ALLSTATE NEW JERSEY INSURANCE COMPANY, ET AL. VS. HARRIS C. LEGOME, ET AL. A-1886-20
(1) On June 11, 2013, Allstate filed a complaint against defendants alleging violations of IFPA, common law fraud, and unjust enrichment. The parties participated in discovery over the next seven years. On May 8, 2020, defendants moved for summary judgment. On July 29, 2020, Judge Swift issued a written decision and order granting defendants’ motions and dismissing all of Allstate’s IFPA and unjust enrichment claims, and a majority of Allstate’s common law fraud claims.”
(2) “As the judge aptly found, the payments were not made as a benefit pursuant to an insurance policy as contemplated by IFPA, but as a penalty against Allstate pursuant to N.J.A.C. 11:3-5.6(e). In that regard, the attorneyfee payments are not mentioned in the insured’s policy. Nor do they diminish the available PIP coverage to the insured, unlike payments to a successful provider or insured, which are paid out of the PIP coverage until the policy limit is exhausted. Furthermore, as the judge said, defendants were never paid what they asked for. Since it is undisputed that Legome was always paid a reasonable amount, which was determined by the arbitrator’s evaluation as established in the Code or by agreement of an Allstate adjuster, there was no harm to Allstate.”
Best Footnote: “Judge Swift emphasized he does not condone any of Legome’s alleged misconduct. Nor do we. The issue, however, is not whether Legome did anything unethical or otherwise unlawful, but whether Allstate has stated a viable claim under IFPA or the common law. We therefore must set aside our distaste for the underlying facts and scrutinize Allstate’s claims with the same objective lens we apply in any plaintiff’s cause of action. It bears noting that despite Allstate’s expressed moral outrage at Legome’s conduct, it apparently never reported these transgressions to the ethics committee, opting instead to pursue claims for money damages. Regardless, Legome has since been disbarred on unrelated ethics charges.”
