The opinion of the court was delivered by: Wolfson, United States District Judge
This case involves Plaintiffs Zeev and Bracha Rothschild's ("Plaintiffs" or "the Rothschilds") claim against Defendant Foremost Insurance Company ("Defendant" or "Foremost") seeking damages for an alleged breach of contract. Specifically, Plaintiffs seek the full amount of their policy limit as stated on the Declarations Page of the Foremost Policy. However, if the Court does not award Plaintiffs the full amount of the policy limit, Plaintiffs assert that, at a minimum, they are entitled to a pro rated percentage of the total loss. Additionally, Plaintiffs assert a bad faith claim against Defendant and claims a violation of the New Jersey Insurance Trade Practices Act ("ITPA"), N.J.S.A. 17:29B-4. Presently before the Court are summary judgment motions by both Plaintiffs and Defendant arising from Defendant's decision to reimburse Plaintiffs based upon a proportion of Plaintiffs' insurance policy limit, rather than upon a proportion of the total loss. At the time of the accident giving rise to their insurance claim, Plaintiffs maintained two insurance policies on the property, one issued by Defendant and another issued by Quincy Mutual Fire Insurance Company ("Quincy"). Because Defendant has already tendered Plaintiffs $103,645.39 to satisfy what it believes is its obligations under the Policy, Plaintiffs seek an additional $34,836.25. For the following reasons, the Court grants Plaintiffs' motion for summary judgment in part and denies it in part, and grants in part and denies in part Defendant's motion for summary judgment as follows: Plaintiffs' Motion for Summary Judgment is granted with respect to their breach of contract claim but denied with respect to their bad faith claim and Defendant's Motion for Summary Judgment is granted with respect to Plaintiffs' bad faith and ITPA claim.
On December 5, 2008, Plaintiffs filed a Complaint against Defendant in the Superior Court of New Jersey, Monmouth County, Law Division seeking damages for breach of contract and various violations of the New Jersey State Department of Banking and Insurance Act. After Foremost filed a notice of removal on January 12, 2009, this matter was transferred to the District Court of New Jersey, and was subsequently assigned to this Court. On February 20, 2009, Foremost filed an Answer and Affirmative Defenses denying that it owed Plaintiffs $138,481.64, as opposed to the $103,000 that has already been paid to Plaintiffs, under the terms and conditions of its policy. Both Plaintiffs and Defendant filed Motions for Summary Judgment pursuant to the Federal Rules of Civil Procedure 56(c) on May 6, 2009. On May 22, 2009, Plaintiffs filed their Opposition to Defendant's Motion, and on May 26, 2009, Defendant filed its Opposition to Plaintiffs' Motion.
The following facts are not in dispute unless otherwise noted. On April 19, 2008, Plaintiffs suffered a total fire loss to their home on the property located at 328 Ocean Avenue, Lakewood, New Jersey ("the Property"). See Def. Statement of Facts ¶ 1. From April 16, 2008 to April 16, 2009, Plaintiffs purchased Foremost Policy No. 381-0067059959- 02 ("the Foremost Policy") for the Property. See Exhibit A ("Ex. A"). On the Declarations Page of the Foremost Policy, the amount of insurance listed for Plaintiffs' dwelling is $187,425.00. Id. Plaintiffs also purchased an insurance policy with Quincy, Policy No. FP 306389 ("the Quincy Policy"), to provide concurrent insurance on the Property. See Exhibit B ("Ex. B"). Quincy's limit of liability, as shown on the Quincy Policy Declarations Page, was $154,500.00. After adding both policies together, the total amount of available insurance was $341,925.00.
The relevant sections of the Foremost Policy are as follows:
Total Loss Payment Method:
A total loss occurs when the dwelling is damaged beyond reasonable repair.
When a total loss occurs, your loss will be equal to the Amount of Insurance shown on the Declarations Page.
SECTION I -- Your Property Coverages If both this and other insurance apply to a loss, we will pay our share. Our share will be the proportionate amount that this insurance bears to the total amount of all applicable insurance.
SECTION II -- Your Liability Coverages This insurance is excess over other valid insurance except insurance written specifically to insure excess over the limits that apply in this section.
The relevant sections of the Quincy Policy ...