Will New Jersey Adopt Time Limits Demands in Bad Faith Cases? Only Time Will Tell

Will New Jersey Adopt Time Limits Demands in Bad Faith Cases? Only Time Will Tell

By Mark R. Vespole, Partner, Tressler LLP

Does a bad faith lawsuit necessarily result in a waiver of the attorney-client privilege when counsel for the insurer questions the underlying plaintiffs about the reasons they rejected the insurer's pretrial settlement offer and there is an excess verdict?

The answer to this question becomes even more complicated when there is a time limits demand for the defendant's policy. To superimpose an additional riddle on to this conundrum, what happens when the defendant's insurer offers its policy limits to settle the case many months before trial, but it is rejected by the plaintiffs because it is tendered many months after a time limits demand?

In V. K. v. New Jersey Manufacturers Ins. Co., 2013 N.J. Super. Unpub. LEXIS 2111 (App. Div. Aug. 26, 2013) [enhanced version available to lexis.com subscribers], the court considered the parameters of the attorney-client privilege when pitted against an insurer's right to conduct discovery in a bad faith lawsuit against it based upon a verdict in excess of the policy limits. The commentary notes that while this case is seminal on issue of the applicability of the attorney-client privilege alone, it presages an even more significant decision down the road on whether or not New Jersey ultimately will recognize a cause of action against an insurer for bad faith in the context of a time limits demand.

    Mark Vespole is a partner based in the Newark office of Tressler LLP, a national insurance, financial services and litigation law firm. Mark focuses his practice on the counseling and representation of various financial institutions and corporations and their employees on corporate raiding, FINRA and SEC compliance, customer and industry securities arbitrations, insurance coverage, bad faith, professional liability, rescission actions, products liability, directors and officers, liability, business torts, construction, employment, toxic tort and general negligence defense litigation, as well as mediation and arbitration. Mark has been certified by the New Jersey Supreme Court as a civil trial attorney for the past 26 years and has also been a certified mediator. In addition, Mark has authored the LEXIS-NEXIS Practice Guide New Jersey Civil Discovery (2007-2013 Editions), co-authored the LEXIS-NEXIS Practice Guide New Jersey Pretrial Practice (2007-2013 Editions), co-authored LEXIS-NEXIS Practice Guide New Jersey Insurance Litigation (2008-2014 Edition) and wrote a chapter on expert witnesses for the LEXIS-NEXIS Practice Guide New Jersey Trial, Post-Trial and Appellate Proceedings (2007 Edition). Additionally, Mark has been selected for inclusion in the 2005, 2006, 2007, 2009, 2010, 2011, 2012 & 2013, New Jersey Super Lawyers®.

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