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Arrajj v. American Commerce Insurance Co.

United States District Court, District of New Jersey

November 5, 2014

JAMES AND GIOVANNA ARRAJJ, Plaintiffs,
v.
AMERICAN COMMERCE INSURANCE COMPANY & SELECTIVE INSURANCE COMPANY OF AMERICA, Defendants

For JAMES ARRAJJ, GIOVANNA ARRAJJ, Plaintiffs: EUGENE DAVID KUBLANOVSKY, LEAD ATTORNEY, Montclair, NJ.

For AMERICAN COMMERCE INSURANCE COMPANY, Defendant: DARREN LEE HARRISON, SILJE MARGRETHE ROALSVIK, LEAD ATTORNEYS, STALKER VORGIN BRACKEN FRIMET, MOUNT LAUREL, NJ.

For SELECTIVE INSURANCE COMPANY OF AMERICA, Defendant: SEAN PATRICK WHALEN, LEAD ATTORNEY, KLEHR HARRISON HARVEY BRANZBURG LLP, CHERRY HILL, NJ.

OPINION

HONORABLE JAMES B. CLARK, III, UNITED STATES MAGISTRATE JUDGE.

THIS MATTER comes before the Court by way of motion of Plaintiffs James and Giovanna Arrajj (" Plaintiffs") for Leave to Amend their Complaint. (Dkt. No. 24). Defendant Selective Insurance Company of America (" Selective)" and Defendant American Commerce Insurance Company (" American Commerce") oppose the motion. (Dkt. Nos. 27, 29). The Court has considered Plaintiffs' Motion without oral argument pursuant to Federal Rule of Civil Procedure 78. Having considered the parties' written submissions, for good cause shown, and for the reasons set forth herein, the Court DENIES in part and GRANTS in part Plaintiff's Motion to Amend their Complaint.

I. BACKGROUND

On May 20, 2014, Plaintiffs filed a Complaint against American Commerce and Selective for breach of contract (flood policy) (Count I), breach of contract (homeowner's policy) (Count II), and breach of good faith and fair dealing (homeowner's policy) (Count III). (Dkt. No. 1). Plaintiffs alleged that their home was destroyed by Hurricane Sandy on October 29, 2012. ( Id., at ¶ 1). Plaintiffs alleged that they purchased a National Flood Insurance Policy from Defendant Selective that provided coverage for the damage they sustained. ( Id., at ¶ 4). They also alleged that they purchased homeowner's insurance from Defendant American Commerce. ( Id., at ¶ 5). Plaintiffs claimed that both Defendant Selective and American Commerce unreasonably and in bad faith denied coverage and underpaid for the damage to Plaintiffs' home and contents. ( Id., at ¶ ¶ 8-9, 20-39).

The Court entered the Hurricane Sandy Case Management Order (" HSCMO") on July 21, 2014. (Dkt. No. 12). The HSCMO provides that any motions to amend the pleadings or join new parties shall be filed no later than sixty (60) days from entry of the HSCMO. On September 18, 2014, Plaintiffs filed the instant motion seeking leave to amend their Complaint. Plaintiffs seek to add two causes of action to the Complaint. First, Plaintiffs seek to add a single cause of action--Count IV for Declaratory Judgment--against Selective. (Dkt. No. 24-3, at ¶ ¶ 59-61). Second, Plaintiffs seek to add a single cause of action--Count V for Violation of New Jersey Consumer Fraud Act--against American Commerce. (Dkt. No. 24-3, at ¶ ¶ 62-69).

II. DISCUSSION

Rule 15(a)(2) of the Federal Rules of Civil Procedure provides, in pertinent part, " a party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires." Fed.R.Civ.P. 15(a)(2). A general presumption exists in favor of allowing a party to amend its pleadings. Boileau v. Bethlehem Steel Corp., 730 F.2d 929, 938 (3d Cir. 1984) (citing Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962)). The Court may deny a motion to amend the pleadings only where there is: (1) undue delay, (2) bad faith or dilatory motive, (3) undue prejudice, (4) repeated failures to cure deficiencies, or (5) futility of amendment. Foman, 371 U.S. at 182; Long v. Wilson, 393 F.3d 390, 400 (3d Cir. 2004) (" We have held that motions to amend pleadings [under Rule 15(a)] should be liberally granted.") (citations omitted); Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002) (" Under Rule 15(a), if a plaintiff requests leave to amend a complaint . . . such leave must be granted in the absence of undue delay, bad faith, dilatory motive, unfair prejudice, or futility of amendment.").

A. Defendant Selective Insurance Company of America

Plaintiffs' proposed declaratory judgment claim (Count IV) seeks a declaration pursuant to 28 U.S.C. § 2201 that " Selective is in breach of its obligation to pay fully the amount due under the policy . . . ." (Dkt. No. 24-3, at ¶ 61). Pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201:

In a case of actual controversy within its jurisdiction . . . any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.

Defendant Selective contends that Plaintiffs' motion should be denied because proposed Count IV for declaratory judgment is wholly redundant of Plaintiffs' Count I for breach of the flood insurance policy. (Dkt. No. 27) (citing Jakubowski v. FEMA, No. 12-2202, *18 (D.N.J. Mar. 27, 2013) (denying, in part, plaintiff's motion to amend his complaint in a flood insurance case to include a count for declaratory judgment because it was redundant of the plaintiff's breach of contract counts). Count I of the Complaint alleges that Defendant Selective breached the insurance contract ...


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