The federal district court denied the public adjuster’s challenge to the policy provision prohibiting insureds from retaining public adjusters. Barbato v. Interstate Fire & Cas. Co., 2025 U.S. Dist. LEXIS 259094 (S.D.N.Y. Dec. 15, 2025).

North Jersey Public Adjusters, Inc. (NJPA) alleged the insurer issued a policy to the insured covering the insured’s apartment building. The property subsequently suffered a fire loss. The insured retained NJPA to assist with the claim. NJPA and the insured executed a public adjuster agreement for public adjusting services.

The insurer demanded that the insured cancel the contract with HJPA because the policy included an “Anti-Public Adjuster Endorsement” (APA Clause). The endorsement provided that the insured would not hire or otherwise utilize the services of a public adjuster. The insured terminated the contract, causing NJPA to lose a prospective fee calculated as five percent of the insurance proceeds paid to the insured.

NJPA filed suit against the insurer. The insurer moved to dismiss.

NJPA first alleged that by enforcing the APA Clause, the insurer induced the insured to terminate its contract with the public adjuster, thereby tortiously interfering with the contract. The court determined that the complaint did not plausibly allege that the APA Clause violated any law. Because the insurer’s enforcement amounted to no more than the exercise of its contractual right, the compliant failed to allege wrongful conduct sufficient to support a tortious interference with contract claim.

The complaint’s allegations of tortious interference with economic advantage also failed. The complaint failed to alleged conduct undertaken solely to harm NJPA or the use of wrongful means tantamount to a crime or independent tort.

Finally, the allegations of restraint of trade were insufficient. Under New York law, any contract, agreement, or arrangement that formed a monopoly or restrained competition in trade was illegal. Here, the complaint pled no relevant product or geographic market, thus failing to state a claim for restraint of trade.

The motion to dismiss was granted without prejudice.