Public Adjusters Attempt to Represent an Insured Subject to APA Clause

Post number 5301

Insurers May Contractually Prevent an Insured from Hiring a Public Adjuster

See the video at https://rumble.com/v76wwhk-public-adjusters-attempt-to-represent-an-insured-subject-to-apa-clause.html and at https://youtu.be/5mto2iHKAg8 PUBLICADJUSTER 1

In Peter Barbato & North Jersey Public Adjusters Inc. v. Interstate Fire & Casualty Company, et al, No. 25-cv-5312 (JGK), United States District Court, S.D. New York (December 15, 2025) the plaintiffs, Peter Barbato and North Jersey Public Adjusters, Inc. (“NJPA”), filed suit against several insurance companies, including Interstate Fire & Casualty Company, Independent Specialty Insurance Company, and certain Underwriters at Lloyd’s of London.

FACTS

NJPA is a New Jersey-based public adjusting firm licensed in New York. The dispute centers on insurance policy provisions that the plaintiffs allege prohibit insureds from retaining public adjusters. Plaintiffs alleged that the defendants’ policy endorsement forms were not approved by the New York State Department of Financial Services (DFS) as required.

LEGAL ISSUES

The legal backdrop involves New York General Business Law § 340, which prohibits restraints of trade and tort claims involving interference with contractual relations and economic advantage.

Whether the insurance policy provisions prohibiting insureds from retaining public adjusters constitute tortious interference with contractual relations or economic advantage.
Whether the policy provisions amount to an unlawful restraint of trade under N.Y. Gen. Bus. Law § 340.
Whether the defendants’ endorsement forms were unlawfully issued without DFS approval.
Whether the class claims for tortious interference and restraint of trade are substantiated under the relevant statutes.

DESCRIPTION OF CLAIMS

Tortious interference with contractual relations (Count I)
Tortious interference with economic advantage (Count II)
Restraint of trade in violation of N.Y. Gen. Bus. Law § 340 (Count III)
Putative class claim for tortious interference with economic advantage (Count IV)
Putative class claim for restraint of trade (Count V)

LEGAL STANDARDS

To survive a motion to dismiss under Rule 12(b)(6), a plaintiff must allege enough facts to state a claim to relief that is plausible on its face.

ANALYSIS

The court, accepting the complaint’s factual allegations as true for the purposes of the motion, considered whether the claims stated a plausible legal basis for relief. The primary focus was on whether the insurance policy provisions at issue unlawfully restricted the use of public adjusters and whether such restrictions violated New York’s antitrust law or tort principles.

Ultimately, the court granted the defendants’ motion to dismiss. This outcome indicates that the court found either that the policy provisions did not amount to tortious interference or unlawful restraint of trade as alleged, or that the plaintiffs failed to state a claim upon which relief could be granted under the applicable statutes.

The decision underscores the court’s view that, even taking the plaintiffs’ allegations as true, the legal theories advanced were insufficient to survive a motion to dismiss.

Defendants’ inclusion of the Anti-Public Adjuster (APA) clause in the Policy is not expressly prohibited by the laws and regulations that DFS is tasked with implementing, and therefore cannot violate the Insurance Law or the Financial Services Law because neither law expressly bars such language. Therefore, contrary to what the defendants argue, the defendants’ conduct falls outside DFS’s Article 4 authority.

This case does not arise from a comprehensive regulatory program or a state-created entity that requires agency oversight. To the contrary, DFS has no direct authority to bar the defendants from including an anti-public-adjuster clause because the defendants are excess-line insurers whose policy forms are not subject to DFS’s review or approval.

TORTIOUS INTERFERENCE WITH CONTRACT

The defendants also argue that there cannot be a claim for tortious interference with contract because the NJPA Agreement has no fixed end date and was therefore terminable at will.

The defendants’ inclusion of the APA clause cannot violate the Insurance Law or the Financial Services Law because neither law expressly bars such language. As the complaint alleges nothing more than the plaintiff’s exercise of its contractual right, it cannot support a claim for tortious interference with contract.

TORTIOUS INTERFERENCE WITH ECONOMIC ADVANTAGE

To state a claim for tortious interference with economic advantage under New York law, the plaintiffs must allege that (1) they had business relations with a third party; (2) the defendants interfered with those business relations; (3) the defendants acted for the sole purpose of harming the plaintiffs or used dishonest, unfair, or improper means and (4) the defendants’ acts injured the relationship.

Because the complaint fails to allege conduct undertaken solely to harm the plaintiffs or the use of wrongful means tantamount to a crime or independent tort, the plaintiffs fail to state a plausible claim for tortious interference with economic advantage.

The USDC in New York concludes that insurers have the right to create, and make a condition of an insurance policy an Anti-Public-Adjuster clause preventing public adjusters from representing the insureds of the policy with an APA clause.

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