Uh Oh, Better Check Before You Get Maaco (NJ)

In Lansing v. Liberty Mutual Fire Insurance Company, the Appellate Court upheld an award of counsel fees to Liberty Mutual, but reversed the trial court’s decision to award treble damages.  Lansing had insured his 1984 Oldsmobile with Liberty Mutual.  In September 2007, Lansing filed an insurance claim for $3,812 for damage to his car allegedly caused by vandals.  Lansing left a recorded message for Liberty Mutual advising of the damage and then obtained an estimate and had the repairs performed at a Maaco repair shop.  Liberty Mutual had not approved the bodywork, nor did it have an opportunity to investigate the claim before the repairs were made.

Lansing subsequently submitted the repair bill to Liberty Mutual for reimbursement.  Liberty Mutual denied the claim and questioned Lansing about an earlier claim.  At that juncture, Lansing withdrew the vandalism claim, but several months later, rescinded his withdrawal and filed a complaint against Liberty Mutual seeking approximately $3,000.  Lansing alleged Liberty Mutual breached its obligation under the policy by refusing to pay the Maaco bill and forced him to withdraw his claim.  He also claimed discrimination under the Americans with Disability Act, citing his dyslexic and ADHD.  Liberty Mutual counterclaimed and alleged fraud under the New Jersey Insurance Fraud Prevention Act (FPA) and sent Lansing a letter notifying him of their intention to seek sanctions, costs and attorney’s fees for frivolous litigation.

During discovery, a witness from Maaco testified that Lansing’s car had not been vandalized, but that the vehicle was merely restored.  Liberty Mutual eventually moved for and was granted summary judgment.  The court also determined that Lansing’s ADA claims were frivolous and awarded Liberty Mutual fees in the amount of $52,769 and also trebled that amount to $158,307.  Lansing appealed and the Appellate court affirmed the counsel fee award, but determined that the trial court had not separately addressed the frivolous claims fee award and the FPA fee award when it trebled counsel fees and remanded to matter to the trial court on that specific issue.

Special thanks to Heather Aquino for her contributions to this post.  For more information, please contact Nicole Brown at nbrown@wcmlaw.com.