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Insurance — coverage — bad faith

January 1, 2011
Wood v. New Jersey Manufacturers Insurance Company, (App. Div. 2010)

The defendant, New Jersey Manufacturers Insurance Company ("NJM"), appealed the summary judgment order determining that NJM had breached its duties by declining to settle a tort action against its insureds within the coverage limits of its liability insurance policy. The Appellate Division reversed because, under the principles of Rova Farms Resort, Inc. v. Investors Ins. Co., there are genuine and triable issues of material fact as to whether NJM acted in bad faith by rejecting the opportunity to settle the underlying case within the policy limits. The Appellate Division vacated the summary judgment order and remanded the bad faith issues for a trial or plenary hearing.

Case Law Alert - 1st Qtr 2011

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