Barry Zalma, Inc. on Insurance Law

An Attempt to Profit from Arson Fails See the full video at and at https://youtu.be/xXCaz2ZbuDU This is a fictionalized true crime story of insurance fraud from an expert who explains why insurance fraud is a “Heads I Win, Tails You Lose” situation for Insurers. It Takes Skill to use Arson to Defraud an Insurer Most people do not understand how hard it is to set fire to a house that will destroy the entire dwelling and its contents. Most residences simply do not have sufficient combustibles in the right place to allow for a sustained fire. Many homes, especially the more modern ones, have fail-safe devices everywhere that make accidental fires a thing of the past. An Insured decided that the only possible means of escaping his mortgage was to burn down his house. Being a rather imaginative fellow, he decided to also make the fire look like an accident. On leaving his house in the afternoon, he opened the gas jets on the stove, blew out the pilot on his gas dryer and water heater, and set the thermostat on his electronically ignited furnace to 80 degrees Fahrenheit. It was a hot Summer day, but he assumed it would eventually cool off a little, the thermostat would kick on the furnace, and the electronic starter would cause a gas explosion that would destroy the entire house. What he did not count on was Southern California’s Santa Ana Winds that brought heat from the desert and kept the outside temperature in the hundreds all day and into the night. The Insured was shocked that a nosey neighbor with clear sinuses would smell the gas, turn it off at the meter, and save the house. Of course, when the Insured returned home, he had to hide his disappointment that the house was still there. Undaunted, however, he tried again the next week. This time he took no chances. He went to the hardware store and bought a case of Coleman cooking fuel and spread it throughout the house. Then he tore up a book of paper matches so that there was no cover, only matches. He lit a cigarette and placed it low between the matches and left the house confident that when the cigarette burned down it would ignite the match heads and burn down the house. He was again sorely disappointed when he returned home to find the house still there. The would-be arsonist had his innocent wife with him as an alibi. When they entered the house, she became hysterical at the sight of the flammable liquids poured throughout the house. She insisted that he report the incident to the fire department. He wouldn’t do it so she, against his wishes, called in the Arson Investigators. “Boy, you were lucky.” A young fire arson unit investigator said. “The idiot who tried to set fire to your house set his fuse upside down!” Immediately, his partner kicked him in the shins but it was too late to stop him. The fact that the cigarette, to be used as a fuse, must be placed at the head of the matches, not the base, was not known to the insured and the cigarette merely burned itself out. The Insured learned a lesson from the arson investigator. The house burned down almost totally two days later. The claim to the insurer included, among many other things, one encyclopedia Britannica and a wooden duck decoy. These inconsequential items, making up part of a claim for more than $100,000.00 in personal property, led to the Insured’s arrest when they were found, intact and undamaged in his temporary residence. The Insured was arrested for arson and insurance fraud. His claim was denied. He, of course, sued for bad faith, and the insurer was required to defend the law suit for a total of five years because it could not compel his testimony at deposition or trial until his criminal case was resolved. In the fifth year of the bad faith suit the insured’s lawyer called the insurer’s lawyer and suggested his client would provide a release and dismiss the suit with prejudice for a payment of only $5,000. The adjuster in charge – although he had spent over $30,000 defending the suit, refused the settlement and instructed his lawyer to offer only $2,000. Following instructions, the insulting offer was made and, much to the surprise of the defense lawyer, the offer was accepted. The suit finally settled with the arsonist and his presumably innocent spouse, for a payment of $2,000.00. Twenty times less than that amount expended by the insurer to defend the spurious lawsuit brought by the Insured. Why did the Insured offer to settle for so little? For at least two reasons: Because the District Attorney could not set a man free to try the arson case and it was continued over and over again until all the witnesses were gone or had forgotten everything they knew. Because the District Attorney and the Insured had made a deal that if the Insured pleaded guilty to one count of insurance fraud he would not go to jail. The District Attorney, although he knew of the insurer’s interest in the case and the lawsuit pending against it did not advise the insurer of the deal. Of course, had the insurer known that the insured was going to plead guilty to insurance fraud they would have paid nothing. The case was never tried. Two days after the settlement was paid in the civil action and more than five years after the fire, the Insured appeared in criminal court and pleaded guilty to one count of insurance fraud. He was given probation. The case wasn’t a priority matter to the prosecutor since only an insurance company was being hurt. The fact that the insurer was required to defend a bad faith suit for five years at enormous cost was of no apparent concern to the prosecutors. The Insured did not profit from the fire with a cash award. He was relieved of his mortgage debt [which the insurer was required to pay to the mortgagee who had not been culpable in the arson] and he paid his lawyer one third of the $2,000 settlement. Since the insured was judgment proof the insurer lost, as uncollectable, the amount paid to the mortgagee and sold the bare land. Interestingly, the arson investigator who worked so hard to find evidence to arrest the insured was later arrested and convicted as a serial arsonist. Apparently, he was upset that there was an arson fire in his town that he did not set. Adapted from my book Insurance Fraud Costs Everyone (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01 Barry Zalma, Esq., CFE, is available at http://www.zalma.com and zalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

Criminals Take Advantage of Government Health Care New Statute Requires Sentencing Review In The People v. Howard Oliver, B317368, California Court of Appeals, Second District, Third Division (May 12, 2023) Howard Oliver appealed from the judgment entered after a jury convicted him of conspiracy to cheat and defraud Medi-Cal, Medi-Cal fraud; grand theft, false and fraudulent claims, insurance fraud, and four counts of tax evasion for 2012 through 2015. Oliver was sentenced to an aggregate sentence of seven years eight months in prison and ordered to pay over $2.85 million in restitution. BACKGROUND In 1997, Oliver hired accountant Lou Cannon to assist with taxes and bookkeeping for his business, Central Desert Industrial Medical Group (Central Desert), an Apple Valley medical clinic which provided medical care to injured workers. Cannon eventually learned that Oliver was also the director of lucrative alcohol and drug counseling centers and became interested in operating one. Oliver counseled her on starting a facility, providing her information and documentation to submit with the relevant applications, and loaned her funds to start the facility. In 2008, Cannon opened West Coast Counseling Center (West Coast) in Long Beach, designating herself as the executive director and Oliver the medical director. Oliver provided his medical license and advised Cannon as to which office to rent, informing her an examination room was not necessary. West Coast's Falsification Of Patient Records West Coast's business was based on billing Medi-Cal. Cannon handled the billing, payroll, and accounting. Oliver served as medical director, signing off on files, plans, and billing. He received a salary of $1,500 per month, which later increased to $2,500 per month. Cannon directed counselors to fill in incomplete intake forms with false information and input progress notes in files of patients who the counselors never counseled. To accomplish this, approximately twice per month, Bailey gave counselors patient names and dates so they could prepare false progress notes in the files. Oliver visited the office once or twice per month to review files, sign them, and return them to counselors. Oliver signed a physical examination waiver for clients. Bailey also instructed the counselors to list group sessions as lasting three hours, even though no sessions went that long. If counselors failed to do so, their pay checks would be withheld until "necessary corrections" to the entries were made. Counselors complained about the falsification of records during a staff meeting with Cannon, Bailey, Oliver, and Moreno. Oliver said to Bailey, "You need to stop doing that with the staff." The counselors were asked to leave the meeting room. After the meeting, Oliver continued to sign off on patient visits that had not occurred. West Coast was doing well financially. West Coast also began offering incentives to encourage Medi-Cal recipients to come into their office and provide their Medi-Cal card in exchange for vouchers for food, clothes, and transportation. Department Of Justice Investigation The Department of Justice investigative auditor assigned to investigate West Coast determined that Medi-Cal paid West Coast approximately $2.8 million between January 2010 and September 2013, approximately half of which was for one-on-one counseling for three hours per day three days per week. The investigation revealed that Oliver had deposited several hundred thousand dollars’ worth of checks into the Central Desert and/or Grove Medical accounts that went unreported on Central Desert's tax returns. Central Desert failed to pay $203,744 in taxes over four years. DISCUSSION The Trial Court's Denial Of Oliver's Mistrial Request Was Not Erroneous The evidence of Oliver's knowledge that the documents he was signing contained false information was overwhelming, and Oliver's contrary arguments are unavailing. The Court concluded that the trial court did not err in denying a mistrial. Assembly Bill No. 518 Requires Re-sentencing Assembly Bill No. 518, which took effect on January 1, 2022 (days after Oliver's December 7, 2021 sentencing), amended section 654 to provide, in pertinent part: "An act or omission that is punishable in different ways by different provisions of law may be punished under either of such provisions, but in no case shall the act or omission be punished under more than one provision." A trial court must exercise its informed discretion when sentencing a defendant. Oliver was convicted of five counts related to Medi-Cal fraud and four counts related to tax evasion. Under the former statute, the trial court was required to impose the longer sentence for count 2 and to stay the sentences for counts 1, 3, 4, and 6 because, as the trial court recognized, those five counts arose out of "essentially all the same course of action." Under the amended statute, the trial court had discretion to sentence Oliver under one of the less severe provisions and stay sentences on the other counts arising out of the same acts and omissions. Howard Oliver's sentence was vacated and the case was remanded to the trial court for re-sentencing. In all other respects, the judgment was affirmed. ZALMA OPINION Defrauding the state and federal governments is a serious crime. Oliver did so with impunity for a payment of $2500 a month plus whatever he could steal from the business and by lying on his tax returns. He was properly convicted of the crimes and sentenced appropriately. Hopefully, although I hold out little hope, when the sentence is looked at again the trial court will exercise its discretion and keep or make longer the sentence Oliver must serve. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01 Barry Zalma, Esq., CFE, is available at http://www.zalma.com and zalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

Employers' Liability Policy Only Covers Accidental Injury In Graphic Packaging International, LLC v. Everest National Insurance Company, No. N22C-03-192 AML CCLD, Superior Court of Delaware (May 8, 2023) the plaintiff sought coverage under an employers' liability insurance policy for losses the plaintiff incurred litigating and settling a workplace injury action filed by its employee. The insurance policy provided coverage only for "bodily injury by accident." In the underlying litigation, the employer faced a claim that it knowingly engaged in conduct that was substantially certain to injure its employee. The employer settled the underlying litigation shortly before trial, and the insurance company denied coverage for the settlement on the basis that the litigation involved a claim for intentional tortious conduct, rather than a claim for an accidental injury within the scope of the policy's coverage. Under settled Texas law, Texas's workers' compensation law when the employer commits an intentional tort the exclusive remedy does not apply. Accordingly, the only claim the employee brought in the underlying litigation was that the employer's conduct "[rose] to the level of an intentional tort." FACTUAL BACKGROUND Plaintiff Graphic Packaging International ("Graphic") or ("GPHC") makes sustainable paper-based packaging solutions for a variety of food, beverage, food-service, and other consumer products companies. GPHC's primary insurer, Arch Insurance Company ("Arch"), issued a Workers' Compensation and Employers' Liability policy to GPHC and Graphic (the "Arch Policy"). The Arch Policy contained a $1 million per occurrence limit and provided two separate coverages. In Part One, the Arch Policy insured Graphic's obligations under state workers' compensation laws. In Part Two, the Arch Policy insured Graphic for employee injury claims outside of workers' compensation. Everest National Insurance Company ("Everest") provided a Commercial Umbrella Liability Policy to GPHC and its subsidiaries, including Graphic (the "Everest Policy"). The Everest Policy contained a $25 million per occurrence coverage limit in excess of the Arch Policy. The Arch Policy (which Everest followed) excluded coverage for "bodily injury intentionally caused or aggravated by [Graphic]." The Crompton Action Montgomery Crompton ("Mr. Crompton"), a Graphic employee, sustained an injury while working at a Graphic paper mill in Texas. During steam production, it was important that a sudden intense release of steam, known as a "blowdown," occur. In July 2018, a hole developed in the blowdown header, requiring placement of a temporary steel patch until the mill could be shut down for repairs. Graphic knew the safest way to repair the blowdown header was to shut down the production process, but Graphic instead ordered Mr. Crompton to manually perform the steel patch. When Mr. Crompton started the repair he noticed hot water leaking from the hole in the header and told his supervisor he was concerned for his safety. Mr. Crompton returned to the blowdown header, and while he was working on the steel patch, a blowdown occurred, covering him in scalding steam that severely burned him. The Texas Workers' Compensation Act ("TWCA") controls the relationship and conduct between an employee who is injured in the course and scope of his employment and an employer who has workers' compensation insurance. When an employer commits an intentional tort, a common-law exception exists to the otherwise exclusive remedy created by the TWCA. Mr. Crompton and his wife ("The Cromptons") sued Graphic in (the "Crompton Action"), alleging "the conduct of [Graphic] rises to the level of an intentional tort; specifically, [Graphic] had knowledge to a substantial certainty that its conduct would bring about harm to Crompton." Arch, as Graphic's primary insurer, defended Graphic in the Crompton Action. Arch offered to tender its $1 million employers' liability limit to Everest to use to attempt to settle the Crompton Action. Everest rejected Arch's tender because Everest "continue[d] to believe that no coverage exist[ed] for any liability Graphic may face in the pending suit." The parties in the Crompton Action participated in a settlement conference on January 18, 2022. During that conference, the Cromptons reduced their demands, and Arch reiterated that its entire $1 million policy limit could be used by Everest and Graphic to settle the case. Everest refused to give Graphic authority to use any portion of the Everest Policy to settle the Crompton Action. The Cromptons also accepted the mediator's proposal, and Graphic paid the portion of the settlement in excess of Arch's policy limit. This Coverage Action Graphic sued Everest for failure to cover the Crompton Action, seeking to recover the amount Graphic paid to settle the Cromptons' claims. Everest successfully moved for judgment on the pleadings. ANALYSIS The Court concluded that it is clear as a matter of law that the Crompton Action did not fall within the scope of Everest's coverage obligation. Graphic, as the insured, had the burden of proving it is entitled to coverage under the terms of the Everest Policy. The Everest Policy's insuring agreement, incorporated from the underlying Arch Policy, states: “Bodily injury caused by intentional tortious conduct is different from bodily injury caused ‘by accident.’ Courts interpret the term ‘accident’ in an insurance policy to mean ‘an event which takes place without one's foresight or expectation or design.’” The controlling Texas law is that only a "substantially certain" intentional injury could have made Graphic liable in the Crompton Action. The Cromptons alleged in their complaint that Graphic knew or believed its actions would injure Mr. Crompton. That claim does not, and cannot be construed to, fall within the policy's coverage for "bodily injury by accident." The Cromptons could prevail only if they proved Graphic, through McCright, intended to injure Mr. Crompton. At the time of the settlement, therefore, Graphic was facing only an intentional tort claim. Intentional torts fall outside the scope of the policy's coverage for accidental injury and therefore the Cromptons' claim against Graphic does not fall within the Everest Policy's scope of coverage. ZALMA OPINION Since the only way the Cromptons could succeed is to prove that Graphic intended to harm Mr. Crompton and, as a result, there was no possibility that Everest could owe indemnity to Graphic. Since Everest followed form with Arch Graphic should have been happy that Arch offered up its limits. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01 Barry Zalma, Esq., CFE, is available at http://www.zalma.com and zalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

Broker Different Than Agent and Insurer Knockerball MidMo, LLC ("Knockerball") appealed from the judgment of the trial court granting McGowan &Company, Inc.'s ("McGowan") motion for summary judgment on Knockerball's claims for negligence and breach of fiduciary duties. In Knockerball Midmo, LLC v. Mcgowan & Company, Inc. d/b/a McGowan Excess & Casualty, No. WD85458, Court of Appeals of Missouri, Western District, Fourth Division (May 9, 2023) the Court of Appeals resolved the dispute. BACKGROUND McGowan, in its capacity as Knockerball's insurance broker, and Sportsinsurance, in its capacity as managing general agent for Liability Insurer, assisted in procuring general liability insurance coverage for Knockerball in the amount of $1 million and the liability insurance policy covered the time period when Hart was severely injured on Knockerball's premises. Hart sued Knockerball for personal injuries (the "Underlying Suit"). Knockerball was served and promptly notified McGowan of the Underlying Suit and provided a copy of the petition to McGowan. McGowan's representative assured Knockerball's managing member that McGowan would "handle it." However, through a variety of missteps by McGowan, Sportsinsurance, and Liability Insurer, no responsive pleading was timely filed on behalf of Knockerball and an order of interlocutory default against Knockerball was entered in the Underlying Suit on March 31, 2017. Knockerball then entered into an agreement with Hart that contained the following provisions: Hart and Knockerball and for the consideration of TEN DOLLARS ($10.00) provided to Hart this day by Knockerball agreed to settle and assign rights against broker and insurer. Thereafter, a bench trial on damages was held on July 11, 2017, at which Knockerball did not cross-examine witnesses or object to the evidence Hart's attorney offered. On July 13, 2017, the court in the Underlying Suit entered a Final Judgment for Hart against Knockerball in the amount of $44,631,268.99 with interest at the rate of 6.16 percent. It is undisputed that Knockerball did not incur any attorney's fees for the defense of the Underlying Suit. And Hart is prohibited from attempting to collect any portion of the judgment in the Underlying Suit against Knockerball or Knockerball's managing member. The trial court found that it was undisputed that not only was Knockerball protected from liability on Hart's claims but it also stood to collect in excess of $1 million as a result of the resolution of actual coverage claims, therefore it was difficult to see how Knockerball has been damaged and that such damage was proximately caused by McGowan's conduct. ANALYSIS This case is not a "bad faith refusal to settle" case against a liability insurer or that insurer's general agent. Simply put, there is a difference between an insurance broker such as McGowan and a general agent for the insurer (i.e., Sportsinsurance). While an agent represents the insurer, an insurance broker, unless otherwise authorized and provided, represents the insured and, unless otherwise shown by the evidence, is to be regarded as the agent of the insured. Knockerball's claims against McGowan are for negligence. The circuit court granted summary judgment in favor of the insurance broker, and the insured appealed, asserting that the trial court erred in concluding that the insured sustained no damages resulting from the insurance broker's failure to procure adequate insurance coverage. The judgment in the Underlying Suit was entered after Hart agreed that he would not levy execution by garnishment or otherwise provided by law, or otherwise collect or attempt to collect on any property, asset, or right of Knockerball for any portion of the Judgment entered against it in the Underlying Suit. Instead of Knockerball suffering damages from a $44 million default judgment in the Underlying Suit, it actually received $1.25 million from Liability Insurer's settlement of Hart's claims against Liability Insurer. Knockerball actually profited from its own business premises negligence due to the corresponding settlement of Hart's coverage and bad faith claims. The Court of Appeals concluded that Knockerball has not been damaged as a result of the judgment entered against it in the Underlying Suit. Knockerball has not established that it sustained pecuniary damage as a result of McGowan's alleged negligence and breach of fiduciary duties to Knockerball as Knockerball's insurance broker. Without damages, the trial court's summary judgment ruling is not erroneous, and Knockerball's appeal is without merit. ZALMA OPINION Although the broker was negligent in not immediately forwarding the notice of the suit to the insurer the resulting actions of the insured and the plaintiff to allow action against the insurer and the brokers resulted in Knockerball incurring no damages but, in fact, profiting from the situation. This part of the case was, in my opinion, a waste of judicial time. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01 Barry Zalma, Esq., CFE, is available at http://www.zalma.com and zalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

ZIFL - 05/15/2023 - Volume 27, Issue 10 The Source For Insurance Fraud Professionals Issue Number 10 of the 27th year of publication of Zalma's Insurance Fraud Letter provides in Adobe pdf format including the following articles. You can read the full 20 page issue at http://zalma.com/blog/wp-content/uploads/2023/05/ZIFL-05-15-2023.pdf Millions for Defense: Not a Dime for Tribute Staged Accident Eliminates Coverage In a no-fault auto insurance matter brought in New York, State Farm Fire and Casualty Company, as the plaintiff insurer established prima facie entitlement to summary judgment by: submitting the examination under oath transcript of defendant insured Lesie Merle, in which she testified that she primarily garaged the car involved in the accident in Far Rockaway, New York, rather than in Connecticut; the affidavit of its underwriter Christina Ardito, who establishes that such misrepresentation to plaintiff of the car’s location was material. You can read the full 20 page issue at http://zalma.com/blog/wp-content/uploads/2023/05/ZIFL-05-15-2023.pdf More McClenny Moseley & Associates Issues This is ZIFL’s sixth installment of the saga of McClenny, Moseley & Associates and its problems with the federal courts in the State of Louisiana and what appears to be an effort to profit from what some Magistrate and District judges indicate may be criminal conduct to profit from insurance claims relating to hurricane damage to the public of the state of Louisiana. You can read the full 20 page issue at http://zalma.com/blog/wp-content/uploads/2023/05/ZIFL-05-15-2023.pdf Prison for 195 Years Arson Investigators May Testify as Experts as to Cause and Origin of Fire Following NFPA Guidelines Establishes Expertise Defendant, Todd N. Perkins, appealed twenty-eight criminal convictions stemming from a jury’s verdict finding that he intentionally caused a building explosion. He challenged the trial court’s denial of a hearing to determine the reliability of the bases for the arson investigators’ opinions. In The People of the State of Colorado v. Todd N. Perkins, No. 20CA0882, 2023 COA 38, Court of Appeals of Colorado, Division A (May 4, 2023) the Court of Appeals dealt with claims of incompetent fire cause experts. You can read the full 20 page issue at http://zalma.com/blog/wp-content/uploads/2023/05/ZIFL-05-15-2023.pdf Good News From the Dam Ngoc Luong ran her own temporary workers agency and found out that, though her workers were temporary, insurance fraud is not. The Dorchester woman is now pleading guilty to a host of fraud charges. Prosecutors allege: From 2015 through 2019, Luong owned and operated Four Seasons Temp, Inc. When collecting payments from her temporary employment agency business clients, Luong cashed most of the checks rather than depositing the funds into her business account. You can read the full 20 page issue including multiple reports of insurance fraud convictions at http://zalma.com/blog/wp-content/uploads/2023/05/ZIFL-05-15-2023.pdf Hard Fraud Those who try to put fraud in more than one category move from soft fraud to what they call “hard fraud.” Hard fraud is considered a fraud or attempted fraud that is premeditated and intentionally committed. It is considered “hard fraud” because the person perpetrating the fraud did so intentionally and the claim was made for the sole purpose of defrauding the insurer rather than a fraud of opportunity. Of course, fraud is always an intended act or failure to act that damages another. The differentiation exists because some fraud perpetrators are honest people tempted to “cheat a little” when a real claim appears while hard fraud perpetrators intend to do the crime even before a loss is reported. Both have committed the crime or cheated an insurer but soft fraud perpetrators are nicer than those who perpetrate hard fraud. You can read the full 20 page issue at http://zalma.com/blog/wp-content/uploads/2023/05/ZIFL-05-15-2023.pdf Health Insurance Fraud Convictions California Man Convicted of Health Care Kickback Conspiracy Steven Donofrio, 49, was convicted by a jury on May 5, 2023, following a two-week trial before U.S. District Judge Robert W. Schroeder, III. Donofrio, a Temecula, California, man has been found guilty of federal violations related to a health care kickback scheme in the Eastern District of Texas. You can read the full 20 page issue including multiple reports of insurance fraud convictions at http://zalma.com/blog/wp-content/uploads/2023/05/ZIFL-05-15-2023.pdf Other Insurance Fraud Convictions Crop Insurance Fraud Conviction James Garrett, age 68, was sentenced to 18 months in federal prison, followed by two years of supervised release, and ordered to pay $1,045,544 in restitution to the United States. Levi Garrett, age 44, was sentenced to 24 months in federal prison, followed by two years of supervised release, and ordered to pay $279,396 in restitution to the United States. Chief Judge Roberto A. Lange, U.S. District Court, has sentenced the two Sully County, South Dakota, men convicted of False Statements in Connection with Federal Crop Insurance. The sentencing took place on January 30, 2023. You can read the full 20 page issue including multiple reports of insurance fraud convictions at http://zalma.com/blog/wp-content/uploads/2023/05/ZIFL-05-15-2023.pdf Arson for Profit Arson is probably the dumbest form of insurance fraud. With modern municipal fire departments arson fires seldom totally destroy the premises, evidence is always left for arson investigators to review, and firefighters and the public are exposed to danger of injury and death and, as a result, judges have little mercy for an arsonist. Arsonists hoping to make a profit from a fire seldom sit back and accept their punishment when they are convicted. You can read the full 20 page issue including multiple reports of insurance fraud convictions at http://zalma.com/blog/wp-content/uploads/2023/05/ZIFL-05-15-2023.pdf Barry Zalma Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California 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; Subscribe to Zalma on Insurance at locals.com https://zalmaoninsurance.local.com/subscribe. Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; I publish daily articles at https://zalma.substack.com, Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ to consider more than 50 volumes written by Barry Zalma on insurance and insurance claims handling. You can read the full 20 page issue at http://zalma.com/blog/wp-content/uploads/2023/05/ZIFL-05-15-2023.pdf

Panel Rehearing Denied by Ninth Circuit Readers of Zalma on Insurance read a digest of the earlier version of this case at http://zalma.com/blog/?s=BERNAL. That decision was amended by the Ninth Circuit to state that "The district court shall enter judgment for MBIC." Appellee's petition for panel rehearing was otherwise denied. No further petitions for rehearing will be accepted. In Massachusetts Bay Insurance Company v. Neuropathy Solutions, Inc., dba Superior Health Centers, and Rigoberto Bernal, an individual; et al., No. 22-55272, United States Court of Appeals, Ninth Circuit (May 5, 2023) the Ninth Circuit refused rehearing and reiterated its decision allowing the insurer to recover from its insured money paid under a reservation of rights. Decision In this diversity action under California law, Massachusetts Bay Insurance Company (MBIC) sought reimbursement of $2 million that it paid under a reservation of rights to settle litigation brought against its insured, Neuropathy Solutions, Inc. (Neuropathy). To the extent that the underlying Bernal action falls within the coverage provisions of the insurance policy (i.e., to the extent Neuropathy's liability arose out of an accidental "occurrence"), coverage is excluded under the policy's "Professional Services" exclusion. Based on California case law, the insurance policy's text, and the operative complaint in the Bernal action, Neuropathy's liability in Bernal fell within the "Professional Services" exclusion. Starting from the very first sentence of the Bernal complaint, it is evident that Neuropathy incurred liability as a result of the professional services it provided. The "Professional Services" exclusion extends to wrongdoing in the supervision and monitoring of others in the provision of professional services, and Neuropathy incurred liability because of its provision of professional advertising and medical services, not inadequate record keeping or poor customer service. Finally, the complaint's allegation that Neuropathy engaged in discriminatory "marketing techniques and high-pressure sales tactics" falls within the "Professional Services" exclusion for advertising services and health advice or instruction. Neuropathy's liability in the Bernal action was thus excluded from coverage, and MBIC is entitled to reimbursement of the $2 million it paid to settle that lawsuit. The district court shall enter judgment for MBIC. ZALMA OPINION The Ninth Circuit, for the second time, reiterated that an insurer that paid a settlement under a reservation of rights and established that there was no coverage for the loss alleged because of a clear and unambiguous exclusion, was entitled to reimbursement of the funds it spent to settle the law suit. The Insured, Neuropathy owes $2 million plus interest to MBIC. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01 Barry Zalma, Esq., CFE, is available at http://www.zalma.com and zalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

Arson Investigators May Testify as Experts as to Cause and Origin of Fire Following NFPA Guidelines Establishes Expertise Defendant, Todd N. Perkins, appealed twenty-eight criminal convictions stemming from a jury's verdict finding that he intentionally caused a building explosion. He challenged the trial court's denial of a hearing to determine the reliability of the bases for the arson investigators' opinions. In The People of the State of Colorado v. Todd N. Perkins, No. 20CA0882, 2023 COA 38, Court of Appeals of Colorado, Division A (May 4, 2023) the Court of Appeals dealt with claims of incompetent fire cause experts. BACKGROUND The prosecution's evidence at trial established the following pertinent facts: In August 2018, a residential apartment building in Denver exploded and caught fire. Law enforcement personnel, including two fire investigators from the Denver Fire Department, responded to the scene and found Perkins, badly injured and burned, in the rubble of an apartment unit belonging to tenant Matthew Brady. A few months after the explosion, the police interviewed Perkins at the hospital. He admitted that he was in the basement of Brady's apartment on the date of the explosion. During their investigation, the police learned the following information: In the months before the explosion, Perkins worked as a handyman for the building owner and had performed repairs in Brady's apartment. The building owner had recently fired Perkins. Brady had not given Perkins permission to be inside his apartment on the day of the explosion. After he was fired, Perkins had sent a series of strange and arguably threatening text messages to the building owner. There was a natural gas smell in the building before the explosion. There were no gas leaks outside the building on the date of the explosion. Right before the explosion, Perkins was seen either on the roof of the building or in Brady's backyard. A certified K-9, trained to detect accelerants, identified multiple potential areas of accelerant in the basement. On the first floor of the apartment, the police found the gas stove turned on, and the thermostat set to "heat." Subsequent testing confirmed that Perkins's DNA was present on both the thermostat and the crescent wrench. Based on their examination of the scene, the fire investigators concluded that the disconnected natural gas lines in the basement of Brady's apartment created a combustible mix of natural gas and air that ignited and caused the explosion. A jury convicted Perkins as noted and the court sentenced him to 195 years in the custody of the Department of Corrections. HEARING The prosecution endorsed Denver Fire Department investigators Don Patterson and Jonathan Riggenbach to testify as fact witnesses and as experts in fire investigation and origin and cause investigation. The fire investigators opined that the explosion originated in the basement of Brady's apartment and that Perkins intentionally caused the explosion by disconnecting natural gas pipes and igniting the gas. The court denied Perkins's motion to refuse to allow expert testimony from the investigators. The standards set forth by the National Fire Protection Association (NFPA) in its NFPA 921, Guide for Fire and Explosion Investigations, are widely regarded as the gold standard for fire investigation techniques. The court found that the prosecution's experts were either NFPA certified or otherwise complied with the NFPA standards for fire investigators. APPLICABLE LAW Perkins challenged the reliability of arson science. A failure to strictly follow the NFPA guidelines does not automatically make the methodology unreliable. It was not designed to encompass all the necessary components of a complete investigation or analysis of any one case nor intended as a comprehensive scientific or engineering text. Because every fire incident is unique, NFPA 921 recognizes that not all techniques will apply to a particular incident and that it is up to the investigator's discretion "to apply the appropriate recommended procedures in this guide to a particular incident." The Court of Appeal concluded that the fire investigators methodology was reliable because they used NFPA 921 to guide their investigation even though they did not strictly adhere to every step in NFPA 921. Since the fire investigators' testimony reveals that their proffered conclusions were based on deductive reasoning, drawing from their personal observations at the scene of the explosion (i.e., the significant amount of physical evidence of the explosion), as well as their review of related investigative reports and other documentary materials - including NFPA 921. Therefore, the trial court did not abuse its discretion by determining that it had sufficient information to make reliability findings. CONCLUSION The standards set by the NFPA and specifically NFPA 921, the Guide for Fire and Explosion Investigations, constitute a reliable basis for an expert's opinion. Strict compliance with NFPA 921 is not required for an expert's testimony to be admissible under CRE 702, and that deviations from NFPA 921 go to the weight of the expert's opinion and not the opinion's admissibility. ZALMA OPINION Arson investigation is, in part, a scientific exercise based upon collection of facts. The NFPA sets standards for fire cause investigation. The standards are not restrictions upon the work of the investigators. They are guidelines not carved in stone. The fire cause investigators followed NFPA 921 sufficiently to allow their testimony as an expert and the conviction was affirmed. The evidence presented at trial was overwhelming and could have been sufficient to convict Perkins and the expertise of the arson investigators were properly presented to help the jury reach a decision. Mr. Perkins should spend the rest of his natural life in Prison. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01 Barry Zalma, Esq., CFE, is available at http://www.zalma.com and zalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

It is Prudent to Read the Policy Before You Sue The insured sued its insurer for what it believe was the limit of liability of its policy for damage to property by fire. The insurer defended based on the fact that as an excess policy in one of multiple lawyers of insurance coverage it was only obligated to pay that proportion of the loss as described in the policy. The Insured sued and the USDC for the Eastern District of Washington resolved the dispute by reading the full policy in Oregon Potato Company v. Kinsale Insurance Company, No. 2:22-CV-0049-TOR, United States District Court, E.D. Washington (May 5, 2023). BACKGROUND In a first-party property insurance excess coverage dispute the USDC was faced with competing motions for summary judgment. Plaintiff Oregon Potato Company (“OPC”) sued Kinsale Insurance Company for (1) declaratory judgment, (2) breach of contract, (3) insurance bad faith and breach of the covenant of good faith and fair dealing, (4) violation of Washington's Unfair Claims Settlement Practices Act and Consumer Protection Act, and (5) reservation to assert claims for violation of Washington's Insurance Fair Conduct Act. OPC is a Washington corporation headquartered in Pasco, Washington that processes vegetable products and has a facility in Warden, Washington. On January 21, 2021, a fire destroyed or damaged OPC property in Warden. Before the fire OPC had purchased first-party property insurance covering its properties written in three layers, with the last insurer, Kinsale taking (20%) over the second excess layer for $25,000,000 to $50,000,000 for the shares shown in their respective parentheses. Kinsale expresses liability as “$5,000,000 Part of $25,000,000 Excess of $25,000,000 Per Occurrence.” Kinsale's policy contains the following Insuring Agreement: The company will indemnify the Insured for our share, as shown in Item 1 of the Declarations Page of this Policy, of the Ultimate Net Loss caused by the direct physical loss or damage to Covered Property in excess of the Primary and Underlying Excess Insurance as shown in the Schedule of Underlying Insurance of this Policy, occurring during the policy period. This agreement is subject to the following terms, conditions and any endorsements to this Policy. Kinsale's policy defines “Ultimate Net Loss” as follows: Ultimate Net Loss shall mean the actual loss sustained by the Insured as a direct physical result of the peril(s) insured against by the policy(ies) of the Primary and/or Underlying Excess Insurer(s) limited by: a. Any sub limited contained within this Policy or the policy(ies) of the Primary and/or Underlying Excess Insurer(s), and b. Making deductions for any salvage and recoveries from any source other than this Policy and the policy(ies) of the Primary and/or Underlying Excess Insurer(s). The first sub-location listed on the Statement of Values, shown in paragraph 10, was severely damaged. Kinsale initially viewed OPC's loss as “a complete loss to our layer/capacity” and set reserves at is full $5 million limit. Kinsale does not dispute that this was its preliminary determination but contends that it was subsequently superseded by a more accurate determination of a lower loss reserve after investigation and evaluation proceeded. OPC sent an Insurance Fair Conduct Act notice to Kinsale asking to pay its full $5 million limit. Kinsale responded that its policy “unambiguously” provides only “limited liability for Location 1 to the $25,100,000 stated value” and that its limit of liability is not $5 million, but instead 20% of every dollar of loss above $25 million. OPC contends it is currently entitled to payment of the remaining balance of Kinsale's $5,000,000 policy limit and Kinsale contending that it has paid all sums due according to proofs of loss submitted to date. DISCUSSION The “Occurrence Limit of Liability Endorsement” (“OLLE”): OLLE is a modification to the underlying policy and sets the upper limits of Kinsale's liability. The OLLE is read in conjunction with the rest of the policy as “ALL OTHER TERMS AND CONDITIONS OF THE POLICY REMAIN UNCHANGED.” The underlying policy states that Kinsale will indemnify OPC “for our share ... of the Ultimate Net Loss . . . in excess of the Primary and Underlying Excess Insurance as shown in the Schedule of Underlying Insurance of this Policy”. Taken together, the language of Kinsale's policy is not ambiguous. Kinsale's insurance policy provides excess coverage, which when triggered, is for their “share”, i.e., $5 million out of the $25 million, or 20 percent. Kinsale's proportional/share liability does not automatically entitle OPC to $5 million under the OLLE - to read otherwise would entitle OPC to overlapping, not excess, coverage. It was only required to pay 20% of the amount owed by its share of the total loss. Therefore, summary judgment in Kinsale's favor is appropriate. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01 Barry Zalma, Esq., CFE, is available at http://www.zalma.com and zalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

Failure to Investigate Potential for Coverage When an insurer contended that an animal liability exclusion in the insured's homeowner's insurance policy (the policy) precluded any duty to defend because the third party plaintiffs sued the insured for injuries they and their dogs sustained when their dogs were bitten by two pit bulls on a public street, the trial court granted summary judgment to the insurer and the insured appealed. In Poonam Dua v. Stillwater Insurance Company, B314780, California Court of Appeals, Second District, Second Division (May 5, 2023) the California Court of Appeals explained why the duty to defend is greater than the duty to indemnify and why the insurer should conduct a thorough investigation before denying a claim for defense. FACTS The insurer reviewed the underlying complaint and determined that the exclusion applied because the underlying complaint alleged that the pit bulls lived at the insured's home, which was covered by an animal liability exclusion and therefore it had no obligation to indemnify an excluded claim. The insured denied any ownership or control of the pit bulls, which were owned by her boyfriend, who did not live at her home. The insurer, ignoring basic insurance policy interpretation rules, equated its obligation to indemnify with its duty to defend. The insurer denied the insured a defense because, if the exclusion applies, the insurer has no obligation to defend. Even if the insured was correct and the pit bulls were not under her ownership, did not live in her home, and were not under her control when the attack occurred the Court of Appeals noted that the third party still might have raised a claim potentially covered by the policy. An insurer can be excused from the duty to defend only if the third party complaint can by no conceivable theory raise an issue within the policy's coverage. The insured was alleged to know the dogs were dangerous and the insurer knew that the dogs were being walked by the insured's boyfriend near her home. Even if, as currently pleaded, the third party lawsuit was frivolous and baseless, does not mean there was no possibility of coverage and thus no duty to defend. Ignoring the California Fair Claims Settlement Practices Regulations, the insurer did nothing to investigate and concluded there was no possible coverage based only on the animal liability exclusion. Poonam Dua (Dua) argued that the trial court erred in granting summary judgment in favor of Stillwater on her claims based on Stillwater's refusal to defend Dua in the third party lawsuit. FACTUAL BACKGROUND Dua was the named insured on a homeowner's insurance policy issued by Stillwater that provided her with personal liability coverage. The policy made three references to an "animal liability exclusion." Third Party Lawsuit Against Dua Simeon and Roslyn Peroff sued Dua and Eric Taylor (Taylor) for personal injuries and property damage caused by Taylor's dogs. In their complaint, the Peroffs alleged that while they were walking their two dogs on a street in Calabasas, California, Taylor was also walking his dogs, and Taylor's dogs attacked the Peroffs' dogs. Taylor was alleged as the owner and the only person walking the dogs when the attack occurred. As to Dua, the Peroffs' complaint alleged that Taylor and his dogs lived at Dua's home, that Dua knew the "TAYLOR PIT BULLS" were dangerous and their attack was reasonably foreseeable to her but she did not prevent it, and that Dua was therefore liable because she was "the owner of the property and/or related [sic] that housed or w[as] otherwise aware of the TAYLOR PIT BULLS," and had a "duty of care" to take measures to prevent the attack and did not do so. The trial court granted Stillwater's motion for summary judgment. DISCUSSION Since the duty to defend is contractual (Buss v. Superior Court (1997) 16 Cal.4th 35, 47.) A liability insurer owes a broad duty to defend its insured against claims that create a potential for indemnity. The duty to defend applies to claims that are groundless, false, or fraudulent. However, where there is no possibility of coverage, there is no duty to defend. Where the extrinsic facts eliminate the potential for coverage, the insurer may decline to defend even when the bare allegations in the complaint suggest potential liability. This is because the duty to defend, although broad, is not unlimited. When Dua sought Stillwater's defense against the Peroffs' lawsuit, she informed Stillwater that she did not own the dogs and that the dogs were in the care, custody, and control of her boyfriend when the dog attack occurred because Taylor was walking the dogs. There was no evidence that Stillwater took any measures to investigate or otherwise negate the facts suggesting that an animal liability exclusion may not apply and there was potential coverage, and therefore it had a duty to defend Dua. Stillwater conflated the possibility of Dua's liability with Stillwater's duty to defend. The Court of Appeals concluded that Stillwater had not established that there was no conceivable theory to bring the third party complaint within the possibility of coverage, and the facts Dua provided to Stillwater suggested that there may be coverage. In sum, Stillwater failed to meet its burden of establishing it was entitled to summary judgment on Dua's breach of contract claim, and the trial court erred in granting it summary judgment. A mere breach of contract, as alleged, however, is insufficient to determine bad faith. Dua has introduced facts giving rise to a material dispute of fact as to whether Stillwater unreasonably or improperly failed to defend when it was presented with facts suggesting that the animal liability exclusions did not apply. The Court of Appeal concluded that summary judgment in favor of Stillwater was improper and on remand, the trial court was required to enter an order denying Stillwater's motion for summary judgment on Dua's second cause of action for bad faith and breach of the covenant of good faith and fair dealing. ZALMA OPINION California's Fair Claim Settlement Practices regulations require the insurer to conduct a thorough investigation of a claim against an insured before making a decision to defend or indemnify an insured. Stillwater decided to rely on an exclusion that, had it done a thorough investigation and believed the reports of its insured, would have defended its insured. The decision of the trial court was a Pyrrhic victory since, on appeal, the appellate court followed the law and compelled the insurer to defend, and possibly indemnify its insured to a spurious claim against a person who neither owned nor controlled the Pit Bulls that caused the injury. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01 Barry Zalma, Esq., CFE, is available at http://www.zalma.com and zalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

Staged Accident Eliminates Coverage In a no-fault auto insurance matter brought in New York, State Farm Fire and Casualty Company, as the plaintiff insurer established prima facie entitlement to summary judgment by: submitting the examination under oath transcript of defendant insured Lesie Merle, in which she testified that she primarily garaged the car involved in the accident in Far Rockaway, New York, rather than in Connecticut; the affidavit of its underwriter Christina Ardito, who establishes that such misrepresentation to plaintiff of the car's location was material. In State Farm Fire And Casualty Company v. Lesie Merle, Katie Dieubon, Brittani Watson, Yolaunda Vaughn, Affinity Rx Inc, All County, LLC, Amsc, LLC, Benessere Services Inc, Honest Acupuncture P.C., Integrated Interventional Pain Management P.C., Khawaja Asim Siddique, M.D., Lite Care Rehab Pt P.C., Macintosh Medical, P.C., Medical Mri P.C., Noam Kurtis Md P.C., Patient Chiropractic, P.C., And Wind Physical Therapy P.C., Index No. 153004/2021, MOTION SEQ. No. 002, 2023 NY Slip Op 31281(U), Supreme Court, New York County (April 19, 2023) the trial court found in favor of State Farm. FACTS Plaintiff established that defendant Brittani Watson failed to appear for an examination under oath ("EUO") pursuant to the terms of the policy. The failure of an injured person to appear for an ["EUO"] is a defense to any claim for benefits by that person or their assignors. State Farm established through claim specialist Richa Sinha who attested EUO testimony led it to conclude that the accident had been staged. This prima facie established plaintiff's right to deny claims arising from the accident. DECISIONS Accordingly, it was ORDERED that: the plaintiff's motion for summary judgment was granted; defendant Lesie Merle's cross-motion to vacate the default judgment entered against her was denied; plaintiff is not obligated to provide any coverage, reimbursements, or pay any monies, sums, or funds to any of the answering defendants herein for any and all no-fault related services for which claims and/or bills have been, or may in the future be, submitted by the answering defendants to plaintiff; The answering defendants lack standing to seek or recover no-fault, uninsured/underinsured and property damage benefits and/or claims submitted by or on behalf of BRITTANI WATSON as she breached a condition precedent to coverage by failing to appear for an examination under oath in connection with the claim that gave rise to the above-captioned lawsuit; that the answering defendants lack standing to seek or receive No-Fault reimbursements for any bill submitted by or on behalf of LESIE MERLE, as she perpetrated a scheme to defraud and/or fraudulently procure a policy of insurance from plaintiff by knowingly submitting an application for insurance that contained material misrepresentations of fact and false and/or fraudulent statements; that the alleged motor vehicle accident of November 26, 2019, which gave rise to the above-captioned lawsuit, was not the product of a covered event as defined by the applicable policy of insurance issued by plaintiff since the incident of November 26, 2019, was the product of a staged and/or intentional event; plaintiff, by reason of no coverage and since the alleged accident of November 26, 2019 was the product of a staged and/or intentional event, is not required to pay any sums, monies, damages, awards and/or benefits to any of the appearing Defendants, their agents, employees, assignors and/or heirs arising out of any current or future proceedings, all uninsured/underinsured motorists lawsuits and arbitrations, arbitrations and lawsuits seeking to recover no-fault benefits, third-party lawsuits and arbitrations, and all claims for property damage arising out of the alleged accident of November 26, 2019. ZALMA OPINION State Farm refused to be cowed by a suit seeking benefits for a fraudulent, staged auto accident, and a fraudulently obtained policy of insurance, and defeated the multiple claims created as part of the fraud scheme. Every insurer should emulate State Farm and thoroughly investigate each claim and, when fraud is suspected, collect the necessary evidence and refuse to pay and be willing to litigate the issue. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01 Barry Zalma, Esq., CFE, is available at http://www.zalma.com and zalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

Two Years Is Not "As Soon as Practical" Plaintiff appealed the trial court order granting summary disposition in defendant's favor (no genuine issue of material fact) and the trial court order granting in part and denying in part defendant's motion for costs and attorney fees. Defendant cross appeals the trial court order granting in part and denying in part its motion for costs and attorney fees. In Maple Manor Rehabilitation Center, LLC v. Evanston Insurance Company, No. 359147, Court of Appeals of Michigan (April 27, 2023) resolved the disputes. FACTS Dorothy Irvine, 88 years old, was admitted to plaintiff, Maple Manor Rehabilitation Center ("Maple Manor"), on November 25, 2014, after a hospital stay. On or about December 11, 2014, she was found lying on the floor at the rehabilitation center. She passed away at the Hospital on December 16, 2014. Irvine's death certificate, issued December 17, 2014, indicated that the cause of her death was atherosclerotic cardiovascular disease, and the manner of her death was natural. On July 20, 2017, Irvine's son, as personal representative of Irvine's estate, filed a wrongful death lawsuit against Maple Manor, asserting negligence ("the Irvine lawsuit"). At the time the Irvine lawsuit was filed, Maple Manor had a professional insurance policy in place with Evanston Insurance Company ("defendant"). However, Maple Manor did not notify the defendant of the Irvine lawsuit when it was filed. Rather, Maple Manor defended the Irvine lawsuit itself. On June 7, 2019, Maple Manor reported the Irvine lawsuit to it broker. On June 12, 2019, defendant denied the request, stating it was not notified of the claim in a timely manner as required by the insurance policy. Maple Manor then filed a complaint against the defendant for breach of contract. Defendant asserted the policy issued to Maple Manor contained language requiring that claims be made during the policy period, and reported to defendant "as soon as practicable," including "immediately" forwarding to Evanston any legal process in order to qualify for coverage. The trial court found that notice provided 18 months after the Irvine lawsuit had been filed was not "as soon as practicable" under the circumstances. The trial court further opined that defendant was prejudiced by the late notice because Maple Manor took away any flexibility on how defendant would have defended the case, who it would have selected as counsel, what strategies it would have employed, etc. The trial court entered an order granting summary disposition in defendant's favor. Defendant thereafter moved for attorney fees in the amount of $26,581.60 plus costs in the amount of $491.20, based primarily on its assertion that Maple Manor's lawsuit was frivolous. The trial court granted defendant's motion in part and denied it in part, awarding defendant $491.20 as prevailing party costs, as well as attorney fees incurred after the September 8, 2020 hearing on defendant's first summary disposition motion in the amount of $13,708.80 for plaintiff's failure to provide reasonable basis for its position. SUMMARY DISPOSITION For well over one hundred years, Michigan jurisprudence has without exception, assumed a working definition with a very specific legal understanding-that of being within a reasonable time under the circumstances. The Irvine lawsuit was filed against Maple Manor on July 20, 2017 but only on June 7, 2019, almost two years after the lawsuit was filed, did Maple Manor notify defendant of the wrongful death lawsuit. Nearly two years is not a reasonable amount of time in any circumstance where Maple Manor fully participated in the lawsuit with the same attorneys it has now and has offered no justifiable excuse and identified no impediment to informing defendant of the Irvine lawsuit prior. Maple Manor specifically requested cancellation of the policy with defendant on May 16, 2018. Maple Manor knew full well it had active insurance with defendant on July 20, 2017, the date the lawsuit was filed, and thereafter until it requested termination of the policy on May 16, 2018. Maple Manor made a conscious, deliberate decision not to inform defendant of the Irvine lawsuit until June 7, 2019. It was not by accident, oversight, mistake, inadvertence, or belief that it did not have coverage. Prejudice to the insurer is a material element in determining whether notice is reasonably given, and the burden is on the insurer to demonstrate prejudice. However, that principle developed in the context of "occurrence" insurance policies not a claims made policy. The delay in giving notice here was approximately two years and delays of far less have been found to be prima facie failure to give notice as soon as practicable. Maple Manor made a deliberate choice to defend against the Irvine lawsuit on its own until a point when it determined it wanted defendant to be involved. This is contrary to the express terms of the insurance contract's requirement of notice of a claim "as soon as practicable" and "immediate" service of summons or other process received by plaintiff, as well as the purpose of notice requirements in insurance contracts in general. CONCLUSION Maple Manor, a professional rehabilitation facility owned and run by doctor principals, was well aware it had professional business insurance coverage provided by defendant for the Irvine lawsuit initiated against it on July 20, 2017. Maple Manor chose not to notify defendant of the lawsuit it deemed frivolous or request defense against it from defendant until nearly two years later, when Maple Manor had already agreed to an arbitration with a minimum liability amount of $10,000. The Court of Appeals concluded that the trial court did not err in finding that there was no material questions of fact on these issues and that the defendant was thus entitled to summary disposition. The purpose of imposing sanctions for asserting frivolous claims is to deter parties and attorneys from filing documents or asserting claims and defenses that have not been sufficiently investigated and researched or that are intended to serve an improper purpose. Maple Manor had no reasonable basis to believe that the facts underlying its legal position in this matter were in fact true, nor did Maple Manor's legal position have any arguable legal merit. The trial court thus abused its discretion in declining to award defendant all of its attorney fees in this frivolous matter. The grant of summary disposition was affirmed. The trial court's order awarding only part of defendant's requested attorney fees was reversed and the case was remanded for entry of an order awarding defendant all of its requested attorney fees. ZALMA OPINION Maple Manor was its own worst enemy. It paid for insurance to cover the Irvine lawsuit but decided to retain its own lawyers to defend the suit without advising its insurer that the lawsuit existed. It then lied when trying, belatedly, to get coverage although its first report to the insurer was almost two years after the suit was served and almost a year after they cancelled the claims made policy. The report was not made during the effective dates of the policy, not as soon as reasonably practical, and the suit it filed was frivolous requiring it to pay the insurer's legal fees. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 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 practiced law in California 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 athttp://www.zalma.com andzalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

No Good Deed Goes Unpunished Why A New Market for Insurers to Protect Small Businesses is Needed The Americans with Disabilities Act (ADA) was signed into law by President George H. W. Bush on July 26, 1990 with the good intentions of helping people with disabilities. It is a federal civil rights law that prohibits discrimination against people with disabilities in everyday activities. The ADA guarantees that people with disabilities have the same opportunities as everyone else to enjoy employment opportunities, purchase goods and services, and participate in state and local government programs. The stated goal of the ADA was to eliminate discrimination against individuals with disabilities. A major source of discrimination suffered by disabled individuals is the inability to gain access to public accommodations such as restaurants, hotels, movie theaters, gas stations and the facilities of other small businesses. The intent of the statute was to ascertain that businesses that want to comply with the law should be able to do so without undue cost, delay, or uncertainty. Although the statute was full of good intentions the law of unintended consequences took hold and those good intentions, were taken advantage of by unscrupulous people and their lawyers. Lawsuits proliferated by persons who claimed to be disabled or simply took the position that they were advocates for the disabled. In truth, the ADA advocates and their lawyers litigated under the ADA with the sole purpose of making money. Most had no intention or concern about the needs of those with disabilities. They took advantage of the provisions of the statute that allow individuals to enforce the accessibility requirements to bring a private right of action against individual businesses and property owners. This important reform in advancing equal access for the disabled has been used by some bad actors for monetary gain more than disability advocacy and threatens the small business economy in some states. The people abused by these bad actors are the owners of small businesses and owners and tenants of small retail establishments like the owners of bodegas, liquor stores, chiropractors, health care providers, and lessors. Under the private right of action allowed by the ADA an aggrieved party can seek injunctive relief remedying the violation and attorney's fees and costs. Monetary damages are not available to private parties seeking to enforce the requirements of the ADA. By providing differing remedies for private and public enforcement revealed to abusers a method to profit from the underlying intent of Congress to prevent private plaintiffs from recovering monetary relief under the ADA. Although the ADA sets its intent clearly, Small business owners have found they are added to the growing evidence of abuse of the private remedies provided by the ADA where, as a small business and small property owner, he or she either must litigate with the ADA advocates or succumb to the abusive lawsuit with a settlement. If they contact a lawyer, they will be advised that they will lose the litigation if there is even small technical errors of compliance and be required to pay fines and attorney’s fees to the advocates and their lawyers. The litigants and their lawyers know this and will offer to settle for a sum close to reasonable so that they can negotiate down to a reasonable amount. The complaints, and discovery are all computer generated by the advocate’s lawyers with only the names of the plaintiff, defendants and non-compliant part of the property, changed. The litigation expense for the plaintiff and counsel is minimal and for the defendant it is excessive. Small business people don’t have the funds necessary to protect themselves from an action legally filed under the ADA and concurrently pay to bring the property into compliance. Agreeing to an offer of settlement is the only choice available to a small business owner because no liability policy provides coverage for the defense or indemnity of the suit brought under the ADA. In a case with which I am familiar a law firm specializing in filing ADA lawsuits, and nothing else, sued a small business owner allegedly on behalf of a person claiming disabilities who met with the receptionist and made an appointment to which she never appeared. Shortly after her scheduled appointment the plaintiff filed and served an ADA lawsuit claiming that the doorbell to the business was mounted about 60 inches above the ground rather than the 40 inches required for the use of a person in a wheelchair, a technical violation of the ADA. In the 30 years since the building was acquired by its owner and leased by its tenant there were no complaints of the inability to use the doorbell. Regardless, the suit was filed and served, and defense counsel was required to be retained to avoid default at the expense of the owner and the tenant from their limited private funds. The abuse of the ADA started with its enactment. The abuse of the ADA is well known to Federal District Court and state judges, who see the same plaintiffs over and over again. There is nothing the judges can do, because of the clear language of the ADA statutes, require that the judge fulfill the requirements of the statute. Attempts have been made to curb the abuse. For example, in 2006, the Hastings Womens Law Journal, 17 Hastings Women's L.J. 93 2006 published an article entitled Private Enforcement of the Americans with Disabilities Act via Serial Litigation: Abusive or Commendable? by Carri Becker, then a JD candidate. The cases Ms. Becker described were identical to the suit I became aware of and whose defendant found itself to be one of a multitude of ADA lawsuits filed across the country and that the minor abuses claimed would cost thousands of dollars to cure plus the fees of the lawyers who brought the suit and the fees of counsel retained to defend the small business owner. Since 2006 ADA lawsuit abuse continued to be prolific throughout the nation. Profitability of ADA litigation has given rise to what courts have described as "a cottage industry" that has little or nothing to do with assisting people with disabilities. Ms. Becker noted that, for example, “a single law firm in Philadelphia has filed hundreds of lawsuits on behalf of two disabled men, reaping thousands in attorney's fees.” Adding to the burden, small businesses are forced to comply not only with the federal standards outlined in the ADA, but also with any state, county, or city-specific regulations. With so many different regulations to follow, it is not surprising that many, if not most, buildings constructed before 1990 are out of compliance. Compounding the problem is the fact that the regulations differ substantially. For example, California's Title 24 regulations require that curb ramps have a one-half inch lip at the bottom, beveled at a 45-degree angle, whereas the ADA requires a flush transition at the bottom of the ramp. Total compliance with both state and federal regulations becomes impossible. It becomes obvious that the intent of almost all the parties filing suits on behalf of people with disabilities are really designed to bring about a cash settlement. For example, although the property owner cured the deficiency with the placement of a new $5 doorbell the demand to settle the lawsuit before discovery and adding lawyers fees was $15,000. In addition, a check of court records indicated that the plaintiff who sued the small business had filed multiple ADA lawsuits. One explanation for many people's distaste for the enforcement of the ADA via serial litigation is that the plaintiffs and their attorneys stand to financially gain from each of the suits they file and often fail to make the property ADA compliant. EXAMPLES OF ADA LAW SUITS Common examples of ADA lawsuits may include when individuals visit several business establishments within the intent to identify ADA violations, which may include the lack of handicapped parking spaces or the lack of wheelchair ramps, and then suing that business for the violation although the plaintiff was not injured. In certain instances, the individual may drive by the establishment and search for violations in the parking lot or outside of the business and never actually enter the establishment or attempt to conduct any business there. These individuals can target several businesses at once, often with the intent to win a large sum of money from the business for their claimed lack of compliance. As the Los Angeles Times reported in November 2018, about 10,000 ADA lawsuits were filed in the first six months of that year. Businesses are able to handle the cost of the upgrades to ensure access. The lawyers that file the ADA lawsuits demand huge payouts. The law lets them do so without first giving the business owner a chance to fix the lack of availability of a compliant property. For example, according to the Orange County Register one Orange County firm filed 335 ADA cases in the past year, including three dozen for a visually impaired Montana woman. The Register concluded that: “This isn’t about access — it’s simple extortion.” [https://www.ocregister.com/2018/11/20/the-latest-abuse-of-the-americans-with-disabilities-act/] What the Register did not report was that the “extortion” is perfectly legal as a result of the ADA statute. In some cases, the lawsuits are collected from the comfort of the attorney’s car or even couch, driving by handicapped parking spots to assess violations or using Google Earth to find motels without accessible pool lifts for the disabled. Lawsuits aiming to bring about compliance with an important equal rights law like the ADA are important in advancing the cause. Some of the serial litigators are doing more to rake in damages than increase accessibility. As many states have statutes that go beyond the federal bill and offer individual lawsuit filers cash payments as well as attorney expenses, the incentives to file a lawsuit shift from accessibility to cash recovery. THE COSTS IMPOSED In California, in addition to having both sides’ legal fees covered by the defendant, a plaintiff may recover a fine of a minimum of $4,000 per ADA violation and the plaintiff is not required to offer a grace period for the violation to be rectified. ADA regulations are poorly dealt with by the nearly 30 million small businesses in the US. Small businesses often lack the expertise, capital and legal support to understand and adhere to the regulations. If a business owner’s first notice of non-compliance with the law is a lawsuit the system is askew, and the small businessperson is not equipped nor able to fund defense of the suit. Sadly, a few attorneys – the ADA “trolls” — realized that ADA can be a profit center by simply filing cases that, on the surface, have merit. But instead of pursuing those cases to a conclusion, the “trolls” offer to go away in exchange for a financial payoff. The “trolls” are especially active in California and New York, where state laws permit private individuals to recover money damages. For years, most of the ADA “troll” cases involved people in wheelchairs suing over physical or architectural accessibility. Suits would be filed, and the attorneys would then demand a certain amount of money to simply go away. These are not “frivolous” suits in the sense that they have no merit. What sets these lawsuits apart is that they are filed with such enormous volume that the attorneys involved could not possibly represent the plaintiffs properly in any one of them. The critical element of the “troll” lawyers’ business plan is volume. The attorneys have to file a lot of cases. And they do. One “pioneer” in this area was a wheelchair-bound California plaintiff whose attorney filed some 400 lawsuits claiming that he confronted virtually identical barriers to access at different businesses, mostly restaurants. These became referred to as “drive-by” cases because there was little or no proof that the named plaintiff had ever actually visited the businesses in question. Although only one of those cases ever actually went to trial, his attorney made an estimated $10 million, and it was not clear how many of the businesses actually fixed the supposed problem. A website, adaabuse.com, reports Mega-ADA-suit-filers one of whom was so egregious he was disbarred. Although there have been attempts to modify the ADA to avoid these abuses the statute remains unchanged. LIABILITY INSURANCE UNAVAILABLE Since no insurance policy provides coverage for an ADA suit because there is no claim of bodily injury, property damage or personal injury. Liability insurance, like that provided by a Commercial General Liability (CGL) policy or a Business Owners Policy (BOP) will never provide a defense or indemnity to an insured for lack of covered claimed injuries. Since an ADA suit neither makes a claim for property damage or bodily injury but only seeks an injunction requiring compliance and attorney’s fees there is no coverage under a Commercial General Liability policy or a Business Owners Policy leaving the small business owner to defend and negotiate a settlement with the troll. A PROPOSAL FOR THE INSURANCE INDUSTRY It seems to me that ADA will not be changed to protect against ADA abuse. Every small business in a facility built before 1990 or without concern for ADA requirements, like most, is a potential defendant in an ADA suit and will be held to uninsured ransom. No current liability insurance policy, CGL, BOP, or common liability insurance policy provides coverage for the ADA suit. As a result, a small business owner, lessor or lessee that protects with insurance will find their assets naked to the ADA trolls. The small business owner will need to retain counsel, defend the suit, pay the legal extortion or face a major judgment. The ADA has created a large market for the liability insurance industry who, by use of a simple endorsement to a CGL or BOP, can create coverage to protect the small business owner and work to defeat the ADA trolls ability to profit from the scheme. PROPOSED ENDORSEMENT The Endorsement wording, I propose follows: THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY It is hereby understood and agreed that the policy is revised to read as follows from the date of inception to the date of expiration stated in the Declarations: Americans With Disabilities Act Endorsement Special Limits of Liability Applying to this endorsement: $25,000 for the cost to make your property comply with the requirements of the ADA to conform to the accessibility required by the ADA and alleged to be in violation of the ADA by a civil suit naming you as a defendant. Insuring Agreement: We agree to pay whatever is required by counsel of our choice to defend and indemnify you if you are sued for violation of the Americans With Disabilities Act (ADA) that are claimed to have prevented a person with a disability or disabilities that the plaintiff or plaintiffs claim prevented the plaintiff(s), and/or others similarly situated, to access and use your premises because they were not in compliance with ADA standards as it relates to users with disabilities like the person suing as plaintiff. We also agree to indemnify you of the cost to bring your property in compliance with the ADA and correct the errors or deficiencies alleged in the suit brought against you, up to the limits of liability. All other terms and conditions remain the same. Every owner of a small commercial building, apartment house, rental property, or operating a small business that invites the public should or will rush to buy insurance to protect against the risk. The prudent insurer, with a staff of lawyers, adjusters, and contractors will rush to issue an endorsement that, for a reasonable additional premium, will find thousands of small business, small property owners, and everyone who is open to the public, eager to pay extra to add the coverage to their liability insurance policies. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 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 practiced law in California 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 athttp://www.zalma.com andzalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

No Insurable Interest - No Right to Insurance Proceeds Thomas Spoon and Maria Spoon appealed from the Pulaski County Circuit Court order granting summary judgment in favor of appellees Chester Lee Bolds and Linda Bolds in the Boldses' civil suit for damages related to insurance proceeds. FACTS In Thomas Spoon And Maria Spoon v. Chester Lee Bolds And Linda Bolds, 2023 Ark.App. 244, No. CV-22-277, Court of Appeals of Arkansas, Division II (April 26, 2023) The Boldses purchased the Spoons' house by warranty deed on July 2, 2020. In November 2020, the Boldses filed an insurance claim because they discovered the roof was leaking. The Boldses' insurance coverage would not pay because there was preexisting damage to the roof. The Boldses then filed a claim against the Spoons' homeowner's insurance. That insurer accepted the claim but paid the money in dispute ($5,219.48) to the Spoons. When the Spoons failed to turn the money paid on the insurance claim over to the Boldses, the Boldses filed suit, raising claims of breach of contract, declaratory judgment, and unjust enrichment. The Boldses then moved for summary judgment because the Spoons’ had no insurable interest. The Spoons contended they are entitled to the money because they were the owners of the property at the time of loss. They claim that unjust enrichment cannot equitably apply because the Boldses did not pay for the insurance policy. The court's order found that any and all interest the Spoons may have had in the house was terminated and extinguished upon the sale of the house to the Boldses, and it ordered the Spoons to reimburse the Boldses for the roof repairs. The Spoons argued that summary judgment was not proper because the court did not address the issues of privity of contract, standing, statute of frauds, or timing. To support their argument, they contend the general rule is that insurance policies are personal contracts between the insured and the insurer and that the Boldses were not a party to the original contract or privy to it. ANALYSIS The issues of breach of contract, unjust enrichment, and declaratory judgment were briefed to the circuit court. To find unjust enrichment, a party must have received something of value to which he or she is not entitled and which he or she must restore. There must also be some operative act, intent, or situation to make the enrichment unjust and compensable. One who is free from fault cannot be held to be unjustly enriched merely because he or she has chosen to exercise a legal or contractual right. Further, if one has money belonging to another, which, in equity and good conscience, he ought not to retain, it can be recovered although there is no privity between the parties. It was undisputed that the Spoons received the insurance money that was distributed for repair of the roof of a house in which they no longer had an interest. Unjust enrichment amounted to an alternative, independent basis for the circuit court's ruling, which has gone unchallenged by the Spoons. Accordingly, the Boldses were entitled to the reimbursement. ZALMA OPINION The insurer erred in paying the Spoons since the had no insurable interest. The Spoons kept the money to which they were not entitled and owed the Boldses for selling them a house with a leaky roof. The Spoons were clearly unjustly enriched and owed the Boldses for the cost of fixing their roof. What the court did not consider, because it was not a party, the insurer who paid the Spoons did not owe indemnity to them and paid a claim it did not owe. Since the insurer did not care and the Boldses did care, they were entitled to the funds. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 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 practiced law in California 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 athttp://www.zalma.com andzalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

Title Insurer Subrogated to Rights of Defrauded Buyer In Lewis v. Fidelity National Title Insurance Company, No. A23A0030, Court of Appeals of Georgia, Fifth Division (April 26, 2023) Torriel Deyon Lewis appealed the grant of summary judgment to Fidelity National Title Insurance Company in Fidelity's fraud action against him. FACTUAL BACKGROUND When a party moves for summary judgment and supports his or her motion by submitting affidavits, depositions, or answers to interrogatories, the nonmoving party may not rest upon the mere allegations and must set forth specific facts showing that there is a genuine issue for trial. In 2007 an entity called House Rescue 911 L.L.C. ("old House Rescue 911 L.L.C.") acquired a parcel of real property. In 2010, old House Rescue 911 L.L.C. was administratively dissolved by the secretary of state. The records of the Georgia Secretary of State show that on February 3, 2017, an entity named House Rescue 911 LLC ("new House Rescue 911 LLC") was formed. New House Rescue 911 LLC's name was identical to old House Rescue 911 L.L.C.'s name except for the absence of periods between the letters LLC. Lewis was listed as the registered agent of new House Rescue 911 LLC. New House Rescue 911 LLC and Lewis were not affiliated in any way with old House Rescue 911 L.L.C. Three weeks after it was formed, new House Rescue 911 LLC purported to sell and to convey by limited warranty deed the parcel of real property that old House Rescue 911 L.L.C. had acquired in 2007. Lewis and new House Rescue 911 LLC had no basis for claiming ownership of the property and had no right to convey any rights to the property. In 2019, the purchaser of the property, Fidelity's insured, was named as a defendant in a petition to quiet title brought by the members of the administratively dissolved old House Rescue 911 L.L.C. The superior court quieted title in the petitioners' favor, and Fidelity paid its insured $66,000 under the title policy. Fidelity then sued new House Rescue 911 LLC and Lewis. The trial court entered a default judgment against new House Rescue 911 LLC and granted Fidelity's motion for summary judgment against Lewis. Lewis filed this pro se appeal. FRAUD The tort of fraud has five elements: a false representation by a defendant, scienter, intention to induce the plaintiff to act or refrain from acting, justifiable reliance by plaintiff, and damage to plaintiff. False Representation Fidelity presented evidence that new House Rescue 911 LLC never owned the property; that Lewis and new House Rescue 911 LLC had no basis for claiming ownership of the property and had no right to convey any rights to the property; but that Lewis nonetheless attested that new House Rescue 911 LLC owned the property. Inducement In the owner's affidavit, Lewis attested that he was making the affidavit "to induce [the purchaser] to purchase said real property, and to induce FIDELITY NATIONAL TITLE INSURANCE COMPANY to issue a . . . title insurance policy." And, of course, Fidelity did issue a title insurance policy. Justifiable Reliance Lewis argued that any reliance on his false representation was not justified because Fidelity did not exercise due diligence. Fidelity presented undisputed evidence that the chain of title showed that title to the property was vested in "House Rescue 911 L.L.C." A title search would not have shown that new House Rescue 911 LLC was a different entity and was not formed until after old House Rescue 911 L.L.C. had acquired the property. A purchaser of land is charged with constructive notice of the contents of a recorded instrument within its chain of title. Conversely, a purchaser is not charged with constructive notice of interests or encumbrances which have been recorded outside the chain of title. The Court of Appeal concluded that Lewis pointed to no evidence creating a question of fact on the justifiable reliance element of Fidelity's fraud claim. Personal Liability An LLC member may be held individually liable if he or she personally participates or cooperates in a tort committed by the LLC or directs it to be done. The undisputed evidence is that Lewis was a member of new House Rescue 911 LLC, that he falsely represented that new House Rescue 911 LLC owned the property, and that he signed the limited warranty deed and the owner's affidavit on behalf of new House Rescue 911 LLC. The trial court did not err in finding that he is personally liable. The judgment was affirmed. ZALMA OPINION Fraud perpetrators are not honest or reliable. They lie. Clearly new House Rescue 911 LLC, and its manager, lied to the buyer of a piece of real property it did not own and also intentionally deceived the title insurer. Mr. Lewis was personally responsible to reimburse the title insurer for the money it was required to pay to its insured and was entitled to subrogate against the fraud perpetrator. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 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 practiced law in California 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 athttp://www.zalma.com andzalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

ZIFL 05-01-2023, Volume 27 Issue 9 Restitution Required John James Succi appealed pro se from the order dismissing his “Motion to Vacate Restitution/Sentencing.” In Commonwealth Of Pennsylvania v. John James Succi, No. 229 EDA 2022, No. J-S22022-22, Superior Court of Pennsylvania (February 28, 2023) the Superior Court gave consideration to the pro se motions of the convicted felon and ordered him to make restitution. Victims of crime must make certain that the state prosecutor, after convicting the criminal, like Succi, must demand restitution. The victims did so in this case and the prosecutor effectively obtained, at sentencing, an order of restitution. Succi, sentenced to many years in prison, may never be able to pay the ordered restitution unless there are assets that could be taken to pay the restitution. Regardless, convicted felons have nothing but time so he wasted the appellate courts time by bringing this pro se motion which failed. He will remain in the Gray Bar Hotel for the next 15 to 30 years. Read the full 22 page issue in Adobe pdf format ZIFL-05-01-2023 McClenny Moseley & Associates Issues This is ZIFL’s fifth installment of the saga of McClenny, Moseley & Associates (MMA) 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. Since the last issue MMA's originator have created a new professional corporation; McClenny was sued for damages due to a auto accident; MMA partners were ordered into court relating to Eldridge Smith becoming a client; more suits against MMA; Huye ignores suspension; MMA attempted to intervene in plaintiffs' cases; a suit against MMA by Access Restoration Services US, Inc for a 572% return on its $3 million investment in MMA's hurricane cases; and a suit by Global Estimating Services seeking $9,865,862.99 for estimating services provided to MMA. Read the full 22 page issue in Adobe pdf format ZIFL-05-01-2023 Another Florida Insurer Bites the Dust Florida Commercial Insurer Capacity Insurance Company Now in Runoff. Read the full 22 page issue in Adobe pdf format ZIFL-05-01-2023 Chutzpah! Fraudster Sues Twice Res Judicata Requires Fraudster to Lose Again After It Sues Again Forcing Two Courts to Deal With a $366.64 Fraudulent Claim is Chutzpah Read the full 22 page issue in Adobe pdf format ZIFL-05-01-2023 Good News From the Coalition Against Insurance Fraud More than 18 months after he pleaded guilty to absconding with almost $5M in premiums, a Florida insurance agent has been sentenced to 14 years in prison. John M. Thomas, 52, the former owner of Thomas Insurance Agency in Pensacola, also must pay more than $8M in restitution. A federal judge decided in March. For more than seven years, Thomas collected premium payments from at least 67 clients, then produced fraudulent policy documents and certificates purporting to show that clients were covered. Thomas used the money for personal gain, including an African safari, a Utah ski resort condominium, a Florida beach condo, a Lexus automobile, and restorations to a 45-year-old Jeep vehicle, according to his 2021 indictment. The independent agency sold homeowners, commercial property, commercial liability, auto, workers’ compensation, and other lines of insurance to some well-known commercial interests in Florida and Alabama before the fraud was discovered, attorneys said. Thomas was arrested and then unexpectedly pleaded guilty to the criminal charges in August of 2021. His sentencing was set for later that year. Prosecutors did not say why the sentencing had to wait another 18 months, but court records suggest that Thomas’ pro se filings with the court may have delayed the proceedings. Plus 9 more convictions. Read the full 22 page issue in Adobe pdf format ZIFL-05-01-2023 Investigation Into Misleading Home Warranty Mailers Results in Refunds to Consumers California Insurance Commissioner Ricardo Lara announced that an insurance company offering home warranties will refund Californians deceived by a misleading mailer sent to hundreds of thousands of consumers. An investigation by the California Department of Insurance found that Response Indemnity Company of California worked with an unlicensed marketing company that mailed a “final notice” to consumers falsely warning that their home warranty was expiring. Because of the Department’s action, Response Indemnity will allow consumers to cancel the home warranty and receive a refund if the consumer purchased the warranty because of the mailer. Read the full 22 page issue in Adobe pdf format ZIFL-05-01-2023 Like Al Capone Marlin Construction Avoided Insurance Fraud but was Convicted of Tax Fraud David T. Aaron and Russell Ultes, co-owners of Marlin Construction Group LLC, cashed millions of dollars of customer checks at check-cashing businesses in order to underreport earnings and avoid federal taxes, federal prosecutors said last week. The men also used the cash to purchase luxury items for themselves, including jet skis and automobiles, according to the criminal complaint the owners of a Fort Myers roofing company, one that has been the subject of a number of complaints from consumers and which has filed multiple assignment-of-benefits lawsuits against property insurers, have pleaded guilty to more than $1 million in tax evasion. Read the full 22 page issue in Adobe pdf format ZIFL-05-01-2023 Health Insurance Fraud Convictions The British Columbia, Canada Supreme Court ordered seven people and one company to pay $155,000 in punitive damages as a result of staged Surrey collisions designed to defraud ICBC. Justice Jennifer Duncan said in an April 13 decision: “Those collisions were used by various of the parties to file personal injury tort actions.” And reports of dozens more convictions. Read the full 22 page issue in Adobe pdf format ZIFL-05-01-2023 Other Insurance Fraud Convictions Jarod Hirbar, age 44, of Kellogg, pled guilty on April 17, 2023, to one count of Fraudulent Submission to Insurer (Class D Felony) following an investigation by the Iowa Insurance Division’s Fraud Bureau. Latisha Hribar, age 42, of Kellogg, pled guilty on April 18, 2023, to one count of Fraudulent Submission to Insurer (Class D Felony) following an investigation by the Iowa Insurance Division’s Fraud Bureau. Plus many more convictions. Plus many more convictions. Read the full 22 page issue in Adobe pdf format ZIFL-05-01-2023 (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 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 practiced law in California 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 athttp://www.zalma.com andzalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library. Read the full 22 page issue in Adobe pdf format ZIFL-05-01-2023

INSURANCE POLICY MEANS WHAT IT SAYS The Eleventh Circuit Court of Appeal was asked to resolve what a court is to do when all the surest proof of contracting parties' subjective intentions and expectations flatly contradict the clear words of the issued policies of insurance. In Shiloh Christian Center v. Aspen Specialty Insurance Company, No. 22-11776, United States Court of Appeals, Eleventh Circuit (April 13, 2023) the Eleventh Circuit followed the generally accepted rules of insurance contract interpretation. SUBJECTIVE INTENT v. POLICY WORDING Aspen Specialty Insurance Company, a billion-dollar insurance conglomerate, had essentially all of the subjective-intent evidence on its side. The policyholder-Shiloh Christian Center, a small Florida church-had the policy text. The district court found the evidence of the parties' subjective intent overwhelming and granted summary judgment to Aspen. FACTS In 2016 and 2017, respectively, Hurricanes Matthew and Irma tore through Melbourne, Florida, pummeling Shiloh Christian Center. On both occasions, the storms peeled back the church's roof, allowing rain to soak the exposed structure. In 2015, the year before Matthew hit, Shiloh's property-insurance policy with Aspen Specialty Insurance Company covered losses resulting from hurricanes. In the middle of that year, though, Shiloh specifically asked Aspen to stop covering named-windstorm-related losses. Aspen agreed and issued an endorsement implementing the requested change: "THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.... It is understood and agreed effective 7/16/2015, the following change is made to this policy: Named Windstorm coverage is removed from this policy." Reflecting the amendment, Aspen reduced Shiloh's premium and even refunded its past payments for named-windstorm coverage. In early 2016, Shiloh began negotiations to renew its policy with Aspen. The binder described the agreed-to scope of coverage this way: "All Risks of Direct Physical Loss or Damage excluding Flood, Earthquake and Named Windstorm." Aspen then issued the 2016 policy. The cover page described the 2016 policy as a "renewal of" its 2015 predecessor. But the two policies' terms differed in material respects. For one thing, the 2016 policy was about $10,000 cheaper per year than the amended 2015 policy. Far more significantly the 2016 policy contained no exclusion for losses caused by named windstorms. A "Named Windstorms" exclusion was conspicuously absent from the policy as issued. In October 2016, a named windstorm-Hurricane Matthew-blew through Melbourne, ripping the roof off Shiloh's building. Aspen denied the claim because Shiloh's policy excluded coverage for losses caused by named windstorms. The following year was basically a carbon copy. Aspen formally issued a policy that described itself as a "renewal" of the 2016 policy, but, again, whose "Exclusions" provision, while expressly carving out losses resulting from all manner of contingencies, said nothing about named windstorms. Like clockwork, in September 2017, a named windstorm- Hurricane Irma-blew through town and tore the roof off of Shiloh's building. Just as it had in Hurricane Matthew, water poured in, exacerbating the damage. Shiloh sued Aspen for breach of contract and sought a declaration that its 2016 and 2017 policies-which we'll call the Matthew and Irma Policies-covered damages caused by named windstorms. The district court granted summary judgment to Aspen. It held that "no reasonable jury" could find that the parties intended the policies at issue to cover named windstorms. ANALYSIS The Irma Policy unambiguously covers named windstorms and the Matthew Policy, although ambiguous, covers them by dint of the traditional contra proferentem canon of insurance-contract interpretation. The general rules governing the interpretation of insurance policies under Florida law are clear that the cardinal principle is that a policy's text is paramount. INTERPRETATION OF THE POLICIES First, the Irma Policy unambiguously covers named windstorms. The expressio unius canon applies with particular force because the Irma Policy's catalogue of exclusions is so detailed. On its face the Irma Policy clearly doesn't exclude- and thus covers-losses resulting from named windstorms. Florida law is clear that when an insurance policy is facially ambiguous, the ambiguity is resolved in favor of coverage and against the insurer, without regard to extrinsic evidence of the parties' supposed intentions or expectations. Accordingly, the Matthew Policy, like the Irma Policy, covers damage that results from named windstorms. The court concluded: Whatever the evidence of the contracting parties' subjective intentions and expectations, the Irma Policy's plain language unambiguously covers losses caused by named windstorms. Although potentially ambiguous, the Matthew Policy likewise-and, again, whatever the evidence of the parties' subjective intentions and expectations-covers losses caused by named windstorms pursuant to the contra proferentem canon, according to which ambiguous insurance contracts are construed in favor of coverage and against the insurer. ZALMA OPINION Aspen failed to properly underwrite and issue the two relevant policies to Shiloh by not incorporating the named windstorm exclusion it had originally. There was no question that the parties intended to exclude windstorms, the premium was reduced as a result of the intent, but Aspen left the exclusion out of the two policies in effect at the time of the two hurricanes. For reasons not described in the opinion Aspen failed to move to reform the two policies to provide the coverages the parties agreed to issue and was compelled to pay the claims neither party expected to cover Shiloh's property. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 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 practiced law in California 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 athttp://www.zalma.com andzalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

Felon Must Pay Restitution to Each Victim John James Succi appealed pro se from the order dismissing his "Motion to Vacate Restitution/Sentencing." In Commonwealth Of Pennsylvania v. John James Succi, No. 229 EDA 2022, No. J-S22022-22, Superior Court of Pennsylvania (February 28, 2023) the Superior Court gave consideration to the pro se motions of the convicted felon. FACTS In a prior appeal, a panel of the Pennsylvania Superior Court summarized the facts leading to the underlying convictions as follows: Succi was a residential and commercial contractor. Beginning in 2005 and continuing through 2013, Succi entered into thirteen contracts to build, remodel, or construct additions on certain properties located in Bucks County, Pennsylvania, Philadelphia County, Pennsylvania, and Margate, New Jersey. In each instance, Succi either failed to finish the work, failed to obtain necessary permits, failed to perform under the contract, claimed he was insured when he was not, or provided fraudulent receipts. It was also typical for Succi to quote a price for a particular project and then increase the costs. If the homeowner challenged Succi's work practices, he threatened them with legal proceedings that would financially cripple the homeowners. In at least two instances, Succi placed mechanic's liens on homeowners' properties. [Commonwealth v. Succi, 480 EDA 2015 (unpub. memo. at 1-2) (Pa. Super. Jan. 5, 2017).] Succi was charged with multiple counts of home improvement fraud, theft by deception, and deceptive business practices, and one count of insurance fraud. Succi was convicted of 12 counts each of deceptive business practices and theft by deception, two counts of home improvement fraud, and one count of insurance fraud. SENTENCING HEARING The sentencing hearing proceeded with victim impact testimony presented by the Commonwealth, and character evidence presented by Succi. The trial court sentenced Succi to an aggregate term of 15 to 30 years' imprisonment, imposing consecutive sentences with respect to each victim. After announcing the sentence for each criminal conviction, the court imposed restitution, as requested by the Commonwealth. Succi filed a direct appeal and argued: several convictions were barred by the statute of limitations; jurisdiction and venue in the Bucks County Court of Common Pleas was improper; and the "life sentence" imposed by the trial court was unconstitutional and illegal. The Appellate Court affirmed the judgment of sentence, and the Pennsylvania Supreme Court denied allocatur review. THE PRO SE MOTION The trial court entered an order denying Succi relief. The court explained that it considered Succi's motion to be a second, untimely PCRA petition, and it had no jurisdiction to address Succi's claim. Whether a PCRA petition or not restitution is governed by state statute that mandates that a trial court "shall order full restitution [r]egardless of the current financial resources of the defendant, so as to provide the victim with the fullest compensation for the loss." The statute further requires that the court "specify the amount and method of restitution" at the time of sentencing. The crux of Succi's claim is that the trial court did not impose restitution at the time of his sentencing as required by statute. After announcing the prison terms imposed for the crimes against each victim, the trial court admitted the Commonwealth's sentencing exhibits, which detailed the restitution requested for each victim. The court noted that if it believed Succi could repay the victims, it "would have entered a different sentence [,]" presumably with a shorter prison term. Therefore, Succi's claim that the court did not impose restitution at the time of his sentencing hearing was simply incorrect. Moreover, the May 20, 2015, order - which Succi claims the court, belatedly and without conducting a hearing, added restitution to his sentence - makes no mention of any restitution amounts which had been set at sentencing. The trial court's order was affirmed. ZALMA OPINION Victims of crime must make certain that the state prosecutor, after convicting the criminal, like Succi, must demand restitution. The victims did so in this case and the prosecutor effectively obtained, at sentencing, an order of restitution. Succi, sentenced to many years in prison may never be able to pay the ordered restitution unless there are assets that could be taken to pay the restitution. Regardless, convicted felons have nothing but time so he wasted the appellate courts time by bringing this pro se motion which failed. He will remain in the Gray Bar Hotel for the next 15 to 30 years. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 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 practiced law in California 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 athttp://www.zalma.com andzalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

Biological Damage Cover Must Overcome Mold Exclusion In Clay Buchholz; Lindsay Buchholz v. Crestbrook Insurance Company, doing business as Nationwide Private Client, No. 22-50265, United States Court of Appeals, Fifth Circuit (April 18, 2023) Clay and Lindsay Buchholz sued their insurer after recovering $745,778 for damage to their ten-thousand-square-foot house in Austin, Texas. The Buchhholz' insured their home with Crestbrook Insurance Company. Their policy included "Biological Deterioration or Damage Clean Up and Removal" coverage ("mold coverage"). The Buchholz family discovered a widespread mold infestation in their home. Although Crestbrook covered many of their losses, it denied a generalized claim for mold growing in the Buchholzes' walls and heating, ventilation, and air conditioning system. A magistrate judge issued a report and recommendation in favor of Crestbrook, and the district court adopted the magistrate judge's conclusions. FACTS Crestbrook paid $745,778 in covered losses on five of the six claims submitted. However, Crestbrook asserted that the sixth claim for general mold growth and mold in the HVAC system was excluded. The Buchholz family retained MLAW Forensics, Inc., to investigate the cause of their mold infestation. Crestbrook paid for MLAW's investigation. Dean R. Read, P.E., wrote a causation report on what he concluded led to the mold growth at the Buchholzes' house that found that "discrete leaks and a 'global' issue due to interruption or restriction of the moisture vapor drive drying process" caused the mold. Specifically, he concluded that the house's HVAC system was "[i]mproperly designed or configured and non-functional," which resulted in "elevated moisture content []" and subsequent mold growth. Based on MLAW's causation report Crestbrook denied Appellants' mold claim. The denial letter referred to policy exclusions for biological deterioration or damage, a defect or inadequacy in design, workmanship, construction and materials. In addition, the policy contained exclusions for weather conditions or dampness, and gradual or sudden loss due to a mechanical breakdown. Crestbrook concluded that the biological deterioration or damage additional limited coverage would not apply to this claim. In their final complaint, the Buchholz family alleged that Crestbrook breached their insurance contract in bad faith and violated the Texas Insurance Code. The magistrate judge concluded that the Buchholz family had failed to demonstrate a "covered cause of loss" as required by their mold coverage. ANALYSIS Under Texas law, when deciding a dispute regarding insurance coverage, the court first looks to the language of the policy because it presumes parties intend what the words of their contract say. The court must give the policy's words their ordinary and generally accepted meaning unless the policy shows the words were meant in a technical or different sense. A disagreement between the parties regarding the meaning of policy terms or interaction between terms does not create ambiguity. The Insured's Burden In a coverage dispute, the insured has the burden first to prove that their loss falls within the terms of the contract. Once the insured demonstrates this, the burden shifts to the insurer, who, to avoid liability, must show that the loss falls into an exclusion to the policy's coverage. The Fifth Circuit Conclusion The Fifth Circuit concluded that the magistrate judge correctly laid out the Texas insurance dispute burden-shifting framework in her report and recommendation she concluded: “[The Buchholzes] fail to identify the cause of the mold damage. Instead, [the Buchholzes] submit that the Policy is an inclusive, all risk policy that covers all-risk of accidental direct physical loss to the property unless an exception applies... Accordingly, [the Buchholzes] fail to meet their burden to show that the Mold Claim is covered under the [mold coverage] provision.” In its motion for summary judgment, Crestbrook argued that mold infestation is an excluded peril under the policy. Applying the Texas insurance burden-shifting framework, the Fifth Circuit agreed with Crestbrook that the mold exclusion bars coverage for the Buchholz family's claim. Under the Texas insurance dispute framework, the Buchholzes must first show a direct physical loss as required under their all-risk policy. Then Crestbrook can identify any exclusions to coverage of that loss. The policy excluded coverage for "loss to any property resulting directly or indirectly from any of the following . . . Biological Deterioration or Damage, except as provided by [the mold coverage]." The Buchholzes showed they suffered a mold infestation, nothing more. Their theory is that water intrusion causes mold. But water intrusion as such is not a loss covered by the policy when its only manifested harm to covered property is fungal growth. Consequently, the Buchholzes did not show that their mold coverage serves as an exception to the mold exclusion. So, their generalized mold claim is excluded by the terms of their policy. Although the Fifth Circuit found that the district court incorrectly applied the Texas insurance coverage burden-shifting framework Crestbrook is still entitled to summary judgment because it has demonstrated that a generalized mold claim is excluded under the policy. ZALMA OPINION The Fifth Circuit concluded that it was required to interpret the insurance policy as it was written and that the generalized mold claim was clearly and unambiguously excluded. Nothing more need be said. The Buchholzes should not have sued their insurer they should have sued the contractor, designer or manufacturer of the defective HVAC system. In fact they should join with their insurer in seeking damages from those who were responsible for the defects that caused the mold infestation. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 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 practiced law in California 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 athttp://www.zalma.com andzalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

Lloyd's Marine Policy Only Insured Against Loss of Property in Transit After Hurricane Irma damaged its property, Pero Family Farm filed an insurance claim. Lloyd’s accepted coverage for part of the claim but denied coverage for the rest. Lloyd's sued seeking declaratory judgment that the insurance policy did not cover the denied portion of the claim. The district court granted summary judgment to Lloyd’s. In Certain Underwriters At Lloyd’s London Subscribing To Policy No. B0799MC029630K v. Pero Family Farm Food Co., Ltd., No. 20-12711, United States Court of Appeals, Eleventh Circuit (April 10, 2023) the Eleventh Circuit interpreted the policy. FACTUAL BACKGROUND Pero grows vegetables (primarily peppers and beans) that it prepares and packages for either retail sale at grocery stores or wholesale by food service companies. The seeds Pero uses are either prepared by Pero from its own vegetables or purchased from third-party seed providers. Pero plants some of its seeds in fields it owns or leases in Florida. But Pero also sends seeds to Trans Gro, a third-party plant grower. Trans Gro plants the seeds and grows the seedlings in its greenhouses in Immokalee, Florida, until the seedlings are mature enough to be transported to Pero's fields and planted in the ground. Once Pero harvests its vegetables, it transports them to its cooled storage facility in Delray Beach, Florida, where it cleans, sorts, stores, and packages the vegetables. Pero packages some of its vegetables in plastic packaging. It then transports the vegetables from the Delray Beach facility to its final customers. The Policy In its 2015 insurance application, Pero stated that its "primary operations" were "[g]rower, [p]acker, [s]eller of vegetables[,] mainly [p]eppers and [g]reen [b]eans"; that the "[t]ype of [g]oods to be [i]nsured" was "produce, primarily peppers [and] beans"; and that it sought to insure "[d]omestic shipments" of "[g]reen beans [and] peppers on vehicles (dump trucks) moving from field to packing house[;] seed is also stored on location." The policy contained a Florida choice of law provision. Subject-Matter Insured All goods and/or merchandise of every description incidental to the business of the Assured or in connection therewith. The policy limits were $150,000 for "[a]ny one domestic inland conveyance" and $5,000,000 for "[a]ny one location." Pero's Insurance Claim On September 10, 2017, Hurricane Irma struck South Florida. Pero submitted a claim to Lloyd’s for the damage it suffered as a result of the hurricane. Pero sought coverage for the loss of vegetables stored in the coolers at its packing house in Delray Beach, as well as: (1) seedlings that had been growing in Trans Gro's greenhouses in Immokalee; (2) plants that had been growing in Pero's fields; and (3) plastic coverings that had been placed over the plants growing in Pero's fields. Lloyd’s accepted coverage (and issued payment) for Pero's loss of the vegetables in its coolers that were in transit but denied coverage for the damage to the seedlings growing in Trans Gro's greenhouse, the plantings in Pero's fields, and the plastic coverings on Pero's fields that were not in transit. The Lawsuit Lloyd’s sued Pero seeking a declaration that the policy did not cover the damage to the seedlings, plantings, or plastic coverings. Lloyd’s alleged that coverage was not due under the policy because: "[t]he seedlings, planted crops, and crop covers were not in transit at the time of the loss," so "there [was] no 'in transit' coverage"; "[t]he seedlings, planted crops, and crop covers were not in storage at any location as defined by the [policy]," so "there [was] no 'location' coverage"; and "[s]eedlings and immature plants are crops and the [policy] d[id] not provide crop coverage"-because Pero "specifically sought cargo coverage for the transit and storage of fresh harvested produce, dry seeds[,] and packaging from field to storage and while in storage," not "crop insurance." Summary Judgment for Lloyd’s The district court granted summary judgment for Lloyd’s and denied Pero's motion because "the unambiguous language in the [p]olicy d[id] not provide coverage for Pero's damaged seedlings, plantings, and plastic coverings." DISCUSSION The Eleventh Circuit agreed with Pero that the policy's language was clear and unambiguous. But it also agreed with Lloyd’s and the district court that the policy did not cover Pero's damaged seedlings, plantings, and plastic coverings. The policy unambiguously covered goods or merchandise only while they were in transit or, by extension, "in store" as "stock" at a "location" during the transit process: Within the geographical limits of this policy, cover hereunder shall attach from the time the Assured assumes an interest in and/or responsibility for the subject [-] matter insured and continues uninterrupted, including transit, stock[,] and location coverage until that interest and/or responsibility ceases. The geographical limits of the policy were from a beginning point to an end location, and anywhere goods or merchandise stopped in between. Coverage "continue[d] uninterrupted, including transit, stock [,] and location coverage," during that trek. The policy was titled "Marine Cargo Insurance," and "cargo," although not defined in the policy, was generally understood, at the time, to mean "[g]oods transported by a vessel, airplane, or vehicle." Consistent with the "Duration of Voyage Clause," the policy's title, and the claims procedure, the policy's other provisions showed that it covered goods or merchandise only while in transit or in storage during the transit process. The policy's "Information" section said that the policy covered "[t]ransits from field to packing house." And the statement of value attached to the policy noted that Pero's Delray Beach "packing house" held "[s]tock/[i]nventory" valued at $5,000,000-the same amount as the policy's per "location" coverage limit. Pero's 2015 insurance application which was attached to and made a part of the effective policy, which the Eleventh Circuit must treat as part of the contract, explained that the policy covered only goods or merchandise in transit or in storage during the transit process. Specifically, the application documents showed that Pero sought to insure "[d]omestic shipments" of "[g]reen beans [and] peppers on vehicles (dump trucks) moving from field to packing house" and the "seed . . . stored on location." Because the insurance policy clearly and unambiguously did not cover the portion of Pero's claim that Lloyd’s denied, the district court properly granted summary judgment for Lloyd’s and denied partial summary judgment for Pero. ZALMA OPINION Insurance policies are contracts and must be interpreted as written if unambiguous. The policy obtained by Pero was not insurance of its crop but was limited to coverage for that portion of its crop while in transit. The hurricane caused damage to some of the crop and merchandise in transit but did not insure other damages caused by the hurricane to property not in transit. Lloyd's used simple, clear, unambiguous language that both parties agreed was unambiguous and the Eleventh Circuit applied the insurance contract as written. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 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 practiced law in California 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 athttp://www.zalma.com andzalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

Reporting Suspected Insurance Fraud is Subject to a Qualified Privilege in Oklahoma Sue Chimento sued claiming defamation, negligence, intentional interference with business relations, false representation, constructive fraud, and conspiracy against Gallagher Benefit Services, Inc., and Scott McCoy, based on allegations they made to the Tulsa Police Department, Tulsa County District Attorney's Office, and the Oklahoma Insurance Department that she had embezzled money while under their employment. The trial court granted partial summary judgment to Defendants, finding that their statements to the police and district attorney were subject to an absolute privilege and their statements to Oklahoma Insurance Department were subject to a qualified privilege under 36 O.S. § 363. In Sue Chimento v. Gallagher Benefit Services, Inc., and Scott Mccoy, Individually, Nos. 120089, 120101, 2023 OK 22, Supreme Court of Oklahoma (March 21, 2023) resolved the dispute. BACKGROUND Petitioner, Sue Chimento would pay individual premiums on behalf of the client Native American Tribes' employees out of the Tribal Account. Given how the Tribal Account was utilized, it was typical for the Tribal Account to have a zero balance. In March 2017, Midfirst Bank found that the Tribal Account was overdrafted. Shortly after management's Mr. McCoy inquired of Chimento as to why the account was overdrafted, Chimento resigned her employment with AJG. McCoy then filed a report with the Tulsa Police Department ("TPD") alleging that Chimento embezzled approximately fifty-one thousand dollars ($51,000.00). Shortly thereafter the Tulsa County District Attorney filed a criminal information charging Chimento with one count of felony embezzlement. The District Attorney later dismissed the charges against Chimento for insufficient evidence. IMMUNITY DEFENSES Defendants asserted that any of their statements to TPD, the District Attorney's Office, and the OID were subject to an absolute privilege, and thus, to the extent any of Chimento's claims were based on these statements, the claims must fail. The trial court granted summary judgment to AJG/GBS on all of Chimento's remaining claims. The trial court found that Defendants' statements to TPD and to the District Attorney's office were subject to an absolute privilege under 12 O.S. § 1443.1 and their statements to the OID were subject to a qualified privilege under 36 O.S. § 363. DISCUSSION The Supreme Court concluded that Defendants' statements to law enforcement were entitled to a qualified privilege. Statements to law enforcement are entitled to a qualified privilege. For example, in Johnson v. Inglis, 1942 OK 80, 123 P.2d 272, the plaintiff sued for defamation after defendant reported to several Oklahoma City police officers that the plaintiff was illegally selling alcohol out of her home. The Supreme Court in the past applied an absolute privilege to communications made during various proceedings and find that statements made to law enforcement enjoy a qualified – and not absolute – privilege. Thus, any statements Defendants made to TPD and the District Attorney's Office only enjoy a qualified privilege. Defendants' Statements To The Oklahoma Insurance Department Are Entitled To A Qualified Privilege. The immunity provisions of §363 expressly apply to reports made when an insurer furnishes information, either orally or in writing for an investigation or prosecution of suspected insurance fraud. The terms of the statute, insofar as to when immunity applies, are clear and unambiguous. If any insurer furnished information for an investigation or prosecution, as they did in this case, they are protected from civil action for libel, slander or any other relevant tort or any criminal action. The Supreme Court concluded that the clear and unambiguous intent of § 363 is to provide qualified immunity from civil actions for individuals who furnish information to the OID regarding fraudulent insurance activity. As noted in the OID's Notice of Hearing to Chimento, its investigation was prompted by and relied upon the investigation of the Tulsa Police Department into allegations made by Defendants against Chimento. The allegations in the Notice of Hearing relate exclusively to Chimento's employment by the Defendants. Therefore, Defendants statements to TPD and the District Attorney's Office are entitled to a qualified privilege. Likewise, Defendants statements to the Oklahoma Insurance Department are entitled to a qualified privilege under 36 O.S.Supp.2012 § 363. ZALMA OPINION State law requires insurers to report to the Oklahoma Department of Insurance (OID) suspected insurance fraud and by statute an insurer is provided an immunity from certain suits like those made by the Plaintiff if the suit is based upon the report to the OID. The report to police, if made in good faith, usually provides an absolute immunity but Oklahoma no makes the immunity qualified. Whether qualified or absolute the immunity protects the defendants. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 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 practiced law in California 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 athttp://www.zalma.com andzalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

Res Judicata Requires Fraudster to Lose Again After it Sues Again Forcing Two Courts to Deal With a $366.64 Fraudulent Claim is Chutzpah Integrated Pain Management, PLLC, sought $366.64 in no-fault insurance benefits for medical services it rendered to assignor Mikwan Murphy on August 16, 2018 although the insurer had already obtained a judgment that the claim was fraudulent. In Integrated Pain Management, PLLC, as assignee of Mikwam Murphy v. Empire Fire & Marine Insurance Company, 2023 NY Slip Op 50219(U), Index No. CV-712234-21/BX, Civil Court of the City of New York, Bronx County (March 22, 2023) the services allegedly provided by Integrated consisted of treatment for injuries Murphy allegedly sustained in an automobile accident on July 22, 2018. Defendant moved for summary judgment contending that plaintiff was barred by the doctrines of res judicata, collateral estoppel, and law of the case from relitigating the issue of coverage for this claim. Plaintiff ignored the motion. PRIOR ACTION In 2019, Empire Fire commenced a declaratory judgment action in Kings County Supreme Court against Integrated Pain Management and Murphy, among others. In that case, Empire Fire alleged that Integrated Pain Management and Murphy participated in an insurance fraud scheme in which rented vehicles would intentionally get into "accidents" with unsuspecting third-party drivers. The drivers and passengers in the rented vehicles would receive payments of up to $1,500, and in exchange for those payments would seek medical treatment from certain designated medical providers, who would seek reimbursement under Empire Fire's no-fault insurance policy. On April 8, 2021, Supreme Court granted default judgment for Empire Fire, ruling in relevant part that Empire Fire was not contractually obligated to reimburse Integrated Pain Management for the services it rendered to Murphy arising from the July 22, 2018 accident because the alleged losses were not the result of an "accident" as contemplated by the insurance policy. DISCUSSION Given Supreme Court's ruling that contractually there is no no-fault coverage for the July 22, 2018 purported "accident." Since Integrated Pain Management and Murphy were both parties to the Brooklyn Action and the claims again from the very same "accident" at issue in that case. Under res judicata, or claim preclusion, a valid final judgment bars future actions between the same parties on the same cause of action. The doctrine applies if the issue in the second action is identical to an issue which was raised, necessarily decided and material in the first action, and the plaintiff had a full and fair opportunity to litigate the issue in the earlier action. The Court found that defendant met its prima facie burden for summary judgment under the doctrines of res judicata and collateral estoppel. Plaintiff sought to wrongfully relitigate the identical issue raised and decided against it in the Brooklyn Action. Defendant's motion for summary judgment seeking dismissal of the complaint was granted and the case was dismissed with prejudice. ZALMA OPINION Fraud perpetrators in the state of New York, like the Plaintiff, have the unmitigated gall to sue an insurer twice for the same fraudulent scheme, waste the time of the courts by causing the courts to rule twice on the same issue and, in my opinion, should face sanctions and punishment from the court and a referral to the prosecutors for criminal prosecution. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 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 practiced law in California 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 athttp://www.zalma.com andzalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

Duty to Defend is Less than Duty to Indemnify Massachusetts Bay Insurance Company (MBIC) seeks reimbursement of $2 million that it paid under a reservation of rights to settle litigation brought against its insured, Neuropathy Solutions, Inc. (Neuropathy). In Massachusetts Bay Insurance Company v. Neuropathy Solutions, Inc., dba Superior Health Centers, and Rigoberto Bernal, an individual; et al., No. 22-55272, United States Court of Appeals, Ninth Circuit (April 3, 2023) the Ninth Circuit determined who owed the settlement payment. The District Court Decision On cross-motions for judgment on the pleadings, the district court held that MBIC had a duty to defend and indemnify Neuropathy in the underlying case (the Bernal action), and that MBIC was thus not entitled to any reimbursement. MBIC satisfied the prerequisites for seeking reimbursement of the amount it paid to settle the Bernal action on Neuropathy's behalf. To seek reimbursement under California law, an insurer must provide (1) a timely and express reservation of rights; (2) an express notification to the insured of the insurer's intent to accept a proposed settlement offer; and (3) an express offer to the insured that it may assume its own defense in the event that the insured does not wish to accept the proposed settlement. The Reservation of Rights MBIC provided a timely and express reservation of rights and informed Neuropathy of its intention to settle the claims for the $2 million policy limit, subject to Neuropathy's approval and MBIC's reservation of rights. This letter also informed Neuropathy of its "right to assume the further handling of this matter going forward" if Neuropathy did not wish to settle the claims for $2 million. Neuropathy signed the settlement agreement on May 28, 2021. Contrary to Neuropathy's argument, MBIC gave Neuropathy sufficient time to consider the proposed settlement. Under California law, the insurer's duty to indemnify runs to claims that are actually covered, in light of the facts proved. By contrast, the insurer's duty to defend runs to claims that are merely potentially covered, in light of facts alleged or otherwise disclosed. Thus, the insurer's duty to defend is broader than its duty to indemnify. The District Court Erred The Ninth Circuit concluded that the district court erred by invoking the broader duty-to-defend standard (potentiality of coverage) to require MBIC to cover not just the cost of defending the underlying Bernal suit but also the $2 million paid to settle it. To the extent that the underlying Bernal action falls within the coverage provisions of the insurance policy coverage is excluded under the policy's "Professional Services" exclusion. That provision excludes: “’Bodily injury’, ‘property damage’, [and] ‘personal and advertising injury’ caused by the rendering of or failure to render any professional service, advice or instruction: (1) By [the insured]; or (2) On [the insured's] behalf; or (3) From whom [the insured] assumed liability by reason of a contract or agreement, regardless of whether any such service, advice or instruction is ordinary to any insured's profession.” Then Ninth Circuit concluded that based on California case law, the insurance policy's text, and the operative complaint in the Bernal action, Neuropathy's liability in Bernal fell within the "Professional Services" exclusion. The "Professional Services" exclusion extends to wrongdoing in the supervision and monitoring of others in the provision of professional services, and Neuropathy incurred liability because of its provision of professional advertising and medical services, not inadequate recordkeeping or poor customer service. Finally, the complaint's allegation that Neuropathy engaged in discriminatory marketing techniques and high-pressure sales tactics falls within the Professional Services exclusion for advertising services and health advice or instruction. Neuropathy's liability in the Bernal action was thus excluded from coverage, and MBIC is entitled to reimbursement of the $2 million it paid to settle that lawsuit. ZALMA OPINION Liability insurance provides a very broad duty to defend an insured that is more than the duty to indemnify. In this case MBIC paid to defend its insured and properly gave the insured to take over the defense if it did not want to settle. It refused and the Ninth Circuit required the insured to reimburse the insurer for the $2 million paid to settle. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 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 practiced law in California 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 athttp://www.zalma.com andzalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

Breach of Contract & Intentional Act Not Insured Carl Hemphill asked the Third Circuit to find that his liability insurer, Landmark American Insurance Co., is obligated to defend him in a lawsuit by a former employee. That employee brought a panoply of claims against Hemphill in his original complaint. None is covered by Hemphill's policy with Landmark. In Carl Hemphill; MJC Labor Solutions, LLC v. Landmark American Insurance Company, No. 20-2544, United States Court of Appeals, Third Circuit (April 5, 2023) applied the four corners rule to resolve the dispute. FACTS Carl Hemphill and MJC Labor (together, Hemphill) provide temporary employee placement and visa application processing services to workers from Mexico and Central America. Hemphill is insured by a miscellaneous professional liability (MPL) policy with Landmark, covering claims "arising out of [] negligent act[s], error[s] or omission[s]" "in the rendering or failure to render . . . permanent and/or temporary placement services[.]" Former MJC client Jose Castillo sued Hemphill (the Castillo Lawsuit), alleging violations of federal human trafficking, wage-and-hour, and unfair trade practices laws, as well as claims for breach of contract and unjust enrichment. When Castillo eventually arrived in the U.S., Hemphill and his wife confiscated his passport; housed him in conditions he described as "filthy," overcrowded, and vermin-infested; assigned him tasks outside the scope of his employment contract; and considerably underpaid him. The parties have since settled the Castillo Lawsuit, but the reimbursement of legal defense costs, incurred in the underlying suit, remain in dispute. ANALYSIS Landmark declined to defend Hemphill on the grounds that Castillo's allegations arose from Hemphill's intentional actions, occurring after Castillo had been placed as an employee, rather than from negligent actions in providing placement services. If the underlying complaint avers facts that might support recovery under the policy, coverage is triggered, and the insurer has a duty to defend. Under Pennsylvania law, the question of whether a claim against an insured is potentially covered is answered by comparing the four corners of the insurance contract to the four corners of the complaint. Courts applying Pennsylvania law must not stray from the operative complaint in determining duty-to-defend issues, even when later proceedings reveal the existence of a covered claim. The District Court Conclusion The District Court found that: Hemphill could not expect Landmark to cover him for any claim not listed in the Landmark policy, and Castillo's complaint does not allege a covered claim. Insured's Reasonable Expectations An insured's reasonable expectations may occasionally prevail over the express terms of a contract, but only in very limited circumstances to protect non-commercial insureds from policy terms not readily apparent and from insurer deception. Hemphill did not argue that the Landmark policy language is facially unclear or that Landmark engaged in deceptive tactics. Instead, he claims that the mere fact that Landmark defended a different lawsuit created a reasonable expectation that it would defend the Castillo Lawsuit. Landmark subjected its defense of the earlier Lawsuit to a complete reservation of rights. The Duty to Defend An insurer's duty to defend is determined solely from the language of the complaint against the insured. It is the potential, rather than the certainty, of a claim falling within the insurance policy that triggers the insurer's duty to defend. Castillo's unfair trade practices claim alleged that Hemphill "deceiv[ed]" Castillo "about rental housing in which he would be living." But Castillo does not allege that Hemphill or MJC ever represented to him that his housing conditions would be sanitary or not crowded, or that he would not have accepted Hemphill's employment offer had he known that the housing conditions were subpar. As for Castillo's start date, his allegations amount to nothing more than a breach-of-contract claim: he alleges that his contracted-for start date was delayed and that he lost money and employment opportunities as a result. Landmark expressly carved out breach-of-contract claims in its policy with Hemphill. It has no duty to defend this one, or any other claim in Castillo's suit. ZALMA OPINION The four corners rule allowed the insurer to refuse to defend or indemnify its insured because Castillo's suit was basically for breach of contract and did not meet any of the requirements of the policy which limited its coverages and did not promise to defend a claim of breach of contract. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 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 practiced law in California 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 athttp://www.zalma.com andzalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

It's Hard to Sue the U.S. Government Without Its Permission Roberta Jean Champlin appealed a decision from the United States Court of Federal Claims dismissing for lack of subject matter jurisdiction her claim that the United States must pay damages for the nonpayment of life insurance proceeds from her deceased former husband's Federal Employees Group Life Insurance policy. In Roberta Jean Champlin v. United States, No. 2022-1402, United States Court of Appeals, Federal Circuit (April 10, 2023) Ms. Champlin sought payment of a Federal Employees' Group Life Insurance (FEGLI) policy after he ex-husband died because her divorce decree granted her half ownership in the policy. BACKGROUND The Federal Employees' Group Life Insurance Act (FEGLIA) establishes a group life insurance program for federal employees. The United States Office of Personnel Management (OPM) is responsible for managing FEGLI polices and has entered a contract with Metropolitan Life Insurance Company (MetLife) to provide insurance to federal employees. FEGLI proceeds are to be paid in the following order of precedence: (1) designated beneficiaries; (2) widowed spouse; (3) children or descendants; (4) parents of deceased; (5) executor or administrator of the estate; and (6) next of kin. The order of precedence can be overridden "if and to the extent expressly provided for in the terms of any court decree of divorce, annulment, or legal separation" but only if that order or decree is "received . . . before the date of the covered employee's death, by the employing agency or, if the employee has separated from service, by the [OPM]." When these circumstances are met, the proceeds "shall be paid (in whole or in part) by the [OPM]" to the individual who is entitled to the proceeds under the court order. Factual & Procedural Background Lewis Dean Champlin, during and after his marriage to Ms. Champlin, had life insurance through a FEGLI policy. In September 2012, the Champlins divorced. As part of their divorce proceedings, Ms. Champlin obtained from the Alaskan state divorce court "award[ed Ms. Champlin] the option to continue maintaining a one-half interest in that policy . . . [while Mr. Champlin] ha[d] the option of paying the other half of the policy and c[ould] designate whoever he chooses to be beneficiary to the other half of the policy benefits." Ms. Champlin paid for half of the policy thereafter. On January 3, 2016, Mr. Champlin died. Ms. Champlin did not receive her half of the proceeds of his life insurance policy. Instead the proceeds were paid to Mr. Champlin's designated beneficiary at the time of his death-Marilyn Susano. Ms. Champlin sued the United States in the Court of Federal Claims, alleging that she is entitled to half of Mr. Champlin's issued life insurance coverage and further requesting a judgment directing the United States to pay her half of the FEGLI proceeds, along with costs and attorney fees. Unfortunately for Ms. Champlin the complaint failed to allege a statutory or legal basis for jurisdiction for her claim. The government moved to dismiss Ms. Champlin's claim for lack of subject matter jurisdiction on the basis that FEGLI-related claims cannot be against the United States because the government has not waived its sovereign immunity for such claims. The OPM authorized MetLife to provide life insurance, and MetLife established an administrative office, which is responsible for administering FEGLI claims. The Court of Federal Claims noted that it found that Ms. Champlin's complaint made no claim for a breach of a legal duty, only a claim to obtain money due under the FEGLI policy. DISCUSSION The Court of Federal Claims' determination that it lacked subject matter jurisdiction over Ms. Champlin's claim for life insurance proceeds from Mr. Champlin's FEGLI policy was correct. The Federal Circuit concluded that Court of Federal Claims is a court of specific jurisdiction and can resolve only those claims for which the United States has waived sovereign immunity. The government's duties under the statute are limited to contracting with and managing private insurance companies that issue FEGLIA-compliant insurance to federal employees, as well as implementing regulations to support the FEGLIA's statutory mandates." Because the United States' duties under the FEGLIA and relevant regulations do not extend to claims for proceeds due under a FEGLI policy, Ms. Champlin has failed to establish that the United States has breached any duty when insurance proceeds are allegedly due. Ms. Champlin sought money that she believes is due to her under the policy because she complied with a divorce court's order. The fact that the policy had already been paid out to another beneficiary before Ms. Champlin became aware of her alleged injury had no effect on the regulation's application. The Court affirmed the Court of Federal Claims' dismissal for lack of subject matter jurisdiction. ZALMA OPINION Ms. Champlin sued the wrong party. The US had no obligation under the FIGLIA statute and did not waive its sovereign immunity. She could have sued MetLife but did not. Alaska's court order could not compel the US to do anything and if anything her case is against the ex-husband's estate for not complying with the Alaska Order to make her a designated beneficiary. The payment was made to a designated beneficiary so MetLife did what it was required to do. A person can only sue the government if it waives its sovereign immunity. Since it did not do so she had no case. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 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 practiced law in California 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 athttp://www.zalma.com andzalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.

Litigants May Not Try Again After Losing The plaintiffs in this action are a group of special-purpose entities that acquired various commercial properties and funded those acquisitions with loans. The loans required the plaintiffs, as borrowers, to obtain residual value insurance policies guaranteeing payment of the outstanding loan to the lenders if the borrowers did not satisfy the loan at maturity. The defendants are the insurers under those policies and related entities. The parties litigated the dispute to final judgment in Michigan and Idaho and filed a new suit in Delaware seeking the remedies they were not allowed to receive in Michigan and Idaho. In PVP Aston LLC, et al v. Financial Structures Limited, et al., C. A. No. N21C-09-095 AML CCLD, Superior Court of Delaware (March 31, 2023) the court was faced with a claim of collateral estoppel - that is - once you lose in one court you cannot go to another court for a different result on the same issue. A "Final Judgment" is Final At the end of the loans' terms, the plaintiffs did not pay the balloon payment, and the defendants therefore paid the lenders the insured value. In exchange for those payments, the lenders assigned the loans and related documents to the defendants. The insurance policies likewise required the borrowers to transfer all title and ownership interest in the properties to the defendants, but the plaintiffs refused to do so. Instead, they took the position that the insurers and lenders breached the parties' agreement or the parties' agreement was otherwise unenforceable. The question that ultimately is dispositive for purposes of the pending motions is whether the collateral estoppel doctrine bars the plaintiffs from relitigating the issues already decided in Michigan and Idaho. FACTUAL BACKGROUND The Parties and the Loan Purchases Plaintiffs are thirty-four special-purpose entities that obtained commercial loans (each, a "Loan") from several lenders or agents of lenders (each, a "Lender") to finance the sale and leaseback of properties formerly owned by Rite-Aid drugstores (each, a "Property"). The Loans were evidenced and secured by a mortgage, note, and related instruments for each Property (the "Loan Documents"). Each Loan required a considerable "balloon" payment when the Loan matured in 2020 or 2021. Defendants are Financial Structures Limited ("FSL") and its special-purpose subsidiaries. Filings in other Courts This litigation is not the only dispute between various Borrowers and FSL, the Lenders, and their affiliates. In addition to the two actions pending in Delaware, litigation has arisen in several states where the subject properties are located, as FSL, its nominees, or third-party purchasers have asserted ownership and possession rights in the properties. Importantly for the purposes of Defendants' motion to dismiss, decisions in two of those states address the same claims and legal theories Plaintiffs seek to advance in this case. Specifically, during the period between the filing of Plaintiffs' initial Complaint and their Amended Complaint, courts in Michigan and Idaho issued decisions that rejected the theories and contractual constructions Plaintiffs advanced in Delaware. Defendants have moved to dismiss the Amended Complaint on the basis of those decisions. Claims in Amended Complaint On December 22, 2021, Plaintiffs moved for partial summary judgment. The Court stayed consideration of that motion while it resolved Defendants' motion to dismiss the Original Complaint. After the Court partially dismissed that complaint and Plaintiffs filed their Amended Complaint, Defendants again moved to dismiss. ANALYSIS Plaintiffs' Amended Complaint Must Be Dismissed In Its Entirety Because All Plaintiffs' Claims Are Barred Under The Collateral Estoppel Doctrine. Collateral estoppel, also known as issue preclusion, refers to the preclusive effect of a judgment on the merits of an issue that was previously litigated or that could have been litigated. Under the collateral estoppel doctrine, once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits based on a different cause of action involving a party to the prior litigation. The Issues Previously Decided Are Identical To The Issues Presented In This Action. The first question for collateral estoppel purposes is whether the issues are identical. Identicality depends on whether the contentions raised in the second proceeding are necessarily inconsistent with the previously adjudicated issues. The Michigan and Idaho courts both disagreed with the Borrowers' position that the parties intended the Insurer's right to a Loan assignment to be conditioned on the performance of an appraisal. The Michigan Court also rejected Plaintiff's effort to recover breach of contract damages because the Policy provides that "the [Insurer] shall have no liability to [the Plaintiff] except to make payment to the Additional Insured in accordance with this Policy." The Idaho Court similarly found that the breach of contract claim was futile. In addition, having concluded the ICA was enforceable, the Idaho Court rejected the claim that FSL allegedly sold unenforceable agreements. The Prior Actions Have Been Finally Adjudicated On The Merits. Under Delaware law, a Delaware court will give the judgments of another state court the same preclusive effect as would a court in that state. Collateral estoppel law in Idaho and Michigan is substantially the same as the law in Delaware. Delaware follows the majority rule that an appeal does not render a judgment non-final for purposes of res judicata or collateral estoppel. Michigan and Idaho law control the question of finality for purposes of this Court's collateral estoppel analysis, and Michigan and Idaho also follow the majority rule. The Michigan Plaintiff And Idaho Borrowers Had A Full And Fair Opportunity To Litigate The Issues In Those Actions. Finally, it is apparent that the parties had a full and fair opportunity to litigate the issues addressed in the Michigan and Idaho actions. The decisions issued by those courts describe the cases' procedural history and reflect that the parties had the opportunity to fairly present their positions. Those courts fully analyzed and considered the parties' multifaceted arguments. The Michigan Borrower moved for reconsideration of the April 22, 2022 decision but did not argue that it had lacked an opportunity to fully litigate the issues. Rather, it argued the Court erred in its analysis of the law regarding clogging the equity of redemption. Defendants' Motion to Dismiss is Granted. Accordingly, Plaintiffs' Motion for Partial Summary Judgment is Denied As Moot. ZALMA OPINION The old children's motto that says one must try and try again when they fail does not apply to litigation. The insurers in this case were entitled to their subrogation rights to require payment of the loan and get title to the property. Once the plaintiffs' lost in Idaho and Michigan they did not have the right to bring the same claims in Delaware and were prevented by the application of the collateral source doctrine. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 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 practiced law in California 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 athttp://www.zalma.com andzalma@zalma.com Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.