The aforesaid conduct of the Defendants rendered the eight (8) policies defective. 196) All the Defendants are therefore strictly liable under the CFA. 197) Plaintiff had no knowledge of aforementioned gaps in coverage. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 61 of 65 PageID: 61Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 61 of 65 PageID: 517 Page 62 of 65 DeGennaro v. Geico, et al 198) WHEREFORE, Plaintiff respectfully asks the Court to find all Defendants are strictly liable for the change in terms in violation of laws and/or regulations affecting the eight (8) insurance policies and rendering them defective and that the deficiency caused to each of the eight (8) polices constitute a separate violation of the CFA and grant the Plaintiff a judgment that all three Defendants committed the aforesaid eight (8) violations of the CFA and awarding Plaintiff treble damages, attorney fees, and all costs as to each separate violation. IN THE ALTERNATIVE COUNT XIV PLAINTIFF vs. DEFENDANTS’ STRICT LIABILITY AS TO CHANGING TERMS OF ISSUED POLICIES 199) Plaintiff, Alfred DeGennaro, incorporates by reference Paragraphs 1 through 81 of this complaint and Paragraphs 188 and 189 of the preceding Count XIII as if fully set forth here and further alleges as follows: 200) There are applicable regulations and laws concerning notice, changing terms, and/or cancellation of insurance policies. 201) Under the CFA, violation of applicable regulations and /or laws constitutes strict liability. 202) In the alternative, even if Geico was unaware that Defendants ABIC and Assurant violated the applicable regulations and/or laws regarding notice, changing terms and/or and cancellation of the two renter’s policy, due to Geico requiring the Plaintiff to purchase the renters polices through Defendants Assurant and ABIC and the strategic partnership between these 3 Defendants, all three Defendants are strictly liable for the gaps in coverage rendering the eight Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 62 of 65 PageID: 62Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 62 of 65 PageID: 518 Page 63 of 65 DeGennaro v. Geico, et al (8) policies defective, due to the violation of applicable regulations and laws concerning notice, changing terms, and/or cancellation. 203) Plaintiff had no knowledge of aforementioned gaps in coverage. 204) WHEREFORE, Plaintiff respectfully asks the Court to find all Defendants are strictly liable for the change in terms in violation of laws and/or regulations affecting the eight (8) insurance policies rendering them defective and that the deficiency caused to each of the eight (8) polices each constitute a separate violation of the CFA and grant the Plaintiff a judgment that all three Defendants committed the aforesaid eight (8) violations of the CFA and awarding Plaintiff treble damages, attorney fees, and all costs as to each separate violation. JURY DEMAND Plaintiff, hereby demands trial by a jury on all triable issues raised in this complaint s/ Alfred DeGennaro Date: 8/21/16 Alfred DeGennaro, Plaintiff Pro Se Also an Attorney in the State of New Jersey DESIGNATION OF TRIAL COUNSEL Alfred DeGennaro, Esquire, is hereby designated as trial counsel for the Plaintiff pro se, in the above matter. s/ Alfred DeGennaro Date: 8/21/16 Alfred DeGennaro, Esquire, Plaintiff Pro Se CERTIFICATION OF NO OTHER ACTIONS 28 U.S.C. § 1746 It is hereby stated that the matter in controversy is not the subject of any other action pending in any other court or of a pending arbitration proceeding to the best of our knowledge or belief. Also, to the best of my belief, no other action or arbitration proceeding is contemplated. Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 63 of 65 PageID: 63Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 63 of 65 PageID: 519 Page 64 of 65 DeGennaro v. Geico, et al However, other than the parties set forth in this pleading more parties may be joined when discovery through this lawsuit produces the names of the other parties which caused the damages. In addition, I recognize my continuing obligation to file and serve on all parties and the Court an amended certification if there is a change in the facts stated in this original certification. Note: A complaint was filed with the New Jersey Department of Banking and Insurance Case # 254842 which concluded by a statement from the DBOI which stated in part: “During the underwriting, records show Geico determined that due to a system error your policy was approved with a $300,000 comprehensive policy liability. On February 24, 2014, based on Geico insurance underwriting guidelines at the time of your policy was purchase, you did not qualify for the $300,000 limit because you conducted a business at the insured location. A letter was emailed to you at adlaw76@gmail.com informing you that your comprehensive personal liability coverage would be reduced from $300,000- $100,000 and an updated declaration page would be issued under separate cover. Geico will be put on notice for this error. At this time due to the error made Geico will honor your request to increase the liability coverage to $300,000 back to the inception date of the policy. This change will cause a change in premium from the inception of $16 for the first term and pro-rated amount for the second term if you wish to have the change process after considering all the information available to us it appears the matter has been favorably resolved. Again the above referenced letter concerning reduction of coverage to $100,000 was never emailed to Plaintiff (such would constitute improper legal notice anyway) and in any event business activities were an exclusion to the policy not a grounds for reduction. No letter was mailed to Plaintiff either. Pro-rating the coverage backward would not help since events have transpired and the companies know the fraudulent scheme is over and they have no risk. The prorating language is ambiguous, since the timeline was occurring during the renewal and was bordering the 2015 old policy and the 2016 new policy which plaintiff was purchasing until he could secure a new insurance company. s/ Alfred DeGennaro Date: 8/21/16 Alfred DeGennaro, Esquire, Plaintiff Pro se. NOTIFICATION OF NEW JERSEY ATTORNEY GENERAL Pursuant to NJSA 56:8-20, I am mailing a copy of this complaint to the Attorney General of the State of New Jersey at: Department of Law + Public Safety, Division of Law - 5th Floor, 124 Halsey Street, Newark, NJ 07101 s/ Alfred DeGennaro Date 8/21/16 Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 64 of 65 PageID: 64Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 64 of 65 PageID: 520 Page 65 of 65 DeGennaro v. Geico, et al Alfred DeGennaro, Esquire, Plaintiff Pro se. CERTIFCATION UNDER FEDERAL RULE OF CIVIL PROCEDURE 11 Under Federal Rule of Civil Procedure 11, by signing below, I certify to the best of my knowledge, information, and belief that this complaint: (1) is not being presented for an improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation; (2) is supported by existing law or by a non-frivolous argument for extending, modifying, or reversing existing law; (3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and (4) the complaint otherwise complies with the requirements of Rule 11. s/ Alfred DeGennaro Date 8/21/16 Alfred DeGennaro, Esquire (Pro Se) New Jersey Attorney Bar Number # 01175 Contact information: Alfred DeGennaro, Esquire Suite 215 621 Shrewsbury Ave Shrewsbury, NJ 07702 Telephone Number = 732-996-6681 E-mail Address = alfred@damages22.com Case 3:16-cv-05274-MLC-DEA Document 1 Filed 08/30/16 Page 65 of 65 PageID: 65Case 3:16-cv-05274-BRM-DEA Document 23-1 Filed 12/ 5/16 Page 65 of 65 PageID: 21 Case 3:16-cv-05274-BRM-DEA Document 23-2 Filed 12/05/16 Page 1 of 14 PageID: 522 Case 3:16-cv-05274-BRM-DEA Document 23-2 Filed 12/05/16 Page 2 of 14 PageID: 523 Case 3:16-cv-05274-BRM-DEA Document 23-2 Filed 12/05/16 Page 3 of 14 PageID: 524 Case 3:16-cv-05274-BRM-DEA Document 23-2 Filed 12/05/16 Page 4 of 14 PageID: 525 Case 3:16-cv-05274-BRM-DEA Document 23-2 Filed 12/05/16 Page 5 of 14 PageID: 526 Case 3:16-cv-05274-BRM-DEA Document 23-2 Filed 12/05/16 Page 6 of 14 PageID: 527 Case 3:16-cv-05274-BRM-DEA Document 23-2 Filed 12/05/16 Page 7 of 14 PageID: 528 Case 3:16-cv-05274-BRM-DEA Document 23-2 Filed 12/05/16 Page 8 of 14 PageID: 529 Case 3:16-cv-05274-BRM-DEA Document 23-2 Filed 12/05/16 Page 9 of 14 PageID: 530 Case 3:16-cv-05274-BRM-DEA Document 23-2 Filed 12/05/16 Page 10 of 14 PageID: 531 Case 3:16-cv-05274-BRM-DEA Document 23-2 Filed 12/05/16 Page 11 of 14 PageID: 532 Case 3:16-cv-05274-BRM-DEA Document 23-2 Filed 12/05/16 Page 12 of 14 PageID: 533 Case 3:16-cv-05274-BRM-DEA Document 23-2 Filed 12/05/16 Page 13 of 14 PageID: 534 Case 3:16-cv-05274-BRM-DEA Document 23-2 Filed 12/05/16 Page 14 of 14 PageID: 535 Case 3:16-cv-05274-BRM-DEA Document 23-3 Filed 12/05/16 Page 1 of 2 PageID: 536 Case 3:16-cv-05274-BRM-DEA Document 23-3 Filed 12/05/16 Page 2 of 2 PageID: 537 Case 3:16-cv-05274-BRM-DEA Document 23-4 Filed 12/05/16 Page 1 of 2 PageID: 538 Case 3:16-cv-05274-BRM-DEA Document 23-4 Filed 12/05/16 Page 2 of 2 PageID: 539 Page 1 of 5 Alfred DeGennaro. Esquire Plaintiff, Pro Se 621 Shrewsbury Avenue Suite 215 Shrewsbury, NJ 07702 alfred@damages22.com 732-996-6681 UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY Alfred DeGennaro : Complaint for Civil Case Plaintiff : Case No.3:16-cv-05274-MLC-DEA vs. : Motion Day December 19, 2016 American Bankers Insurance Company : Filed Electronically of Florida, et. al : Declaration of Alfred DeGennaro, Defendants Esquire, Plaintiff Pro Se : I, Alfred DeGennaro, Esquire, declare under the penalty of perjury that the foregoing is true and correct: 1) I am an attorney-at-law in the State of New Jersey, And Plaintiff Pro Se and I have been admitted to practice before the U.S. District Court for the District of New Jersey. 2) I submit this Declaration in support of my opposition to Defendants’ American Bankers Insurance Company of Florida and Assurant Specialty Property Case 3:16-cv-05274-BRM-DEA Document 23-5 Filed 12/05/16 Page 1 of 5 PageID: 540 Page 2 of 5 (collectively the “Assurant Defendants”) Motion to Dismiss Plaintiff’s Complaint with Prejudice. 3) A true copy of Plaintiff’s Complaint in this matter is attached hereto as Exhibit A. 4) Exhibit B consists of 14 pages and it consists of true copies of the following documents: 4a) Exhibit B at page 1 (ExB-1) is a true copy of the letter I obtained from the Department of banking and insurance dated February 24, 2014 by which Assurance Specialty Property claims it’s sent me notice that my Comprehensive Personal Liability limit was being reduced from $300,000 to $100,000 4b) Exhibit B at page 2 (ExB-2) is a true copy of the letter dated January 21, 2014 sent by GEICO stating that I might not meet the required liability limit of $300,000. 4c) Exhibit B at page 3 (ExB-3) is a true copy of the page of my renters insurance policy for the period of 2014 through 2015 which contains Section II (b) Exclusions, and at Subsection (1) (b) excludes coverages “arising out of or in connection with a business.” 4d) Exhibit B at pages 4 to 5 (ExB-4 and ExB-5) is a true copy of the email dated January 31, 2014 from Assurant transmitting my renter’s insurance policy Case 3:16-cv-05274-BRM-DEA Document 23-5 Filed 12/05/16 Page 2 of 5 PageID: 541 Page 3 of 5 4e) Exhibit B at page 6 (ExB-6) is a true copy of the letter from Assuring Specialty Property thanking me for acquiring my renters insurance through them. 4f) Exhibit B at page 7 (ExB-7) is a true copy of the letter sent by GEICO insurance agency Inc. thanking me for purchasing a renters policy through the Geico insurance agency and pointing out I will receive a multi-policy discount and that I can review all my discounts at Geico.com 4g) Exhibit B at page 8 (ExB-8) is a true copy of a declaration page from American Bankers Insurance Company of Florida dated 1/31/14 stating that my personal liability coverage was $300,000 per occurrence. 4h) Exhibit B at page 9 to 10 (ExB-9 and ExB-10) is a true copy of the endorsement declaration sent to me by Geico. 4i) Exhibit B at page 11 to 12 (ExB-11 and ExB-12) is a true copy of the facts I sent to GEICO transmitting the cover letter which transmitted the renter’s insurance policy which I purchased from GEICO. 4j) Exhibit B at page 13 (ExB-13) is a true copy of a declaration page from American Bankers Insurance Company of Florida sent on 2/26/14 but dated for the policy preriod1/31/14 through 1/31/15 stating that my personal liability coverage was $100,000 per occurrence. 4k) Exhibit B at page 14 (ExB-14) is true copy of a confirmation of coverage sent by email from Assurant Specialty Property dated January 12, 2015 Case 3:16-cv-05274-BRM-DEA Document 23-5 Filed 12/05/16 Page 3 of 5 PageID: 542 Page 4 of 5 (as a matter of information only) indicating at the bottom that my policy represents a contract between myself and Voyageur Indemnity. It also lists my personal liability coverage as $100,000 without the prior occurrence language 5) Exhibit C (pages 1+2: EX -C-1, Ex C-2 ) is a true copy of a confirmation of coverage sent by email from Assurant Specialty Property dated January 12, 2015 (as a matter of information only) indicating at the bottom that my policy represents a contract between myself and Voyageur Indemnity. It also lists my personal liability coverage as $100,000 without the prior occurrence language. 6) Exhibit D (pages 1+2: EX -D-1, Ex D-2 ) is a true copy of a confirmation of coverage sent by email from Assurant Specialty Property dated January 11, 2016 establishing that the Plaintiffs personal liability coverage was change back to $300,000 per occurrence. 7) Exhibit E is this Declaration (Pages 1 - 5). 8) Exhibit F is a proposed form of Order. 9) Exhibit G is the Certificate of Service. 7) I have attached true copies of unreported decisions as Exhibits as follows: 7a) Exhibit H: Abbas v. Pennymac Corp. (Docket No. A-3466-13T2 - Decided July 2015 - 2015 WL 4275962) 7b) Exhibit I: Gallerstein v. Berkshire Life Ins. Co. of Am., No. 05- 05661(JAG), 2006 WL 2594862 (D.N.J. 2006) Case 3:16-cv-05274-BRM-DEA Document 23-5 Filed 12/05/16 Page 4 of 5 PageID: 543 Page 5 of 5 7c) Exhibit J: Henderson v. Hertz Corp., No. L-6937-03: 2005 WL 4127090, at *5 (N.J. Super. Ct. App. Div. 2006) s/ Alfred DeGennaro Dated 12-3-16 Alfred DeGennaro, Esquire Plaintiff, Pro Se Case 3:16-cv-05274-BRM-DEA Document 23-5 Filed 12/05/16 Page 5 of 5 PageID: 544 Alfred DeGennaro. Esquire Plaintiff, Pro Se 621 Shrewsbury Avenue Suite 215 Shrewsbury, NJ 07702 alfred@damages22.com 732-996-6681 UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY Alfred DeGennaro : Complaint for Civil Case Plaintiff : Case No.3:16-cv-05274-MLC-DEA vs. : ORDER DENYING American Bankers Insurance Company : ASSURANT DEFENDANTS’ of Florida, et. al MOTION TO DISMISS : WITH PREJUDICE Defendants : The United States District Court for the District of New Jersey: ORDER THIS MATTER having been opened to the Court by defendant American Bankers Insurance Company of Florida and Assurant Specialty Property (collectively the “Assurant Defendants”) upon their Motion to Dismiss With Prejudice Plaintiff Alfred DeGennaro’s Complaint; and the Court having Case 3:16-cv-05274-BRM-DEA Document 23-6 Filed 12/05/16 Page 1 of 2 PageID: 545 considered the papers filed on behalf of the Assurant Defendants, the Plaintiff’s opposition papers and any other papers submitted, and for good cause shown: IT IS on this ________ day of __________________, 2016; ORDERED that the Assurant Defendants’ Motion to Dismiss Plaintiff’s Complaint with Prejudice is denied; ____________________________ Brian R. Martinotti, U.S.D.J. Case 3:16-cv-05274-BRM-DEA Document 23-6 Filed 12/05/16 Page 2 of 2 PageID: 546 UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY Alfred DeGennaro : Complaint for Civil Case Plaintiff : Case No.3:16-cv-05274-MLC-DEA vs. : American Bankers Insurance Company : Certificate of Service of Florida, et. al Defendants : Filed Electronically I, Alfred DeGennaro, Esquire, Plaintiff Pro Se, hereby certify that on this day I caused one copy each of the Brief in Opposition to defendant American Bankers Insurance Company of Florida and Assurant Specialty Property (collectively the “Assurant Defendants”) Motion to Dismiss With Prejudice including its Exhibits, and the Declaration of Alfred DeGennaro, Esq., and a proposed form of order to be filed with the Court and served on the Defendants and all counsel of record via the Court’s Electronic Case Filing (ECF) system, in accordance with L. Civ. R. 5.2. s/AlfredDeGennaro Alfred DeGennaro. Esquire Plaintiff, Pro Se 621 Shrewsbury Avenue Suite 215 Shrewsbury, NJ 07702 alfred@damages22.com 732-996-6681 Dated: 12-5-16 Case 3:16-cv-05274-BRM-DEA Document 23-7 Filed 12/05/16 Page 1 of 1 PageID: 547 NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-3466-13T2 MEDHAT ABBAS, Plaintiff-Appellant, v. PENNYMAC CORP., Defendant-Respondent. _____________________________________ Argued January 7, 2015 - Decided Before Judges Fuentes and Ashrafi. On appeal from Superior Court of New Jersey, Hudson County, Law Division, Docket No. L- 2297-13. Nicholas A. Stratton argued the cause for appellant (Denbeaux & Denbeaux, attorneys; Joshua W. Denbeaux and Mr. Stratton, on the brief). Kevin C. Rakowski argued the cause for respondent (Blank Rome L.L.P., attorneys; Mr. Rakowski and Louis A. Greenfield, of counsel and on the brief). PER CURIAM On October 29, 2012, plaintiff Medhat Abbas's home in the Township of North Bergen was damaged by the powerful "Superstorm" Sandy. Plaintiff's homeowner's insurance carrier, GEICO, together with and/or doing business as Homesite Insurance July 16, 2015 Case 3:16-cv-05274-BRM-DEA Document 23-8 Filed 12/05/16 Page 1 of 6 PageID: 548 A-3466-13T2 2 Company, assessed the damage to the house and issued a check in the amount $12,277.43 to defendant PennyMac Corporation (PennyMac), 1 the owner of the promissory note and mortgage originally executed by plaintiff to secure the loan he used to purchase his home in May 2006. On May 10, 2013, plaintiff filed a complaint against PennyMac in the Superior Court Law Division alleging common law fraud and a violation of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20. Plaintiff alleged PennyMac ignored his repeated demands for the release of the funds his homeowner's insurance carrier had paid to PennyMac, forcing him to use $9000 of his own funds to pay contractors to repair the storm damage to his home. Plaintiff alleged that despite his compliance with all of PennyMac's requests for documentation, defendant continued to wrongfully withhold the funds paid by the insurance carrier in connection with this loss. On May 20, 2013 (ten days after plaintiff filed his complaint), defendant issued a check to plaintiff in the amount of $12,277.43, representing the proceeds paid by plaintiff's homeowner's insurance company in connection with the storm damage claim. The check was dated May 14, 2013, and plaintiff 1 Although PennyMac Corporation was not the original lender, it became and remains the owner of the promissory note and mortgage for purposes of this cause of action. Case 3:16-cv-05274-BRM-DEA Document 23-8 Filed 12/05/16 Page 2 of 6 PageID: 549 A-3466-13T2 3 received the check sometime before May 24, 2013. Defendant alleges the decision to release the funds was totally unrelated to plaintiff's complaint. The affidavit executed by the process server indicates PennyMac was served with plaintiff's summons and complaint at its business address in Moorpark, California, at 4:43 p.m. on June 4, 2013. 2 On June 13, 2013, plaintiff's counsel sent defendant a letter, returning the check as a rejected settlement offer and stating, "[Plaintiff] is unwilling to discuss or accept any offer of settlement at this time." On July 24, 2013, defendant filed its answer to plaintiff's complaint. On January 2, 2014, defendant filed a motion to dismiss plaintiff's complaint on summary judgment. After considering the arguments of counsel, the motion judge granted defendant's motion and dismissed plaintiff's complaint with prejudice. The judge held plaintiff was unable to show he suffered an ascertainable loss as required by the CFA under N.J.S.A. 56:8-19 because defendant had released to him the $12,277.43, which was the underlying basis of his complaint. Plaintiff now appeals arguing the motion judge erred in viewing defendant's "tardy attempt to mitigate the damages 2 We note, however, that the affiant's signature was notarized by a notary public on May 5, 2013. We have no explanation for this discrepancy and presume it was merely a clerical error. Case 3:16-cv-05274-BRM-DEA Document 23-8 Filed 12/05/16 Page 3 of 6 PageID: 550 A-3466-13T2 4 caused by [its] unconscionable business practices [as a means of] absolv[ing] [it] of liability under the Consumer Fraud Act." Defendant argues the trial judge correctly dismissed plaintiff's cause of action because plaintiff could not prove an ascertainable loss after having received and rejected the $12,277.43 from defendant, an amount thirty-three percent greater than the amount of money plaintiff was suing to recover. Because the trial court's decision was based purely on a question of law, our review is de novo. Manalapan Realty, L.P. v. Twp. Comm., 140 N.J. 366, 378 (1995) ("A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference."). Because the court dismissed the case by granting defendant's motion for summary judgment, we view the evidence in the light most favorable to plaintiff. R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). After considering the record before us and mindful of prevailing legal standards, we reverse and remand for further proceedings. Our Supreme Court recently reaffirmed the three basic elements a plaintiff must establish to present a prima facie case under the CFA: "To prevail on a CFA claim, a plaintiff must establish three elements: "1) unlawful conduct by defendant; 2) Case 3:16-cv-05274-BRM-DEA Document 23-8 Filed 12/05/16 Page 4 of 6 PageID: 551 A-3466-13T2 5 an ascertainable loss by plaintiff; and 3) a causal relationship between the unlawful conduct and the ascertainable loss." Zaman v. Felton, 219 N.J. 199, 222 (2014) (quoting Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 557 (2009)). Here, the question before us is limited to determining whether plaintiff suffered an "ascertainable loss." N.J.S.A. 56:8-19 provides: Any person who suffers any ascertainable loss of moneys or property, real or personal, as a result of the use or employment by another person of any method, act, or practice declared unlawful under this act or the act hereby amended and supplemented may bring an action or assert a counterclaim therefor in any court of competent jurisdiction. In any action under this section the court shall, in addition to any other appropriate legal or equitable relief, award threefold the damages sustained by any person in interest. In all actions under this section, including those brought by the Attorney General, the court shall also award reasonable attorneys' fees, filing fees and reasonable costs of suit. "An ascertainable loss under the CFA is one that is 'quantifiable or measurable,' not 'hypothetical or illusory.'" D'Agostino v. Maldonado, 216 N.J. 168, 185 (2013) (quoting Thiedemann v. Mercedes-Benz USA, L.L.C., 183 N.J. 234, 248 (2005)). Applying these standards here, plaintiff suffered a clearly quantifiable or measurable loss when defendant failed to release the $12,277.43 in insurance proceeds in a timely fashion. Justice Patterson emphasized in D'Agostino that in Case 3:16-cv-05274-BRM-DEA Document 23-8 Filed 12/05/16 Page 5 of 6 PageID: 552 A-3466-13T2 6 adjudicating CFA claims, a trial court must conduct "a case- specific analysis of a defendant's conduct and the harm alleged to have resulted from that conduct." Id. at 186. The evidence shows defendant failed to forward the insurance proceeds to plaintiff in a timely fashion, without having a good-faith basis for such a prolonged delay. Defendant's decision to send the proceeds at a time of its choosing does not eliminate liability under the CFA because the $12,277.43 in insurance proceeds became the ascertainable loss the moment the funds were wrongly withheld. Under the circumstances presented here, defendant cannot escape liability by releasing the insurance proceeds at a time when plaintiff had already assumed the burden of financing the cost of rebuilding his home. This approach leaves the door ajar for unscrupulous operators to use unconscionable commercial practices, as long as it can close the door before the victimized consumer initiates legal action to enforce the remedial measures conferred by the Legislature in the CFA. Here, defendant was not entitled to summary judgment because plaintiff's evidence showed an ascertainable loss at the time he filed his complaint. Reversed and remanded. Case 3:16-cv-05274-BRM-DEA Document 23-8 Filed 12/05/16 Page 6 of 6 PageID: 553 Gallerstein v. Berkshire Life Ins. Co. of America, Not Reported in F.Supp.2d (2006) © 2016 Thomson Reuters. No claim to original U.S. Government Works. 1 Gallerstein v. Berkshire Life Ins. Co. of America, Not Reported in F.Supp.2d (2006) KeyCite Yellow Flag - Negative Treatment Declined to Extend by Paulus Sokolowski & Sartor, LLC v. Continental Cas. Co., D.N.J., August 30, 2013 2006 WL 2594862 Only the Westlaw citation is currently available. NOT FOR PUBLICATION United States District Court, D. New Jersey. Peter GALLERSTEIN, Plaintiff, v. BERKSHIRE LIFE INSURANCE COMPANY OF AMERICA, et al., Defendants. Civil Action No. 05-05661(JAG). | Sept. 11, 2006. Attorneys and Law Firms Richard M. Golomb, Golomb & Honik, Philadelphia, PA, for Plaintiff. Robert P. Lesko, McCarter & English, Newark, NJ, for Defendants. OPINION GREENAWAY, JR., U.S.D.J. *1 This matter comes before this Court on the motion to dismiss the Complaint for failure to state a claim upon which relief can be granted, pursuant to FED.R.CIV.P. 12(b)(6), by Defendants Berkshire Life Insurance Company of America (“Berkshire”) and its parent company, Guardian Life Insurance Company of America (“Guardian”) (collectively, “Defendants”). For the reasons set forth below, Defendants’ motion to dismiss will be denied. BACKGROUND Peter Gallerstein (“Plaintiff”), a New Jersey doctor, has been a practicing physician specializing in cardiology since 1975. (Compl.¶ 34.) Until March 10, 2000, Plaintiff’s sole employment was as a cardiologist at Morristown Cardiology Associates, P.A. (“Morristown”). (Id. at ¶ 37.) Plaintiff alleges that he has suffered from ulcerative colitis since August, 1992. (Id. at ¶¶ 35, 36.) Case 3:16-cv-05274-BRM-DEA Document 23-9 Filed 12/05/16 Page 1 of 6 PageID: 554 Plaintiff purchased two disability income insurance policies (G-452924, G-451480) from Berkshire. (Compl.¶¶ 13, 16.) Plaintiff also purchased two disability income insurance policies (G-601882, G-617393) from Guardian. (Compl.¶¶ 20, 22.) Attached to the Complaint are copies of the applications filed for the two Guardian policies, which show that Plaintiff lived in New York at the time of their purchase. (Compl.Ex.A, B.) The Complaint alleges that, at all relevant times, Plaintiff practiced cardiology in Morristown, New Jersey. (Compl.¶ 4.) Plaintiff claims that on or about May, 1999, he became unable to perform some of the duties of his regular occupation as a result of a deterioration in his health. (Compl.¶¶ 1, 36.) Plaintiff alleges that, as a result of his ulcerative colitis, he was unable to take night calls or weekend calls for several months at Morristown. (Id. at ¶ 37.) Plaintiff further alleges that, as a result of the restrictions placed on him by his condition, he was compelled to leave his private practice on March 10, 2000. (Id. at ¶ 38.) After his departure from private practice, Plaintiff took a position as Director of the Corporate Medical Clinic at Honeywell (“Honeywell”) where he has performed industrial medical work and administrative work for 40-45 hours per week with no night or weekend call. (Id.) Plaintiff’s income declined from $33,500 per month at the Morristown practice to approximately $18,000 per month at Honeywell. (Id.) Plaintiff alleges that he pursued a lengthy and unsuccessful battle with Berkshire to obtain benefits under his disability income insurance policies. Berkshire issued a final letter denying him benefits on January 9, 2004. (See Compl. ¶¶ 42- 75.) On December 2, 2005, Plaintiff filed a Complaint alleging four counts against Defendants: 1) breach of contract; 2) unfair trade practices and bad faith; 3) intentional misrepresentation; and 4) breach of fiduciary duty. The parties briefed this motion to dismiss under New Jersey law. When this Court reviewed the record and found that two policies were alleged to have been purchased in New York, a supplementary briefing on choice of law was ordered. ANALYSIS I. Governing Legal Standards A. Standard for a Rule 12(b)(6) Motion to Dismiss *2 On a motion to dismiss for failure to state a claim, pursuant to FED.R.CIV.P. 12(b)(6), the court must accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the non-moving party. See Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384-85 (3d Cir.1994). A complaint should be dismissed only if the alleged facts, taken as true, fail to state a claim. See In re Warfarin Sodium, 214 F.3d 395, 397-98 (3d Cir.2000). The question is whether the claimant can prove any set of facts consistent with his or her allegations that will entitle him or her to relief, not whether that person will ultimately prevail. See Hishon v. King & Spalding, 467 U.S. 69, 73 (1984). “[A] complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46 (1957). While a court will accept well-pled allegations as true for the purposes of the motion, it will not accept unsupported conclusions, unwarranted inferences, or sweeping legal conclusions cast in the form of factual allegations. See Morse v. Lower Merion School District, 132 F.3d 902, 906 n. 8 (3d Cir.1997). All reasonable inferences, however, must be drawn in the plaintiff’s favor. See Sturm v. Clark, 835 F.2d 1009, 1011 (3d Cir.1987). Moreover, the claimant must set forth sufficient information to outline the elements of his or her claims or to permit inferences to be drawn that the elements exist. See FED.R.CIV.P. 8(a)(2); Conley, 355 U.S. at 45-46. “The defendant bears the burden of showing that no claim has been presented.” Hedges v. United States, 404 F.3d 744, 750 (3d Cir.2005). The Supreme Court has characterized dismissal with prejudice as a “harsh remedy.” New York v. Hill, 528 U.S. 110, 118 (2000). Dismissal of a count in a complaint with prejudice is appropriate if amendment would be inequitable or futile. “When a plaintiff does not seek leave to amend a deficient complaint after a defendant moves to dismiss it, the court must inform the plaintiff that he has leave to amend within a set period of time, unless amendment would be inequitable or futile.” Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir.2002). B. Choice of Law Case 3:16-cv-05274-BRM-DEA Document 23-9 Filed 12/05/16 Page 2 of 6 PageID: 555 A federal district court sitting in diversity must apply the choice of law principles of the forum state. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496-97 (1941). The New Jersey Supreme Court has established these choice of law rules: [T]he determinative law is that of the state with the greatest interest in governing the particular issue. The first step in the analysis is to determine whether a conflict exists between the law of the interested states. Any such conflict is to be determined on an issue-by-issue basis. If an actual conflict exists, the next step is to identify the governmental policies underlying the law of each state and how those policies are affected by each state’s contacts to the litigation and to the parties. If that state’s contacts are not related to the policies underlying its law, then that state does not possess an interest in having its law apply. Consequently, the qualitative, not the quantitative, nature of a state’s contacts ultimately determines whether its law should apply. *3 Vezey v. Doremus, 510 A.2d 1187, 1189 (N.J.1986). Under New Jersey law, the governing law in a contract case is that of the jurisdiction with the most significant relationship and closest contacts with the transaction and the parties. State Farm Mut. Auto. Ins. Co. v. Estate of Simmons, 417 A.2d 488, 491 (N.J.1980). “The law of the state that the parties understood was to be the principal location of the insured risk governs unless some other state has a more significant relationship to the transaction and the parties.” Gilbert Spruance Co. v. Pa. Mfrs. Ass’n Ins. Co., 629 A.2d 885, 894. (N.J.1993). II. Defendant’s 12(b)(6) Motion to Dismiss In addressing the motion to dismiss, this Court must, for each issue, perform a choice of law analysis. With the exception of the actual purchase transaction for two of the policies, all events in the Complaint are alleged to have occurred in the state of New Jersey. Plaintiff argues persuasively that, since Plaintiff worked and resided in New Jersey throughout his entire dispute with Defendants, beginning before the time of the onset of the illness, New Jersey has the most significant interest in every issue in this case except for those involved in the purchase transactions. Moreover, neither party contends that choosing New York rather than New Jersey law determines the outcome of this motion to dismiss. All issues involving events subsequent to purchase will be decided under New Jersey law. As will be discussed further below, because there is no actual conflict between the law of fraud of New York and New Jersey, for the purposes of this motion, the validity of the claim of fraud in the purchase transaction will be decided under New Jersey law as well. A. Count IV: Breach of Fiduciary Duty Plaintiff alleges breach of fiduciary duty in his Complaint. Plaintiff and Defendant dispute whether New Jersey law imposes a fiduciary duty upon insurers. Defendants contend that, under New Jersey law, an “insurer simply does not owe a fiduciary duty to its insured when it is rendering a claim determination.” (Defs.’ Br. 8 .) This is incorrect. New Jersey has broadly recognized an insurer’s fiduciary duty insofar that an insurer owes a duty of good faith to the insured. See Rova Farms Resort, Inc. v. Investors Ins. Co., 323 A.2d 495, 505 (N.J.1974). Defendants argue for an unreasonably narrow reading of Rova Farms in particular and New Jersey law in general. In Rova, however, the New Jersey Supreme Court addressed the duties of insurers to their insureds in unmistakeably broad terms: “Good faith is a broad concept ... [which] imposes upon the insurer the duty to exercise good faith in settling claims.” Id. Subsequent decisions of the New Jersey Supreme Court continue to reflect this broad approach to the fiduciary obligations of insurers to their insureds. “An insurance company owes a duty of good faith to its insured in processing a first-party claim.” Pickett v. Lloyd, 621 A.2d 445, 450 (N.J.1993). In Pickett, the Court cited a state appellate decision, Sobotor v. Prudential Property & Casualty Ins. Co., 200 N.J.Super. 333, 337-41 (N.J.Super.Ct.App.Div.1984), for the proposition that the “relationship of insured and insurer, either agent or broker, is [a] fiduciary one, carrying with it affirmative duties toward the insured.” See also Griggs v. Bertram, 88 N.J. 347, 361 (N.J.1982) (noting “the overriding fiduciary duty of an insurer to deal with an insured fairly and candidly”). Clearly, New Jersey law recognizes an insurer’s fiduciary duty to its insured in settling claims. *4 The Supreme Court discussed the concept of fiduciary duties in Pegram v. Herdrich, 530 U.S. 211, 231 (2000): “At common law, fiduciary duties characteristically attach to decisions about managing assets and distributing property to beneficiaries.... Thus, the common law trustee’s most defining concern historically has been the payment of money in Case 3:16-cv-05274-BRM-DEA Document 23-9 Filed 12/05/16 Page 3 of 6 PageID: 556 the interest of the beneficiary.” An insurer paying a disability claim is paying money in the interest of a beneficiary and thus also reflects this defining characteristic. Moreover, the Court quoted from Justice Cardozo’s famous formulation in Meinhard v. Salmon: “A trustee is held to something stricter than the morals of the market place.” Pegram, 530 U.S. at 225 (quoting Meinhard v. Salmon, 249 N.Y. 458, 464 (1928)). As will be discussed in the next section, New Jersey has codified the stricter obligations of an insurer to its insured in settling claims in N.J. Stat. Ann. § 17:29 B-4(9)(f). This statute by itself contradicts the assertion that, as a matter of law, New Jersey imposes no fiduciary duties on an insurer settling claims. Defendants’ motion to dismiss Plaintiff’s claim for breach of fiduciary duty, pursuant to FED.R.CIV.P. 12(b)(6), is denied. B. Count II: Bad Faith Plaintiff alleges bad faith on the part of Defendants in refusing to pay him benefits as a part of Count II, for violation of N.J. Stat. Ann. § 17:29 B-4. This statute defines unfair acts, practices, and methods of competition in the business of insurance. N.J. Stat. Ann. § 17:29B-4. N.J. Stat. Ann. § 17:29 B-4(9) addresses unfair claim settlement practices. N.J. Stat. Ann. § 17:29 B-4(9)(f) states a good faith requirement for insurers: “Not attempting in good faith to effectuate prompt, fair and equitable settlement of claims in which liability has become reasonably clear” constitutes an unfair claim settlement practice. Id. In New Jersey, an insurer cannot be liable as a matter of law for denying a claim in bad faith if the basis for that denial is “fairly debatable.” Pickett, 621 A.2d at 450. Application of the “fairly debatable” standard requires an intensive factual examination. Defendants agree that there are factual questions about the correctness of their claim determination. (Defs.’ Reply Br. 9.) Yet they use this to argue that, if there are factual questions, then the denial is necessarily “fairly debatable” and the bad faith claim must be dismissed. This is illogical and, if accepted, would require that plaintiffs prove their bad faith claims conclusively in their complaints, an outcome at odds with our legal system’s differentiation of pleading and proof. In a case of this factual complexity, at a stage at which all reasonable inferences must be made in Plaintiff’s favor, this Court cannot conclude that it appears beyond doubt that Plaintiff would be wholly unable to prove any bad faith at any time. Thus, this Court denies Defendants’ motion to dismiss Plaintiff’s claim of bad faith, pursuant to FED.R.CIV.P. 12(b)(6). C. Count III: Intentional Misrepresentation *5 Plaintiff alleges fraud and intentional misrepresentation at the time of purchase, as well as subsequently, by Defendants. New York and New Jersey provide for the same five essential elements in determining common law fraud. See Winslow v. Corporate Express, Inc., 834 A.2d 1037, 1044 (N.J.Super.Ct.App.Div.2003); Schlaifer Nance & Co., Inc. v. Estate of Warhol, 194 F.3d 323, 336 (2d Cir.1999). There is no actual conflict in the two states’ laws of common law fraud. FED.R.CIV.P. 9(b) requires that “[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred generally.” “The purpose of Rule 9(b) is to provide notice of the ‘precise misconduct’ with which defendants are charged” in order to give them an opportunity to respond meaningfully to the complaint, “and to prevent false or unsubstantiated charges.” Rolo v. City of Investing Co. Liquidating Trust, 155 F.3d 644, 658 (3d Cir.1998) (citing Seville Indust. Machinery v. Southmost Machinery, 742 F .2d 786, 791 (3d Cir.1984)). To satisfy Rule 9(b), a plaintiff must “plead with particularity the ‘circumstances’ of the alleged fraud.” Rolo, 155 F.3d at 658. Plaintiffs need not “plead the ‘date, place or time’ of the fraud, so long as they use an ‘alternative means of injecting precision and some measure of substantiation into their allegations of fraud.’ “ Rolo, 155 F.3d at 658 (citing Seville, 742 F.2d at 791). The Third Circuit has cautioned that courts should “apply the rule with some flexibility and should not require plaintiffs to plead issues that may have been concealed by the defendants.” Rolo, 155 F.3d at 658 (citing Christidis v. First Pa. Mortg. Trust, 717 F.2d 96, 99 (3d Cir.1983)). In New Jersey, a cause of action for common-law fraud has five elements: (1) a material misrepresentation of a presently existing or past fact; (2) knowledge or belief by the defendant of its falsity; (3) an intention that the other person rely on it; (4) reasonable reliance thereon by the other person; and (5) resulting damages. Winslow, 834 A.2d at 1044. The Complaint alleges: (1) that Defendants misrepresented that they would make benefit payments as per the policy; (2) that Defendants never intended to make these payments; (3) that Defendants intended for Plaintiff to rely on these misrepresentations; (4) that Plaintiff reasonably relied on the misrepresentations, as evidenced by Plaintiff’s Case 3:16-cv-05274-BRM-DEA Document 23-9 Filed 12/05/16 Page 4 of 6 PageID: 557 continuing payment of premiums; and (5) that Plaintiff suffered pecuniary loss consisting of the loss of monthly benefits, attorney’s fees, litigation costs, expenses, interests and earnings upon the unpaid benefits. (Compl.¶¶ 100-02, 105). Defendants argue that Plaintiff has failed to plead the first element, a material misrepresentation of a presently existing or past fact. The Complaint alleges that Defendants misrepresented their lack of intent to perform under the contract. (Compl.¶ 99-100.) Defendants contend that New Jersey law does not permit fraud claims to be premised on misrepresentations as to future facts or events. In support, Defendants distort the holding of Anderson v. Modica, 4 N.J. 383, 391 (N.J.1950), which expressly allows for fraud claims implicating future events if fraudulent scienter is alleged, that is, when the perpetrator is alleged to have misrepresented the present intent of future performance on a promise at the moment the promise is made. See also Lightning Lube v. Witco Corp., 4 F.3d 1153, 1186 (3d Cir.1993) (citing Anderson for this point). Because Plaintiff alleges fraudulent intent at the time the contractual promises were made, this is sufficient to state a claim under Anderson. *6 Plaintiff’s Complaint is sufficient to satisfy FED.R.CIV.P. 9(b). The Plaintiff provides sufficient information for the Defendants “to prepare a defense as to the particular allegations of fraud.” Rolo, 155 F.3d at 659. Looking to the Complaint, Plaintiff specifies the dates that the four agreements were entered into and then notes the subsequent alleged failure to fulfill the terms of these agreements, all of which were in effect until January 3, 2005. (Compl.¶ 99.) Moreover, after reading the Complaint, Defendants know that they must prepare to rebut Plaintiff’s arguments that Defendants entered into the insurance agreements without any intention of ever fulfilling the policy’s terms and that Defendants falsely represented that they would fulfill the terms of the policies. (Id. at ¶ 100.) The information set out by Plaintiff sufficiently satisfies the standard that a plaintiff “plead with particularity the ‘circumstances’ of the alleged fraud.” Rolo, 155 F.3d at 658. Thus, Defendants’ motion to dismiss, pursuant to FED.R.CIV.P. 9(b), is denied. D. Gist of the Action Doctrine Defendants assert that Plaintiff’s fraud (intentional misrepresentation) claim is barred because it is “nothing more than a breach of contract claim recast as a tort and thus, is subject to the “gist of the action” doctrine under Pennsylvania law. (Defs.’ Br. 14.) This Court need not consider this argument since Pennsylvania law has no application to this case. Not only does New Jersey not recognize the “gist of the action” doctrine, it has explicitly recognized that an action can sound in both contract and tort. “A wrongful failure to settle, wherein the insurer has breached the fiduciary obligation imposed by virtue of its policy, sounds in both tort and contract.” Rova Farms, 323 A.2d at 51. E. Period of Limitations Defendants have withdrawn this argument. (Defs.’ Reply Br. 12.) CONCLUSION For the reasons stated above, this Court denies Defendants’ motion to dismiss Plaintiff’s Complaint for failure to state a claim upon which relief can be granted, pursuant to FED.R.CIV.P. 12(b)(6). All Citations Not Reported in F.Supp.2d, 2006 WL 2594862 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 1 Gallerstein v. Berkshire Life Ins. Co. of America, Not Reported in F.Supp.2d (2006) Case 3:16-cv-05274-BRM-DEA Document 23-9 Filed 12/05/16 Page 5 of 6 PageID: 558 End of Document © 2016 Thomson Reuters. No claim to original U.S. Government Works. © 2016 Thomson Reuters. No claim to original U.S. Government Works. 1 Gallerstein v. Berkshire Life Ins. Co. of America, Not Reported in F.Supp.2d (2006) © 2016 Thomson Reuters. No claim to original U.S. Government Works. 1 Case 3:16-cv-05274-BRM-DEA Document 23-9 Filed 12/05/16 Page 6 of 6 PageID: 559 Henderson v. Hertz Corp, Not Reported in A.2d (2006) © 2016 Thomson Reuters. No claim to original U.S. Government Works. 1 KeyCite Yellow Flag - Negative Treatment Distinguished by In re OnStar Contract Litigation, E.D.Mich., February 19, 2009 2005 WL 4127090 Only the Westlaw citation is currently available. UNPUBLISHED OPINION. CHECK COURT RULES BEFORE CITING. Superior Court of New Jersey, Appellate Division. Naomi R. HENDERSON, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. The HERTZ CORPORATION, Defendant-Respondent. Argued Feb. 28, 2005. | Decided June 22, 2006. On appeal from the Superior Court of New Jersey, Law Division, Essex County, L-6937-03. Attorneys and Law Firms Bruce D. Greenberg argued the cause for appellant (Lite, DePalma, Greenberg & Rivas, attorneys; Mr. Greenberg on the brief, and Joseph N. Kravec, Jr. (Specter, Specter, Evans & Manogue), of the Pennsylvania bar, admitted pro hac vice, of counsel and on the brief). Alan E. Kraus argued the cause for respondent (Latham & Watkins, attorneys; Lisa Ann T. Ruggiero and Mr. Kraus, on the brief). Before Judges A.A. RODRÍGUEZ, CUFF and HOENS. Opinion PER CURIAM. *1 Plaintiff Naomi Henderson appeals from the January 29, 2004 order of the Law Division granting the motion of defendant, The Hertz Corporation (“Hertz”), to dismiss her complaint for failure to state a claim upon which relief may be granted. We affirm. For purposes of our review and in light of the procedural posture of this appeal, we accept as true the facts set forth in plaintiff’s complaint. Hertz is a national car rental company with its headquarters in New Jersey. At all times relevant to this appeal, Hertz not only rented vehicles to customers, but also offered for sale three different varieties of insurance which could be purchased along with the cars being rented. More particularly, defendant offered third-party insurance known as Liability Insurance Supplement (LIS), first-party insurance coverage known as Personal Accident Insurance (PAI), and personal property or damage insurance referred to as Personal Effects Coverage (PEC). Each type of insurance coverage was underwritten by independent insurance companies and only made available for sale by Hertz. According to the complaint, plaintiff rented a car from Hertz at Newark Airport on January 12, 1998. In connection with that rental, she purchased LIS coverage but chose not to purchase PAI or PEC coverage. She returned the rental car without incident, never having had to make a claim against the LIS coverage. Plaintiff further alleges that at various times between April 1988 and August 2003, she rented cars from Hertz in states other than New Jersey and that she purchased one or more of the insurance products in connection with each of those other rentals. She concedes she never filed any claims under the coverages provided by any of the insurance products she purchased. Plaintiff filed her complaint seeking to sue individually and as the representative of a class of individuals who both rented vehicles from Hertz and purchased one or more of the insurance products from Hertz during the period from April 1988 through August 2003. The complaint alleges that Hertz misrepresented, concealed or failed to disclose to plaintiff and the other members of the class that it was not licensed or registered to sell the insurance products that she and the class members purchased. She asserts that she and other members of the class are therefore entitled to damages from defendant based upon six separate causes of action, namely, a violation of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 to -20, common law fraud, illegal contract subject to rescission, breach of the implied covenant of good faith and fair dealing, negligent misrepresentation and unjust enrichment. Defendant filed a motion to dismiss the complaint for failure to state a claim, see R. 4:6-2(e), in lieu of answering the complaint. That motion, in summary, asserted that plaintiff’s complaint failed to state a claim because it essentially sought to create a private right of action arising from a licensing requirement, which could Case 3:16-cv-05274-BRM-DEA Document 23-10 Filed 12/05/16 Page 1 of 7 PageID: 560 Henderson v. Hertz Corp, Not Reported in A.2d (2006) © 2016 Thomson Reuters. No claim to original U.S. Government Works. 2 only be enforced by the Commissioner of the Department of Banking and Insurance (“the Commissioner”), because it sought to rescind a fully executed contract and because plaintiff could not demonstrate that she had suffered an ascertainable loss as required by the Consumer Fraud Act. On January 29, 2004, Judge Bernstein granted the Hertz motion, separately addressing the sufficiency of each of the complaint’s causes of action as a part of his oral decision. *2 On appeal, plaintiff asserts that Judge Bernstein erred in dismissing the complaint for failure to state a claim. She argues that the complaint states a cause of action, cognizable within the Consumer Fraud Act, which is parallel to, but not coextensive with, the remedies that are available to the Department of Banking and Insurance to enforce the applicable insurance licensing statutes. In addition, she asserts that because she purchased a product that Hertz was not lawfully entitled to sell to her and which Hertz lacked the appropriate license to sell, she has suffered an ascertainable loss. In the alternative, she urges us to find that the factual allegations support relief based on her other causes of action. We disagree and we affirm. We begin our analysis with an explanation of the relevant statutory and regulatory scheme governing insurance products and with an examination of the required elements of the Consumer Fraud Act. Since April 1988, the New Jersey Insurance Producer Licensing Act (IPLA), N.J.S.A. 17:22A-1 to -25, has required that an entity or person must be licensed in order to offer insurance for sale or receive a fee, commission or compensation for sales of insurance. N.J.S.A. 17:22A-3. Effective August 15, 2001, the Legislature repealed that statute, but replaced it with a revised enactment. See New Jersey Insurance Producer Licensing Act of 2001 (IPLA(2001)), N.J.S.A. 17:22A-26 to -48. The relevant language of the statute currently in force is similar to the requirements under IPLA. As currently in force, IPLA(2001) provides that a “person shall not sell, solicit or negotiate insurance in this State unless the person is licensed for that line of authority in accordance with this act.” N.J.S.A. 17:22A-29. In addition, IPLA(2001) specifically defines “person” to include both individuals and business entities. Id. at -28. Both IPLA and IPLA(2001) vest the Commissioner with authority for both issuance of licenses to sell insurance and enforcement of compliance with the statutes. See IPLA, N.J.S.A. 17:22A-4, -20; IPLA(2001), N.J.S.A. 17:22A-32, -33, -45. Pursuant to IPLA, the Department of Banking and Insurance (“the Department”) adopted regulations which plaintiff asserts require car rental companies, like Hertz, to register as limited insurance representatives for purposes of sales of insurance, such as the coverages Hertz offered. See 20 N.J.R. 904, 906-07, 909-10 (April 18, 1988). The regulations accomplish this result by defining car rental companies as sellers of “ticket insurance,” N.J.A.C. 11:17-1.2, and by requiring sellers of ticket insurance to register in accordance with the Act. N.J.A.C. 11:17-2.2(a)(9)(iii). According to the complaint, Hertz did not register as required by IPLA or IPLA(2001) and therefore was not licensed to offer the insurance products that it made available in connection with its car rentals to plaintiff and the other class members from 1988 through 2003.1 *3 Plaintiff concedes that our Supreme Court has concluded that there is no private right of action under IPLA. See Lemelledo v. Beneficial Management Corp. of Am., 150 N.J. 255, 272 (1997). She concedes that IPLA’s licensing requirements can only be enforced by the Department, which it accomplishes through the imposition of fines and penalties. Ibid. She does not suggest that the analysis of the similar statutory scheme enacted by IPLA(2001) would yield a contrary result. She asserts, however, that the claims she has raised are cognizable causes of action within the Consumer Fraud Act, or sounding in common law fraud, illegal contract, breach of the covenant of good faith and fair dealing, negligence or unjust enrichment. The Law Division judge found these arguments unconvincing. Addressing the first count of the complaint, in which plaintiff asserted that the contract for sale of the insurance products was illegal and subject to the equitable remedy of rescission, the judge concluded that although the contract was illegal under IPLA, the statute did not make the contract unenforceable. Moreover, he concluded that because the contract had been fully performed and plaintiff had received the full benefit of the insurance coverage for which she paid, rescission was not available as a remedy. With respect to the counts of the complaint seeking relief pursuant to the Consumer Fraud Act or for common law fraud or misrepresentation, the judge noted that the sole basis for these allegations was Hertz’s failure to register and become licensed. Because permitting that claim to proceed would be tantamount to asserting a private remedy under IPLA or IPLA(2001), he concluded it was barred. Furthermore, the judge found no other allegation in the complaint suggesting that Hertz misled plaintiff or that it engaged in any other deceptive practice such as, for example, leading her to believe that the purchase of the coverage was anything other than an option, or overcharging her for the coverage. As a result, the judge concluded that the complaint did not assert any Case 3:16-cv-05274-BRM-DEA Document 23-10 Filed 12/05/16 Page 2 of 7 PageID: 561 Henderson v. Hertz Corp, Not Reported in A.2d (2006) © 2016 Thomson Reuters. No claim to original U.S. Government Works. 3 fraud-based claim apart from the one resting on the violation of IPLA. The judge also dismissed the count in the complaint for breach of the covenant of good faith and fair dealing, concluding that this implied contract theory was unsupported by any of the factual allegations. Finally, the motion judge concluded that there could be no claim for unjust enrichment because plaintiff had received the benefit of her bargain. On appeal, plaintiff asserts that the judge erred in dismissing the complaint for failure to state a claim. More specifically, she asserts that the allegations in the complaint suffice to support a cause of action pursuant to the Consumer Fraud Act which is parallel to the remedies that are available to the Commissioner as enforcement mechanisms for IPLA or IPLA(2001). In addition, she asserts that she has identified an ascertainable loss, a critical element to the Consumer Fraud Act analysis, arguing that she was damaged by purchasing a product that defendant was not lawfully entitled to sell to her and that she would not have purchased had she been aware that defendant lacked the appropriate license. In the alternative, she asserts that the judge erred in his analysis of the sufficiency of her other claims. In particular, she argues that he failed to consider that Hertz, by failing to advise her that it was not licensed to sell the LIS, PAI and PEC products, committed common law fraud and breached the covenant of good faith and fair dealing. Finally, she argues that Hertz has been unjustly enriched by being permitted to profit from the sale of these products in violation of IPLA and IPLA(2001). *4 A motion for failure to state a claim requires the judge to search the pleading in depth and with liberality in order to determine whether a cause of action is suggested. Printing Mart-Morristown v. Sharp Electronics Corp., 116 N.J. 739, 746 (1989). In addressing any motion to dismiss for failure to state a claim, the court must “accept as true all factual assertions in the complaint.” Smith v. SBC Communications, Inc., 178 N.J. 265, 268-69 (2004). Moreover, in doing so, every reasonable inference to be drawn from the factual assertions must be accorded to the plaintiff. Id. at 282. We have specifically considered the effect of such a motion in the context of a Consumer Fraud Act complaint. See New Jersey Citizen Action v. Schering-Plough Corp., 367 N.J.Super. 8, 13 (App.Div.), certif. denied, 178 N.J. 249 (2003). In particular, we have commented that a motion for failure to state a claim in the context of the Consumer Fraud Act should be approached “with hesitation.” Id. at 13 (citing Seidenberg v. Summit Bank, 348 N.J.Super. 243, 249-50 (App.Div.2002)(other citations omitted)). However indulgently the court is required to view the sufficiency of factual allegations in evaluating a motion to dismiss for failure to state a claim, the motion judge must nevertheless grant the motion if the complaint fails to articulate a legally sufficient basis entitling plaintiff to relief. See Camden County Energy Recovery Assocs., L.P. v. New Jersey Department of Environmental Protection, 320 N.J.Super. 59, 64 (App.Div.1999), aff’d o.b . 170 N.J. 246 (2001). As we have recently held, “[a] motion to dismiss a complaint under R. 4:6-2(e) for failure to state a claim upon which relief can be granted must be evaluated in light of the legal sufficiency of the facts alleged in the complaint.” Donato v. Moldow, 374 N.J.Super. 475, 482 (App.Div.2005). Although a plaintiff need not prove the truth of the factual allegations in response to a motion to dismiss for failure to state a claim, it is plaintiff’s duty to demonstrate allegations “which, if proven, would constitute a valid cause of action.” Sickles v. Cabot Corp., 379 N.J.Super. 100, 106 (App.Div.)(quoting Leon v. Rite Aid Corp., 340 N.J.Super. 462, 472 (App.Div.2001)), certif. denied, 185 N.J. 297 (2005). With these indulgent standards of review in mind, we turn to the specific complaint and the arguments of the appellant. Although there are six separate counts in the complaint, the central focus of plaintiff’s appeal, and therefore the focus of our analysis, is on the Consumer Fraud Act, N.J.S.A. 56:8-1 to -20, and the related claims sounding in common law fraud and misrepresentation. We begin, therefore, by observing that the Consumer Fraud Act gives citizens a cause of action under certain conditions. As our Supreme Court has held, in order to state a claim under the Consumer Fraud Act, a plaintiff must allege each of three elements: (1) unlawful conduct by a defendant; (2) an ascertainable loss on the part of the plaintiff; and (3) a causal relationship between defendant’s unlawful conduct and that ascertainable loss. See Cox v. Sears Roebuck & Co., 138 N.J. 2, 24 (1994). Based upon our review of the allegations in the complaint, we conclude, as did the motion judge, that plaintiff has failed to state a claim consistent with these necessary requirements of the Consumer Fraud Act. In particular, her claim falls short because she cannot demonstrate that the unauthorized sale of insurance products is “unlawful conduct” as that concept is embodied in the Consumer Fraud Act and because she cannot demonstrate that she has suffered an ascertainable loss because of Hertz’s conduct. *5 We first conclude that plaintiff has failed to allege facts that would support relief under the Consumer Fraud Act because the nature of the misrepresentation or deceptive practice on which she bases her claim, namely, the sale of a product which Hertz was not authorized by license to sell, is not a legally cognizable claim. That is to Case 3:16-cv-05274-BRM-DEA Document 23-10 Filed 12/05/16 Page 3 of 7 PageID: 562 Henderson v. Hertz Corp, Not Reported in A.2d (2006) © 2016 Thomson Reuters. No claim to original U.S. Government Works. 4 say, IPLA and IPLA(2001) make plain that enforcement of the licensing provisions relating to the sale of insurance products is for the Commissioner. See In re Commissioner of Insurance’s March 24, 1992 Order, 256 N.J.Super. 158, 176 (App.Div.1992), aff’d, 132 N.J. 209 (1993)(“Implied remedies are unlikely to be intended by a Legislature that enacts a comprehensive legislative scheme including an integrated system of procedures for enforcement”); Mizrahi v. Allstate Ins. Co., 276 N.J.Super. 112, 118 (Law Div.1994)(IPLA “seeks to compel compliance with its licensing requirements by permitting the Commissioner to impose substantial fines ... and to refuse to issue or renew a license for any statutory violation”). Our Supreme Court has specifically held that IPLA does not create a private right of action or a private remedy for an individual who purchases an insurance product from an unlicensed insurer. See Lemelledo, supra, 150 N.J. at 272. Nothing in IPLA(2001) would support a different conclusion as it relates to that legislative scheme. Viewed against these precedents, plaintiff’s claim must fail as a matter of law. A review of the complaint reveals that the only acts or practices plaintiff alleges give rise to her cause of action are that Hertz sold insurance without a license, that Hertz was required to be licensed and that Hertz’s sale of insurance was either illegal or against public policy. None of these acts, however, falls outside the scope of IPLA or IPLA(2001); none can be the basis for a private remedy under the Consumer Fraud Act. None, by extension, can support a private remedy through any other misrepresentation-based theory. Even were plaintiff to contend, and her complaint does not, that defendant should have revealed to her that it was an unlicensed seller of ticket insurance and that she would not have purchased the products had she been aware of those facts, we would reach the same result. Because her factual assertions are, fundamentally, that Hertz violated IPLA or IPLA(2001) they cannot support relief under any of the theories in her complaint. It is significant to our analysis that plaintiff has defined the class of claimants to include only those who purchased insurance products from Hertz but who thereafter made no claims for coverage pursuant to those policies. She concedes that any Hertz customer who purchased one of the insurance products and who thereafter made a claim under those policies was compensated for their covered claims. That being the case, plaintiff has defined the class of persons she seeks to represent to include only those individuals who have no claim at all. That is to say, the very definition of the class demonstrates that the insurance Hertz sold was recognized as valid by the underwriters, notwithstanding the fact that Hertz had no license to sell it. By defining the class to exclude all individuals who purchased the insurance and made a claim for which they were compensated, plaintiff only asserts a cause of action which IPLA and IPLA(2001) have reserved to the Commissioner. In short, she seeks to create a private right of action to remedy the unlicensed sale. *6 Nor does the holding of the Supreme Court in Perez v. Rent-A-Center, Inc., 186 N.J. 188 (2006), or the analysis of the Law Division in Artistic Lawn & Landscape Co. v. Smith, 381 N.J.Super. 75 (Law Div.2005), both called to our attention by plaintiff while this matter was pending, see R. 2:6-11(d), support a different result. In Perez, the Court concluded that a claim amounting to a statutory violation could also form the basis for a Consumer Fraud Act claim. Its reasoning, however, rested on the conclusion that a rent-to-own contract was a retail installment contract, within the meaning of the Retail Installment Sales Act (“RISA”), N.J.S.A. 17:16C-1 to -61, and subject to that statute. Having reached that conclusion, the Court then relied on the rationale of Lemelledo, supra, 150 N.J. at 264-66, which had earlier concluded that a RISA violation could support a Consumer Fraud Act cause of action. See Perez, supra, 186 N.J. at 219-20. The Court’s reasoning in Perez does not undercut the Court’s earlier conclusion in Lemelledo that an IPLA violation does not similarly give rise to a Consumer Fraud Act claim. Lemelledo, supra, 150 N.J. at 272. Indeed, the Perez Court pointed out that there is no suggestion that the remedy of the Consumer Fraud Act would conflict with the RISA enforcement scheme. In light of the fact that the Court in Lemelledo reached the contrary conclusion in its separate analysis of the relationship between the Consumer Fraud Act and IPLA, based on the latter’s lack of a private remedy, we find nothing in Perez that supports plaintiff’s assertions. Indeed, the Court has not altered its conclusion that a conflict between the regulatory scheme and the asserted private remedy compels the latter to give way to the former. Similarly, although the Law Division judge in Artistic Lawn concluded that a contractor who was not licensed to perform a lawn irrigation installation project could be subject to a Consumer Fraud Act claim, neither the court’s analysis nor the statutory framework addressed in that decision supports a like conclusion here. Apart from the fact that the licensing framework addressed in Artistic Lawn is unlike IPLA or IPLA(2001), as the court there recognized, the full performance of the contract itself, regulations notwithstanding, might compel an alternate result. See Artistic Lawn, supra, 381 N.J.Super. at 87. Indeed, the Law Division judge in Artistic Lawn relied in Case 3:16-cv-05274-BRM-DEA Document 23-10 Filed 12/05/16 Page 4 of 7 PageID: 563 Henderson v. Hertz Corp, Not Reported in A.2d (2006) © 2016 Thomson Reuters. No claim to original U.S. Government Works. 5 part on our earlier expression of a similar concern, that is, the inherent unfairness of preventing a remedy to a contractor who has fully performed. See Scibeck v. Longette, 339 N.J.Super. 72, 82 (App.Div.2001). Even were we to conclude that plaintiff here had a potential private remedy, because Hertz fully performed, the concern we expressed in Scibeck would support the same conclusion here, precluding plaintiff from pursuing her claim. As we noted in Scibeck, plaintiff, having received the full benefit of the bargain of the insurance coverage that Hertz sold her, should not be permitted to “use the [Consumer Fraud] Act as a sword rather than a shield.” Ibid. Having reviewed and considered each of these additional precedents cited for us by plaintiff, we discern no basis on which to conclude that the Law Division judge erred in deciding that she has failed to state a claim for relief pursuant to the Consumer Fraud Act. *7 Alternatively, we would affirm the motion judge’s decision because plaintiff has failed to set forth facts that suffice to meet the ascertainable loss requirement of the Consumer Fraud Act. We need not describe this requirement or the history of the development of our understanding of it, see Weinberg v. Sprint Corp., 173 N.J. 233, 251 (2002); Meshinsky v. Nichols Yacht Sales, Inc., 110 N.J. 464, 473 (1988), at great length, particularly in light of the recent guidance from our Supreme Court about the meaning of the term. See Thiedemann v. Mercedes-Benz U.S.A., LLC, 183 N.J. 234, 238 (2005). In Thiedemann, the Court reiterated that summary judgment on a Consumer Fraud Act claim is appropriate if a “plaintiff fails to produce evidence from which a finder of fact could find or infer” that the plaintiff sustained an ascertainable loss. Ibid. Significant to our analysis of plaintiff’s complaint against Hertz, the Court there defined the concept of ascertainable loss as a “quantifiable or otherwise measurable loss.” Ibid. In analyzing and in attempting to define the ascertainable loss requirement, the Court observed that “[t]here is little that illuminates the precise meaning that the Legislature intended in respect of the term ‘ascertainable loss’ in our statute.” Id. at 248. In doing so, the Court echoed its earlier statement that “[w]e neither can ascribe a plain meaning to the term ascertainable loss, nor find legislative history that sheds direct light on those words.” See Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 11 (2004). Most significant to our analysis, in Thiedemann, the Court concluded that “[t]o give effect to the legislative language describing the requisite loss for private standing under the [Consumer Fraud Act], and to be consistent with Weinberg, a private plaintiff must produce evidence from which a factfinder could find or infer that the plaintiff suffered an actual loss.” Thiedemann, supra, 183 N.J. at 248. As a further illustration of the meaning of “actual loss” the Court noted that “[i]n cases involving breach of contract or misrepresentation, either out-of-pocket loss or a demonstration of loss in value will suffice to meet the ascertainable loss hurdle and will set the stage for establishing the measure of damages.” Ibid. The Court stressed, however, that the “certainty implicit in the concept of an ‘ascertainable’ loss is that [such loss] is quantifiable or measurable.” Ibid. The calculation does not need to be exact, and plaintiff need not experience any out-of-pocket loss. Ibid. Rather “an ‘estimate of damages, calculated within a reasonable degree of certainty,’ will” be sufficient to demonstrate an ascertainable loss. Id. at 249 (quoting Cox, supra, 138 N.J. at 22). In the time since the Court decided Thiedemann, we have addressed several other issues related to the analysis of the concept of ascertainable loss. We have reiterated our earlier rejection of the “price-inflation” theory, see Dabush v. Mercedes-Benz U.S.A., LLC, 378 N.J.Super. 105, 123 (App.Div.) (citing Citizen Action, supra, 367 N.J.Super. at 16), certif. denied, 185 N.J. 265 (2005), and we have concluded that a plaintiff who relies only on hypothetical surmise about an automobile component without any out-of-pocket loss or evidence of its value cannot meet the Thiedemann test. Id. at 124. We have concluded that automobile repairs that would have been covered by warranties but which were voluntarily foregone in an effort to support a Consumer Fraud Claim Act also did not meet the ascertainable loss test. See Perkins v. DaimlerChrysler Corp., 383 N.J.Super. 99, 112 (App.Div.2006). *8 We recognize that the Court in Thiedemann had the benefit of a more complete record than the one we here review. While the Thiedemann appeal followed a motion for summary judgment, based on a record more fully developed in discovery than the limited record before us in light of the procedural posture of this matter, we do not find that difference significant. We conclude, rather, as we did in Perkins, that the parameters of the Thiedemann test for ascertainable loss are such that they can be applied appropriately to this complaint in the context of a motion to dismiss for failure to state a claim. See Perkins, supra, 383 N.J.Super. at 111. Applying even these more recent precedents to plaintiff’s complaint, we reach the same conclusion as did Judge Bernstein. Although plaintiff purchased insurance products from an allegedly unlicensed seller, she must concede that, had she had the occasion to file a claim against that insurance coverage, it would not have been rejected on that ground. In fact, she got the benefit of her Case 3:16-cv-05274-BRM-DEA Document 23-10 Filed 12/05/16 Page 5 of 7 PageID: 564 Henderson v. Hertz Corp, Not Reported in A.2d (2006) © 2016 Thomson Reuters. No claim to original U.S. Government Works. 6 bargain because she was covered against the various perils as to which the insurance products applied each time she bought coverage. The mere fact that she did not need to file a claim does not mean that she did not receive the coverage for which she bargained. It therefore cannot equate with an ascertainable loss as our Supreme Court has interpreted that term. Rather, it is only by defining the putative class so as to exclude every purchaser who made a claim and who realized the full benefit of the coverage as well that plaintiff attempts to demonstrate a loss. We decline to interpret the reach of the ascertainable loss requirement to include plaintiff, who only by fortuity, did not actually need the coverage she purchased. Indeed, it is in the nature of insurance that some people will buy it and not use its available coverages. To suggest that every purchaser of insurance who does not thereafter make a claim against the coverage has suffered an “actual” loss in the sense required under the Consumer Fraud Act is to stretch the concept well beyond its meaning and intendment as we understand it. Henderson also argues that the Law Division judge erred in dismissing her claims based on theories of common law fraud, negligent misrepresentation, illegal contract (rescission), breach of the covenant of good faith and fair dealing and unjust enrichment. Although we find no merit in her assertion that the judge erred, we separately address each of these theories. We begin by noting that the same factual allegations which plaintiff utilized to support her Consumer Fraud Act claim also give rise to each of the other claims. We need only comment briefly on plaintiff’s common law fraud and negligent misrepresentation claims. First, as Hertz points out, both of these claims are, in the context of the facts here, simply alternative articulations of a proposed private remedy, barred by IPLA and IPLA(2001), for Hertz’s alleged failure to maintain a license or to advise plaintiff that it was not licensed. The result, therefore, of our analysis, can be no different from our decision on the Consumer Fraud Act claim. See Crusco v. Oakland Care Center, 305 N.J.Super. 605, 614-17 (App.Div.1997)(artful repleading of barred statutory claim insufficient to state a claim). Second, were we to examine the factual assertions in comparison to the elements of either of these causes of action, we would conclude that plaintiff’s complaint fails to state a claim. *9 The elements of common law fraud or misrepresentation are: (1) a false representation of fact; (2) made by defendant; (3) with knowledge that it is false; (4) with the intent to deceive plaintiff; (5) upon which representation plaintiff relies to his or her detriment; (6) sustaining a loss. See Jewish Center of Sussex County v. Whale, 86 N.J. 619, 624 (1981); Louis Schlesinger Co. v. Wilson, 22 N.J. 576, 585-86 (1956); Fischetto Paper Mill Supply, Inc. v. Quigley Co., Inc., 3 N.J. 149, 152-53 (1949). As with our discussion of the Consumer Fraud Act’s ascertainable loss requirement, plaintiff’s inability to demonstrate that she suffered any loss as a result of Hertz’s sale of insurance without a license is fatal to her claim. Moreover, as plaintiff does not assert and cannot demonstrate that she relied to her detriment on any statement, or omission, by Hertz, her claim cannot be sustained under either of these theories for this separate reason. Similarly, plaintiff’s illegal contract claim, on which she bases her demand for the equitable remedy of rescission, fails because the contract is fully executed. So articulated, the flaw in her reasoning is apparent, for the equitable remedy is not available after performance. See County of Morris v. Fauver, 153 N.J. 80, 97 (1998); Intertech Assocs., Inc. v. City of Paterson, 255 N.J.Super. 52, 59 (App.Div.1992)(quoting Driscoll v. Burlington-Bristol Bridge Co., 28 N.J.Super. 1, 4 (App.Div.1953)). Even if by selling the insurance without a license, Hertz violated the law, the insurance coverage plaintiff bargained for was provided. Indeed, although the risk insured against did not occur during the rental period, plaintiff concedes that had it, she would have been covered, just as those excluded from the putative class in fact were covered. Because her illegal contract claim seeks to rescind a contract for services after all obligations promised by Hertz have been performed, it fails as a matter of law. We reject as well plaintiff’s argument that Hertz breached the covenant of good faith and fair dealing. Judge Bernstein reasoned that because plaintiff received the full fruits of the contract of insurance, she could not prevail on this claim. On appeal, plaintiff urges us to conclude that the covenant of good faith and fair dealing required Hertz to affirmatively advise her that it was not licensed to sell the insurance coverage. We disagree. The essence of the covenant of good faith and fair dealing, implied in every contract, as defined by our Supreme Court, is that “neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract.” Bak-A-Lum Corp. of Am. v. Alcoa Bldg. Products, Inc., 69 N.J. 123, 129-30 (1976)(quotations omitted); see Sons of Thunder v. Borden, Inc., 148 N.J. 396, 420 (1997). Even assuming that Hertz misrepresented whether it was licensed to sell the products, there are no allegations in the complaint that Hertz did anything to destroy or injure plaintiff’s rights under the contracts of insurance. Because it is undisputed that the insurance policies sold by Hertz did provide the coverage as represented, plaintiff can have no claim for Case 3:16-cv-05274-BRM-DEA Document 23-10 Filed 12/05/16 Page 6 of 7 PageID: 565 Henderson v. Hertz Corp, Not Reported in A.2d (2006) © 2016 Thomson Reuters. No claim to original U.S. Government Works. 7 breach of the covenant of good faith and fair dealing. *10 Finally, we agree with the motion judge that plaintiff’s unjust enrichment claim also fails. Hertz performed its obligations to plaintiff by providing her with a valid insurance contract as promised. See Paley v. Baron Sav. and Loan Ass’n., 82 N.J.Super. 75, 84 (App.Div.), certif. denied, 41 N.J. 602 (1964). There can be no claim for the equitable remedy of unjust enrichment, therefore, because Hertz did not receive a benefit at plaintiff’s expense. See Assocs. Commercial Corp. v. Wallia, 211 N.J.Super. 231, 243 (App.Div.1986). Rather, Hertz undeniably provided the insurance coverage even if it was not licensed to do so. Hertz therefore received only payment for that which it provided. In the absence of factual allegations that Hertz received a benefit that enriched it beyond its contractual rights, there can be no claim for damages pursuant to the unjust enrichment theory. See Callano v. Oakwood Park Homes Corp., 91 N.J. Super . 105, 109 (App.Div.1966). In summary, our review of the record compels us to conclude, as did Judge Bernstein, that the facts set forth in plaintiff’s complaint fail as a matter of law to state claims for relief either within the Consumer Fraud Act, or for common law fraud, negligent misrepresentation, illegal contract, breach of the covenant of good faith and fair dealing or unjust enrichment. Affirmed. All Citations Not Reported in A.2d, 2005 WL 4127090 Footnotes 1 Hertz does not concede that these regulations apply to its sales of these products. Rather, it asserts that the scope of the regulations is more narrow than plaintiff’s complaint alleges. For purposes of this appeal, and in light of its procedural context, we accept plaintiff’s assertions about the applicability of these regulations as true. End of Document © 2016 Thomson Reuters. No claim to original U.S. Government Works. 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