LEONE et al v. LANTANA INSURANCE LTD.

Filing 9

OPINION filed. Signed by Judge Joel A. Pisano on 9/2/2014. (mmh)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

ALFIO & JENNIFER A. LEONE IV,
Plaintiffs,
v.
LANTANA INSURANCE LTD.,
Defendant.

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Civil No. 14-695 (JAP)(DEA)
OPINION

PISANO, District Judge.
Plaintiffs, Alfio and Jennifer Leone IV (“Plaintiffs”), have brought this action against
Defendant, Lantana Insurance Ltd. (“Defendant” or “Lantana”), relating to their claims for
coverage under their Homeowner’s Insurance Policy. Before the Court is a motion to dismiss
Plaintiffs’ demand for attorney’s fees by Defendant Lantana [ECF No. 5]. This motion is
unopposed. For the reasons set forth below, the Court grants Defendant’s motion.
I.

Background
The following allegations are summarized from the Complaint, and must be taken as true

in deciding this motion. 1 Plaintiffs purchased a Homeowner’s Insurance Policy from Defendant
Lantana. On or about October 29, 2012, Plaintiffs’ home, located in Toms River, New Jersey
(the “Insured Property”), suffered extensive wind damage as a result of Super Storm Sandy.
Plaintiffs allege that Lantana has denied or partially denied Plaintiffs’ insurance claim, despite
evidence of wind damage that is separable from any flood damage to the Insured Property.

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See Toys ‘R’ Us, Inc. v. Step Two, S.A., 318 F.3d 446, 457 (3d Cir. 2003); Dayhoff, Inc. v. H.J.
Heinz Co., 86 F.3d 1287, 1301 (3d Cir. 1996).

On October 29, 2013, Plaintiffs filed suit against Lantana in the Superior Court of New
Jersey, Law Division, Ocean County. Plaintiffs’ Complaint consists of a claim for declaratory
judgment, breach of contract, and breach of the duty of good faith and fair dealing. On January
31, 2014, Lantana removed the action to this Court under 28 U.S.C. § 1332. Lantana now moves
to dismiss Plaintiffs’ demand for attorney’s fees.
II.

Standard of Review
Federal Rule of Civil Procedure 12(b)(6) provides that a court may dismiss a complaint

“for failure to state a claim upon which relief can be granted.” When reviewing a motion to
dismiss, courts must first separate the factual and legal elements of the claims, and accept all of
the well-pleaded facts as true. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009).
All reasonable inferences must be made in the Plaintiff’s favor. See In re Ins. Brokerage
Antitrust Litig., 618 F.3d 300, 314 (3d Cir. 2010).
In order to survive a motion to dismiss, the plaintiff must provide “enough facts to state a
claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007). This standard requires the plaintiff to show “more than a sheer possibility that a
defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A “plaintiff's
obligation to provide the grounds of his entitle[ment] to relief requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do.”
Twombly, 550 U.S. at 555 (internal quotations and citations omitted). When assessing the
sufficiency of a civil complaint, a court must distinguish factual contentions and “[t]hreadbare
recitals of the elements of a cause of action, supported by mere conclusory statements.” Iqbal,
556 U.S. at 678. Any legal conclusions are “not entitled to the assumption of truth” by a
reviewing court. Id. at 679. Rather, “[w]hile legal conclusions can provide the framework of a

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complaint, they must be supported by factual allegations.” Id. See also Fowler, 578 F.3d at 210
(explaining that “a complaint must do more than allege a plaintiff’s entitlement to relief”).
III.

Analysis
A federal court sitting in diversity should look to the law of the state in which they sit for

guidance regarding attorney’s fee awards, providing that the state law does not run counter to a
federal statute or rule of court. See Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240,
259 n. 31 (1975) (quoting 6 J. Moore, Federal Practice ¶ 54.77(2), pp. 1712–1713 (2d ed. 1974)).
New Jersey follows the American Rule, under which “the prevailing litigant is ordinarily not
entitled to collect a reasonable attorneys fee from the loser.” Guarantee Ins. Co. v. Saltman, 217
N.J. Super. 604, 609 (App. Div. 1987). This rule stems from the belief that “sound judicial
administration will best be advanced if litigants bear their own counsel fees.” Right to Choose v.
Byrne, 91 N.J. 287, 316 (1982) (quotation omitted). There are three exceptions to the general
rule against recovery of attorney’s fees: (1) “where counsel fees are permitted by court rule or
statute”; (2) “pursuant to a contract”; (3) “or where counsel fees are a traditional element of
damages in a particular cause of action.” Guarantee Ins., 217 N.J. Super. at 610.
Here, Plaintiffs have alleged that Lantana issued them a first party property insurance
policy, under which they submitted a claim for wind damage to the Insured Property. Their
Complaint is based on the alleged failure to pay this first party property damage claim.
Specifically, Count One seeks a declaration of Lantana’s contractual obligations to pay
Plaintiffs’ first party property damage claim, Count Two alleges Lantana breached its insurance
contract with Plaintiffs by failing to pay Plaintiffs’ first party property damage claim, and Count
Three alleges that Lantana has breached its duty of good faith and fair dealing in its handling of

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Plaintiffs’ claim. Under each claim, Plaintiffs seek attorney’s fees pursuant to N.J. Ct. R. 4:429(a)(6).
Under New Jersey Court Rule 4:42-9(a)(6), counsel fees are allowed “in an action upon a
liability or indemnity policy of insurance, in favor of a successful claimant.” N.J. Ct. R. 4:429(a)(6). Therefore, New Jersey courts have held that “[s]ince the intention of the Rule is to
permit an award of counsel fees only where an insurer refuses to indemnify or defend its
insured’s third-party liability to another, generally, it is not extended to permit counsel fees to
its insured on a direct suit against the insurer to enforce a casualty or other first-party
direct coverage.” Guarantee Ins., 217 N.J. Super. 604, 610–11 (emphasis added); see also
Shore Orthopaedic Grp., LLC v. Equitable Life Assur. Soc. of U.S., 397 N.J. Super. 614, 624
(App. Div. 2008) (affirming rejection of claim for counsel fees under Rule 4:42-9(a)(6) because
the Rule “does not pertain to first party claims”). This Rule, therefore, does not permit the
imposition of attorney’s fees as a form of relief in a first party claim such as this. Plaintiffs have
provided no other grounds of express statutory authorization, an agreement, or an established
exception under which they could receive counsel fees. Accordingly, Plaintiffs’ demand for
attorney’s fees must be dismissed. See Shore Orthopaedic, 397 N.J. Super at 624; Guarantee
Ins., 217 N.J. Super. at 610–11.
IV.

Conclusion
For the reasons stated above, Lantana’s motion to dismiss Plaintiffs’ demand for

attorney’s fees is granted. An appropriate Order accompanies this Opinion.
/s/ Joel A. Pisano
JOEL A. PISANO, U.S.D.J.
Dated: September 2, 2014

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