Law Offices of

 Thomas E. Maloney, Jr.

 We are here to help     We are here to help     We are here to help

10 Madison Ave, Third Floor,   Morristown, NJ 07960   973.538.4100




The Adjuster's Advantage

A Newsletter Devoted to the Public Adjuster


Vol. 2,  No. 8                                                  August 20, 2012




            As you enjoy the last days of summer and prepare for hurricane (tropical storm) season, we offer a few brief items of interest.


Bello affirmed, but not over


            The Appellate Division of the New Jersey Superior Court on July 12, 2012, affirmed the lower court ruling in Bello v. Merrimack Mutual which I discussed in the The Adjuster's Advantage last year (July 12, 2011). You may recall that case involved a jury finding bad faith by the insurance company in its handling of a windstorm claim and awarding damages substantially in excess of the policy limits, which the court refused to reduce to the policy limits. The trial court compounded the loss by also awarding attorney's fees to the insured. The Appellate Court upheld the jury award and rebuffed the alleged trial errors. Importantly, the Court also upheld the award in excess of the policy limits and upheld the award of attorney's fees as items of consequential damages. Counsel for Merrimack advised me that the company will petition the Supreme Court for certification.


            Members of the NJPAA: Should the Association seek to file an amicus (friend of the Court) brief in support of the insured on the bad faith issues?


Cancellation of retainer


            If you find yourself in the unhappy situation of an insured attempting to cancel your retainer agreement, please note that the insured's notice of cancellation does NOT need to be sent by certified mail, return receipt requested.


            You may recall that the inclusion of the notice of the right to cancel in your retainer agreement is based upon the reference to the federal door-to-door sales regulations which are incorporated by reference in the NJ Administrative Code regulation as discussed in the June 2011 issue of The Adjuster's Advantage. In RAB Performance Recoveries, LLC v. George, 419 N.J.Super. 81 (2011), the NJ Appellate Division invalidated the requirement for certified mail notice of cancellation contained in a door-to-door sales contract. The Court found that the federal law did not require that the notice be given by certified mail and hence a NJ statute which contained such a requirement was pre-empted by the Federal Trade Commission regulations.


            If your contract/retainer agreement contains a requirement that the insured give you notice of cancellation by certified mail, you should remove it. In any event, you cannot enforce that requirement.


Partial repairs


            Insurance companies frequently refuse to pay for repair or replacement of an entire structural component (roof, wall, etc.) when only a part of the component is damaged by an insured event. Hence some homes have mismatched roof shingles, brick work that looks like a patchwork quilt, siding in multiple colors, etc. Since the insured had a uniformly colored building prior to the loss, the principle of indemnity would suggest that the owner be returned to the situation pertaining prior to the loss and have a uniformly colored structure.


            You may already have encountered a nasty new provision incorporated in some homeowner policies. Form CHO 70 09 07 10 adds a condition to the Loss Settlement conditions to provide specifically that the insurer is obligated only to cover the cost to repair or replace the damaged portion with equivalent materials, meaning materials similar to the undamaged portion in function, color, texture or shape. The last sentence reads "We are not liable for replacement of the undamaged portion."


            This form will undoubtedly be used by those companies that include it in the policy to attempt to avoid the expense of matching. We should expect some litigation over the definition of "similar" as contained in this form. "Similar" is certainly not defined as "identical", but, as with beauty, is in the eye of the beholder.


            An interesting concept is developing that could remedy this problem. The Supreme Court in Georgia recently upheld the Georgia Insurance Commissioner's directive to insurers to consider "diminution in value" as an element of a property loss. Obviously, a home with mismatched siding has less value than a home with matching siding. If the diminution in value is an element of the loss, the insurance company would be well advised to pay the cost necessary to match the repair with the undamaged portion of the structure. Your argument to obtain this result is the diminution in value of the home with mismatched or patch-worked components.


Appraisal Project


            Just a reminder, the Appraisal Project is underway and I await your submissions!


            Enjoy the remainder of the summer. If we can help you or your insureds, please feel free to contact us at 973-538-4100 or by email at We are here to help!

Tom Maloney

Tom Maloney


Representing the Insured in:

  • Coverage Disputes
  • Claims
  • Investigations
  • Examinations Under Oath
  • Suits
  • Trials
  • Appeals

Statewide coverage

Associate Member New Jersey Public Adjusters Association


AV rated Attorney Martindale-Hubbell


Admitted: All State and Federal Courts in New Jersey; Third Circuit Court of Appeals; U.S. Supreme Court


Certified by the Supreme Court Of New Jersey as a Civil Trial Attorney - 1982


Qualified Mediator by the New Jersey Supreme Court


Pro Hac Vice Admissions:NY, NH, MD, USDC-SDNY,

Second Circuit Court of Appeals


Georgetown University Columbia Law School


DISCLAIMER: This newsletter contains the personal opinions of the writer and is not intended to and does not provide legal advice in any way, shape or form; does not create an attorney-client relationship between the writer and the recipient or any other person; and is offered without charge for informational purposes only. You should consult with an attorney of your own choosing in any matter in which you seek legal advice.