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Insurance for State of Delaware Waives Sovereign Immunity Post 4803 On February 15, 2023, Kimberly Letke ("Plaintiff") filed a pro se Complaint against Defendant Matthew Sprinkle ("Sprenkle") for defamation and malicious prosecution. On October 3, 2023, Plaintiff filed another Complaint added Defendants Cpl. Tyler Beulter of the DNREC police ("Beulter") and the Attorney General of Delaware, Kathleen Jennings ("Jennings"), in which she added three additional claims: false arrest and violations of public trust, unlawful detention, and violations of her rights under the Fourth Amendment to the United States Constitution. In Kimberly Letke v. Matthew Sprenkle, CPL. Tyler Beulter, and Attorney General Kathleen Jennings, C.A. Nos. S23C-10-019 CAK, S23C-10-002 CAK, Superior Court of Delaware (May 6, 2024) the court was faced with a Motion to Dismiss based upon sovereign immunity. FACTS Sprenkle hunted and harvested a deer in Cape Henlopen State Park, allegedly trespassing on Plaintiff's neighbor's property to reach the Park. Plaintiff shouted at Sprenkle and called the police. The police spoke with Sprenkle and ultimately arrested Plaintiff for a violation of the Delaware statute prohibiting impeding lawful hunting. The charge was ultimately dropped. Plaintiff's claims, including those for defamation and malicious prosecution spring from that incident and the statements that Sprenkle allegedly made to Beulter about Plaintiff. Absolute Immunity The doctrine of sovereign immunity provides that the State of Delaware, including its agencies, can only be sued by consent, or by an express act of the General Assembly. When the State has not waived sovereign immunity, the Court does not have to consider whether the State Tort Claims Act is applicable. The Court has dismissed in the past claims against Delaware state agency defendants where the state agency defendants submitted an affidavit from the Insurance Coverage Administrator of the State of Delaware affirming that the State had not purchased any insurance coverage for such claims. Without a waiver of sovereign immunity, the Court held that plaintiffs' claims were barred, and therefore, the Court was not required to consider whether the State Tort Claims Act was applicable. Qualified Immunity Assuming arguendo that there is not absolute sovereign immunity for Beulter, or that the State has waived sovereign immunity with respect to him or his agency, the doctrine of qualified immunity bars Plaintiff's claims against Beulter. When properly applied, qualified immunity protects all but the plainly incompetent or those who knowingly violate the law. ANALYSIS Plaintiff's claims against Beulter are founded upon an alleged act or omission arising out of the performance of his official duty, and, therefore, is barred by the qualified immunity statute. First, all actions surrounding Plaintiff's arrest were in the performance of an official duty. Second, there is nothing in the Complaint, other than what may be fairly read as mere accusations, that indicates Beulter was not acting in good faith. Third, there is nothing in the Complaint that indicates that Beulter acted with gross or wanton negligence. For the reasons discussed above, Defendant Beulter's Motion to Dismiss was GRANTED. ZALMA OPINION No one likes being arrested. Regardless you cannot sue a police officer or a prosecutor for defamation if everything they did was part of their official duties. The state of Delaware allows the state to waive sovereign immunity only if the state has bought insurance to protect it against such claims. Since there was no insurance protecting the officer he was immune from the suit. (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe to my substack at https://barryzalma.substack.com/subscribe Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg. Go to the Insurance Claims Library – https://lnkd.in/gwEYk.

Force Placed Insurance Charges Allow Special Defense to Foreclosure Post 4802

ZIFL-05-15-2024 Post 4801 The Source for the Insurance Fraud Professional Zalma’s Insurance Fraud Letter (ZIFL) continues its 28th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma.It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ This issue contains the following articles: Incompetent Insurance Fraud Claim Results in Conviction Fraudster Pawns Jewelry & Then Claims it Stolen The defendant, Vincent Chaney, appealed two orders from Superior Court denying his motions to suppress and for a new trial. In State of New Hampshire v. Vincent Chaney, No. 2022-0718, Supreme Court of New Hampshire (May 3, 2024) resolved the dispute over Chaney’s conviction. Read the full 23 page issue here in Adobe pdf format. More McClenny Moseley & Associates Issues This is ZIFL’s twentyeigth installment of the saga of McClenny, Moseley & Associates and its problems with the federal courts in the State of Louisiana and what appears to be an effort to profit from what some Magistrate and District judges indicate may be criminal conduct to profit from insurance claims relating to hurricane damage to the public. On April 23, 2023, MMA filed its Statement of Financial Affairs. MMA Reported Gross Income as follows: 2024 - $803,956.63, 2023 - $12,247,362.23, 2022 - $22,596,895.00. Read the full 23 page issue here in Adobe pdf format. Now Available New Book The Compact Book of Adjusting Property Claims – Fourth Edition On January 2, 2024, in Kindle, paperback and hardback formats, The Compact Book of Adjusting Property Claims, Fourth Edition is now available for purchase here and here. The Fourth Edition contains updates and clarifications from the first three editions plus additional material for the working adjuster and the insurance coverage lawyer. Help, My House Is Falling Into The Sea Normally Honest People Will Try Insurance Fraud "I present blogs and videos so you can learn how insurance fraud is perpetrated and what is necessary to deter or defeat insurance fraud. This Video Blog of True Crime Stories of Insurance Fraud, with the names and places changed to protect the guilty, are all based upon investigations conducted by me and fictionalized to create a learning environment for claims personnel, SIU investigators, insurers, police, and lawyers to better understand insurance fraud and weapons that can be used to deter or defeat a fraudulent insurance claim." The Honest Real Estate Lawyer Tempted to Commit Fraud Read the full 23 page issue here in Adobe pdf format. Lies on Insurance Application Expensive False Statement on Application Requires Rescission Kimberli Orr obtained no-fault automobile insurance from defendant USA Underwriters and was involved in an automobile collision. Defendant denied plaintiff’s claim for benefits because it discovered that plaintiff made material misrepresentations on her application for insurance. Defendant argued that it was entitled to rescind and void plaintiff’s insurance policy, and the trial court granted defendant summary disposition. In Kimberli Orr v. USA Underwriters, No. 363452, Court of Appeals of Michigan (April 25, 2024) the Court of Appeals resolved the dispute. Read the full 23 page issue here in Adobe pdf format. Health Insurance Fraud Convictions NBA STAR 'BIG BABY' IS GOING TO JAIL FOR INSURANCE FRAUD Ex-Boston Celtics player Glen 'Big Baby' Davis has been sentenced to 40 months in prison for defrauding the NBA healthcare plan. Davis, alongside several others, participated in a scheme that involved submitting false or inflated claims for medical and dental services that were never provided. Davis personally submitted $132,000 in fraudulent claims, which were uncovered through geolocation data and travel records. Overall, the group defrauded the plan of over $5 million. Davis will also be on supervised release for 3 years and must pay $80,000 in restitution. Nevada Attorney General Ford Announces Conviction Of Health Care Company And Its Owner Ashley Bunton-Dodson, 36, of Las Vegas, and Remedy Wellness and Resource Center, LLC (“Remedy Wellness”), were sentenced May 7, 2024 in a Medicaid fraud case involving billing for services that were not provided to Medicaid recipients. http://Read the full 23 page issue here in Adobe pdf format. How to Avoid Insurance Fraud from the Louisiana Department of Insurance LDI and St. Tammany Parish Sheriff’s Office to Help Consumers Avoid Storm-Related Insurance Fraud I usually write everything in ZIFL, but this notice is useful wherever you work or live and as you read just change “Louisiana” to your state’s name. Read the full 23 page issue here in Adobe pdf format. New Book Now Available from Barry Zalma Property Investigation Checklists: Uncovering Insurance Fraud, 14th Edition Property Investigation Checklists: Uncovering Insurance Fraud, 14th Edition provides detailed guidance and practical information on the four primary areas of any investigation of suspicious claims. The book also examines recent developments in areas such as arson investigation procedures, bad faith, extracontractual damages, The fake burglary, and Lawyers Deceiving Insurers, Courts & Their Clients During, Catastrophes—A New Type Of Fraud and the appendices includes the NAIC Insurance Information and Privacy Protection Model Act and usable forms for everyone involved in claims and will provide necessary information to the claims adjuster, SIU fraud investigator, claims manager, or coverage lawyer so he or she can be capable of excellence. The newest book joins other insurance, insurance claims, insurance fraud, and insurance law books by Barry Zalma all available at the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Other Insurance Fraud Convictions Former Desert Sun VP Sentenced For Ordering His Son To Shoot Him In Legs To Delay Prison Shannon Egeland's insurance scheme and concocted shooting, which led to the amputation of his left leg, "an unthinkable kind of situation,'' and tacked on three years and 10 months to his 10-year sentence for mortgage fraud. He was sentenced in U.S. District Court in Portland. Read the full 23 page issue here in Adobe pdf format. The Tort of Bad Faith Read the full article at https://www.linkedin.com/pulse/new-book-from-barry-zalma-tort-bad-faith-barry-zalma-esq-cfe and at https://zalma.com/blog plus more than 4300 posts. What Every Insurance Professional, Every Insurance Coverage Lawyer, Every Plaintiffs Bad Faith Lawyer, and Every Insurance Claims Person Must know About the Tort of Bad Faith A Book Needed by Every Insurance Claims Professional Read the full 23 page issue here in Adobe pdf format. 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 for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com Over the last 55 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. Barry Zalma, Inc., 4441 Sepulveda Boulevard, CULVER CITY CA 90230-4847, 310-390-4455 Read the full 23 page issue here in Adobe pdf format

Litigation is an Improper Method to Negotiate Insurance Coverage Post 4800 Plaintiffs' attempted to secure insurance coverage for an action currently pending in federal court (the "Underlying Litigation"). Plaintiffs looked to two towers of D&O insurance to provide that coverage, naming a dozen individual insurers in the process. The problems faced by the insurers were: A provision in the earlier tower of insurance, dubbed the "No Action" clause, commands that no actions may be filed against the insurer until the insured's payment obligations are finally determined. Plaintiffs attempted to convince the Court that the need to enable swift litigation against insurers outweighed the need to enforce contracts as written. The prior acts exclusions found in the latter tower's policies. The Underlying Litigation centers on alleged wrongs that occurred too early to be eligible for coverage under the latter tower. In Origis USA LLC and Guy Vanderhaegen v. Great American Insurance Company, et al, C. A. No. N23C-07-102 SKR CCLD, Superior Court of Delaware (May 9, 2024) explained the way Delaware interprets insurance contracts. FACTUAL BACKGROUND The insurers are two towers of multiple insurers who are named as defendants. The Underlying Litigation The Underlying Litigation are only tangentially relevant to this coverage dispute. It was brought by Pentacon BV and Baltisse NV (together, the "Investors") to recover sums that Plaintiffs and Plaintiffs' affiliates-who are not insured under the two towers at issue here-allegedly stole through fraud. The heart of the allegations are that Plaintiffs and their affiliates undersold the Investors on the value of the Investors' shares in Origis and Origis's parent company, Origis Energy NV. Plaintiffs and their affiliates bought out the Investors' interest in Origis and Origis Energy for $105 million. Just a few months later, Plaintiffs sold Origis to a third party for $1.4 billion. The investors complain that they did not get their fair share of that payday. The 2021-22 Tower As relevant here, Great American's policy, which was followed by the other 2021-22 Insurers' policies, states: “With respect to any Liability Coverage Part, no action shall be taken against the Insurer unless, as a condition precedent thereto, there has been full compliance with all the terms of this Policy, and until the Insured's obligation to pay has been finally determined by an adjudication against the Insured or by written agreement of the Insured, claimant and the Insurer.” The 2023-24 Tower The second relevant tower of D&O insurance (the "2023-24 Tower") had a policy period of February 4, 2023 to February 4, 2024. In this timeframe, Bridgeway issued the primary policy, and several other insurers (together, the "2023-24 Excess Insurers" and, together with Bridgeway, the "2023-24 Insurers") each issued excess policies in that ascending order. After the applicable retention, each of the 2023-24 Insurers had a $2.5 million limit. Each of the 2023-24 Tower's policies had a provision excluding coverage for claims arising out of wrongful acts that first occurred before November 18, 2021. RSUI's first-layer excess policy reflects a fairly representative example, stating: “The Insurer shall not be liable to make any payment for Loss in connection with any Claim made against any Insured that alleges, arises out of, is based upon or attributable to, directly or indirectly, in whole or in part, any actual or alleged Wrongful Acts which first occurred prior to November 18, 2021.” DISCUSSION Delaware courts review insurance contracts to assess the parties' intent "as expressed through their contractual language." Like any contract, when an insurance contract's terms are reasonably susceptible of but one meaning, and are thus unambiguous, Delaware courts will apply that meaning. The No Action Clause Precludes This Litigation Against the 2021-22 Tower and Plaintiffs Cannot use this Litigation to Reopen Negotiations. Great American, joined by Markel, argued that the plain language of the No Action clause blocks Plaintiffs' ability to bring this coverage dispute before the Underlying Litigation concludes. Delaware courts are exceptionally inclined to hold sophisticated parties to their bargains. For that reason, the Court refused to disregard the No Action clause. The Court was fully confident that the representatives of this billion dollar company were well-equipped to understand the policy language and negotiate necessary changes. The Court enforced the No Action clause as it is written. That prohibition will be lifted when Plaintiffs satisfy the two conditions contained in the No Action clause. Until then, the 2021-2022 Insurers' motions to dismiss must be granted. The Prior Acts Exclusion Precludes Coverage under the 2023-24 Tower. The analysis is even clearer with respect to the unavailability of coverage for the Underlying Litigation under the 2023-24 Tower. Even if the Court were to accept that Plaintiffs met their burden to establish coverage, the 2023-24 Insurers successfully refute that coverage with the prior acts exclusion. The 2023-24 Insurers' motions to dismiss must be granted. CONCLUSION Plaintiffs' policies do not support Plaintiffs' current suit. In one set of policies, Plaintiffs agreed not to sue their insurers until the occurrence of a particular event that is yet to occur. In the other set of policies, Plaintiffs waived coverage for pre-existing wrongs such as the Underlying Litigation. Accordingly, the motions to dismiss must be GRANTED. ZALMA OPINION Insurance contracts with multiple towers of insurance coverage with multiple insurers taking on the risk of loss in excess of the underlying insurance coverages where, in this case the layers contained multiple insurance policies waiting for each lawyer to pay out its limit before the next in the tower has to pay. Here, the contract language limited the coverages in ways that upset the insureds who tried to rewrite the policies to provide coverage they did not buy. The court refused to change the conditions of the policy. (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe to my substack at https://barryzalma.substack.com/subscribe Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg. Go to the Insurance Claims Library – https://lnkd.in/gwEYk.

If Lender Approves Use of Insurance Funds to Repair It Cannot Claim it was Damaged Post 4799 CG Tides LLC, et al. (the "Borrowers") appealed a final summary judgment of foreclosure. Among other things, the judgment at issue allows over $20,000,000 in retroactively calculated default interest on a loan with a principal balance of $41,793,694. The retroactive default interest is based on the finding that the Borrowers' use of hurricane insurance proceeds to repair hurricane damage to the mortgaged property violated the Note and therefore constituted a default. In CG Tides LLC, et al. v. SHEDDF3 VNB, LLC, No. 3D23-0071, Florida Court of Appeals, Third District, (May 8, 2024) the Court of Appeals found issues of fact. BACKGROUND This foreclosure case involves three main actors: CG Tides LLC, et al., which are the mortgagors that borrowed the money and granted the Mortgage at issue. The original lender, Ocean Bank. SHEDDF3 VNB, LLC (the "Note Holder"), which purchased the Note from Ocean Bank and brought the foreclosure action. The trial court granted summary judgment and entered a total foreclosure judgment of $82,169,522, which included principal of $41,793,694, miscellaneous costs, and prejudgment default interest of $40,167,725. No surprise, the borrower appealed. THE LOAN In October 2014, the Borrowers obtained a $45,000,000 loan from Ocean Bank and granted a mortgage in the Tides Hotel on Miami Beach. To simplify greatly, the Note provided for the payment of interest only during the term of the loan and the payment of the entire principal on a set date, unless the parties exercised an option to convert the loan to a more traditional 25-year loan. The parties extended the due date for payment of the principal several times. THE HURRICANE In September 2017, the Hotel was seriously damaged by Hurricane Irma and was closed for over a year. The Mortgage authorized Ocean Bank to direct the Hotel's insurance company to pay any insurance proceeds directly to Ocean Bank and provided that Ocean Bank could sign any draft as the Borrowers' attorney. However, under the Note and Mortgage, Ocean Bank had the "sole but reasonable discretion not to use the proceeds to repair." Except in certain, limited circumstances when the proceeds had to be used to repair the Hotel. The Borrowers, on the other hand, were obliged to repair the Hotel even if the proceeds were not available for that purpose. Despite the Mortgage's terms, and although aware of the insurance claim, Ocean Bank never exercised the option to have the insurance proceeds sent directly to it. In November 2017, the Borrowers received $2,000,000 in insurance proceeds. The Borrowers spent at least $7,728,367 ($5.5 million more than the insurance proceeds to repair and renovate the Hotel after the hurricane). Among other things, the Note Holder relied on the affidavit of an Ocean Bank vice president so testifying and on Ocean Bank emails inquiring about the insurance proceeds. On the other hand, the Borrowers maintained the opposite. Ocean Bank "approved" a document from the Borrowers. A related memorandum in the file regarding construction at the Hotel also stated the Borrowers intended to use the insurance proceeds "to perform renovations" in light of "damage during Hurricane Irma." Ocean Bank sold the loan to the Note Holder. The Note was sold at par for the principal owed, $41,793,694. According to the managing director of the Note Holder, its business model is to acquire pre-existing, non-performing loans so that it can "mine the loan histories" to "exploit" opportunities to obtain "retroactive default interest." Ultimately, the Note Holder filed the underlying foreclosure action. The Borrowers counterclaimed for breach of contract and various other remedies. The Note Holder obtained summary judgment. DISCUSSION The Borrowers argued an issue of fact existed whether the Borrowers' use of the insurance proceeds to repair the hurricane damage breached the loan contract and triggered a default. The borrower claimed Ocean Bank knew and approved of the Borrowers' use of the insurance proceeds to repair the hurricane damage to the Hotel. On one hand, a vice president of Ocean Bank denied this fact under oath. When interpreted in a light most favorable to the non-moving party, other evidence in the summary judgment indicates that Ocean Bank knew of the hurricane damage, knew of the insurance claim, did not exercise its right under the Mortgage to direct the insurance company to pay the proceeds solely to itself, received a copy of the Borrowers' tax return reflecting receipt of the insurance proceeds at issue, verbally approved the use of the proceeds for repair and renovation, and approved this use in writing in its own internal records. The Court of Appeals concluded that the point was that the evidence and inferences therefrom conflict. A factfinder could reach different results depending on what evidence it credited and what reasonable inferences it draws from the evidence credited. Given the state of the record, summary judgment should not have been entered on this issue and the judgment was reversed and remanded to the trial court. ZALMA OPINION Summary judgment is not appropriate when there are disputed issues of fact. In most property insurance policies, when there is a mortgage, an insurance policy naming a mortgagee requires payment to both the named insured and the mortgagee. In common practice the borrower could only use the insurance funds to repair if the mortgagee agreed. There was conflicting evidence because it appears the lender agreed and the new note holder, created conflicting evidence and attempted to profit from the hurricane and the monies paid by the hotel owners to repair the building while foreclosing. The court of appeals refused to allow the summary judgment to stand because there were issues of fact remaining to be established by the trier of fact. (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe to my substack at https://barryzalma.substack.com/subscribe Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg. Go to the Insurance Claims Library – https://lnkd.in/gwEYk.

No Meeting of Minds No Contract Post 4798 Attorney Richard Schicker sued a former client, Brandi Cady, seeking payment for attorney fees under a contingency fee agreement. The district court dismissed Schicker's complaint, finding that there had been no meeting of the minds during the formation of the agreement and thus there was no valid, enforceable contract. In Richard Schicker v. Brandi Cady, No. A-23-455, Court of Appeals of Nebraska (May 7, 2024) the Nebraska Court of Appeals explained what is needed to form a viable and enforceable contract. STATEMENT OF FACTS Attorney Schicker sued Cady alleging that he had entered into a written contract with Cady whereby Schicker was to represent Cady in a claim against Lincoln Financial Group (LFG) for life insurance benefits owing to Cady due to the death of Cady's husband. LFG later agreed to pay Cady the full policy amount and the complaint sought judgment against Cady for 40 percent of that amount, plus any costs incurred by Schicker. Cady testified that at the time of her husband's death, the couple had three young children, and that she immediately attempted to collect his life insurance benefits. Cady called Schicker's law office and testified that she called to inquire about a personal injury claim, as she had heard from community members that the highway where her husband was killed had been deemed dangerous and was soon to be under construction. A contingency fee agreement between Cady and Schicker was executed. The agreement was entered into evidence and state that Schicker was to be paid 40 percent of the amount recovered or settled on behalf of Cady. In the first paragraph of the fee agreement is the statement, "[c]lient may have a claim against ___" and the section is filled in with "Lincoln Financial[.]" She did not recall "Lincoln Financial" appearing anywhere in the fee agreement at the time she signed it. On October 2, 2017, at 10:36 a.m., Cady sent Schicker an email with the subject line "Cancellation of Services." The email states: “At this time, I have a family member who is going to handle insurance claims for Lincoln Financial. ... I do still want to retain you for possible case regarding the accident itself." On October 2, 2017 the parties canceled their fee agreement. Another copy of the fee agreement was entered into evidence, which includes the additional notation "Agreement cancelled as of 10-2-2017" at the bottom of the form and Schicker's signature below the notation. Cady testified that she had done all of the work to collect the insurance claim herself. Klenda (a representative of LFG) testified that the only phone call she had with Schicker occurred after the claim was paid and he was attempting to collect attorney fees from LFG. The district court dismissed Schicker's complaint. The blank space in the fee agreement as established that the actual fee agreement was not completed. In addition the district court found that Schicker lacked credibility. Schicker's itemized bill stated that he spent 58.6 hours of billable time over the course of 12 days working toward the collection of the insurance benefit. The district court concluded that no agreement had been formed between Schicker and Cady because there was no meeting of the minds as elicited by the testimony at trial. ANALYSIS Meeting of the Minds. A party seeking to enforce a contract has the burden of establishing the existence of a valid, legally enforceable contract. To create a contract, there must be both an offer and an acceptance; there must also be a meeting of the minds or a binding mutual understanding between the parties to the contract. It is a fundamental rule that in order to be binding, an agreement must be definite and certain as to the terms and requirements. It must identify the subject matter and spell out the essential commitments and agreements with respect thereto. Because a meeting of the minds had not occurred, there existed no valid, enforceable contract between the parties. The district court did not err in so finding. Since there was never a meeting of the parties' minds concerning the claim at issue in the contingency fee agreement there was no valid and enforceable contract. ZALMA OPINION Signing a contract where the subject of the contract is left blank is an error a law student would never make nor should any licensed attorney like attorney Schicker. He had the unmitigated gall to sue a client for fees he claimed he earned to gain the benefits of a life insurance policy claiming to spend more than 4 hours a day for 12 straight days on the subject although he never contacted the insurer before they had already paid. He never obtained a valid contingency fee agreement because the key element was left blank when the client signed it. Amateurish actions by a lawyer should never be enforced. (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe to my substack at https://barryzalma.substack.com/subscribe Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg. Go to the Insurance Claims Library – https://lnkd.in/gwEYk.

The Poet Enters the World of Insurance Fraud Post 4797 I present blogs and videos so you can learn how insurance fraud is perpetrated and what is necessary to deter or defeat insurance fraud. This Video Blog of True Crime Stories of Insurance Fraud, with the names and places changed to protect the guilty, are all based upon investigations conducted by me and fictionalized to create a learning environment for claims personnel, SIU investigators, insurers, police, and lawyers to better understand insurance fraud and weapons that can be used to deter or defeat a fraudulent insurance claim. The insured was a poet. Before immigrating from Soviet Armenia, he was a member in good standing at the Armenian Poets Union. They paid him for his work five hundred rubles a month. He lived in the capital city of Yerevan in the shadow of Mount Ararat. Like all Soviet citizens, before the fall of the Soviet Union, he supplemented his income by buying and selling in the black market. He specialized in jewelry and diamonds. By 1977 he had amassed, off the pain and suffering of others, over 300 carats of diamonds and diamond jewelry. Most of the diamonds were old mine cut, popular in Russia in the 1890’s, but now out of date. The wealth he had amassed frightened him. He knew that eventually the Soviet Police would catch him and send him to a Gulag. He was committing the most heinous of Soviet crimes. He was a successful entrepreneur. He went to the American Consulate and got a visa as a refugee. He had convinced the American Consulate the Soviet Government was censoring his poetry. He wanted freedom to write. Poetry is not an essential industry. The Soviet Government agreed to his immigration. He came directly to Los Angeles and settled in the Armenian community in the hills of Glendale, California. He brought with him all but twenty carats of the diamonds. He needed to use some of his 300 carats to bribe Soviet Customs Officials. For many years he and his family lived by selling the diamonds at auctions. He continued to write poetry but there was no market for Armenian poetry in the United States. The few Armenian language newspapers would publish his poems but could not pay him. At a social gathering at the Armenian church he expressed his concerns to an acquaintance who ran an art gallery. The gallery owner had been in the United States longer than the poet. He knew how trusting Americans were. He knew that Americans believed what they were told until proved otherwise. He understood that Americans took seriously their belief that everyone was innocent until proven guilty. He explained to his friend how he could easily make enough money to support his family comfortably for the rest of his life. The gallery owner told the poet he would rent him a portion of his art gallery to open a jewelry store. The poet only needed to buy an insurance policy insuring against loss of an inventory of jewelry. The insurer would not ask him before issuing a policy to prove he had any jewelry but would take his word. The poet was incredulous. “Won’t they want to see the jewelry?” “No. They insured my art gallery without ever sending anyone to look at the paintings. If they do send someone out just tell them the jewelry is in your safety deposit box. Tell them you feared bringing it out until you had insurance. You can put in showcases the jewelry you do have to make it look like a legitimate jewelry store.” The next day Poetry Jewelry was born. The insurer took the risk without any questions. The security and safes were proper. The premium would be paid in full since the poet had obtained independent premium financing through his broker. The insurer issued a policy that requested an immediately inspection of the premises. The inspector visited the premises, saw immediately that it was not as represented and advised the company to cancel. They did. The insured went to a new broker. The new insurer did not require an inspection of the premises by anyone other than the broker. It issued a million dollar policy. Two weeks later, before the insurer could change its mind, the poet’s oldest son locked the poet and his mother, the poet’s wife, and the gallery owner in the small four by four bathroom. The son then took home all the inventory of Poetry Jewelers. The three people locked in the bathroom waited ten minutes to make sure the oldest son had driven away and then pushed the holdup button secreted in the bathroom because it is common for thieves to lock jewelry store owners in the bathroom. The three captives also pounded on the wall to gain the attention of the restaurant owner next door. The police were called and broke the door down to free the poet, his wife and the gallery owner. The loss exceeded a million dollars. The poet thanked God that they were insured. Their million dollar fraud would have been successful but for an unusual coincidence. The insurer hired as its adjuster the same firm that had inspected the store for the first insurer. They remembered the insured. They knew that the prior insurer had canceled. The adjusters knew when the poet told them that the policy was his first ever that he was lying. The adjuster knew when the insured told him that his inventory was a million dollars he was lying. The adjuster gathered the evidence together and presented it to the insurer. They rescinded the policy and denied the claim. The insured retained a lawyer. The lawyer immediately filed suit in U.S. District Court for breach of the covenant of good faith and fair dealing and made claim for fifty million dollars over the one million dollar claim. The insurance company spared nothing. Its lawyers deposed every person who had any connection with the poet. The deposition of the poet lasted for three days. Each member of the family was deposed. Paralegals poured over every word of the transcripts and found conflicting testimony. The insurer obtained documentary evidence from every possible location except Yerevan, Soviet Armenia. The lawyers spent weeks preparing for trial. The poet was unprepared. His family was unprepared. They expected, regardless of the evidence they presented, that the jury would hate the insurance company and punish it. At trial, although well-rehearsed, the poet’s lies began to compound. The testimony of the inspector established the inventory was not there at the time of the inspection. The insured did not have a safety deposit box and therefore could not even prove the existence of a box to hold the jewelry he claimed he had. Under cross-examination the poet’s son’s testimony became confused. The judge took over the cross- examination and, unable to answer confidently, the poet’s son broke down and cried on the stand. Lies were admitted. After five days of trial with testimony from nine in the morning until six every night, the jury went off to deliberate. The jury returned with its verdict in forty-five minutes. The verdict was for the defense. The jury was convinced that the poet had presented a fraudulent claim and that the insurance company had properly rescinded the policy. The result was unusual. The cost was enormous. The investigation cost, court costs, expert witness fees and attorneys’ fees exceeded $500,000. The insurer defeated the claim for one million dollars in lost jewelry and fifty million dollars in punitive damages. The word went out. This insurance company fights. Do not insure with them. The insurer saved more than the payment of the poet’s claim. It saved all the other fraudulent claims that would have been presented had they not fought. The poet paid nothing to his lawyer who took the case on a contingency basis. He continued living off the jewelry he brought from Soviet Armenia. Adapted from my book, Insurance Fraud Costs Everyone, available from Amazon.com here and here (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe to my substack at https://barryzalma.substack.com/subscribe Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg. Go to the Insurance Claims Library – https://lnkd.in/gwEYk.

Fraudster Pawns Jewelry & Then Claims it Stolen Post 4796 The defendant, Vincent Chaney, appealed two orders from Superior Court denying his motions to suppress and for a new trial. In State of New Hampshire v. Vincent Chaney, No. 2022-0718, Supreme Court of New Hampshire (May 3, 2024) resolved the dispute over Chaney's conviction. FACTS In 2018, the defendant traveled to Florida and purchased three pieces of jewelry: (1) a necklace worth $63,138 (hereinafter, the large necklace); (2) a necklace worth $4,500 (hereinafter, the small necklace); and (3) a bracelet worth $16,050. Following the purchases, the defendant took out an insurance policy with Phoenix Insurance Company, also known as Travelers Insurance, on all three pieces of jewelry. Chaney filed an insurance claim with Travelers Insurance for the small necklace and bracelet. Travelers Insurance paid the claim in March. In May, the defendant filed a second claim with Travelers Insurance alleging that the large necklace had been stolen during an armed robbery in Boston. Travelers ultimately denied the second claim due to the defendant's non-cooperation and referred the case to the New Hampshire Insurance Department (Department), indicating that it believed the insurance claim to be suspicious. During the state's investigation, the investigator learned that Castro had twice pawned a bracelet identical to the one reported missing in the first insurance claim. At the time of the investigation, the bracelet remained at the pawn shop. In December 2019, the investigator interviewed Ms. Castro who lived with Chaney after he obtained approval for a one-party intercept in order to record the interview. Castro described the three pieces of jewelry and alleged that they were all either missing or stolen. She stated that she had an older bracelet at her house similar to the one that went missing but that she had never insured the older bracelet due to its age. She also stated that she had never pawned the older bracelet. Castro changed her story and stated that the bracelet at the pawn shop was the older bracelet that she previously claimed was at her house. The interview ended soon thereafter. After obtaining a warrant the state's search discovered drugs, drug paraphernalia, multiple firearms, and one of the missing necklaces. The defendant was subsequently charged with possession of a controlled substance with intent to sell and numerous counts of being a felon in possession of a deadly weapon. The defendant was separately charged with three counts of insurance fraud in connection with the claims he made to Travelers Insurance. ANALYSIS To suppress evidence seized under a search warrant, the defendant must show that the misrepresentations in the supporting affidavit were material and were made intentionally or recklessly. Materiality is determined by whether, if the omitted statements were included, there would still be probable cause. In its order on the defendant's motion to suppress, the trial court concluded that the affidavit supporting the search warrant did not contain any material misrepresentations or omissions that rendered the warrant invalid. Regarding the investigator's failure to mention the friend's corroboration, the court ruled any such omission was immaterial to a finding of probable cause. Finally, the court found that, although the defendant's assertion that the investigator, rather than Castro, initiated the termination of the interview was "mostly accurate," The Supreme Court agreed with the trial court's well-reasoned and thorough order that the affidavit supporting the search warrant did not contain any material omissions or misrepresentations that rendered the warrant invalid. The task of the issuing court is to make a practical, common-sense decision whether given all the circumstances set forth in the affidavit before it, including “veracity” and basis of knowledge of persons supplying hearsay information, there is a fair probability that contraband or evidence of a crime will be found in a particular place. The reviewing court may consider only the information that the police brought to the issuing court's attention. Neither the issuing court nor the reviewing court could have considered the 2005 receipt when determining probable cause, and any alleged error in not attempting to introduce it at the suppression hearing did not prejudice the defendant's case. The order was affirmed and Mr. Chaney's conviction stood affirmed. ZALMA OPINION Mr. Chaney was involved in an amateurish attempt at insurance fraud by reporting the theft of jewelry that he had pawned, a fact easy for a police agency to establish but difficult for an insurer to determine. Chaney was caught when the pawned jewelry was found, a search warrant was obtained and the police not only found in his residence one of the "stolen" items, plus drugs sufficient to arrest him as a drug dealer as well as a perpetrator of insurance fraud. He tried to claim the warrants were improper and the Supreme Court refused his claims. (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg. Subscribe to substack at https://barryzalma.substack.com/subscribe. Go to the Insurance Claims Library – https://lnkd.in/gwEYk.

Plaintiff Entitled to Know All Insurance Available to Defendants Post 4795 Pedro Fundora filed suit against Robert Dangond and Maria Guevara after sustaining injuries when Dangond struck Fundora with a vehicle owned by Guevara. On appeal, Fundora argued that the trial court erred by granting Robert Dangond and Maria Guevara's Motion to Enforce Settlement Agreement. In Pedro Fundora, etc. v. Roberto Dangond, No. 3D22-1749, Florida Court of Appeals, Third District (May 1, 2024) the plaintiffs sought to rescind a settlement agreement because the defendant's insurer did not tell Plaintiff's counsel about all insurance available to the Defendants. FACTS During litigation, Fundora sent Dangond and Guevara's insurer, Progressive Insurance Company, a demand letter pursuant to section 627.4137(1), Florida Statutes (2011), which provides that: an 'insurer which does or may provide liability insurance coverage to pay all or a portion of a claim which might be made shall provide . . . a statement . . . setting forth [the information specified in this statute] with regard to each known policy of insurance ....' (Emphasis supplied). In response, Progressive sent Fundora a letter disclosing only one policy, held by Dangond. Included in the disclosure was a statement "certify[ing] . . . that the contents of this disclosure made pursuant to Florida Statute 627.4137 are true and correct." Progressive did not disclose any other policies. When Fundora later offered to settle with Dangond and Guevara, for limits based on the disclosures from Progressive, Fundora sent Progressive a demand letter, again requesting disclosure of information on additional known policies, and making the settlement offer contingent on verification that Progressive knew of no other policies. Two weeks later, Progressive sent Fundora's counsel a letter accepting the settlement offer. Progressive responded to the disclosure demand by attaching affidavits from Dangond and Guevara stating that there was no additional coverage. On the same day that Progressive sent the letter accepting Fundora's settlement offer, it also sent a separate letter to Fundora disclosing an additional insurance policy held by Dangond and Guevara's codefendant, Dangond Construction, that potentially could provide coverage for the accident. Because Progressive disclosed this policy after accepting the settlement offer, Fundora did not have the benefit of reviewing the additional policy prior to offering to settle. ANALYSIS Fundora's request to Progressive for information on any known policies pursuant to section 627.4137(1) was an essential term of Fundora's offer to settle with which Progressive failed to comply. The Court of Appeals concluded that a settlement offer is unenforceable because, despite multiple demands pursuant to section 627.4137 and clearly establishing that compliance was a necessary and essential element of any settlement acceptance, Fundora was deceived. Since the defendant's insurer did not provide the information until after one response and the acceptance of the settlement offer, the insurer's failure to provide the disclosure in accordance with section 627.4137 rendered the settlement unenforceable because the plaintiff made it clear that the insurance disclosure was an essential term and because the insurance disclosure is an essential term under case law. The Court of Appeals agreed with Fundora that the settlement was unenforceable it reversed. ZALMA OPINION One of the greatest incentive for a plaintiff to accept a settlement offer from a defendant is the amount of insurance available when the defendant seems to be judgment proof. When an insurer violates the statute and fails to disclose that there is more insurance, the settlement agreement was made based on false information and it was unconscionable to accept a settlement offer based on a fraudulent statement of available insurance. (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg. Go to the Insurance Claims Library – https://lnkd.in/gwEYk.

Normally Honest People Will Try Insurance Fraud I present blogs and videos so you can learn how insurance fraud is perpetrated and what is necessary to deter or defeat insurance fraud. This Video Blog of True Crime Stories of Insurance Fraud, with the names and places changed to protect the guilty, are all based upon investigations conducted by me and fictionalized to create a learning environment for claims personnel, SIU investigators, insurers, police, and lawyers to better understand insurance fraud and weapons that can be used to deter or defeat a fraudulent insurance claim. Post 4793 See the full video at and at https://youtu.be/ZFSXlqgdcQA The Honest Real Estate Lawyer Tempted to Commit Fraud Career criminals are not the only people who perpetrate insurance fraud. The temptation has become so great that almost anyone who is given the opportunity, will try. Those who do not premeditate insurance fraud are called perpetrators of soft frauds. Most are small. Some are not. The story that follows is a not a soft fraud but one that was premeditated for a great deal of money by a person who should have known better. Some years ago, residents of a hillside community of multi-million dollar homes received a letter from the county engineer informing them that their houses sat on an active landslide. The engineers concluded that an unusual amount of irrigation water, water from septic systems, and rainfall lubricated an ancient landslide under their homes and that the slide was moving. The engineers were concerned because it was moving at the rate of three inches a year. The houses sitting on the landslide were also moving a few inches a month. Within ten years the houses would be torn apart by the movement if nothing was done to stabilize the hillside. Homeowners, living on the hill, noticed cracks in the plaster walls. Concrete block walls split at the mortar seams. Cracks formed in the foundation systems. Since the homes on the hill were all valued from $1,500,000 and $8,500,000, the monetary value of the potential loss of 300 homes on the landslide was enormous. Many of the homeowners gathered and hired counsel to pursue persons responsible for their damage. On advice of counsel, the homeowners reported claims to their insurers. Most of the insurers denied the claims because of clear and unambiguous exclusions for earth movement or subsidence. The insurers concluded that the predominant cause of the damage was the excluded peril of earth movement. The claims were fairly and reasonably rejected. Some of the homeowners accepted the decision of their insurers. Some of the homeowners sued their insurers. The imaginative homeowners, like the insured, found a better way. The insured was a real estate lawyer. He had experience in dealing with insurers for commercial developers he represented. He knew that, in addition to the basic retail insurance market, there was a surplus and excess lines insurance market that would insure almost anything. ASK ME NO QUESTIONS I'LL TELL YOU NO LIES Without informing his broker of the landslide situation on the hillside he asked the broker to seek a specialty insurance policy for his home. He wanted insurance that covered him for both earthquake and earth movement, landslide, mudslide or other types of earth movement normally excluded by homeowner’s policies. He explained to the broker a concern that the wild fires that often devastate hillside communities remove vegetation from the hillsides and increase the hazard of mudflow and landslide. He had invested a great deal of money in his home and wanted to protect against that risk. The broker found a policy offered by a surplus line insurer. The policy insured dwellings only for the perils of earthquake and earth movement. The premium was a reasonable 3.75 percent of the value of the dwelling with a deductible equal to only 5 percent of the total amount at risk. To obtain the policy all the insurer required, by way of application, was the name of the insured, the address of the property to be insured, and the amount of insurance requested. It asked no questions about the potential risks of loss and the insured – since he was not asked – provided no information nor did he advise the insurer of the report from the county engineer. After receiving a signed application from the insured the insurer agreed to insure any property because it did not fall within certain specified earthquake fault areas. The insured obtained a $2,500,000 policy for a premium of only $9,375.00. Before the insured bought the policy, he had received and read the letter from the County. He knew there was a landslide actively affecting his house. At the time he bought the policy the insured had already seen cracks in his plaster walls. When he bought the policy, the insured applied the old maxim “ask me no questions – I’ll tell you no lies.” His experience as a real estate attorney convinced the insured that if he told his prospective insurer his house was sitting on an active landslide it would not insure him. The insurer did not ask. The insured did not offer the information. After the policy had been in effect for three months and the cracks in the plaster had grown to a size that he could place his index finger inside the crack he reported a loss to the earth movement insurer. He presented a claim for the total loss of the house. He demanded payment of policy limits less the deductible. The insurer sent its adjuster to meet with the insured. They retained a geologist to inspect the property and determine the cause of the damage. The geologist learned of the active landslide from the public records kept by the city and County. He informed the insurer that thirteen months before it issued the policy the county had sent notice to all homeowners, including the insured, advising the homeowners of the active landslide. After completing its investigation, with the advice of counsel, the insurer did the following: It advised the insured that the policy was rescinded from its inception because of the concealment of a material fact. The insured had concealed the fact of the landslide. With the notice the insurer returned the $9,375.00 premium. It advised the insured that even if it had not rescinded the policy it would have denied his claim as one that was not fortuitous. The investigation showed that the landslide had started before the inception of the policy. The insurer further advised the insured that the loss in progress rule barred any recovery. The insurer recommended that the insured present his claim, if he still wished to pursue it, to the insurer who insured him against earth movement at the time of the loss. The insurer, reasonably concluded that although the loss was progressive and continuous it was fairly certain that a loss had occurred on or before the insured learned of the landslide. Of course, the insured did not have earth movement insurance at the time of the notice and bought the insurance from the surplus line insurer in an attempt to recover for the loss that had already occurred. The insured, if asked, would testify that he had no intent to defraud his insurer. He would testify that the insurer, if it had asked him, would have been told the truth. All he was doing was taking an economic advantage over a lazy insurer who did not bother to ask. What the lawyer/insured would have said, on its face, sounded reasonable. It wasn’t true. He knew of a material fact that would affect the decision of his insurer to insure him. He concealed that fact from the insurer. He intended to conceal the fact from the insurer. Had the insurer known the truth it would not have issued a policy for a loss that was in progress since, by definition, insurance only reacts to a contingent or unknown event. The insured, in fact, attempted a fraud. His action in fraudulently getting an earth movement policy was reprehensible. His actions in buying the earth movement policy were no less a fraud than if he set the house aflame and made claim on his fire insurance. Insurance is, as the lawyer should have known at the time, a contract where one undertakes to indemnify another against loss, damage, or liability arising from a contingent or unknown event. As a lawyer the intentional concealment of a material fact with the intent to deceive an insurer to its detriment is fraud, a criminal act, and if convicted, grounds for disbarment. For that reason, the insured accepted the denial and did nothing further about the claim. Had the insurer not done the minimum investigation and retained the services of a competent engineer it would have paid the $2,500,000.00 claim. Had the insured’s fraud been presented to a prosecutor he could have been arrested, tried and convicted of attempted insurance fraud and would have been disbarred. He was lucky that the insurer agreed to a mutual rescission of the policy, a return of the premium, and to forget what was attempted. (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe to my substack at https://barryzalma.substack.com/subscribe Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg. Go to the Insurance Claims Library – https://lnkd.in/gwEYk.

Fairly Debatable Claim Defeats Charge of Bad Faith Post 4794 On May 7, 2019, Saddletree Holding, LLC (Saddletree) filed an insurance claim for damages sustained to its building located in Upton, Wyoming (the Building). The Building was used as a community events center. Following a winter of heavy snowfall, Saddletree discovered that the Building's steel support columns had buckled two or more inches and the roof had deflected downward approximately six inches. The Building was insured by Evanston; Markel was the claims processor. In Saddletree Holding, LLC v. Evanston Insurance Company; Markel Service, Inc., No. 23-8024, United States Court of Appeals, Tenth Circuit (April 30, 2024) the Tenth Circuit ruled on the breach of contract and bad faith suit filed by Saddletree. The claims were denied for damages Saddletree claimed to its building in eastern Wyoming. Saddletree sued seeking damages for (1) breach of contract, (2) substantive bad faith, and (3) procedural bad faith. The district court entered judgment in favor of Evanston and Markel and dismissed the case with prejudice. Saddletree appealed. BACKGROUND During claims processing, Defendants retained an engineer who inspected the Building. Defendants' engineer determined that the damage was the result of the Building's inadequate "design[] and/or construct[ion]." Evanston disclaimed coverage pursuant to a Policy exclusion precluding damage caused by "hidden or latent defect[s]" or "any quality in property that causes it to damage or destroy itself." Saddletree did not contemporaneously contest the denial. Instead, it sued its builder, Dreams Carports &Buildings, Inc. To support that suit, Saddletree requested Defendants turn over their engineering report. They declined. So, Saddletree retained its own engineer, who "determined that the original design is deficient[.]" Saddletree's engineer also noted "[i]t is very fortunate the structure has not collapsed based on the levels of deficiencies determined." (emphasis added). On March 23, 2021, the district court entered default judgment against Dreams and awarded Saddletree over $2.2 million in damages, a judgment that Saddletree is still attempting to collect. The district court entered summary judgment for Defendants on all of Saddletree's asserted claims. ANALYSIS Saddletree does not dispute that its claim of breach fell outside the Policy's two- year limitations period. Instead, it argued Defendants were either estopped from raising the limitations defense or waived it. The argument failed for several reasons: It is directly contradicted by the record: Saddletree testified it had "no idea" what it would have done differently had it received Defendants' engineering report sooner. That makes sense, since its own report provided all the information it needed to pursue its collapse theory against Defendants within the limitations period. Saddletree did not identify any authority indicating Defendants had a duty to provide their engineering report. Absent an affirmative duty to provide the report, Defendants did not act inappropriately in refusing to provide it, and that refusal did not lead to estoppel. Defendants are entitled to rely on the Policy's two-year limitations period. The district court correctly entered summary judgment for Defendants. SUBSTANTIVE BAD FAITH The test used in determining whether a claim was denied in bad faith is an objective one which questions whether the validity of the denied claim was not fairly debatable. A claim is fairly debatable when a reasonable insurer would have denied or delayed payment of benefits under the facts and circumstances. If a realistic question of liability does exist, the insurance carrier is entitled to reasonably pursue that debate without exposure to a claim of violation of its duty of good faith and fair dealing. In pursing that debate, an insurer is entitled to rely on the conclusion of independent experts unless there is a showing that there was collusion between the experts and the insurer or that the experts knowingly made false reports. By the Policy's terms, coverage does not apply to a building that is standing even if it is "cracking, bulging, sagging, bending, [or] leaning ...." Defendants' expert provided a supplemental report on March 17, 2022, which opined "the yielding and buckling . . . occurred gradually as snow accumulated on the roof and was not an instantaneous or abrupt failure." Both because it is "fairly debatable" whether the Building "collapsed" for purposes of coverage, and because Defendants were entitled to rely on their expert engineering report in making their coverage determination, the insurer acted properly and not in bad faith. Defendants' conduct did not constitute procedural bad faith as a matter of law and because Saddletree failed to identify recoverable damages necessary to sustain its claim. Therefore, the Tenth Circuit concluded, as a matter of law that the insurer’s conduct failed to exhibit the egregious level of misconduct typifying bad faith. ZALMA OPINION The Tenth Circuit could have rejected the appeal on the failure to file suit before the expiration of the private limitation of action provision, alone. Regardless, it also dealt with the claims of bad faith and breach of contract to eliminate all of Saddletree's claims. Saddletree has a judgment against the builders of the structure and only sued when it found it could not collect the default judgment. (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe to my substack at https://barryzalma.substack.com/subscribe Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg. Go to the Insurance Claims Library – https://lnkd.in/gwEYk.

False Statement on Application Requires Rescission Post 4792 Plaintiff Kimberli Orr obtained no-fault automobile insurance from defendant USA Underwriters and was involved in an automobile collision. Defendant denied plaintiff's claim for benefits because it discovered that plaintiff made material misrepresentations on her application for insurance. Defendant argued that it was entitled to rescind and void plaintiff's insurance policy, and the trial court granted defendant summary disposition In Kimberli Orr v. USA Underwriters, No. 363452, Court of Appeals of Michigan (April 25, 2024) the Court of Appeals resolved the dispute. THE APPLICATION In plaintiff's application for no-fault insurance from defendant, plaintiff Misrepresented that all drivers who might operate her vehicle, including residents of her household, were listed on the application, and that her driver's license had been suspended or revoked anytime in the three-year period before she applied for the insurance. Defendant issued the policy and, unfortunately, on the next day, plaintiff was involved in an automobile collision. THE INVESTIGATION Plaintiff made a claim for insurance benefits for the damages she sustained in the collision. During defendant's investigation of plaintiff's claim, defendant discovered that plaintiff's grandmother lived with her, but she was not listed on the insurance application. Thus, defendant refused to pay plaintiff any benefits, voided plaintiff's policy, and sent her a check for the premiums she had paid. Plaintiff cashed the check essentially accepting the insurer’s rescission then changed her mind and sued defendant. During discovery, defendant learned that plaintiff's license had been suspended for three-days within the three years before plaintiff sought insurance from defendant. THE MOTION FOR SUMMARY JUDGMENT Defendant moved for summary disposition because, it argued, plaintiff made material misrepresentations on her insurance application that entitled defendant to rescind and void her insurance policy. In addition to evidence of the grandmother's residence, defendant also submitted plaintiff's driving record confirming that her license had been suspended for three-days within the three-year period before she applied for the insurance. Defendant further submitted affidavits from its underwriters that confirmed that it would not have issued plaintiff an insurance policy if it had known of the misrepresentations. The trial court found that plaintiff made a reckless and material misrepresentation on her insurance application regarding her license, and that defendant relied upon that misrepresentation when it issued plaintiff the insurance policy. The trial court granted defendant summary disposition. ANALYSIS Summary disposition is appropriate if there is no genuine issue regarding any material fact and the moving party is entitled to judgment as a matter of law. The trial court focused on plaintiff's driving record, rather than the grandmother's residence, and the Court of Appeals did the same. As a result, an insurance policy is subject to common law contract defenses, including fraud, because the no-fault act does not prohibit an insurer from such defenses. Generally, fraud in the inducement to enter a contract renders the contract voidable at the option of the insurer. To establish fraudulent action, an insurer showed: that plaintiff made a material representation; that it was false; that when plaintiff made it, she knew it was false, or made it recklessly, without any knowledge of its truth and as a positive assertion; that she made it with the intention that it should be acted on by defendant; that defendant acted in reliance upon it; and that defendant thereby suffered injury. A misrepresentation is material when an insurer would not have issued a policy if the misrepresentation had been known to the insurer. Plaintiff argued that her misrepresentation with regard to her driving record was not made knowingly or recklessly because she did not receive notice of the license suspension. Plaintiff's argument is misplaced, however, because the law requires her to know her driving status, i.e., whether or not she is a licensed driver, because only a licensed driver may drive. Rescission is justified without regard to the intentional nature of the misrepresentation, as long as it is relied upon by the insurer. In this case, defendant provided affidavits that demonstrated that it relied on plaintiff's misrepresentations because it would have offered plaintiff's policy at a different price, or not at all, if it had known that plaintiff's license had recently been suspended. Rescission is an equitable remedy. An insurer is not precluded from availing itself of traditional legal and equitable remedies to avoid liability under an insurance policy on the ground of fraud in the application for insurance, even when the fraud was easily ascertainable and the claimant is a third party. Fraud in the procurement of an insurance policy essentially taints the entire policy and all claims submitted under it, thereby invalidating the policy in a manner that suggests no policy ever existed. ZALMA OPINION Although an accident the day after a policy comes into effect is a classic red flag of fraud there was no need to prove the accident was less than honest since it was easily established the insured lied on her application for insurance. A material misrepresentation on an application even if unintentional is a basis for rescission in most states and specifically in Michigan. Whatever Ms. Orr would have collected from her no-fault insurer was lost because she lied. (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe to my substack at https://barryzalma.substack.com/subscribe Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg. Go to the Insurance Claims Library – https://lnkd.in/gwEYk.

ZIFL Volume 28, Issue 9 Read the complete article and the full issue of ZIFL in Adobe .pdf format http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-05-01-2024.pdf Happy Law Day Post 4791 The Source for the Insurance Fraud Professional Zalma’s Insurance Fraud Letter (ZIFL) continues its 28th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma.It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ This issue contains the following articles: What is Insurance Fraud? Next to tax fraud, insurance fraud is the most practiced crime in the world. It is perpetrated by members of every race, religion, and nationality. It is found in every profession. The possibility of a tax-free profit when coupled with the commonly held belief that criminal prosecution will probably not occur, is sometimes too difficult for normally honest people to resist. Adapted from my book Insurance Fraud Volume I Second Edition Available as a Kindle book; Available as a Hardcover; Available as a Paperback Read the complete article and the full issue of ZIFL in Adobe .pdf format http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-05-01-2024.pdf Man Bites Dog & Dog Bites Back Third Circuit Compels Arbitration of IFPA Qui Tam Claims The Insurance Fraud Prevention Act (IFPA) allows insurers to sue health care providers pursuing insurers with assignments of benefits from personal injury protection (PIP) claims (no fault insurance) on behalf of the state. GEICO did so against multiple health care providers who asked the court to compel GEICO to arbitrate each potential fraud claim. Read the complete article and the full issue of ZIFL in Adobe .pdf format http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-05-01-2024.pdf More McClenny Moseley & Associates Issues This is ZIFL’s twenty seventh installment of the saga of McClenny, Moseley & Associates and its problems with the federal courts in the State of Louisiana and what appears to be an effort to profit from what some Magistrate and District judges indicate may be criminal conduct to profit from insurance claims relating to hurricane damage to the public of the state of Louisiana. April 3, 2024 - Monson v. MMA, et al files a First Amended Complaint for Class Action and Damages in the USCA for the Southern District of Texas, Houston Division, Civil Action No. 4:23-cv-00928. Read the complete article and the full issue of ZIFL in Adobe .pdf format http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-05-01-2024.pdf Now Available New Book The Compact Book of Adjusting Property Claims – Fourth Edition On January 2, 2024, in Kindle, paperback and hardback formats, The Compact Book of Adjusting Property Claims, Fourth Edition is now available for purchase here and here. The Fourth Edition contains updates and clarifications from the first three editions plus additional material for the working adjuster and the insurance coverage lawyer. Read the complete article and the full issue of ZIFL in Adobe .pdf format http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-05-01-2024.pdf Criminal Tries to Get Out of Sentence Fraudster Fails to Obtain Post Conviction Relief Robert Sitler appealed from the order that dismissed his petition filed pursuant to the Post Conviction Relief Act (“PCRA”). A jury found him guilty of homicide by vehicle and the trial court, sitting without a jury. In Commonwealth Of Pennsylvania v. Robert Sitler, No. 2946 EDA 2022, J-S20044-23, Superior Court of Pennsylvania (April 11, 2024) the appellate court refused to provide relief for Sitler. Read the complete article and the full issue of ZIFL in Adobe .pdf format http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-05-01-2024.pdf From the Coalition Against Insurance Fraud Tyburious M. Heyward, an insurance fraud ringleader who specializes in staged automobile accidents, has pleaded guilty in Sumter, South Carolina. Heyward recruited dozens of individuals to participate as drivers and passengers in intentional automobile collisions to collect insurance payouts for nonexistent injuries from multiple insurance companies. Heyward directed his co-conspirators to seek unnecessary medical treatment for specific, subjective injuries and symptoms. Heyward also provided and directed the use of false medical, residency, identity, and lost wages documents throughout the claims processes. Heyward previously served time in prison for similar conduct. In fact, while incarcerated in the South Carolina Department of Corrections, Heyward used a contraband cell phone to recruit others to conduct staged accidents at his direction in this recent case. This case was prosecuted by Special Assistant Attorney General Joshua Underwood, the Director of SCDOI’s Insurance Fraud Division and investigated by agents of the South Carolina Law Enforcement Division (SLED) Insurance Fraud Unit. Read the complete article and the full issue of ZIFL in Adobe .pdf format http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-05-01-2024.pdf Health Insurance Fraud Convictions Doctor Convicted for $5.4M Medicare Fraud Scheme Adarsh Gupta, M.D., 51, of Sewell, New Jersey, a federal jury convicted a New Jersey doctor today for causing the submission of over $5.4 million in fraudulent claims to Medicare for orthotic braces ordered through a telemarketing scheme. Read the complete article and the full issue of ZIFL in Adobe .pdf format http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-05-01-2024.pdf Insurer Immune from Malicious Prosecution Suit SIU Report to State Made in Good Faith Makes it Immune from Suit for Malicious Prosecution In The Hanover Insurance Group, Inc; and Michael Arline, Jr., v. Luke Frazier, No. 2D22-1689, Florida Court of Appeals, Second District (April 3, 2024) Luke Frazier sued The Hanover Insurance Group, Inc., and Michael Arline, Jr., an employee in Hanover’s Special Investigations Unit, for malicious prosecution. Read the complete article and the full issue of ZIFL in Adobe .pdf format http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-05-01-2024.pdf New Book Now Available from Barry Zalma Property Investigation Checklists: Uncovering Insurance Fraud, 14th Edition Property Investigation Checklists: Uncovering Insurance Fraud, 14th Edition provides detailed guidance and practical information on the four primary areas of any investigation of suspicious claims. The book also examines recent developments in areas such as arson investigation procedures, bad faith, extracontractual damages, The fake burglary, and Lawyers Deceiving Insurers, Courts & Their Clients During, Catastrophes—A New Type Of Fraud and the appendices includes the NAIC Insurance Information and Privacy Protection Model Act and usable forms for everyone involved in claims and will provide necessary information to the claims adjuster, SIU fraud investigator, claims manager, or coverage lawyer so he or she can be capable of excellence. The newest book joins other insurance, insurance claims, insurance fraud, and insurance law books by Barry Zalma all available at the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Other Insurance Fraud Convictions Self Proclaimed ‘Godfather’ Gets 54 Years In Prison About a $150M Southern California Workers’ Comp Scheme Peyman Heidary, 53, a man, who Riverside County Superior Court records say called himself “The Godfather,” was ordered to serve 54 years in state prison and pay $23 million in fines for masterminding a criminal organization that attempted to bilk the state out of $150 million in a workers’ compensation fraud the District Attorney’s Office said on Monday, April 15. Read the complete article and the full issue of ZIFL in Adobe .pdf format http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-05-01-2024.pdf Criminal’s Money Stays With State Assets Forfeited to State are not Subject to Attachment In B.D. v. Sussex County Prosecutor’s Office, No. A-1781-22, Superior Court of New Jersey, Appellate Division (April 19, 2024) the court dealt with the claims of a victim of a sex offender who attempted to get assets of offender that was forfeited to the state. In this declaratory judgment action, plaintiff, B.D., appealed from the Law Division’s order dismissing his complaint, in which he sought to obtain proceeds forfeited to the Sussex County Prosecutor’s Office (SCPO) in a related health care insurance fraud case. Read the complete article and the full issue of ZIFL in Adobe .pdf format http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-05-01-2024.pdf Houston Attorney Eric B. Dick Faces Sanction Again Eric B. Dick, a well-known plaintiffs’ attorney in Houston, faces significant legal repercussions for the second time in recent months due to his litigation practices. Galveston County District Court Judge Kerry L. Neves recently ruled that Dick filed a groundless lawsuit against Standard Casualty Co. in bad faith, resulting in a summary judgment ordering Dick and the Dick Law Firm to reimburse the insurer over $100,000. This judgment follows a similar sanction of $137,000 in Harris County Civil Court against Dick for frivolous litigation against the same insurer. Read the complete article and the full issue of ZIFL in Adobe .pdf format http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-05-01-2024.pdf 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 for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com Over the last 55 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. Barry Zalma, Inc., 4441 Sepulveda Boulevard, CULVER CITY CA 90230-4847, 310-390-4455

Assets Forfeited to State are not Subject to Attachment Post 4790 In B.D. v. Sussex County Prosecutor's Office, No. A-1781-22, Superior Court of New Jersey, Appellate Division (April 19, 2024) the court dealt with the claims of a victim of a sex offender who attempted to get assets of offender that was forfeited to the state. In this declaratory judgment action, plaintiff, B.D., appealed from the Law Division's order dismissing his complaint, in which he sought to obtain proceeds forfeited to the Sussex County Prosecutor's Office (SCPO) in a related health care insurance fraud case. FACTS Troy Leonard, an in-home therapist who treated multiple minors, including plaintiff, who had attention-deficit/hyperactivity disorder, autism, and other undiagnosed learning disabilities. Between September 2015 and November 2015, while the SCPO investigated Leonard for allegations of sexual assault of minors, it discovered Leonard committed health care insurance fraud between 2014 and 2015. SCPO investigators uncovered multiple bank accounts containing the proceeds of that fraud and determined Leonard purchased four vehicles between 2014-2015, when the suspected health care fraud claims occurred. In 2015, the SCPO obtained an order to seize and restrain those bank accounts, which the court granted. Leonard was arrested and charged with multiple counts of sexual abuse of minors, including plaintiff, and thirty-eight counts of second-degree health care claims fraud for allegedly billing insurance companies for services he did not render. Altogether the SCPO seized $610,228.15 and four vehicles. The court entered a final judgment by default in favor of the State, with title vesting in Sussex County for the property on April 18, 2016. Leonard pleaded guilty in the criminal matter in May 2016 and entered into a stipulation of settlement pursuant to a plea agreement, agreeing to forfeit the seized property. In 2016 plaintiff's legal guardians initiated a separate civil action against Leonard seeking civil zdamages stemming from the sexual abuse. On September 16, 2016, Leonard was convicted of multiple counts of second-degree sexual assault and second-degree health care fraud by a practitioner. Later a final judgment was issued in plaintiff's favor against Leonard. Plaintiff was awarded $700,000 in compensatory damages and $100,000 in punitive damages. Plaintiff sued the SCPO for declaratory judgment seeking to satisfy his award from the forfeited proceeds in the amount of the judgment. The trial court concluded plaintiff did not have standing to bring a claim against SCPO for the forfeited proceeds. DISCUSSION Plaintiff argued he had standing to bring his declaratory judgment claim against defendant because he had a personal interest in the matter, there is a significant public interest, and there is an actual controversy between the parties. The appellate division concluded that Plaintiff lacked standing to assert an entitlement to the forfeited proceeds. A plaintiff must have a sufficient stake in the outcome of the litigation, a real adverseness with respect to the subject matter, and there must be a substantial likelihood that the plaintiff will suffer harm in the event of an unfavorable decision. The pivotal question before the Appellate Division was whether plaintiff had an interest sufficient to support this declaratory judgment action. Since the final judgment of forfeiture severed all property interests Leonard had in the funds held in the bank accounts and cars months before plaintiff obtained a writ of attachment to Leonard's property on August 5, 2016, and nearly a year before plaintiff obtained the final judgment in the civil action, Leonard had no funds to attach. A writ reaches only ascertainable property of the defendant in attachment. Here, the proceeds were no longer Leonard's property when the writ of attachment issued, and later when final judgment was entered. The final judgment of forfeiture eliminated Leonard's ownership of the money and vehicles Plaintiff had no right to notice of the forfeiture because the final judgment for forfeiture was issued on April 18, 2016, and plaintiff did not file his complaint until July 7, 2016. ZALMA OPINION The plaintiff is clearly a victim of Mr. Leonard. He obtained a judgment against Leonard. He could attach any property belonging to Leonard. However, Leonard had no property worth attaching since the state took his property - obtained by fraud - by forfeiture. There is no question that a fraud perpetrator cannot be allowed to profit from his fraud, even if his victims were harmed and should be able to collect a judgment, it can only collect from honestly obtained assets. (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe to my substack at https://barryzalma.substack.com/subscribe Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg. Go to the Insurance Claims Library – https://lnkd.in/gwEYk.

After Health Provider Entity's Management is Arrested for Fraud Reporting Suspicion to Beneficiaries is not Defamation Post 4789 It is Chutzpah to Charge Defamation About a True Statement rainBuilders, LLC appealed from an order granting summary judgment in favor of defendants Optum, Inc., et al (collectively, defendants) in Brainbuilders, LLC v. Optum, Inc., Optum Services, Inc., et al, No. A-0621-22, Superior Court of New Jersey, Appellate Division (April 19, 2024) resolved claims of defamation. FACTS Letters dated July 25, 2017 and August 2017 sent by the Optum entities to BrainBuilders' patients following an investigation into purported fraud by individuals associated with BrainBuilders. BrainBuilders provides healthcare services to children on the autism spectrum. As an out-of-network or non-participating healthcare provider, BrainBuilders receives reimbursement for claims only if a patient's health insurance plan allowed "out-of-network benefits" or the insurer made a "single case agreement" for the patient's care. The Optum entities are the health claims administrator for health plans issued or administered by the Oxford entities and UHC entities. The Optum entities do not sell or issue health insurance policies. Rather, they provide support for defendants who issued health insurance policies to individual insureds. The Optum entities also evaluate insurance claims submitted by providers to its affiliated insurers, including BrainBuilders. The Optum entities often investigate whether a provider has requested reimbursement beyond the provider's entitlement, such as by misrepresenting or inflating the services provided. In June 2017, four individuals related to the management of BrainBuilders were arrested and charged with conspiracy to defraud Medicaid. A criminal complaint, alleging misappropriation of funds, was filed against several individuals affiliated with BrainBuilders. The arrests were reported in the news media and the Optum entities learned of the arrests on July 14, 2017. Subsequently the Optum entities sent letters to BrainBuilders' patients insured by the Oxford and UHC entities (July 2017 letters). The July 2017 letters explained the Optum entities were suspending payment for services provided by BrainBuilders due to potential insurance fraud and other violations of state and federal law. BrainBuilders sued defendants asserting the following causes of action: conspiracy; tortious interference with business relations; tortious interference with prospective economic advantage; negligence trade libel; defamation, libel, and slander; and unjust enrichment and quantum meruit. BrainBuilders alleged the statements in the July and August 2017 letters were false and defamatory. Defendants moved for summary judgment and the motion judge granted defendants' motion and dismissed BrainBuilders' claims with prejudice. Further, around the same time period, the judge noted the Optum entities "separately uncovered evidence suggesting BrainBuilders was engaged in fraud, waste, or abuse." Thus, the judge concluded, "[w]hen read with context, no reasonable person" could interpret the July or August 2017 letters "as fallacious or injurious. Our law of defamation is grounded on the principle that people should be free to enjoy their reputations unimpaired by false and defamatory attacks. To prevail on a defamation claim, a party must demonstrate: (1) the assertion of a false and defamatory statement concerning another; (2) the unprivileged publication of that statement to a third party; and (3) fault amounting at least to negligence by the publisher. True Statements are not Actionable as Defamation. Our courts have stated that true statements are absolutely protected under the First Amendment from liability for defamation. The allegedly defamatory statements in the July and August 2017 letters related to BrainBuilders' "potential fraud," potential "violations of state and federal law," and concerns for "quality of care or member safety." It is uncontroverted that several of BrainBuilders' officers were arrested for conspiracy to defraud Medicaid in association with "income they received from BrainBuilders." These individuals were arrested because they potentially committed fraud. Additionally, the arrests raised legitimate concerns regarding the quality of care rendered by BrainBuilders. Moreover, BrainBuilders claimed it conferred only benefits to the insured members and not defendants. Under these circumstances, the Appellate Division was satisfied BrainBuilders failed to proffer any support for its unjust enrichment and quantum meruit claims. ZALMA OPINION It takes a certain amount of unmitigated gall to sue for defamation an entity that reported that the plaintiffs officers were arrested for Medicaid fraud, a major felony. Their officers were arrested - albeit I could find no report on the result of the charges - for insurance fraud, telling their customers about the arrests in good faith is not defamation since the statements were true. (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe to my substack at https://barryzalma.substack.com/subscribe Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg. Go to the Insurance Claims Library – https://lnkd.in/gwEYk.

Driver Must Request UIM Coverage Post 4748

Coverage Limited to Conduct of Business of Insured Post 4787 Jodi Greenlaw, as personal representative of the estate of her late husband Philip J. Greenlaw (collectively, the Estate), appealed from a judgment of the Superior Court granting a motion for summary judgment filed by MMG Insurance Company (MMG) on MMG's complaint seeking a declaratory judgment that it had no duty to indemnify Joseph McNeely, a close friend of Greenlaw, in a separate wrongful death action that the Estate filed against McNeely after Greenlaw's death. In MMG Insurance Company v. Estate Of Philip J. Greenlaw et al., 2024 ME 28, No. Cum-23-228, Supreme Court of Maine (April 18, 2024) the Supreme Court interpreted the policy as written. BACKGROUND In 2019, McNeely operated, as sole owner, a landscaping business called Cutter's Edge Lawn Maintenance. MMG issued a businessowners insurance policy providing both property and liability coverage to McNeely (the MMG Policy). McNeely had discussed with Greenlaw, his close friend, measuring and providing a proposal to hydroseed Greenlaw's backyard. On May 20, 2019, Greenlaw hosted "an informal social group" of men at his house. The group "met year-round on Monday evenings to share their enthusiasm for motorcycles by eating, drinking, telling stories, and taking a ride together if the weather permitted." The group also "discussed business-related topics" and "engaged in frequent business dealings." McNeely attended these meetings when he could. McNeely and Greenlaw went to the backyard, where McNeely measured and provided pricing for the project. Greenlaw said he planned to think about the project and would get back to McNeely about it. At around 8:00 p.m., Jodi returned home, and the men, including McNeely and Greenlaw, "wereinebriated." After 10:00 p.m., Jodi asked how the measuring for the hydroseeding went, and either McNeely or Greenlaw told her about the project's progress. "Late in the evening," while "sitting and gabbing," Greenlaw initiated a wrestling match with McNeely. During the wrestling bout, McNeely put Greenlaw in a chokehold, and Greenlaw lost consciousness and died soon after, despite McNeely's efforts to revive him. The MMG Policy, stated that MMG will pay those sums that the insured becomes legally obligated to pay as damages because of bodily injury to which this insurance applies. The MMG Policy defines an "insured" as anyone "designated in the Declarations" as an "individual . . . but only with respect to the conduct of a business of which [the named insured is] the sole owner." (Emphasis added.) DISCUSSION The Estate contends that "whether Greenlaw's death occurred with respect to the conduct of McNeely's business" is a triable issue of fact and that the court "erred by discounting the 'earlier business dealings' and the litany of other facts . . . when summarily finding that the 'wrestling itself was not business-related.'" Unambiguous contract language, however, must be interpreted according to its plain meaning. The Supreme Court concluded that MMG Policy provision was unambiguous. The MMG Policy designated McNeely as an individual, and McNeely was thus covered as an insured, only with respect to the conduct of a business of which he was the sole owner. The Supreme Court found that the trial court did not err in determining that there was no genuine issue of material fact and that McNeely's actions while he was wrestling with Greenlaw were not with respect to the conduct of McNeely's landscaping business. Although it is undisputed that earlier in the evening McNeely had measured Greenlaw's backyard and discussed his landscaping business with several individuals, there is no contention, that McNeely's actions while wrestling with Greenlaw were to further McNeely's business. In the opinion of the Supreme Corut an ordinary person would not think that the policy's language would cover McNeely's actions while wrestling with Greenlaw. ZALMA OPINION Getting drunk with a friend, entering into a wrestling match at the home of the friend, and choking his friend to death, could not be part of the landscaping business of the insured even though the two discussed business before the drinking and wrestling began. Wrestling and a fatal choke hold have nothing to do with landscaping. (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe to my substack at https://barryzalma.substack.com/subscribe Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg. Go to the Insurance Claims Library – https://lnkd.in/gwEYk.

Rejection of UIM Cover by Agent Valid Post 4786 Brandon Lawrence appealed the trial court's order finding Progressive Northern Insurance Co. (Progressive) made a valid, meaningful offer of underinsured motorist (UIM) coverage to his agent, Ashley Outlaw. In Progressive Northern Insurance Co. v. Brandon Lawrence and Ashley Outlaw, No. 2024-UP-127, Appellate Case No. 2020-001245, Court of Appeals of South Carolina (April 17, 2024) the Court of Appeals explained the law of agency and its relationship to insurance. FACTS From 2008 to 2013, Lawrence and Outlaw lived together in the same house with their son; they never married. They split the household expenses, but Outlaw paid the bills and took care of any insurance needs. On August 19, 2009, Outlaw purchased an insurance policy from Progressive to cover Lawrence's motorcycle; however, Lawrence did not discuss obtaining UIM coverage with Outlaw, nor did he read the policy, did not have any involvement in obtaining the policy, and did not have any contact with Progressive. The application for the insurance policy was mailed to Lawrence and Outlaw. It listed Outlaw as "Married" and as an "Insured" and Lawrence as "Married" and as Outlaw's "Spouse." On September 5, 2009, Outlaw signed the application form and rejected Progressive's offer of UIM coverage. Outlaw paid the premium for the policy, and Lawrence reimbursed her. In May 2013, Lawrence was involved in a motorcycle accident. On August 12, 2016, Progressive filed a declaratory judgment action and sought a determination that UIM coverage was offered to Lawrence through his agent, Outlaw, and that Lawrence was bound by Outlaw's rejection of UIM coverage. The trial court found Lawrence was bound by Outlaw's rejection of UIM coverage because Lawrence appointed Outlaw as his agent to obtain the policy. Lawrence testified in his deposition and at trial that he knew Outlaw was getting insurance; that he asked her to do so; and that she had his permission to do so. LAW, ANALYSIS, AGENCY The Court of Appeals noted that it is well-settled that the relationship of agency between a husband and wife is governed by the same rules which apply to other agencies, and no presumption arises from the mere fact of the marital relationship that one spouse is acting as agent for the other. An agency relationship may be, and frequently is, implied or inferred from the words and conduct of the parties and the circumstances of the particular case. Therefore, the Court of Appeals held that an agency relationship existed between Lawrence and Outlaw and that Outlaw's rejection of UIM coverage bound Lawrence. Lawrence stated he assumed Outlaw would purchase UIM coverage, he did not discuss such optional coverage with her, read the policy, check to see if the policy included UIM coverage, or have any contact with Progressive himself. Lawrence gave Outlaw the authority to obtain the insurance policy, and he is bound by Outlaw's rejection of UIM coverage. To hold otherwise would allow Lawrence to benefit from Outlaw's procurement of the policy but not be bound by her rejection of UIM coverage. MEANINGFUL OFFER OF UIM COVERAGE Automobile insurance carriers must, by statute, "offer, at the option of the insured, underinsured motorist coverage up to the limits of the insured liability coverage . . . ." S.C. Code Ann. § 38-77-160 (2015). Progressive's application included the words "Underinsured Motorist Coverage" and several paragraphs that explained what such coverage entailed. Additionally, the information about UIM coverage offered by Progressive was not found in a separate form, the UIM information and rejection form was included within the main application that Outlaw received and signed. Progressive made a meaningful offer of UIM coverage to Lawrence's agent, Outlaw. Progressive's offer of UIM coverage was made through a form it sent to Lawrence by mail. Progressive's offer of UIM coverage specifically outlined the limits. Progressive intelligibly advised Outlaw, who acted as Lawrence's agent, of the UIM coverage. Outlaw had experience purchasing insurance in the past by regularly handling the insurance needs of the household. ZALMA OPINION It's sad that Lawrence was injured by an underinsured motorist and could not recover from his motorcycle policy because his "wife" rejected Progressive's offer of UIM coverage as his agent for the motorcycle policy and other insurance policies for their "family." The case ignored the fact that she lied on the application about a material fact claiming that Outlaw and Lawrence were married, when they were not. If that was a fact material to the decision of Progressive to issue the insurance it could have declared the policy void for material misrepresentation of fact or rescind the policy. Not necessary because there was no UIM cover. (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe to my substack at https://barryzalma.substack.com/subscribe Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg. Go to the Insurance Claims Library – https://lnkd.in/gwEYk.

Insurance Companies are Victims When Wife Killed for Insurance Money Post 4785 Secondary Beneficiaries Have No Right to Insurance Proceeds Obtained by Father as a Result of Murder of Mother Petitioners Julian and AnaBianca Rudolph (jointly, “Petitioners”) sued by a Verified Petition for Adjudication of Interests in Property Ordered Forfeited (“Petition”) and a memorandum of law in support. In United States Of America v. Lawrence Rudolph, and Lori Milliron, CRIMINAL No. 22-cr-012-WJM, United States District Court, D. Colorado (April 12, 2024) the USDC resolved the dispute finding the insurers, not the secondary beneficiaries were the victims of the fraud. BACKGROUND On August 1, 2022, Defendant Lawrence Rudolph (“Defendant”) was convicted by a jury of committing foreign murder. The jury also convicted him of committing mail fraud. With respect to Count 2, nine insurance policies paid claims out due to the mail fraud. On May 17, 2023, the Court entered its Preliminary Order of Forfeiture, which determined which specific assets are forfeitable by Defendant. On August 21, 2023, the Court conducted the sentencing hearing as to Defendant, at which it also addressed restitution and forfeiture. The Court ordered that Defendant must pay $4,877,744.93 in restitution to the insurance company victims as set forth in the life insurance payments. FACTUAL ALLEGATIONS Petitioners are the daughter and son of the deceased, Bianca Rudolph, and Defendant. They petitioned the USDC for an ancillary hearing based on their legal interest, both personally and on behalf of their deceased mother's estate, in certain assets this Court has ordered forfeited to the United States. Prior to her death, Bianca Rudolph obtained nine life insurance policies from seven different insurance carriers Petitioners are specifically listed as contingent beneficiaries on three of the insurance policies, meaning they would receive the proceeds if the primary beneficiary (namely, Defendant or the Rudolph Trust) is disqualified in any way. Defendant began collecting on the life insurance policies almost immediately after Bianca Rudolph's death in October 2016, receiving $4,877,744.93 in insurance proceeds between January and March 2017. In doing so, he hid the fact that he murdered Bianca Rudolph. He was tried and convicted of murder and fraud in August 2022. After the conclusion of the trial, the Government moved for an order that Defendant: (1) forfeit property identified as proceeds of his insurance fraud offense; and (2) pay mandatory restitution to the victims of his crimes. ANALYSIS To establish that they have statutory standing Petitioners must first demonstrate that they have a legal interest in the property to contest the forfeiture. Petitioners have the burden to prove a legal interest in the property exists. Petitioners argued that they were the beneficiaries of a constructive trust over the assets subject to forfeiture. The Court concluded that Petitioners have not met their burden to establish that they are entitled to a constructive trust under Arizona law. As a result, they cannot establish that they have standing to contest the forfeited property. Elements of Equitable Constructive Trust In Arizona, a court may impose a constructive trust when title to property has been obtained through actual fraud, misrepresentation, concealment, undue influence, duress, or similar means, or if there has been a breach of fiduciary duty. The Arizona cases do say a constructive trust can be imposed in situations where it is necessary to compel one who unfairly holds a property interest to convey that interest to another to whom it justly belongs. Party to Whom the Insurance Proceeds “Justly Belong” The Court found that Petitioners are not entitled to a constructive trust. To establish standing for a constructive trust, Petitioners must establish that they are asserting their own rights and not those of third parties. Petitioners reiterate that they, or trusts that ultimately benefit them, are the contingent beneficiaries of the life insurance policies, and with limited exceptions, the insurance companies agree that they are the proper beneficiaries of those policies. Whether an Adequate Remedy at Law Exists The Court agreed with the Government's position because the insurance companies, not Petitioners, are the victims of Defendant's fraud and have selected an adequate remedy at law: restitution. This element of the constructive trust analysis is designed for the defrauded party-here, the insurance companies. The Court concluded that Petitioners lack standing to continue with the ancillary proceeding under Federal Rule of Criminal Procedure 32.2(c) and dismisses their Petition. ZALMA OPINION The fact that the Petitioners - the children of the murdered woman who was murdered by their father - sought the proceeds of his crime, the insurance proceeds. They would not have received the money if she died of natural causes. They were not the victim of the insurance fraud, they were victims of their father's criminal conduct who killed their mother but that did not give them a right to the insurance proceeds. (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. 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SIU Report to State Made in Good Faith Makes it Immune from Suit for Malicious Prosecution Post 4784 In The Hanover Insurance Group, Inc; and Michael Arline, Jr., v. Luke Frazier, No. 2D22-1689, Florida Court of Appeals, Second District (April 3, 2024) Luke Frazier sued The Hanover Insurance Group, Inc., and Michael Arline, Jr., an employee in Hanover's Special Investigations Unit, for malicious prosecution after Frazier was acquitted of charges of making a false statement in support of an insurance claim and grand theft arising from statements Frazier made to Hanover in connection with an insurance claim. Hanover and Arline defended claiming immunity from suit under section 626.989(4)(c), Florida Statutes (2011). The trial court rejected the claims of immunity and ultimately entered judgment in favor of Frazier. Hanover and Arline appealed. THE IMMUNITY STATUTE Every insurer admitted to do business in Florida is statutorily required to establish and maintain an "anti-fraud investigative unit" or division, commonly called a special investigations unit (SIU), to investigate and report possible fraudulent insurance acts by insureds or by persons making claims against policies held by insureds. If an insurer has knowledge or believes that a fraudulent insurance act has been committed, it must send a report to the Division of Investigative and Forensic Services ("DIFS") detailing the information it has giving rise to its suspicion. This reporting is mandatory. Upon receiving a report, DIFS conducts an independent investigation. Should DIFS's investigation lead it to conclude that there has been a violation of law, it is required by statute to report it to the state attorney. As part of this legislatively mandated anti-fraud program, section 626.989(4)(c) provides insurers and their employees immunity from civil actions, absent fraud or bad faith, arising out of the furnishing of the information required by the statute. FACTS Arline, as an SIU investigator, investigated a dispute that arose after Frazier was involved in a minor collision while driving a car owned by a Hanover insured, Marvic Grant. The driver of the other car involved in the collision, Wendy Williams, filed a claim with Hanover. Williams' claim went unresolved for almost a month while Hanover tried unsuccessfully to get a statement from Grant and Frazier. When the adjuster finally spoke to Frazier, his description of the collision and the resulting damage was different than the account Williams had provided. Frazier told Hanover that as the cars approached the toll plaza, Williams accelerated to get in front of him and the rear passenger side of her car hit the front driver's side of his car which then pushed his car into yellow posts near the toll booth causing damage to the passenger side of his car, not just the driver's side. Relying on Frazier's statement, Hanover's adjuster told Williams that he was holding her fifty percent responsible for the accident and that Hanover would compensate her accordingly. Williams told the adjuster this was unacceptable and that she intended to contact her carrier and retain an attorney. Unbeknownst to Williams, at the time this took place Grant had filed a claim with Hanover for damage to her car, which included damage to the passenger side of the car. Williams first learned of Grant's claim when she got a subrogation letter from Hanover stating it was holding her responsible for nearly $5,000 in damages to Grant's car. Williams was stunned at the amount because the damage to Grant's car, as well as hers, had been minor. Williams advised Hanover her belief that Frazier and Grant were acting fraudulently because they were claiming that both sides of Grant's car were damaged in the collision with her car. Hanover assigned Arline to investigate the conflicting accounts given by Frazier and Williams. Williams filed a fraud report with DIFS alleging that Frazier and Grant were claiming damage to Grant's car that was not related to the accident in which she was involved. Based on Williams' allegations, DIFS opened an investigation. Arline, completed his investigation and concluded Grant should have filed two claims with Hanover, not one, and been subject to two deductibles. DIFS determined that there was probable cause to believe that Grant and Frazier "made material misrepresentations of fact in their claim" with Hanover in that they claimed Grant's car was damaged on the passenger side during the accident when it was not. Frazier and Grant were charged with making a false statement to an insurance company and grand theft. After a jury found Frazier not guilty, he sued for malicious prosecution against Hanover and Arline. CONCLUSION Absent fraud or bad faith, section 626.989(4)(c) immunizes insurers and their employees if they have done what is required by the anti-fraud statute. Frazier's evidence entirely failed to show fraud or bad faith in connection with Arline's investigation or report to DIFS. Accordingly, Arline and Hanover were statutorily immune from suit, and the judgment in favor of Frazier was reversed. ZALMA OPINION States like Florida realize that insurance fraud makes it difficult or impossible for insurers in the state to make a profit and provide affordable insurance to its citizens. By requiring insurers to maintain an SIU and report all suspected insurance fraud to the DIFS, it hopes to reduce the impact of insurance fraud. Acting on the report of Ms. Williams and Hanover's SIU, Frazier was arrested for fraud, tried, and acquitted. Since Hanover and its SIU reported in good faith it was immune from suit and the judgment in favor of Williams was reversed and the intent of the statute was enforced (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. 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Fraudster Fails to Obtain Post Conviction Relief Post 4783 Robert Sitler appealed from the order that dismissed his petition filed pursuant to the Post Conviction Relief Act ("PCRA"). A jury found him guilty of homicide by vehicle and the trial court, sitting without a jury. In Commonwealth Of Pennsylvania v. Robert Sitler, No. 2946 EDA 2022, J-S20044-23, Superior Court of Pennsylvania (April 11, 2024) the appellate court refused to provide relief for Sitler. BACKGROUND On November 12, 2012, just before 9 p.m., Sitler was driving his truck along a two-lane road with a center turning lane. His girlfriend, Denise Dinnocenti, and her children were passengers in the truck. Sitler was driving Dinnocenti to a dance rehearsal, which started at 9 p.m. Regina Qawasmy was driving in front of Sitler, who was following very closely behind her. As she prepared to turn right, she noticed a young man, later identified as 16-year-old Timothy Paciello, standing in the center lane waiting to cross the street. Prior to turning, Qawasmy began to decrease her speed. Suddenly, Qawasmy heard the revving of an engine and then saw a flash, which she later learned was Paciello flying into the air. According to Dinnocenti, Sitler, while driving behind Qawasmy, sped around Qawasmy on the left and into the center lane, going 50 miles per hour in a 35 mph zone. Sitler did not see Paciello in the lane and as a result, struck him with his truck. After striking Paciello, Sitler pulled into a nearby parking lot. He handed his keys over to Dinnocenti and instructed her and her children to tell the police that she was driving. When police arrived, Dinnocenti did as Sitler had said and told them that she was driving. At the scene and in a later written statement, Sitler likewise claimed that Dinnocenti was driving. The fraud failed because the police later recovered surveillance footage from the Sunoco gas station across the street from the accident. The footage showed Paciello walking into the center lane and then out of sight of the video. A few moments later, Sitler's truck is seen speeding down the center lane. Officer Matthew Meitzler informed Dinnocenti that there was footage of the accident. Eventually, both Dinnocenti and Sitler admitted that he was driving the vehicle. The case then proceeded to a three-day trial, after which Sitler was convicted. He was sentenced to an aggregate term of eight and one-half to seventeen years' incarceration. In addition, on the first day of trial, Sitler entered an open guilty plea to insurance fraud, conspiracy to commit insurance fraud, false reports to law enforcement and other charges relating to the false statements about who was driving. At trial the court informed the jury about his prior vehicular manslaughter conviction. ANALYSIS Sitler claimed that that the lower court erred by denying relief on his claim that his trial counsel provided ineffective assistance by not objecting to the jury instruction offered by the lower court prior to admission of his prior manslaughter conviction. He asserts that trial counsel consulted with an accident reconstruction expert, but he "r[a]n out of funds" by the time of trial and was unable to afford the services of the rebuttal witness. The PCRA court properly denied Sitler's claim for lack of prejudice because Sitler failed to demonstrate a reasonable probability that a request for funds to retain an accident reconstruction expert as a rebuttal witness would have changed the result of his trial. That proffer may have been sufficient for proving that trial counsel's failure to request indigent funding deprived him of a rebuttal witness, but it did nothing to advance Appellant's burden to demonstrate that he was prejudiced by trial counsel's failure to pursue funds for an expert rebuttal witness. The appellate court agreed with the PCRA court that there was overwhelming evidence of Appellant's guilt and that Appellant was unable to show prejudice by demonstrating that a successful petition for rebuttal expert funds would have resulted in a different trial verdict. For the foregoing reasons, the appellate court concluded that the PCRA court did not err or abuse its discretion in dismissing Appellant's post-conviction petition without a hearing. ZALMA OPINION Mr. Sitler caused the death of a teenager by driving around a car ahead of him, struck and killed a teenaged pedestrian, caused his girlfriend to lie to the police about who was driving and admitted to insurance fraud and multiple other crimes relating to the manslaughter only to have a jury convict him of the death of the teenager. He tried to reduce his sentence with claims of a poor defense lawyer and lack of funds. The court didn't buy his arguments and he will, thankfully for pedestrians everywhere, stay in jail. (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. 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Homeowner Is Found to be a Beneficiary of Forced Placed Insurance Post 4782 Keith Rath was unhappy with Arch Insurance Company over coverage for damage from the Derecho (windstorm) that hit Cedar Rapids in 2020. Rath's bank holding a security interest in his home contracted with Arch to obtain a force-placed policy after Rath's homeowners insurance lapsed. When Rath sued Arch for breach of contract and related claims, Arch argued that he had no right to sue because Rath was not an intended third-party beneficiary of the contract between Arch and the bank. Keith Rath and Dennis Faltis v. Arch Insurance Company, No. 23-0157, Court of Appeals of Iowa (April 10, 2024) read the full policy and found the language of the policy gave Rath an interest in the proceeds of the insurance policy. FACTS The bank is Rath's lender for a loan secured by his home. At some point, Rath let his homeowners insurance lapse in violation of the terms of the loan agreement. When the bank learned of the lapse, it notified Rath that the insurance it bought might be "significantly more expensive than the insurance" he could obtain himself and might provide less coverage than such a personal policy. Rath then began paying monthly premiums for this insurance to the bank. THE INSURANCE CONTRACT The policy stated that Rath, as the "Borrower," "has no interest in this policy" yet included an endorsement expressly giving Rath a benefit. That endorsement provides that while Rath "is neither a Named Insured nor an additional named insured under the policy," he "shall be considered an additional loss payee only as respects amounts of insurance over and above the interests of" the bank in his home. The Court of Appeals concluded that there was no possible purpose for this endorsement besides providing a benefit to Rath. The policy warns in a general statement on its cover pages that it does not "provide coverage for the Interest or equity of the Borrower." It later defines the "Named Insured" as "the creditor, lending institution, company, or person holding and/or servicing the Mortgagee Interest on the Described Location." And it expressly confirms that "[t]he Borrower is not a Named Insured under this policy and no coverage is provided, either directly or indirectly, to the Borrower." The policy's default text also defines the Borrower and then makes abundantly clear: "The Borrower has no interest in this policy." But that last line was stricken and replaced with text from an Amount-of-Insurance endorsement that the parties added to the policy. So rather than having "no interest in this policy," under the endorsement: "The Borrower is neither a Named Insured nor an additional named insured under this policy; however, the Borrower shall be considered an additional loss payee only as respects amounts of insurance over and above the interests of the Named Insured in the Described Location." THE STORM In August 2020, a Derecho [A widespread, long-lived wind storm that is associated with a band of rapidly moving showers or thunderstorms. Although a derecho can produce destruction similar to the strength of tornadoes, the damage typically is directed in one direction along a relatively straight swath.] swept across Iowa, hitting Cedar Rapids especially hard. A tree fell on the house and it sustained wind damage. Among other damage, Rath believes most of the roof was damaged, along with siding, windows, and electrical systems. And so, Rath reported the damage to the bank, which made a claim to Arch under the policy. After Arch's adjuster agreed that "the dwelling sustained damage due to wind and tree impact," Arch decided that there was a covered loss of $1,222.37 and mailed a check for that amount directly to Rath. THIS PROCEEDING About a year after the storm, Rath sued Arch over this dispute. Rath claimed that Arch breached the insurance contract by denying proper payment for his losses and refusing to engage in the appraisal process under the policy. He also brought claims of bad faith and unjust enrichment and sought declaratory and injunctive relief related to his rights under the policy and the appraisal process. Rath appealed the district court's grant of summary judgment and dismissal of all his claims. Interpreting an insurance policy is a legal question. Rath's main argument that he is an intended third-party beneficiary of the insurance policy relies on the Amount-of-Insurance endorsement. The court of appeals agreed with Rath that the endorsement manifests an unambiguous intent to benefit him. Indeed, the Court of Appeals concluded that there is no other possible intent for contract provisions increasing the coverage above the bank's interest and giving Rath a right to payment. Saying that Rath is not a "Named Insured nor an additional named insured" is not the same as saying he is not a third-party beneficiary. By deleting that text-while also increasing the coverage above the bank's interest and giving Rath a right to payment-the endorsement leaves little doubt that indeed Rath does now have an interest in the policy. He is an intended third-party beneficiary. The parties fought a preliminary legal skirmish on the limited ground chosen by Arch-whether Rath is a third-party beneficiary under the contract. And because Arch lost that battle, the fight must now go on. ZALMA OPINION Poor wording in an insurance policy will often result in strange and confusing court decisions. The court found, because a clause allowed Rath to recover for losses over the interest of the bank made him a third party beneficiary. What the Court of Appeal ignored was that his interest was only available after the full interest of the bank were paid. The loss was only $1,222.37, much less than a mortgage loan. Since the loss was less than the amount of the banks interest, Rath had no right to that money as a third party beneficiary since the loss was less than the interest of the bank. (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe to my substack at https://barryzalma.substack.com/subscribe Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg. Go to the Insurance Claims Library – https://lnkd.in/gwEYk.

Third Circuit Compels Arbitration of IFPA Qui Tam Claims Post 4781 Government Employees Insurance Co.; GEICO Indemnity Co.; GEICO General Insurance Company; GEICO Casualty Co. v. Mount Prospect Chiropractic Center, P.A., d/b/a Mount Prospect Health Center; et al, United States Court Of Appeals For The Third Circuit, Nos. 23-1378, 23-2019 & 23-2053, No. 23-1378 April 15, 2024) the Third Circuit required arbitration of GEICO's claims of fraud by health care providers under the New Jersey Insurance Frauds Prevention Act (IFPA) BACKGROUND The IFPA allows insurers to sue health care providers pursuing insurers with assignments of benefits from personal injury protection (PIP) claims (no fault insurance) on behalf of the state. GEICO did so against multiple health care providers who asked the court to compel GEICO to arbitrate each potential fraud claim. GEICO sued defendants-appellants (collectively, the “Practices”) in separate actions in the District of New Jersey, alleging they defrauded GEICO of more than $10 million by abusing the personal injury protection (“PIP”) benefits offered by its auto policies. It alleges the Practices filed exaggerated claims for medical services (sometimes for treatments that were never provided), billed medically unnecessary care, and engaged in illegal kickback schemes. GEICO’s suits against the Practices each included a claim under the IFPA, which gives insurers a fraud claim. The Medical Practices sought arbitration of GEICO’s IFPA claim, arguing both that a valid arbitration agreement covered the claim and that a different New Jersey insurance law allowed them to compel arbitration. But each District Court disagreed, ruling instead that IFPA claims cannot be arbitrated. IFPA Claims Can Be Arbitrated. The Practices' effort to compel arbitration under a different New Jersey law could do the same for the Practices' FAA-based request. GEICO bears the burden of persuading the Third Circuit that the IFPA prohibits arbitration. GEICO claims that every known decision has held IFPA claims inarbitrable. The Practices cite no case holding otherwise. GEICO claims that the IFPA's antifraud mission bars arbitration. But it does not explain why arbitrating IFPA claims frustrates that goal. The United States Supreme Court has made clear that claims arising from laws empowering private attorneys general can be arbitrated. The American Arbitration Association rules give the arbitrator broad discretion to "grant any remedy or relief[.]" Am. Arb. Ass'n, Commercial Arbitration Rules and Mediation Procedures 28 (2013) (Rule 47), https://perma.cc/4Y74- WZM8. In addition, New Jersey has a strong policy in favor of arbitration. The Third Circuit, therefore, predicted that the New Jersey Supreme Court would allow arbitration of IFPA claims. Having concluded that IFPA claims are arbitrable, the Third Circuit then considered whether the IFPA claims before it should be compelled to arbitration. New Jersey Insurance Law Compels Arbitration. Each Practice sought arbitration of GEICO's IFPA claim through N.J. Stat. Ann. § 39:6A-5.1(a) (the "Provision"). It allows "any party" to compel arbitration of "[a]ny dispute regarding the recovery of medical expense benefits or other benefits provided under [PIP] coverage . . . arising out of the operation, ownership, maintenance or use of an automobile". As these suits are GEICO's effort to recover medical expense claims paid through auto insurance PIP benefits, they fall under the Provision's plain text. GEICO asserts that the Provision does not apply to IFPA claims because they deal with fraud. First, the Provision does not have an exception for fraud, and the Third Circuit may not carve a broad exclusion from a plain statute on the Third Circuit's our own initiative. Second, the list of claims specifically subject to the Provision suggests fraud falls under its umbrella. That group includes whether the disputed medical treatment was actually performed and whether the treatment performed is reasonable or necessary. That is the alleged fraud underpinning GEICO's IFPA claims: billing for fictitious or unnecessary care. Because the Provision's plain language is broad and does not carve out fraud, but rather explicitly includes fraud-like claims, GEICO's argument failed to persuade the Third Circuit. GEICO's IFPA Claims Are Subject to an Arbitration Agreement. In the alternative, the Third Circuit also concluded that GEICO's IFPA claims must be compelled to arbitration under the FAA. That statute compels claims to arbitration once a movant shows both that an arbitration agreement was validly formed and that it covers the claims at issue. To establish that an agreement was formed when (as here) a motion to compel arbitration is based on a complaint standing alone, a defendant must show that the complaint and the documents on which s it relies facially suggest that the parties agreed to arbitrate. GEICO does not contest the Practices' reliance on two documents to suggest formation of an arbitration agreement. The first is GEICO's Precertification and Decision Point Review Plan (the "Plan"). This document, required by New Jersey law and approved by the New Jersey insurance regulator, governs GEICO's reimbursement of PIP claims. GEICO could force the Practices to prove more than a suggestion by submitting or pointing to additional facts sufficient to place the arbitration agreement in issue. It would not have taken much for GEICO to put contract formation in play. To compel arbitration of GEICO's IFPA claims, the Third Circuit concluded it must hold that the arbitration agreement in the Plan covers them. Nothing in the amended complaint precludes arbitration of GEICO's IFPA claims. Rather the law requires it. Therefore, Third Circuit concluded the District Court abused its discretion in denying the motion and the Third Circuit ordered arbitration. ZALMA OPINION Since local prosecutors failed to deal with health care providers who try to defraud insurers like GEICO, it used the qui tam provisions of the IFPA to sue the medical providers and thereby take the profit out of their crime. The health care providers compelled arbitration thereby requiring GEICO to prove fraud in each individual claim which will probably cost more than the amount of the fraud. What is needed is for the state to prosecute the fraud perpetrators or allow the fraud to continue since it may become self-defeating for GEICO to go through with hundreds of individual arbitrations. Regardless of the legal basis for the Third Circuit's decision, its practical effect is to make PIP fraud profitable and the fraudsters should sing Hosannas for the Third Circuit's decision. The criminal doctors need to be prosecuted as DOJ is prosecuting Medicare and Medicaid fraudsters. (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe to my substack at https://barryzalma.substack.com/subscribe Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg. Go to the Insurance Claims Library – https://lnkd.in/gwEYk.

Private Limitation of Action Provision Defeats Bad Faith Suit Post 4780 No Right to Bad Faith If No Coverage for Loss James H. Drevs and Patricia Henderson appealed from the order of the Law Division dismissing with prejudice their complaint seeking insurance coverage for storm damage to their real property. In James H. Drevs and Patricia Henderson v. Metropolitan Property And Casualty Insurance Company, No. A-0637-22, Superior Court of New Jersey, Appellate Division (April 4, 2024) the Appellate Division applied the private limitation of action provision of the policy. FACTS Plaintiffs own property in Cherry Hill, which has a home and an inground swimming pool. In 2020, the property was insured under a policy issued by Farmers Property and Casualty Insurance Company, formerly known as defendant Metropolitan Property and Casualty Insurance Company. On or about July 6, 2020, a windstorm and significant rainfall damaged plaintiffs' home and swimming pool. Plaintiffs filed two claims for insurance coverage with defendant arising from the storm: the first claiming damage to the roof of their home and the second claiming a partial collapse of their inground pool. Defendant undertook an investigation of plaintiffs' claims. It hired an engineering firm to investigate the cause of the partial collapse of the pool. The engineering firm concluded the pool damage was caused by excessive hydrostatic pressure from significant rainfall during the July 6, 2020 storm. The insurer’s claims coordinator sent plaintiffs a letter denying their claim for coverage of the damage to the pool. The claims coordinator issued a check to plaintiffs for the covered portion of the loss from the damaged roof of their home. Plaintiffs sued defendant alleging breach of contract and bad faith in its denial of plaintiffs' claim for coverage for the damage to their pool. According to defendant, the one-year period began running again on September 14, 2020, when it denied plaintiffs' pool damage claim. Defendant argued that because the complaint was filed on May 19, 2022, a year and eight months after September 14, 2020, it was time barred. The trial court issued an oral opinion granting defendant's motion. ANALYSIS The appellate court found no basis on which to reverse the trial court's order. Plaintiffs' policy is referenced in the complaint. The correspondence from defendant denying plaintiffs' pool damage claim and granting their claim for damages to their house form the basis of plaintiffs' claims. The September 14, 2020 letter unequivocally denied plaintiffs' claim for coverage of the damage to their pool. Plaintiffs produced no evidence that the parties engaged in discussions, correspondence, or any other type of interaction in the seven months between defendant's denial of plaintiffs' pool damage claim and correspondence by counsel for the plaintiffs. It was undisputed that more than one-and-a-half years passed between the September 14, 2020 denial of plaintiffs' pool damage claim and the May 19, 2022 filing of the complaint. A bad faith claim may not be asserted by a party who cannot establish a right to payment of the claim as a matter of law. Because plaintiffs filed an untimely complaint challenging the denial of their claim, they cannot prove they are entitled to coverage for the damage to their pool. ZALMA OPINION Every first party property policy or homeowners policy contain a private limitations of action provision preventing insureds from suing one year after a loss. New Jersey, and many states, toll the running of the statute from the date of loss until the date the insurer makes an unequivocal denial of coverage. The insureds waited more than a year and a half after the denial of the claim and its suit was barred. They are not without a remedy, their lawyer knew or should have known of the limitation and failed to file suit within the period allowed nor did he seek an extension to the time to sue. (c) 2024 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe to my substack at https://barryzalma.substack.com/subscribe Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg. Go to the Insurance Claims Library – https://lnkd.in/gwEYk.

ZIFL, Volume 28, Issue 8 Subscribe to ZIFL Here Post 4779 See the full video at and at https://youtu.be/p6L-wEbN4_g The Source for the Insurance Fraud Professional No Reason to Release Convicted Arsonist Early In United States Of America v. Jonathan Paul Wiktorchik, Jr., No. 23-2564, United States Court of Appeals, Third Circuit (March 25, 2024) Federal Prisoner Jonathan Wiktorchik appealed, acting as his own lawyer, from the District Court's denial of his motion for compassionate release. Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf More McClenny Moseley & Associates Issues This is ZIFL’s twenty sixth installment of the saga of McClenny, Moseley & Associates and its problems with the federal courts in the State of Louisiana and what appears to be an effort to profit from what some Magistrate and District judges indicate may be criminal conduct to profit from insurance claims relating to hurricane damage to the public of the state of Louisiana. March 11, 2024. Matthew Monson Reported That Mcclenny's Sale To Moseley Uncovered! It was common knowledge that James McClenny sold his interest in MMA to Zach Moseley. New details revealed in a recent court filing. The deal was effective March 31, 2023. Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf Now Available New Book The Compact Book of Adjusting Property Claims – Fourth Edition On January 2, 2024, in Kindle, paperback and hardback formats, The Compact Book of Adjusting Property Claims, Fourth Edition is now available for purchase here and here. The Fourth Edition contains updates and clarifications from the first three editions plus additional material for the working adjuster and the insurance coverage lawyer. Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf Never Lie on an Application for Insurance Conceal or Misrepresent Material Facts Requires Rescission in Alabama Allied World sued general liability insurer concerning policies issued to Clint Lovette (“Lovette”) and his companies. ((collectively “Lovette Defendants”) for the policy periods of March 16, 2018, to March 16, 2019, and March 16, 2019, to March 16, 2020. Allied World sought a judicial determination in its favor that it does not owe the Lovette Defendants a defense or indemnity regarding two cases. In Allied World Surplus Lines Insurance Company v. Lovette Properties, LLC, et al., No. 2:22-cv-00738-RDP, United States District Court, N.D. Alabama, Southern Division (March 15, 2024) the USDC resolved the disputes. Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf Pro Se Plaintiff’s Qui Tam Suit Fails Private Citizen May Not Compel Enforcement of a Criminal Law Ronald Rothman appealed from an order of the District Court dismissing his complaint with prejudice and remanding a foreclosure proceeding to state court. In Ronald S. Rothman v. CABANA SERIES IV TRUST; IGLOO SERIES IV TRUST; U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee; WELLS FARGO BANK, N.A.; BALBEC CAPITAL, L.P.; SN SERVICING CORPORATION; FRIEDMAN VARTOLO, LLP; QUENTEN GILLIAM, ESQ., No. 23-2455, United States Court of Appeals, Third Circuit (April 2, 2024) the USCA, 3rd Circuit resolved the dispute. Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf Health Insurance Fraud Convictions Holy Health Care Services, LLC Owner Sentenced to 3 Years In Federal Prison For Health Care Fraud Scheme Julius Bakari, age 46, of Silver Spring, Maryland, was sentenced to 3 years in federal prison, followed by 3 years of supervised release, for conspiracy to commit health care fraud in connection with a scheme to fraudulently bill Medicaid. The defendant’s conviction stems from a scheme involving services purportedly provided by Holy Health Care Services, LLC (“Holy Health”), a mental health services provider with locations in Washington, D.C. Judge Xinis also ordered Bakari to pay restitution in the amount of the loss, $3,343,781. The sentence was imposed on April 9, 2024. Read the full article with dozens more convictions and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf Arson for Profit Arson for profit is the most egregious form of insurance fraud. Perpetrators of an arson for profit scheme do not consider the fact that arson can cause residents, neighbors, police, or firefighters to be injured or killed. Claims based on an arson-for-profit, are based upon the lack of intelligence or ability of the arsonist. Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf New Book Now Available from Barry Zalma Property Investigation Checklists: Uncovering Insurance Fraud, 14th Edition provides detailed guidance and practical information on the four primary areas of any investigation of suspicious claims. The newest book joins other insurance, insurance claims, insurance fraud, and insurance law books by Barry Zalma all available at the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ The Tiffany Kid A Fictionalized True Crime Story of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. How a Rich Kid Became an Insurance Fraudster. The insured grew up with his wealthy parents on the shores of San Francisco Bay in Marin County. He wanted for nothing that money could buy. He was tall, blond, blue-eyed and handsome. Debutantes pulled their sister’s hair for the chance to dance with him. Life was good, but dull. Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf Other Insurance Fraud Convictions Benicia Contractor Pleads Guilty To Insurance Fraud for Underreporting Nearly $1 Million In Payroll Kent Bo Fridolfsson, 67, of Benicia, pleaded guilty to six charges of insurance fraud and grand theft after a joint investigation with the California Department of Insurance, Solano County District Attorney’s Office and the Employment Development Department (EDD) revealed he underreported payroll by nearly $1 million to illegally save on workers’ compensation insurance and taxes. Fridolfsson was placed on formal probation, ordered to pay over $725,000 in restitution, and ordered to surrender his contractor’s license. Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf Insurance Fraud Schemes Every claims person and SIU investigator must be aware of the various schemes used by insurance criminals to defraud insurers. For example, the NAIC identified the following common schemes that result in the crime of insurance fraud... Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf Barry Zalma, Inc., 4441 Sepulveda Boulevard, CULVER CITY CA 90230-4847, 310-390-4455; Subscribe to Zalma on Insurance at locals.com https://zalmaoninsurance.local.com/subscribe. Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome. Go to the podcast Zalma On Insurance at https://podcastrs.spotify.com/pod/show/barry-zalma/support Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; I publish daily articles at https://zalma.substack.com, Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf