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Zalma on Insurance
Zalma's Insurance Fraud Letter - April 1, 2024
Zalma’s Insurance Fraud Letter (ZIFL) continues its 28th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma.
Litigation Between Insurers Should be Avoided
Potential of Coverage is Enough to Require an Insurer to Defend. When two or more insurance companies issue When two or more insurance companies issue policies with a potential for coverage of a claim of bodily injury they should work together to protect their mutual insured rather than litigate with the insured and the other insurers. Litigation is expensive and may result in a case and result they did not wish to have.
Soft Fraud
For reasons known only to governmental entities some insist on categorizing fraud into both “hard” and “soft” fraud. By so doing the governmental entities that so categorize fraud make one type of fraud less heinous and less criminal than the other. Fraud, whether categorized “soft” or “hard,” are criminal and if a person is tried and convicted of fraud both can be sent to jail for the same amount of time.
Red Flags of Insurance Fraud
Indicators of Insurance Fraud are Investigative Tools. Suspicious claims have common attributes. Insurers and their anti-fraud organizations have collated the common attributes into lists of indicators or red flags of fraud. The lists were created as training aids and to be used to determine whether further investigation is required to determine if a claim is legitimate or false and fraudulent. Continually growing, these lists are known as the “red flags” or “indicators” of fraud lists. There are many different categories, ranging from those associated with the claim itself or with insureds to indicators of specific types of fraud, such as bodily injury fraud or arson for profit.
Pollution Exclusion Deters Deliberate or Negligent Behavior that Leads to Environmental Harm
In the world of business, corporations obtain commercial insurance to protect their assets, and commercial insurers customarily include exclusion provisions in their policies. Exclusion provisions dispel the notion that insurance coverage is without limits and place the insured on notice about actions or omissions that will trigger an insurer’s denial of coverage. Insurance policies that include pollution exclusion provisions accomplish even more.
Court Must Read Statute as Written
Statute Limited to Acts of Insured Cannot be Used Against Insurer. Insured Seeks to Impose Damages on Insurer under the Fraud Act. The United States District Court from Tennessee, noted that losses claimed under a policy of insurance issued to Plaintiff Volunteer Management & Development Company (“Volunteer”) by Defendant State Auto Property & Casualty Insurance Co. (“State Auto”) resulted in a suit where Volunteer claims breach of contract and insurance fraud against State Auto and filed a petition to compel appraisal and appoint umpire. State Auto moved to dismiss the claims under the Insurance Fraud Act, “agency,” and punitive damages.
$16 Million to $1
Failure to Provide a Proper Standard for Damages Reduced Judgement. In Malcolm Wiener v. AXA Equitable Life Insurance Company, No. 3:18-cv-00106-RJC-DSC, United States District Court, W.D. North Carolina, Charlotte Division (March 8, 2024) Wiener obtained a $16 Million jury award that the Fourth Circuit required the USDC to address AXA's argument for post-trial relief challenging the amount of damages AXA argued that the jury rested its $16 million award on an improper standard, and thus, that the award lacks a basis in substantial evidence.
Patient Brokering and Referral Scheme Enjoined
GEICO Again Acts Proactively Against Insurance Fraud and Takes a Bite Out of Crime. No-Fault auto insurance was touted as a panacea to increasing insurance rates because of auto accident litigation. It failed because it turned into a profit center for dishonest lawyers, heath care providers and patient brokers.
Overwhelming Evidence Establishes Guilt
Witness Statement Rejected and Instruction by Court to Ignore not Prejudicial. A jury convicted Adan Contreras Rivas of several felonies, including theft by false pretenses. On appeal, Rivas argued he was denied his right to a fair trial under the federal Constitution because a prosecution witness briefly mentioned that Rivas had been previously arrested.
CHUTZPAH – CHARGE OF TWO SEPARATE CRIMES DO NOT VIOLATE CONSTITUTION
Different Crimes, Different Victims, Different Witness, No Double Jeopardy. Read the full article at https://lnkd.in/giku3nfW, see the full video at https://lnkd.in/gMJg2RZA and at https://lnkd.in/gzYdPrz7 and at https://zalma.com/blog plus more than 4750 posts.
Arsonist Begs Ohio Court to Release Him From Prison
Compassionate Release Not Available to Convict Only Because he is Fat & Diabetic. ARSON-FOR-PROFIT IS A VIOLENT CRIME OF THE FIRST ORDER. Of the hundreds of different kinds of insurance fraud the most violent and dangerous is an arson for profit. People, including firefighters, die or are seriously injured in the fires. Daryl Evans was caught, tried and convicted of the crimes and is now serving an 183-month sentence for insurance fraud relating to his arson of several Warren, Ohio properties.
Insurance Fraud & Politics
US Senator Charged with Insurance Fraud & Other Crimes Fights Search. In United States Of America v. Robert Menendez, Nadine Menendez, Wael Hana, Jose Uribe, and Fred Daibes, No. S2 23-CR-490 (SHS), the United States District Court, S.D. New York (March 4, 2024) dealt with attempts to defeat the search warrants that found evidence that Senator Menendez, (D. New Jersey) was involved in selling favors for the benefit of a foreign country.
Insurance Only Pays for Fortuitous Losses
W.W. Contracting, Inc. and its owner, Doug Williams (collectively, W.W.), entrusted tools to a W.W. employee but demanded their return at the end of his employment. When the now-former employee allegedly failed to return all the tools, W.W. reported them as stolen and sought insurance coverage for the alleged theft. W.W.’s insurance company denied the claim primarily because W.W.’s insurance policy excluded coverage for property loss “caused by or resulting from dishonest acts by anyone entrusted with the property.”
Warranties in Insurance Policies
Certain policies contain the term “warranty.” This is a word of great power. Generally, a warranty can be defined as follows:. A “warranty” in insurance law is a statement or condition forming part of a contract whereby insured agrees that certain acts have been or shall be done, and validity of contract depends upon exact fulfillment of condition, regardless of whether breach relates to or causes loss sustained.
Go To Jail, Do Not Pass Go, Stay in Jail
Insurance Agent Defrauded Clients by Keeping Premium for His Own Benefit. In United States Of America v. John M. Thomas, a.k.a. John Thomas, No. 23-11137, United States Court of Appeals, Eleventh Circuit (February 20, 2024) Thomas appealed from his 168-month sentence for 16 counts of wire fraud, 4 counts of money laundering, and 4 counts of money laundering to conceal proceeds of unlawful activity.
Ignore Court Orders at Your Peril
Frivolous Litigation and Frivolous Appeal Causes Default to Be Entered. Transamerica Life Insurance Company (“Transamerica”) sued Akop Arutyunyan and his daughter Anahit Arutyunyan for allegedly engaging in a conspiracy to defraud Transamerica into paying benefits under a long-term care insurance policy.
ADA Requires Evidence of Intentional Discrimination
ADA Allows Employer to Dismiss Employee for Good Cause. Jennifer Akridge appealed the entry of summary judgment for her former employer, defendant Alfa Mutual Insurance Company, on her claim brought under the Americans with Disabilities Act ("ADA" ). Akridge contended that Alfa discriminated against her by terminating her to avoid paying healthcare costs related to her multiple sclerosis ("MS" ) and severe migraines. In Jennifer Akridge v. ALFA Insurance Companies, ALFA Mutual Insurance Company, No. 22-12045, United States Court of Appeals, Eleventh Circuit (February 16, 2024) the Eleventh Circuit applied the "but for test" to determine if the employer discriminated against a disabled employee.
It is Time to Control Punitive Damages
The US Supreme Court has clearly stated that “[p]unitive damages may properly be imposed to further a State’s legitimate interests in punishing unlawful conduct and deterring its repetition.” [BMW of North America, Inc. v. Gore, 517 U. S. 559.] These damages often exceed the fines assessed by the state if the same person had acted criminally to damage the plaintiff.
Lie on Application & Find Policy Rescinded
MD Refused to Recognize She was Deceived and Misrepresented Facts on Application. Former patients of Pediatric Partners for Attention and Learning, Inc., sued the clinic and its founder, Dr. Joni Johnson, in state court after learning that the clinic’s inhouse psychologist Sharonda Avery, who treated them, was actually not a psychologist at all. The insurer sued to confirm rescission because the application contained false statements.
Insurance Fraud is a Violent Crime
A Murderer Guilty of Killing for Insurance Money Must Serve the Full Sentence 60 Year Sentence. CHUTZPAH: DEFENDANT KILLS GIRLFRIEND AND TRIES TO COLLECT LIFE INSURANCE. Ronald Epps, a prisoner in federal custody, filed a Motion to Vacate, Set Aside, or Correct his Sentence as well as a filing he called a Motion for Compassionate Release.
Zalma on Insurance
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Barry Zalma, Esq., CFE is a retired insurance coverage lawyer who blogs daily with digests of insurance cases and writes books and articles on insurance claims, insurance law, and insurance fraud.
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