Barry Zalma, Inc. on Insurance Law

Charge of Insurance Fraud, if True, Not Defamatory In RMS Insurance Services, Inc., d/b/a Flanders Insurance Agency, and Owen G. Costanza, an Individual v. Donald G. Sattler, an Individual, Marion L. Thornberry, an Individual, Elisabeth M. Rodgers, an Individual, and Cheryl Russell-Smith, an Individual, No. 4-23-0143, 2023 IL App (4th) 230143-U, Court of Appeals of Illinois, Fourth District (October 17, 2023) a suit claim of defamation by a politician failed. THE SUIT Plaintiffs RMS Insurance Services, Inc., d/b/a Flanders Insurance Agency (Flanders), and Owen G. Costanza, in his individual capacity, filed a 17-count complaint against defendants Donald G. Sattler, Marion L. Thornberry, Elisabeth M. Rodgers, and Cheryl Russell-Smith. Defendants Sattler, Thornberry, and Rodgers filed a motion for summary judgment asking the court to dismiss plaintiffs' first amended complaint with prejudice the court granted defendants' motions and dismissed plaintiffs' entire amended complaint with prejudice. BACKGROUND According to plaintiffs' complaint, Costanza was the former president of the Village of Poplar Grove. During the 2020 election, Sattler ran against Costanza for the office of village president. Costanza was the incumbent village president at that time. The complaint outlined animosity that existed between Costanza and defendants prior to and after the election. Plaintiffs alleged defendants made defamatory statements about Costanza including accusations Costanza committed criminal acts, including insurance fraud. Sattler defeated Costanza in the election. However, plaintiffs alleged defendants continued to post the allegations against Costanza after the election was over. The trial court (Judge Stephen E. Balogh presiding) found plaintiffs alleged the three defendants wanted to ruin Costanza's career in local politics. The crux of the defendants' motion for summary judgment is that their statements are all privileged because those statements are indisputably, materially and substantially true. Under Illinois law, recovery for a defamatory statement in this case will only be allowed if there is a showing of actual malice. This requires proof by the plaintiff that has established both that the utterance was false and that it was made with knowledge of its falsity or in reckless disregard of whether it was false or true. The trial court indicated it was undisputed that Costanza had been accused of, administratively disciplined for, and fired for committing fraud in the general sense of the word while working in the insurance industry. Costanza had a misdemeanor criminal record and has engaged in fraud, as that term is generally understood, in his work as an insurance professional. ANALYSIS When a party moving for summary judgment supplies facts which, if not contradicted, would entitle the moving party to a judgment as a matter of law, the nonmoving party may not rely on his pleadings alone to raise issues of material fact. A plaintiff must present a factual basis that would arguably entitle the plaintiff to a judgment. Applicable Law To state a defamation claim, a plaintiff must present facts showing that the defendant made a false statement about the plaintiff, that the defendant made an unprivileged publication of that statement to a third party, and that this publication caused damages. Qualified Privilege Even if a statement is defamatory, the statement cannot support a defamation claim if it is true. Regardless, even if a defamatory statement is not substantially true, the statement is not actionable if protected by a qualified privilege. Courts must look at the alleged defamatory statements in context, giving the words of the statement, and any implications arising from them, their natural and obvious meaning. The Court of Appeal concluded that the plaintiffs failed to establish the trial court erred in examining all of the statements made in the flyer. The foundation for all of plaintiffs' claims in their amended complaint was defendants' alleged defamation. As a result, defendants' motion for summary judgment challenged all of plaintiffs' claims. Plaintiffs failed to establish the trial court erred in granting defendants' motion for summary judgment as to the entire amended complaint. ZALMA OPINION Accusing a person of the crime of insurance fraud is per se defamatory. However, if, as in this case, the charge is true the defamation charge fails. Costanza was not convicted of the crime of insurance fraud but lost his license to act as an insurance agent as a result of insurance fraud and was disciplined for the acts. Since the charge was true there was no way for Costanza to succeed in his defamation suit. Politics, Mr. Costanza, learned is a dirty game and will succeed if the allegations against him of insurance fraud was true. (c) 2023 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe to Excellence in Claims Handling at locals.com at https://zalmaoninsurance.locals.com/subscribe or at substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01 Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 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; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library.

ZALMA’S INSURANCE FRAUD LETTER On or Before November 3, 2020 It is Imperative That Everyone Votes. I Have My Preferences and I Will Exercise the Right and Obligation to Vote. I Hope You All Will Do the Same. Volume 24, Issue 21 – November 1, 2020; Subscribe to e-mail Version of ZIFL, it’s Free! Read last two issues of ZIFL here. Go to the Barry Zalma, Inc. web site here Videos from “Barry Zalma on YouTube” Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921A ClaimSchool™ Publication © 2020; Barry Zalma & ClaimSchool, Inc.; Go to my blog & Videos at: Zalma on Insurance; And at https://zalma.com/blog; Go to the Insurance Claims Library; Listen to the Podcast: Zalma on Insurance; Videos from Zalma on Insurance. Multiple Acts of Insurance Fraud Must be Distinct In State of New Jersey v. Randi Fleischman, 917 A.2d 722, 189 N.J. 539, Supreme Court of New Jersey (Decided March 19, 2007, Corrected March 26, 2007, pursuant to the New Jersey Code of Criminal Justice (Code), one can be charged with the offense of insurance fraud for knowingly making a false or misleading statement of material fact in connection with an insurance claim. That third-degree offense may be elevated to the second degree by aggregating five “acts” of insurance fraud, the total value of which exceeds $1,000. OIG Most Wanted Fugitives The Office of the Inspector General has created a webpage contains information about OIG’s most wanted health care fugitives. In all, they are seeking more than 170 fugitives on charges related to health care fraud and abuse. All the fugitives are available at https://oig.hhs.gov/fraud/fugitives/profiles.asp#thorsen. Wisdom “Facts do not cease to exist because they are ignored.” – Aldous Huxley “Socialists desire to practice legal plunder, not illegal plunder. Socialists, like all other monopolists, desire to make the law their own weapon. And when once the law is on the side of socialism, how can it be used against socialism? For when plunder is abetted by the law, it does not fear your courts, your gendarmes, and your prisons. Rather, it may call upon them for help.” —Frederic Bastiat “Some men are born mediocre, some men achieve mediocrity, and some men have mediocrity thrust upon them.” – Joseph Heller “It pays to be obvious, especially if you have a reputation for subtlety.” — Isaac Asimov “Truth does not become more true if the whole world were to accept it; nor does it become less true if the whole world were to reject it.” — Maimonides “An election is nothing more than the advanced auction of stolen goods.” —Ambrose Bierce Proof of Confession That Accident Was Staged Requires Summary Judgment This case clearly established that the accident was staged and there was no reason for the trial court to refuse to allow it present the obvious and damning proof. More importantly, this case teaches that although insurers are obligated to cooperate with and provide everything its investigation reveal to the prosecution and the Fraud Division, but the obverse is not true. There is no reason why the prosecutors who obtained a confession from one of the co-conspirators should have forced the insurer to jump through litigation hoops to get the statement and continue defending a fraudulent suit. They should have shared that evidence immediately to assist the victim of the crime. Health Insurance Fraud Convictions 48 Months in Prison for Health Care Fraud Susanne “Suzi” Gawel was sentenced to 48 months in prison, one year of supervised release and ordered to pay $646,690.32 in restitution after conviction. Gawel worked as an office manager at a Fort Wayne company that sold durable medical equipment (DME) to clients across northern Indiana. Some of the company’s clients were Medicaid beneficiaries. Through her work, Gawel had access to Medicaid patient information, including patients’ names, addresses, dates of birth, Medicaid ID numbers and treating physician information. Other Insurance Fraud Convictions Consider Books to Show Your Appreciation to Your Insurer Clients or Claims Employees © 2020 – Barry Zalma https://zalma.com/zalmas-insurance-fraud-letter-2/Read last two issues of ZIFL here. Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921 Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts Listen to the Podcast: Zalma on Insurance https://anchor.fm/dashboard/episodesZalma on Insurance Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/ Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkV7pkuOtkiv6oakpgK33CNlNAYW-WBlLCOZFtgvpSdcL7R-tsWKfMVqG6fEuvmM7Hh7gUEJ7yKOdgHDbGl_cGAU%3De-mail Version of ZIFL, it’s Free! –

Excess Insurer Owes Nothing Until Primary Insurer's Limits Are Exhausted Vizio, Inc. appealed the district court's order granting Arch Insurance's motion to dismiss. Arch issued an insurance policy to Vizio and provided coverage excess to Navigators Insurance's primary policy, meaning that Arch only covered losses that exceeded the $5 million limit of the Navigators Policy. The Arch Policy "followed form" to Navigators' policy, so it has the same terms except for those specifically contradicted by the Arch Policy. Vizio also had a separate line of general liability coverage with Chubb. In VIZIO, INC. v. ARCH INSURANCE COMPANY, et al., No. 22-55755, United States Court of Appeals, Ninth Circuit (October 30, 2023) Vizio sought coverage from an excess insurer after reaching a settlement with plaintiffs in a class action suit without first getting permission from the excess insurer. FACTS After consumers filed class action lawsuits against Vizio in connection with its Smart TV products (the "Smart TV Litigation"), Vizio notified both Navigators and Arch of its potential insurance claims in a February 2016 email. Arch requested more information, while Navigators denied coverage, citing a policy exclusion. Vizio twice forwarded Navigators' denial letter to Arch, but Vizio never provided Arch with any substantive updates about the Smart TV Litigation. Arch, in turn, failed to convey a coverage decision, though internal records show that Arch decided to deny coverage. About two years later, without seeking or receiving Arch's consent, Vizio settled the Smart TV Litigation for $17 million. On Arch's motion the district court dismissed Vizio's fourth amended complaint with prejudice, holding (among other things) that Vizio failed to properly notify Arch of its claim after the underlying policy limit was exhausted. The District Court Erred In Holding That Providing Notice Prior To Exhaustion Was Improper. Finding that notice was given the district court incorrectly concluded Vizio failed to give proper notice but rightly determined that Arch at that time had no duty to defend or indemnify because the primary policy limit had not yet been exhausted. Vizio's February 2016 email was adequate notice. Vizio Failed To Comply With The Consent Provision Before Settling. First, Vizio admits that it did not obtain Arch's consent prior to settling the Smart TV Litigation as required under the Arch Policy. Since a following form excess policy has the same terms and conditions as the underlying primary policy and, therefore, the Navigators Policy's consent provision is incorporated into the Arch Policy. Second, Vizio argues that Arch's policy conflicts with Navigators' policy. Not so. Lastly, Vizio argues that, if the consent provision applies, Vizio was excused from performing because Arch allegedly breached the policy first by not properly responding to Vizio's February 2016 email. However, Vizio failed to allege facts that would plausibly show that Arch breached any of its duties under the policy. Moreover, even if Arch breached the policy as alleged, this would not excuse Vizio from seeking Arch's consent to the settlement. ANALYSIS Insurance contracts in the state of California incorporate the terms of California's insurance regulations. Vizio relies on California Code of Regulations Title 10, Section 2695.7(b) for the proposition that an insurer's failure to accept or deny a claim within 40 days of tender is a breach of the insurance policy. But Section 2695.7(b) only applies after an insurer receives a "proof of claim," which is defined as evidence of a claim that "reasonably supports the magnitude or the amount of the claimed loss." 10 C.C.R. § 2695.2(s). A "notice of claim" is not a proof of claims. Vizio's February 2016 email to Arch was a notice of claim, not a proof of claim. Vizio also alleged Arch breached the contract when it internally denied coverage and never informed Vizio. Arch's alleged breach would only excuse Vizio's non-consensual settlement if Vizio had requested and been denied coverage. But Arch never informed Vizio that it would deny coverage, and Vizio never followed up or provided Arch with any substantive updates about the Smart TV Litigation. Thus, Vizio, having never been notified of a denial of coverage, still had an obligation to obtain Arch's consent to any settlement, notwithstanding Arch's alleged breach. Without notice, Arch was denied the opportunity to participate in the settlement negotiations, which the insurance contract established as a prerequisite to Arch's duty to pay. Vizio's Claim For The Breach Of The Implied Covenant Of Good Faith And Fair Dealing Fails. Under California law, without a breach of the insurance contract, there can be no breach of the implied covenant of good faith and fair dealing. Because Vizio breached the policy by not soliciting Arch's consent prior to settlement, no benefits were due, and Arch therefore did not breach the contract. Vizio's Equitable Contribution Claim Fails. Equitable contribution is the right to recover, not from the party primarily liable for the loss, but from a co-obligor who shares such liability with the party seeking contribution. However, as a general rule, there is no contribution between a primary and an excess carrier. Arch was indisputably an excess insurer because it only had an obligation to indemnify Vizio once the $5 million limit of the Navigators Policy was exhausted. ZALMA OPINION The Ninth Circuit read the two policies: the primary and the following excess policy. Both policies required that the insured advise the insurers of their intent to settle, obtain permission from the insurer, or lose the right to indemnity. The settlement of the class action may have been a wise decision by Vizio but its failure to seek the participation and consent of Arch cost them any possibility of obtaining contribution from Arch and deprived Arch of the ability to reject coverage or pay. (c) 2023 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe to Excellence in Claims Handling at locals.com at https://zalmaoninsurance.locals.com/subscribe or at substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01 Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 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; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library.

About WordPress ClaimSchool, Inc. Customize 00 Comments in moderation New Edit Post ExactMetrics Search Howdy, barryzalma Log Out ClaimSchool, Inc. Creating Insurance Claims Professionals by Excellence in Claims Handling Skip to content Training to Create Insurance Claims Professionals ← Washington State Rewrites CGL Posted on August 18, 2022 by barryzalma Assuming that Coverage Exists Does not Make a Contract See the full video at and at https://youtu.be/IaoTSNF9VxI Barry A. Lindsten appealed a circuit court order dismissing his action against Astronautics Corporation of America (Astronautics) and Robertson Ryan &Associates, Inc. and Michael R. Schulte (Robertson Ryan). In Barry A. Lindsten, Sarah M. Lindsten v. Astronautics Corporation of America, Mayo Medical Plan, Trumbull Insurance Company, Hartford Casualty Insurance Company and Hartford Fire Insurance Company, Defendants, Robertson Ryan &Associates, Inc. and Michael R. Schulte, ABC Insurance Company, No. 2021AP115, Court of Appeals of Wisconsin, District I (August 16, 2022) the Court of Appeals resolved the issues raised by Lindsten. BACKGROUND On August 13, 2016, in Milwaukee County, a motor vehicle struck a rental vehicle driven by Lindsten. At the time of the accident, Lindsten was in Wisconsin to perform work for his employer, Astronautics, who provided and paid for the rental vehicle. Lindsten alleged that Astronautics and its insurance agent/broker, Robertson Ryan, had failed to provide underinsured motorist (UIM) coverage. Astronautics moved to lift the stay for the limited purpose of addressing whether it was a proper party in the case. The circuit court granted Astronautics’ motion to lift the stay and allowed the parties to conduct discovery on the following limited issues: (1) whether Lindsten was acting within the scope of his employment for Astronautics when the accident at issue took place; and (2) whether Astronautics entered into a contract with Lindsten to specifically provide UIM coverage. Lindsten filed an amended complaint. Lindsten raised two causes of action against Astronautics: (1) breach of an oral contract; and (2) reformation. According to Lindsten, on or prior to the date of the accident, he was informed by Astronautics’ travel administrator that Astronautics “would provide full insurance coverage” and “would take care of all his insurance needs on rental cars.” Based on prior travel experience with previous employers, Lindsten assumed this included UIM coverage. Lindsten further alleged that the travel administrator informed him that he should sign an insurance waiver to specifically opt out of the insurance coverage offered by the rental agency in favor of the coverage provided by Astronautics. In regards to Robertson Ryan, Lindsten also raised two causes of action: (1) breach of contract; and (2) negligence. Lindsten alleged that Astronautics had specifically requested that Robertson Ryan provide UIM coverage, and that Robertson Ryan had failed to procure a policy that would provide UIM coverage. Further, Lindsten alleged that if Robertson Ryan had procured the UIM coverage, Lindsten would have been a third-party beneficiary of any such insurance coverage. Both Astronautics and Robertson Ryan filed a motion to dismiss. Astronautics contended that the allegation that Astronautics agreed to take care of all of Lindsten’s insurance needs was not specific enough to cover an offer to provide UIM coverage, thus, no contract was created. Further, Astronautics contended that only written contracts could be reformed. The circuit court granted the motions to dismiss. The court explained that a “specific offer” is required to create an insurance contract, and that it is not enough to simply allege that there was an offer for “insurance,” “full coverage,” or “insurance needs.” Rather, the pleadings needed to specifically refer to UIM coverage. DISCUSSION A motion to dismiss for failure to state a claim tests the legal sufficiency of the complaint. To survive a motion to dismiss, a complaint must contain a short and plain statement of the claim, identifying the transaction or occurrence or series of transactions or occurrences out of which the claim arises and showing that the pleader is entitled to relief. In other words, a complaint must plead facts, which if true, would entitle the plaintiff to relief. Whether a complaint states a claim upon which relief may be granted is a question of law that we review de novo, benefitting from the circuit court’s decision. The court will accept as true the factual allegations in the complaint but will not accept any legal conclusions. Factual allegations must be more than labels and conclusions or a formulaic recitation of the elements of a cause of action. On appeal, Lindsten asserts that the circuit court erred in granting the motions to dismiss. When certain conditions exist, a statute provides the exclusive remedy for recovery for an employee against an employer. Lindsten’s brief-in-chief fails to address why this doctrine does not apply. We generally do not address undeveloped arguments, and we decline to do so here. The trial court’s decision was affirmed. ZALMA OPINION A person cannot create a contract without being able to prove that there was an offer, acceptance of the offer, and payment of consideration. Lindsten claimed that there was an oral contract to provide him all insurance he needed. Even if there was an offer and acceptance of that offer it was too vague to make sense or to be enforceable. Insurance is a contract between the insurer and the insured. Lindsten was neither an insurer nor was he an insured. He was the employee of the insured. (c) 2022 Barry Zalma & ClaimSchool, Inc. 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 at http://www.zalma.com and zalma@zalma.com. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome. 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; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Making Sick Horse Well is not a Breach of Horse Mortality Policy The parties sued over an insurance dispute concerning a champion show horse named Thomas. Thomas is alive and well, but Thomas's owner, Julie Greenbank, sued her insurer, Great American Assurance Company, for failing to provide mortality coverage for Thomas. In Julie Greenbank v. Great American Assurance Company, No. 21-2622, United States Court of Appeals, Seventh Circuit (August 30, 2022) Greenbank alleged that Great American breached the insurance policy and acted in bad faith by unreasonably withholding consent for Thomas's authorized humane destruction, opting instead to perform a tenotomy that destroyed Thomas's use as an athletic show horse. She also alleged that Great American's continued care and control over Thomas, long after the policy terminated, constitutes conversion and theft. The district court dismissed her claims at summary judgment, and Greenbank appealed. THE INSURANCE POLICY In September 2017, Greenbank purchased an American Saddle bred gelding horse named Awesome whose barn name was "Thomas" for $500,000. Greenbank intended to use Thomas as an athletic show horse for competitive purposes. Shortly after this purchase, Greenbank obtained a mortality insurance policy with Great American for Thomas's full purchase price. The policy provided coverage in the event of Thomas's "death" or "authorized humane destruction." Under the policy, a horse's death or authorized humane destruction must result, in part, from an illness, injury, or specific surgery. To obtain coverage in the event of Thomas's death or authorized humane destruction, the policy required Greenbank to meet certain conditions precedent. One condition precedent required Greenbank to immediately notify Great American if Thomas becomes ill. The policy notes that failure to provide immediate notice of Thomas's illness "will invalidate any claim under the policy." If Thomas becomes ill, the policy allows Great American to, with Greenbank's permission, assume control over Thomas's treatment. In addition to mortality coverage, the policy also includes a "Major Medical Endorsement" (MME) and a "Guaranteed Renewal Endorsement" (GRE). THOMAS' HEALTH In December 2017, Greenbank boarded Thomas at Cedarwood Farms in Evansville, Indiana, to begin training with Chuck Herbert. In February 2018, however, Thomas became sick with colic and pneumonia. Thomas lost 50 pounds, and developed cellulites in all four legs and uveitis in his eye. Based on this, Dr. Stone determined that Thomas was "very sick." On top of this, Thomas later pulled his right stifle, rendering him lame in his right hind; Thomas's ability to get up and down was compromised. Greenbank reported Thomas' pneumonia to Great American. After hearing from a vet that Thomas might need to be euthanized, Great American, pursuant to the policy, retained its own veterinarians to provide treatment for Thomas. Eventually, Thomas was transported to Hagyard Equine Medical Institute, a facility in Lexington, Kentucky, where Dr. Kathy MacGillivray became Thomas's primary veterinarian. Dr. MacGillivray evaluated Thomas and determined that Thomas suffered from a deep lung abscess and severe laminitis. Dr. MacGillivray advised that based on Thomas's declining health, it would not be unreasonable to make a euthanasia recommendation. She wanted to try treatment first, before recommending euthanasia. Thomas received treatment for his deep lung abscess first, followed by his severe laminitis. For the latter condition, veterinary podiatry specialist Dr. Brian Fraley recommended that Thomas undergo a tenotomy, which involves a one-inch incision and cutting the deep flexor tendon to restore blood flow and relieve pressure on the coffin bone. Greenbank objected to Thomas's tenotomy on the basis that it would destroy Thomas's future athleticism as a show horse; she requested more conservative treatments. But Dr. Fraley advised that the tenotomy was Thomas's only chance of regaining any athletic ability, because, after a tenotomy, the tendon would eventually heal and become functional. Dr. Fraley performed Thomas's tenotomy, and as he would later testify, Thomas's tenotomy went well and Thomas had a "remarkable" recovery. Within a year after his surgery, Thomas gained back his weight and returned to trotting, bucking, running, and galloping around the Pine Ridge Farm, where he now resides. GREAT AMERICAN'S POLICY ACTIONS Greenbank's policy expired on September 28, 2018. To renew the policy under the GRE, she submitted a payment of $14,725.000. Great American however, denied the policy renewal based on Greenbank's failure to meet several conditions precedent, including providing Great American with immediate notice of Thomas's illness in February 2018. Though the policy has terminated, Great American continues to care for and maintain control of Thomas. Greenbank's Lawsuit Dismissed at Summary Judgment The district court determined that Great American did not breach the policy because there was no covered cause of loss-Thomas did not die by natural causes or authorized humane destruction. Breach of Contract Greenbank argued that Great American breached the insurance policy but failed to show that Great American breached the insurance. Mortality Coverage The mortality insurance policy at issue provides coverage in the event of Thomas's "death" or "authorized humane destruction." There is no dispute that Thomas did not die naturally or by authorized humane destruction. That alone should end the inquiry into whether Great American breached a mortality insurance contract. Thomas saw three veterinarians over a period of five months, and during that time, no veterinarian suggested that Thomas needed to be euthanized, let alone certified that fact to Great American. The possibility of euthanasia is neither certification nor a determination that immediate euthanasia was imperative for humane reasons. There was no evidence that Great American expressly agreed to euthanize Thomas and nothing in the policy required it to do so. Nothing in the contract says that Great American was expected to protect Thomas's use as a show horse. To protect against Thomas's use as a show horse, Greenbank could have sought a loss of use policy. She cannot now attempt to turn a mortality insurance policy into a loss of use policy by claiming that Great American unreasonably withheld authorized humane destruction. BAD FAITH In addition to her breach of contract claims, Greenbank argues that Great American acted in bad faith based on several policy actions relating to (1) the mortality coverage and (2) the GRE. Mortality Coverage Great American did not wrongly deny mortality coverage, therefore, Greenbank is unable to show bad faith as to this claim. Just because Great American did not choose the medical route Greenbank desired, or otherwise resolve the claim to her liking, does not mean Great American acted in bad faith. GRE Renewal Because Greenbank failed to show that Great American breached the contract under the GRE, her bad faith claim fails for this reason as well. Conversion and Theft Tortious conversion, or common law conversion, is either "the appropriation of the personal property of another to the party's own use and benefit. A plaintiff claiming tortious conversion must establish that he or she owned the property, and that the defendant's possession was unauthorized or without consent. Where the defendant's initial possession of plaintiff's property is lawful, conversion occurs only after an unqualified demand for return, unless such demand would be futile. There is no dispute that Great American's initial possession and control of Thomas was lawful based on the policy. The district court denied the motion. It is unusual that Great American maintained control of Thomas long after the policy terminated. Greenbank, however, has failed to demonstrate that Great American's control of Thomas falls within the bounds of common law conversion, because of a very important fact-she never demanded Thomas, and she has failed to show that any demand for Thomas would have been futile. Statutory Conversion and Theft Unlike tortious conversion, statutory conversion does not require a plaintiff to demand a return. Although a demand for return is not required, a plaintiff must present evidence to raise a reasonable inference that the defendant was aware that their possession was unauthorized. Contrary to the allegations no evidence exists for a jury to determine that Great American knowingly or intentionally exercised unauthorized control over Thomas. This is especially true when Greenbank's counsel specifically stated during a telephonic court conference that Great American could keep Thomas: When the magistrate judge asked, "Do you want the horse or not?," Greenbank's counsel replied, "No, as far as we are concerned, they can keep it." With no evidence that Great American knew that their continued control of Thomas was purportedly unauthorized, Greenbank's statutory conversion and theft claims fail. The judgment of the District Court was affirmed. ZALMA OPINION A horse owner upset because the insurer saved the life of the horse, at its expense, and the horse is now alive and well, is counter-intuitive. Most horse owners want their horse to live and be well. In this case the insured wanted the horse dead because she could recover $500,000. She would recover nothing if veterinarians paid for by the insurer brought the horse back to health. The Seventh Circuit dealt with all of the Plaintiff's specious arguments especially when she refused possession of her half-million dollar horse who is now well and acting like a healthy horse. (c) 2022 Barry Zalma & ClaimSchool, Inc. 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 at http://www.zalma.com and zalma@zalma.com. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome. 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; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Modern Tax Law Makes Punitive Damages Only For The Benefit Of The Lawyers In Gary L. Greenberg and Irene Greenberg v. Commissioner of Internal Revenue, No. 25420-07. (U.S.T.C. 01/24/2011) the United States Tax Court dealt with a recipient of insurance bad faith punitive damages who tried to avoid tax on the award. As a result, the recipient of the award of punitive damages for the bad faith conduct of their insurer, resulted in a major tax consequence and not the windfall the plaintiffs thought they received. Because the Greenbergs could not convince the Tax Court of their position the Court not only slapped the Greenbergs down in affirming a tax deficiency of over $1 million, but further sanctioned them with an accuracy-related penalty, because the taxpayers had neither substantial authority, nor reasonable cause underlying their posture on the damage award. The Tax Court noted that the definition of gross income broadly encompasses any addition to a taxpayer’s wealth. Therefore, absent an exception by another statutory provision, damage awards from a lawsuit must be included in gross income. In general, exclusions from income are narrowly construed by the tax court. The Greenbergs argued that the punitive damages they received in their insurance bad faith case may be excluded from income under section 104(a) (3) primarily because punitive damages could not have been awarded without the insurance policy. The Tax Court discounted the “but for” argument, and found it was discredited by the Supreme Court’s analysis of section 104(a)(2) in O’Gilvie v. United States, 519 U.S. 79 (1996). In that case the Supreme Court considered an earlier version of section 104(a)(2) that excluded from income “the amount of any damages received (whether by suit or agreement and whether as lump sums or as periodic payments) on account of personal injuries or sickness”. The Court reasoned that both the statute and the intention of Congress to exclude only those damages that compensate for personal injuries or sickness indicated that the exclusion does not include punitive damages.

"The Sleeze" - One of More than 85 True Crime Stories

Lawyer Lies on Application for Malpractice Insurance - Policy Rescinded Travelers issued a Lawyers Professional Liability Insurance Policy to Grimmer, Davis, Revelli & Ballif (“Grimmer Davis”). Grimmer Davis is a law firm with its principal place of business in Lehi, Utah. Matthew Grimmer was the sole shareholder of Grimmer Davis and had general managing and governing responsibilities at the firm. Grimmer is a licensed attorney with knowledge of the rules of professional conduct. Jacob Davis was an employee of Grimmer Davis. Davis is also an attorney with knowledge of the rules of professional conduct. Defendant Grimmer and Associates, P.C. (“G&A”) is a law firm with its principal place of business in Lehi, Utah. G&A is located in the same office as Grimmer Davis. Grimmer is the sole shareholder of G&A, and Davis was also employed at G&A. Grimmer made false statements in the application and in Travelers Casualty And Surety Company Of America v. Grimmer Davis Revelli & Ballif, P.C., et al., No. 2:19-cv-597-DAK-JCB, United States District Court, D. Utah (November 10, 2021) Travelers sought to rescind the policy. BACKGROUND Georgia Noel Inman and her twin brother Walker Patterson Inman III (“Patterson”) were clients or former clients of G&A and its attorneys. Patterson was also a client or former client of Grimmer Davis and its attorneys. Georgia and Patterson's father died when they were twelve years old. Their stepmother served as their deceased father's personal representative and successor trustee. However, there were allegations that she was pilfering or hiding assets from the estate. In 2013, Grimmer and G&A began representing Georgia and Patterson in the probate dispute with their stepmother in an action in Wyoming. On June 27, 2018, Georgia filed a motion to disqualify the firm Grimmer Davis and the individual attorneys Grimmer and Davis from representing Patterson in the consolidated trust cases pending in Wyoming, citing various conflicts of interest and breaches of professional duties against Grimmer, Davis, G&A and Grimmer Davis (“Grimmer Parties”). In this disqualification motion, Georgia asserted that the Grimmer Parties advocated for positions that favored Patterson and were adverse to her interests. The motion states that “Georgia potentially has claims against parties and lawyers in this litigation” and “Georgia now has viable claims, which she will be bringing to undo both the Greenfield Plantation sale and the assignment of claims”-two transactions involving Georgia, Patterson, and Grimmer. The Wyoming court appointed a Special Master in the consolidated trust cases, who issued a Report of Special Master on Georgia's Motion to Disqualify on March 5, 2019. The Special Master found that Grimmer made an audio recording of Georgia and used her confidential statement to him in a manner adverse to her best interests. Finally, the Special Master found that in refusing to pay sums due for the purchase of the Greenfield Plantation and in filing a counterclaim in related litigation in South Carolina, Grimmer was adverse to Georgia. The Special Master recommended that Grimmer and Davis be disqualified from further representation in the consolidated trust cases and that any member of any firm with which Grimmer was associated also be disqualified. He further recommended that Grimmer's pro hac vice admission be revoked. The South Carolina court also found that a material adversity existed between Grimmer, who at that time was the trustee of a trust holding assets for Patterson as the sole beneficiary, Patterson, and Georgia. INSURANCE Travelers had initially provided professional liability insurance coverage to Grimmer Davis for the policy period of March 20, 2018 to March 20, 2019. At the conclusion of that policy period, Grimmer Davis failed to submit a renewal application and the 2018 policy expired. Travelers did not automatically renew Grimmer Davis' coverage. However, in April 2019, Grimmer Davis requested that Travelers issue a new policy to provide coverage retroactive to March 20, 2019, the 2018 policy's expiration date. Grimmer Davis submitted an application for insurance, dated April 18, 2019, which Grimmer signed on behalf of Grimmer Davis. In response to Question 27 on the application, asking whether “you or any member or employee of your firm have knowledge of any incident, act, error, or omission that is or could be the basis of a claim under this proposed professional liability policy, ” Grimmer Davis answered “No.” Grimmer also agreed to immediately inform Travelers if any of the information supplied in the application changed between the date of the application and the effective date of any insurance policy Travelers issued in response to the application. If Grimmer provided any changed information, the application allowed Travelers to “withdraw or modify any outstanding quotation or agreement to bind coverage.” In order to evaluate Grimmer Davis' request for a renewal policy with a retroactive effective date of March 20, 2019, Travelers required Grimmer Davis to provide a letter confirming that its attorneys were not aware of any facts or circumstances after March 20, 2019, that may give rise to a claim under the renewal policy. Grimmer Davis provided Travelers with a letter, dated April 18, 2019 (“No Known Circumstances Letter”), stating, in part, that “[a]s of the date of this letter, we are not aware of any facts, circumstances, or losses from the period of March 20, 2019 to the present as respects our lawyers' professional lawyers insurance.” Kristin Montalvo, the Travelers underwriter responsible for Grimmer Davis' account, reviewed the application and letter to evaluate the risk of insuring Grimmer Davis. She provided Grimmer Davis with a quote and Grimmer Davis accepted. On April 19, 2019, Travelers issued to Grimmer Davis a Travelers 1st Choice+ Lawyers Professional Liability Coverage insurance policy, effective March 20, 2019 to March 20, 2020. A week later, on April 25, 2019, Georgia asserted a malpractice claim against Grimmer Davis, G&A, Grimmer, and Davis based on their prior representation of her. Montalvo, Travelers' underwriter, testified in an Affidavit that if Grimmer Davis had disclosed Georgia's various claims and assertions against the Grimmer attorneys in the Wyoming and South Carolina actions, as well as those court's findings regarding ethical violations, Travelers would not have issued the renewal policy. DISCUSSION Traveler’s Motion for Summary Judgment Utah law provides for rescission of insurance policies in three circumstances. Utah Code Annotated Section 31A-21-105(2) governs rescission and provides that “no misrepresentation . . . affects the insurer's obligations under the policy unless: (a) the insurer relies on it and it is either material or is made with intent to deceive; or (b) the fact misrepresented or falsely warranted contributes to the loss.” Courts applying this statute have held that an insurer may rescind a policy where the insurer relies on a material misrepresentation made by the applicant; the insurer relies on a misrepresentation that was made by the applicant with the intent to deceive; or the applicant's misrepresentation contributes to the loss. An insurer need only satisfy one of the justifications for rescission to rescind a policy. Travelers, however, claims that it is entitled to rescind the policy under all three of those justifications. Here, Grimmer acted on behalf of Davis Grimmer and attested in the application and the “No Known Circumstances” letter that no one at the firm was aware of any facts, circumstances, or losses that could impact coverage under the policy. However, at the time Grimmer signed those documents, Georgia Inman had already repeatedly threatened substantial claims against the firm and its attorneys, and two courts had already determined that the attorneys' conduct was improper and breached professional obligations to a former client. The information Grimmer gave or failed to give Travelers occurred before Travelers agreed to issue the policy. Although the policy's inception date was backdated to pre-date the Application, Travelers only agreed to backdate the policy because of Grimmer's misrepresentations and material omissions. The inception date of the policy, which was obtained as a direct result of misrepresentations and material omissions, does not require that the terms of the policy apply to the issue. The more applicable law in this situation is Utah's rescission statute. Utah courts have recognized that the doctrine of equitable estoppel will prevent a party from taking advantage of misrepresentations made in the insurance context. Equitable estoppel may be invoked to prevent injustice where one has reasonably relied to his or her detriment on an intentional or negligent false representation by another. [Barnard v. Barnard, 700 P.2d 1113, 1115 (Utah 1985).] All the elements for equitable estoppel are met here. Grimmer made untrue statements and omitted material information to obtain a policy with a backdated inception date. Travelers relied on those misrepresentations and agreed to issue the policy with a backdated inception date. The undisputed evidence demonstrates that Grimmer knew or should have known that the information he provided to Travelers was false and given with the intent to obtain the insurance policy. Intent to deceive can be inferred from circumstantial evidence. Grimmer had threats from Georgia Inman that she would bring any claims possible against the firms and attorneys. A few weeks before applying for the renewal policy, the Wyoming court issued a ruling in favor of Georgia. That ruling was issued five days after the prior policy expired. Grimmer knew or should have known that he and his firm needed insurance coverage. However, when he applied for that insurance coverage and asked for it to apply retroactively, he did not mention any of these material circumstances to Travelers. He knew or should have known that Travelers was concerned about this kind of information when they asked for a separate letter. Nonetheless, he did not disclose the information. Georgia made complaints relating to Grimmer Davis' ongoing representation of Patterson, the alleged resulting damages to assets owned by a trust to which Georgia is a beneficiary, and their obligations to her as a former client. Defendants contend that Georgia's claims against Grimmer Davis can simply be attributed to Georgia's confusion as to the firms' names. She did admit to some confusion as to the relationship of the two firms, but she also made clear she was seeking disqualification of Grimmer, Davis and both firms specifically. She repeatedly referred to “firms” in the plural, as did the courts. There is no genuine dispute as to whether Georgia threatened claims against Grimmer Davis and its members relating to conduct that occurred after she was represented by G&A. Under the terms of the policy, a “Claim” is a demand for “money or services” against an “Insured” for a “Wrongful Act.” Georgia claimed that the damages to the trust was in March 2018, after Grimmer Davis was formed. Georgia repeatedly made such claims stemming from Grimmer Davis' representation of Patterson in 2018 after Grimmer Davis was formed and representing Patterson. Grimmer does not allege that he was unaware of Georgia's claims and assertions. The Special Master's Report and the Wyoming Court's Order clearly dealt with both firms. Even if Georgia's claims against Grimmer Davis had proved to be unmeritorious, it was clear that she intended to bring them and bring them against Grimmer Davis, Grimmer, and Davis. It does not matter whether she alleged a valid claim, only that she was threatening to bring claims. Grimmer either knew or should have known that the information he provided Travelers was false. Grimmer's representations to Travelers were material because Travelers relied on them in issuing the renewal policy and they contributed to the loss. A fact is material to the risk assumed by an insurance company if reasonable insurers would regard the fact as one which substantially increases the chance that the risk insured against will happen and therefore would reject the application. If a fact would “naturally influence the insurer's judgment in making the contract, estimating the degree or character of the risk, or in fixing the rate of insurance, ” then it is material. Defendants present no evidence to dispute Travelers' position on reliance or materiality. Defendants do not assert a material disputed fact that would prevent this court from entering summary judgment. Even if Georgia Inman erroneously made claims against Grimmer Davis, and Grimmer and Davis in their roles at Grimmer Davis, Grimmer Davis should have disclosed the existence of those claims to Travelers when it was pursuing the renewal policy. Those claims were material and Travelers relied on Grimmer Davis' assertions that there were no such claims in issuing the policy renewal. Grimmer knew of the claims and did not disclose them. The court, therefore, concludes that Defendants made misrepresentations to Travelers, Travelers relied on those misrepresentations, and those misrepresentations were material to Traveler's decision to provide insurance. Accordingly, the court concluded that Travelers is entitled to rescind the policy under Utah law. The court further declares that the policy is void and Travelers has no duty to defend or indemnify Defendants under the policy. Therefore, the court granted Traveler's motion for summary judgment. ZALMA OPINION A lawyer should know that insurance is a contract of utmost good faith where neither party may do anything to deprive the other of the benefits of the contract. In this case, a lawyer not only failed to act in good faith when applying for malpractice insurance, he acted badly by misrepresenting to the insurer that he knew of no potential action against him or his firms when, in fact, he had been so advised by Georgia and her counsel and by orders of two different courts. Rescission was the only appropriate action available to the Travelers. © 2021 – 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. Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome. He is available at http://www.zalma.com and zalma@zalma.com. Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award. Over the last 53 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. Go to training available at https://claimschool.com; articles at https://zalma.substack.com, 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 https://www.rumble.com/zalma ; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg;Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/ podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4

An “adjuster” or “insurance adjuster” is by statutory definition, a person, co-partnership or corporation who undertakes to ascertain and report the actual loss to the subject-matter of insurance due to the hazard insured against. Insurance companies create, by issuing an insurance policy, a contractual obligation to pay its insureds’ valid claim. To do so insurers understand that the person insured is not able to prove the cause and extent of loss without assistance. Therefore, insurers dispatch a person with special knowledge – the adjuster – to separate fact from fiction, to establish cause and origin of the claimed loss, and determine sufficient information to enable the insurance company determine the amounts necessary to indemnify the insured as the policy promised. The adjuster is also present to distinguish the valid claim from a claim for which the insurance company is not liable under its policy. Some policies specifically state that the claimant must use his own judgment in estimating the amount of loss and that the assistance of an insurance adjuster is a “courtesy only” — the claimant must still send a proof of loss within 60 days after the loss even if the adjuster does not furnish the form or help you complete it. As a general rule, when an insurer gives its insured written notice of its desire that proof of loss under a policy of fire insurance be furnished and provides a suitable form for such proof, failure of the insured to file proof of loss within 60 days after receipt of such notice, or within any longer period specified in the notice, is an absolute defense to an action on the policy.

Construction Defects That Need Insurance to Respond Construction defects are any deficiencies in the performance or completion of the design, planning, supervision, inspection, or construction for any new building or structure that has been remodeled or undergone repairs. Understanding what a construction defect is has become so complex that states have begun to define them by statute. For example, construction defects are defined as a “violation of statutory performance standards for every building component in a dwelling” for any new residential construction sold after January 1, 2003, in California. Under Illinois law, it is well-established that a construction defect is not an “occurrence” or “accident”; rather, it is the natural and ordinary consequence of poor workmanship. Since almost anything in a construction project can go wrong, this chapter will only deal with the kinds of construction defects that have caused, and will continue to cause, major damage to property and serious problems for occupants of structures. Courts across North America have recognized the following major, albeit not all-inclusive, construction defect categories: Design Deficiencies ¾ where design professionals, such as architects or engineers, design buildings that do not function as intended or specified. The motivation for the design may be form, function, aesthetics, or cost considerations, but the result is a defect. Material Deficiencies ¾ use of inferior building materials causing problems, such as leaky windows, or deterioration of flashing, building paper, waterproofing membranes, asphalt roofing shingles, particle board, drywall, or other products. Leaking windows are a common claim of defect and prevention requires good workmanship. Window leaks can result from many things including, rough framing not being flush with outside at openings, improperly flashed windows, improperly applied building paper, window frame that is racked during storage or moving, or lack of sheet metal drip edge above window header. Construction Deficiencies ¾ substandard workmanship often manifested by water intrusion, cracked foundations, floor slabs, or walls, dry rotted wood or other building materials, termite or other pest infestations, electrical and mechanical problems, plumbing leaks and back-ups, lack of appropriate sound insulation, and/or other problems related to poor quality work. Poor quality workmanship often is seen by property owners as water infiltration through some portion of the building structure. Cracks in foundations, floor slabs, walls, dry rotting of wood or other building materials, termite or other pest infestations, electrical and mechanical problems, plumbing leaks and back-ups, lack of appropriate sound insulation and fire-resistive construction between adjacent housing units. © 2020 – 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 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com. Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award. Over the last 52 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. https://zalma.com/zalmas-insurance-fraud-letter-2/Read last two issues of ZIFL here. Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921 Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts Listen to the Podcast: Zalma on Insurance https://anchor.fm/dashboard/episodesZalma on Insurance Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/ Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkV7pkuOtkiv6oakpgK33CNlNAYW-WBlLCOZFtgvpSdcL7R-tsWKfMVqG6fEuvmM7Hh7gUEJ7yKOdgHDbGl_cGAU%3De-mail Version of ZIFL, it’s Free! –

A Video Explaining the Obligations of an Adjuster to the Underwriting of Insurance A djusters are the representatives of the insurers who fulfill the promises made by the underwriter when the risk was taken and a policy was issued. The adjuster (sometimes called a claims representative) must determine that the decision to insure was based upon accurate facts and that the underwriter fully understood the risk he or she was taking. The work of the underwriter begins with the submission of an application from a prospective insured, directly or by an agent or broker. The underwriter reviews the application and either presents an offer to insure or a refusal to insurer. The underwriter is obligated by tradition and the history of the insurance industry to believe that the applicant reports facts to the underwriter honestly and in good faith. By considering that the applicant is dealing with the underwriter fairly and in good faith the underwriter is able to be confident in the evaluation of the risk presented. The application presented to an underwriter, either directly or via an agent or broker, is a request for an offer of insurance. Acting on the understanding that the applicant is acting in good faith the underwriter can weigh the hazards faced by a particular property, individual or business before agreeing to take on the risk of loss and make an offer of insurance. After completing a review of the application and all facts available to the underwriter from other sources and his or her experience will either issue an offer of insurance or a refusal to insure. Underwriters take information from adjusters, after a loss, to reevaluate the risk decision, to be certain they were not deceived and to better evaluate the risk taken so they can deal with future requests for renewal or increases in coverages fairly and in good faith. Sometimes an insurer will ask an adjuster to perform a pre-risk inspection to determine if the risk is worthy before the underwriter makes the decision to accept a risk for insurance. Underwriters also use the services of inspection companies and engineers to inspect the property or the risk before making a decision to offer or refuse to offer insurance. Usually, however, information from the adjuster is provided to help the underwriter determine whether to cancel, non-renew, or continue on the risk, or modify the policy and premium before agreeing to continue on the risk on the same terms and conditions or modify terms, conditions and premium amount. © 2021 – 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 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com. Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award. Over the last 53 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. 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;Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/ podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4

Zalma's Insurance Fraud Letter - October 1, 2022 Insurer Proactive Against Fraud CIGNA Obtains $14,371,384.95 Judgment Against Fraudulent Health Care Provider Since police, prosecutors and state insurance fraud investigators are seldom willing to arrest or prosecute insurance fraud perpetrators it is necessary for insurers to be proactive and sue those who attempt or succeed in defrauding insurers. In Connecticut General Life Insurance Company and CIGNA Health And Life Insurance Company v. Mike Ogbebor and Stafford Renal LLC, No. 3:21-cv-00954 (JAM), United States District Court, D. Connecticut (September 6, 2022) CIGNA successfully sued a fake provider and obtained a default judgment for almost $15 million against the corporate defendant and its alter ego individual. Read the full story at ZIFL-10-01-2022 Another Florida Insurer Is Insolvent FedNat Insurance Co. is now insolvent and must be liquidated – the sixth Florida property insurer this year to throw in the towel. The Florida Department of Financial Services filed a consent agreement with the Leon County Circuit Court, detailing the extent of FedNat’s financial troubles and asking the court to approve DFS as the receiver for the insurer. The move was not unexpected, after FedNat agreed in May to cancel policies, transfer others to a sister company and wind down operations with what regulators hoped would be an orderly runoff. The Demotech financial rating firm also withdrew its stability rating for FedNat on August 1, 2022. Read the full story at ZIFL-10-01-2022 Free Insurance Videos Barry Zalma, Esq., CFE has published five days a week videos on insurance claims, insurance claims law, insurance fraud and insurance coverage matters at https://www.rumble.com/zalma.https://rumble.com/c/c-262921. He 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. Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award. Over the last 54 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. See the more than 400 videos at https://www.rumble.com/zalma Good News From the Coalition Against Insurance Fraud In shock and her blood pressure rising, Sharon Beighton was stunned to learn Bruce Saunders fell into a woodchipper and was ground up while clearing trees on her property near Brisbane, Australia. A tragic accident, it seemed. Prosecutors allege he was murdered: In a complex love “quadrangle,” Sharon Graham had two lovers hit Saunders on the head with a crowbar and place his lifeless body into the chipper so she could claim his $750K (AU) life policy. Graham is a former boyfriend of Saunders and was policy beneficiary. Roser was clearing trees with Saunders and swung the death-dealing crowbar. Peter John Koenig helped Roser feed Sanders into the chipper. Roser then lied that a tree branch hit Saunders, making him woozy and bleeding. Seemingly confused, Saunders supposedly stood unsafely on top of the chipper and tumbled into the churning blades — head-first. Police photos show Saunders’ legs sticking out of the woodchipper horizontally. Graham plotted his murder for six months. Yet Saunders’ murder made no sense to Beighton. Far from woozy, he appeared perfectly alert and wasn’t bloody, she told investigators. Beighton’s granddaughter said Graham made a “big deal” about how much money Saunders had and that “he would die first, and she would get everything.” Graham called the life insurer just a few days after the murder to collect the money. Graham and Roser face trial. Koenig pled guilty. Read the full list of convictions at ZIFL-10-01-2022 A Resource for the Insurance Professional After practicing insurance law for over five decades, Barry Zalma, an internationally recognized and award-winning insurance expert and author, is releasing multiple education books on Amazon.com. The publications are designed to inform claims people, special investigation unit investigators, coverage lawyers, plaintiffs’ bad faith lawyers, insurance management and the insurance buying public on insurance claims procedures and insurance fraud. Each resource leverages key insights and learnings from Zalma’s 55+ years of practical experience as a claims person and insurance coverage attorney. To be an insurance professional requires continuous learning. That’s the motivation behind my writing; I have felt a need to share my experiences to help people in the industry learn how to properly handle claims and avoid accusations of the tort of bad faith.” See his latest interview for new adjusters at https://player.fm/series/daily-claims/episode-11-advice-for-new-and-aspiring-adjusters. Visit Zalma’s Insurance Claims Library to view all publications that can be purchased through Amazon as Paperback and Kindle e-books. Health Insurance Fraud Convictions U.S. Attorney & Feds Increase Efforts to Prosecute Fraud Perpetrators Durable Medical Equipment Company Health Care Fraud Sentenced to Seven Years in Federal Prison Daniel Pintado Cazola, on September 9, was sentenced to 87 months in prison for his role in using a durable medical equipment company to commit Medicare and Medicaid fraud and trying to conceal his connection to the crime by listing a straw owner in corporate and bank records. Earlier this year, Pintado Cazola pled guilty to one count of conspiracy to commit health care fraud, wire fraud, and mail fraud, and one count of aggravated identity theft. Read the full list of convictions at ZIFL-10-01-2022 Prosecutors Allow Arson-for-Profit to Succeed Stupid Plea Bargain Destroys Insurer’s Right to Restitution Intentionally burning a dwelling and the concomitant presentation of an insurance claims is an arson for profit and two serious felonies. However, in The People V. Damon Lawrence George, C095325, California Court of Appeals, Third District, Placer (September 12, 2022) Damon Lawrence George was allowed by the prosecution to plead guilty only to the unlawful burning of his house. The People, failing to understand the implications upon an insurer, allowed the insurance fraud to succeed by dismissing several related charges against defendant, including insurance fraud, without obtaining a People v. Harvey (1979) 25 Cal.3d 754 (Harvey). waiver, and allowing the defendant to keep the money paid. Read the full story at ZIFL-10-01-2022 Other Insurance Fraud Convictions Salt of the Earth Michigan Farmer Will Pay $1.2 Million Settlement Over Crop Insurance Fraud Gaylord D. Lincoln and G. Lincoln Farms, LLC, located in Springport, Michigan, agreed to pay $1,200,000 to resolve allegations that they violated the False Claims Act by causing the submission of fraudulent claims for federal crop insurance and federal farm benefit payments. The settlement amount was negotiated based on the defendants’ ability to pay. This settlement resolves civil claims the United States brought against the defendants in a December 2021 lawsuit. In its complaint, the United States alleged that the defendants defrauded the U.S. Department of Agriculture’s (“USDA”) Farm Service Agency (“FSA”) by operating a scheme to avoid benefit program payment limitations. Specifically, the United States alleged that the defendants placed their farmland and crops in the names of their employees, who served as a facade for defendants but had no financial risk or interest in the crops and had them enroll in FSA benefit programs. These individuals then provided the FSA benefit payments to the defendants. The United States further alleged that defendants caused these individuals to take out fraudulent federal crop insurance policies for these crops, even though they had no insurable interest in these crops, and that the proceeds of the policies went to the defendants. The complaint and other filings in this case can be found on the Court’s online docket under United States v. Lincoln, No. 1:21-cv-1089 (W.D. Mich.). Read the full list of convictions at ZIFL-10-01-2022 New Books: “How to Acquire, Understand, and Make a Successful Claim on a Commercial Property Insurance Policy: Information Needed for Individuals and Insurance Pros to Deal With Commercial Property Insurance” The New Book is now available as a Kindle book here, paperback here and as a hardcover here. The Tort of Bad Faith What Every Insurance Professional, Every Insurance Coverage Lawyer, Every Plaintiffs Bad Faith Lawyer, and Every Insurance Claims Person Must know About the Tort of Bad Faith Available as a Hardcover Available as a paperback Available as a Kindle Book Insurance Fraudsters Deserve No Quarter What every insurer should know about how it can be proactive in the efforts against insurance fraud by refusing to pay every fraudulent claim. How Giving No Quarter Worked Many years ago a client I represented was offended that an insured tried to defraud him and the people who were names in the syndicate he represented at Lloyd’s, London.I walked the Underwriter through the debris of the house that was burned, showed him some of the remains of the allegedly highly valuable fine arts, and then explained how he was deceived into issuing the policy. I was the attorney for Lloyd’s underwriters for the fine arts and Imperial Casualty for the homeowners policy. Barry Zalma, Esq., CFE 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 54 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. 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, 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

The Staged Loss Some losses are fictions created for the sole purpose of presenting a claim like those engaged in by convicted attorneys in my book, Insurance Fraud, Volume I. The number of variations on types of staged losses are limited only by the imagination of the insurance criminals. Some of the variations follow: AUTOS Staged Theft. A staged theft occurs when “the owner contracts with an intermediary to dispose of a vehicle. The owner ‘gives up’ the vehicle and then reports it to the insurer as stolen." The person to whom the vehicle is given up will pass it to a salvor who breaks it up into its component parts and sells the parts (a “chop shop.”) The staged theft is difficult to detect unless the perpetrator is sloppy, aggressive or forgets his prepared script as to the loss facts. For example, in United States of America v. Rocky Glen Beasley, No. 11-30228 (5th Cir. 10/27/2011) Rocky Glen Beasley was convicted by a jury of wire fraud and conspiracy to commit wire fraud. He was sentenced to one year and one day of imprisonment and a two-year term of supervised release. Beasley’s convictions stem from the staged theft of his Ford F-150 pickup truck by Stephen Yates. According to the evidence adduced at trial, Beasley and Yates prearranged the staged theft of Beasley’s truck. Overwhelming evidence required the conviction to be affirmed, A staged theft of an automobile performed to defraud an insurer is a crime and can be punished in federal and state courts. Rocky Glen Beasley was unfortunate enough to be tried and convicted in federal court where fraud convictions bear definite sentences. Abandonment The owner abandons a vehicle on a city street or in a parking lot, creating a morale hazard where the car will usually be stolen. The insured will report the vehicle stolen and attempt to collect from an insurer before the vehicle is recovered. Dumping “[T]he owner disposes of a vehicle by dumping it into a lake or other body of water.” Cars have even been found buried underground and some lakes have been found to have more than 50 cars underwater.

What is a Man in the Middle Attack? After an unknown individual (“fraudster”) gained unauthorized access to Fishobowl’s accountant, Ms. Wendy Williams’ e-mail account. Once inside Ms. Williams’ e-mail account, the fraudster created certain “rules” to redirect certain e-mail communications within the e-mail system. One rule redirected e-mail communications containing certain keywords to an e-mail account that is not associated with Fishbowl. Another rule marked e-mail communications sent from “fedins.com” as having already been “read, ” and automatically stored them in the “RSS Subscriptions” folder. These rules prevented Ms. Williams from noticing certain e-mail communications, including e-mails from Federated Insurance regarding invoice payments. In Fishbowl Solutions, Inc. v. The Hanover Insurance Company, No. 21-cv-00794 (SRN/BRT), United States District Court, D. Minnesota (May 9, 2022) it became clear that the purpose of the scheme was to trick Fishbowl’s customers into paying invoices to the fraudster without Fishbowl noticing. Pursuant to this scheme, the fraudster directed six of Fishbowl’s customers to change how and where to make their payments. By employing a variety of techniques to conceal the scheme, the fraudster posed as Ms. Williams when communicating by e-mail with Federated Insurance. The fraudster also posed as Federated Insurance when communicating by e-mail with Ms. Williams. As a result of the scheme, Federated Insurance made two payments to the fraudster, totaling $176,962. The fraudster was a classic man in the middle who attacked Fishbowl to the tune of more than $176,962. Fishbowl discovered the scheme and informed the six customers about the scheme, five of them were able to recall or redirect their payments. However, Federated Insurance was unable to do so. Although the United States Secret Service recovered $29,035.79 of the monies paid by Federated Insurance to the fraudster, Fishbowl suffered a loss of the difference, which totaled $147,926.21. BACKGROUND Fishbowl is a software company. It creates and customizes packaged software for its customers using the latest technologies. This software helps customers innovate and access information. The Policy Hanover issued a Technology Professional Liability Policy to Fishbowl. The Policy provides “Cyber Business Interruption and Extra Expense” coverage (the “Coverage”), as follows: “We will pay actual loss of ‘business income’ and additional ‘extra expense’ incurred by you during the ‘period of restoration’ directly resulting from a ‘data breach’ which is first discovered during the ‘policy period’ and which results in an actual impairment or denial of service of ‘business operations’ during the ‘policy period.’” The term “[b]usiness income” includes net income “that would have been earned or incurred if there had been no impairment or denial of ‘business operations’ due to a covered ‘data breach.’” “Business operations” means Fishbowl’s “usual and regular business activities.” “Data breach” is defined in seven different ways in the Policy. The Insurance Claim Hanover received Fishbowl’s insurance claim seeking reimbursement for business interruption and losses due to the fraudster’s conduct. Within a few weeks, Hanover denied the claim. The Civil Suit Fishbowl sued, alleging breach of contract and seeking declaratory and monetary relief. During discovery, Fishbowl deposed the claims manager Fishbowl alleged that claims manager testified that, as defined by the Policy, Fishbowl “sustained a data breach” and “had suffered an actual loss of business income.” Plaintiff’s Motion to Amend Fishbowl timely moved to amend the Complaint, seeking to add a claim for bad faith. Fishbowl contended that Hanover acted with bad faith by repeatedly ignoring, and by failing to properly investigate, its claim and by failing to cover its loss. The Order The magistrate judge denied the motion to amend as futile. In reaching that decision, the court analyzed whether Plaintiff had plausibly plead a claim for bad faith in the Proposed Amended Complaint. The magistrate judge found that Fishbowl failed to plausibly plead the second prong of the test. The court concluded that it is an unresolved legal question whether the Coverage applied to losses caused by a “man in the middle” cyberattack. Because the law is unresolved, the court found the issue “fairly debatable,” and therefore, cannot serve as a basis for a claim of bad faith. DISCUSSION Federal Rules of Civil Procedure provides that “[t]he court should freely give leave [to amend a pleading] when justice so requires.” Fed.R.Civ.P. 15(a)(2). But “[a] district court may appropriately deny leave to amend where there are compelling reasons such as . . . futility of the amendment.” The Amendment is futile where the proposed amended claim would not withstand a motion to dismiss for failure to state a claim. Although a complaint need not contain detailed factual allegations, it must allege facts with enough specificity to raise a right to relief above the speculative level. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, are insufficient. Analysis The Minnesota Legislature has created a private cause of action to penalize bad faith denial of benefits by insurance providers. Under the statute, a party, after commencing a civil suit, may make a motion to amend the pleadings to claim recovery of taxable costs. The applicable legal basis for establishing a claim under the statute is a two-prong test, which is as follows: The court may award as taxable costs to an insured . . . if the insured can show: (1) the absence of a reasonable basis for denying the benefits of the insurance policy; and (2) that the insurer knew of the lack of a reasonable basis for denying the benefits of the insurance policy or acted in reckless disregard of the lack of a reasonable basis for denying the benefits of the insurance policy. At this stage of the proceedings, plaintiff needs to plausibly plead facts that demonstrate each prong of the test. First: the pertinent question is “whether a reasonable insurer under the circumstances would not have denied the insured the benefits of the insurance policy.” A reasonable insurer would not have denied the benefits when there was a covered data breach. Accordingly, the Court found that Plaintiff has plausibly plead the first prong. Second: the plaintiff must pass a subjective test, requiring a certain mens rea on the part of the insurer. Specifically, it requires an insured to prove that the insurer knew, or recklessly disregarded or remained indifferent to information that would have allowed it to know, that it lacked an objectively reasonable basis for denying the insured’s claim for benefits. Even if Plaintiff is correct as to the failures of Hanover’s investigation, a district court will not grant a motion to amend the pleadings to add a bad faith claim where it is “fairly debatable” whether coverage applies. Even if Plaintiff’s legal interpretation of the Policy might prevail, the fact that the issue is legally debatable precludes a bad faith claim. In the absence of any case law that controls whether a “man in the middle” attack constitutes a data breach on the Policy, the Court finds Hanover’s interpretation reasonable. The Magistrate Judge’s April 6, 2022 Order was affirmed. ZALMA OPINION Bad faith requires a mens rea or an evil intent. When the law is unclear and the insurer fairly argues an issue that is debatable and where there is no dispositive case law, the issue is fairly debatable and there is no basis for seeking damages for damages due to the tort of bad faith . Just published Random Thoughts on Insurance Volume XIV: A Collection of Blog Posts from Zalma on Insurance — (c) 2022 Barry Zalma & ClaimSchool, Inc. 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 at http://www.zalma.com and zalma@zalma.com. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome. 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; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Only Truck Driver Responsible for Accident After a collision between an Amtrak train and a truck pulling a trailer there were multiple lawsuits filed for injuries of people on the train and the widow of the truck driver, Bobby Jenkins who died in the accident. The collission occurred when, despite warning markers, Jenkins failed to stop at the point where the private road on which he was driving crossed the railroad track. In Progressive Paloverde Insurance Company v. BJ Trucking Earthmover, L.L.C. Defendant, et al, No. 21-30379, United States Court of Appeals, Fifth Circuit (July 15, 2022) established who was responsible for the accident and resulting injuries. BACKGROUND The Accident On the day of the collision, Jenkins was hauling sand in Southeastern Louisiana. He was driving a semi-truck pulling a dump trailer. Both the truck and trailer were owned by BJ Trucking Earthmover, LLC (“BJ Trucking”) of which Jenkins was the only member. The twenty-seven tons of sand he was hauling came from the Fluker Pit which is on property leased from Fluker Farms, Inc. by Industrial Aggregates of the Florida Parishes, L.L.C. (“Industrial Aggregates”). The private road on which Jenkins was driving was allegedly owned by Kent Enterprises, LLC (“Kent”). Jenkins attempted to cross the railroad track at DOT#930094V. The crossing is marked by two stop signs and two “cross bucks.” Illinois Central Railroad, Co. (“IC/CN”) owns the track on which the Amtrak train was traveling at the time. The train was traveling at the permitted track speed of 79 miles per hour. Jenkins neither slowed nor stopped at the crossing as he approached it. Video surveillance recorded by the train established that while approaching the crossing, Bobby Jenkins ignored the stop sign and crossbucks and did not slow down. Jenkins drove into the crossing, and he and the vehicle were struck by the train. Jenkins’s widow, Katy Jenkins, filed the original lawsuit in state court. A series of related cases were then consolidated. Progressive Paloverde Insurance Company (“Progressive”) insured the truck that Jenkins was driving. Heck Industries, Inc. (“Heck”) was alleged to have been Jenkins’s employer at the time of the accident, but Heck insists that Jenkins was working as its independent contractor. Heck submitted a defense and indemnity claim to Progressive because Heck was named as an additional insured on the Jenkins policy. Gray Insurance Co. (“Gray”) insured Heck, but maintains that its policy provides only excess coverage for Heck. Gray contends that the Progressive policy should be primary. Progressive filed a declaratory judgment complaint to determine whether it (Progressive) owed defense or indemnity to any of the named parties. In a series of orders granting summary judgment, the district court concluded: the sole cause of the collision between the truck driven by Bobby Jenkins, and operated by Bobby Jenkins and [BJ Trucking], was the negligence of Bobby Jenkins and [BJ Trucking]; Heck was not an employer of Bobby Jenkins or [BJ Trucking]; Progressive’s non-trucking insurance policy did not cover the 1998 Peterbilt truck driven by Bobby Jenkins at the time of the collision; and Industrial Aggregates breached no duty to maintain the railroad crossing. ISSUES ON APPEAL: Did the district court err in granting summary judgment holding that Jenkins was the sole cause of the collision? Did the district court err in holding that Jenkins was not an employee of Heck? Did the district court err in holding that Progressive’s non-trucking exclusion barred its policy’s coverage for this accident? CAUSE OF THE COLLISION Injured people employed on the train brought their claims under the Federal Employers Liability Act (“FELA”). FELA provides the exclusive remedy for a railroad employee engaged in interstate commerce whose injury resulted from the negligence of the railroad. Awarding summary judgment to the defendant railroad is appropriate only when there is a complete absence of probative facts to support a jury verdict in the plaintiff’s favor. Under Louisiana law, a motorist approaching a railroad crossing marked by a stop sign must “stop” and may not proceed until he can do so safely. When the crossing is marked by a cross buck, such a motorist must listen and look in both directions along such track for any approaching train and for signals indicating the approach of a train. He must yield the rightof-way to any approaching train and then shall proceed only upon exercising due care and upon being sure that it is safe to proceed. A motorist’s failure to comply with these duties suffers legal consequences. There was no evidence of defect in the crossing. Amtrak met the burden by providing a crossing that can be traversed by a motorist who uses reasonable care. That is especially true in this case because Jenkins was familiar with the crossing: He had crossed it on a near-daily basis over several years. EMPLOYEE OR INDEPENDENT CONTRACTOR? Employers are responsible for the damage caused by their employees, but a principal cannot be held liable for the acts of an independent contractor. Jenkins was not Heck’s employee. Heck, therefore, is not responsible for Jenkins’s actions. The question whether an actor is an employee or an independent contractor may be resolved as a matter of law when the facts are not in dispute. The element of control that distinguishes an employee from an independent contractor focuses on whether the purported employer had the right to control the method and means by which the individual performed the work tasks. It matters less what supervision and control is actually exercised; the important question is whether, from the nature of the relationship, the right to do so exists. Heck did not have any control over the manner in which Jenkins completed his work. Heck based payment to Jenkins on each discrete load. Jenkins controlled his own schedule, and either he or Heck could have terminated the relationship at any point. The district court is correct that Heck did not exercise – and did not have the ability to exercise – control over the manner and means in which Jenkins completed his work. INSURANCE Jenkins’s policy with Progressive named Heck as an additional insured. Heck pleaded that Progressive was “obligated to defend, indemnify, and insure Heck” for the accident. However, the district court agreed with Progressive that its non-trucking exclusion barred coverage of Heck. At the time of the accident, Jenkins was hauling twenty-seven tons of sand. The non-trucking exclusion applies because Jenkins was indisputably hauling property at the point of collision. The district court was correct in holding that Progressive’s policy did not cover Jenkins’s truck or its trailer during this accident because those vehicles were unquestionably hauling property. And, that function was clearly excluded from coverage. No party in this appeal has standing to challenge the dismissals of Industrial Aggregates or Gray. Their dismissals, therefore, must stand. Similarly, Kent was properly dismissed from this appeal by a joint motion. The trial court did not err. ZALMA OPINION Mr. Jenkins limited the insurance coverage he bought to protect third parties he might injury while operating his tractor and acquired a policy that excluded coverage while he was hauling property. He was clearly negligent and that negligence caused his death as well as injury to those on the train and the train itself. No coverage for anyone and the finding that he was solely responsible for the accident and injuries the injured could only collect from his estate. Sad for those injured who would not have been injured had he stopped at the crossing. Just published Random Thoughts on Insurance Volume XIV: A Collection of Blog Posts from Zalma on Insurance — (c) 2022 Barry Zalma & ClaimSchool, Inc. 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 at http://www.zalma.com and zalma@zalma.com. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome. 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; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

A site for the insurance claims professional and anyone who wants to know soThe first thing every person representing an insurer with regard to a potential fraudulent claim must understand that the insurance policy is the basis for every insurance fraud investigation. Without an insurance policy there can be no insurance fraud. The insurance policy contract describes the rights and obligations of the parties to the policy of insurance. It contains, in clear and unambiguous language, weapons to defeat a fraudulent claim. The construction of insurance contracts should be, but often is not, governed by the same rules of construction applicable to all contracts. The courts claim that when they construe an insurance contract it gives the terms of the policy their ordinary and generally accepted meaning. The primary goal of the court is to give effect to the written expression of the intent of the parties to the insurance policy. Some rules that must be followed when construing or interpreting an insurance contract include: If the terms of the policy are in any respect ambiguous or uncertain, it must be interpreted in the sense in which the promisor (the insurer) believed at the time of making it, that the promisee (the insured) understood it. If the language of a policy or contract is subject to two or more reasonable interpretations, it is probably ambiguous. Where an ambiguity involves an exclusionary provision of an insurance policy, courts adopt the construction urged by the insured as long as the construction is not unreasonable, even if the construction urged by the insurer appears to be more reasonable or a more accurate reflection of the intent of the insured and insurer. In reaching the conclusion that a policy exclusion was ambiguous, and the policy, therefore, provided coverage, the courts should follow the settled rule that any ambiguity or uncertainty in an insurance policy is to be resolved against the insurer and that if semantically permissible, the contract will be given such construction as will fairly achieve its object of providing indemnity for the loss to which the insurance relates. It is a maxim of law that a contract should be construed against its drafter. The maxim is sometimes referred to as the contra preferendum Provisions excluding coverage are strictly construed against the insurer. Ambiguities in insurance applications will usually be construed against the insurer to avoid denial of coverage because of alleged misrepresentations. Where the language of a contract is clear and unambiguous, it must be interpreted solely by reference to the four corners of that document. When a policy is interpreted, the provisions of an endorsement controls the interpretation over the body or declarations of a policy when the two are in conflict. The basic rules of construction or interpretation of an insurance contract are all subject to the limitation that a court cannot and should not do violence to the plain terms of a contract by artificially creating ambiguity where none exists. In situations in which reasonable interpretation favors the insurer, and any other would be strained and tenuous, no compulsion exists to torture or twist the language of the contract. An insurance company has the right to limit the coverage of a policy issued by it and when it has done so, the plain language of the limitation must be respected. © 2020 – 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 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com. Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award. https://zalma.com/zalmas-insurance-fraud-letter-2/Read last two issues of ZIFL here. Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921 Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts Listen to the Podcast: Zalma on Insurance https://anchor.fm/dashboard/episodesZalma on Insurance Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/ Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkV7pkuOtkiv6oakpgK33CNlNAYW-WBlLCOZFtgvpSdcL7R-tsWKfMVqG6fEuvmM7Hh7gUEJ7yKOdgHDbGl_cGAU%3De-mail Version of ZIFL, it’s Free! –

Zalma's Insurance Fraud Letter Volume 25, Issue 4 – February 15, 2021; A ClaimSchool™ Publication © 2021. Barry Zalma & ClaimSchool, Inc., Go to my blog & Videos at: Zalma on Insurance, And at https://zalma.com/blog Go to the Insurance Claims Library,Listen to the Podcast: Zalma on Insurance, Videos from Zalma on Insurance, Subscribe to e-mail Version of ZIFL, it’s Free! Read last two issues of ZIFL here;Go to the Barry Zalma, Inc. web site here,Videos from “Barry Zalma on YouTube” Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921 Bad Faith Set-Ups Bad faith insurance claims are successful when a plaintiff can prove that the insurance company wrongfully denied an insurance claim and deprived the insured of the benefits of the contract of insurance without good cause. Bad faith insurance suits can arise in the context of any insurance policy. Convicted of Insurance Fraud In State of Delaware v. Paul Disabatino, ID No.: 1505000293, Superior Court of The State of Delaware (February 3, 2021) Health Insurance Fraud Convictions Videos on YouTube And Zalma On Insurance from Barry Zalma ­­­Over 110 Videos describing important insurance issues described by Barry Zalma and available to anyone who views or subscribes to the YouTube account. Issues include insurance fraud, definition of insurance, insurance as a contract of personal indemnity, millions for defense and not a dime for tribute and the tort of bad faith. Please subscribe. There are 62 Videos are at https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw/videos but I have had some difficulty posting new videos to my YouTube channel and have decided to post all future videos on insurance, insurance claims, insurance law, and insurance fraud to this YouTube Channel my Rumble channel https://rumble.com/c/c-262921 and my blog, https://zalma.com/blog. Other Insurance Fraud Convictions New Book: “It’s Time to Abolish The Tort of Bad Faith” Consider Books to Show Your Appreciation to Your Insurer Clients or Claims Employees By providing clients, claims departments, or claims personnel with any one or more of the books offered by the Insurance Claims Library. By so doing you can add to the insurance claims professionalism of your clients, employees and claims personnel. With delivery handled by Amazon.com any one or more of the following books, all available from amazon.com and http://zalma.com/blog/insurance-claims-library/, will gain the respect and gratitude from each recipient and their employers. Zalma on Insurance Videos Over the last 53 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created a library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals available at http://zalma.com/blog/insurance-claims-library/. My original channel does not allow me to add posts so I have created a new channel, Barry Zalma available at Zalma on Insurance Videos and at https://rumble.com/search/video?q=zalma where I post a new video almost every day Podcasts are available at https://anchor.fm/barry-zalma; https://www.breaker.audio/zalma-on-insurance; https://www.google.com/podcasts?feed=aHR0cHM6Ly9hbmNob3IuZm0vcy8xY2FlYjg1NC9wb2RjYXN0L3Jzcw==; https://overcast.fm/itunes1509583809/zalma-on-insurance; https://pca.st/ujampbxm; https://radiopublic.com/zalma-on-insurance-Wel2lZ; and https://open.spotify.com/show/2VTJCeGmBUkf0IlFV8SWJk. Barry Zalma, Esq., CFE © 2021 – 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 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com. Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award. Over the last 53 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.

A VIDEO EXPLAINING ZALMA’S INSURANCE FRAUD LETTER JANUARY 15, 2021 Professional Insurance Adjusting and Insurance Fraud At the turn of the century, insurers, in a search for profit, decimated their professional claims staff. They laid off experienced personnel and replaced them with young, untrained and unprepared people. A virtual clerk replaced the old professional claims handler. Process and computers replaced skill and judgment. Insurers intentionally forgot that the promises made by an insurance policy are kept by the professional claims person. A professional claims staff is a cost-effective method to avoid litigation. The professional claims person is an important part of the insurer’s defense to litigation against insurers for breach of contract and to detect and defeat attempts at insurance fraud. A staff of claims professionals dedicated to excellence in claims handling are a profit center for an insurance company. Experience establishes that claims professionals resolve more claims for less money without the need for either party to involve counsel. A happy insured or claimant satisfied with the results of his or her claim will never sue the insurer. Incompetent or inadequate claims personnel force insureds and claimants to lawyers. Every study performed on claims establish that claims with an insured or claimant represented by counsel cost more than those where counsel is not involved. Excellence in Claims Handling Excellence in claims handling is a program that can help insurers avoid charges of bad faith in both first and third party claims. Proposal Insurance fraud is not a local problem. It is a depletion of the wealth of the entire country. The lawyer for the Department of Insurance of each state is the State Attorney General. A special unit could be established in the office of the Attorney General, funded with the monies taken from the insurance industry to support the war against insurance fraud. This unit should be given a simple mandate: File and prosecute every insurance fraud brought to the unit by the Fraud Division that has a better than 50% chance of success. Single counts should be prosecuted. When prosecutors file multiple charges against individual defendants the case becomes a major action requiring a great deal of time to prosecute. Judges and juries do not want to be involved in a prosecution that takes months to prosecute. If there are multiple counts available, the prosecutor should charge only the one where the evidence of fraud is overwhelming. If the jury finds for the defendant the prosecutor can charge the next count continuously until the statute of limitation runs. Sentences across the state must be consistent and true punishment. I have seen such inconsistency where cases, after conviction, the criminals received sentences that ranged from 24 hours to 24 years. It is not enough for the state to say that the insurance companies must investigate and work to fight fraud. The state must also aggressively and vigorously fight insurance fraud. If the legislatures really want insurers to fight insurance fraud; if the legislatures wish to keep strong and viable this important industry; if the legislatures want to reduce the insurance premiums paid by their constituents, they must make practical the war on insurance fraud. As long as the tort of bad faith and the exposure of punitive damages hangs over insurance companies, the war will be one of attrition where no one will win. The stories I have fictionalized in my book “It’s Time to Abolish The Tort of Bad Faith were written to show how insurance fraud is taking money out of the pockets of innocent and honest people who buy insurance. For every dollar taken by a fraud an insurer must collect two dollars in premiums. Every person in the US who does not commit fraud is paying to support those who do. A minimum of $20.00 for every $100.00 every person insured pays in premiums goes into the pockets of insurance criminals. If the stories in this book make the reader angry, write to your local District Attorney, States Attorney, Attorney General or US Attorney and let them know of your anger. Consider the digest of the case that follows as an example of how difficult it is to effectively fight insurance fraud when a fraud proved with overwhelming evidence still needed to go through trial and appeal before the insurance criminal was sent to jail.

ZIFL - 10/15/2022 - http://zalma.com/blog/wp-content/uploads/2022/10/ZIFL-10-15-2022-1.pdf Short teases about the articles in this issue can be read at ZIFL-10-15-2022 Ethics & Insurance Fraud Insurance fraud is a crime in most jurisdictions. In California it is a felony subject to five years in prison upon conviction. By definition a person who commits the crime of insurance fraud is not acting ethically. In State v. Whitaker, 175 P.3d 136, 117 Hawai=i 26 (Haw. App. 12/31/2007) Whitaker, after presenting a claim to his insurer, was indicted, convicted, and sentenced for Insurance Fraud in violation of Hawaii Revised Statutes (HRS) ' 431:10C‑307.7(a)(1) and (b)(2) (2005), and Attempted Theft in the Second Degree (Attempted Theft 2) in violation of HRS ' 708‑831(1)(b) (Supp. 2000) and HRS ' 705‑500 (1993). RICO Judgment Allows Disgorgement Damages Fraudsters Must Disgorge Profits of Crime - In Diane Creel and Lynn Creel v. Dr. Says, LLC, et al., Civil Action No. 4:18-CV-00615, United States District Court, E.D. Texas, Sherman Division (September 27, 2022) the plaintiffs obtained a verdict against Defendants Dr. Yupo Jesse Chang; MD Reliance, Inc.; Universal Physicians, PA; Dr. Says, LLC; Office Winsome, LLC; and Yung Husan Yao (aka Angela Yao) for violations of the civil Racketeer Influenced and Corrupt Organization Act (“RICO”) and RICO conspiracy. The Court, after the verdict, needs to enter its findings of fact and conclusions of law regarding equitable disgorgement. New California Fraud Statutes SB 1040, authored by Senator Susan Rubio, authorizes the Insurance Commissioner to order restitution from persons who sell insurance without the necessary license from the Department of Insurance, including “extended vehicle warranties” sold illegally through robocalls and misappropriation of consumers’ and businesses’ premiums, among other insurance scams. Good News From the Coalition Against Insurance Fraud Dead patients couldn’t stop Thomas G. O’Lear from billing taxpayers $3.7M for fraudulent X-rays in the Indianapolis area. O’Lear ran a portable-X-ray firm that zapped patients in nursing homes, skilled nursing facilities and long-term care facilities. He billed for thousands of X-rays that he and his business did not perform. That included 151 X-rays on dates after the patients had died. He also billed Medicare and Medicaid for services at nursing facilities on dates when patients were either hospitalized and not on-site at the facilities. O’Lear took multiple X-rays in one visit and falsely claimed that each was done on a different day, requiring separate reimbursement for transporting the portable equipment on each date. And he falsely billed for multiple images of patients when only one image was done — thus requiring a higher reimbursement. O’Lear covered up his scheme by forging medical records, falsifying X-ray images and forging signatures of his employees and the doc he said had ordered X-rays. Insurer Takes the Profit out of Fraud Insured’s Suit for Fire Insurance Benefits Defeated by Qui Tam Claim by Insurer In Lisa A. McCullough v. Metlife Auto & Home, No. 4:20-CV-01807, United States District Court, M.D. Pennsylvania (September 30, 2022) McCullough sued seeking to force MetLife to pay Plaintiff for an insurance policy on the McCullough’s home, which was destroyed in a fire in 2019. A Resource for the Insurance Professional After practicing insurance law for over five decades, Barry Zalma, an internationally recognized and award-winning insurance expert and author, is releasing multiple education books on Amazon.com. The publications are designed to inform claims people, special investigation unit investigators, coverage lawyers, plaintiffs’ bad faith lawyers, insurance management and the insurance buying public on insurance claims procedures and insurance fraud. Each resource leverages key insights and learnings from Zalma’s 55+ years of practical experience as a claims person and insurance coverage attorney. INSURER AWARDED DAMAGES FOR FRAUD Insured’s Suit for Fire Insurance Benefits Defeated by Qui Tam Claim by Insurer == In Lisa A. McCullough v. Metlife Auto & Home, No. 4:20-CV-01807, United States District Court, M.D. Pennsylvania (September 30, 2022) McCullough sued seeking to force MetLife to pay Plaintiff for an insurance policy on the McCullough’s home, which was destroyed in a fire in 2019. Health Insurance Fraud Convictions Doctor Admits Illegally Prescribing 120,000 Opioid Pills -- Dr. Dzung Ahn Pham of Tustin, California pleaded guilty to writing prescriptions for more than 120,000 opioid pills over a six-year span, including to an impaired driver who struck and killed a bicyclist. In his plea agreement, Dr. Pham admitted distributing the pills without a legitimate medical purpose in exchange for cash and insurance payments. He pleaded guilty in October to conspiracy to distribute controlled substances, the Orange County Register reported. Pham faces up to 20 years in federal prison when he is sentenced on Jan. 6, 2023. Other Insurance Fraud Convictions Onetime Brewery Owner and Financial Advisor Found Guilty of Murdering Client for Life Insurance Benefits -- Keith Todd Ashley, 50, was found guilty by federal jurors in the Eastern District of Texas on charges of wire fraud, mail fraud, carrying a firearm in relation to a crime of violence, and bank fraud. Ashley, a North Texas man was found guilty of several fraud-related felonies in federal court earlier this week. Prosecutors say the frauds were part of a wide-ranging series of crimes that eventually came to include a murder and coverup orchestrated to obtain life insurance benefits. 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 54 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. 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, 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

Passover A Seder for the American Family By Thea R. Zalma & Barry Zalma For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lost the ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah. Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and wonder how did all these wonderful things come into being. Jews believe the force we call G_d created the entire universe and everything in it. Jews feel G_d is all seeing and knowing and although we can’t see Him, He is everywhere and in everyone.We understand that when G_d began to create the world there was nothing and that time, as we know it, had no meaning. G_d created all. We feel G_d gave people a conscience hoping it would help us decide right from wrong, to do our best to make good choices, to try to help others, not hurt others and to try to make right the wrongs we have done to others. The rituals that make up the Jewish holidays help remind us how thankful we are for how much we have accomplished with G_d ’s help and how grateful we are to G_d for everything we have and everything we are. Thea and Barry Zalma have created this English only Seder that works for our family and will allow you and your families to tell the story of the Exodus painlessly and with the joy and celebration it deserves so that no member of our family forgets what G_d did for us when He took us out of slavery in Egypt and led us to a promised land. https://www.amazon.com/Passover-Seder-American-Family-Zalma-ebook/dp/B0848NFWZP/ref=tmm_kin_swatch_0?_encoding=UTF8&qid=1584364029&sr=8-4 and https://www.amazon.com/Passover-Seder-American-Family-Zalma/dp/B0849TVPQJ/ref=tmm_pap_title_0?_encoding=UTF8&qid=1584364029&sr=8-4

The Property Damage Trigger of Coverage The term "trigger of coverage" means "what event must occur for potential coverage to commence under the terms of the insurance policy" and "what must take place within the policy's effective dates for the potential of coverage to be 'triggered.'" [In Re Feature Realty Litig., 468 F. Supp.2d 1287, 1295, n.2 (E.D. Wash. 2006)] After the California Supreme Court adopted a continuous trigger in Montrose Chemical Corp. v. Admiral Ins. Co. (1995) 10 Cal.4th 645, 685, 42 Cal.Rptr.2d 324, 913 P.2d 878 (Montrose) in the case of successive policies, property damage that is continuous or progressively deteriorating throughout several policy periods is potentially covered by all policies in effect during those periods, so that the insurer’s duty to defend arose under those policies. Insurers, trying to limit their coverage, revised the policy wording. Therefore, the precise question is what result follows under the language of the policies of insurance to which the parties agreed. The “continuous injury” trigger has been applied mostly in cases involving gradual release of pollutants and other environmental harms. After Montrose, the insurer revised its policies to use the language for the very purpose of "obviat[ing] the application of the ‘progressive damage-continuous trigger’ articulated in Montrose." As a result, the defendant’s policies state that property damage "which commenced prior to the effective date of this insurance will be deemed to have happened in its entirety prior to, and not during, the term of this insurance." [Ins. Co. of Pa. v. Am. Safety Indem. Co., 32 Cal.App.5th 898, 244 Cal.Rptr.3d 310 (Cal. App., 2019)] In King Cnty. v. Travelers Indem. Co. (W.D. Wash., 2019) the Louisiana Court of Appeals ruled that allegations by a property owner that an environmental consultant failed to detect the presence of pollutants on its property did not trigger coverage under the consultant’s liability policies. The Court found that the “occurrence” giving rise to the claims against the insured took place years prior to the issuance of the policies in question. [Herzog Contracting Corp. v. Oliver, No. 40, 918 So.2d 516 (La. App. Cir.2 12/16/2005).] © 2021 – 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 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com. Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award. Over the last 53 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. 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; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims- library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and Read last two issues of ZIFL here.

ZIFL - 6-15-2023 - Volume 27, Issue 12 The Source For Insurance Fraud Professionals This, the Twelfth issue of the 27th year of publication Zalma’s Insurance Fraud Letter provides multiple articles on how to deal with insurance fraud in the United States. The issue begins with: Restitution Order Can’t Be Discharged in Bankruptcy After Frayba Tipton and William Tipton pled guilty to committing insurance fraud, they were ordered to pay victim restitution to Nationwide Insurance Company of America (Nationwide). Nationwide obtained a civil judgment and an award of over $1,200,000 in civil litigation against the Tipton’s only to have the judgment discharged in bankruptcy. Nationwide then petitioned the trial court to convert the criminal restitution orders to civil judgments against both defendants. The trial court granted Nationwide’s petition and entered civil judgments against the defendants. In Nationwide Insurance Company Of America v. Frayba Tipton et al., C095606, California Court of Appeals, Third District, San Joaquin (May 26, 2023) the court agreed that the restitution order could be made collectible as a civil judgment and not subject to discharge in bankruptcy. See the full issue at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-06-15-2023.pdf More McClenny Moseley & Associates Issues This is ZIFL’s eighth 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. See the full issue at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-06-15-2023.pdf Another Insurer Bites the Dust Nevada Insurance Commissioner Petitions to Place Friday Health in Receivership Friday Health Plans of Nevada has fallen afoul of Nevada Insurance Commissioner Scott Kipper who filed legal action with the Nevada District Court to place it under regulatory supervision. See the full issue at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-06-15-2023.pdf Bad News from The Public A new survey shows it’s, like, totally cool to exaggerate damages on an insurance claim or, like, totally awesome to say you hurt yourself at work when you didn’t. See the full issue at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-06-15-2023.pdf Health Insurance Fraud Convictions Fifteen Year Sentence in $134 Million COVID-19 Health Care Fraud and Money Laundering Scheme Billy Joe Taylor, age 44, pleaded guilty to conspiracy to commit health care fraud and money laundering on October 27, 2022. According to court documents, Taylor and his co-conspirators submitted more than $134 million in false and fraudulent claims to Medicare in connection with diagnostic laboratory testing, including urine drug testing and tests for respiratory illnesses during the COVID-19 pandemic, that were medically unnecessary, not ordered by medical providers, and not provided as represented. Taylor and his co-conspirators obtained medical information and private personal information for Medicare beneficiaries, and then misused that confidential information to repeatedly submit claims to Medicare for diagnostic tests. According to court documents, Taylor and his co-conspirators received more than $38 million from Medicare on those fraudulent claims. See the full issue and dozens more convictions at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-06-15-2023.pdf Florida Judge Slams SFR Contractor for Misrepresentation, Fraud in Tower Hill Case SFR Services, a Florida restoration firm made famous by its volume of claims litigation and its charges that United Property & Casualty Insurance Co. had instructed desk adjusters to alter their estimates, now finds itself in some legal trouble of its own. See the full issue at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-06-15-2023.pdf Other Insurance Fraud Convictions Man Sentenced to Prison for Staged Arson and Insurance Fraud Denis Vladmirovich Molla falsely reported to the Brooklyn Center Police Department that his camper had been intentionally set on fire the 30-year-old Minnesota resident has been handed a 30-month prison sentence, followed by one year of supervised release, for filing fraudulent insurance claims related to a staged arson incident. See the full issue and more convictions at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-06-15-2023.pdf The Baseball Card Scam This is a Fictionalized True Crime Story of Insurance Fraud from my experience as an Insurance Fraud Expert and is provided to explain why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is true, only the names and places were changed to protect the guilty. See the full issue at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-06-15-2023.pdf Qui Tam and Insurance Fraud The qui tam portion of the California Insurance Frauds Prevention Act, like that in many other states, has a qui tam provision. See the full issue at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-06-15-2023.pdf It’s Time to Subscribe to Locals or Substack For Subscribers Only I Have Published Special Insurance Videos See the full issue at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-06-15-2023.pdf (c) 2023 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe 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.

A site for the insurance claims professional and anyone who wants to know something about insurance, insurance claims, insurance coverage, and insurance law.

A Video Explaining Various Defenses to Intentional Torts Self-Defense and Defense of a Third Party The California Civil Code states: Any necessary force may be used to protect from wrongful injury the person or property of oneself, or of a wife, husband, child, parent, or other relative, or member of one’s family, or of a ward, servant, master or guest. (California Civil Code § 50) The person must reasonably believe that danger exists, and must use only such force as is reasonably necessary. Defenses to Battery—Use of Deadly Force Deadly force or force likely to cause bodily harm is not justified merely in defense of property. Spring guns or other deadly mechanical devices are to be used only if deadly force is justifiable. Deadly force may be used against a felonious trespasser. Use of Reasonable Force This is always a defense. For example: holding a violent person’s arms behind his back; striking a dog about to attack a child; holding a person who was intentionally striking a child; or escorting a trespasser off the premises. Defenses to Defamation, Including Libel and Slander Defenses to False Imprisonment Reasonable detention without arrest is a judicial privilege codified by California Penal Code § 490.5(f)(1). For example, a storekeeper who believes a theft has been committed may detain the suspected person for a reasonable time. Defense of Champerty And Maintenance Using venture capital to finance litigation has been tolerated in many states because defendants often have more funds available than injured plaintiffs. Recently, the Ohio Supreme Court, and a few others, have called into question whether such arrangements violate the traditional rule against champerty and maintenance. © 2021 – 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 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com. Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award. Over the last 53 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. 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;Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/ podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4

Premature Denial for Failure to Appear at EUO Fails It is not Reasonable to Deny a Claim for Failure to Appear for EUO Before the Date the EUO was Scheduled to Occur In March 2021, an arsonist destroyed a building on the Brockton Fair fairgrounds known as the "State Building," owned by BAS Holding Corporation ("BAS") and, according to BAS, insured against loss by Philadelphia Indemnity Insurance Company ("Philadelphia"). Philadelphia undertook an investigation to determine coverage. The insurer sought an examination under oath ("EUO") of George Carney, the president and owner of BAS. In Philadelphia Indemnity Insurance Company v. BAS Holding Corporation, Brockton Agricultural Society, No. 22-1296, United States Court of Appeals, First Circuit (August 17, 2023) the First Circuit recognized that a requirement for EUO must be reasonable and the claimed premature denial was probably not reasonable. FACTUAL BACKGROUND Philadelphia sued seeking a declaration that BAS breached the insurance policy's EUO condition. In its answer, BAS denied that it had refused to submit to an EUO. On cross-motions for summary judgment, the district court granted judgment for Philadelphia on the ground that BAS failed to cooperate by not providing Carney for an EUO. BAS appealed. BAS is the record owner of the State Building, a landmark building located on the Brockton Fair fairgrounds in Brockton, Massachusetts. The interior of the building was mostly open space used for exhibits or storage at the annual agricultural fair. The fire set by the arsonist on March 17, 2021, caused a total loss of the structure. The remains of the building were razed that same day. At the time of the fire, BAS held a policy (the "Policy") issued by Philadelphia that BAS claimed covered the State Building. BAS gave notice of the fire to Philadelphia mere hours after it broke out. As its investigation unfolded, Philadelphia became convinced that the State Building may not be insured under the Policy and wrote a "reservation of rights" letter to BAS. On June 16, 2021, Philadelphia also sought an EUO of BAS in accordance with the Policy's EUO condition. Philadelphia did not ask BAS to produce any specific person for the EUO. Instead, Philadelphia asked BAS to designate someone who could answer questions relating to eight enumerated topics. BAS presented Susan Rodrigues as its designee to attend the EUO. The president of BAS, Carney, testified in his deposition that "Sue [Rodrigues] . . . and Joe Cappucci, they handled all the insurance." She did "everything" to help put on the fair and also oversaw maintenance work on the fairgrounds and buildings throughout the year, including the State Building. During her examination, Rodrigues identified six people – five maintenance workers and Carney – who might be able to provide additional information in response to BAS's questions. On August 4, the day after Rodrigues appeared for her EUO, Philadelphia sent an email to BAS's counsel requesting EUOs of the six individuals she identified as potentially having additional relevant information. In that email, Philadelphia specifically asked for Carney to appear for an EUO on August 19, 2021. Pointing to Policy language stating that Philadelphia could only take an EUO if it is "reasonably required," BAS wrote that Philadelphia's request for six additional examinations under oath was improper and was not permitted by the Policy or law, particularly where Philadelphia has still not identified a factual basis upon which it has reserved its rights, and the information produced to date establishes that coverage is owed under the Policy for the loss. According to Philadelphia, this email constituted a second refusal of BAS to produce Carney for an EUO. On August 13, less than 72 hours after sending the August 10 email, and before BAS had sent any response, Philadelphia sent an email denying BAS's insurance claim for "refusing Philadelphia's requests for Examinations Under Oath. The email stated, in relevant part: "BAS's refusal to participate in the EUOs [that counsel] requested on August 4, 2021 constitutes a material breach of the Insured's obligations under the policy and reflects its continuing failure to cooperate in Philadelphia's investigation or settlement of the claim." ANALYSIS Under Massachusetts law, attendance at reasonably requested EUOs is a condition precedent for insurance coverage. Thus, the question before the First Circuit was a narrow one: did the district court rule correctly -- as a matter of law -- that BAS willfully and without excuse refused Philadelphia's request for an EUO of Carney, thereby breaching the insurance contract? The timeline of Philadelphia's denial weighs heavily against any conclusion that BAS refused to produce Carney for an EUO. On August 3, Rodrigues appeared for an EUO on behalf of BAS. On August 4, Philadelphia asked for EUOs of Carney and the maintenance workers. On August 4 and August 9, BAS sent emails that, read together, requested further information before submitting to additional EUOs. On August 10, Philadelphia wrote to BAS asking for "confirm[ation] that Mr. Carney will appear next Thursday, August 19th, for an EUO as previously requested, or [make] contact . . . to arrange for a new date, time and place within the next two weeks" and to "confirm that BAS will make the other individuals available for their EUO's [sic] on Friday, August 20, 2021," or on various dates thereafter. This email from Philadelphia provided some explanation as to why the interview of Carney was reasonably required. Moreover, Rodrigues's EUO testimony reveals that Philadelphia's assertion that "Ms. Rodrigues . . . was in fact unable to testify about any of the topics of examination specified by [Philadelphia]" is flatly wrong. While it is clear that Rodrigues was not able to answer all of Philadelphia's questions. The First Circuit found that it was impossible to find on the record that BAS willfully and without excuse refused to present Carney for an EUO. In other words, Carney's non-appearance at an EUO, especially since his first possible opportunity to appear on August 19 had not yet passed when Philadelphia notified BAS of its decision to deny coverage, in and of itself does not support the district court's grant of summary judgment as a matter of law in favor of Philadelphia. The entire discussion between the parties about whether there should be additional EUOs of Carney and the five maintenance workers spanned only nine days. The First Circuit vacated the district court's grant of summary judgment for Philadelphia and remanded for further proceedings not inconsistent with the opinion. ZALMA OPINION I have personally taken hundreds of EUOs. I, like the First Circuit, cannot understand how an insurer can deny a claim for failure to appear on a date prior to the date scheduled for the EUO to take place. Such a denial makes no sense. I have sat with a court reporter at the time and place scheduled for an EUO and no one appeared and, thereafter denied the claim only to withdraw the denial when the witness produced an excuse like the birth of a child or the hospitalization of the witness. The failure to wait a week or two to deny the claim gained Philadelphia nothing more than the ire of the First Circuit. (c) 2023 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Subscribe to Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Subscribe 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 Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 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; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library