A federal district court in New Jersey has granted an insurance company's motion to dismiss an insured's cause of action brought under two New Jersey consumer protection laws, finding that the insured was not eligible to recover under those laws.
The Case
Ana Lidia Alpizar-Fallas sued Progressive Garden State Insurance Company, alleging that she had been injured in a motor vehicle accident with its insured and that Progressive, through one of its employees, had contacted her to set up an in-person meeting.
According to Ms. Alpizar-Fallas, the Progressive employee had expressly represented to Ms. Alpizar-Fallas and her husband, Jose Ovares, that their signatures were necessary for Progressive to expedite the processing of their property damage claim.
Ms. Alpizar-Fallas also alleged that the Progressive employee had represented that the document he prepared and delivered to her needed to be signed merely to facilitate her receipt of the money for the damages to her motor vehicle.
Ms. Alpizar-Fallas asserted that she relied on the employee's representations and signed the document he produced; that the employee did not speak Spanish, Ms. Alpizar-Fallas' native language; and that the employee had required that Ms. Alpizar-Fallas sign the release during the meeting without advising her that she could consult an attorney prior to signing the release.
According to Ms. Alpizar-Fallas, the document she signed “was in fact a broadly written comprehensive general release of any and all claims.” She alleged that “[t]he release contained language that released, acquitted[,] and forever discharged all claims against [Progressive's insured] for any and all known and unknown personal injuries resulting from the motor vehicle accident.”
Ms. Alpizar-Fallas alleged that Progressive had violated the Unfair Claims Settlement Practices Act (“UCSPA”) regulations codified at N.J.A.C. 11:2-17, et seq., and the New Jersey Consumer Fraud Act (“CFA”), N.J.S.A. 56:8-1, et seq.
Progressive moved to dismiss that cause of action.
The District Court's Decision
The district court granted Progressive's motion.
In its decision, the district court first found that there was “no private right of action for policyholders against their insurers based on UCSPA violations or negligence.”
It then ruled that, to the extent Ms. Alpizar-Fallas' cause of action arose under the CFA, it had to be dismissed because her allegations did not state a viable CFA claim. New Jersey courts, the district court explained, had “consistently held that the payment of insurance benefits [was] not subject to the [CFA].”
In the insurance context, the district court continued, the CFA applied only to the sale of insurance policies as goods and services marketed to consumers.
The district court concluded that Ms. Alpizar-Fallas' allegations did not concern the sale or marketing of the insurance policy itself, but related to obtaining insurance benefits that she believed she was entitled to for her alleged personal injuries and the misrepresentations that purportedly caused her to release her entitlement to those benefits.
The case is Alpizar-Fallas v. Favero, No. 17-2768 (MAS) (LHG) (D.N.J. Aug. 31, 2017). Attorneys involved include: For ANA LIDIA ALPIZAR-FALLAS, Individually and on behalf of all others similarly situated, Plaintiff: CHARLES XAVIER GORMALLY, EDWARD P. CAPOZZI, THOMAS KAMVOSOULIS, LEAD ATTORNEYS, BRACH EICHLER, L.L.C., ROSELAND, NJ. For FRANK E. FAVERO, Defendant: FRANCIS JAMES LEDDY, III, LEAD ATTORNEY, MCGIVNEY & KLUGER PC, FLORHAM PARK, NJ. For BRIAN BARBOSA, PROGRESSIVE GARDEN STATE INSURANCE COMPANY, Defendants: FRANCIS XAVIER NOLAN, IV, EVERSHEDS SUTHERLAND (US) LLP, NEW YORK, NY.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].