JENNIFER BURDEN, ET AL. VS. MICHAEL G. HARRINGTON, NANCY E. MARTIN, JESSICA M. GONZALEZ, and MANUEL GONZALEZ, Defendants, and FARMERS INSURANCE COMPANY and MID-CENTURY INSURANCE COMPANY, Defendants Respondents, Slip Copy 2026 WL 708406

Prospective vs. Retroactive Application of Statutes: The New Jersey Insurance Fair Conduct Act (IFCA)

By
Emily S. Knepper

The plaintiffs, Jennifer and Craig Burden, appealed from a law division order denying their motion to lift the stay and file an amended complaint and an order denying their motion for reconsideration. The plaintiffs’ complaint alleged negligence stemming from a motor vehicle accident where Jennifer Burden was a passenger when the car was struck by a vehicle operated by the defendant, Michael G. Harrington. The plaintiffs’ complaint against Harrington was settled, exhausting his automobile liability insurance policy. Plaintiffs’ third amended complaint asserted uninsured (UM), underinsured motorist (UIM), and bad faith claims against plaintiffs’ UM/UIM carrier, Mid-Century Insurance Company (MCIC). The bad faith claim was stayed pending trial.

The case proceeded to trial, and the jury returned an award in favor of the plaintiffs. The plaintiffs then moved to lift the stay of the bad faith claim and for leave to file an amended complaint to add a second cause of action under the New Jersey Insurance Fair Conduct Act (IFCA), N.J.S.A. 17:29BB-1 to -3, which was enacted during the pendency of the litigation. Plaintiffs claimed “[MCIC] acted in [b]ad [f]aith prior to and after trial of this matter and, therefore, [wa]s in violation of [IFCA].” In an oral decision, the court denied the motion to lift the stay and file an amended complaint as it determined the claims were precluded because they alleged an ongoing tort that commenced prior to the enactment of the statute.

The Appellate Court found the decision was not in error, as the amended complaint would have been futile as the IFCA was not meant to be applied retroactively. There are “three circumstances that will justify giving a statute retroactive effect: (1) when the Legislature expresses its intent that the law apply retroactively, either expressly or implicitly; (2) when an amendment is curative; or (3) when the expectations of the parties so warrant.” James v. N.J. Mfrs. Ins. Co., 216 N.J. 552, 563 (2014).