USDC in New Jersey Bends Over Backwards to Help a Pro Se Plaintiff


To Sustain a Suit Against an Insurer it is Necessary to Allege Adequate Facts

No one likes to have an insurance claim denied. However, many times the insurance company made the correct decision. When an insured finds it difficult or impossible to get a lawyer to bring a suit against an insurer there is a good chance the insurer was right. When the insured sues, as a pro se (a non lawyer acting as if he is a lawyer) the courts will try to find a way – regardless of how poor the case is — to help the pro se keep the suit alive.

In Thomas I. Gage v. Preferred Contractors Insurance Company Risk Retention Group LLC, et al., Civil Action No. 19-20396 (MAS) (ZNQ), United States District Court District Of New Jersey (August 31, 2020) Preferred Contractors Insurance Company Risk Retention Group LLC (“Preferred Contractors”) and Golden State Claims Adjusters, Inc.’s (“Golden State”) (collectively, “Defendants”) filed an unopposed Motion to Dismiss pro se Plaintiff Thomas I. Gage’s (“Plaintiff”) Complaint. The Court has carefully considered Defendants’ submission and decides the matter without oral argument.


Plaintiff owns and operates a home improvement business in New Jersey called Virtue Builders, Inc. (“VBI”). Plaintiff purchased for VBI a commercial general liability insurance policy (the “Policy”) with Preferred Contractors through a third-party seller, Affordable Insurance Group, Inc. (“Affordable Insurance”). On or about July 17, 2019, a heavy rainstorm damaged a retaining wall VBI was hired to construct. Plaintiff filed a claim under the Policy for the damage, but Golden State, Preferred Contractors’ third-party claims adjuster, denied the claim for the repair or replacement of work performed where the insured performed operations.

Following the coverage denial, Plaintiff sued alleging twelve-counts action against Defendants and Affordable Insurance that were  loosely structured, often repetitive and lacked sufficient factual allegations.


When analyzing a Rule 12(b)(6) motion to dismiss, the district court conducts a three-part analysis. First, the court must take note of the elements a plaintiff must plead to state a claim. Second, the court must accept as true all of a plaintiff’s well pleaded factual allegations and construe the complaint in the light most favorable to the plaintiff. The court, however, may ignore legal conclusions or factually unsupported accusations that merely state the-defendant-unlawfully-harmed-me. Finally, where a plaintiff proceeds pro se, the complaint must be “liberally construed,” and however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers. A pro se litigant, however, is not absolved from complying with the federal pleading requirements merely because the litigant proceeds pro se.

Claims involving fraud are subject to a narrower pleading standard than that of standard claims and plaintiff failed to even come close to a sufficient pleading.

Plaintiff also alleges breach of contract against Defendants for failing to (1) “objectively and fairly evaluate Plaintiff’s claim[,]” (2) “reasonabl[y] and properly investigate Plaintiff’s claim[,]” (3) “follow the company’s established investigation procedures[,]” (4) “hire a qualified structural engineer” to investigate the claim, (5) inform Plaintiff why a structural engineer was not needed, and (6) interview witnesses.

The Complaint failed to point to a specific provision which Defendants breached. Failure to identify a specific provision of a contract that was breached is grounds for dismissal. Plaintiff, accordingly, failed to state a claim for breach of contract, and the Breach of Contract Count (Count One) was dismissed without prejudice.

Bad Faith Counts

Plaintiff alleges the Defendants engaged in bad faith and violated the implied covenant of good faith and fair dealing when they denied Plaintiff payment under the Policy without thoroughly investigating Plaintiff’s claim. To state a claim for bad faith denial of insurance coverage, Plaintiff must show: (1) the insurer lacked a reasonable basis for its denying benefits, and (2) the insurer knew or recklessly disregarded the lack of a reasonable basis for denying the claim. To establish a first-party bad faith claim for denial of benefits in New Jersey, a plaintiff must show that no debatable reasons existed for denial of the benefits. Plaintiff fails to allege that Defendants lacked a fairly debatable reason for its denial of coverage.

Rather, the Policy illustrates that Defendants did possess a reasonable basis for its denying benefits. The denial for the repair or replacement of work the insured performed or to real property upon which it performed operations was clearly excluded. The Court, however, provides Plaintiff an opportunity to amend his Complaint. If Plaintiff chooses to amend his pleading, Plaintiff must provide additional factual allegations detailing how Defendants lacked a reasonable basis for denying Plaintiff’s insurance claim.

Plaintiff’s Fraud Counts neither place the Defendants on notice of the precise misconduct with which they are charged, nor allege the who, what, when, where, and how of the fraud at issue. Accordingly, the Fraud Counts (Counts Nine and Ten) are dismissed without prejudice. The Court, however, provides Plaintiff an opportunity to amend his Complaint

Defendants’ Motion to Dismiss is granted. Plaintiff’s Complaint is dismissed without prejudice. Plaintiff may, however, amend his Complaint. If Plaintiff chooses to amend his pleading, Plaintiff must provide additional factual allegations detailing how Defendants breached the Policy.


Hopefully the plaintiff – who saw no reason to oppose the insurers’ motion – will not take up the court’s offer to consider an amended complaint. If he does the plaintiff must accept the judge’s advice and allege sufficient factual allegations to support his suit. The judge was kind. The plaintiff was not able to allege a viable lawsuit. With the advice provided by the judge, if the plaintiff is willing or able, the court will need to rule on another spurious complaint brought by a plaintiff who is unwilling to recognize that a clear and unambiguous exclusion for damage to work done by the insured is enforceable. If the complaint is amended the court and the litigants will spend a great deal of money that is totally unnecessary.

© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at and

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

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