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Jurisdiction Chosen by Contract of Insurance Must be Followed Government Employees Insurance Company (hereinafter “GEICO”) sought review of the trial court's July 12, 2023 judgment denying its motion for partial summary judgment. In Washington Dos Santos v. USAA Casualty Insurance Company, Government Employees Insurance Company And Carrie Ann Rainey, No. 2023-C-0559, Court of Appeals of Louisiana, Fourth Circuit (September 18, 2023) resolved the dispute. RELEVANT FACTS Washington Dos Santos sued for damages asserting damages as a result of a motor vehicle accident. Dos Santos named GEICO as a defendant in its capacity as the uninsured/underinsured motorist insurer of the vehicle he was operating at the time of the accident. In his petition for damages, Dos Santos asserted that GEICO violated Louisiana's penalty statutes which require that an insurer be fair in its handling of claims and tender payment when satisfactory proof of loss is established. On April 23, 2023, GEICO filed a motion for partial summary judgment asserting that Respondent's claim under his insurance policy contract dictates that all claims are subject to North Carolina law and therefore, Louisiana's penalty statutes are inapplicable. GEICO averred that the policy was issued to Respondent at a North Carolina address; Respondent has a North Carolina driver's license; and the vehicle is registered in North Carolina. DISCUSSION To succeed in a motion for summary judgment there must be a genuine issue of material fact. A genuine issue is one to which reasonable persons could disagree; if reasonable persons could reach only one conclusion, no need for trial on that issue exists and summary judgment is appropriate. GEICO maintained the trial court erred in denying its motion for partial summary judgment because the insurance policy specifically mandates Respondent's claim is subject to North Carolina law and thus, Louisiana's penalty statutes are inapplicable. GEICO did so because Dos Santos’ policy provided, in pertinent part: “This policy is issued in accordance with the laws of North Carolina and covers property or risks principally located in North Carolina. Any and all claims or disputes in any way related to this policy shall be governed by the laws of North Carolina.” CLEAR AND UNAMBIGUOUS POLICY WORDING Dos Santos’ insurance policy mandates application of North Carolina law. The language in the policy is clear and unambiguous thus, it must be enforced as written. When the words of an insurance contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent and courts must enforce the contract as written. The language contained in GEICO's policy with Respondent are clear, North Carolina law applies to any disputes or claims. GEICO satisfied its burden of establishing that the language of the contract of insurance is clear and unambiguous and that North Carolina law applies. Therefore, the trial court's judgment denying GEICO's motion for partial summary judgment was reversed. ZALMA OPINION People like Mr. Dos Santos want to punish an insurer that fails to pay what they want so they can profit from an insurance policy. Louisiana allows an insurer to be penalized and North Carolina does not. Since the policy clearly stated that the law of North Carolina applied and the fact that the accident happened in Louisiana was irrelevant. Regardless of the desires of an insured to punish his insurer the contract wording controls the interpretation of an insurance policy. (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/

Situs of Assault Does not Create Coverage A coverage dispute arose from the sexual assault of a special needs student aboard her school bus. National Liability and Fire Company sought a declaration that it had no duty to defend or indemnify the bus company or its school district client in a state court action brought by the student and her mother because its policy did not cover the incident alleged in their complaint. The District Court erroneously held that National had to defend both entities and later concluded it also had to indemnify them. In National Liability & Fire Insurance Co. v. Brimar Transit, Inc. Pittsburgh Public School District, No. 22-2565, United States Court of Appeals, Third Circuit (September 22, 2023) the dispute was resolved. FACTS Brimar Transit, Inc. transported students for the Pittsburgh School District under a multi-year contract. National insured the vehicles in Brimar's fleet. Among the students Brimar transported to and from school were children with special needs. One of those students-an adolescent girl named K.M.-had developmental challenges known to Brimar and the District. Traveling on the bus with her each day was a 12-year-old boy with similar challenges who had sexually assaulted K.M. multiple times, including a groping incident during gym class. The gym incident led the District and Brimar to craft a specific plan to separate K.M. from the male student on the bus: K.M. sat right behind the driver, while the male student sat in the rear. The regular bus driver followed the plan. And when she took maternity leave, her first replacement did too. A second substitute driver took over the route without following the plan and sat K.M. next to the male student. Their proximity allowed the male student to use his body weight to pin K.M. to the seat. With K.M. trapped, the male student pulled down both their pants and assaulted her from behind. Despite being only several feet away during the assault, and despite the cries of other children, the driver did not intervene or even acknowledge the attack on K.M. K.M. managed to push the male student off her a short time later, though he assaulted her again by slapping her backside as she exited at her stop. K.M. and her mother sued Brimar and the District alleging Brimar failed to tell the driver about the plan and failed to train and supervise her properly. They similarly alleged the District was negligent and should have ensured K.M.'s safety on the bus. National defended Brimar in the state court action after issuing a reservation of rights letter but declined to defend the District. National sued seeking declaratory judgment and later moved for judgment on the pleadings, urging that it had no duty to defend the defendants for two reasons. First, it had no duty to defend Brimar because K.M.'s alleged injuries did not result from the "use" of the bus and there was an abuse and molestation exclusion that should apply. Second, it had no duty to defend the District as a non-insured. The District Court disagreed with National on both counts. While this action was pending, National paid more than $500,000 to settle the plaintiffs suit. National moved for summary judgment yet the trial Court held that because National's act of settling the state court claim before critical facts and evidence developed kept the District Court from making nuanced decisions about its duties to defend and indemnify, it would need to indemnify Brimar and the District. THE APPEAL Discussion Pennsylvania law imposes separate, though related, duties on insurers to defend and indemnify their insureds. Pennsylvania courts analyze those allegations using the "four-corners" rule: if the allegations even "potentially could support recovery under the policy," then the insurer has a duty to defend its insured in the case. The Policy determines whether National had a duty to defend. Based on that provision, National offers two ways in which the District Court erred in holding it had a duty to defend. First, the complaint pleads injuries "resulting from" the sexual assault, not the "use" of Brimar's bus. And second, sexual assaults like K.M.'s are excluded by the Policy's "Abuse or Molestation Exclusion." National argued the District Court erred and urged instead that, to trigger coverage, the underlying bodily injury must be causally connected to the use of the insured vehicle as a motor vehicle. The male student's previous assaults confirm the bus was merely incidental to the sexual assault-i.e., as the situs of the attack. Because the allegations in the complaint do not forge a strong enough link between the use of the school bus and K.M.'s injuries, the Third Circuit concluded that the District Court erred in finding National had a duty to defend Brimar and the District. ZALMA OPINION The injuries suffered by KM were horrific but they were not, under any definition of the term, a result of the use of the school bus. The driver erred but the driver, nor the use of the bus, caused her injury. National should now seek to recover the money it paid, under a reservation, on behalf of the defendants. (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/

Indian Tribe's Sovereign Immunity Limits Waived by Insurance if Claimant Complies with Waiver Requirements The Seminole Tribe of Florida ("the Tribe") appealed an order denying its motion to dismiss based on sovereign immunity. The trial court rejected the Tribe's contention that Jose Webster did not comply with the terms of the sovereign immunity waiver contained in the 2010 Gaming Compact (the Compact). The Compact required, among other conditions, that the Tribe and its insurance carrier have one year to resolve a claim after a Patron gives notice of the claim, and if the claim is not settled in that time, the Patron may file suit. In Seminole Tribe Of Florida, d/b/a Seminole Gaming v. Jose Webster, No. 4D2022-3448, Florida Court of Appeals, Fourth District (September 13, 2023) the Tribe asserted in the motion to dismiss that the defendant failed to comply with the required conditions because he sued the Tribe within one year of having given written notice of the underlying claim. The trial court denied the motion, because the last of three variations of the plaintiff's complaint filed would have complied with the Compact. As a federally recognized Indian tribe, the Seminole Tribe is entitled to sovereign immunity over all claims unless such immunity is abrogated by Congress or waived by the Seminole Tribe. Further, a waiver must be strictly construed with any ambiguities being resolved against waiver. Webster was a patron at the Seminole Hard Rock Hotel & Casino Hollywood (the "Casino") in September 2019. He claims the Tribe was negligent in failing to protect him from criminal acts which allegedly occurred at the Casino during his visit. In January 2020, Webster timely provided written notice of his claim to the facility. Two months later, Webster sued "Seminole Hard Rock Entertainment, Inc. d/b/a Seminole Hard Rock Casino." The proper defendant was the "Seminole Tribe of Florida d/b/a Seminole Hard Rock Hotel &Casino-Hollywood. The trial court denied the Tribe's motion to dismiss without prejudice. DISCUSSION The first amended complaint and second amended complaint named the Tribe, albeit each stating a different fictitious name. Those complaints alleged the same tort cause of action against the Tribe. Even if the fictitious name may be in error, the fact remains that the real party in interest, and the proper defendant, is the Tribe. The Tribe contends that Webster failed to comply with the Compact's Section VI.D.4. by filing the first amended complaint within the one-year pre-suit period set by the Compact, and Webster's failure to strictly follow the Compact's procedures bars his claim. The record does not include proof that the Tribe responded to Webster's claim within thirty days of his written notice. Therefore, although Webster's first amended complaint commenced suit against the Tribe within one year of his notice of claim his original suit did not. For the foregoing reasons, the appellate court reversed the order denying sovereign immunity and remand for further proceedings. ZALMA OPINION Sovereigns, like the tribe can only be sued if the sovereign entity agrees. The tribe agreed to waive the immunity if certain conditions were met. Webster failed to meet the requirements of the waiver compact and, as a result, he could not sue as he did. The tribe had insurance and he needed to provide the insurer with the time and opportunity to settle his claim. By prematurely suing he was unable to take advantage of the waiver. (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/

Statute of Limitations Bars Bad Faith Claim Loann T. Phan-Kramer and Jonerik Kramer sued American States Insurance Company for underinsured motorist coverage, won, and collected. Now, they have sued American States again asserting statutory bad faith, breach of contract/good faith and fair dealing, and loss of consortium. In Loann T. Phan-Kramer and Jonerik Kramer v. American States Insurance Company, No. 2:23-cv-01867-JDW, United States District Court, E.D. Pennsylvania (September 14, 2023) the USDC took away part of plaintiffs claim and allowed the rest to proceed in a Solomon like decision. BACKGROUND FACTS On April 15, 2016, an underinsured motorist rear-ended Loann T. Phan-Kramer. She suffered a full thickness tear of her rotator cuff, as well as other neck and back injuries. At the time of the accident, American States Insurance Company insured Ms. Phan-Kramer, including underinsured motorist (“UIM”) benefits. After suing then settling with the other driver, Plaintiffs filed their UIM insurance claim with American States. American States denied that claim and Plaintiffs sued. At trial, the jury returned a verdict in Plaintiffs' favor and the insurer satisfied the verdict. DISCUSSION The Tort of Bad Faith The statute of limitations bars Plaintiffs' claim. The statute of limitations on a bad faith claim is two years in Pennsylvania. The statute begins to run when the insurer first refuses to pay the claim. When the court denied Plaintiffs' motion for leave to file a second amended complaint, the court concluded that the statute of limitations began to run on June 28, 2019, when American States denied their claim. Plaintiffs' time to file this claim expired on June 28, 2021. Therefore, American States's Motion on the bad faith claim was granted because it was barred by the statute of limitations. Breach of Contract/Loss of Consortium The Third Circuit has adopted a bright-line rule that res judicata cannot bar claims that are predicated on events that postdate the filing of the initial complaint. Because Plaintiffs' breach of contract and loss consortium claims both rely (at least in part) on American States's conduct following the filing of the initial lawsuit, res judicata cannot preclude these claims. American States acknowledged that the Amended Complaint “focus[es] . . . on the ways that American States supposedly acted in bad faith during the litigation and trial of the underlying UIM/consortium case.” Because the bright-line rule bars the application of res judicata, American States's Motion on the breach of contract and loss of consortium claims was denied. ZALMA OPINION Insurance companies, like every person and corporation, are imperfect. American States decided it did not owe UIM benefits to its insured, took the issue to trial and lost. It paid the judgment only to be sued for defending the original suit. The court found that the insured/plaintiffs filed their bad faith claim too late and dismissed that action only to allow the breach of contract and loss of consortium claims to proceed. The decision is a Pyrrhic victory for the plaintiffs since they already recovered in the initial suit the contract damages. (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/

Insurer Not Obligated to Commit Insurance Claims Suicide Benjamin D. Markuson, Erik Saterbo, and Stephen Saterbo v. State Farm Mutual Automobile Insurance Company, an Illinois corporation; Crawford Law Group, P.A., a Florida corporation; and Larry Walker, No. 2D21-2443, Florida Court of Appeals, Second District (September 15, 2023) Benjamin Markuson and Erik and Stephen Saterbo appealed the entry final summary judgment based upon the trial court's conclusion that State Farm was under no legal duty to its insured to accept any or all of the three proposals for settlement made by Mr. Markuson. FACTUAL BACKGROUND The underlying case arises from a 2006 automobile accident involving Erik Saterbo and Mr. Markuson. At the time of the accident, Erik was operating a vehicle owned by his father, Stephen. Due to his injuries, Mr. Markuson sued the Saterbo. The Saterbos had an insurance policy with State Farm which provided policy limits of $300,000.00 against liability for bodily injuries sustained in an auto accident. And on January 15, 2009, State Farm authorized the Crawford Law Group, P.A.-the firm retained by State Farm to defend the Saterbos-to make a settlement offer to Mr. Markuson to resolve his case for the policy limits. The offer was not accepted. Instead, in 2011 and 2012, Mr. Markuson issued two settlement offers to State Farm's insureds (the first, oral; the second, written) that were largely indistinguishable in their terms. In pertinent part, Mr. Markuson's offer would have required State Farm to (1) tender the $300,000.00 policy limits to Mr. Markuson; (2) authorize State Farm's insureds to enter into a consent judgment in the amount of $1.9 million that would not be recorded or enforced against the Saterbos; and (3) authorize the Saterbos to assign their rights in any claims against their insurance agent. In return, Mr. Markuson would execute a release of all his claims against the Saterbos and a satisfaction of the aforementioned consent judgment. The proposal made no indication that State Farm would be released from any bad faith liability. State Farm declined to accept these proposals, and the case continued to trial. Following a jury trial, Mr. Markuson recovered a total of $3,084,074.00, a sum considerably greater than the coverage afforded. The settlement offers by Mr. Markuson formed the basis of a bad faith complaint against State Farm where Markuson and the Saterbos sued with a seven count complaint against State Farm, Crawford Law Group, P.A., and Larry Walker-State Farm's agent. The alleged bad faith occurred when State Farm failed to settle the personal injury action by declining three of Mr. Markuson's proposals for settlement. The trial court concluded that State Farm had no duty to enter into a consent judgment that was in excess of the policy limits "as a matter of law." The trial court found that "each of the three proposals exposed State Farm to extracontractual claims or payment" and that nothing suggested State Farm would be released by entering into the proposed consent judgments. It further found that State Farm never withdrew its offer of the policy limits. Thus, the trial court determined that "State Farm did not act in bad faith when it did not agree to or negotiate with respect to any of the three proposals." DISCUSSION Here, the thrust of the bad faith case turns on State Farm's refusal to enter into an agreement-that is, State Farm, in the plaintiffs' view, had a duty to authorize its insureds to consent to a judgment more than five times the amount of the policy limit (thereby expediting the availability of a bad faith claim) and to do so without releasing State Farm from liability. Florida law is clear that an insurer has no duty to enter into such an agreement. There is no duty because entering into a consent judgment, for purposes of expediting bad faith litigation, is indeed the 'functional equivalent' of an excess judgment. The obligation to negotiate and settle claims on behalf of its insured is defined by and bounded within the insurance contract itself; an insurer does not ordinarily have a duty to pay a claim in excess of a policy's limit. CONCLUSION The Florida Court of Appeals concluded that, as a matter of law, the trial court correctly determined that State Farm had no duty to enter such an agreement. Thus, where there was no duty to accept the proposals, declining the proposals could not serve as the basis of the bad faith claim. The circuit court erred by entering a final judgment in favor of State Farm to the extent the plaintiffs' claims raised other theories of bad faith and remanded the case to trial on the other issues. ZALMA OPINION Insurance is a means of protecting against the risk of loss for accidentally injuring a third person up to the limits of the policy. Insurers have no obligation to expose themselves to an excess verdict and the court of appeals concluded that State Farm had no duty because entering into a consent judgment, for purposes of expediting bad faith litigation, would force the insurer to pay an excess judgment when its only contractual obligation was to defend its insured and, if there is a judgement, to pay the full limit of liability. To accept the offer that the plaintiff suggested as evidence of bad faith would be to commit financial suicide and violate the clear terms of its policy. (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/

Insurer that Pays Limit of Policy After Appraisal Did not Breach The Covenant of Good Faith & Fair Dealing Washington Street, LLC ("Washington Street") appealed a District Court order granting summary judgment to Nationwide Property and Casualty Insurance Company ("Nationwide"), which ended Washington Street's claims that Nationwide proceeded in bad faith in delaying claim payments following a fire that damaged Washington Street's property. In Washington Street, LLC v. Nationwide Property & Casualty Insurance Company, No. 22-3396, United States Court of Appeals, Third Circuit (September 13, 2023) the Third Circuit resolved the dispute. BACKGROUND In July 2019, a fire caused by a tenant's negligence destroyed an apartment building owned by Washington Street. Washington Street promptly submitted a claim for recovery to its insurer, Nationwide. Some six weeks later, in September 2019, Nationwide provided an initial claim estimate and payment, after Washington Street's attorney complained about the pace of the investigation. That initial payment ($376,342.95) was, as Nationwide acknowledged, incomplete, as it was subject to change based on additional repairs or damage found. In October 2019, Washington Street provided estimates for repairs not covered in Nationwide's initial report. Nationwide reviewed those estimates and hired a consultant to review the entire project. The consultant completed his assessment in January 2020, estimating the total cost of repairs to be $635,898.86, after which Nationwide paid an additional $208,555.91, an amount the parties accepted as bringing the total payments to $584,907.68. Washington Street was dissatisfied with that amount and demanded an impartial appraisal of the total loss. Nationwide cooperated by hiring an appraiser. Washington Street also hired an appraiser, and the two appraisers appointed an "umpire" to resolve any disagreements. In November 2020, the umpire entered an award for Washington Street: $859,670.03 for dwelling loss, $7,720.05 for business personal property, $35,306.40 for debris removal, and $74,200 for loss of income. The total amount exceeded Washington Street's policy limit of $854,700 for dwelling loss, $60,000 for business income, and $25,000 for debris removal, and Nationwide paid the full policy amount. During the appraisal, on June 3, 2020, Nationwide filed a subrogation lawsuit against the tenant who had negligently caused the fire. The subrogation investigation began in July 2019, but Nationwide did not inform Washington Street of the lawsuit until January 14, 2021. Eventually, Nationwide obtained a settlement that resulted in Washington Street receiving an additional $15,000, an amount Washington Street described as "fair and acceptable." Washington Street sued. After discovery, Nationwide moved for summary judgment and the District Court granted it. The Court held that Nationwide's handling of Washington Street's claim was "by no means a model of perfection" but it did not constitute bad faith. DISCUSSION Washington Street claims that Nationwide demonstrated bad faith by delaying six weeks to make its first partial payout, failing to make further estimates until Washington Street pressed for progress, hiring a building consultant for the alleged purpose of further delaying the process, making a still-deficient payment six months after the fire, knowingly misrepresenting its appraisal policy, delaying its policy reformation request, and filing its subrogation action prematurely. Pennsylvania provides a statutory remedy if an insurer acts in bad faith toward the insured. Bad faith requires evidence so clear, direct, weighty and convincing as to enable a clear conviction, without hesitation, about whether or not the defendants acted in bad faith. At the summary judgment stage, the insured's burden in opposing a summary judgment motion brought by the insurer is commensurately high because the court must view the evidence presented in light of the substantive evidentiary burden at trial. Nationwide promptly investigated Washington Street's claim, and its claims specialist visited the burned building soon after the site was deemed safe. So too, Nationwide's delay of six weeks in providing the first payment appears reasonable. On August 26, 2019, the claims specialist wrote, the fact is it is a large building and although I have spent days estimating, it has been a slow process. Nationwide's first payment included a detailed estimate of property damage that was admittedly underinclusive and left the door open for Washington Street to submit further estimates once repairs got underway. Washington Street did not initiate any repairs, however. The District Court noted, "Nationwide probably could have been more diligent," but that doesn't mean that Nationwide's pace of review was unreasonable, much less that it showed disregard for Washington Street's contractual rights. Therefore, Washington Street did not show by clear and convincing evidence - the applicable standard of proof - that Nationwide acted in bad faith in processing Washington Street's insurance claim. ZALMA OPINION The tort of bad faith requires a breach of contract by an insurer that provides clear, direct, weighty and convincing evidence sufficient to enable a clear conviction, without hesitation that the insurer acted in bad faith. The evidence did not exist to establish the required clear and convincing evidence of wrong doing it only reflected a claim that took time and expertise to resolve. (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/

Attorneys May Not Be Sued for the Tort of Bad Faith For many years lawyers for policy holders have sued insurer's lawyers for the tort of bad faith to avoid federal court. I was sued dozens of times in spurious lawsuits claiming that drafting a denial letter was sufficient to sue me personally as the lawyer for an insurer for the tort of bad faith. In so doing the suits almost invariably drove a conflict between the lawyer and his or her client although the lawyer was not a party to the contract of insurance. The California Supreme Court resolved the issue in a case called Jerome Gruenberg v. Aetna Insurance Company et al., 9 Cal.3d 566, 510 P.2d 1032, 108 Cal.Rptr. 480, Supreme Court of California, In Bank. (June 11, 1973.) FACTS Gruenberg sued his insurers and their lawyers for the tort of bad faith after his claim for fire damage to his bar, the Brass Rail, was damaged by fire. The insurers engaged the services of defendant P. E. Brown and Company (Brown). Carl Busching, a claims adjuster employed by Brown, went to the Brass Rail to investigate the fire and inspect the premises. While he was there, he stated to an arson investigator of the Los Angeles Fire Department that plaintiff had excessive coverage under his fire insurance policies. Eventually the premises were locked, and nothing was removed until November 14, 1969, when Busching authorized the removal of the rubble and debris. Gruenberg was eventually charged in a felony complaint with the crimes of arson (Pen.Code, § 448a) and defrauding an insurer (Pen.Code, § 548). Defendant insurance companies also retained attorney Donald Ricketts who demanded in writing that plaintiff appear on December 12, 1969, to submit to an examination under oath and to produce certain documents. On November 26, 1969, plaintiff's attorney responded by letter to Ricketts explaining that he had advised plaintiff not to make any statements concerning the fire loss while criminal charges were pending. The letter also requested that the insurers waive the requirement of an examination until the criminal charges lodged against plaintiff were concluded. Ricketts refused the request and warned that failure to appear for the examination would void coverage under the policies. Gruenberg did not appear and Rickets, on behalf of the insurers denied the claim. The charge against Gruenberg were dismissed by the magistrate for lack of probable cause. DISCUSSION The Supreme Court only ruled on the sufficiency of these allegations which of course must be sustained by proper proof. Plaintiff alleged that Brown, the insurance adjusting firm, and its employee, Busching, and Cummins, the law firm, and its employee, Ricketts, were the agents and employees of defendant insurers and of each other and were acting within the scope of that agency and employment when they committed the acts attributed to them. Gruenberg contended that these non-insurer defendants breached only the duty of good faith and fair dealing. The Supreme Court concluded that the non-insurer defendants were not parties to the agreements for insurance; therefore, they are not, as such, subject to an implied duty of good faith and fair dealing. Moreover, as agents and employees of the defendant insurers, they cannot be held accountable on a theory of conspiracy. Plaintiff sufficiently pleaded a cause of action against the insurers for breach of the covenant. However, since the remaining defendants were not subject to the implied duty arising from the contractual relationship, the complaint does not state sufficient facts to constitute a cause of action against them and that the judgment of dismissal in their favor was proper. ZALMA OPINION The tort of bad faith is a mix of contract and tort. One cannot commit the tort unless that person or entity is a party to the contract of insurance. Therefore, the lawyers and adjusters were dismissed since they were charged with a tort they could not commit. I personally was sued multiple times as the lawyer for an insurer who denied a claim only to defeat those suits with a motion for summary judgment and a declaration that "I am not now, nor have I ever been, an insurer." I then, in an attempt to stop spurious lawsuits, sued the lawyers who filed suits against me for malicious prosecution. I would recommend the same to any lawyer sued for bad faith, a tort that an insurer's lawyer cannot commit. (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/

No Indemnity for City's Sole Negligence The City of Kansas City sought contractual indemnity against Occupational Health Centers of the Southwest, P.C. doing business as Concentra Medical Centers in the Circuit Court of Jackson County only to be refused by the trial court. In City Of Kansas City, Missouri v. Occupational Health Centers Of The Southwest, P.C., d/b/a Concentra Medical Centers, No. WD85602, Court of Appeals of Missouri, Western District, Third Division (September 12, 2023) the City's indemnity claim sought to shift to Concentra the costs associated with an employment discrimination claim which had been asserted against the City. The circuit court granted summary judgment to Concentra, and the City appealed. FACTUAL BACKGROUND In 2012, the City and Concentra executed Contract No. EV1227, for the performance of drug and alcohol testing on City employees. The City sent Shahidah Hazziez, a City employee, to a Concentra facility for a purportedly random drug screening. Hazziez later contended that she and other Muslim City employees had been disproportionately selected for such drug testing. Concentra notified the City that Hazziez had refused to provide a compliant urine sample and had claimed that it was due to a bladder infection. After Hazziez was fired she sued the City, as well as a number of Concentra-affiliated entities and employees. Hazziez settled her claims against the Concentra defendants. Thereafter a jury trial began against the City and defendants other than the City settled. After an eight-day trial, Hazziez asked the jury for damages because the City had discriminated against her. The only adverse employment action Hazziez identified was the termination of her employment with the City. The jury found in Hazziez's favor and against the City on Hazziez's claims for discrimination based on sex and a perceived disability. The jury awarded her compensatory damages of $172,000.00 but found that the City was not liable for punitive damages. The court subsequently awarded Hazziez attorney's fees in the amount of $303,660.00, and costs of $10,130.85. The Court of Appeal affirmed the judgment on appeal and also awarded Hazziez her attorney's fees on appeal. On remand the circuit court determined that Hazziez's reasonable appeal-related fees and expenses were $88,896.00. The City satisfied the judgment in November 2020. The City filed a third-party petition against Concentra for indemnification under Concentra's contract for drug and alcohol testing services. The circuit court entered its judgment on July 29, 2022, granting Concentra's motion for summary judgment and denying the City's cross-motion. Ultimately, the circuit court concluded that Hazziez's claims against the City were not based in whole or in part on Concentra's actions, but that the City's liability to Hazziez was based on its own actions, for which Concentra had no indemnification obligation. DISCUSSION The Court of Appeal focused on the plain and ordinary meaning of the contract itself and did not look to extrinsic evidence unless the terms of the contract were ambiguous. The City was held liable for its own actions. The claims for which the City was held liable did not arise out of or result from acts or omissions caused in whole or in part by Concentra. Concentra was required to indemnify the City for liability arising from Concentra's actions, but not liability resulting from the City's own conduct. Because the City's liability to Hazziez arose solely from its own actions, not in whole or in part from Concentra's actions, the circuit court properly granted summary judgment to Concentra on the City's contractual indemnity claim. ZALMA OPINION Insurance is designed to protect an insured for damages resulting from its negligence. Indemnity agreements, like that in the City's contract with Concentra, is designed only to provide indemnity if the City was held liable for the actions of Concentra, the indemnitor. Since only the acts of the City caused damage to Hazziez it had no right to indemnity from Concentra and could only be indemnified by its own insurance. (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/

ZIFL Volume 27, Number 18 This, the eighteenth 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. Subscribe to Zalma’s Insurance Fraud Letter Where You Can be Notified About the two Issues a Month The Source for Insurance Fraud Professional Where You Can Read: Public Adjuster Andrew Mitchell Pled Guilty to Fraud Andrew Mitchell aka Andrew Aga on August 31, 2023, pleaded guilty to defrauding four St. Chrles Parish, Louisiana residents of insurance money following Hurricane Ida. He has remained in custody since his arrest in January 2023. Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf More McClenny Moseley & Associates Issues This is ZIFL’s Fourteenth 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. Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf Crime Doesn’t – Pay it Costs “Runner” Must Pay Restitution to Insurers The Eighth Circuit was called upon to decide the amount of restitution owed by a participant in a recruitment-and-kickback scheme aimed at defrauding automobile-insurance companies. The district court ordered restitution for every chiropractic patient that Abdisalan Hussein recruited from 2013 onward. In United States of America Plaintiff v. Abdisalan Abdulahab Hussein, also known as Abdisalan A. Hussein, No. 22-1275, United States Court of Appeals, Eighth Circuit (August 23, 2023) the Eighth Circuit resolved the dispute. Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf A Different Kind of Insurance Fraud Parag Bhavsar, 42, of Newark, pleaded guilty before US District Judge Madeline Cox Arleo to information charging him with one count of conspiracy to commit mail fraud and one count of conspiracy to commit interstate transfer of stolen property. Bhavsar, an Indian national admitted that he defrauded various telephone providers and insurance companies out of millions of dollars by using stolen or fake identities to submit fraudulent claims for replacement cellular devices and then reselling those devices outside the US. Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf Good News From the Las Vegas man sentenced to 27 months for wire fraud and telemedicine scheme. Sergey Duman was sentenced for participating in a scheme to defraud private health insurance companies. Duman purchased Cedar Care Pharmacy in Allentown, Pennsylvania, in January 2020. For the next six months, Cedar Care effectively acted as a shell pharmacy for a telemedicine fraud scheme. During that time, an entity purporting to be a telemedicine company regularly submitted prescriptions to the pharmacy that had been written without the knowledge of the listed patient. The pharmacy then fraudulently submitted private insurance, and Medicaid claims for the prescriptions even though the pharmacy never provided the prescribed medications to patients. He faces 27 months' imprisonment for wire fraud. The Court also ordered a 3-year term of supervised release to follow the term of imprisonment and over $4.8M in restitution. The Texas Commissioner of Insurance Cassie Brown has served an emergency cease and desist order on multiple insurance companies. Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf Strems Files for Bankruptcy -Will He Get His $36 Million? Scot Strems, a Florida lawyer known as “public enemy number one” by Florida’s property insurance industry after it filed thousands of unnecessary lawsuits – many of them on the same claim – has slipped into bankruptcy, putting a deep red line under an expensive and frustrating chapter in the state’s insurance litigation crisis. Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf Evidence of Arson Not Needed to Defeat Arson-for-Profit Back in 2001 I examined James E. Mitchell under oath on behalf of his insurer, United National Insurance Company who admitted to misrepresenting material facts when he applied for the insurance. As a result of that EUO and the testimony of the underwriter, United National decided to rescind the policy rather than accuse him of fraud and arson for profit, but still refuse his claim for fire damage and offered to return the premium he paid. Of course, in an expression of “chutzpah” (unlimited gall) he sued only to have the court conclude the rescission was appropriate. Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf Health Insurance Fraud Convictions Dentist back in jail for practicing without a license William C. Gardner used to advertise himself as the best cosmetic dentist in Albuquerque. Now he’s an inmate at the Sandoval County Detention Center, accused of “defiantly practicing dentistry” despite the revocation of his license more than three years ago. Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf Rescission Results in Policy Void From its Inception ARSON FOR PROFIT IS A VIOLENT CRIME Imperial Casualty and Lloyd's Underwriters retained me in the 1980's to advise concerning the fire claim presented by Levon Sogomonian and his wife as a result of a major arson fire and explosion that destroyed their home. The investigation took more than a year, multiple days of examination under oath (EUO), death threats to the claims investigator and a bomb threat at my office, that eventually established the leading case in California concerning rescission of insurance. Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf Other Insurance Fraud Convictions Injured Worker Gets Help from a Friend…and a Bat According to ICW Group a Florida Truck Driver who was injured on the job made a few unfortunate decisions when she decided she wasn’t ready to go back to work and wanted to make a little extra money. She asked a friend to hit her with a baseball bat! Her friend complied, but not to the satisfaction of the truck driver. The injured worker grabbed the bat and took a few extra swings at herself for good measure. Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf Barry Zalma Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com

Rescission Results Policy Void From its Inception ARSON FOR PROFIT IS A VIOLENT CRIME Imperial Casualty and Lloyd's Underwriters retained me in the 1980's to advise concerning the fire claim presented by Levon Sogomonian and his wife as a result of a major arson fire and explosion that destroyed their home. The investigation took more than a year, multiple days of examination under oath (EUO), death threats to the claims investigator and a bomb threat at my office, that eventually established the leading case in California concerning rescission of insurance. In Imperial Casualty And Indemnity, Company v. Levon Sogomonian and Elichka Sogomonian, No. B022012, 243 Cal.Rptr. 639, 198 Cal.App.3d 169, Court of Appeal, California (Feb. 4, 1988) Levon and Elichka Sogomonian (defendants) appealed from a summary judgment entered in favor of plaintiff Imperial Casualty Insurance Company (herein "Imperial") on both Imperial's complaint and defendants' cross-complaint. FACTUAL BACKGROUND On July 14, 1982, Imperial issued a homeowner's policy to defendants which provided casualty and fire insurance protection for defendants' home. On or about October 9, 1982, defendants' home was destroyed by a fire and explosion. A second fire on October 10, 1982 a second arson fire destroyed what had not been destroyed by the first fire. Following an investigation, Imperial concluded that certain misrepresentations and a number of omissions had been made by the defendants in their application for the policy which they had submitted to Imperial on June 7, 1982. Imperial sued, seeking: Rescission of the policy ab initio, together with the judgment of the court so declaring; and repayment, with interest, of advance payments (against the then anticipated fire insurance proceeds) of $30,300 which Imperial made to the defendants on or about November 18, 1982. In its motion for summary judgment Imperial produced evidence that the defendants, in responding to questions in the policy application, (1) specifically denied (for the immediately preceding three years) any loss history and any policy cancellations or renewal refusals and (2) failed to include the following facts: That in February of 1980 (within three years of their application to Imperial) defendants suffered landslide damages to their property which resulted in a legal action for $500,000 in damages filed against them by a downhill neighbor. This claim was submitted by the defendants to their then insurance carrier, Equitable General Insurance Company; That in early 1981 defendants suffered an uninsured loss by theft of precious stones exceeding $100,000 in value; That on December 12, 1981, Underwriters Insurance Company had cancelled a homeowner's policy which it had previously issued on the same property here involved; That on March 29, 1982, defendants had presented a water damage claim to Blue Ridge Insurance Company with respect to this same property; That, on April 5, 1982, over two months prior to the submission of the application to Imperial, the defendants had been notified by Blue Ridge Insurance Company of the non-renewal of the homeowner's insurance policy which that company had theretofore issued. Subsequently, on July 19, 1982, just a few days after the issuance of Imperial's policy, defendants were informed that the reason for such non-renewal was substandard property maintenance by defendants of the same property here involved. Defendants did not ever provide such information to Imperial; That at the time of the application, there was pending a lawsuit with Equitable Life Assurance Society, wherein that company sought to rescind a health policy on the grounds that defendants had made material misrepresentations and omissions in the application for that policy; That at the time the application was made to Imperial defendants had a second mortgage on their property with Alliance Bank (the existence of a first mortgage with American Savings & Loan Association was disclosed; however, the total owed on the home was approximately $425,000 of which nearly one-half, or $200,000, was secured by the undisclosed second trust deed). Imperial offered the deposition testimony of its former underwriter who was responsible for making the decision to issue the subject policy. She testified that she relied on defendants' application and had she known the "true facts" she would not have approved the issuance of the policy. DISCUSSION In their brief, defendants effectively conceded that of the established material issues of fact claimed by Imperial, they only really disputed three. Given the state of this record and defendants' concession in their brief, the Court of Appeal was compelled to the conclusion that no factual dispute exists with respect to the fact of defendants' concealment of certain information requested by Imperial. Moreover, there is no factual dispute that Imperial issued the policy in reliance on the truth of the statements made by the defendants and that Imperial's underwriter has stated that had Imperial known the actual facts, which only came to light during the post fire investigation, it would not have issued the policy. The Court of Appeal concluded that the application submitted by the defendants to the information sought by Imperial and denied to it by the false negative answers and omissions of defendants were material to Imperial's decision to provide insurance coverage. That conclusion is the only one that reasonably can be drawn from the undisputed evidence presented. Rescission of The Policy of Insurance Bars Any Claim By the Insured Under Insurance Code Section 790.03(h). “A contract is extinguished by rescission." (Civil Code § 1688.) The consequence of rescission is not only the termination of further liability, but also the restoration of the parties to their former positions by requiring each to return whatever consideration has been received. DISPOSITION Since the summary judgment did not provide a complete restitution to Imperial and Lloyd's, the judgment was reversed, with directions to the trial court to make and enter a new order granting summary adjudication of issues which is consistent herewith. A trial was held thereafter and I testified as a fact and expert witness only to have Mr. Sogomonian threaten my life as I entered the courtroom to testify. Judgment was had in favor of Imperial and Lloyd's and they recovered all advance payments, attorneys and investigation fees. ZALMA OPINION Importantly this case established the law of the state of California with regard to rescission of insurance. Although there was evidence that the fire was created on behalf of Mr. Sogomonian no criminal charges were brought and Sogomonian continued to attempt to gain from the fire by suing the investigator. In 15 years of work all litigation was resolved, Sogomonian paid, and went on to litigate with others on various other schemes. Contrary to his hopes I survived and am now 81-years-old and still working. If you want the full details of this case see my book "Arson for Terrorism and Profit" a fictionalized novel about arson for profit available at https://www.amazon.com/dp/1653323183/ref=sr_1_2?keywords=arson+for+terrorism+and+profit&qid=1577809094&sr=8-2 (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/

Rescission of Insurance for Innocent Misrepresentation of Material Facts Evidence of Arson Not Needed to Defeat Arson-for-Profit Back in 2001 I examined James E. Mitchell under oath on behalf of his insurer, United National Insurance Company who admitted to misrepresenting material facts when he applied for the insurance. As a result of that EUO and the testimony of the underwriter, United National decided to rescind the policy rather than accuse him of fraud and arson for profit, but still refuse his claim for fire damage and offered to return the premium he paid. Of course, in an expression of “chutzpah” (unlimited gall) he sued only to have the court conclude the rescission was appropriate. In James E. Mitchell, Individually and as Trustee of the Mitchell Family Trust v. United National Insurance Company, No. B170364, Court of Appeal, Second District, Division 5, 25 Cal.Rptr.3d 627, 127 Cal.App.4th 457 (March 8, 2005) the Court of Appeal established a standard for dealing with rescission of an insurance policy. It concluded that an insurer may, under Insurance Code sections 331 and 359, rescind a fire insurance policy based on an insured's negligent or unintentional misrepresentation of a material fact in an insurance application. Because there was undisputed evidence that the insurer relied upon the misstatements of material facts in the insured's application for insurance, the summary judgment granted by the trial court was affirmed. BACKGROUND During the policy period, the building was destroyed by arson. The arsonist, an acquaintance of Mitchell's, perished in the fire. The trial court granted summary judgment. Mitchell purchased the building in February 2000 in the name of his trust. On April 11, 2000, Mitchell's brokers applied for insurance to Debra Messina of Excess & Surplus Lines Insurance Brokers, Inc., an authorized underwriter for United National. Mitchell represented in the application that: the property to be insured consisted of a 3,420-square-foot commercial building; the building was to be used by Mitchell as a "video production studio and offices"; the business to be conducted in the building had $20,000 in payroll and generated $300,000 in receipts; there was no existing insurance on the building; the building had no uncorrected fire code violations; the building had a burglar alarm; and Records & Records & Filmworks, Inc. (later changed to James E. Mitchell) was the purchaser of the building. In fact, the seven representations were false including the fact that the building was subject to a City of Los Angeles abatement order stating that the building could not be occupied without a clearance or repaired without a permit and contained such deficiencies as being open to unauthorized entry, littered with combustible debris, excessive dry weeds or vegetation, broken windows, damaged or missing doors, damaged exterior wall covering, damaged interior wall and ceiling covering, and deteriorated flooring (and no permit had been obtained for corrective work on these deficiencies). THE ARSON FIRE Carl Robinson a business consultant with a prospective buyer for the property. Mitchell gave Robinson the keys to the property for the purpose of showing it to the prospective buyer. On November 22, 2000, while Mitchell was in Chicago, Robinson set fire to the building and was killed in the ensuing blaze. Although evidence indicated that Mitchell retained Robinson to burn the building, his death in the fire, made proving Robinson and Mitchell were working an arson-for-profit scheme, United National limited its denial of Mitchell's claim on the ground that it had rescinded the policy based on material misrepresentations in Mitchell's application for insurance. Mitchell admitted that the application for insurance submitted to United National "contained inaccuracies" that caused United National to rescind the policy but claimed that those inaccuracies were not material and were solely the fault of his brokers. The trial court granted summary judgment in favor of United National finding as a matter of law on the undisputed facts that the information sought by United's underwriter and denied to it by plaintiff's false answers and omissions was material to United's decision to provide insurance coverage. DISCUSSION RESCISSION BASED ON MISREPRESENTATION United National based its right to rescind the policy on the California Insurance Code including section 331 that states: "Concealment, whether intentional or unintentional, entitles the injured party to rescind insurance" and Insurance Code section 359 that similarly provides: "If a representation is false in a material point, whether affirmative or promissory, the injured party is entitled to rescind the contract from the time the representation becomes false." An insured's negligent or inadvertent failure to disclose a material fact in the application that materiality is determined under "a subjective test; the critical question is the effect the truthful answers would have had on [the insurer], not on some ‘average reasonable’ insurer.” For the purpose of rescission of an insurance policy the materiality of a misrepresentation is determined by its probable and reasonable effect upon the insurer. The application questions in this case plainly impacted decisions on whether to insure and the premium to charge. In his response to defendant's statement of undisputed material facts Mitchell admitted that questions concerning the ownership, size and condition of the building, the nature of the business to be conducted, and its payroll and receipts, and the existence of insurance under the FAIR Plan were factors impacting either the underwriting decision or the amount of the premium and coverage, and that his answers to these questions may have affected the decision to bind coverage and the amount of the premium. United National's representative, Ms. Messina, said she relied upon Mitchell's answers to the questions, including the condition of the building, its use, and whether it was covered by insurance. Contrary to Mitchell's argument, Ms. Messina had no obligation to verify the accuracy of the representations since she could rely on the covenant of good faith and fair dealing that required the insured to honestly apply for the insurance. The undisputed evidence showed that there were material misrepresentations in Mitchell's application for insurance. United National had the right to, and did, rescind the policy based on these misrepresentations. The trial court therefore properly granted summary judgment. The judgment was affirmed and United National was awarded its costs on appeal. ZALMA OPINION It is often difficult to prove that an insured was involved in an arson-for-profit scheme. Mitchell was out of the state when the fire occurred and the arsonist died in the fire he set. Evidence indicated that Robinson was only trying, on behalf of Mitchell, to sell the property to United National by destroying the building by fire. Since Robinson's death made the intentional arson fraud difficult to prove United National decided to use the lies on the application to defeat the fraud since, although Mitchell understood fraud he did not understand insurance and lied to get the policy. The rescission established that that liars never prosper. (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/

Clear & Unambiguous Exclusion The insurer sued seeking a declaratory judgment that it need not defend or indemnify defendant TFS NY against a personal injury lawsuit pending in the New York Supreme Court, Kings County. In Clear Blue Specialty Insurance Company v. TFS NY, INC. d/b/a Sugardaddy's and Tywan Simmons, No. 22-CV-1915 (AMD) (SJB), United States District Court, E.D. New York (September 6, 2023) resolved the dispute. BACKGROUND The defendant owns and operates a nightclub. Between April 2019 and April 2020, the plaintiff insured the defendant under a Commercial General Liability insurance contract. Like any other insurance policy, this contract had exclusions. At issue in this case is the scope of a Sublimited Assault or Battery endorsement and a Third Party or Contracted Security exclusion-specifically, whether these provisions require the plaintiff to defend and indemnify the defendant against a lawsuit pending in New York state court. The parties agreed that the insurance policy was in effect when the incident took place and that Mr. Simmons's lawsuit triggers the plaintiff's duty to defend under the Sublimited Assault or Battery endorsement, because the lawsuit includes negligence claims. They also agree that Castillo was “an outside security company” as defined by the insurance policy. The policy provides, in part: “We have no duty to defend any insured against any claims or ‘suits’ seeking damages for ‘bodily injury’, ‘property damage’ … or ‘injury’ in regard to the matters covered by this exclusion (outside security services) and we have no duty to pay damages in regard to the matters covered by this exclusion" DISCUSSION The plaintiff argues that it has no duty to defend or indemnify against Mr. Simmons's lawsuit, because it disclaimed liability over any “suit” “involving” “operations of any third party or contracted security services provider.” While the defendant agrees that the plaintiff is not liable for claims involving Castillo and does not have to indemnify the defendant for them, it nevertheless contends that the plaintiff must “defend the entire action” because the lawsuit includes claims against the defendant and its employees, who “are covered by [the] policy.” Insurance Contracts Under New York Law The duty to defend is contractual in nature. Accordingly, there is no duty to defend where the alleged basis for liability is not within the coverage of the policy. The Plaintiff's Duty to Defend The defendant contends that the plaintiff owes a duty to defend because the exclusion is silent as to whether insurance would apply to separate and distinct claims of assault and battery that are made against the defendant and its employees. However, the plain language of the exclusion, which states repeatedly that it “does not apply to any . . . ‘suit' . . . directly or indirectly based on, attributable to, arising out of, involving, resulting from or in any way related to the acts, omissions or operations of any third party or contracted security services provider.” Mr. Simmons's complaint alleges that he was “assaulted” and “sustain[ed] serious and severe injuries” “as a direct consequence and result of the acts of [all] the defendants.” Mr. Simmons's “suit,” therefore, “involv[es]” a “contracted security services provider” and falls within the exclusion. The complaint alleges that the altercation was the product of joint action of the defendant, its employees and Castillo, each of which is included in every cause of action. The plaintiff thus has no duty to defend. Finally, even if there is no duty to defend on the facts alleged in Mr. Simmons's complaint, there might still be a duty to indemnify the defendant if the state court dismisses the claims against Castillo or if the jury decides that the defendant's employees were the only ones involved in Mr. Simmons's assault. But at this time, the exclusion must be enforced, and the plaintiff has no duty to defend. Duty to Indemnify Developments in Mr. Simmons's lawsuit may trigger a duty to indemnify. If that happens, the defendant may move to reopen the case. However, since the underlying suit is at the pleading stage, the plaintiff's motion for summary judgment was granted as there is no duty to defend. The defendant may move to reopen on the issue of indemnification if the state court determines that Castillo played no part in Mr. Simmons's assault. ZALMA OPINION Clear and unambiguous language in an exclusion will always be enforced. Since the suit alleged that the security service was involved in his assault, battery and injury the exclusion applied and there was no duty to defend. Since little evidence exists for the USDC to rule upon it left open the possibility - slim - that there might be a duty to indemnify. A Solomon-like decision that will not require the death of a baby nor the defense of the security company. (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/

Ambiguous Policy Language Forces Insurer to Pay Losses It Did not Intend to Cover INSURER HOIST ON ITS OWN PETARD Insurers often complain that their insureds do not read the insurance policy and compel them to fulfill all policy terms or receive nothing. In my experience almost no one reads an insurance policy until there is a dispute over a claim. In Michigan an insurer did not read the policy it issued. In Village Of Kalkaska v. Michigan Municipal League Liability And Property Pool, No. 359267, Court of Appeals of Michigan (August 31, 2023) a policy was issued to the Village that provided - by fairly clear language - coverage the insurer did not intend to provide and as a result found it obligated to pay claims for millions of dollars. Michigan Municipal League Liability and Property Pool appealed the trial court's order denying its motion for summary disposition claiming that its intent was to exclude coverage for the losses claimed by the Village. FACTS In 1996, plaintiff, Village of Kalkaska, contracted with certain of its employees to provide lifetime retirement health benefits. In 2014, plaintiff determined that the obligation to provide lifetime retirement health benefits to the employees was prohibitively expensive. Plaintiff therefore adopted a resolution ending its agreement to pay the employees lifetime retirement health benefits. Four of the affected employees sued plaintiff for breach of contract. In one of the lawsuits, a jury awarded the employee present and future damages. Plaintiff thereafter settled the lawsuits with the other three employees for present and future damages. Plaintiff asserts that thus far the cost of resolving the lawsuits is nearly $2,000,000. Defendant is "a non-profit self-insurance pool owned and governed by its members" that provides liability insurance to numerous Michigan municipalities. The policy provided plaintiff with various types of coverage, including coverage for liability in the administration of its employee benefits program. Defendant moved for summary disposition on the basis that the policy does not provide coverage for plaintiff's intentional breach of its contract with its employees. DISCUSSION An insurance policy provision is valid if it is clear, unambiguous, and not in contravention of public policy. If a contract does not violate the law or a traditional defense to enforceability, a court is required to apply the unambiguous provisions of the contract as written because an unambiguous contract reflects the intent of the parties as a matter of law. THE TRIAL COURT'S DECISION The trial court first determined that the policy provides coverage, but then concluded that ambiguity in the policy necessitated submitting the matter to the jury. The trial court concluded that because the question was a close one, a genuine issue of material fact existed whether the Village was engaged in the administration of a benefits program when it terminated the employees' lifetime retirement health benefits. Since a decision to terminate an employee benefit plan may qualify as a negligent act, error, or omission which causes a termination or cancellation of an employee under an employee benefit plan the Court noted that defendant made a strong argument that the wholesale termination may not be as comparable to administering under the plan, nothing within the contract of insurance that has been drafted by the defendant appears to allow for the distinction, even if it's a good argument because it simply says, "effecting enrollment, termination, or cancellation of employees." The trial court concluded that no exclusions from coverage applied, but because it was a close question it was therefore ambiguous. PUBLIC POLICY Defendant contended that regardless of the policy language, defendant obviously did not intend to assume any and all contractual liabilities upon which plaintiff chooses to intentionally default. Defendant argued that it did not agree to pay plaintiff's contractual obligations, but only to pay damages arising from plaintiff's wrongful acts in administrating its employee benefits program, i.e., damages arising from plaintiff's breach of its contract obligations under its employee benefits program. The claim in this case allows plaintiff intentionally to shift its contractual obligation to defendant. By so doing it provides an unreasonable result not intended by defendant. But the intent of the parties is determined by the unambiguous policy language as a matter of law and a court may not fail to enforce a contract on the basis of reasonableness. Therefore, the trial court erred by finding an issue of material fact for the jury; the trial court should have found that the policy provides coverage and granted summary disposition for the plaintiff and the Court of Appeals reversed and remanded for entry of judgment for plaintiff. ZALMA OPINION The greatest sin that an insurer can commit is to write an insurance policy that is ambiguous and that, as a result, provides a coverage it did not intend. In this case, because of the weakness of the policy language the insurer finds itself obligated to pay for a run-of-the-mill breach of contract, something no insurance company would intentionally cover. Insurers who usually insist on its insureds reading the policy as issued should not complain when it failed to read the policy it delivered to the insured in a manner understandable and unambiguous. (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/

If Insurer Agrees to Defend Insured May Not Expect it to Pay Independent Counsel

Insurance Fraud Charges Against Defense Counsel Does Not Result in Reversal for Ineffective Counsel While Jesse Steven Castro's case was pending, his attorney was charged with two insurance fraud felony offenses. Castro's case proceeded to trial, and a jury convicted him of continuous sexual abuse of a child. Castro filed a motion for new trial claiming that he received ineffective assistance of counsel because his attorney failed to disclose and was distracted by her pending charges and in so doing, prioritized her financial interest in representing him above a fiduciary duty to disclose her pending charges. In Jesse Steven Castro v. The State Of Texas, No. 14-19-00679-CR, Court of Appeals of Texas, Fourteenth District (August 31, 2023) the Court of Appeals resolved the dispute. BACKGROUND Castro hired Jana Lewis-Perez to represent him. Lewis-Perez was then indicted for two felony insurance fraud offenses. Castro's case proceeded to trial. After the jury returned its guilty verdict, it assessed punishment at 38 years' confinement. The trial court overruled Castro's motion for new trial. EFFECTIVENESS OF COUNSEL On appeal, Castro argued that Lewis-Perez was unconstitutionally ineffective because she had a conflict of interest between a fiduciary duty to her client to disclose her pending charges and her financial self-interest. According to Castro, Lewis-Perez's conduct amounted to fraud by nondisclosure, resulting in denial of Castro's "right to counsel of his choice." A trial court abuses its discretion in denying a motion for new trial only when no reasonable view of the record could support the trial court's ruling. The Sixth Amendment to the United States Constitution guarantees in all criminal prosecutions that the accused shall have the right to reasonably effective assistance of counsel. The Sixth Amendment also guarantees a defendant the right to "conflict-free" representation. A defendant demonstrates a violation of his right to reasonably effective assistance of counsel based on a conflict of interest if he can show that: his counsel was burdened by an actual conflict of interest; and the conflict had an adverse effect on specific instances of counsel's performance. An actual conflict of interest exists if counsel is required to make a choice between advancing her client's interest in a fair trial or advancing other interests (perhaps counsel's own) to the detriment of her client's interest. A potential conflict of interest is insufficient to reverse a conviction. On appeal, Castro contends that Lewis-Perez provided ineffective assistance of counsel because she had a conflict of interest, i.e., a fiduciary duty to disclose her criminal fraud indictments to Castro. In Texas, a fiduciary relationship exists between attorneys and clients as a matter of law. As a fiduciary, an attorney is obligated to render a full and fair disclosure of facts material to the client's representation. However, this duty to inform does not extend to matters beyond the scope of representation. Although Castro attested that Lewis-Perez seemed distracted and unprepared, he points to no specific examples of this behavior in the record and merely speculates that the cause of any alleged distraction was his attorney's pending cases. Castro does not cite, nor did the Court of Appeals find, any authority to support his proposition that Lewis-Perez's failure to inform him of her pending felony indictments was an "actual conflict of interest." The court was not persuaded that Castro established that Lewis-Perez was burdened with an "actual conflict of interest" that required her to make a choice between advancing Castro's interest in a fair trial or advancing her own interest. Absent a showing that a potential conflict of interest became an actual conflict, the court refused to speculate about a strategy an attorney might have pursued, but for the existence of a potential conflict of interest. The record did not demonstrate that Lewis-Perez's alleged failure to inform Castro of her pending insurance fraud charges, unrelated to Castro's continual sexual abuse of a child charges, was so outrageous that no competent attorney would have engaged in it. During trial Lewis-Perez made numerous objections, cross-examined witnesses, called three witnesses for the defense, and was successful in asking the jury to sentence Castro toward the lower end of the punishment range. The Court of Appeals concluded that Castro failed to show a reasonable probability that, but for trial counsel's presumptively deficient performance, the result of the trial would have been different. Having concluded that the trial court did not abuse its discretion in denying Castro's motion for new trial based on ineffective assistance of counsel. ZALMA OPINION Insurance fraud is a serious crime. However, a charge of insurance fraud is nothing more than that, the lawyer charged is presumed to be innocent. In addition, the Court of Appeals recognized that she effectively and aggressively defended Castro and successfully got the jury and trial judge to sentence Castro at the lower end of the punishment range even after he was convicted of the heinous crime of continuous sexual abuse of a child. (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/

A Fictionalized True Crime Story This is a Fictionalized True Crime Story of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. See the full video at and at https://youtu.be/q1rw1mSLLHw Insurance Fraud Scheme Born After Business Failure The Ben-Cohain brothers, quite by accident, came upon an imaginative fraud. The Los Angeles County District Attorney, after a lengthy investigation, charged them with violation of Penal Code § 550, insurance fraud, among others related crimes. The Ben-Cohain brothers operated a small furniture assembly facility in Los Angeles County. They imported knocked-down children’s furniture (made of composition wood and Formica laminates) from Israel. They hoped to sell it to wealthy people in Beverly Hills and West Los Angeles who wished to support the State of Israel. The quality of the merchandise, however, was not high and the Ben-Cohain brothers had difficulty making a profit. In 2019 the rains came to Southern California and a skylight in their industrial building leaked some water onto a small amount of their composition board furniture. They called their insurance agent, reported a claim, and with invoices for most of the merchandise they presented and received $75,000 for their actual water damage loss. The Ben-Cohain brothers purchased the salvage from their insurer for a small deduction in their total claim and sold it shortly after receiving payment. With the proceeds, one brother purchased a used Mercedes sedan and the other a used BMW. They were soon short of money since they still could not sell the low quality knocked-down merchandise. They sought out the services of Mr. Rosenberg, a public insurance adjuster, who attached a nylon rope to sprinkler head thirty feet above the warehouse floor and yanked it out of its fitting. The water flowed for fifteen minutes until the fire department came and turned off the sprinkler system. The fire department, with its usual efficiency, vacuumed out the water and protected the furniture. After the fire department was gone, the brothers, noting that insufficient damage had been done by the water from the sprinklers, ordered their two laborers to form a bucket brigade. The laborers poured twenty-five buckets of water from the restroom on the stored furniture effectively making all of their inventory unsaleable. Shortly thereafter they called the insurer and a claim was presented for $1,000,000. The insurer, unsuspecting, retained salvors to inventory the damaged furniture and determine if any had a value in salvage. While the salvors were doing their work, one laborer came up to him and whispered: “Senior, no es accidente!” Fraud Detected Although the salvor spoke no Spanish he understood what was said to him. He reported the statements to the insurer. The insurer, American Indemnity Insurance Company, immediately assigned the case to investigator Steve Thomas of its special investigation unit. Mr. Thomas retained the services of Spanish speaking investigators who met with the laborers and obtained the full story of the fraud. American Indemnity then retained counsel to take the sworn examination of the laborers. Counsel, provided instructions for further investigation and later examined the insureds under oath at the request of the insurer. American Indemnity, although suspicious, wanted to complete the fair and thorough investigation required of it by California law. During the examination under oath it seemed the brothers Ben-Cohain had blatantly lied. They lied about the cause of the incident. They lied about what was destroyed. They lied about where the things destroyed were manufactured. They lied about the quality of the knocked-down furniture. They lied about the financial condition of their business. They lied about everything. The brothers provided invoices and shipping documents they intended to prove the value of the damaged furniture. The documents proved that the support for their claim was false and fraudulent. They testified that none of their furniture was purchased domestically. At the time, they did not know that their laborers had introduced American Indemnity to the local manufacturer. The examinations under oath filled more than four days of sworn testimony. When the testimony was completed American Indemnity denied the claim and declared the policy void because of fraud. American Indemnity, following California law, reported the claim to the fraud division of the Department of Insurance. The fraud investigator, Martin Sandiego of the Department of Insurance fraud division, commenced the criminal investigation that resulted in a presentation of the case to the Los Angeles County District Attorney’s Office. After considerable work by American Indemnity, its counsel and almost a year of detailed investigation by the Fraud Division, the Los Angeles County District Attorney filed seven felony counts against each brother for insurance fraud and grand theft. They arrested both brother’s Ben-Cohain while they were parked illegally near a night club on Sunset Boulevard in West Hollywood. After spending a weekend in the County Jail, the brothers were released on $75,000 cash bonds. They left town and forfeited bail. The Fraud Division of the State of California Department of Insurance, the Los Angeles District Attorney’s Office, and American Indemnity Insurance Company deserve commendation for their dedication, hard work and courage in thwarting an attempt at a major fraud. The two laborers, although fearing deportation as illegal aliens, did the right thing and stopped what could have been the perfect crime. As long an honest people refuse to stand by and let criminals succeed there is still hope for this country and its insurance industry. I know things are changing. In the first twenty-five years I had been involved with attempts to defeat or deter insurance fraud I could count ten people, out of the thousands I have investigated, who were arrested for insurance fraud. In the last twenty-five years cases in which I have been involved in dealing with insurance fraud readers of my twice monthly newsletter, Zalma’s Insurance Fraud Letter, can see that convictions for insurance fraud across the country, seem to be increasing. The increase is either due to serious effort to defeat fraud or an increase in fraud that is so serious that it cannot be ignored by prosecutors. I sincerely hope that the new insurance commissioners and prosecutors across the country will redirect the efforts of their local Fraud Division and attorneys general to prosecute insurance fraud. Besides million dollar frauds, like that attempted by the Ben-Cohain brothers, effort must be made to bring to justice those fraudsters who avoid attention by committing insurance fraud for small amounts of money repeatedly. The bail bondsman travelled to Israel to collect the $150,000 his company was required to pay when they defaulted and escaped to Israel. He found them only to have his demand for money met with two UZI machine guns threatening his life. Applying good common sense the bail bondsman returned to California and wrote off the debt on his tax return. In 1990 Moshe Ben-Cohain and Menashe Ben-Cohain started a course of conduct that led to their arrest for insurance fraud. They failed to appear after posting bond and are, along with their co-conspirator, Raz Rosenberg, fugitives. Adapted from my book Insurance Fraud Costs Everyone Available as a Kindle Book and Available as a Paperback from Amazon.com. (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/

GEICO Continues to Sue Allegedly Fraudulent Health Care Providers Defendants Todd Koppel, M.D. and Garden State Pain Management, P.A. (collectively, the “Koppel Defendants”) moved the USDC to quash a subpoena served by Plaintiffs Government Employees Insurance Co., upon the New Jersey Office of the Insurance Fraud Prosecutor (“OIFP”), (the “Motion”). In In Re Government Employees Insurance Co., et al. v. Todd Koppel, et al., No. 2:21-cv-03413-MEF-JRA, United States District Court, D. New Jersey (August 28, 2023) the USDC dealt with the right to subpoena the prosecutor's files. BACKGROUND Plaintiffs sued the Koppel Defendants alleging that they unlawfully obtained personal injury protection (“PIP”) benefits from Plaintiffs by making false representations as to their compliance with New Jersey law when, in fact, they were operating in violation of New Jersey law by paying kickbacks to chiropractors in exchange for patient referrals. Based on these allegations, Plaintiffs have asserted claims against the Koppel Defendants pursuant to the New Jersey Insurance Fraud Prevention Act, N.J.S.A. 17:33A, the civil Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962, and common law fraud and unjust enrichment. The Subpoena sought a copy of all criminal and investigative records from the OIFP's Medicaid Fraud Control Unit concerning the Koppel Defendants. The Koppel Defendants filed a motion to quash the Subpoena, arguing, that the information sought is irrelevant and that Plaintiffs have failed to show a compelling need for the requested information, which is privileged under New Jersey law. Alternatively, the Koppel Defendants request entry of a protective order to prevent discovery of the Koppel Defendants' investigative files. DISCUSSION Defendants challenge the Subpoena based on relevancy, privilege, and undue burden. A party lacks standing to challenge subpoenas issued to non-parties based on those grounds. The Court found that Defendants lack standing to challenge the Subpoena on the grounds of relevancy and undue burden. In addition the defendants failed to convincingly articulate why the information that is subject to the subpoena is irrelevant, or how its production would be unduly burdensome. To the contrary, the Court noted that the information Plaintiffs seek overlaps with the allegations in the complaint and is, therefore, relevant. Conversely, the Koppel Defendants do have standing to challenge the Subpoena because they claim the records are privileged under New Jersey law. Privilege State statutes allow that confidentiality of the information and materials in the possession of OIFP shall not preclude OIFP from coordinating and providing information to and among referring entities on pending cases of suspected insurance fraud, where such action would serve the public interest in facilitating the investigation or prosecution of insurance fraud. Moreover, the IFPA specifically addresses disclosure of OIFP investigatory files to insurers such as Plaintiffs. The discretion of the Insurance Commissioner controls whether the records sought by Plaintiffs remain privileged. It is not a privilege that belongs to the Koppel Defendants themselves. The OIFP did not join in the Koppel Defendants' Motion, nor did the OIFP sought to quash the Subpoena independently. Because the OIFP's only objection to disclosure is the lack of court order, the USDC found that the Subpoena does not unnecessarily hinder the OIFP and that the records may be disclosed. The Koppel Defendants Motion to quash was, as a result, denied. The Koppel Defendants also failed to meet their burden to show that good cause exists to issue a protective order. Accordingly, the Koppel Defendants' alternative request for a protective order was denied. ZALMA OPINION GEICO should be honored for its proactive act against insurance fraud by taking the profit out of insurance fraud since very few such fraudsters are arrested, tried or convicted. Although the OIFP did not prosecute the Koppel Defendants, they collected information that will assist GEICO in its efforts to obtain damages and fines from the Koppel Defendants who they believe defrauded GEICO. Taking the profit out of fraud is more effective than prosecution of fraudsters for crime. (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 – https://zalma.com/blog/ins

ANTI-SLAP MOTION FAILS BECAUSE PLAINTIFF NOT A PUBLIC FIGURE Tien Dung Tran, the owner of two YouTube channels, appealed from an order denying his special motion to strike plaintiffs Manh Van Truong (Mike) and Meiji Truong's complaint pursuant to the anti-SLAPP statute. He contends plaintiffs' claims, which include defamation and intentional and negligent infliction of emotional distress, arise from protected activity because the statements he allegedly made on YouTube came after plaintiffs voluntarily put themselves in the public spotlight in the local Vietnamese-American community. In Manh Van Truong et al. v. Tien Dung Tran, G061703, California Court of Appeals, August 29, 2023 the evidence did not demonstrate that the targeted comments were made in connection with an issue of public interest. FACTS Plaintiffs and defendant are members of the Vietnamese-American community in Orange County, California. Plaintiffs own and operate several home improvement related businesses. Defendant owns two YouTube channels for which he creates video content. The complaint refers to defendant's YouTube content as primarily "Vietnamese community gossip." Following purported statements made by defendant about plaintiffs on his YouTube channels, plaintiffs sued defendant for defamation. The suit said the remarks conveyed the following about Mike that, among other things he committed insurance fraud; was a communist supporter who conspires with Vietnamese gangsters to attack America; among other things. Nine days after plaintiffs filed an amended, more detailed, complaint, defendant filed a special motion to strike the complaint pursuant to the anti-SLAPP statute. On the first occasion, the day before the 2020 presidential election, Mike asked defendant and another highly viewed YouTube channel to come film. He agreed to have the interview livestreamed and the recording posted on defendant's channel. The next day, Mike requested defendant remove the recorded content; defendant did so. Following a hearing on the anti-SLAPP motion, the trial court issued an order denying it in full. Specifically, defendant did not show the alleged statements were made in connection with an issue of public interest. DISCUSSION Defendant asserts the trial court erroneously found the anti-SLAPP statute does not apply to plaintiffs' claims. The court's consideration of the anti-SLAPP motion was appropriate, notwithstanding the filing of the first amended complaint. Litigation of an anti-SLAPP motion involves a two-step process. the moving defendant bears the burden of establishing that the challenged allegations or claims arise from protected activity in which the defendant has engaged. for each claim that does arise from protected activity, the plaintiff must show the claim has at least minimal merit. If the plaintiff cannot make this showing, the court will strike the claim. Contending the trial court erred in concluding the alleged statements fall outside the scope of the anti-SLAPP statute, defendant invokes two categories of protected activity. Among the matters to consider are whether the subject of the speech or activity was a person or entity in the public eye or could affect large numbers of people beyond the direct participants. Defendant contends plaintiffs were quasi-public figures in positions of prominence who actively sought public attention. The defendant did not meet his burden of demonstrating the targeted statements fall within the scope of activity protected by the anti-SLAPP statute, the trial court properly denied his motion. ZALMA OPINION Accusing a self-made billionaire of insurance fraud and other criminal conduct is, on its face, defamatory. The Anti-Slap statute protects the publisher of such comments if the person accused is a protected activity. The attempt failed in the trial court and was affirmed by the Court of Appeal. (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 – https://zalma.com/blog/ins

"Runner" Must Pay Restitution to Insurers The Eighth Circuit was called upon to decide the amount of restitution owed by a participant in a recruitment-and-kickback scheme aimed at defrauding automobile-insurance companies. The district court ordered restitution for every chiropractic patient that Abdisalan Hussein recruited from 2013 onward. In United States of America Plaintiff v. Abdisalan Abdulahab Hussein, also known as Abdisalan A. Hussein, No. 22-1275, United States Court of Appeals, Eighth Circuit (August 23, 2023) the Eighth Circuit resolved the dispute. Background Hussein ended up at a Twin Cities chiropractic clinic after an automobile accident. The visit resulted in a job: the clinic hired him to recruit patients. And then another one did too. Hussein's role was to bring in as many accident victims as possible. Each new patient could undergo treatment up to $20,000, the limit of basic economic benefits available under most Minnesota automobile-insurance policies. In return, Hussein received a kickback of up to $1,500, a portion of which he shared with patients who returned for multiple visits. The U.S. Government started "Operation Backcracker," targeting insurance fraud. If Hussein "qualified as [a] 'runner' [under Minnesota law], then insurers had no obligation to reimburse the clinic[s] for any services provided." After a jury trial, the district court ordered Hussein to pay restitution to the insurance companies he defrauded. He complained, alleging he was not a "runner." Because of Minnesota statutory law, the Eighth Circuit explained that not all recruiters are runners and restitution only applied to runners. On remand, the amount of restitution decreased. This time, the district court concluded that Hussein qualified as a runner for only 53 of the 65 victims, which dropped the award to $155,864. Hussein, for his part, has adopted an all-or-nothing strategy: he does not believe he owes a single penny of restitution. ANALYSIS The linchpin of Hussein's argument is that he was never a runner. Once runners are involved, it taints the relationship and automatically relieves insurers of their duty to pay. In statutory terms, once a runner recruits someone, every health-care service provided afterward becomes "non-compensable and unenforceable as a matter of law." A runner is someone who "directly procures or solicits prospective patients" for "pecuniary gain" and "knows or has reason to know that the provider's purpose" is to "obtain . . . benefits under or relating to" an automobile-insurance contract. Hussein had an active role in recruiting accident victims. He also helped coach patients to deceive insurance companies all in an effort to line his own pockets. The trial record completes the picture. Hussein received up to $1,500 per patient he recruited, which satisfies the pecuniary-gain requirement. A series of text messages establishes the remaining elements. In one, Hussein texted with a clinic owner about how one patient was "a piece of shit" for not coming to enough appointments. The Eighth Circuit concluded that Hussein "directly procure[d]" these patients with at least a "reason to know," if not actual knowledge, that the provider's purpose was to obtain benefits under an automobile-insurance contract. The problem for Hussein is that the government met its ultimate burden of proving the loss. In a fraud case, the government bears the burden of proving a prima facie case that each victim was entitled to restitution, and the defendant bears the burden of rebutting it. One patient who testified that she called him about chiropractors even though she did not know him while he referred to another as "a piece of shit" for ending her visits. Neither were friends. And it goes without saying that being a "helpful person" in the Somali community does not transform every interaction into one "made in a social setting." The judgment of the district court was affirmed ZALMA OPINION The crime of insurance fraud is destroying the ability of the insurance industry to serve the public and make a small profit. "Runners" called "cappers" in other states are the first level of many insurance fraud schemes. Hussein used his involvement in the Minnesota Somali community to allow unscrupulous medical providers to defraud insurers. The court, applying the strange Minnesota statute required Hussein to make restitution to most of the insurers he defrauded and put a small dent in auto insurance fraud in Minnesota. One can only hope they also convicted the health care providers and made them pay restitution as well. (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

ZIFL - 9/1/2023 - Volume 27, Issue 17 This, the seventeenth 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: Subscribe to Zalma's Insurance Fraud Letter https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkcitKvwMc3HNWiyrn6jw8ERzpnmgU_oNjTrm1U1YGZ7_ay4AZ7_mCLQBKsXokYWFyD_Xo_zMFYUMovVTCgTAs7liC1eR4LsDBrk2zBNDMBPp7Bq0VeAA-SNvk6xgrgl8dNR0BjCMTm_gE7bAycDEHwRXFAoyVjSABkXPPaG2Jb3SEvkeZXRXPDs%3D The Source for Insurance Fraud Professional Allstate’s Qui Tam Actions Work to Take the Profit Out of Fraud Man Bites Dog Story – Allstate May Sue on Behalf of State for Insurance Fraud Allstate Insurance Company and several of its affiliates (collectively, Allstate) brought qui tam actions on behalf of the State of California alleging insurance fraud under the California Insurance Frauds Prevention Act (IFPA) (Ins. Code, § 1871 et seq.) and the Unfair Competition Law (UCL) (Bus. &Prof. Code, § 17000 et seq.) against three medical corporations, a medical management company and its parent company, four physicians, and Sattar Mir, an individual. Read the full September 1, 2023 issue at https://zalma.com/blog/wp-content/uploads/2023/08/ZIFL-09-01-2023.pdf More McClenny Moseley & Associates Issues This is ZIFL’s Thirteenth 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. Read the full September 1, 2023 issue at https://zalma.com/blog/wp-content/uploads/2023/08/ZIFL-09-01-2023.pdf Bad Men Must Serve the Time for Crimes from Insurance Fraud to Murder Insurance Fraud is a Violent Crime After a multiple-count indictment against dozens of members of the Gangster Disciples five of them, Alonzo Walton, Kevin Clayton, Donald Glass, Antarious Caldwell, and Vancito Gumbs, appealed their convictions and sentences following a joint trial. Each raised several grounds for reversal contending they were overcharged and over-sentenced. Some argued that the Racketeer Influenced and Corrupt Organizations Act violated the Sixth Amendment because the jury failed to find that the conspiracy involved murder. Read the full September 1, 2023 issue at https://zalma.com/blog/wp-content/uploads/2023/08/ZIFL-09-01-2023.pdf Good News From the Edgar Perez, 51, of Miramar, Florida, the final defendant of a 12 person, $53M healthcare fraud conspiracy has been sentenced to federal prison. This will befollowed by three years of supervised release and ordered to pay restitution of $547K for his participation in a healthcare fraud conspiracy that billed Coalition member Blue Cross Blue Shield for more than $53M for services, including allergy tests and physical therapy, that patients never received. The defendants opened multiple clinics throughout South Florida and paid recruiters to provide personal information for insurance beneficiaries. The defendants then submitted fraudulent bills to BCBS and received payments into clinic bank accounts before transferring them to personal accounts, making cash withdrawals, and laundering money through various businesses and individuals. Read the full September 1, 2023 issue at https://zalma.com/blog/wp-content/uploads/2023/08/ZIFL-09-01-2023.pdf Health Insurance Fraud Convictions Four East Tennessee Doctors Convicted in Drug Trafficking and Fraud Scheme Evann Herrell, Mark Grenkoski, Keri McFarlane, and Stephen Cirelli were each physicians who worked for EHC Medical in Harriman and Jacksboro, Tenn. Robert Taylor, who opened EHC Medical in 2013 and operated it through late 2018, pleaded guilty to a drug trafficking conspiracy charge and was sentenced earlier this year to 30 months in prison. He forfeited $13.8 million and paid an additional fine of $200,000. Lori Barnett, a registered nurse who helped Taylor supervise day-to-day operations, and three other physicians – Matthew Rasberry, Helen Bidwaid, and Eva Misra – also pleaded guilty to related drug or money laundering charges and are awaiting sentencing. Read the full September 1, 2023 issue and multiple convictions at https://zalma.com/blog/wp-content/uploads/2023/08/ZIFL-09-01-2023.pdf Other Insurance Fraud Convictions Murdaugh’s Friend Pleads to More Charges in Helping Steal Insurance Funds Cory Fleming, a 54-year-old former attorney, convicted murderer Alex Murdaugh `s old college buddy has pleaded guilty to a second set of charges for helping the disgraced South Carolina attorney steal millions of dollars of insurance settlements from the sons of Murdaugh’s dead housekeeper. Read the full September 1, 2023 issue and multiple convictions at https://zalma.com/blog/wp-content/uploads/2023/08/ZIFL-09-01-2023.pdf Insurance Fraud by Insurers Insurance fraud is not limited to fraud by insureds against their insurers or claimants defrauding people who are insured. Much to the shame of the insurance industry, the reverse also happens. Read the full September 1, 2023 issue at https://zalma.com/blog/wp-content/uploads/2023/08/ZIFL-09-01-2023.pdf Barry Zalma Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com

Appraisal Required to Establish Amount of Loss The plaintiff, Shelter Mutual Insurance Company (Shelter), appealed the circuit court of Coles County's March 28, 2023, oral pronouncement denying its motion for judgment on the pleadings and ordering the parties to proceed forward with the appraisal process as outlined in the at-issue insurance policy, and the circuit court's written March 30, 2023, order memorializing the same. In Shelter Mutual Insurance Company v. Tim Morrow and Jodie Morrow, 2023 IL App (5th) 230249-U, No. 5-23-0249, Court of Appeals of Illinois, Fifth District (August 24, 2023) was asked to determine if appraisal could be compelled. BACKGROUND Shelter issued a homeowners insurance policy to the Morrows (the Policy). The Policy was in effect from April 7, 2021, to April 7, 2022. The policy provided: Appraisal If you and we fail to agree on the market value, total restoration cost, actual cash value, or amount of loss, as may be required in the applicable policy provision, either party may make written demand for an appraisal. ... The appraisers shall then appraise the loss, stating separately the market value, total restoration cost, actual cash value, or loss to each item as may be required in the applicable policy provision.... On December 10, 2021, a hail and windstorm occurred affecting the Morrows' property. The Morrows submitted a claim to Shelter for damage allegedly sustained because of the storm. Shelter inspected the claimed property damage and determined that the damage added up to less than the Morrows' deductible of $1000. In response, the Morrows obtained their own report and estimate from a public adjuster, the Accuval Group LLC, dated December 21, 2021. That report indicated that a complete tear-off and replacement of the residence roof and garage roof, as well as removal and replacement of the fencing would be necessary at a total cost of $38,198.15, less the $1000 deductible. Following this report, Shelter obtained a second assessment, this time from Donan Engineering, dated February 2, 2022. That report concluded that some of the damage claimed was attributed to the storm, but other damage claimed was not. That report found that much of the damage was attributable to installation errors, inadvertent man-made damage, and sealant strip failure. On February 8, 2022, Shelter sent a letter informing the Morrows that it continued to view the loss as not exceeding their deductible. On May 5, 2022, the Morrows submitted a written demand for appraisal pursuant to the appraisal provision in the policy. Shelter sued for declaratory judgment seeking to deny insurance coverage to the Morrows for the alleged damages resulting from the December 10, 2021, storm. The Morrows answered the complaint and filed counterclaims asserting breach of contract and bad faith, specifically alleging bad faith for Shelter's refusal to submit to the appraisal process as outlined in the Policy and as previously invoked by the Morrows on May 5, 2022. The circuit court denied the motion for judgment on the pleadings and ordered the parties to proceed with the appraisal process as previously invoked by the Morrows and as outlined in the Policy. ANALYSIS An appraisal clause is analogous to an arbitration clause. The Court of Appeals held that an order denying a motion to dismiss was tantamount to an order denying arbitration. Shelter contends that a party's "right or obligation to engage in the appraisal process is limited to what they agreed to in the policy, and to the nature of the appraisal process itself." It then argues that an appraisal process is limited to "determining the price of covered damage," but is not the proper venue for "resolving a dispute about whether covered damage occurred," or "the extent of that covered damage." Shelter's assessment acknowledged that a tornado touched down approximately 1.8 miles northwest of the Morrows' property on the date of the storm. The report acknowledged that "higher wind speeds affected [the Morrows'] property." Based upon these facts alone, it is evident that the question at issue is not whether a covered loss occurred because a covered loss was found by Shelter's own adjuster in its report. Therefore, the true dispute of the parties is the amount of that covered loss. This case involves a determination of the "amount of loss," which is expressly stated within the appraisal clause as an appropriate issue for determination under that process The Court of Appeals affirmed the circuit court’s oral pronouncement. ZALMA OPINION Once the insurer determined that there was a covered loss and the insured presented evidence that the loss exceeded the deductible contrary to the insurer's position the policy provided a method to resolve the dispute over the amount of loss. There was no basis to deny coverage - once the adjuster determined the existence of a covered loss - if agreement could not be reached appraisal was the appropriate method of resolving the dispute over the quantum of the loss. (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

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

Agent for Insurer Only an Order Taker Steven and Nancy Taylor appealed the trial court's granting defendant Lake Michigan Insurance Company's motion for summary disposition and dismissing their case and the court's denial of their motion for reconsideration. In Steven G S Taylor and Nancy Taylor v. Lake Michigan Insurance Company, No. 360974, Court of Appeals of Michigan (August 24, 2023) the plaintiffs alleged the agent should have required higher policy limits for the replacement of their log home. FACTUAL BACKGROUND Plaintiffs purchased property with a log home in Bellaire, Michigan during September 2015 for $408,000. They contacted defendant, an independent insurance agency with whom they previously did business, to assist them in securing homeowner's insurance. Plaintiffs told defendant's representative, Lisa Stanard, that they believed the property likely would hold a greater value in the future because they purchased it through a "distressed sale." Stanard obtained information from Steven regarding the nature of the house and input and processed that information to generate a rate comparison and replacement cost estimate which she then uploaded into Auto-Owners Insurance Company's (Auto-Owners) computer system. Auto-Owners' had the property inspected and concluded that house replacement cost estimate to $709,734. Auto-Owners issued plaintiffs a homeowner's insurance policy which they accepted without objection. The policy contained an increased cost endorsement (ICE) that provided for payment to plaintiffs of an additional 25% ($175,250) if certain conditions were met. Plaintiffs' house burned and they suffered a total loss. Plaintiffs submitted a claim to Auto-Owners and a proof of loss which stated that plaintiffs estimated among other things the building damage amount at $1,282,500 and acknowledged the policy limit of $876,250 the ICE amount. Auto-Owners advised the plaintiffs that they paid the full policy limit including the ICE addition to the limits of $876,250. Unsatisfied with Auto-Owners' settlement of their claim, plaintiffs sued defendant essentially alleging that defendant owed them a duty to ensure the adequacy of their homeowner's insurance policy to enable them to rebuild their house. ANALYSIS An insurance policy constitutes a contractual agreement between the insurer and the insured. Michigan law has long presumed that one who has signed a written contract knows the nature of the instrument and understands its contents. The rule of reasonable expectations clearly has no application to unambiguous contracts. An alleged “reasonable expectation” cannot supersede the clear language of a contract Under common law an insurance agent whose principal is the insurance company owes no duty to advise a potential insured about any coverage. The general rule of no duty only changes when (1) the agent misrepresents the nature or extent of the coverage offered or provided, (2) an ambiguous request is made that requires a clarification, (3) an inquiry is made that may require advice and the agent, though he need not, gives advice that is inaccurate, or (4) the agent assumes an additional duty by either express agreement with or promise to the insured. Defendant is an independent insurance agency that serves as an agent of several insurance carriers and assists its clients in procuring insurance from those carriers. As such, defendant owed plaintiffs a duty to strictly follow their instructions. The record reflects that Auto-Owners sent a third-party inspector to plaintiffs' Bellaire property to inspect and present Auto-Owners with the inspection report from which Auto-Owners adjusted upward the estimated house replacement cost. No evidence establishes that anyone affiliated with defendant agreed or promised plaintiffs to assess the adequacy of the policy limits set by and offered by Auto-Owners. The record reveals that Steven knew the terms of the policy before accepting Auto-Owners' offer. The trial court properly determined that no genuine issue of material fact precluded granting summary disposition for defendant. The trial court correctly determined that defendant did not owe plaintiffs a duty to assess and ensure the adequacy of the homeowner's insurance coverage that plaintiffs obtained from Auto-Owners and plaintiffs failed to establish a special relationship that gave rise to a duty to do so. ZALMA OPINION An insurance agent transacts insurance on behalf of the insurer. As such the insurer's agent is an order taker who presents the order to its principal, the insurer. The agent owes no obligation to a potential insured to determine the appropriate replacement value of the dwelling. It, based on information from its principal, a policy limit suggested by the insurer which the insured accepted and obtained the full policy limit when the house burned. (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

Every Exclusion Must be Read as a Part of an Entire Policy McCann Plumbing, Heating & Cooling, Inc.; Andrew R. McCann; and Wendy McCann, sued defendant, Pekin Insurance Company, for breach of an insurance contract and sought declaratory judgment because the demolition of an adjacent building damaged the McCann's building. In McCann Plumbing, Heating & Cooling, Inc., an Illinois Corporation; Andrew R. McCann; and Wendy McCann v. Pekin Insurance Company, an Illinois Corporation, 2023 IL App (3d) 190722, No. 3-19-0722, Court of Appeals of Illinois, Third District (August 23, 2023) the Court of Appeals broke ground with the first ruling on a governmental action exclusion. BACKGROUND Andrew R. McCann and Wendy McCann own a commercial building in Onarga, Illinois. They purchased the building in 2011 to use for McCann Plumbing, Heating &Cooling, Inc., their heating, ventilation, and air conditioning business. At the time of purchase, the building was surrounded by two uninhabited properties to its north and south. Pekin Insurance Company (Pekin) is a licensed provider of personal and business insurance and provides insurance policies to the residents of Illinois. The McCanns and Pekin entered into a commercial lines insurance policy. The policy provided insurance coverage for "direct physical loss of or damage to" the covered property, which included the McCanns' building and their business's tangible property stored in the building. The Village of Onarga declared that the building adjacent and to the south of the McCanns' property was in an unsafe or unsanitary condition. The Village then ordered the building to be demolished. On January 23, 2018, a contractor retained by the Village demolished the building. The parties stipulated that, in the course of the adjacent building's destruction, the McCanns' building was damaged, leaving a portion of their building open to the elements. The McCanns sought coverage from Pekin for damage incurred from the January 23, 2018, demolition. In response to the McCanns' claim, Pekin tendered a letter on March 21, 2018, denying coverage for damage resulting from the demolition based on several exclusionary provisions of their policy, including the governmental action exclusion. In granting Pekin's motion for judgment on the pleadings, the circuit court found that "the government[al] act[ion] exclu[sion] applies" and dismissed the case. ANALYSIS Neither party disputes that the Village's directive to demolish the adjacent property constitutes an "order of governmental authority." The parties stipulated that on or about January 23, 2018, the adjacent building was demolished. Both parties also agree, at least to some extent, that the McCanns' property incurred damage as a result of the adjacent building's destruction. The central issue is whether this damage was caused "directly or indirectly" from the destruction and whether that damage falls within the purview of the governmental action exclusion under the parties' commercial lines insurance policy. There is no binding authority in Illinois interpreting the applicability of the governmental action exclusion, and as consequence, there is no Illinois case law offering guidance on whether this exclusion may be broadly applied to exclude losses incurred ancillary to a governmental order. The commercial lines insurance policy before the Court of Appeals features the adverbial phrase "directly or indirectly" modifying the verb "caused" within the preamble sentence for the exclusions: "We will not pay for loss or damage caused directly or indirectly by any of the following..." including governmental action. For the exclusion to apply, however, it is necessary that the destruction of property be carried out through an order of governmental authority. Considering the preamble sentence and the relevant exclusion together, the court found, at a minimum, that the McCanns' property damage is a loss that grew out of and was therefore "caused *** indirectly" from the destruction of the adjacent property. Further the McCanns' loss falls under the governmental action exclusion because the damage stems from the Village's demolition order. The McCanns assert that the Village's demolition order only sanctioned damage to the adjacent building and not their own. Therefore, a narrow reading of the exclusion's phrase "by order of governmental authority" does not include the McCanns' property, as there was never an order of destruction against their property. However, reading the policy in its entirety, the exemption covers "loss or damage caused directly or indirectly" through the "destruction of property by order of governmental authority." A plain reading of these clauses together does not imply a separate order is required for the exemption to attach. ZALMA OPINION The greatest error made by people interpreting an insurance policy is to take a part of a policy without reading it in context with the entire policy. The Court of Appeals read the entire policy and disabused the plaintiffs of their claims trying to take a small part of a policy to change its meaning. The attempt failed because the full policy made it clear that the Plaintiffs property was damaged by the order of the governmental authority to demolish the adjacent property resulting directly in the damage of the plaintiffs property. (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. 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 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.

Bad Men Must Serve the Time for Crimes from Insurance Fraud to Murder After a multiple-count indictment against dozens of members of the Gangster Disciples five of them, Alonzo Walton, Kevin Clayton, Donald Glass, Antarious Caldwell, and Vancito Gumbs, appealed their convictions and sentences following a joint trial. Each raised several grounds for reversal contending they were overcharged and over-sentenced. Some argued that the Racketeer Influenced and Corrupt Organizations Act violated the Sixth Amendment because the jury failed to find that the conspiracy involved murder. In United States Of America v. Antarious Caldwell, a.k.a. Fat, a.k.a. Phat, Kevin Clayton, Alonzo Walton, a.k.a. Spike, Vancito Gumbs, Donald Glass, a.k.a. Smurf, a.k.a. Dred, No. 19-15024, United States Court of Appeals, Eleventh Circuit (August 16, 2023) the Eleventh Circuit Affirmed all but one sentence and all convictions. BACKGROUND The Gangster Disciples began as a loosely affiliated network of street gangs in Chicago but later became a hierarchical national criminal organization. Its hierarchy consisted of a "Chairman" and "national board" for the country, "Governors of Governors" in charge of multi-state regions, "Governors" in charge of each state, "Regents" in charge of counties, and "Coordinators" in charge of municipal-level divisions or, in larger cities, subdivisions called "counts" or "decks." The "Chief Enforcer" managed a team of "Enforcers" who exacted punishments for violations of the gang's rules, such as the prohibition against cooperating with the police. Relevant Crimes The indictment charged an array of criminal activities including carjacking and insurance fraud, attempted robbery of Eric Wilder, murder of DeMarco Franklin, Stone Mountain Inn and Central Avenue Shootings, murder of Robert Dixon, the last crime relevant to the appeal was Glass's killing of Robert "Rampage" Dixon in August 2015. Pretrial and Trial Proceedings The principal charge against all the defendants was count one, which charged that the defendants conspired to conduct and participate directly and indirectly in the conduct of the Gangster Disciples through a pattern of racketeering activity in violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(c). The indictment named 34 defendants, and this appeal concerns the joint trial of Alonzo Walton, Kevin Clayton, Donald Glass, Antarious Caldwell, and Vancito Gumbs, who were convicted, and Perry Green, who was acquitted. The district court ordered that all the defendants be secured with ankle restraints throughout the trial. Walton was convicted of racketeering conspiracy, carjacking Frederick, and using a firearm during that carjacking. Clayton was convicted of the racketeering conspiracy only. Glass was convicted of the racketeering conspiracy, acquitted of the murder of Robert Dixon, convicted of carrying a firearm during a crime of violence, namely the killing of Robert Dixon, convicted of causing the death of Robert Dixon with a firearm and acquitted of two marijuana possession charges. Caldwell was convicted of the racketeering conspiracy, the attempted Hobbs Act robbery of Eric Wilder, and carrying a firearm during a crime of violence, the attempted robbery. Vancito Gumbs was convicted of the racketeering conspiracy. For each of the convicted defendants, the jury found that "the RICO conspiracy involve[d] murder." The jury acquitted a sixth codefendant, Perry Green. DISCUSSION The Eleventh Circuit concluded that the district court did not abuse its discretion in its pretrial and trial procedural decisions and that the district court also did not abuse its discretion when it declined to ask questions during voir dire about unconscious bias. Although not in effect when the trial occurred in 2019, the revised Rules require that notice of expert opinion testimony come "sufficiently before trial" for adequate preparation and does not measure timeliness based on the expected date of the testimony. The Ankle Restraints Did Not Violate the Defendants' Rights. Gumbs, Glass, and Caldwell argued that the district court abused its discretion when it ordered them to be restrained at the ankles throughout trial. The common-law rule against shackling prevents creating an unfair impression of guilt for the jury and is limited to contexts that implicate that danger. However, the record makes clear that the ankle restraints were not perceptible to the jury and no defendant alleges that he lacked access to counsel. The district court ordered that the restraints be placed on the defendants' legs only, that they be muffled to prevent clanking, that a curtain around the defense table conceal them from the jury, and that the defendants enter and exit the courtroom outside the presence of the jury. The District Court Did Not Impermissibly Depart from Neutrality When It Questioned a Witness. The trial judge is more than a referee to an adversarial proceeding. Consistent with the common-law tradition, the judge may comment on the evidence and question witnesses and elicit facts not yet adduced or clarify those previously presented. This questioning is limited only by the principle that a judge must maintain neutrality between the parties. The district judge stayed well within these bounds. He asked a single question without commenting on the veracity or relevance of the witness's testimony. The district court did not err, let alone clearly err, when it asked a witness for that information. The jury found that the conspiracy included actual, not inchoate, murder as part of its racketeering activities. He instructed the jury that "acts involving murder" for the purposes of finding the two racketeering activities needed for conviction extended to Georgia-law conspiracy to commit murder and attempted murder. But the district court never said that the jury should read the phrase "involve murder" to mean "involve acts involving murder." Sufficient Evidence Supports the Finding that Walton Intended to Cause Death or Serious Bodily Harm in the Frederick Carjacking. Pointing a gun at someone and demanding money is the kind of evidence on which prosecutors may rely to prove the mens rea for carjacking. Caldwell's Conviction Under the Armed Career Criminal Act and His Sentence Must Be Vacated. The Supreme Court recently held that attempted Hobbs Act robbery is not a "crime of violence" under section 924(c). 142 S.Ct. at 2020. So, the Eleventh Circuit must vacate Caldwell's conviction and it remand for the district court to re-sentence Caldwell for his remaining counts of conviction. All the other convictions and sentences were affirmed. ZALMA OPINION Insurance fraud is a serious crime. It is not as serious as murder. But when a group of men work together to commit murder and insurance fraud they are acting beyond reason and deserve as serious a sentence as the court can provide in accordance with the law. The appeal was their right and the Eleventh Circuit had the obligation and right to disavow them of their arguments and only changed a sentence because of a change in the law. (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 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; 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\