Client: Unidentified Insurance Company
Court: Superior Court of New Jersey, Atlantic County
Brief Attorney: Charles F. Holmgren, Esq.
**Results may vary depending on your particular facts and legal circumstances**
Plaintiffs claimed they purchased an umbrella policy containing $1 Million in Underinsured Motorists (UIM) coverage and attempted to reform the actual policy they purchased, a $1 Million liability umbrella policy, to what they believed they had. After an auto accident, the plaintiffs sued their insurance company claiming: 1) the $1 Million liability umbrella policy should be reformed to a $1 Million UIM policy, 2) personal injury damages from the auto accident covered by the reformed UIM policy, and 3) bad faith in failing to pay their initial claims for UIM benefits covered by the reformed UIM policy.
In the Summer of 2020, the parties engaged in a socially-distanced, one-day bench trial on the initial issue of contract reformation. Without a direct defense witness as to any statements the plaintiffs made to the insurer, counsel was able to secure a verdict in favor of the insurance company denying the plaintiffs’ claim to reform the umbrella policy to include $1 Million in UIM. The Court determined that the plaintiffs could not meet their burden of proving fraud or unconscionable conduct by clear and convincing evidence, stating that “[e]ven if Plaintiffs’ burden was only a preponderance of the evidence, the claim for reformation would still fail.”
Importantly, because the plaintiffs could not reform the umbrella policy to include $1 Million in UIM coverage, the other two actions – the personal injury claim for UIM benefits and the claim for bad faith – were rendered moot because the court determined the plaintiffs did not have an umbrella policy permitting $1 Million of UIM coverage.