Gap in Coverage not Bad Faith

USDC Dismisses Multiple Counts Against Insurer

Post 5038

Vincent Cusumano and Vincent Cusumano Architect P.C. (VCA), alleged that the defendants, Berkshire Hathaway issued a professional liability policy with a three-month gap in coverage, which precluded coverage for claims arising from prior work. The plaintiffs asserted thirteen causes of action, including breach of contract, promissory estoppel, and common law fraud.

In Vincent Cusumano Architect P.C. and Vincent Cusumano v. Berkshire Hathaway Direct Insurance Company d/b/a Three By Berkshire Hathaway, Todd Sharpee, John Does 1-10 names being fictitious and unknown, and ABC Corps. 1-10 names being fictitious and unknown, Civil Action No. 23-cv-22970 (JXN)(JSA), United States District Court, D. New Jersey (March 29, 2025) dismissed multiple causes of action.

COUNTS DISMISSED

The court dismissed several counts in the case for the following reasons:

Declaratory Judgment (Count 1):
The court found that the declaratory judgment claim was duplicative of the breach of contract claim. Since the breach of contract claim would resolve the same issue, the declaratory judgment was deemed unnecessary.
Specific Performance (Count 2):
The court dismissed this claim because specific performance is an equitable remedy, not an independent cause of action. Plaintiffs cannot amend their complaint through opposition briefs.
Breach of Contract (Count 3):
The court dismissed this claim because the plaintiffs failed to identify a provision within the insurance contract that the defendants breached. The policy's terms were clear and did not cover the underlying claim.
Quantum Meruit/Unjust Enrichment (Count 5):
The court dismissed this claim because the existence of an express and enforceable contract (the Berkshire Policy) precludes a claim for unjust enrichment.
Breach of Covenant of Good Faith and Fair Dealing (Count 6):
The court dismissed this claim as it was duplicative of the breach of contract claim and failed to establish bad faith under New Jersey law.
Common Law Fraud (Count 7):
The court dismissed this claim because the plaintiffs could not establish reasonable reliance in the face of clear contradictory language in the insurance policy.
Breach of Fiduciary Duty (Count 12):
The court dismissed this claim because the insurance agent owed a fiduciary duty to the insurance company, not to the insured.

The USDC determined that the suit can proceed on the remaining counts but concluded that the 7 counts dismissed were not viable.

ZALMA OPINION

When a person or entity sues an insurance company they often throw in the kitchen sink of causes of action. The architect did just that and found that seven of at least 13 causes of action were not viable and the remaining counts will face either an additional motion for summary judgment or at trial.

(c) 2025 Barry Zalma & ClaimSchool, Inc.

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