CONTINUED FROM A PREVIOUS ARTICLE POSTED HERE. You can read more about it in 2 Dennis J. Wall, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 9:35, titled "Force-Placed Insurance: The Most Frequently Alleged Claims and Causes of Action, Including Alleged Bad Faith" (3d Edition Thomson Reuters 2020 Supplements).
(©2020 Dennis J. Wall. All Rights Reserved)
In New Jersey,
[t]o show a breach of the covenant of good faith and fair dealing, a plaintiff must show “(1) the defendant act[ed] in bad faith or with a malicious motive, (2) to deny the plaintiff some benefit of the bargain originally intended by the parties, even if that benefit was not an express provision of the contract.” [Citation omitted.] Proof of a party’s “bad motive” or “intention” must support a claim of breach of contract grounded on an alleged breach of the implied covenant of good faith and fair dealing.[1]
In this case, the federal judge held that the plaintiffs adequately alleged a breach of the good faith covenant that was implied in their loan agreement as to those unauthorized charges that were not excluded by the statute of limitations:
... Plaintiffs sufficiently allege bad faith because they state that the Defendant knowingly charged them for three fees outside the express terms of the contract. (Compl. at ¶¶ 21–22.) Defendant did so intentionally and therefore acted “in bad faith, dishonestly, or with improper motive” and “destroy[ed] or injure[d] the right of the [Plaintiffs] to receive the benefits or reasonable expectations of the contract.” (Id. at ¶ 129). Taking all inferences in the Plaintiffs’ favor, Plaintiffs were denied the benefit of their bargain because they contracted to pay for only those fees permitted by the agreement, not any others. (Id.)[2]
[1] Zirbser v. Wells Fargo Bank, N.A., No.: 19-cv-01099-RBK-KMW, 2019 WL 3244621, at *4 (D.N.J. July 19, 2019).
[2] Zirbser v. Wells Fargo Bank, 2019 WL 3244621, at *4.
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