Key Takeaway
New Jersey court rules insurance carriers cannot sue attorneys for "overpaid" PIP fees under IFPA when payments were regulatory penalties, not policy benefits.
This article is part of our ongoing no-fault coverage, with 271 published articles analyzing no-fault issues across New York State. Attorney Jason Tenenbaum brings 24+ years of hands-on experience to this analysis, drawing from his work on more than 1,000 appeals, over 100,000 no-fault cases, and recovery of over $100 million for clients throughout Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, and the Bronx. For personalized legal advice about how these principles apply to your specific situation, contact our Long Island office at (516) 750-0595 for a free consultation.
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.”
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Legal Context
Why This Matters for Your Case
New York's no-fault insurance system, established under Insurance Law Article 51, is one of the most complex insurance frameworks in the country. Every motorist must carry Personal Injury Protection coverage that pays medical expenses and lost wages regardless of fault, up to $50,000 per person.
But insurers routinely deny valid claims using peer reviews, EUO scheduling tactics, fee schedule reductions, and coverage defenses. The Law Office of Jason Tenenbaum has handled over 100,000 no-fault cases since 2002 — from initial claim submissions through arbitration before the American Arbitration Association, trials in Civil Court and Supreme Court, and appeals to the Appellate Term and Appellate Division. Jason Tenenbaum is one of the few attorneys in the state who both writes his own appellate briefs and tries his own cases.
His 2,353+ published legal articles on no-fault practice are cited by attorneys throughout New York. Whether you are dealing with a medical necessity denial, an EUO no-show defense, a fee schedule dispute, or a coverage question, this article provides the kind of detailed case-law analysis that helps practitioners and claimants understand exactly where the law stands.
About This Topic
New York No-Fault Insurance Law
New York's no-fault insurance system requires every driver to carry Personal Injury Protection (PIP) coverage that pays medical expenses and lost wages regardless of who caused the accident. But insurers routinely deny, delay, and underpay valid claims — using peer reviews, IME no-shows, and fee schedule defenses to avoid paying providers and injured claimants. Attorney Jason Tenenbaum has litigated thousands of no-fault arbitrations and court cases since 2002.
271 published articles in No-Fault
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Disclaimer: This article is published by the Law Office of Jason Tenenbaum, P.C. for informational and educational purposes only. It does not constitute legal advice, and no attorney-client relationship is formed by reading this content. The legal principles discussed may not apply to your specific situation, and the law may have changed since this article was last updated.
New York law varies by jurisdiction — court decisions in one Appellate Division department may not be followed in another, and local court rules in Nassau County Supreme Court differ from those in Suffolk County Supreme Court, Kings County Civil Court, or Queens County Supreme Court. The Appellate Division, Second Department (which covers Long Island, Brooklyn, Queens, and Staten Island) and the Appellate Term (which hears appeals from lower courts) each have distinct procedural requirements and precedents that affect litigation strategy.
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