Bad Faith Claims Under Rova Farms Can Get a Jury Trial

Wood v. New Jersey Manufacturers Ins. Co., 206 N.J. 562 (2011).  The question of what claims are triable to a jury has vexed the courts for many years, in various different contexts.  Wood contains a sound and scholarly analysis of whether an insured’s claim that his or her insurer acted in bad faith in refusing to settle a claim within policy limits is triable with or without a jury.  Justice Rivera-Soto wrote the opinion for a unanimous Court, holding that the claim could be tried to a jury.  [Disclosure:  I represent New Jersey Manufacturers Ins. Co. in a pending appeal having nothing to do with any of the issues in Wood].

The Court emphasized, as it has in the past, that “primarily legal” matters are triable by jury, while “primarily equitable” ones are not.  In determining whether an action is primarily legal or primarily equitable, Justice Rivera-Soto stated that courts are to “look to the historical basis for the cause of action and focus on the requested relief,” with the requested relief being “the more persuasive factor.”  “The determination of whether a jury trial attaches to a plaintiff’s cause of action cannot be driven by the label a party affixes to its pleading; it is the obligation of the judiciary to transcend superficialities and and reach the substance of what is alleged and sought.”

Applying those principles, the Court had no trouble finding that the claim at issue was triable to a jury.  Though styled as a declaratory judgment claim, “at its core, a Rova Farms bad faith claim is a simple breach of contract claim, one that perforce must assert that, by failing in bad faith to compromise a claim within the policy limits prior to a verdict, the insurer has breached the implied contractual covenant of good faith and fair dealing.”  This was a “garden-variety action at law” for breach of contract, which “was at common law and remains today an action triable to a jury.”

Moreover, the relief sought was solely monetary damages, a purely legal form of relief, with no equitable component.  Thus, both the basis for the claim and the requested relief pointed to a right to trial by jury.

A good summary of much of the law about when civil cases are triable to a jury is contained in an article that I co-authored with one of my former partners, entitled The Right to a Civil Jury Trial in New Jersey, 47 Rutgers Law Review 1461 (1995).  That article has been cited favorably by the Supreme Court and Appellate Division in prior cases.  Though Wood did not rely on that article, the case reaffirmed prior law in this area and reached the correct result.

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