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Choking a Friend to Death Not a Covered Loss                                                                                                                    

Coverage Limited to Conduct of Business of Insured

Read the full article at https://lnkd.in/g4sDVGan, see the full video at https://lnkd.in/gaU3jvXZ and at https://lnkd.in/gFKrsvw7 and at https://zalma.com/blog plus more than and more than 4750 posts.

Post 4787

Jodi Greenlaw,  as personal representative of the estate of her late husband Philip J. Greenlaw (collectively, the Estate), appealed from a judgment of the Superior Court granting a motion for summary judgment filed by MMG Insurance Company (MMG) on MMG’s complaint seeking a declaratory judgment that it had no duty to indemnify Joseph McNeely, a close friend of Greenlaw, in a separate wrongful death action that the Estate filed against McNeely after Greenlaw’s death.

In MMG Insurance Company v. Estate Of Philip J. Greenlaw et al., 2024 ME 28, No. Cum-23-228, Supreme Court of Maine (April 18, 2024) the Supreme Court interpreted the policy as written.

BACKGROUND

In 2019, McNeely operated, as sole owner, a landscaping business called Cutter’s Edge Lawn Maintenance. MMG issued a businessowners insurance policy providing both property and liability coverage to McNeely (the MMG Policy).

McNeely had discussed with Greenlaw, his close friend, measuring and providing a proposal to hydroseed Greenlaw’s backyard. On May 20, 2019, Greenlaw hosted “an informal social group” of men at his house. The group “met year-round on Monday evenings to share their enthusiasm for motorcycles by eating, drinking, telling stories, and taking a ride together if the weather permitted.” The group also “discussed business-related topics” and “engaged in frequent business dealings.” McNeely attended these meetings when he could.

McNeely and Greenlaw went to the backyard, where McNeely measured and provided pricing for the project. Greenlaw said he planned to think about the project and would get back to McNeely about it. At around 8:00 p.m., Jodi returned home, and the men, including McNeely and Greenlaw, “wereinebriated.” After 10:00 p.m., Jodi asked how the measuring for the hydroseeding went, and either McNeely or Greenlaw told her about the project’s progress. “Late in the evening,” while “sitting and gabbing,” Greenlaw initiated a wrestling match with McNeely. During the wrestling bout, McNeely put Greenlaw in a chokehold, and Greenlaw lost consciousness and died soon after, despite McNeely’s efforts to revive him.

The MMG Policy, stated that MMG will pay those sums that the insured becomes legally obligated to pay as damages because of bodily injury to which this insurance applies. The MMG Policy defines an “insured” as anyone “designated in the Declarations” as an “individual . . . but only with respect to the conduct of a business of which [the named insured is] the sole owner.” (Emphasis added.)

DISCUSSION

The Estate contends that “whether Greenlaw’s death occurred with respect to the conduct of McNeely’s business” is a triable issue of fact and that the court “erred by discounting the ‘earlier business dealings’ and the litany of other facts . . . when summarily finding that the ‘wrestling itself was not business-related.'”

Unambiguous contract language, however, must be interpreted according to its plain meaning. The Supreme Court concluded that MMG Policy provision was unambiguous. The MMG Policy designated McNeely as an individual, and McNeely was thus covered as an insured, only with respect to the conduct of a business of which he was the sole owner.

The Supreme Court found that the trial court did not err in determining that there was no genuine issue of material fact and that McNeely’s actions while he was wrestling with Greenlaw were not with respect to the conduct of McNeely’s landscaping business.

Although it is undisputed that earlier in the evening McNeely had measured Greenlaw’s backyard and discussed his landscaping business with several individuals, there is no contention, that McNeely’s actions while wrestling with Greenlaw were to further McNeely’s business. In the opinion of the Supreme Corut an ordinary person would not think that the policy’s language would cover McNeely’s actions while wrestling with Greenlaw.

ZALMA OPINION

Getting drunk with a friend, entering into a wrestling match at the home of the friend, and choking his friend to death, could not be part of the landscaping business of the insured even though the two discussed business before the drinking and wrestling began. Wrestling and a fatal choke hold have nothing to do with landscaping.

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Choking a Friend to Death Not a Covered Loss

Coverage Limited to Conduct of Business of Insured Post 4787 See the full video at https://rumble.com/v4rb9tb-choking-a-friend-to-death-not-a-covered-loss.html  and at https://youtu.be/ywvsC-SIgrk Jodi Greenlaw,  as personal representative of the estate of her late husband Philip J. Greenlaw (collectively, the Estate), appealed from a judgment of the Superior Court granting a motion for summary…

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Agent Binds Principal                                                                                                                    

Rejection of UIM Cover by Agent Valid

Read the full article at https://lnkd.in/gH_jX9bZ, se the full video at https://lnkd.in/gFP5pPHU  and at https://lnkd.in/gv-zXXTW and at https://zalma.com/blog plus more than 4750 posts.

Post 4786

IBrandon Lawrence appealed the trial court’s order finding Progressive Northern Insurance Co. (Progressive) made a valid, meaningful offer of underinsured motorist (UIM) coverage to his agent, Ashley Outlaw.

In Progressive Northern Insurance Co. v. Brandon Lawrence and Ashley Outlaw, No. 2024-UP-127, Appellate Case No. 2020-001245, Court of Appeals of South Carolina (April 17, 2024) the Court of Appeals explained the law of agency and its relationship to insurance.

FACTS

From 2008 to 2013, Lawrence and Outlaw lived together in the same house with their son; they never married. They split the household expenses, but Outlaw paid the bills and took care of any insurance needs. On August 19, 2009, Outlaw purchased an insurance policy from Progressive to cover Lawrence’s motorcycle; however, Lawrence did not discuss obtaining UIM coverage with Outlaw, nor did he read the policy, did not have any involvement in obtaining the policy, and did not have any contact with Progressive.

The application for the insurance policy was mailed to Lawrence and Outlaw. It listed Outlaw as “Married” and as an “Insured” and Lawrence as “Married” and as Outlaw’s “Spouse.” On September 5, 2009, Outlaw signed the application form and rejected Progressive’s offer of UIM coverage. Outlaw paid the premium for the policy, and Lawrence reimbursed her.

In May 2013, Lawrence was involved in a motorcycle accident. On August 12, 2016, Progressive filed a declaratory judgment action and sought a determination that UIM coverage was offered to Lawrence through his agent, Outlaw, and that Lawrence was bound by Outlaw’s rejection of UIM coverage. The trial court found Lawrence was bound by Outlaw’s rejection of UIM coverage because Lawrence appointed Outlaw as his agent to obtain the policy. Lawrence testified in his deposition and at trial that he knew Outlaw was getting insurance; that he asked her to do so; and that she had his permission to do so.

LAW, ANALYSIS, AGENCY

The Court of Appeals noted that it is well-settled that the relationship of agency between a husband and wife is governed by the same rules which apply to other agencies, and no presumption arises from the mere fact of the marital relationship that one spouse is acting as agent for the other. An agency relationship may be, and frequently is, implied or inferred from the words and conduct of the parties and the circumstances of the particular case.

Therefore, the Court of Appeals held that an agency relationship existed between Lawrence and Outlaw and that Outlaw’s rejection of UIM coverage bound Lawrence. Lawrence stated he assumed Outlaw would purchase UIM coverage, he did not discuss such optional coverage with her, read the policy, check to see if the policy included UIM coverage, or have any contact with Progressive himself. Lawrence gave Outlaw the authority to obtain the insurance policy, and he is bound by Outlaw’s rejection of UIM coverage. To hold otherwise would allow Lawrence to benefit from Outlaw’s procurement of the policy but not be bound by her rejection of UIM coverage.

MEANINGFUL OFFER OF UIM COVERAGE

Automobile insurance carriers must, by statute, “offer, at the option of the insured, underinsured motorist coverage up to the limits of the insured liability coverage . . . .” S.C. Code Ann. § 38-77-160 (2015).

Progressive’s application included the words “Underinsured Motorist Coverage” and several paragraphs that explained what such coverage entailed. Additionally, the information about UIM coverage offered by Progressive was not found in a separate form, the UIM information and rejection form was included within the main application that Outlaw received and signed.

Progressive made a meaningful offer of UIM coverage to Lawrence’s agent, Outlaw.

Progressive’s offer of UIM coverage was made through a form it sent to Lawrence by mail. Progressive’s offer of UIM coverage specifically outlined the limits. Progressive intelligibly advised Outlaw, who acted as Lawrence’s agent, of the UIM coverage.

Outlaw had experience purchasing insurance in the past by regularly handling the insurance needs of the household.

ZALMA OPINION

It’s sad that Lawrence was injured by an underinsured motorist and could not recover from his motorcycle policy because his “wife” rejected Progressive’s offer of UIM coverage as his agent for the motorcycle policy and other insurance policies for their “family.” The case ignored the fact that she lied on the application about a material fact claiming that Outlaw and Lawrence were married, when they were not. If that was a fact material to the decision of Progressive to issue the insurance it could have declared the policy void for material misrepresentation of fact or rescind the policy. Not necessary because there was no UIM cover.

(c) 2024 Barry Zalma & ClaimSchool, Inc.

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Agent Binds Principal

Rejection of UIM Cover by Agent Valid Post 4786 See the full video at https://rumble.com/v4r4aq5-agent-binds-principal.html  and at https://youtu.be/c5qaoVv0Pik Brandon Lawrence appealed the trial court’s order finding Progressive Northern Insurance Co. (Progressive) made a valid, meaningful offer of underinsured motorist (UIM) coverage to his agent, Ashley Outlaw. In Progressive Northern…

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Assets Forfeited as Restitution for Murder for Profit                                                                                                                    

Insurance Companies are Victims When Wife Killed for Insurance Money

Read the full article at https://lnkd.in/gZ4BU8bJ, see the full video at https://lnkd.in/gK5Zz2Km and at https://lnkd.in/gWBKrGkJ and at https://zalma.com/blog plus more than 4750 posts.

Post 4785

Secondary Beneficiaries Have No Right to Insurance Proceeds Obtained by Father as a Result of Murder of Mother

Julian and AnaBianca Rudolph (jointly, “Petitioners”) sued by a Verified Petition for Adjudication of Interests in Property Ordered Forfeited (“Petition”) and a memorandum of law in support. In United States Of America v. Lawrence Rudolph, and Lori Milliron, CRIMINAL No. 22-cr-012-WJM, United States District Court, D. Colorado (April 12, 2024) the USDC resolved the dispute finding the insurers, not the secondary beneficiaries were the victims of the fraud.

BACKGROUND

On August 1, 2022, Defendant Lawrence Rudolph (“Defendant”) was convicted by a jury of committing foreign murder. The jury also convicted him of committing mail fraud. With respect to Count 2, nine insurance policies paid claims out due to the mail fraud.

On May 17, 2023, the Court entered its Preliminary Order of Forfeiture, which determined which specific assets are forfeitable by Defendant. On August 21, 2023, the Court conducted the sentencing hearing as to Defendant, at which it also addressed restitution and forfeiture. The Court ordered that Defendant must pay $4,877,744.93 in restitution to the insurance company victims as set forth in the life insurance payments.

FACTUAL ALLEGATIONS

Petitioners are the daughter and son of the deceased, Bianca Rudolph, and Defendant. They petitioned the USDC for an ancillary hearing based on their legal interest, both personally and on behalf of their deceased mother’s estate, in certain assets this Court has ordered forfeited to the United States.

Prior to her death, Bianca Rudolph obtained nine life insurance policies from seven different insurance carriers Petitioners are specifically listed as contingent beneficiaries on three of the insurance policies, meaning they would receive the proceeds if the primary beneficiary (namely, Defendant or the Rudolph Trust) is disqualified in any way.

Defendant began collecting on the life insurance policies almost immediately after Bianca Rudolph’s death in October 2016, receiving $4,877,744.93 in insurance proceeds between January and March 2017. In doing so, he hid the fact that he murdered Bianca Rudolph.   He was tried and convicted of murder and fraud in August 2022.

After the conclusion of the trial, the Government moved for an order that Defendant: (1) forfeit property identified as proceeds of his insurance fraud offense; and (2) pay mandatory restitution to the victims of his crimes.

ANALYSIS

To establish that they have statutory standing Petitioners must first demonstrate that they have a legal interest in the property to contest the forfeiture. Petitioners have the burden to prove a legal interest in the property exists.

Petitioners argued that they were the beneficiaries of a constructive trust over the assets subject to forfeiture. The Court concluded that Petitioners have not met their burden to establish that they are entitled to a constructive trust under Arizona law. As a result, they cannot establish that they have standing to contest the forfeited property.

Elements of Equitable Constructive Trust

In Arizona, a court may impose a constructive trust when title to property has been obtained through actual fraud, misrepresentation, concealment, undue influence, duress, or similar means, or if there has been a breach of fiduciary duty. The Arizona cases do say a constructive trust can be imposed in situations where it is necessary to compel one who unfairly holds a property interest to convey that interest to another to whom it justly belongs. Party to Whom the Insurance Proceeds “Justly Belong”

The Court found that Petitioners are not entitled to a constructive trust. To establish standing for a constructive trust, Petitioners must establish that they are asserting their own rights and not those of third parties.

Petitioners reiterate that they, or trusts that ultimately benefit them, are the contingent beneficiaries of the life insurance policies, and with limited exceptions, the insurance companies agree that they are the proper beneficiaries of those policies.

Whether an Adequate Remedy at Law Exists

The Court agreed with the Government’s position because the insurance companies, not Petitioners, are the victims of Defendant’s fraud and have selected an adequate remedy at law: restitution. This element of the constructive trust analysis is designed for the defrauded party-here, the insurance companies.

The Court concluded that Petitioners lack standing to continue with the ancillary proceeding under Federal Rule of Criminal Procedure 32.2(c) and dismisses their Petition.

ZALMA OPINION

The fact that the Petitioners – the children of the murdered woman who was murdered by their father – sought the proceeds of his crime, the insurance proceeds was understandable. However they would not have received the money if she died of natural causes. They were not the victim of the insurance fraud, they were victims of their father’s criminal conduct who killed their mother but that did not give them a right to the insurance proceeds.

(c) 2024 Barry Zalma & ClaimSchool, Inc.

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Assets Forfeited as Restitution for Murder for Profit

Insurance Companies are Victims When Wife Killed for Insurance Money See the full video at https://rumble.com/v4qwsv3-assets-forfeited-as-restitution-for-murder-for-profit.html and at https://youtu.be/0zcpwPVIJ6M Post 4785 Secondary Beneficiaries Have No Right to Insurance Proceeds Obtained by Father as a Result of Murder of Mother Julian and AnaBianca Rudolph (jointly, “Petitioners”) sued by a…

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Insurer Immune from Malicious Prosecution Suit

SIU Report to State Made in Good Faith Makes it Immune from Suit for Malicious Prosecution

Barry Zalma

Apr 22, 2024

Read the full report at https://lnkd.in/gMBmYssK, see the full video at https://lnkd.in/gXwh-fhG and at https://lnkd.in/gYP83E9r, and https://zalma.com/blog plus more than 4750 posts.

Post 4784

In The Hanover Insurance Group, Inc; and Michael Arline, Jr., v. Luke Frazier, No. 2D22-1689, Florida Court of Appeals, Second District (April 3, 2024) Luke Frazier sued The Hanover Insurance Group, Inc., and Michael Arline, Jr., an employee in Hanover’s Special Investigations Unit, for malicious prosecution.

Hanover and Arline defended claiming immunity from suit under section 626.989(4)(c), Florida Statutes (2011). The trial court rejected the claims of immunity and ultimately entered judgment in favor of Frazier. Hanover and Arline appealed.

THE IMMUNITY STATUTE

Every insurer admitted to do business in Florida is statutorily required to establish and maintain an “anti-fraud investigative unit”. If an insurer has knowledge or believes that a fraudulent insurance act has been committed, it must send a report to the Division of Investigative and Forensic Services (“DIFS”) detailing the information it has giving rise to its suspicion. This reporting is mandatory.

As part of this legislatively mandated anti-fraud program, section 626.989(4)(c) provides insurers and their employees immunity from civil actions, absent fraud or bad faith, arising out of the furnishing of the information required by the statute.

FACTS

Arline, as an SIU investigator, investigated.

Frazier and Grant were charged with making a false statement to an insurance company and grand theft. After a jury found Frazier not guilty, he sued for malicious prosecution against Hanover and Arline.

CONCLUSION

Absent fraud or bad faith, section 626.989(4)(c) immunizes insurers and their employees if they have done what is required by the anti-fraud statute. Arline and Hanover were statutorily immune from suit.

ZALMA OPINION

States like Florida realize that insurance fraud makes it difficult or impossible for insurers in the state to make a profit and provide affordable insurance to its citizens. By requiring insurers to maintain an SIU and report all suspected insurance fraud to the DIFS, it hopes to reduce the impact of insurance fraud. Acting on the report of Ms. Williams and Hanover’s SIU, Frazier was arrested for fraud, tried, and acquitted. Since Hanover and its SIU reported in good faith it was immune from suit and the judgment in favor of Williams was reversed and the intent of the statute was enforced

(c) 2024 Barry Zalma & ClaimSchool, Inc.

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#insurance #claims #insurance claims #fraud #insurance fraud #immunity #report fraud #suspected fraud #insurance books #amazon.com

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Insurer Immune from Malicious Prosecution Suit

SIU Report to State Made in Good Faith Makes it Immune from Suit for Malicious Prosecution Post 4784 See the full video at https://rumble.com/v4qea4l-insurer-immune-from-malicious-prosecution-suit.html  and at https://youtu.be/_3Hc8MniqRE In The Hanover Insurance Group, Inc; and Michael Arline, Jr., v.  Luke Frazier, No. 2D22-1689, Florida Court of Appeals, Second District (April 3, 2024) Luke…

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Criminal Tries to Get Out of Sentence                                                                                                                    

Fraudster Fails to Obtain Post Conviction Relief

Read the full article at https://lnkd.in/gPd7u3DP, see full video at https://lnkd.in/gPNxfnET and at https://lnkd.in/gWzjwWkS and https://zalma.com/blog plus more than 4750 posts.

Robert Sitler appealed from the order that dismissed his petition filed pursuant to the Post Conviction Relief Act (“PCRA”). A jury found him guilty of homicide by vehicle and the trial court, sitting without a jury.

In Commonwealth Of Pennsylvania v. Robert Sitler, No. 2946 EDA 2022, J-S20044-23, Superior Court of Pennsylvania (April 11, 2024) the appellate court refused to provide relief for Sitler.

BACKGROUND

On November 12, 2012, just before 9 p.m., Sitler was driving his truck along a two-lane road with a center turning lane. His girlfriend, Denise Dinnocenti, and her children were passengers in the truck. Sitler was driving Dinnocenti to a dance rehearsal, which started at 9 p.m.

Regina Qawasmy was driving in front of Sitler, who was following very closely behind her. As she prepared to turn right, she noticed a young man, later identified as 16-year-old Timothy Paciello, standing in the center lane waiting to cross the street. Prior to turning, Qawasmy began to decrease her speed. Suddenly, Qawasmy heard the revving of an engine and then saw a flash, which she later learned was Paciello flying into the air.

According to Dinnocenti, Sitler, while driving behind Qawasmy, sped around Qawasmy on the left and into the center lane, going 50 miles per hour in a 35 mph zone. Sitler did not see Paciello in the lane and as a result, struck him with his truck.

After striking Paciello, Sitler pulled into a nearby parking lot. He handed his keys over to Dinnocenti and instructed her and her children to tell the police that she was driving. When police arrived, Dinnocenti did as Sitler had said and told them that she was driving. At the scene and in a later written statement, Sitler likewise claimed that Dinnocenti was driving. The fraud failed because the police later recovered surveillance footage from the Sunoco gas station across the street from the accident. The footage showed Paciello walking into the center lane and then out of sight of the video. A few moments later, Sitler’s truck is seen speeding down the center lane. Officer Matthew Meitzler informed Dinnocenti that there was footage of the accident. Eventually, both Dinnocenti and Sitler admitted that he was driving the vehicle.

The case then proceeded to a three-day trial, after which Sitler was convicted. He was sentenced to an aggregate term of eight and one-half to seventeen years’ incarceration. In addition, on the first day of trial, Sitler entered an open guilty plea to insurance fraud, conspiracy to commit insurance fraud, false reports to law enforcement and other charges relating to the false statements about who was driving. At trial the court informed the jury about his prior vehicular manslaughter conviction.

ANALYSIS

Sitler claimed that that the lower court erred by denying relief on his claim that his trial counsel provided ineffective assistance by not objecting to the jury instruction offered by the lower court prior to admission of his prior manslaughter conviction. He asserts that trial counsel consulted with an accident reconstruction expert, but he “r[a]n out of funds” by the time of trial and was unable to afford the services of the rebuttal witness.

The PCRA court properly denied Sitler’s claim for lack of prejudice because Sitler failed to demonstrate a reasonable probability that a request for funds to retain an accident reconstruction expert as a rebuttal witness would have changed the result of his trial. That proffer may have been sufficient for proving that trial counsel’s failure to request indigent funding deprived him of a rebuttal witness, but it did nothing to advance Appellant’s burden to demonstrate that he was prejudiced by trial counsel’s failure to pursue funds for an expert rebuttal witness.

The appellate court agreed with the PCRA court that there was overwhelming evidence of Appellant’s guilt and that Appellant was unable to show prejudice by demonstrating that a successful petition for rebuttal expert funds would have resulted in a different trial verdict.

For the foregoing reasons, the appellate court concluded that the PCRA court did not err or abuse its discretion in dismissing Appellant’s post-conviction petition without a hearing.

ZALMA OPINION

Mr. Sitler caused the death of a teenager by driving around a car ahead of him, struck and killed a teenaged pedestrian, caused his girlfriend to lie to the police about who was driving and admitted to insurance fraud and multiple other crimes relating to the manslaughter only to have a jury convict him of the death of the teenager. He tried to reduce his sentence with claims of a poor defense lawyer and lack of funds. The court didn’t buy his arguments and he will, thankfully for pedestrians everywhere, stay in jail.

(c) 2024 Barry Zalma & ClaimSchool, Inc.

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Criminal Tries to Get Out of Sentence

Fraudster Fails to Obtain Post Conviction Relief Post 4783 See full video at https://rumble.com/v4q6s6x-criminal-tries-to-get-out-of-sentence.html and at https://youtu.be/T8izcEXer9k Robert Sitler appealed from the order that dismissed his petition filed pursuant to the Post Conviction Relief Act (“PCRA”). A jury found him guilty of homicide by vehicle and the trial court, sitting without a…

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Unclear Language in Policy Interpreted in Favor of Property Owner

Homeowner Is Found to be a Beneficiary of Forced Placed Insurance See the full video at https://rumble.com/v4pzy46-unclear-language-in-policy-interpreted-in-favor-of-property-owner.html  and at https://youtu.be/1N3KeQW1ZhQ Post 4782 Keith Rath was unhappy with Arch Insurance Company over coverage for damage from the Derecho (windstorm) that hit Cedar Rapids in 2020. Rath’s bank holding a security…

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Man Bites Dog & Dog Bites Back                                                                                                                    

Read the full article at https://lnkd.in/gS5NANH3, see the full video at https://lnkd.in/ggYpQA3J and at https://lnkd.in/gvNrjEBu, and at https://zalma.com/blog plus more than 4750 posts.

Third Circuit Compels Arbitration of IFPA Qui Tam Claims

Post 4781

The Insurance Fraud Prevention Act (IFPA) allows insurers to sue health care providers pursuing insurers with assignments of benefits from personal injury protection (PIP) claims (no fault insurance) on behalf of the state. GEICO did so against multiple health care providers who asked the court to compel GEICO to arbitrate each potential fraud claim.

In Government Employees Insurance Co.; GEICO Indemnity Co.; GEICO General Insurance Company; GEICO Casualty Co. v. Mount Prospect Chiropractic Center, P.A., d/b/a Mount Prospect Health Center; et al, United States Court Of Appeals For The Third Circuit, Nos. 23-1378, 23-2019 & 23-2053, No. 23-1378 April 15, 2024) the Third Circuit required arbitration of GEICO’s claims of fraud by health care providers under the New Jersey Insurance Frauds Prevention Act (IFPA)

BACKGROUND

GEICO sued defendants-appellants (collectively, the “Practices”) in separate actions in the District of New Jersey, alleging they defrauded GEICO of more than $10 million by abusing the personal injury protection (“PIP”) benefits offered by its auto policies. It alleges the Practices filed exaggerated claims for medical services (sometimes for treatments that were never provided), billed medically unnecessary care, and engaged in illegal kickback schemes. GEICO’s suits against the Practices each included a claim under the IFPA, which gives insurers a fraud claim.

The Medical Practices sought arbitration of GEICO’s IFPA claim, arguing both that a valid arbitration agreement covered the claim and that a different New Jersey insurance law allowed them to compel arbitration. But each District Court disagreed, ruling instead that IFPA claims cannot be arbitrated.

IFPA Claims Can Be Arbitrated.

The Practices’ effort to compel arbitration under a different New Jersey law could do the same for the Practices’ FAA-based request. GEICO bears the burden of persuading the Third Circuit that the IFPA prohibits arbitration.  GEICO claims that every known decision has held IFPA claims inarbitrable. The Practices cite no case holding otherwise.

GEICO claims that the IFPA’s antifraud mission bars arbitration. But it does not explain why arbitrating IFPA claims frustrates that goal. The United States Supreme Court has made clear that claims arising from laws empowering private attorneys general can be arbitrated. The American Arbitration Association rules give the arbitrator broad discretion to “grant any remedy or relief[.]” Am. Arb. Ass’n, Commercial Arbitration Rules and Mediation Procedures 28 (2013) (Rule 47), https://perma.cc/4Y74- WZM8.

In addition, New Jersey has a strong policy in favor of arbitration. The Third Circuit, therefore, predicted that the New Jersey Supreme Court would allow arbitration of IFPA claims. Having concluded that IFPA claims are arbitrable, the Third Circuit then considered whether the IFPA claims before it should be compelled to arbitration.

New Jersey Insurance Law Compels Arbitration.

Each Practice sought arbitration of GEICO’s IFPA claim through N.J. Stat. Ann. § 39:6A-5.1(a) (the “Provision”). It allows “any party” to compel arbitration of “[a]ny dispute regarding the recovery of medical expense benefits or other benefits provided under [PIP] coverage . . . arising out of the operation, ownership, maintenance or use of an automobile”.  As these suits are GEICO’s effort to recover medical expense claims paid through auto insurance PIP benefits, they fall under the Provision’s plain text.

GEICO asserts that the Provision does not apply to IFPA claims because they deal with fraud.

First, the Provision does not have an exception for fraud, and the Third Circuit may not carve a broad exclusion from a plain statute on the Third Circuit’s our own initiative.

Second, the list of claims specifically subject to the Provision suggests fraud falls under its umbrella. That group includes whether the disputed medical treatment was actually performed and whether the treatment performed is reasonable or necessary. That is the alleged fraud underpinning GEICO’s IFPA claims: billing for fictitious or unnecessary care. Because the Provision’s plain language is broad and does not carve out fraud, but rather explicitly includes fraud-like claims, GEICO’s argument failed to persuade the Third Circuit.

GEICO’s IFPA Claims Are Subject to an Arbitration Agreement.

In the alternative, the Third Circuit also concluded that GEICO’s IFPA claims must be compelled to arbitration under the FAA. That statute compels claims to arbitration once a movant shows both that an arbitration agreement was validly formed and that it covers the claims at issue. To establish that an agreement was formed when (as here) a motion to compel arbitration is based on a complaint standing alone, a defendant must show that the complaint and the documents on which s it relies facially suggest that the parties agreed to arbitrate.

GEICO does not contest the Practices’ reliance on two documents to suggest formation of an arbitration agreement. The first is GEICO’s Precertification and Decision Point Review Plan (the “Plan”). This document, required by New Jersey law and approved by the New Jersey insurance regulator, governs GEICO’s reimbursement of PIP claims. GEICO could force the Practices to prove more than a suggestion by submitting or pointing to additional facts sufficient to place the arbitration agreement in issue.

It would not have taken much for GEICO to put contract formation in play. To compel arbitration of GEICO’s IFPA claims, the Third Circuit concluded it must hold that the arbitration agreement in the Plan covers them.

Nothing in the amended complaint precludes arbitration of GEICO’s IFPA claims. Rather the law requires it. Therefore, Third Circuit concluded the District Court abused its discretion in denying the motion and the Third Circuit ordered arbitration.

ZALMA OPINION

Since local prosecutors failed to deal with health care providers who try to defraud insurers like GEICO, it used the qui tam provisions of the IFPA to sue the medical providers and thereby take the profit out of their crime. The health care providers compelled arbitration thereby requiring GEICO to prove fraud in each individual claim which will probably cost more than the amount of the fraud. What is needed is for the state to prosecute the fraud perpetrators or allow the fraud to continue since it may become self-defeating for GEICO to go through with hundreds of individual arbitrations. Regardless of the legal basis for the Third Circuit’s decision, its practical effect is to make PIP fraud profitable and the fraudsters should sing Hosannas for the Third Circuit’s decision. The criminal doctors need to be prosecuted as DOJ is prosecuting Medicare and Medicaid fraudsters.

(c) 2024 Barry Zalma & ClaimSchool, Inc.

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Man Bites Dog & Dog Bites Back

Third Circuit Compels Arbitration of IFPA Qui Tam Claims Post 4781 See the full video at https://rumble.com/v4psoxu-man-bites-dog-and-dog-bites-back.html  and at https://youtu.be/Lx6_lFigogk In The Insurance Fraud Prevention Act (IFPA) allows insurers to sue health care providers pursuing insurers with assignments of benefits from personal injury protection (PIP) claims (no fault insurance) on…

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 Swimming Pool Claim Sunk

Read the full article at https://lnkd.in/gigeC5RZ, see the full video at https://lnkd.in/gC3DYAsJ and at https://lnkd.in/g95WJisK, and https://zalma.com/blog plus more than 4750 posts.

Private Limitation of Action Provision Defeats Bad Faith Suit

Post 4780

No Right to Bad Faith If No Coverage for Loss

James H. Drevs and Patricia Henderson appealed from the order of the Law Division dismissing with prejudice their complaint seeking insurance coverage for storm damage to their real property.

In James H. Drevs and Patricia Henderson v. Metropolitan Property And Casualty Insurance Company, No. A-0637-22, Superior Court of New Jersey, Appellate Division (April 4, 2024) applied the private limitation of action provision of the policy.

No Right to Bad Faith If No Coverage for Loss

James H. Drevs and Patricia Henderson appealed from the order of the Law Division dismissing with prejudice their complaint seeking insurance coverage for storm damage to their real property.

In James H. Drevs and Patricia Henderson v. Metropolitan Property And Casualty Insurance Company, No. A-0637-22, Superior Court of New Jersey, Appellate Division (April 4, 2024) the Appellate Division applied the private limitation of action provision of the policy.

FACTS

Plaintiffs own property in Cherry Hill, which has a home and an inground swimming pool. In 2020, the property was insured under a policy issued by Farmers Property and Casualty Insurance Company, formerly known as defendant Metropolitan Property and Casualty Insurance Company.

On or about July 6, 2020, a windstorm and significant rainfall damaged plaintiffs’ home and swimming pool. Plaintiffs filed two claims for insurance coverage with defendant arising from the storm: the first claiming damage to the roof of their home and the second claiming a partial collapse of their inground pool.

Defendant undertook an investigation of plaintiffs’ claims. It hired an engineering firm to investigate the cause of the partial collapse of the pool. The engineering firm concluded the pool damage was caused by excessive hydrostatic pressure from significant rainfall during the July 6, 2020 storm. The insurer’s claims coordinator sent plaintiffs a letter denying their claim for coverage of the damage to the pool.

The claims coordinator issued a check to plaintiffs for the covered portion of the loss from the damaged roof of their home.

Plaintiffs sued defendant alleging breach of contract and bad faith in its denial of plaintiffs’ claim for coverage for the damage to their pool.

According to defendant, the one-year period began running again on September 14, 2020, when it denied plaintiffs’ pool damage claim. Defendant argued that because the complaint was filed on May 19, 2022, a year and eight months after September 14, 2020, it was time barred.

The trial court issued an oral opinion granting defendant’s motion.

ANALYSIS

The appellate court found no basis on which to reverse the trial court’s order. Plaintiffs’ policy is referenced in the complaint. The correspondence from defendant denying plaintiffs’ pool damage claim and granting their claim for damages to their house form the basis of plaintiffs’ claims. The September 14, 2020 letter unequivocally denied plaintiffs’ claim for coverage of the damage to their pool. Plaintiffs produced no evidence that the parties engaged in discussions, correspondence, or any other type of interaction in the seven months between defendant’s denial of plaintiffs’ pool damage claim and correspondence by counsel for the plaintiffs.

It was undisputed that more than one-and-a-half years passed between the September 14, 2020 denial of plaintiffs’ pool damage claim and the May 19, 2022 filing of the complaint.

A bad faith claim may not be asserted by a party who cannot establish a right to payment of the claim as a matter of law.

Because plaintiffs filed an untimely complaint challenging the denial of their claim, they cannot prove they are entitled to coverage for the damage to their pool.

ZALMA OPINION

Every first party property policy or homeowners policy contain a private limitations of action provision preventing insureds from suing one year after a loss. New Jersey, and many states, toll the running of the statute from the date of loss until the date the insurer makes an unequivocal denial of coverage. The insureds waited more than a year and a half after the denial of the claim and its suit was barred. They are not without a remedy, their lawyer knew or should have known of the limitation and failed to file suit within the period allowed nor did he seek an extension to the time to sue.

(c) 2024 Barry Zalma & ClaimSchool, Inc.

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Swimming Pool Claim Sunk

Private Limitation of Action Provision Defeats Bad Faith Suit Post 4780 See the full video at https://rumble.com/v4pm4n0-swimming-pool-claim-sunk.html  and at https://youtu.be/W9XJi0tdetE No Right to Bad Faith If No Coverage for Loss James H. Drevs and Patricia Henderson appealed from the order of the Law Division dismissing with prejudice their complaint seeking insurance coverage for storm…

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Zalma’s Insurance Fraud Letter – April 15, 2024

'Read the full article at https://lnkd.in/gfcuCcsR, See the full video at https://lnkd.in/gMd-3KQQ and at https://lnkd.in/gbgpZC5F and at https://zalma.com/blog plus more than 4750 posts.

ZIFL, Volume 28, Issue 8

The Source for the Insurance Fraud Professional

Zalma’s Insurance Fraud Letter – April 15, 2024 Posted on April 15, 2024 by Barry Zalma

ZIFL, Volume 28, Issue 8

Subscribe to ZIFL Here Post 4779

See the full video at https://rumble.com/v4p2ule-zalmas-insurance-fraud-letter-april-15-2024.html and at https://youtu.be/p6L-wEbN4_g The Source for the Insurance Fraud Professional

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. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/

No Reason to Release Convicted Arsonist Early

In United States Of America v. Jonathan Paul Wiktorchik, Jr., No. 23-2564, United States Court of Appeals, Third Circuit (March 25, 2024) Federal Prisoner Jonathan Wiktorchik appealed, acting as his own lawyer, from the District Court’s denial of his motion for compassionate release.

Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf

More McClenny Moseley & Associates Issues

This is ZIFL’s twenty sixth installment of the saga of McClenny, Moseley & Associates and its problems with the federal courts in the State of Louisiana and what appears to be an effort to profit from what some Magistrate and District judges indicate may be criminal conduct to profit from insurance claims relating to hurricane damage to the public of the state of Louisiana. March 11, 2024. Matthew Monson Reported That Mcclenny’s Sale To Moseley Uncovered! It was common knowledge that James McClenny sold his interest in MMA to Zach Moseley. New details revealed in a recent court filing. The deal was effective March 31, 2023.

Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf

Now Available New Book

The Compact Book of Adjusting Property Claims – Fourth Edition

On January 2, 2024, in Kindle, paperback and hardback formats, The Compact Book of Adjusting Property Claims, Fourth Edition is now available for purchase here and here. The Fourth Edition contains updates and clarifications from the first three editions plus additional material for the working adjuster and the insurance coverage lawyer.

Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf

Never Lie on an Application for Insurance

Conceal or Misrepresent Material Facts Requires Rescission in Alabama

Allied World sued general liability insurer concerning policies issued to Clint Lovette (“Lovette”) and his companies. ((collectively “Lovette Defendants”) for the policy periods of March 16, 2018, to March 16, 2019, and March 16, 2019, to March 16, 2020. Allied World sought a judicial determination in its favor that it does not owe the Lovette Defendants a defense or indemnity regarding two cases.

In Allied World Surplus Lines Insurance Company v. Lovette Properties, LLC, et al., No. 2:22-cv-00738-RDP, United States District Court, N.D. Alabama, Southern Division (March 15, 2024) the USDC resolved the disputes.

Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf

Pro Se Plaintiff’s Qui Tam Suit Fails

Private Citizen May Not Compel Enforcement of a Criminal Law

Ronald Rothman appealed from an order of the District Court dismissing his complaint with prejudice and remanding a foreclosure proceeding to state court.

In Ronald S. Rothman v. CABANA SERIES IV TRUST; IGLOO SERIES IV TRUST; U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee; WELLS FARGO BANK, N.A.; BALBEC CAPITAL, L.P.; SN SERVICING CORPORATION; FRIEDMAN VARTOLO, LLP; QUENTEN GILLIAM, ESQ., No. 23-2455, United States Court of Appeals, Third Circuit (April 2, 2024) the USCA, 3rd Circuit resolved the dispute.

Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf

Health Insurance Fraud Convictions

Holy Health Care Services, LLC Owner Sentenced to 3 Years In Federal Prison For Health Care Fraud Scheme

Julius Bakari, age 46, of Silver Spring, Maryland, was sentenced to 3 years in federal prison, followed by 3 years of supervised release, for conspiracy to commit health care fraud in connection with a scheme to fraudulently bill Medicaid. The defendant’s conviction stems from a scheme involving services purportedly provided by Holy Health Care Services, LLC (“Holy Health”), a mental health services provider with locations in Washington, D.C. Judge Xinis also ordered Bakari to pay restitution in the amount of the loss, $3,343,781. The sentence was imposed on April 9, 2024.

Read the full article with dozens more convictions and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf Arson for Profit

Arson for profit is the most egregious form of insurance fraud. Perpetrators of an arson for profit scheme do not consider the fact that arson can cause residents, neighbors, police, or firefighters to be injured or killed. Claims based on an arson-for-profit, are based upon the lack of intelligence or ability of the arsonist.

Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf

New Book Now Available from Barry Zalma

Property Investigation Checklists: Uncovering Insurance Fraud, 14th Edition provides detailed guidance and practical information on the four primary areas of any investigation of suspicious claims. The newest book joins other insurance, insurance claims, insurance fraud, and insurance law books by Barry Zalma all available at the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

The Tiffany Kid

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.

How a Rich Kid Became an Insurance Fraudster.

The insured grew up with his wealthy parents on the shores of San Francisco Bay in Marin County. He wanted for nothing that money could buy. He was tall, blond, blue-eyed and handsome. Debutantes pulled their sister’s hair for the chance to dance with him. Life was good, but dull.

Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf

Other Insurance Fraud Convictions

Benicia Contractor Pleads Guilty To Insurance Fraud for Underreporting Nearly $1 Million In Payroll

Kent Bo Fridolfsson, 67, of Benicia, pleaded guilty to six charges of insurance fraud and grand theft after a joint investigation with the California Department of Insurance, Solano County District Attorney’s Office and the Employment Development Department (EDD) revealed he underreported payroll by nearly $1 million to illegally save on workers’ compensation insurance and taxes. Fridolfsson was placed on formal probation, ordered to pay over $725,000 in restitution, and ordered to surrender his contractor’s license.

Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf Insurance Fraud Schemes

Every claims person and SIU investigator must be aware of the various schemes used by insurance criminals to defraud insurers. For example, the NAIC identified the following common schemes that result in the crime of insurance fraud…

Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf

Barry Zalma, Inc., 4441 Sepulveda Boulevard, CULVER CITY CA 90230-4847, 310-390-4455; Subscribe to Zalma on Insurance at locals.com https://zalmaoninsurance.local.com/subscribe. Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome. Go to the podcast Zalma On Insurance at https://podcastrs.spotify.com/pod/show/barry-zalma/support Write to Mr. Zalma at [email protected]; http://www.zalma.com; http://zalma.com/blog; I publish daily articles at https://zalma.substack.com, Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/04/ZIFL-04-15-2024.pdf

Benicia Contractor Pleads Guilty To Insurance Fraud for Underreporting Nearly $1 Million In Payroll

Insurance Fraud Schemes

Every claims person and SIU investigator must be aware of the various schemes used by insurance criminals to defraud insurers. For example, the NAIC identified the following common schemes that result in the crime of insurance fraud…

Barry Zalma, Inc., 4441 Sepulveda Boulevard, CULVER CITY CA 90230-4847, 310-390-4455.

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Fairly Debatable Action by Insurer                                                                                                                    

Reasonable & Arguable Reason to Deny Claim not Bad Faith

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Post 4778

William A. Lemons, Jr., M.D., a doctor who specialized in obstetrics and gynecology (“OB/GYN”), sued Principal Life Insurance Company (“Principal”) for breach of contract and bad faith for its refusal to pay him disability benefits under a “regular occupation rider” provision contained in his insurance policy with the company. A jury returned a verdict in favor of Lemons on the breach of contract claim and in favor of Principal on the bad-faith claim.

William A. Lemons, Jr. MD v. Principal Life Insurance Company, No. 22-12064, United States Court of Appeals, Eleventh Circuit (April 5, 2024)

FACTUAL BACKGROUND

Lemons decided to open his own OB/GYN practice, which he called Covenant Gynecology & Wellness, P.C. (“Covenant”). In October 2015, during Covenant’s business development phase, Lemons worked for Blue Cross Blue Shield (“BCBS”) as an insurance claims consultant. A few months later, in February 2016, he began working at the Birmingham Metro Treatment Center, an opioid addiction treatment and recovery facility. A month later, he started working at the Fritz Clinic, another opioid treatment clinic.

In April 2016, Lemons opened Covenant and started seeing patients. He did not deliver babies or otherwise engage in obstetrics, and he did not submit any insurance claims for any obstetrics-related work. Eventually, Lemons devoted most of his time and resources to Covenant, and he reduced the number of hours at his other jobs to concentrate more on his OB/GYN practice. Lemons’ solo medical practice was unsuccessful. On July 15, 2016, he closed Covenant because he was not seeing enough patients. Lemons’s deteriorating health also played a significant role in his decision to close Covenant. Beginning in 2013, Lemons started developing hand tremors and was officially diagnosed with a neurological condition in March 2016.

In November 2016, Lemons completed a disability claim form and reported that, as of July 15, 2016, he was totally disabled and could no longer work as an OB/GYN. Lemons was interviewed and stated that he was working at BCBS approximately 15 hours per week, at Birmingham Metro approximately 12-18 hours per week, and at the Fritz Clinic 4 hours per week. He maintained that, at the time of his disability, his regular occupation was as an OB/GYN and, therefore, Principal should approve his claim under the “regular occupation rider.” The claims person responded that because Lemons was working other non-OB/GYN jobs when he became disabled, Principal could not just look at his occupation as an OB/GYN and would need to consider his other jobs in evaluating his claim.

Principal eventually approved Lemons’ claim under a “loss of earnings” provision in the policy based on the reduction to Lemons’s income as a result of his disability. A few weeks later, on February 9, 2017, Principal denied Lemons’s claim for benefits under the “regular occupation rider” provision. Principal explained that, because Lemons regularly worked at BCBS, Birmingham Metro, and the Fritz Clinic prior to the onset of his disability, he was not “totally disabled from all occupations that [he was] engaged in prior to [d]isability” as the regular occupation rider required.

ANALYSIS

The Supreme Court of Alabama has made clear that mental anguish damages are unavailable for breach of contract claims related to long-term disability insurance policies. Therefore, the Eleventh Circuit affirmed the district court’s ruling as to Lemons’s recoverable damages.

The “Benefit Update Rider” Claim

Lemons acknowledges that he did not specifically plead a separate claim related to the “benefit update rider” provision. It is undisputed that Principal sent letters to Lemons regarding the “benefit update rider” provision in 2004, 2007, and 2010. The 2004 letter explained that his benefits had increased to $10,000 per month, and the subsequent letters informed him that his benefits had been capped at that amount.

The Bad-Faith Claim

The Eleventh Circuit concluded that the district court did not err in denying Lemons’ motions. At trial, Lemons testified that he spent most of his time working at Covenant prior to the onset of his disability. He admitted that he did not derive any income from his practice at Covenant and did not submit any insurance claims for OB/GYN services to patients. The jury also could have found that Principal had an arguable reason for not issuing Lemons benefits pursuant to the “regular occupation rider” policy provision because the evidence showed that Principal gathered-as part of its decisional process-information suggesting that Lemons’s regular occupation was not as an OB/GYN.

The verdict in this case was not against the clear weight of evidence given the genuine issue of fact as to whether a breach of contract occurred. The Eleventh Circuit affirmed the district court’s judgment.

ZALMA OPINION

Lawyers representing people whose claim was rejected in whole or in part will always include a cause of action for the tort of bad faith and seek exemplary as well as tort damages. However, if, as in this case the insurer honors the claim that was available to the insured and refused to provide benefits related to his specialty of OB/GYN because he tried but never acted as an OB/GYN and admitted he made no money from the failed practice. They paid what they owed and there was neither a genuine dispute about the coverage nor were the actions of the insurer fairly debatable.

(c) 2024 Barry Zalma & ClaimSchool, Inc.

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#insurance #claims #bad faith #good faith #insurance claims #insurane books #amazon.com