NJ (06/25/25) – Mound Cotton successfully defended its clients, an insurance broker and agent, in a decision by the New Jersey Appellate Division, which upheld the dismissal of Consumer Fraud Act (CFA) claims brought against them. The appeal arose from a lawsuit filed by a neurosurgeon who alleged that insurance producers and the agent made misrepresentations about four disability and business overhead expense insurance policies purchased through CFG.
The plaintiff sought treble damages under the CFA, claiming that the brokers misled him about the policies’ benefits and failed to disclose that income from his secondary medical-legal consulting work could impact eligibility for total disability benefits. On behalf of the insurance brokers and the agents, Mound Cotton Partners Barry R. Temkin and Kate E. DiGeronimo, along with Katharine Anne Lechleitner, successfully argued that insurance brokers are exempt from CFA liability under longstanding precedent. The Appellate Division agreed, affirming the trial court’s dismissal of the CFA claims with prejudice.
In its opinion, the court reaffirmed its 2006 decision in Plemmons v. Blue Chip Insurance Services, holding that insurance brokers qualify as “semi-professionals” subject to extensive regulation and licensure and are therefore excluded from CFA liability when performing brokerage services. The panel declined to follow the reasoning of a more recent case, Shaw v. Shand, which limited CFA exemptions to historically recognized “learned professionals,” noting that Shaw did not involve insurance brokers and did not overrule Plemmons. This decision confirms the continued application of the CFA exemption to licensed insurance brokers in New Jersey and clarifies that conflicting dicta in subsequent cases do not override binding precedent. It also reinforces Mound Cotton’s strong track record in defending insurance professionals in high-stakes litigation.