Moore & Van Allen Earns Noteworthy Dismissal for Clear Blue Insurance
Moore & Van Allen PLLC (MVA) is pleased to announce its recent victory on behalf of Clear Blue Specialty Insurance Group (Clear Blue) in a lawsuit that deals with an important issue at the intersection of banking/lending and insurance. As a result of the win, Clear Blue has been fully dismissed from the lawsuit.
“We are honored to have represented Clear Blue in defense of these serious but faulty claims and to have achieved a superb outcome,” said MVA Co-head of Litigation Mark A. Nebrig, who led the team that represented Clear Blue.
On Aug. 3, 2023, the New Jersey Superior Court granted Clear Blue’s motion to dismiss the plaintiff’s claim that Clear Blue aided and abetted conversion and violations of New Jersey Racketeer Influenced and Corrupt Organizations (RICO) Act committed by independent insurance agents. The case is captioned CEBV, LLC v. Clear Blue Specialty Insurance Company, et. al. (including scores of other defendants), Case No. GLO-L-00856-22. Months earlier, on Dec. 16, 2022, the court granted Clear Blue’s initial motion to dismiss plaintiff’s breach-of-contract claim with prejudice. For that claim, the plaintiff had alleged that Clear Blue breached the premium finance loan contracts that the insurance agents had secured to obtain the loans.
Certain insurance policyholders with large premium charges seek loans to fund their premium charges, typically permitting the policyholders to make lower installment payments. Those policyholders typically use an insurance agent to secure the loans. According to the complaint, certain agents had used fake insurance policies purportedly issued by Clear Blue and other insurers to fraudulently obtain the loans, then kept the loaned money to “fund their personal lavish lifestyles.”
The court’s dismissal of both claims demonstrates Clear Blue’s fundamental argument that a policyholder’s transaction with a premium finance lender is separate and distinct from the policyholder’s transaction with the insurance company. The mere fact that the policyholder uses an independent insurance agent to secure the premium finance loan is not sufficient to allege that the insurance company is liable for the agents’ acts.
Although the plaintiff sought to connect Clear Blue to the fraud scheme, we successfully demonstrated that the independent agents were not acting on behalf of Clear Blue, which itself was an innocent victim of the scheme,” said MVA Associate Fielding Huseth, who argued the motion to dismiss. “And we did so in the face of the very high standard that applies to motions to dismiss in New Jersey.”
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