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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

SOLIMINE et al v. BANKER STANDARD INSURANCE COMPANY et al

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Case Number: 
2:14-cv-02804 Search Pacer
ACE Group party(s): 
Opposing Party: 
EMIL SOLIMINE
Court Type: 
Federal
US District Court: 
District of New Jersey
Date Filed: 
May 2 2014

Plaintiffs, Emil Solimine and Yvonne Solimine, citizens of New Jersey and Florida,
having residence addresses of 62 Tingley Road, Brookside, NJ 07926 (Morris County) and 830
South Ocean Boulevard, Palm Beach FL 33480 (the "Solimines"), for their Complaint against
defendant, Banlcers Standard Insurance Company, a Pennsylvania corporation with its principal
place of business at 436 Walnut St., Philadelphia, PA 19106 ("Bankers"), and Illinois Union
Insurance Company, an Illinois corporation with its principal place of business at 525 W.
Monroe Street, Suite 400, Chicago IL 60661 ("Illinois Union") allege as follows:

NATURE AND BACKGROUND OF THIS ACTION
1. This is an action to enforce first-party property insurance coverage, and for bad faith
failure to pay a valid insurance claim, in connection with the destruction of a home
owned by the Solimines and located at 1033 Ocean Avenue, Mantoloking NJ 08738
(the "Property"), as a result of the weather event commonly known as "Superstorm
Sandy." Despite the clear mandate of New Jersey's Unfair Claims Settlement Practices
Act, N.J.S.A. 17:29-B (4)(9)(d), which makes it illegal for insurance companies to
refuse "to pay claims without conducting a reasonable investigation based upon all
available information," the insurance companies in this case have failed and refused to
adjust properly the Solimines' claim relating to the Property, contending instead, with
no valid evidence, that all damage to the Property is flood-related and therefore
excluded.

JURISDICTION AND VENUE
2. Jurisdiction in this matter is based upon diversity of citizenship under 28 U.S.C. §1332
(a)(1) in that the Solimines are citizens of New Jersey and Florida, Bankers is a
Pennsylvania corporation with its principal place of business in Pennsylania, Illinois
Union is an Illinois corporation with its principal place of business in Illinois, and the
amount in controversy exceeds $75,000.
3. Venue in this District is appropriate under 28 U.S.C. §1391 because either Bankers or
Illinois Union sold and breached the relevant insurance policy for property located in
this District,
Cas
FACTS COMMON TO ALL CLAIMS
4. Bankers and Illinois Union are in the business of selling insurance policies for
substantial premiums, including within the State of New Jersey. Both Bankers and
Illinois Union are members of the ACE Group of insurance companies ("ACE").
5. ACE represents to the public that its companies provide "superb claims service."
According to ACE (and, therefore, Bankers and Illinois Union): "Whether you have a
loss involving imported marble flooring in your dining room, a collection of rare
impressionist paintings, or a personal liability lawsuit that threatens a substantial
portion of your net worth, we have the expertise to properly recognize and fairly
establish a value for your claim."
6. According to ACE (and, therefore, Bankers and Illinois Union): "The superb quality of
our coverage and service becomes most evident when our customers have a claim. We
ask every customer who has had one to assess our performance. The consistent result:
99 percent would likely refer us to their friends or family."
7. For substantial premiums, Illinois Union sold the Solimines a property insurance policy
numbered 500-00-23-14 H01, which includes the Property as an insured location (the
"Policy"). For reasons that are unclear, relevant claim correspondence from ACE
refers to a property insurance policy, numbered 267932118, sold by Bankers to the
Solimines. Bankers is therefore included in this lawsuit as a defendant. All references
to Illinois Union are deemed to include Bankers, and the term "Policy" includes the
insurance policy described in ACE's claim correspondence.
8. The storm commonly known as "Superstorm Sandy" made landfall in New Jersey on
October 29, 2012.
9. "Superstorm Sandy" caused extensive damage to the Property and to its contents.
10. The Solimines duly filed an insurance claim with Illinois Union.
11. In response to the claim, Illinois Union advised the Solimines by letter dated June 14,
2013 that "no wind damages were observed" at the Property, and that coverage would
not be provided because, in Illinois Union's view, all of the damages at the Property
were flood-related ("June 14 Letter"). In the June 14 Letter, Illinois Union further
stated: "If you are aware of additional facts, circumstances or other information which
you believe may impact coverage, please forward the information to [Illinois Union] at
your earliest convenience."
12. In reality, the Property was severely damaged by wind and wind-driven rain as a result
of "Sandy," both of which are covered causes of loss under the Policy.
13. The June 14 Letter based its coverage denial largely upon a report prepared by National
Forensic Consultants ("NFC") and dated March 14, 2013. For unclear reasons, the
NFC report apparently was not forwarded to the Solimines until two months later.
14. NFC is not an impartial or disinterested organization. With respect to insurance
coverage claims, NFC's website at www.nfcexperts.com emphasizes that insurance
companies are among its target clients, stating: "We have been providing expert
investigation services for the legal, insurance, manufacturing and construction
industries since 1995." The NFC website offers a menu of services for insurance
industry clients, such as helping to "audit business interruption and loss of income
claims," and conducting seminars on the question of "property damage liability claims
analysis."
15. A review of the Lexis-Nexis database reveals at least 10 separate cases in which NFC
has performed forensic services on behalf of carriers, and, upon information and belief,
no instances in which NFC performed services on behalf of policyholders in coverage
matters. Examples of NFC's work include the following:
a. Geary v. State Farm Fire & Casualty Co.. 2013 U.S. Dist. LEXIS 3242 (E.D.
Pa.) (NFC hired by State Farm to support denial of water damage claim;
Michael Black, who signed the report relating to the Solimine Property, was
State Farm's expert in this case).
b. Swan Caterers, Inc. v. Nationwide Mutual Fire Insurance Co., 2012 U.S. Dist.
LEXIS 162305 (E.D. Pa.) (NFC hired by Nationwide to support denial of stormrelated
damage claim).
c. Moffett v. Computer Sciences Corporation. 2011 U.S. Dist. LEXIS 68038 (D.
Md.) (NFC hired by flood insurance company to support denial of claim).
d. Sunquest Properties. Inc. . Nationwide Mutual Fire Insurance Co.. 2010 U.S.
Dist. LEXIS 14727 (S.D. Miss.) (NFC hired by Nationwide to support denial of
storm-related damage claim).
e. O'Kane v. Hartford Fire Ins. Co.. 2005 U.S. Dist. LEXIS 28907 (D.N.J.) (NFC
hired by Hartford to support denial of flood claim).
f. Messa v. Omaha Property & Casualty Co..l22 F. Supp.2d 523 (D.N.J. 2000)
(NFC hired by Omaha to support denial of flood claim).
g. McArdle v. The Hartford Insurance Co. of the Midwest. 2000 U.S. Dist. LEXIS
3366 (E.D. Pa.) (NFC hired by Hartford to support denial of structural damage
claim).
h. Woodward v. Farm Family Casualty Insurance Co.. 796 A.2d 638 (Del. 2002)
(NFC hired by Farm Family to support denial of structural damage claim),
i. New Jersey Manufacturers Insurance Company v. Cujdik. 2012 NJ. Unpub.
LEXIS 301 (NJ. App. Div. Feb. 14, 2012) (NFC hired by NJM to support
subrogation claim after fire loss),
j . Goldsteins Rothenbergs-Raphael Sacks v. Erie Insurance Exchange, 2005 Phila.
Ct. Com. PL LEXIS 245 (May 27, 2005) (NFC hired by carrier to support denial
of roof damage claim).
16. The NFC Report is replete with breezy generalizations and factual errors, and contains
no objective testing from which the validity of NFC's processes and conclusions can be
assessed. Such generalizations include, but are not limited to, the following:
a. At page 4, the NFC Report states: "Personal observation of storm damage to
structures located further inland indicated minimal wind damage with flood
damage correlated to the properties' elevation and exposure to tidal waters." No
indication is given as to how the existence of "minimal" wind damage was
determined.
b. At pages 4 and 5, the NFC Report suggests that maximum gust speeds in the
area of the Property on the date of loss were between 62 mph and 78 mph. The
NFC Report states at page 5 that maximum gust speeds in Seaside Heights were
62 mph. These statements are incorrect. The Borough of Seaside Park Office of
Emergency Management, for example, has specifically confirmed that
maximum wind gusts in Seaside Park (adjacent to Seaside Heights and only 8
miles from the Property) were 97 mph. In fact, Sandy was so powerful that 60
mph gusts were recorded in Gary, Indiana, almost 800 miles from the storm's
center; and, Attachment C to the NFC Report states that when the storm center
was 40 miles south of Atlantic City, "[mjaximum sustained winds were
estimated to be 90 mph." Appendix A of Attachment C to the NFC Report
states that peak wind gusts at Sandy Hook (north of Mantoloking) were 87 mph,
and, at Tuckerton (south of Mantoloking), 88 mph.
c. At page 5, the NFC Report states: "The beachfront residence sustained an
exceptional loss of sand below and adjacent to its footprint from the scour
associated with the storm surge and the Lyman Street breach." (Emphasis
added.) While the report goes on to attribute the majority of the damage
throughout the property to "storm surge," no specific technical testing is cited to
support this conclusion, other than a reference to aerial photographs and FEMA
modeling of the storm surge. In fact, the NFC Report notes at Page 7:
"Correlation between my site observations and the weather data for flood was
not attempted due to the current lack of information... The FEMA Modeled
Surge Area...correlated well for area coverage but did not reflect the storm
surge localized to the insured's site." (Emphasis added.) That is an
understatement. The FEMA modeling referred to in the NFC Report (depicted
on Photo # 6 of Attachment B of the NFC Report) shows that the storm surge
did not extend to the Property.
d. Although the NFC Report attributes the majority of the damage to "storm
surge," the NFC Report notes at page 8: "No high water line was observed on
the exterior of the building." If the damage was in fact caused by flooding, a
high water line would exist.
e. At page 7, the NFC Report reaches the following remarkable conclusion, based
solely on an examination of aerial photographs: "Both site and neighborhoodspecific
conditions were unexceptional with regards to the wind damage
observed."
f. At Page 7, the NFC Report states: "No wind damage was observed to either the
beachfront residence or the secondary residence/garage." NFC cites no criteria
used to determine whether "wind damage" existed. A variation of this
statement appears at Page 8 of the NFC Report: "Wind damage to the insured
property's beachfront residence on the date of loss was not observed." NFC
representatives obviously were not at the property on the date of loss, and no
objective criteria were relied upon to make these statements.
g. The caption to photograph #9 of Attachment A of the NFC Report reads: "South
elevation of garage with -2-3 feet of sand against overhead doors and sidewalls
deposited from the storm surge scour around and below the primary residence."
(Emphasis added.) NFC improperly attributed all of the sand movement to
"storm surge," and none at all to the high winds. This conclusion is physically
impossible.
h. The caption to photograph #25 of Attachment A of the NFC Report reads:
"Detail of minor masonry cracks at the fireplace face's left side. Crack locations
identified by arrows. Cracks were fresh and likely caused by minor house
movement from storm surge. Date of photo 2/5/13." (Emphasis mine.) No
basis is given for this assumption, which is belied by evidence attached to the
NFC Report showing that storm surge did not impact the Property.
17. The June 14 Letter bases a coverage denial upon the faulty, improper and insupportable
premises cited by NFC. The June 14 letter also states at the fifth page: "We are unable
to make payment for [the] damage; your policy expressly excludes loss or damage in
which flood or storm surge, or other excluded perils, is a contributing cause of the
damage." This is a deliberate misquotation of the policy language. The relevant
language actually reads: "We do not cover loss that is caused directly or indirectly, or
which ensues from or is the result of any of the following, unless noted otherwise. Such
loss is excluded regardless of any other cause or event contributing concurrently or in
any sequence to the loss." This language applies to situations of concurrent or
sequential causation; in other words, for example, a situation where a policyholder
argues that wind (a covered cause of loss) caused "storm surge" (an excluded cause of
loss) which caused damage. To suggest that coverage is excluded even if wind
separately causes damage is an unreasonable reading of the policy, and creates
impermissible illusory coverage.
18. As a result of the faulty analysis provided by Illinois Union and NFC, the Solimines
were forced to incur substantial expense to retain an independent expert, Apec-LLC
("Apec") to perform a proper analysis of the nature of damage at the Property. Based
upon scientific analysis, Apec concluded that 100% of the damage sustained by the
main house on the Property (which was elevated and behind a sand dune) was windrelated
- a conclusion supported by the data attached to the NFC Report, which
indicate that "storm surge" did not reach the Property and that the Property was
exposed to damaging high winds. Apec also noted damage to shingles on the roofing
at the Property, which could only have been caused by wind - a fact ignored by Illinois
Union and NFC. The Solimines provided the Apec report to Illinois Union on
November 22, 2013. No meaningful or substantive response has been received.
FIRST COUNT
(Breach of Contract)
19. The Solimines repeats each of the prior allegations of this Complaint.
20. The actions of Illinois Union and Bankers in failing to adjust and resolve the
Solimines' claim promptly and fairly constitute a breach of contract, as the result of
which the Solimines have been damaged.
WHEREFORE, the Solimines demand judgment against Illinois Union and Bankers on this
First Count, jointly and severally, as follows:
A. Awarding the Solimines compensatory damages, plus interest at the allowable
rate.
B. Awarding the Solimines their costs of suit, plus attorneys' fees to the extent
provided by law.
C. Awarding the Solimines such additional relief that the Court may deem
appropriate under the circumstances.

SECOND COUNT
(For Declaratory Judgment)
21. The Solimines repeats each of the prior allegations of this Complaint.
22. As a result of the conduct of Illinois Union and Bankers, a justiciable controversy
exists between the parties entitling the Solimines to declaratory relief.
WHEREFORE, the Solimines demand judgment against Illinois Union and Bankers on this
Second Count, jointly and severally, as follows:
A. Declaring and adjudging that the Solimines' claim for Sandy-related damages is a
covered loss under the Policy.
B. Declaring and adjudging that the previous efforts by Illinois Union and Bankers to deny
the Solimines' claim are null, void and of no effect.
C. Awarding the Solimines their costs of suit, plus attorneys' fees to the extent provided
by law.
D. Awarding the Solimines such additional relief as the Court may deem appropriate under
the circumstances.
THIRD COUNT
(For Specific Performance of Appraisal Provision of Policy)
23. The Solimines repeat each of the prior allegations of this Complaint.
24. Page 25 of 36 of the Form SURPLUS HOME ACES 0510 within the Policy contains a
specific provision for the conduct of an appraisal "[i]f you and we disagree on the
amount of the loss."
25. Because Illinois Union contends that there is no wind damage to the Property, and
therefore no compensable loss under the Policy, while the Solimines contend that there
is substantial wind damage to the Property, and therefore substantial compensable loss
under the Policy, a disagreement exists as to the amount of the loss. Upon information
and belief, Illinois Union will deny and oppose any effort by the Solimines to invoke
the appraisal provision, on the ground that further "investigation" is needed before any
such appraisal can take place. Hence, while the Policy provides for a "written demand"
for appraisal, providing Illinois Union with such a "written demand" would be futile.
26. Under New Jersey law, the Solimines have the right to enforce the appraisal provision
in the Policy irrespective of the existence of any alleged coverage dispute.
WHEREFORE, the Solimines demand judgment against Illinois Union and Bankers on
this Third Count, jointly and severally, as follows:
A. Ordering and adjudging that the appraisal provided for in the Policy take place
immediately, and that the award resulting from such a process be binding as to the
amount of the Solimines' claim.
B. Awarding the Solimines their costs of suit, plus attorneys' fees to the extent
provided by law.
C. Awarding the Solimines such additional relief as the Court may deem appropriate
under the circumstances.
FOURTH COUNT
(Breach of the Duty of Good Faith and Fair Dealing)
27. The Solimines repeat each of the prior allegations of this Complaint.
28. The NFC Report is replete with unsupportable assumptions and lacks any verifiable
scientific evidence to support Illinois Union's illogical contention that all damage to
the Property is flood-related, and none is wind-related. The only purpose of the NFC
Report is to create a "record" that an "investigation" has been conducted, in an effort to
insulate Illinois Union from a claim of bad faith.
29. Illinois Union has recklessly and intentionally disregarded evidence showing that
coverage exists for the Solimines' claim, unlawfully placing its own financial interests
ahead of those of its policyholders.
30. As noted by the New Jersey Supreme Court in Pickett v. Lloyd's. 131 N.J. 457 (1993),
violations of New Jersey's Unfair Claims Settlement Practices Act ("UCSPA"),
N.J.S.A §17:29B-4(9) et seq., and its related regulations are indicia of a breach of the
duty of good faith and fair dealing. Here, Illinois Union has breached UCSPA and its
related regulations, including, but not limited to, the following:
a. Illinois Union is not permitted to deny or offer to compromise a claim "because
of a policy provision, including any concerning liability, a condition, or an
exclusion without providing a specific reference to such language and a
statement of the facts which make that language operative." N.J.A.C. §11:2-
17.8 (emphasis added).
b. Illinois Union is not permitted to misrepresent "pertinent facts or insurance
policy provisions relating to coverages at issue." N.J.S.A, § 17:29-B(4)(9)(a).
c. Illinois Union is not permitted to refuse to pay claims without conducting "a
reasonable investigation based upon all available information." N.J.S.A. §
17:29-B(4)(9)(d) (emphasis added).
d. Illinois Union must promptly provide "a reasonable explanation of the basis in
the insurance policy in relation to the facts or applicable law for denial of a
claim or for the offer of a compromise settlement." NJ.S.A 17:29B-4(9)(n)
(emphasis added).
e. "[UJnless a clear justification exists," first party claims are to be paid within 30
calendar days from receipt of proof of loss. N.J.A.C. §ll:2-17.7(c)(l)
(emphasis added).
f. "In any case where there is no dispute as to one or more elements of a claim,
payment for such element(s) shall be made notwithstanding the existence of
disputes as to other elements of the claim where such payment can be made
without prejudice to either party." N.J.A.C. § 11:2-17.8(g).
g. "If a first party claimant.. .does not submit sufficient information to establish his
or her entitlement to the benefits claimed, then the insurer shall provide the
claimant with a general description of the information and documentation
needed to establish such entitlement." N.J.A.C. §11:2-17.8(1).
31. No reasonably debatable basis existed for denial of Policy benefits to the Solimines. In
addition, no valid reasons existed to delay processing the Solimines' claim and Illinois
Union (and Bankers) knew or recklessly disregarded the fact that no valid reasons
supported the delay
WHEREFORE, The Solimines demands judgment against Illinois Union and Bankers on
this Fourth Count, jointly and severally, as follows;
A. Awarding the Solimines compensatory damages, plus interest at the allowable rate.
B. Awarding the Solimines consequential damages, plus interest at the allowable rate.
C. Awarding the Solimines exemplary damages.
D. Awarding the Solimines their costs of suit, plus attorneys' fees to the extent provided
by law.
E. Awarding the Solimines such additional relief as the Court may deem appropriate
under the circumstances.

The provided text is an excerpt from a document filed in this case. For a full understanding of the case, one should read the complete court file, including the response.

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