True Crime of Insurance Fraud Video Number 72

Levon Sogomonian v. Imperial & Lloyd'sShow more

Since I began writing these stories in 1990 I have changed the names of the parties to protect the guilty. This is an exception.

In 1981, Levon Sogomonian, a person who claimed to be a refugee from Soviet Armenia purchased a homeowners policy from Imperial Casualty. Simultaneously he purchased a Personal Articles Floater (PAF) from Underwriters at Lloyd’s, London insuring him up to a limit of liability in excess of $2 million for the loss of his house and its contents. Shortly after receiving the policies, an arson fire occurred destroying the house and its contents.

On investigation Mr. Sogomonian’s insurers proved that he had lied on the applications for insurance to Imperial Casualty and Lloyd’s. The Superior Court granted the insurers’ motion for summary judgment. The Court affirmed the insurers rescission of the policies from their inception. Mr. Sogomonian appealed, and that decision is reported as Imperial Casualty v. Sogomonian 198 Cal.App. 3d 169, 243 Cal. Rptr. 639 (1988)

The Appellate Court, noting that the trial court failed to determine how much money Mr. Sogomonian owed to the insurers as a result of his fraud sent the case back down to the trial court for a determination of the amounts owed by Mr. Sogomonian.

Judge Miriam Vogel (now justice of the Court of Appeal) tried the case without a jury. Mr. Sogomonian contended that he should not be obligated to repay any funds to the insurer. He claimed the insurers’ acted in bad faith by losing the debris from the fire Sogomonian valued at $2,000,000.

Imperial and Lloyd’s had, to protect the evidence, collected all of the debris of the personal property destroyed in the fire and stored it at Bekins Van & Storage. Sogomonian claimed the loss of the valuable debris was a malicious act that should deprive the insurers of any reimbursement.

After hearing several days of sworn testimony, Judge Vogel made the following conclusions:

The fire at the Sogomonian residence was an arson that was probably committed by, or at the direction of Mr. Sogomonian.

After viewing the debris at Bekins Van & Storage she concluded that nothing was missing and, even if it was missing, the debris was valueless.

Mr. Sogomonian was required to reimburse Imperial and Lloyd’s for all of the money expended by them in making advance payments, making payments to innocent mortgagees, and for attorney’s fees and costs incurred in the declaratory relief action a sum over $500,000.

Mr. Sogomonian, in a cross-complaint against his insurance agent managed to convince that agent’s insurer to pay the damages in exchange for a release of the agent.

Sogomonian, however, was unwilling to acknowledge his loss. He was angry and desired retribution. He concluded that his loss of the $2 million he expected to make from his fraudulent insurance claim was due to the activities of the investigators retained by Lloyd’s and Imperial, the late Leslie M. Schifrin of Schifrin, Gagnon & Dickey, in Van Nuys, California.

Sogomonian filed a lawsuit, in propria persona, in the Los Angeles Superior Court naming Mr. Schifrin and his firm as defendants. Sogomonian alleged that Mr. Schifrin had converted, lost or stolen $2 million in valuable fire debris that Judge Vogel had decided was not lost and had no value. Mr. Schifrin hired counsel to defend himself and his firm from this frivolous lawsuit and obtained, after spending more than $10,000 in attorney’s fees, a judgment in his favor.

Mr. Schifrin, and his counsel, concluded that Mr. Sogomonian should not profit from his wrongful activities. Mr. Schifrin, therefore, filed a complaint with the Superior Court accusing Sogomonian of maliciously prosecuting the lawsuit against Schifrin.

At the first settlement conference called, the settlement judge was livid. He advised Mr. Sogomonian, from the bench, that his actions in suing Mr. Schifrin were despicable and an absolute misuse of the judicial system for the sole purpose of revenge. He advised Mr. Sogomonian to settle for any amount Mr. Schifrin was willing to accept. Sogomonian responded that he, not Schifrin, was the victim and that Schifrin had stolen his merchandise. The judge threw up his hands in desperation and closed the hearing.

On June 1, 1994, after several continuances because of Mr. Sogomonian’s alleged ill health, the case was scheduled to come to trial in Van Nuys Superior Court. The day before the trial a check arrived on counsel’s desk for the amount of Mr. Schifrin’s demand. The trial did not go forward. Mr. Schifrin, after receiving three death threats and thirteen years of spurious and frivolous activities by Mr. Sogomonian, received a small amount of justice.

The lawyer who advised Sogomonian to file the original suit failed to appear for trial because he was in jail for exchanging shots with a person who owed him legal fees.

It took 15 years but some justice was done to a person involved in a fraud.

ZALMA OPINION

It is important when faced with an arson-for-profit scheme and insurance fraud it is essential that the insurers who have sufficient evidence to prove the fraud to insist on resolving the invariable bad faith suit from the arsonist to the highest courts in the land. Mr. Sogomonian was persistent but eventually failed totally and was required to pay restitution to the insurers. The state of California refused to even consider criminal prosecution.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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