David Solimine v. Chubb Custom Insurance Company

Summary

The United States District Court for the District of New Jersey denied Chubb Custom Insurance Company’s motion to dismiss a bad-faith insurance claim brought by David Solimine. The court held that the complaint plausibly alleged Chubb lacked a reasonable basis for denying coverage based on an allegedly flawed expert report. The court nevertheless granted Chubb’s alternative request to sever Count 2 and stay discovery on that claim pending resolution of the breach-of-contract claim.

Holdings

1. Plaintiff has adequately alleged a bad faith claim by pleading specific facts that Defendant's reliance on an allegedly flawed expert report demonstrated reckless indifference to the lack of a reasonable basis for denying coverage.
2. Severance and a stay of discovery on the bad faith claim is warranted because the claims involve different key issues and the 'fairly debatable' standard necessitates a ruling on coverage prior to adjudication of the bad faith claim.

Questions Presented

1. Whether Plaintiff stated a plausible claim for breach of the implied covenant of good faith and fair dealing (bad faith) against the insurer
2. Whether the bad faith claim should be severed and discovery stayed pending resolution of the breach of contract claim

Disposition

other