A New Jersey couple sued an insurance company Friday, claiming it defrauded them out of the sales tax in their Superstorm Sandy claim, and their lawyer said others might also have been affected.
Charles and Beverly Mooney sued in federal court, seeking class-action status and alleging that Selective Insurance "intentionally manipulated" its insurance claim software to shortchange the couple. The suit asks for the Mooneys' claim to be redone with the sales tax costs and seeks other damages.
Continue Reading Below
A spokeswoman for Selective wasn't immediately available for comment.
The Mooneys' summer home in Toms River was wiped out by the storm, and they're still struggling to come up with the money for repairs. Selective paid them for what it said it owed them, but Charles Mooney said it wasn't enough to fix the house and he is paying out of pocket to finish the work.
"I'm not saying that the sales tax that they withheld from me is going to be the difference, but it's certainly not helping," Mooney said.
The Mooneys were paid $108,913, but the lawsuit said that doesn't include the required 7 percent sales tax "despite Selective's representation to the contrary."
The couple said they were told by the insurance company that sales tax was included on individual items in the claim, but the lawsuit said that functionality was not available in the software Selective used until later in 2013.
The suit comes after Federal Emergency Management Agency officials agreed this week to provide Sandy victims who think their insurance claims were not fairly paid out a chance for a review. The review could include up to 144,000 claims and won't limit corrective action to the 2,200 that are in litigation.
There have been allegations of fraud involving how some insurance companies assessed damage after the October 2012 storm that killed 71 people in the state and cost the country $65 billion. Insurers have denied any wrongdoing.
Attorney Chip Merlin, who filed the suit for the Mooneys and represents hundreds of other homeowners who suffered damage from Sandy in New Jersey and New York in cases against insurance adjusters, said three other homeowners have reported similar sales tax issues and be believes those cases are likely just the beginning.