If you’ve been asking this question, mark your calendar for May 15. On that date, NJCJI President Marcus Rayner will be discussing the New Jersey Supreme Court’s unusual decision in the Wadeer case on a panel at the Insurance Council of New Jersey’s Spring Workshop.
The issues raised in the case included whether to retain or modify the “fairly debatable” standard for first party claims, when a bad faith cause of action accrues, the applicability of the entire controversy doctrine, and the recovery of attorney’s fees. In its decision, the court upheld the fairly debatable standard, but also referred the following three issues to the Court’s Civil Practice Committee for review and recommendations:
- The court determined that the nature of first-party bad faith claims – they can arise while the case is ongoing – makes them difficult to reconcile with the entire controversy doctrine, which requires the parties in a case to bring all the claims that they may have against one another that are at all related to the central claim at the same time. The court asked that the Civil Practice Committee determine whether the court’s rules should be changed to allow a policyholder to bring a first-party bad faith claim against an insurer after the resolution of an underlying uninsured motorist action.
- The court also directed the Civil Practice Committee to develop an amendment to the Offer of Judgment Rule. The Rule allows an offering party to recover litigation expenses and attorneys’ fees when a pre-trial offer is rejected and the subsequent monetary award exceeds 120 percent of the offer. The court would like the Committee to clarify if the Rule is triggered by the amount the jury awards or the amount a court reduces the jury award to in order to conform to the applicable insurance policy.
- Finally, the court asked that the Civil Practice Committee to determine whether attorney’s fees should be available to plaintiffs like Wadeer who bring a lawsuit against their insurer if they prevail.
This panel discussion will focus on the implications of the Wadeer decision, examine the procedures of the Civil Practice Committee and analyze the various outcomes of the Committee’s possible recommendations.