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Zalma's Insurance Fraud Letter - June 15, 2024
ZIFL - Volume 28 Issue 12
Post 4823
Subscribe to ZIFL Here
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:
Arson-for-Profit Scheme Fails
Innocent Co-Insureds Have no Rights to Proceeds When Fraud Committed on Their Behalf
Plaintiffs Timeless Bar, Inc. and Horseshoe Club, LLC sued their insurer Illinois Casualty Company, claiming the latter breached the parties’ insurance agreement. Specifically, the Plaintiffs allege that even though the fire that destroyed their property was intentionally set by an officer of the corporation and a member of the LLC, the insurer was obligated under the policy and Minnesota law to pay for the loss.
In Timeless Bar, Inc., doing business as The Press Bar and Parlor, and Horseshoe Club, LLC v. Illinois Casualty Company, No. 22-cv-1685 (KMM/LIB), United States District Court, D. Minnesota (May 21, 2024) the USDC, in a lengthy opinion resolved the issues of who was responsible for the fraud.
Read the full article and all 18 pages of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/06/ZIFL-06-15-2024.pdf
More McClenny Moseley & Associates Issues
This is ZIFL’s twenty ninth 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.
Litigation Financing on the Verge of Regulation
Third-party litigation financing has become a controversial issue in the U.S. court system over the past decade. Litigation financing has a history dating back to medieval England.The practice was once prohibited by doctrines in common law known as “champerty” or “maintenance,” which barred strangers to a lawsuit from providing funding in exchange for a financial interest in the outcome of the case.
James Whittle, vice president and counsel for the Washington-based American Property Casualty Insurance Association, said third-party litigation funding as we know it began roughly 30 years ago in Australia before moving to other countries that practice common law, such as the U.S. and the United Kingdom.
Read the full article and all 18 pages of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/06/ZIFL-06-15-2024.pdf
Bloods Gang Member Took Over Fire Restoration Industry in New York Sentenced to 12 Years
Jatiek Smith, a gang leader who recruited other gang members and used violence, threats of violence, and extortion to take over the fire restoration business in New York City and defraud insurance companies was sentenced to 12 years in prison.
Smith was sentenced by U.S. District Judge Jed S. Rakoff after being convicted following a bench trial in December 2023 of racketeering and extortion conspiracies. In addition to the prison term, Smith, of Staten Island, New York, was sentenced to three years of supervised release and ordered to forfeit $354,546.44. Restitution will be determined at a later date, according to prosecutors.
Read the full article and all 18 pages of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/06/ZIFL-06-15-2024.pdf
RICO Suit Against Chiropractors
Allstate Effectively Alleges RICO Conspiracy
In Allstate Insurance Co. et al. v. Lint Chiropractic PC et al., No. 2:23-cv-10904, United States District Court, E.D. Michigan, Southern Division (May 30, 2024) Allstate brought a RICO case against chiropractors and conspiracies to defraud Allstate.
Read the full article and all 18 pages of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/06/ZIFL-06-15-2024.pdf
Health Insurance Fraud Convictions
Pharmacy Owner Sentenced to Two Years in Prison for $1M Health Care Fraud Scheme
Paul Mansour, 56, of Sierra Madre, California was a pharmacist who co-owned Mansour Partners Inc., doing business as Best Buy Drugs (Best Buy), was sentenced to two years in prison for submitting more than $1 million in false and fraudulent claims to Medicare for prescription drugs that were never dispensed to beneficiaries.
According to court documents, From January 2017 to July 2022, Mansour created fake patient profiles in the Best Buy pharmacy’s digital filing system using fictitious names, dates of birth, and addresses. Mansour added fraudulent prescriptions to the fake patient profiles and then submitted false and fraudulent claims to Medicare for those prescriptions in the name of actual Best Buy patients. In doing so, Mansour billed Medicare for fraudulent prescriptions that were never dispensed to beneficiaries. Mansour pleaded guilty on April 5, 2023, to one count of health care fraud.
Read the full article and all 18 pages of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/06/ZIFL-06-15-2024.pdf
Chutzpah From Convicted Dentist
Sentenced to 20 Years in Prison for Medicaid Fraud Yet Demands Return of his License to Practice Dentistry
THE LICENSE REVOCATION
The Board of Dental Examiners revoked Seth Lookhart’s dental license after he was convicted of dozens of crimes perpetrated in furtherance of a fraudulent scheme of staggering proportions that jeopardized the health and safety of his patients. Lookhart appealed the Board’s revocation of his license, arguing that his punishment was inconsistent with past Board decisions. On appeal, the superior court concluded that the Board properly exercised its discretion by revoking Lookhart’s dental license.
Read the full article and all 18 pages of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/06/ZIFL-06-15-2024.pdf
Convictions of Other Than Health Insurance Fraud
10 Years In Prison For Leading One Of The Largest No-Fault Insurance Frauds In New York History
BRADLEY PIERRE was sentenced to 10 years in prison by U.S. District Judge Paul G. Gardephe for conspiracy to commit bribery and conspiracy to defraud the Internal Revenue Service (“IRS”) in connection with his orchestration of a $60 million fraud targeting No-Fault automobile insurance companies. PIERRE pled guilty before Judge Gardephe on December 18, 2023.
Read the full article and all 18 pages of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/06/ZIFL-06-15-2024.pdf
Insurance Fraud Is Epidemic
Insurance fraud continually takes more money each year than it did the last from the insurance buying public. There is no certain number. Most attempts at insurance fraud succeed. Estimates of the extent of insurance fraud in the United States range from $87 billion to more than $308 billion every year.
Insurers and government backed pseudo-insurers can only estimate the extent they lose to fraudulent claims. Lack of sufficient investigation and prosecution of insurance criminals is endemic. Most insurance fraud criminals are not detected. Those that are detected do so because they became greedy, sloppy and unprofessional so that the attempted fraud becomes so obvious it cannot be ignored.
Adapted from my book, Insurance Fraud Second Edition, Volume I Available as a Kindle book; Available as a Hardcover; Available as a Paperback
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Read the full article and all 18 pages of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/06/ZIFL-06-15-2024.pdf
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Arbitration Clause in Policy Void in Louisiana
Right of Contracting Parties to Arbitrate Prohibited by Louisiana Statute
Post 4822
Plaintiff SKAV, L.L.C. owns a Best Western hotel in Abbeville, Louisiana. The hotel was damaged when Hurricane Laura, one of the strongest hurricanes in state history, made landfall in August 2020. SKAV submitted a claim on a surplus lines insurance policy it had purchased from Independent Specialty Insurance. The policy contained a broad arbitration clause, requiring "[a]ll matters in dispute" to be settled by arbitration. SKAV litigated the dispute and the insurer asked that arbitration - in accordance with the contract of insurance, be arbitrated.
In S. K. A. V., L.L.C. v. Independent Specialty Insurance Company, No. 23-30293, United States Court of Appeals, Fifth Circuit (June 5, 2024) the Fifth Circuit Court of Appeals was asked to answer whether § 22:868 of the Louisiana Revised Statutes void an arbitration provision in a contract for surplus lines insurance?
FACTS
SKAV sued Independent Specialty in the Western District of Louisiana, alleging that it had failed to timely and adequately cover the hotel's hurricane damage under the terms of the policy. The parties unsuccessfully participated in several months of court-directed mediation, after which Independent Specialty moved to compel arbitration. The district court denied the motion concluding that § 22:868 preempted the Federal Arbitration Act.
ANALYSIS
The parties primarily dispute what effect, if any, § 22:868 of the Louisiana Revised Statutes has on the insurance policy's arbitration clause. The statute bars insurance policies from ousting Louisiana courts of jurisdiction and permits, in limited circumstances, forum- and venue-selection provisions.
There was no dispute that the surplus lines insurance policy at issue in this case is, under subsection (D), was "not subject to approval by the Department of Insurance." Thus, the only question is whether the policy's arbitration clause is barred by subsection (A)(2) or permitted by subsection (D).\
Many district courts in Louisiana, including some in New York, have reached conflicting decisions on this specific issue. One district court in the Eastern District of Louisiana certified the question to the Louisiana Supreme Court last year, but, over two dissenting opinions, the State's High Court declined to answer. The Fifth Circuit, as a federal court exercising diversity jurisdiction, needs to resolve this case as it thinks the Louisiana Supreme Court would rule.
From the start, Louisiana courts have described § 22:868 as memorializing an "anti-arbitration policy." The statute does not expressly mention arbitration, but it bars insurance policies from "[d]epriving the courts of this state of the jurisdiction . . . of action against the insurer," and Louisiana courts, in turn, have understood arbitration clauses to divest them of jurisdiction.
The Fifth Circuit’s reading of § 22:868, concluded that the policy did not create a valid and enforceable arbitration agreement and that when a statute prevents the valid formation of an arbitration agreement, as it read § 22:868 to do, the Fifth Circuit cannot compel arbitration, even on threshold questions of arbitrability.
ZALMA OPINION
When a contract of insurance requires all disputes to be resolved by arbitration it deprives the state of its jurisdiction to resolve disputes by means of its courts. The statute clearly and unambiguously deprived parties of the right to select arbitration over the state courts as the forum to resolve disputes over the terms and conditions of contracts. Since the statute prevents the formation of an arbitration the Fifth Circuit had no right to compel arbitration.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Go to the Insurance Claims Library – https://lnkd.in/gwEYk
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Litigation Sloth Defeats Suit
Taking Six Years to Sue Insurers is Time Barred
Post 4821
The appellate courts of the state of New York are noted for their ability to resolve an appeal quickly and with brevity.
The Supreme Court, the trial court, dismissed plaintiffs' complaint against Allied World National Insurance Company as time-barred because plaintiffs commenced this action eight years after Allied's disclaimer of insurance coverage.
In Kent Avenue Property 3, LLC, et al. v. Allied World National Assurance Company, Scottsdale Insurance Company, Appeal No. 2448, 2024 NY Slip Op 03086, Index No. 814800/21, Case No. 2023-05552, Supreme Court of New York, First Department (June 6, 2024) the New York appellate Court resolved the dispute.
FACTS & ANALYSIS
The Supreme Court, Bronx County (Fidel E. Gomez, J.), entered May 30, 2023 denied plaintiffs' cross-motion for summary judgment declaring that defendant Allied World National Assurance Company (Allied) is obligated to defend and indemnify plaintiffs. The court granted Allied's motion to dismiss the complaint as against it and dismissed the complaint in its entirety.
In September 2013, plaintiffs "possessed sufficient information... to formulate the factual basis for [the] assertion" that the disclaimer was untimely under Insurance Law § 3420(d)(2), and thus, the statute of limitations began to run. Accordingly, plaintiffs' action commenced on October 29, 2021 was found to be time-barred under the six-year (CPLR 213[1]) statute of limitations.
The appellate court concluded that the Supreme Court properly searched the record and dismissed the complaint against the remaining defendant Scottsdale Insurance Company since the claims were similarly time-barred.
In view of the foregoing, the court properly denied plaintiffs' cross-motion for summary judgment as moot.
ZALMA OPINION
Statutes of limitation exist to protect litigants against stale claims. The state of New York's limitation period is six years. The decision of the trial court and the appellate court were obvious, the appeal was unworthy, and proved that you can't just sue an insurance company and always get rich, especially when you wait 8 years after the claim is rejected to file a suit.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Insurer Has the Right to Oppose Plan that Exposes it to Potential Fraud
SCOTUS Unanimously Gives Insurer Right as a "Party in Interest" to a Chapter 11 Bankruptcy
Post 4820
Truck Insurance Exchange is the primary insurer for Kaiser Gypsum Co. and Hanson Permanente Cement (Debtors), producers of products with asbestos who had filed for Chapter 11 bankruptcy after facing thousands of asbestos-related lawsuits. As part of the bankruptcy process, the Debtors filed a proposed reorganization plan (Plan). That Plan creates an Asbestos Personal Injury Trust (Trust) under 11 U.S.C. §524(g), a provision that allows Chapter 11 debtors with substantial asbestos-related liability to fund a trust and channel all present and future asbestos-related claims into that trust.
Truck is contractually obligated to defend each covered asbestos personal injury claim and to indemnify the Debtors for up to $500,000 per claim. For their part, the Debtors must pay a $5,000 deductible per claim, and assist and cooperate with Truck in defending the claims. The Plan treats insured and uninsured claims differently, requiring insured claims to be filed in the tort system for the benefit of the insurance coverage, while uninsured claims are submitted directly to the Trust for resolution.
In Truck Insurance Exchange v. Kaiser Gypsum Co., Inc., et al., No. 22-1079, 602 U.S. __ (2024), United States Supreme Court (June 6, 2024) SCOTUS concluded that: " An insurer with financial responsibility for bankruptcy claims is a "party in interest" under §1109(b) that 'may raise and may appear and be heard on any issue' in a Chapter 11 case."
FACTUAL BACKGROUND
Truck sought to oppose the Plan under §1109(b) of the Bankruptcy Code, which permits any "party in interest" to "raise" and "be heard on any issue" in a Chapter 11 bankruptcy. Among other things, Truck argued that the Plan exposes it to millions of dollars in fraudulent claims because the Plan does not require the same disclosures and authorizations for insured and uninsured claims. Truck also asserts that the Plan impermissibly alters its rights under its insurance policies.
SOTOMAYOR, JUSTICE issued the opinion for 8 members of the court with Justice Alito not participating.
FACTS
Chapter 11 Bankruptcy offers individuals and businesses in financial distress a fresh start to reorganize, discharge their debts, and maximize the property available to creditors. Chapter 11 is designed to strike a balance between a debtor's interest in reorganizing and restructuring its debts and the creditors' interest in maximizing the value of the bankruptcy estate.
A "party in interest" enjoys certain rights in the proceedings, including the ability to file a Chapter 11 plan when a trustee has been appointed, 11 U.S.C. §1121(c)(1); request the appointment or removal of a trustee, §§1104, 1105; challenge the good faith of persons voting to approve a plan, §1126(e); and object to confirmation of a plan, §1128(b).
Truck was the Debtors' primary insurer. It issued policies that covered the Debtors from 1965 through 1983. Truck is contractually obligated to defend each covered asbestos personal injury claim and typically indemnify the Debtors for up to $500,000 per claim. The Debtors have to pay a $5,000 deductible per claim and assist and cooperate with Truck in defending against the claims. The Plan required the Bankruptcy Court to make a finding that the Debtors' conduct in the bankruptcy proceedings neither violated this assistance-and-cooperation duty nor breached any implied covenant of good faith and fair dealing (Plan Finding).
The Plan treated insured and uninsured claims differently.
Truck was the only party involved in the bankruptcy that did not support the Plan. It advanced three main objections.
the Plan was not "proposed in good faith," 11 U.S.C. §1129(a)(3), "because it reflected a collusive agreement between the Debtors and claimant representatives," and did not require "the same disclosures and authorizations" for insured and uninsured claims. Truck claimed that this "disparate treatment would expose [Truck] to millions of dollars in fraudulent tort claims."
The Plan Finding impermissibly altered Truck's rights under its insurance policies "by relieving the Debtors of their assistance-and-cooperation obligations and by barring Truck from raising the Debtors' bankruptcy conduct as a defense in future coverage disputes."
The Trust did not comply with various provisions of §524(g), including the requirement to "deal equitably with claims and future demands," as required by §524(g)(2)(B)(ii)(III).
Following the Bankruptcy Court's recommendation, the District Court confirmed the Plan.
ANALYSIS
"Party" in this context is best understood as "[a] person who constitutes or is one of those who compose . . . one or [the] other of the two sides in an action or affair; one concerned in an affair; a participator; as, a party in interest." Webster's New International Dictionary 1784 (2d ed. 1949).
The Court held that insurers such as Truck with financial responsibility for bankruptcy claims are parties in interest. Bankruptcy reorganization proceedings can affect an insurer's interests in myriad ways. A reorganization plan can impair an insurer's contractual right to control settlement or defend claims. A plan can abrogate an insurer's right to contribution from other insurance carriers. Or, as alleged here, a plan may be collusive, in violation of the debtor's duty to cooperate and assist and impair the insurer's financial interests by inviting fraudulent claims. An insurer with financial responsibility for bankruptcy claims can be directly and adversely affected by the reorganization proceedings in these and many other ways, making it a "party in interest" in those proceedings.
Truck will have to pay the vast majority of the Trust's liability-up to $500,000 per claim for thousands of covered asbestos-injury claims. The proposed Plan would have Truck stand alone in carrying the financial burden, because the injunction "permanently and forever stay[s], restrain[s] and enjoin[s]" any action against Debtors. A plan that lacks the disclosure requirements for the uninsured claims risks exposing Truck "to millions of dollars in fraudulent tort claims." That potential financial harm-attributable to Truck's status as an insurer with financial responsibility for bankruptcy claims-gives Truck an interest in bankruptcy proceedings and whatever reorganization plan is proposed and eventually adopted.
The fact that Truck's financial exposure may be directly and adversely affected by a plan is sufficient to give Truck (and other insurers with financial responsibility for bankruptcy claims) a right to voice its objections in reorganization proceedings. Moreover, §1109(b) provides parties in interest only an opportunity to be heard-not a vote or a veto in the proceedings. A party in interest is "not intended to include literally every conceivable entity that may be involved in or affected by the chapter 11 proceedings. There may be difficult cases that require courts to evaluate whether truly peripheral parties have a sufficiently direct interest. This case is not one of them. Insurers such as Truck with financial responsibility for claims are not peripheral parties.
Section 1109(b) provides parties in interest a voice in bankruptcy proceedings. An insurer with financial responsibility for bankruptcy claims is a "party in interest" that may object to a Chapter 11 plan of reorganization.
The judgment of the United States Court of Appeals for the Fourth Circuit was reversed.
ZALMA OPINION
It is important to those of us involved in the fight against insurance fraud that SCOTUS, even Justice Sotomayor, writing for the full court, recognized that insurance fraud is a problem and that an insurer has the right to dispute a Chapter 11 Bankruptcy plan that could expose it to many fraudulent claims without the ability to protect itself. The decision does not change the Plan, it just gives Truck the right to oppose the plan and work to adjust the plan to protect its interests as well as the interest of the petitioners.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Go to the Insurance Claims Library – https://lnkd.in/gwEYk
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No Financial Loss - No Coverage
Cybersecurity Policy Requires Direct Financial Loss
Post 4819
Insured Cannot Claim for Loss Incurred by Customer
After suffering from a phishing scam, Door Systems, Inc. (appellant) sought coverage under a cybersecurity insurance policy (policy) it obtained from CFC Underwriting Limited, Underwriters at Lloyd's, London, and Evolve Cyber Insurance Services, LLC. The parties disputed the scope of coverage, and appellant filed a complaint against respondents alleging, among others, breach of contract. The trial court sustained a demurrer concluding the SAC did not plead a "direct financial loss" sustained by appellant.
In Door Systems, Inc. v. CFC Underwriting Limited, et al., G062645, California Court of Appeals, Fourth District, Third Division (June 3, 2024) the Court of Appeal resolved the dispute.
FACTS
On May 13, 2021, appellant, a leading distributor of integrated fire doors and fire protection smoke curtains, filed a complaint against its cyber security insurers, alleging causes of action for: (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; and (3) declaratory judgment - duty to indemnify. The trial court sustained a demurrer without leave to amend.
Insured Event
The complaint alleged that on January 20, 2021, someone impersonated appellant's President and sent electronic correspondence to "one of [appellant's] clients, X-Act Finish & Trim, Inc." (X-Act). At the time, X-Act owed appellant at least $395,000 for products ordered from appellant. The impersonator demanded $395,000 and provided wire directions for payment. X-Act complied but was later informed by appellant that the money had not been deposited into appellant's account. Subsequently, appellant and X-Act conducted an investigation and were able to recover $160,419.20, leaving a balance of $234,580 that appellant sought to recover from respondents.
Order Sustaining Demurrer without Leave to Amend
The trial court sustained the demurrer to the second amended complaint (SAC) without leave to amend ruling that the SAC failed to state facts sufficient to constitute a claim. The plaintiff failed to allege a loss sustained by the appellant. Instead still appellant alleged X-Act paid the fraudster."
Direct Financial Loss Sustained by the Company
The allegation that appellant cannot collect the funds from X-Act because of the UCC's "imposter rule" is unfounded. A wire transfer is a "payment order." Thus, the "imposter rule" did not apply. The imposter rule would not prevent appellant from recovering the lost funds from X-Act.
When the imposter later demanded payment of the invoiced amount, X-Act wired the monies to an account not controlled by appellant. Appellant and X-Act later recovered a portion of the wired funds. Even if the transferred funds were specifically earmarked to pay X-Act's debt to appellant, because money is fungible, X-Act still has an obligation to pay its remaining debt to appellant.
The Court of Appeals concluded that appellant did not suffer a direct financial loss from the phishing scam. Without a direct financial loss, coverage is not triggered. Thus, the trial court properly sustained the demurrer to the First Cause of Action for breach of contract.
Without a breach of contract, there is no breach of the covenant of good faith and fair dealing. The trial court properly sustained the demurrer to the Second Cause of Action.
The judgment is affirmed. Respondents are entitled to their costs on appeal.
ZALMA OPINION
An insurance policy, like the cybersecurity policy involved here, promises to indemnify the insured in case of an insured against loss. Since only X-Act suffered a loss by paying the phisher and sent money it owed to the appellant to a criminal, the appellant incurred no loss and it can still collect what it is owed from X-Act who did not have a cyber security policy.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Go to the Insurance Claims Library – https://lnkd.in/gwEYk
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RICO Suit Against Chiropractors
Allstate Effectively Alleges RICO Conspiracy by Chiropractors to Defraud Allstate
Post 4818
Allstate Effectively Alleges RICO Conspiracy by Chiropractors to Defraud Allstate
In Allstate Insurance Co. et al. v. Lint Chiropractic PC et al., No. 2:23-cv-10904, United States District Court, E.D. Michigan, Southern Division (May 30, 2024) Allstate brought a RICO case against chiropractors and conspiracies to defraud Allstate. Various Allstate insurers accused several medical and chiropractic clinics, their suppliers, and their managers of orchestrating a racketeering scheme to exploit Michigan's no-fault insurance law by generating and submitting hundreds of fraudulent medical bills for reimbursement.
In response to dueling motions for summary judgement the USDC concluded that Plaintiffs have sufficiently alleged their claims, but Defendants' counterclaims fall short of providing a factual or legal basis distinct from the original allegations. Defendants' motion to dismiss was denied and Plaintiffs' motion to dismiss was granted.
BACKGROUND
Robert Super, a chiropractor from Florida, exercises “dominion and control” over all units of a medical device called the Nervomatrix. The Nervomatrix is used to treat “trigger points” - painful areas of knotting or tightness in muscles. To do so, the Nervomatrix first scans for trigger points (TPII) and then treats them with electrical stimulation (“LINT”).
Super proliferated the fraudulent use of Nervomatrix machines at numerous medical clinics in Michigan. Super implemented a “predetermined protocol” mandating the use of Nervomatrix machines-regardless of medical necessity.
Defendants also billed for services not rendered-with Lint Chiropractic billing for treatments at some clinics before Nervomatrix machines were installed there, and Super billing during times that those clinics considered the machines abandoned because they had lost contact with him. Lint Chiropractic frequently used preprinted prescription forms with identical signatures, altering only the date and clinic address.
ANALYSIS
Plaintiffs allege violations of two provisions of the RICO statute. Plaintiffs have plausibly alleged claims under both provisions.
THE RICO ENTERPRISE
A RICO “enterprise” may include “any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.” [18 U.S.C. § 1961(4)]. This definition is intentionally broad, designed to stamp out corruption. Liability under 18 U.S.C. § 1962(c) requires that Defendants “participate” in the enterprise's conduct.
THE PARTICIPANTS
Lint Chiropractic Enterprise. Super owned and managed Lint Chiropractic and directed its staff's conduct. He installed Nervomatrix machines there and developed a predetermined protocol to direct patients toward unnecessary treatments, resulting in fraudulent billing.
MI Medical Enterprise. Super also owned and managed MI Medical, implementing the same fraudulent protocol used at Lint Chiropractic. Diagnostic conducted unnecessary tests on MI Medical patients to support these bills.
Supplies Plus Enterprise. Super managed Supplies Plus, deciding to write prescriptions for unnecessary DME and generating fraudulent bills.
Diagnostic Chiropractic Enterprise. Super managed Diagnostic Chiropractic, which billed for unnecessary tests arranged by Lint Chiropractic.
The USDC concluded that Plaintiffs sufficiently alleged the existence of each enterprise and how Defendants participated in the conduct of those enterprises.
Pattern of Racketeering Activity
To establish a pattern of racketeering activity, Plaintiffs must demonstrate that Defendants committed at least two predicate acts of racketeering within ten years. Plaintiffs allege that all the predicate acts of mail and wire fraud served the common purpose of inducing Plaintiffs to pay large sums for bogus medical bills. These allegations sufficiently demonstrate the necessary relationship among the acts.
Predicate Acts and Civil Rule 9(b)
Although fraud claims are subject to a heightened pleading standard, requiring plaintiffs to state with particularity the circumstances constituting fraud or mistake, the Allstate plaintiffs adequately alleged the fraudulent scheme, detailing how Defendants orchestrated a plan to defraud Plaintiffs with the Nervomatrix and fraudulent medical bills. Plaintiffs have pled their § 1962(c) fraud claims with sufficient particularity under Rule 9(b). Defendants' motion to dismiss on these grounds is denied.
RICO-Conspiracy Claim Under § 1962(d)
The key is not that each Defendant committed every act of fraud but that they conspired to achieve the fraudulent objectives of the enterprise.
MOTION TO DISMISS COUNTERCLAIMS
If Plaintiffs prevail on their fraud claims, it will necessarily mean that Counterclaimants are not entitled to the payments. Thus, the counterclaims serve no purpose. Accordingly, Defendants' Motion to Dismiss, was DENIED and it was ORDERED that Plaintiffs' Motion to Dismiss, was GRANTED.
ZALMA OPINION
The type of Fraud that Allstate used to base its RICO action is rampant as detailed in hundreds of health insurance fraud convictions reported in Zalma's Insurance Fraud Letter twice a month. The Allstate entities, as the victim of the fraud, is proactively fighting the frauds perpetrated against it by this RICO case that, when tried successfully, will take the profit out of the crime.
(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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Go to the Insurance Claims Library – https://lnkd.in/gwEYk
34
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Chutzpah From Convicted Dentist
Sentenced to 20 Years in Prison for Medicaid Fraud Yet Demands Return of his License to Practice Dentistry
Post 4817
See the full video at and at https://youtu.be/KJBOw53VXG8
THE LICENSE REVOCATION
The Board of Dental Examiners revoked Seth Lookhart's dental license after he was convicted of dozens of crimes perpetrated in furtherance of a fraudulent scheme of staggering proportions that jeopardized the health and safety of his patients. Lookhart appealed the Board's revocation of his license, arguing that his punishment was inconsistent with past Board decisions. On appeal, the superior court concluded that the Board properly exercised its discretion by revoking Lookhart's dental license.
In a case of Chutzpah (unmitigated gall) in Seth Lookhart v. State Of Alaska, Division Of Corporations, Business, & Professional Licensing, Board Of Dental Examiners, No. S-18466, No. 7702, Supreme Court of Alaska (May 24, 2024) he asked for his license to practice dentistry from jail, the time of the Supreme Court was wasted as it resolved the issues raised by Lookhart.
FACTS AND PROCEEDINGS
Seth Lookhart was issued an Alaska dental license in June 2014 and a parenteral sedation permit in May 2015. Between May 2016 and March 2017, Lookhart systematically and unnecessarily sedated his patients in a manner that allowed him to fraudulently bill the maximum amount covered by Alaska's Medicaid program, overcharging Medicaid by more than $1.6 million. Lookhart routinely billed Medicaid for sedation that was not performed, billed Medicaid at higher rates than other insurers, and created false dates of service to maximize his wrongful reimbursements. During this same period Lookhart also stole an additional $412,500 from a business partner.
In order to maximize his billings to Medicaid, Lookhart engaged in a series of standard-of-care violations: He sedated patients beyond the scope of his training and permit, sedated multiple patients simultaneously, billed Medicaid for sedation during routine cleanings, and sedated patients with underlying chronic diseases that made sedation dangerous. He allowed his unlicensed office manager to sedate patients, pressured patients into unwanted sedation, and left sedated patients to drive themselves home.
On two occasions, Lookhart's patients nearly lost their lives as a direct consequence of his reckless sedation practices. Lookhart also extracted one deeply sedated patient's tooth while riding a hoverboard, and then sent a video of the unsafe extraction to his friends and family members without the patient's consent.
After a six-week bench trial ending in January 2020, he was convicted on 46 charges, including 11 felony counts of medical assistance fraud, three felony counts of scheming to defraud, one count of felony theft. The trial court also issued an order finding that the State had proven 13 sentencing aggravators beyond a reasonable doubt. The trial court found that the evidence against Lookhart was "overwhelming." He was ultimately sentenced to 20 years in prison with eight years suspended.
Dental Board Proceedings
Following Lookhart's convictions, the Division of Corporations, Business and Professional Licensing filed a 17-count accusation seeking to revoke Lookhart's dental license. Lookhart stipulated to the facts contained in the accusation, leaving it to an administrative law judge (ALJ).
The ALJ concluded that Lookhart's "astonishing range of misconduct" was "more wide-ranging and severe" than in any prior case in which the Board imposed a lesser sanction. Taken as a whole, the ALJ concluded that revocation was the "clear and obvious sanction," adopting the Division's contention that, "[i]f this case does not require it, no future case will."
The Superior Court's Decision
The trial court noted that "no Alaska case is factually comparable to the sheer scale of malfeasance here," that the Board "painstakingly detailed" Lookhart's misconduct, and that it had "carefully considered and rejected any comparison with prior Board cases."
DISCUSSION
As relevant to this case the statute which provides for license revocation in cases of fraud and providing the same for standard-of-care violations, would be rendered meaningless.
No Prior Dental Board Decision Involves Similar Facts.
Lookhart stole millions of dollars from the state program that provides medical care for the indigent, while simultaneously defrauding a business partner of several hundred thousand more, and committing an egregious string of standard-of-care violations that not only jeopardized the safety, privacy, and autonomy of his patients, but also brought the dental profession into disrepute.
Lookhart stole millions of dollars from Medicaid. In furtherance of this massive fraud, he repeatedly subjected his patients to great risk of harm. There are no cases in the Board's history comparable to Lookhart's.
The Supreme Court concluded that the Board did not abuse its discretion by revoking Lookhart's license. None of the Board's prior licensing cases involved misconduct of the scope and severity in this case, so there was no applicable precedent to limit the Board's exercise of its discretion.
ZALMA OPINION
"Chutzpah" is a Yiddish word for unmitigated gall usually explained as a person convicted of murdering his parents who asks for clemency because he is an orphan. Lookhart, a dentist about to serve 20 years in state prison had the chutzpah to demand his license to practice dentistry reinstated. The Supreme Court gave his claim short-shrift and by doing so protected his fellow prisoners from being treated by a vicious person who almost killed a patient while extracting a tooth balancing on a hoverboard and stealing from Medicaid.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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23
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No Coverage for Covid Caused Damage
Covid Virus Does not Cause Direct Physical Damage to Property
Post 4816
California Supreme Court Finds no Coverage Under First Party Property Policy
The Ninth Circuit's Inquiry
In Another Planet Entertainment, LLC v. Vigilant Insurance Company, S277893, the Supreme Court of California (May 23, 2024)where Chief Justice Guerrero authored the opinion of the Court, in which Justices Corrigan, Liu, Kruger, Groban, Jenkins, and Evans concurred in a response to an inquiry from the Ninth Circuit Court of Appeals that posed the following question: "Can the actual or potential presence of the COVID-19 virus on an insured's premises constitute 'direct physical loss or damage to property' for purposes of coverage under a commercial property insurance policy?"
The question arose in the context of a civil lawsuit filed by Another Planet Entertainment, LLC (Another Planet) against its property insurer, Vigilant Insurance Company (Vigilant). Another Planet operates venues for live entertainment. It suffered pandemic-related business losses when its venues closed, and Vigilant denied Another Planet's subsequent claim for insurance coverage.
The Supreme Court concluded, consistent with the vast majority of courts nationwide, that allegations of the actual or potential presence of COVID-19 on an insured's premises do not, without more, establish direct physical loss or damage to property within the meaning of a commercial property insurance policy. Under California law, direct physical loss or damage to property requires a distinct, demonstrable, physical alteration to property. The physical alteration need not be visible to the naked eye, nor must it be structural, but it must result in some injury to or impairment of the property as property.
DISCUSSION
The Supreme Court noted that the fundamental principle of a property insurance contract is to indemnify the owner against loss; that is to place the owner in the same position in which he or she would have been had no accident occurred. However, as almost all first party property insurance provides, for there to be a need to indemnify the insured there must be direct physical loss or damage to the property, the risk of loss of which was insured.
Principles of Interpretation
The Ninth Circuit's question and the parties' arguments required the Supreme Court to interpret the phrase "direct physical loss or damage to property" in the insurance policy Vigilant issued to Another Planet. The clear and explicit meaning of these provisions, must be interpreted in their ordinary and popular sense, unless used by the parties in a technical sense or a special meaning is given to them by usage, controls judicial interpretation. If the meaning a layperson would ascribe to contract language is not ambiguous, the Supreme Court will apply that meaning.
Direct Physical Damage to Property
Notwithstanding the parties' disagreement regarding the ultimate question of insurance coverage the available authorities in California and elsewhere reflect a substantial degree of consensus regarding the meaning of direct physical damage to property.
Direct Physical Loss to Property
Although the precise meaning of direct physical loss to property is more contested, its general scope is readily ascertainable. Loss can simply be a more extreme form of damage, but its meaning is also broader. Loss is often used to refer to destruction and ruin but its definition also includes the partial or complete deterioration or absence of a physical capability or function, an instance of losing someone or something, and the harm or privation resulting from losing or being separated from someone or something.
"Property Damage" in Commercial General Liability Policies
The nature of third party CGL insurance is materially different from first party property insurance. Third party coverage turns on the insured's legal liability, rather than the fact of injury to property itself. Because the definition of property damage in Another Planet's CGL policy is materially different, on its face, from the terms used in its property insurance policy, the former carries little weight in interpreting the latter.
CONCLUSION
The Supreme Court, after dozens of pages of analysis, answered the Ninth Circuit's question as follows: “No, the actual or potential presence of the COVID-19 virus on an insured's premises generally does not constitute ‘direct physical loss or damage to property’ for purposes of coverage under a commercial property insurance policy."
ZALMA OPINION
I know I claimed I was sick of Covid cases and would ignore them in this blog. However, this case from the California Supreme Court answering an inquiry from the Ninth Circuit, although lengthy and detailed, was a very simple decision establishing the Covid virus does not cause direct physical loss or damage to the property, the risk of loss of which was insured. Hopefully this will put the issue to rest.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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22
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Arsonist Must Pay Restitution to Insurer
Yes, Insurance Company is a Victim of an Arson
Post 4815
In September 2019 Otho Harris visited a Boost Mobile store for assistance with his broken cellphone. He became enraged when he was told that it could not be repaired. He returned in the middle of the night and set fire to the store, causing extensive damage. Harris was charged with arson in violation of 18 U.S.C. § 844(i). After difficult relationships with three different appointed attorneys, he opted to represent himself and eventually pleaded guilty. He was sentenced to eight years in prison and ordered to pay $195,701 in restitution.
In United States of America v. Otho Harris, No. 23-1294, USCA, Seventh Circuit (May 23, 2024) the USCA resolved the restitution order.
FACTS
Harris challenged only the restitution order, arguing that it was not supported by a proper investigation and determination of the loss amount. The pre-sentence report ("PSR") and the government's written version of the offense incorporated a 13-page insurance claim prepared by the victim's insurer itemizing the losses from the fire. Harris did not object to this accounting of the loss amount. Quite the opposite: he had an opportunity to review these materials before sentencing, assured the judge that he had done so, and affirmed the accuracy of the factual material in the PSR.
BACKGROUND
In December 2019 a federal grand jury returned an indictment charging Harris with one count of arson in violation of § 844(i). After holding a hearing on the motion of the third appointed defense lawyer, the judge determined that Harris knowingly and voluntarily waived his right to counsel and could represent himself.
Over the next year Harris agreed to plead guilty and signed a written plea agreement with the government. He acknowledged in the agreement that his sentence must include an order of full restitution to the victims of the crime (including insurance companies) in an amount to be determined by the court. The judge accepted his guilty plea and set the case for sentencing.
THE PSR
The probation office filed a pre-sentence report about a month before the sentencing hearing. It included a description of the financial impact of Harris's crime on two victims- the owner of the Boost Mobile store and his insurer-in the total amount of $195,701. The PSR incorporated the insurance company's 13-page claim report, a copy of which was attached to the government's written version of the offense. This document provided a detailed itemization of the store's losses, which included telecommunications devices and accessories for sale, business equipment, and office fixtures.
The available insurance coverage was just $35,000, which the insurer reached after appraising 33 of 104 items included in the claim. The insurance company paid its full policy limit to the store owner, so the probation officer recommended that the court order Harris to pay $35,000 to the insurer and the balance- $160,701-to the store owner.
The judge imposed a sentence of eight years in prison. The judge also adopted the PSR's restitution figures and ordered Harris to pay restitution in the total amount of $195,701-$35,000 to the insurer and the balance to the store owner.
DISCUSSION
The government maintains that Harris waived his right to challenge the restitution order by expressly affirming the accuracy of the factual material in the PSR at the sentencing hearing.
Particularly relevant to this case, the Seventh Circuit had previously opined that a criminal defendant waives the right to contest the judge's factual findings at sentencing when he expressly states on the record that he has no objection to the findings.
The judge began the sentencing hearing by confirming that Harris had received and reviewed both the PSR and the government's written version of the offense, which included a copy of the itemized insurance claim detailing the losses from the fire damage. The judge also confirmed that Harris had no objections or arguments in opposition to the factual matters in the PSR.
WAIVER
The Seventh Circuit recognized that resolving waiver questions does not require a rigid analysis. Harris's conduct at the sentencing hearing was based on a month's time to review the PSR and the incorporated insurance accounting, which detailed the restitution amount recommended by the government and the probation officer.
Here the judge relied on information presented by the probation officer, as required by statute, and accepted the itemized claim accounting from the insurance company as a reasonable measure of the losses from the fire. There was no basis to reverse as a plain error.
ZALMA OPINION
Arson is a vicious crime where firefighters and passers-by are injured or die. Mr. Harris was lucky that his vicious act only damaged property not people and he would only serve 8 years in prison and make restitution to the victims of his crime, the Boost store, its owner and the insurer that paid its limit to the store owner. I have heard judges, in the last 55 years of my career in insurance, say that insurers cannot be victims of a crime of arson. Reality and the Seventh Circuit concluded that the insurer is a victim entitled to restitution.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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76
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Liars Never Prosper
Failure to Tell the Truth on an Insurance Application Voids Entire Policy as if it Never Existed
Post 4814
16
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Zalma's Insurance Fraud Letter - June 1, 2024
ZIFL Volume 28, Issue 11
Post 4813
Subscribe to ZIFL Here
Read the full 26 page issue here in Adobe pdf format.
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:
The Scope of Loss
When dealing with a potential fraudulent first party-property loss it is essential that the investigation into the claim is through and prompt. To do a thorough investigation of a property loss it is essential that the insured and the company’s adjuster agree to a complete scope of loss so that the investigation into the amount of the loss is prepared and agreed to in immediately.
In a loss to structures or contents the scope of loss is generated at the first meeting between the adjuster and the insured. The scope of loss is where both parties agree on the categories of property damaged.
Read the full 26 page issue here in Adobe pdf format http://zalma.com/blog/wp-content/uploads/2024/05/ZIFL-06-01-2024.pdf.
More McClenny Moseley & Associates Issues
This is ZIFL’s twenty ninth 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 26, 2024 - MMA Generated Lawsuits Dismissed
Read the article and the full 26 page issue here in Adobe pdf format http://zalma.com/blog/wp-content/uploads/2024/05/ZIFL-06-01-2024.pdf.
Insureds are Made More Equal Than Insurers
California Court of Appeals Extends Meaning of Statute to Make Insured More Powerful than Insurers at EUO
As George Orwell explained in his novel “Animal Farm” we are all equal, but some are more equal than others. In Vladimir Myasnyankin v. Nationwide Mutual Insurance Company, A166946, A167445, California Court of Appeals, First District, Fifth Division (January 30, 2024) the Court of Appeals decided, over the dissent of the Presiding Judge that the insured in a disputed claim is more equal than the insurer.
Read the article and the full 26 page issue here in Adobe pdf format http://zalma.com/blog/wp-content/uploads/2024/05/ZIFL-06-01-2024.pdf
New Book
The Compact Book of Adjusting Property Claims – Fourth Edition
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 article and the full 26 page issue here in Adobe pdf format http://zalma.com/blog/wp-content/uploads/2024/05/ZIFL-06-01-2024.pdf.
Health Insurance Fraud Convictions
The federal prosecutors and courts have been busy prosecuting health insurance fraud.
Doctor, One of Top Prescribers of Opioids in Massachusetts, Is Sentenced
Dr. Olarewaju James Oladipo, of Canton, a Massachusetts, an orthopedic surgeon who prosecutors say was one of the top prescribers of opioid drugs in the state was sentenced in federal court in Boston for his role in a health care fraud scheme.
Oladipo was sentenced by U.S. District Court Judge Allison D. Burroughs to 16 months in prison, followed by one year of supervised release. In December 2023, Oladipo was convicted by a federal jury of 10 counts of health care fraud.
Read the article and dozens of convictions and the full 26 page issue here in Adobe pdf format http://zalma.com/blog/wp-content/uploads/2024/05/ZIFL-06-01-2024.pdf
New Book Now Available from Barry Zalma
Property Investigation Checklists: Uncovering Insurance Fraud, 14th Edition
Read the article and the full 26 page issue here in Adobe pdf format http://zalma.com/blog/wp-content/uploads/2024/05/ZIFL-06-01-2024.pdf.
Other Insurance Fraud Convictions
Tennessee Man Sentenced to Over 3 Years in Federal Prison for Crop Insurance Fraud
David Garrett Manion, 61, of Lafayette, Tennessee, was sentenced to 3 years and 6 months in federal prison, followed by 3 years of supervised release, and was ordered to pay $3.5 million in restitution for defrauding the federal crop insurance program.
According to court documents, Manion was convicted for defrauding the federal crop insurance program between 2016 and 2022. Manion also has a prior 2016 conviction for defrauding the federal crop insurance program. As part of that 2016 case, Manion agreed to a five-year debarment from the federal crop insurance program administered by the United States Department of Agriculture Risk Management Agency.
While that case was being resolved, however, Manion devised a scheme under which other family members applied for and received crop insurance for tobacco that was farmed by and belonged to Manion. In addition to $3.5 million in criminal restitution, Manion agreed to pay the Risk Management Agency nearly $5.5 million to resolve other outstanding issues.
Read the article and multiple convictions and the full 26 page issue here in Adobe pdf format http://zalma.com/blog/wp-content/uploads/2024/05/ZIFL-06-01-2024.pdf
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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59
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Appeal Dismissed Even With Fraud Allegation
Appeal Lost Due to Failure to Provide an Adequate Record
Post 4810
In an action to recover damages for personal injuries, the defendant Myrtle 6, LLC, appealed from an order of the Supreme Court, Kings County (Lawrence S. Knipel, J.). The order, insofar as appealed from, denied those branches of the motion of the defendant Myrtle 6, LLC to stay the trial ,to vacate the note of issue, and to compel discovery.
The Appellate Court, in Jay Bing v. Myrtle 6, LLC, 2024 NY Slip Op 02516, No. 2022-03586, Index No. 519239/16, Supreme Court of New York, Second Department (May 8, 2024) resolved the appeal after finding the record on appeal to be inadequate.
FACTS
The plaintiff commenced this action against the defendant Myrtle 6, LLC and another defendant to recover damages for personal injuries. The defendant moved to stay the action, vacate the note of issue, and compel discovery. The Supreme Court issued a stay of trial and granted leave for the defendant to amend its answer and allege various fraud defenses.
The defendant alleged that there was a related criminal case pending against the plaintiff's previous attorney in connection to an insurance fraud scheme. Although the defendant's affirmation in support of its motion stated that the details of the fraud scheme were outlined in prior motions with exhibits, none of the prior motions or exhibits were included in the record on appeal.
In an order after oral arguments the Supreme Court inter alia, denied those branches of the defendant's motion which were to stay the trial, to vacate the note of issue, and to compel discovery.
ANALYSIS
It is the obligation of the person seeking to appeal a judgment, the appellant, to assemble a proper record on appeal. Generally speaking, a
n appellant's record on appeal must contain all of the relevant papers before the Supreme Court. In New York and every other state, appeals that are not based upon complete and proper records must be dismissed.
The appellate court observed that the record provided to it by the appellant was inadequate for meaningful appellate review. The appellant failed to include all relevant documents that were before the Supreme Court (the trial court). The record failed to include the exhibits allegedly demonstrating that the plaintiff's former counsel was involved in a fraud scheme. Since these omissions have rendered meaningful appellate review of the court's order virtually impossible, the appeal must be dismissed.
ZALMA OPINION
When a plaintiff's lawyer is under arrest for insurance fraud the right of an injured party to establish a claim against the defendant becomes problematic. The appeal of the order could have been effective but failed because the record on appeal was inadequate. The Appellant is not without a remedy, the defendants can sue their lawyers for malpractice.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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18
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Umbrella Does Not Have Same Exclusion as Primary
Umbrella Does Not Have Same Exclusion as Primary
Post 4809
Many companies find that a single policy of liability insurance is inadequate and purchase multiple layers or insurance. Many times the policies follow each other's terms and conditions, but not always. Thermoflex Waukegan obtained several lawyers of coverage but did not require the terms and conditions of each policy to be the same.
In Thermoflex Waukegan, LLC v. Mitsui Sumitomo Insurance USA, Inc., Nos. 23-1521, 23-1578, United States Court of Appeals, Seventh Circuit (May 17, 2024) reviewed the trial court decision.
Thermoflex Waukegan required hourly workers to use hand prints to clock in and out. This led to a claim that doing so without workers' written consent, and using a third party to process the data, violated the Biometric Information Privacy Act, 740 ILCS 14/1 to 14/20 (BIPA or the Act).
THE TRIAL COURT
The trial court concluded that an exclusion in the Basic policy renders it inapplicable to any claim based on the Act. The exclusion provides that the insurance does not apply to claims arising out of any access to or disclosure of any person's or organization's confidential or personal information, including patents, trade secrets, processing methods, customer lists, financial information, credit card information, health information or any other type of nonpublic information.
ANALYSIS
Thermoflex maintained that this policy is ambiguous because the exclusion mentions patents, which are public. True, the list contains mismatched items. But it can’t create ambiguity about either the opening phrase of the exclusion: "any person's or organization's confidential or personal information" or the catchall "any other type of nonpublic information."
The Seventh Circuit found it was enough that the exclusion in this policy does not have a flaw.
DUTY TO DEFEND
The Excess and Umbrella policy, on the other hand, has two parts. Coverage U (for "Umbrella") lacks an exclusion relating to nonpublic information. It does not matter what Coverage U includes; the parties agree that it covers BIPA claims unless something excludes coverage. The trial judge found that none of the three arguably applicable exclusions to Coverage U is so clear that it forecloses a duty to provide Thermoflex with a defense in the state-court suit.
The third exclusion, which the parties call the "ERP exclusion" (for "employment-related practices") bars coverage of injury arising out of: a) refusal to employ that person; b) termination of employment of that person; or c) coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, malicious prosecution, discrimination, sexual misconduct, or other employment-related practices, policies, acts, or omissions directed towards that person. Parts (a) and (b) of this exclusion don't have anything to do with BIPA claims. Mitsui relied on part (c) contending that collecting and processing handprints to determine how much time an employee spends at work is an "employment-related practice". The Seventh Circuit concluded that a general policy requiring all hourly workers to place their hands on a scanner is an employment-related practice but is not "directed towards" any given employee. It is just a term or condition of employment, and this exclusion taken as a whole is not concerned with the terms and conditions of employment so it does not prevent coverage for a defense.
The Umbrella policy provides for defense and indemnity only after underlying insurance (and deductibles, which the policies call self-insured retentions) has been exhausted.
Because Thermoflex has at least one other policy that applies to the BIPA claims the duty to defend does exist under the Umbrella does not begin until the limits of that policy (plus deductibles) have been exhausted.
With that proviso-which is part of the district court's decision and judgment, Mitsui owes Thermoflex a defense under the Umbrella policy.
ZALMA OPINION
When primary or basic insurance policies provided limited coverages and an umbrella provides more expansive coverage, the duty to defend applies to the umbrella insurer once a primary or basic insurer expends its limits plus self-insured retentions. The decision eliminated coverage for some insurers and found a duty to defend exists for other coverages. To avoid such a result many insurers who write umbrella policies follow the basic insurer's policy terms and conditions. Mitsui didn't and must provide a defense under the umbrella policy.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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12
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Indictment Establishes Probable Cause
Suit for Malicious Prosecution Requires Favorable Termination of Prosecution
Post 4809
Mrs. Marty Spann alleged that Defendants Asurion Insurance Services, Inc. (“Asurion”); former District Attorney General Bruce Griffey; and Tennessee Wildlife Resource Agency (“TWRA”) employees Ed Carter, Mitchell Bailey, Dale Grandstaff, Brad Jackson, and Shawn Karns (collectively with Griffey, the “State Defendants”) maliciously prosecuted her for evidence tampering and insurance fraud. The court was faced with two Motions to Dismiss filed by the State Defendants and Asurion.
In Marty Spann v. Ed Carter, et al., No. 3:23-cv-01028, United States District Court, M.D. Tennessee, Nashville Division (May 17, 2024) the USDC resolved the issue of malicious prosecution against an insurer and the state.
FACTUAL ALLEGATIONS
Although the operative Amended Complaint reads like a potential blockbuster movie the Court only needed to recite a few allegations to resolve the pending motions. That is, on February 21, 2014, Mrs. Spann was arrested and charged with tampering with her husband's cellphone-which she allegedly knew was potential evidence in a TWRA investigation-and filing a false insurance claim with Asurion reporting that the cellphone was missing. On September 13, 2022, more than eight years after the arrest, the State of Tennessee dismissed the charges against Mrs. Spann under Tennessee Rule of Criminal Procedure 48(a).
Mrs. Spann then brought this lawsuit against the State Defendants and Asurion for malicious prosecution, alleging that each Defendant played a role in “bringing the baseless action [against her] to begin with” and “continuing to prosecute the action without probable cause.” Asurion and the State Defendants moved to dismiss the Amended Complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).
ANALYSIS
Malicious Prosecution Under Tennessee Law
To establish a malicious prosecution claim under Tennessee law, a plaintiff must show that:
A prior suit or judicial proceeding was instituted without probable cause,
Defendant brought such prior action with malice, and
The prior action was finally terminated in plaintiff's favor.
The State Defendants and Asurion argued that Mrs. Spann's state malicious prosecution claim failed under the third element because the criminal proceeding at issue did not terminate in her favor. They based the argument on the fact that the Tennessee Supreme Court recently clarified that, for purposes of malicious prosecution, an action is terminated in a plaintiff's favor only if the termination of the underlying criminal proceeding reflects on the merits of the case and was due to the innocence of the accused. There is no language in the Order or Rule 48(a) that reflects on the merits of the case or indicates that the case was terminated due to Mrs. Spann's innocence.
Accordingly, the Court dismissed Mrs. Spann's state malicious prosecution claim because she did not allege facts sufficient to show that the dismissal of her criminal charges constituted a favorable termination.
Malicious Prosecution Under Federal Law
The federal claim, 42 U.S.C. § 1983, provides that an individual may bring a private cause of action against anyone who, acting under color of state law, deprives a person of rights, privileges, or immunities secured by the Constitution or conferred by federal statute. To successfully bring a § 1983 malicious prosecution claim under the Fourth Amendment, a plaintiff must plausibly allege four elements:
the defendant made, influenced, or participated in the decision to prosecute the plaintiff;
there was no probable cause for the prosecution;
as a consequence of the legal proceedings, the plaintiff suffered a deprivation of liberty apart from the initial arrest; and
the criminal proceeding was resolved in the plaintiff's favor.
Because the September 13, 2022 Order of Dismissal establishes that Mrs. Spann's criminal prosecution ended without a conviction, she has plausibly alleged that the criminal proceeding was resolved in her favor.
Although the Complaint does not specify or indicate how Asurion, a private insurance company, acted with state-given authority. Conclusory allegations are insufficient to show that Asurion is a state actor. Accordingly, the Court dismissed Mrs. Spann's federal malicious prosecution claim against Asurion because the Complaint failed to allege Asurion acted under color of state law.
The grand jury indictment provides a presumption of probable cause for Mrs. Spann's prosecution and defeats the claim of malicious prosecution.
Mrs. Spann has not come close to rebutting the probable cause presumption because she has not alleged that any State Defendant provided false testimony to the grand jury to secure an indictment. Accordingly, the Court dismissed Mrs. Spann's remaining federal malicious prosecution claims for failing to rebut the probable cause presumption created by the February 20, 2014 grand jury indictment.
ZALMA OPINION
Mrs. Spann was arrested, based on probable cause, on two crimes including the crime of insurance fraud. The basis of the claim was the dismissal of the prosecution without a finding of fact, a trial or an acquittal. The state just decided they did not want to try Mrs. Spann for the crime. Proving that no good deed goes unpunished Mrs. Spann took the dismissal and decided to try to profit from the good deed of dismissing her criminal prosecution. Her attempt failed because there was no evidence of malicious prosecution.
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24
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Arson-for-Profit Scheme Fails
Innocent Co-Insureds Have no Rights to Proceeds When Fraud Committed on Their Behalf
Post 4808
Plaintiffs Timeless Bar, Inc. and Horseshoe Club, LLC sued their insurer, Defendant Illinois Casualty Company, claiming the latter breached the parties' insurance agreement. Specifically, the Plaintiffs allege that even though the fire that destroyed their property was intentionally set by an officer of the corporation and a member of the LLC, the insurer was obligated under the policy and Minnesota law to pay for the loss.
In Timeless Bar, Inc., doing business as The Press Bar and Parlor, and Horseshoe Club, LLC v. Illinois Casualty Company, No. 22-cv-1685 (KMM/LIB), United States District Court, D. Minnesota (May 21, 2024) the USDC, in a lengthy opinion resolved the issues of who was responsible for the fraud.
BACKGROUND
In April 2016, while still a married couple, Andrew Welsh and Jessie Welsh purchased a bar in St. Cloud, Minnesota. The couple opened the business as The Press Bar and Parlor and operated it through a corporation, Timeless Bar, Inc. (“Timeless Bar”). They also set up a real estate holding company, Horseshoe Club, LLC (“Horseshoe Club”), and arranged the building purchase through that company. On February 17, 2020 a fire that destroyed the bar. The Defendant and law enforcement later discovered that Andrew intentionally set the fire.
Illinois Casualty Company (“ICC”) insured The Horseshoe Club against the risk of loss by fire and covered as an additional named insured - “building owner” - for certain losses associated with the building itself under the Policy.
The Arson and Plaintiffs' Insurance Claims
On February 17, 2020, Andrew Welsh burned down the bar. The following day, Andrew executed a Non-Waiver Agreement with ICC as the authorized representative of Timeless Bar as a named insured under the Policy. On February 26, 2020, Timeless Bar and the Horseshoe Club submitted the initial insurance claim to ICC via a “Proof of Loss” seeking approximately $1.4M in proceeds. The initial claim sought the policy limits for the building and other amounts. The claim states that the fire was of “unknown origin.” Further, the sworn proof of loss states: That said loss did not originate by any act, design or procurement on the part of your insured, or as affiant; nothing has been done by or with the privity or consent of your insured or this affiant, to violate the conditions of the policy, or render it void. Andrew and Jessie both signed that proof of loss on behalf of the businesses. There is no dispute that in the proof of loss, Andrew falsely stated that the fire was of unknown origin and that the loss did not originate by any act, design, or procurement of his own. Nor is there any dispute that his submission of the false claim as an affiant on behalf of the insured was an effort to defraud ICC.
DISCUSSION
The crux of the dispute in this case is whether Andrew Welsh's conduct-burning down the bar and later lying about it in the insurance claims-allows ICC to deny coverage to Timeless Bar and Horseshoe Club. ICC argued that Andrew's conduct is imputable to the Plaintiffs for purposes of all three exclusions at issue: his submission of fraudulent insurance claims precludes coverage for the Plaintiffs under the Misrepresentation and Dishonesty Exclusions, and his arson precludes coverage under the Intentional Acts Exclusion.
As explained below, the Court found that there is no genuine dispute that Andrew filed fraudulent claims on behalf of both Timeless Bar and Horseshoe Club. Because he did so, no reasonable jury could find that ICC breached the Policy by denying coverage under either the Misrepresentation Exclusion or the Dishonesty Exclusion.
Misrepresentation and Dishonesty Exclusions
ICC is entitled to judgment as a matter of law because the Policy provides no coverage. He filed a fraudulent claim when he signed the original Proof of Loss on February 26, 2020, and the May 15, 2020 amended Proof of Loss. No reasonable jury could conclude otherwise based on this record.
“Innocent Insureds”
Minn. Stat. § 65A.01, subd. 3, provided that the entire policy was void if, either before or after a loss, “the insured has willfully and with intent to defraud, concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof or the interests of the insured therein.” (emphasis in the original)
The Court found that, even viewed in the light most favorable to Plaintiffs, Andrew's false statements in the proofs of loss submitted to ICC were dishonest acts and were made with intent to defraud ICC, and his actions are properly imputed to Timeless Bar and Horseshoe Club for purposes of applying the Misrepresentation and Dishonesty Exclusions.
Andrew's actions are imputed to the Plaintiffs, the Misrepresentation Exclusion and the Dishonesty Exclusion preclude coverage as a matter of law, and ICC is entitled to summary judgment.
ZALMA OPINION
Arson-for-Profit is a serious crime. An arson fire is a specifically peril, the risk of loss of which, is insured by a fire policy. There is no "arson" exclusion in a fire insurance policy. The named insured may go to jail for the crime but that does not effect the insurance claim. Where Welsh went wrong was in signing under oath a false claim as a result of the fire. The fraud voided coverage and no one had the right to recover even his innocent wife and the innocent corporations who owned the building where the bar was located.
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24
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Insureds are Made More Equal Than Insurers
California Court of Appeals Extends Meaning of Statute to Make Insured More Powerful than Insurers at EUO
Post 4807
As George Orwell explained in his novel "Animal Farm" we are all equal but some are more equal than others. In Vladimir Myasnyankin v. Nationwide Mutual Insurance Company, A166946, A167445, California Court of Appeals, First District, Fifth Division (January 30, 2024) the Court of Appeals decided, over the dissent of the Presiding Judge that the insured in a disputed claim is more equal than the insurer.
FIRE POLICY EUO CONDITION
Residential property insurance policies commonly require an insured to submit to an examination under oath (EUO) if requested by the insurer in connection with the resolution of a claim. Insurance Code section 2071.1, subdivision (a)(4), provides that an insured subject to an EUO "may record the examination proceedings in their entirety."
In an issue of first impression: whether the statute entitles an insured to make a video recording of the insurer's participants in an EUO. After considering the statute's plain language, statutory framework, and legislative history, the Court of Appeals concluded the provision does confer such a right.
BACKGROUND
Following water damage to his home, Vladimir Myasnyankin (Myasnyankin or plaintiff) filed a claim under his property insurance policy with Nationwide Mutual Insurance Company (Nationwide). Pursuant to the policy terms, Nationwide required plaintiff to submit to an EUO, which was scheduled to be in person. Relying on section 2071.1, subdivision (a)(4) (hereafter section 2071.1(a)(4)), plaintiff sought to video record the entire proceeding, including Nationwide's attorneys and claims adjusters. Nationwide refused to proceed with the EUO, asserting section 2071.1(a)(4) only permitted plaintiff to video record himself. Further, Nationwide threatened to deny plaintiff's claim unless he agreed to proceed with the EUO. Plaintiff then sued Nationwide seeking a declaration of his rights under section 2071.1.
DISCUSSION
An insured's compliance with a policy requirement to submit to an examination under oath is a prerequisite to the right to receive benefits under the policy. Examinations under oath are frequently conducted under circumstances where the loss is undocumented or suspect. The purpose of the examination under oath is to enable the insurer to obtain the information necessary to process the claim. The examination is normally conducted orally before a court reporter who administers the oath and transcribes the proceeding.
The plain language provides an insured may record every element and part of the examination proceeding just as the insurer may by the means of a certified court reporter or a video. Like a video taped deposition only the face and statements of the witness are viewed while questions and answers are recorded.
The Court of Appeals noted that the legislative history of the statute does not explicitly address whether section 2071.1(a)(4) encompasses the right to video record the insurer's representatives. However, it demonstrates an express and unequivocal intent to protect insureds from harassment in EUO proceedings. Significantly, video records nonverbal conduct, such as eye-rolls or glares, which would not be captured by audio recordings or reporter's transcripts. In addition, the knowledge that a person is being video recorded may prompt that person to modify their behavior in a positive manner.
The Court of Appeals concluded that the plain language, statutory framework, and legislative history all support a construction of section 2071.1(a)(4) granting insureds the the right to record the proceedings.
THE DISSENT
Presiding Justice Teri L. Jackson dissented because she disagreed with the majority's interpretation of section 2071.1(a)(4). Justice Jackson noted that had the Legislature wanted to confer specific recording rights, it could have done so as it has done in a variety of other contexts. For example, persons attending various public meetings "shall have the right to record the proceedings with an audio or video recorder ...." (Gov. Code, §§ 11124.1, subd. (a), 54953.5, subd. (a), italics added; see Welf. &Inst. Code, § 4660.)
Justice Jackson noted that there is little, if any, discussion in the legislative history about specific recording methods. And what minimal references there are, none mention an insured's right to video record an insurer's participants.
Case law has long confirmed an insurer may contractually require, as a condition of coverage, that an insured submit to an EUO. She concluded that "[F]rom review of the plain language of section 2071.1 and its legislative history, together with the applicable case law and statutory scheme, the conclusion is that section 2071.1(a)(4) does not give an insured an unqualified right to video record an insurance company's participants in every instance and/or a concomitant right to refuse to participate in an EUO unless this specific method of recording is permitted.
ZALMA OPINION
In my opinion the only purpose of recording the facial expressions and appearance of the lawyers representing the insurer at an EUO and any representative of the insurer is to harass, intimidate or make the process of the EUO expensive. The statute requires that the insurer provide the insured with a copy of the transcript of the proceedings and if recorded by oral or video recording. Adding a second or third video record is only their to intimidate or lesson the inquiries of the insurer faced with a potentially fraudulent claim. Hopefully the case will go up to the California Supreme court to consider the well reasoned dissent of Justice Jackson.
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16
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Who's on First?
Insurers Dispute Who Must Defend Additional Insured
Post 4806
\
\Other Insurance Clauses Control who Defends Whom
The Travelers Indemnity Company of America (“Travelers”) and Defendant Ohio Security Insurance Company (“Ohio Security”) moved for summary judgment. In The Travelers Indemnity Company Of America v. Ohio Security Insurance Company, No. 23-cv-3451 (AS), United States District Court, S.D. New York (May 10, 2024) the USDC resolved the disputes.
BACKGROUND
Ohio Security issued an insurance policy to Sutega USA Corp. (“Sutega”). Travelers sued seeking a declaratory judgment that, under the policy, Ohio Security has a duty to defend and indemnify Shawmut Design and Construction (“Shawmut”), Zara USA, Inc. (“Zara”), Eklecco Newco LLC (“Eklecco”), and Pyramid Management Group, LLC (“Pyramid”) in a state court lawsuit.
Construction Contracts
In 2015, Zara, Shawmut, and Sutega entered into several contracts related to the construction of a new Zara store in Palisades, New York. The contract states that Shawmut “shall supervise and direct the Work” and all parties included additional insured provisions and other insurance provisions.
Insurance Policies
The Travelers policy provided commercial general liability coverage subject to certain terms, conditions, and exclusions. The Travelers policy contains an amendment to the “other insurance” provision stating: “This insurance is excess over any of the other insurance, whether primary, excess, contingent or on any other basis, that is available to the insured when the insured is added as an additional insured under any other policy, including umbrella or excess policy.”
The Travelers Policy provides coverage to Zara, Eklecco, and Pyramid as additional insureds subject to certain terms and conditions. Ohio Security issued a commercial general liability policy to Sutega. The Ohio Security policy applied Sutega's place of business is listed as an address in Miami, Florida. As relevant here, the policy states that Ohio Security has “the right and duty to defend the insured against any ‘suit' seeking” damages for bodily injury.
The policy contains a Commercial General Liability Extension Endorsement that defines “insured” to include: “any person or organization whom you have agreed to add as an additional insured in a written contract.
The Ohio Security policy also contains an “other insurance” provision.
Underlying State Court Lawsuit
John Autenrieth was injured while using a table saw during the construction. Autenrieth sued Eklecco, Shawmut, Apollo, Pyramid, Zara, and Palisades Center, LLC in New York state court. Autenrieth alleges that the defendants breached their non-delegable duties under New York law to maintain a safe work environment.
Shawmut's insurer, Travelers, alleged that Sutega's insurer, Ohio Security, has a duty to defend and to indemnify Shawmut, Zara, Eklecco, and Pyramid in the state court action. Ohio Security denied that its policy covers these entities. The only disputed issue for the Court is whether Shawmut is covered by the Ohio Security policy. The answer is yes, at least as to Ohio Security's duty to defend Shawmut.
DISCUSSION
For purposes of these motions, the Court found that no actual conflict exists. The only disputed issue is whether the Ohio Security policy covers Shawmut. Under both Florida and New York law, an insurer's duty to defend is broad. The parties do not dispute that there is a written contract between Sutega and Shawmut. Therefore, Ohio Security has a duty to defend Shawmut in the underlying state court action pursuant to the policy issued to Sutega.
Primary Coverage
Shawmut is an additional insured under the Ohio Security policy in the underlying state court litigation. Neither party disputes that Shawmut also has insurance coverage as the named insured under the Travelers policy. The Travelers argued that Ohio Security is required to provide Shawmut coverage on a primary and non-contributory basis. Given the plain language of the insurance contracts and Ohio Security's failure to respond, the Court agrees with Travelers.
ZALMA OPINION
The "other insurance" clauses in insurance policies often results in unnecessary disputes between insurers as to who, between multiple insurers who insure against the same risk of loss, must be first in line to defend or indemnify an insured. The court resolved one of those disputes in this case and told the various insurers and insureds to resolve any remaining issued. To answer the question as to Shawmut Ohio is on first.
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27
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No Post Conviction Help
Unrelated Witness Misconduct no Help to Convicted Shooter
Post 4806
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Public Policy is Vague and Uncertain
Courts Should Not Counter the Work of the Legislature by Use of "Public Policy"
Post 4805
Artemiz Freeman sought to collect uninsured/underinsured motorist benefits under her policy with appellant Progressive County Mutual Insurance Co. ("Progressive"). Progressive denied coverage under the policy's regular-use exclusion and Freeman sued. Resolving the parties' cross-motions for summary judgment, the trial court concluded that the regular-use exclusion violated public policy and Progressive appealed the trial court's determination.
In Progressive County Mutual Insurance Company v. Artemiz Freeman, No. 14-22-00450-CV, Court of Appeals of Texas, Fourteenth District (May 14, 2024) the Court of Appeals explained the importance of protecting legislative actions.
BACKGROUND
Freeman is a police officer with the City of Houston. On February 13, 2018, Freeman was in her police vehicle when she was rear-ended by another car. The driver of that car had an insurance policy that provided $50,000 in liability coverage.
Freeman's expenses from the accident exceeded $50,000. Freeman filed for uninsured/underinsured motorist ("UM/UIM") and personal injury protection benefits under her personal automobile insurance policy issued by Progressive. The policy provides UM/UIM motorist benefits and states that Progressive "will pay for damages that an insured person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury" that is sustained by an insured person in an accident arising out of the use of an uninsured motor vehicle.
The policy also includes a regular-use exclusion applicable to this coverage which states, in relevant part, as follows:
EXCLUSIONS - READ THE FOLLOWING EXCLUSIONS CAREFULLY. IF AN EXCLUSION APPLIES, COVERAGE WILL NOT BE AFFORDED UNDER THIS PART III.
Coverage under this Part III [regarding UI/UIM benefits] will not apply:
to bodily injury sustained by any person using or occupying:
* * *
a motor vehicle that is owned by or available for the regular use of you or a relative. (emphasis added).
Progressive denied Freeman's claim for UM/UIM benefits on the grounds that her policy excluded bodily injury sustained while a person was using or occupying a motor vehicle "owned by or available for the regular use" of the insured. Progressive concluded that Freeman's police vehicle fell within the exclusion's definition of a vehicle "available for [her] regular use."
Progressive paid Freeman personal injury protection benefits pursuant to her policy. Freeman also received workers' compensation benefits from the City of Houston.
Freeman sued Progressive in June 2019, asserting claims for breach of contract, breach of the duty of good faith and fair dealing, and violations of the Texas Insurance Code. Freeman also requested a declaratory judgment stating that she is entitled to an award of UM/UIM benefits.
ANALYSIS
The trial court determined that although the patrol vehicle was available for Ms. Freeman's regular use, that the "regular use" exclusion as applied in this case violates public policy since it operates to deprive an insured of the protection required by the Texas Uninsured Motorists Statute. As a result, the trial court granted Artemiz Freeman's motion for summary judgment and motion for declaratory relief and denied Progressive's motion for summary judgment.
GOVERNING LAW
To protect motorists from financial loss when they are involved in car accidents with uninsured or underinsured motorists, Texas law requires automobile insurers to include UM/UIM coverage in their policies unless the insureds reject that coverage in writing. The underlying policy behind this statute is the state's interest in protecting conscientious and thoughtful motorists from financial loss.
The trial court concluded that, although the patrol vehicle involved in the accident was available for Freeman's regular use, the "regular use" exclusion as applied in this case violates public policy. Public policy can be a vague and uncertain term. Courts are apt to encroach upon the domain of that branch of the government if they characterize a transaction as invalid because it is contrary to public policy, unless the transaction contravenes some positive statute or some well-established law.
Based on this record, the Court of Appeals could not conclude that Freeman has met her burden that she has suffered any financial loss, or that Progressive's policy violates the state's interest in protecting conscientious and thoughtful motorists from financial loss. The trial court erred when it held that the regular use exclusion as applied in this case violates public policy.
The judgment was reversed and Freeman will take nothing on her claims for UM/UIM benefits and attorney's fees.
ZALMA OPINION
Insurance policies are contracts that must be interpreted as written, The trial court felt sorry for Ms. Freeman's injuries and decided that the public policy of the state of Texas was that the regular use exclusion violated the policy for which the Legislature enacted UM/UIM laws. The Court of Appeals, found that the use of the concept of public policy to reverse a clear and unambiguous statute and policy wording. The Court of Appeals intelligently supported the separation of powers between the Legislative and Judicial parts of the state government.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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22
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Unique Insurance Fraud In Louisiana
Three Cases Dismissed Because of Suit Against an Insurer who Did Not Insure the Plaintiff
Post 4804
McClenny, Moseley & Associates (MMA) has had serious problems with the US District Courts in 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. In April and May several cases have been the subject of motions for Summary Judgment from insurers who were sued by MMA who was sanctioned by the District Courts and new lawyers took over the cases only to find the plaintiffs had no right to sue since they were not insured by the insurer defendants. For a representative sample note the information from the following three cases:
In Ave Duruisseau v. Farmers Property & Casualty Insurance Co, No. 6:22-CV-03860, United States District Court, W.D. Louisiana, Lafayette Division (April 26, 2024) Summary Judgment was granted because there was no genuine issue of material fact for trial because Farmers did not insure Plaintiff's property.
In Hester Cole v. Foremost Insurance Company Grand Rapids Michigan, No. 2:22-CV-03514 United States District Court, W.D. Louisiana, Lake Charles Division (April 26, 2024) the court granted Summary Judgment because there was no genuine issue of material fact for trial because Foremost did not insure Plaintiff's property on August 27, 2020.
In Terry Ramirez v. Atlantic Casualty Insurance Co, No. 2:22-CV-04797, United States District Court, W.D. Louisiana, Lake Charles Division (May 7, 2024), James D. Cain, Jr. United States District Judge, dealt with a Motion for Summary Judgment filed by defendant Atlantic Casualty Insurance Company (“Atlantic Casualty”). The motion was unopposed.
The suit dealt with alleged damage to a residence located at 2026 7th Avenue, Lake Charles, Louisiana, in Hurricane Laura, which made landfall in Southwest Louisiana on August 27, 2020, and Hurricane Delta, which impacted the same area on October 9, 2020. Plaintiff, who was then represented by counsel from the law firm of McClenny Moseley & Associates, filed suit in this court against Atlantic Casualty on August 25, 2022, raising claims of breach of insurance contract and bad faith. Therein he represented that he was the owner of the property represented at 2026 7th Avenue and that the property was insured under a policy issued by Atlantic Casualty. All cases filed by plaintiff's counsel were suspended due to concerns about misconduct committed by that firm. New counsel enrolled for plaintiff on July 11, 2023, and the stay was lifted.
Atlantic Casualty moved for summary judgment, showing that plaintiff is not the owner of the insured property and is not listed as a named insured under the policy and requested that the court dismiss plaintiff's claims with prejudice.
Louisiana law provides that an insurance policy is a contract and that its provisions are construed using the general rules of contract interpretation in the Louisiana Civil Code. The policy at issue is a commercial lines policy that provides lessor's risk coverage to several dwellings, including the one at 2026 7th Avenue. Doc. 20, att. 3, pp. 5-6. Darrell and Shirley Crochet are listed as the named insureds. According to Atlantic Casualty's records, they are also the owners of 2026 7th Avenue and plaintiff was a tenant at that address. The policy provides that certain individuals, such as employees, may be considered insureds in connection with the business run from that property. However, there is no basis under the policy to consider that the tenant has an insurable interest in the immovable property. Accordingly, plaintiff cannot maintain a claim for breach of contract against Atlantic Casualty. In the absence of a valid contractual claim, plaintiff's bad faith claims must also fail. The Motion for Summary Judgment was granted and all claims in this matter were dismissed with prejudice.
The result of these three cases indicates that the MMA firm had a problem with the truth and filed suits on behalf of people who were not insured by the insurer defendant and was, as a result, a suit based on fraudulent allegations.
ZALMA OPINION
The last 28 issues of Zalma's Insurance Fraud Letter has described the problems faced by MMA and insurers in the state of Louisiana who were required to defend false and fraudulent lawsuits.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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52
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Officer Immune from Suit
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.
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Overcharge of Force Placed Insurance Defense to Foreclosure
Force Placed Insurance Charges Allow Special Defense to Foreclosure
Post 4802
30
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Zalma's Insurance Fraud Letter - May 15, 2024
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
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Insureds Must Negotiate Terms of Coverage Before Inception
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.
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Go to the Insurance Claims Library – https://lnkd.in/gwEYk.
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Lender Must Elect To Take Insurance Proceeds
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.
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