ZIFL-05-15-2024Subscribe to ZIFL Here  Post 4801 Read the full 23 page issue here in Adobe pdf format. See the full video at  https://rumble.com/v4v566z-zalmas-insurance-fraud-letter-may-15-2024.html  and at https://youtu.be/r7TbELn-Si0 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/ This issue contains the following articles: The defendant, Vincent Chaney, appealed two orders from Superior Court denying his motions to suppress and for a new trial. In State of New Hampshire v. Vincent Chaney, No. 2022-0718, Supreme Court of New Hampshire (May 3, 2024) resolved the dispute over Chaney’s conviction. Read the full 23 page issue here in Adobe pdf format. This is ZIFL’s twentyeigth 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. On April 23, 2023, MMA filed its Statement of Financial Affairs.  MMA Reported Gross Income as follows:  2024 - $803,956.63,  2023 - $12,247,362.23, 2022 - $22,596,895.00. Read the full 23 page issue here in Adobe pdf format. 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 23 page issue here in Adobe pdf format. Kimberli Orr obtained no-fault automobile insurance from defendant USA Underwriters and was involved in an automobile collision. Defendant denied plaintiff’s claim for benefits because it discovered that plaintiff made material misrepresentations on her application for insurance. Defendant argued that it was entitled to rescind and void plaintiff’s insurance policy, and the trial court granted defendant summary disposition. In Kimberli Orr v. USA Underwriters, No. 363452, Court of Appeals of Michigan (April 25, 2024) the Court of Appeals resolved the dispute. Read the full 23 page issue here in Adobe pdf format. Ashley Bunton-Dodson, 36, of Las Vegas, and Remedy Wellness and Resource Center, LLC (“Remedy Wellness”), were sentenced May 7, 2024 in a Medicaid fraud case involving billing for services that were not provided to Medicaid recipients. http://Read the full 23 page issue here in Adobe pdf format. LDI and St. Tammany Parish Sheriff’s Office to Help Consumers Avoid Storm-Related Insurance Fraud I usually write everything in ZIFL, but this notice is useful wherever you work or live and as you read just change “Louisiana” to your state’s name. Read the full 23 page issue here in Adobe pdf format. 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 book also examines recent developments in areas such as arson investigation procedures, bad faith, extracontractual damages, The fake burglary, and Lawyers Deceiving Insurers, Courts & Their Clients During, Catastrophes—A New Type Of Fraud and the appendices includes the NAIC Insurance Information and Privacy Protection Model Act and usable forms for everyone involved in claims and will provide necessary information to the claims adjuster, SIU fraud investigator, claims manager, or coverage lawyer so he or she can be capable of excellence. 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/ Shannon Egeland's insurance scheme and concocted shooting, which led to the amputation of his left leg, "an unthinkable kind of situation,'' and tacked on three years and 10 months to his 10-year sentence for mortgage fraud. He was sentenced in U.S. District Court in Portland. Read the full 23 page issue here in Adobe pdf format. Read the full article at https://www.linkedin.com/pulse/new-book-from-barry-zalma-tort-bad-faith-barry-zalma-esq-cfe and at https://zalma.com/blog plus more than 4300 posts. A Book Needed by Every Insurance Claims Professional Read the full 23 page issue here in Adobe pdf format. 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   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 [email protected] Over the last 55 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals. Barry Zalma, Inc., 4441 Sepulveda Boulevard, CULVER CITY CA 90230-4847, 310-390-4455 Read the full 23 page issue here in Adobe pdf format The Source for the Insurance Fraud ProfessionalIncompetent Insurance Fraud Claim Results in ConvictionFraudster Pawns Jewelry & Then Claims it StolenMore McClenny Moseley & Associates IssuesNow Available New BookThe Compact Book of Adjusting Property Claims – Fourth EditionHelp, My House Is Falling Into The SeaNormally Honest People Will Try Insurance Fraud"I present blogs and videos so you can learn how insurance fraud is perpetrated and what is necessary to deter or defeat insurance fraud. This Video Blog of True Crime Stories of Insurance Fraud, with the names and places changed to protect the guilty, are all based upon investigations conducted by me and fictionalized to create a learning environment for claims personnel, SIU investigators, insurers, police, and lawyers to better understand insurance fraud and weapons that can be used to deter or defeat a fraudulent insurance claim."The Honest Real Estate Lawyer Tempted to Commit FraudLies on Insurance Application ExpensiveFalse Statement on Application Requires RescissionHealth Insurance Fraud ConvictionsNBA STAR 'BIG BABY' IS GOING TO JAIL FOR INSURANCE FRAUDEx-Boston Celtics player Glen 'Big Baby' Davis has been sentenced to 40 months in prison for defrauding the NBA healthcare plan. Davis, alongside several others, participated in a scheme that involved submitting false or inflated claims for medical and dental services that were never provided. Davis personally submitted $132,000 in fraudulent claims, which were uncovered through geolocation data and travel records. Overall, the group defrauded the plan of over $5 million. Davis will also be on supervised release for 3 years and must pay $80,000 in restitution. Nevada AttorneyGeneral Ford Announces Conviction Of Health Care Company And Its OwnerHow to Avoid Insurance Fraud from the Louisiana Department of InsuranceNew Book Now Available from Barry ZalmaProperty Investigation Checklists: Uncovering Insurance Fraud, 14th EditionOther Insurance Fraud ConvictionsFormer Desert Sun VP Sentenced For Ordering His Son To Shoot Him In Legs To Delay PrisonThe Tort of Bad FaithWhat Every Insurance Professional, Every Insurance Coverage Lawyer, Every Plaintiffs Bad Faith Lawyer, and Every Insurance Claims Person Must know About the Tort of Bad FaithBarry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Force Placed Insurance Charges Allow Special Defense to Foreclosure Post 4802 In an action to foreclose a mortgage the trial court granted in part the plaintiff's motion to strike the defendant's special defenses and counterclaim; subsequently, the court, Cirello, J., granted the plaintiff's motion for summary judgment as to liability only; thereafter, the court, Spader, J., rendered judgment of foreclosure by sale, and the defendant appealed. In M&T Bank v. Robert R. Lewis, No. SC 20817, Supreme Court of Connecticut (April 30, 2024) the appeal of a foreclosure judgment presented one question important to insurance professionals: Whether allegations of impropriety in a mortgagee's force placement of property insurance arise from the making, validity or enforcement of the mortgage for purposes of a special defense to a foreclosure action. Robert R. Lewis claimed that the trial court improperly granted the plaintiff's motion to strike two of the defendant's special defenses arising from the plaintiff's conduct in its force placement of flood insurance on the property at issue, alleging that the plaintiff had unclean hands and breached the implied covenant of good faith and fair dealing on the ground that those defenses do not arise from the making, validity or enforcement of the mortgage. After the defendant failed to make his monthly payment on August 1, 2017, the plaintiff notified him in writing of his default. The plaintiff subsequently elected to accelerate the note and foreclose on the mortgage. The parties participated in the state's court-supervised foreclosure mediation program but were unable to reach an agreement to modify the loan. The trial court granted the plaintiff's motion for summary judgment as to liability only. Defendant's claim that the trial court improperly granted in part the plaintiff's motion to strike the defendant's special defenses of unclean hands and breach of the implied covenant of good faith and fair dealing predicated on the plaintiff's improprieties in the force placement of the flood insurance, do not ''arise from the making, validity or enforcement'' of the mortgage. In the present case, the trial court struck the special defenses of unclean hands and breach of the implied covenant of good faith and fair dealing on the ground that the defendant's allegations did not relate to ''the specific mortgage at issue in this case.'' (Emphasis added.) The question remains whether those allegations are sufficiently related to the making, validity or enforcement of the mortgage. The Supreme Court concluded that they are. The defendant alleges, the plaintiff charged the defendant an amount greater than the ''cost'' of the insurance, in violation of section 5 of the mortgage agreement, concealed a ''kickback'' agreement that it had with ASIC. All of this alleged conduct is directly related to the plaintiff's reliance on and enforcement of section 5 of the mortgage agreement. The Supreme Court noted that the alleged effect of the plaintiff's conduct in enforcing section 5 of the mortgage agreement-that it wrongfully increased the defendant's overall debt-provides a sufficient nexus to the foreclosure action. Defendant's allegations in support of the special defenses are sufficiently connected to the enforcement of the mortgage. Since an action to foreclose a mortgage is an equitable proceeding it is a fundamental principle of equity jurisprudence that for a plaintiff to show that he is entitled to the benefit of equity he must establish that he comes into court with clean hands. The clean hands doctrine is applied not for the protection of the parties but for the protection of the court. It is applied not by way of punishment but on the basis of considerations that make for the advancement of right and justice.  A mortgagor who has defaulted on a mortgage is not precluded from asserting the special defense of unclean hands. Therefore, the Supreme Court took the Defendants allegations as true it concluded that the defendant alleged willful conduct that is not equitable, fair or honest. The defendant sufficiently pleaded that the plaintiff's alleged misrepresentations interfered with his right to receive the benefits of the agreement. This Defendant did by alleging that the plaintiff's kickback scheme wrongfully resulted in the defendant's payment of more than he was obligated to pay and more than the plaintiff was entitled to charge him, pursuant to the mortgage agreement. By alleging that Plaintiff's conduct with force placed insurance increased his overall debt the trial court improperly struck the special defenses. Insurance is important to every mortgagee needing it to protect the security for the loan. Mortgages require insureds to obtain insurance and allow, if they fail, to obtain force placed insurance that only protects the mortgagee at the expense of the insured. However, the mortgagee should never charge the insured more than it pays since that would be fraudulent and, as in this case, a defense to the foreclosure. (c) 2024 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 my substack at https://barryzalma.substack.com/subscribe Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; 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://lnkd.in/gwEYk. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurance for State of Delaware Waives Sovereign Immunity On February 15, 2023, Kimberly Letke ("Plaintiff") filed a pro se Complaint against Defendant Matthew Sprinkle ("Sprenkle") for defamation and malicious prosecution.  On October 3, 2023, Plaintiff filed another Complaint added Defendants Cpl. Tyler Beulter of the DNREC police ("Beulter") and the Attorney General of Delaware, Kathleen Jennings ("Jennings"), in which she added three additional claims: false arrest and violations of public trust, unlawful detention, and violations of her rights under the Fourth Amendment to the United States Constitution. In Kimberly Letke v. Matthew Sprenkle, CPL. Tyler Beulter, and Attorney General Kathleen Jennings, C.A. Nos. S23C-10-019 CAK, S23C-10-002 CAK, Superior Court of Delaware (May 6, 2024) the court was faced with a Motion to Dismiss based upon sovereign immunity. Sprenkle hunted and harvested a deer in Cape Henlopen State Park, allegedly trespassing on Plaintiff's neighbor's property to reach the Park. Plaintiff shouted at Sprenkle and called the police. The police spoke with Sprenkle and ultimately arrested Plaintiff for a violation of the Delaware statute prohibiting impeding lawful hunting. The charge was ultimately dropped. Plaintiff's claims, including those for defamation and malicious prosecution spring from that incident and the statements that Sprenkle allegedly made to Beulter about Plaintiff. The doctrine of sovereign immunity provides that the State of Delaware, including its agencies, can only be sued by consent, or by an express act of the General Assembly. When the State has not waived sovereign immunity, the Court does not have to consider whether the State Tort Claims Act is applicable. The Court has dismissed in the past claims against Delaware state agency defendants where the state agency defendants submitted an affidavit from the Insurance Coverage Administrator of the State of Delaware affirming that the State had not purchased any insurance coverage for such claims. Without a waiver of sovereign immunity, the Court held that plaintiffs' claims were barred, and therefore, the Court was not required to consider whether the State Tort Claims Act was applicable. Assuming arguendo that there is not absolute sovereign immunity for Beulter, or that the State has waived sovereign immunity with respect to him or his agency, the doctrine of qualified immunity bars Plaintiff's claims against Beulter. When properly applied, qualified immunity protects all but the plainly incompetent or those who knowingly violate the law. Plaintiff's claims against Beulter are founded upon an alleged act or omission arising out of the performance of his official duty, and, therefore, is barred by the qualified immunity statute. First, all actions surrounding Plaintiff's arrest were in the performance of an official duty. Second, there is nothing in the Complaint, other than what may be fairly read as mere accusations, that indicates Beulter was not acting in good faith. Third, there is nothing in the Complaint that indicates that Beulter acted with gross or wanton negligence. For the reasons discussed above, Defendant Beulter's Motion to Dismiss was GRANTED. No one likes being arrested. Regardless you cannot sue a police officer or a prosecutor for defamation if everything they did was part of their official duties. The state of Delaware allows the state to waive sovereign immunity only if the state has bought insurance to protect it against such claims. Since there was no insurance protecting the officer he was immune from the suit. (c) 2024 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 my substack at https://barryzalma.substack.com/subscribe Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; 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://lnkd.in/gwEYk. FACTSAbsolute ImmunityQualified ImmunityANALYSISZALMA OPINION --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Three Cases Dismissed Because of Suit Against an Insurer who Did Not Insure the Plaintiff Texas Law Firm McClenny, Moseley & Associates (MMA) has had serious problems with the US District Courts in 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. In April and May several cases have been the subject of motions for Summary Judgment from insurers who were sued by MMA who was sanctioned by the District Courts and new lawyers took over the cases only to find the plaintiffs had no right to sue since they were not insured by the insurer defendants. For a representative sample note the information from the following three cases: In Ave Duruisseau v.  Farmers Property & Casualty Insurance Co, No. 6:22-CV-03860, United States District Court, W.D. Louisiana, Lafayette Division (April 26, 2024) Summary Judgment was granted because there was no genuine issue of material fact for trial because Farmers did not insure Plaintiff's property. In Hester Cole v.  Foremost Insurance Company Grand Rapids Michigan, No. 2:22-CV-03514 United States District Court, W.D. Louisiana, Lake Charles Division (April 26, 2024) the court granted Summary Judgment because there was no genuine issue of material fact for trial because Foremost did not insure Plaintiff's property on August 27, 2020. In Terry Ramirez v. Atlantic Casualty Insurance Co, No. 2:22-CV-04797, United States District Court, W.D. Louisiana, Lake Charles Division (May 7, 2024), James D. Cain, Jr. United States District Judge, dealt with a Motion for Summary Judgment filed by defendant Atlantic Casualty Insurance Company (“Atlantic Casualty”). The motion was unopposed. The details were a little different. The suit dealt with alleged damage to a residence located at 2026 7th Avenue, Lake Charles, Louisiana, in Hurricane Laura, which made landfall in Southwest Louisiana on August 27, 2020, and Hurricane Delta, which impacted the same area on October 9, 2020. Plaintiff, who was then represented by counsel from the law firm of McClenny Moseley & Associates, filed suit in this court against Atlantic Casualty on August 25, 2022, raising claims of breach of insurance contract and bad faith. Therein he represented that he was the owner of the property represented at 2026 7th Avenue and that the property was insured under a policy issued by Atlantic Casualty. All cases filed by plaintiff's counsel were suspended due to concerns about misconduct committed by that firm. New counsel enrolled for plaintiff on July 11, 2023, and the stay was lifted. Atlantic Casualty moved for summary judgment, showing that plaintiff is not the owner of the insured property and is not listed as a named insured under the policy and requested that the court dismiss plaintiff's claims with prejudice. Louisiana law provides that an insurance policy is a contract and that its provisions are construed using the general rules of contract interpretation in the Louisiana Civil Code. The policy at issue is a commercial lines policy that provides lessor's risk coverage to several dwellings, including the one at 2026 7th Avenue. Doc. 20, att. 3, pp. 5-6. Darrell and Shirley Crochet are listed as the named insureds. According to Atlantic Casualty's records, they are also the owners of 2026 7th Avenue and plaintiff was a tenant at that address. The policy provides that certain individuals, such as employees, may be considered insureds in connection with the business run from that property. However, there is no basis under the policy to consider that the tenant has an insurable interest in the immovable property. Accordingly, plaintiff cannot maintain a claim for breach of contract against Atlantic Casualty. In the absence of a valid contractual claim, plaintiff's bad faith claims must also fail. The Motion for Summary Judgment was granted and all claims in this matter were dismissed with prejudice. The result of these three cases indicates that the MMA firm had a problem with the truth and filed suits on behalf of people who were not insured by the insurer defendant and was, as a result, a suit based on fraudulent allegations. The last 28 issues of Zalma's Insurance Fraud Letter has described the problems faced by MMA and insurers in the state of Louisiana who were required to defend false and fraudulent lawsuits. (c) 2024 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 my substack at https://barryzalma.substack.com/subscribe Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; 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://lnkd.in/gwEYk ZALMA OPINION --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Suspicion of Fraud Cannot Support Qui Tam Action Post 4770 Richard Campfield, suing for the State of California, appealed the trial court sustained the demurrer of defendants Safelite Group, Inc. and its subsidiaries, Safelite Solutions LLC and Safelite Fulfillment, Inc. (collectively, Safelite) without leave to amend. Campfield contends he adequately alleged a cause of action under the Insurance Fraud Prevention Act (Ins. Code, § 1871 et seq.) (IFPA) within the statute of limitations. In State Of California, ex rel. Richard Campfield v. Safelite Group, Inc., et al., A168101, California Court of Appeals, First District, Fourth Division (March 29, 2024) explained the requirements to plead a Qui Tam action under the IFPA. Campfield owns a windshield repair company that licenses and sells products for repairing vehicle windshield cracks. Safelite is the nation's largest retailer of vehicle glass repair and replacement services. Safelite also serves as the third party administrator for over 175 insurance and fleet companies, including 23 of the top 30 insurers in California and the country, for processing and adjusting policyholders' vehicle glass damage claims, and it has direct electronic access to over 20 insurance company databases. In 2015, Campfield sued Safelite in federal district court in Ohio, alleging Safelite's continued reliance on its six-inch rule violated the Lanham Act's (15 U.S.C. § 1051 et seq.) Safelite admitted in responses to interrogatories in the Ohio action that it has never conducted studies on the safety or viability of repair of cracks longer than six inches. Campfield filed under seal the complaint in the present action against Safelite, alleging a single qui tam cause of action for violation of the Insurance Frauds Prevention Act (IFPA). The Insurance Commissioner and the San Francisco County District Attorney declined to intervene, so in September 2022 the trial court unsealed the complaint. Safelite demurred, arguing, among other things, that the complaint failed to allege facts constituting a cause of action under the IFPA. Campfield failed to plead his claim with sufficient particularity, and the statute of limitations barred the complaint. After briefing and a hearing, the trial court sustained the demurrer without leave to amend based on the statute of limitations and noted that Safelite had raised "substantial arguments" that the complaint had not stated a cognizable claim and that the action was barred by the IFPA's public disclosure bar. The trial court then dismissed the action. The IFPA was enacted to prevent automobile and workers' compensation insurance fraud in order to, among other things, significantly reduce the incidence of severity and automobile insurance claim payments and therefore produce a commensurate reduction in automobile insurance premiums. The sole cause of action in the complaint is based on Insurance Code section 1871.7, subdivision (b), which allows for the imposition of civil penalties and other remedies against anyone who violates Insurance Code section 1871.7 or Penal Code sections 549, 550, or 551. Campfield alleges Safelite violated Penal Code section 550, subdivision (b)(1) and (2). As in any action sounding in fraud, an IFPA action must be pleaded with particularity. To effectively state his IFPA cause of action, Campfield must allege facts showing that Safelite presented, or caused to be presented, a false statement as part of, or in support of or opposition to, a claim for payment or other benefit pursuant to an insurance policy or prepared or made a false statement intended to be presented to any insurer or any insurance claimant in connection with, or in support of or opposition to, any claim or payment or other benefit pursuant to an insurance policy. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

"Property Damage" Must Be Actual Not Potential Post 4771 Breach of Construction Contract Not an Insured Peril After the plaintiff's motion for summary judgment was rejected and the defendant insurer's motion for summary judgment was granted the plaintiff appealed. In Westchester Modular Homes Of Fairfield County, Inc. v. Arbella Protection Insurance Company, No. AC 45433, Court of Appeals of Connecticut (April 2, 2024) and the Court of Appeals resolved the dispute. On or about April 27, 2016, the plaintiff entered into a contract with Diana Lada L'Henaff and Jean Jacques L'Henaff for the construction of a new modular home on property located in New Canaan (property). During construction, disputes arose between the L'Henaffs and the plaintiff. Ultimately, the L'Henaffs terminated their contract with the plaintiff on December 14, 2016. The plaintiff filed a mechanic's lien on the property on or about February 3, 2017, and commenced an action to foreclose on the lien on or about April 7, 2017 (underlying litigation). The L'Henaffs filed a counterclaim that alleged that they "desired to build a modern home and had very carefully and specifically specified the type of insulation, materials, and finishes that they required the builder that won the job to satisfy." The L'Henaffs alleged that work on the project progressed slowly and with constant problems. The L'Henaffs alleged that the plaintiff had breached the construction contract. The plaintiff, as a named insured under a commercial general liability policy issued by the defendant (policy), filed a claim for coverage with the defendant which was refused. The defendant disclaimed coverage on the basis that the first revised counterclaim filed in the underlying litigation did not allege "property damage" caused by an "occurrence" and, therefore, it did not trigger coverage under the policy. The trial court determined that the pleadings in the underlying litigation did not allege property damage. As to the extrinsic documents submitted to the defendant by the plaintiff, the court determined that such evidence established only the existence of possible defective work that could lead to future property damage if not remedied but that it did not demonstrate the existence of current property damage. Because there are no factual issues in dispute in the present case, the court was only faced with the legal question whether the defendant had a duty to defend the plaintiff. Specifically, the defendant contended that the extrinsic documents suggested, "at most, that the construction deficiencies could potentially result in water damage to nondefective areas of the property if not fixed." (Emphasis in original) The Plaintiffs alleged construction defects and did not allege damage that the defects caused to other, nondefective property. Since the plaintiffs expert testified that he had identified defective work that, if not remedied, could lead to property damage in the future but identified no damage, Plaintiffs failed to allege facts bringing the underlying litigation seeking property damage that would have required a defense. The Court of Appeals made clear that repairs to structural deficiencies, made for the purpose of preventing physical injury to tangible property before the alleged deficiency has caused property damage are not within the insuring agreement's definition of property damage. Because there was no indication of water damage at all. At most, the construction deficiencies could potentially result in water damage to nondefective areas of the property if not fixed. Damage to nondefective property in the form of rot or mold caused by water intrusion would be property damage within the terms of the policy language. However, the plaintiff did not present any evidence of actual damage or case law holding that the presence of water, in the absence of actual damage, amounts to covered physical damage. The Court of Appeals concluded that the notification of the mere presence of water, without some corresponding physical damage, did not provide the defendant with actual knowledge of facts establishing a reasonable possibility of coverage because the presence of water does not constitute property damage within the terms of the policy. Accordingly, the defendant did not have a duty to defend the plaintiff in the underlying litigation, and the court properly rendered summary judgment in favor of the defendant. When an insured breaches the terms of a construction contract it will invariably be sued by the other party to the contract for damages resulting from the breach. Westchester Modular Homes breached its contract by creating a defective modular home that would, in the future, if defects were not cured, suffer physical damage. Since there was no physical damage to the structure - just the potential of damage - coverage did not apply and Westchester was obligated to defend and indemnify itself to the allegations of the underlying litigation. (c) 2024 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 my substack at https://barryzalma.substack.com/publish/post/107007808  Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; 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://lnkd.in/gwEYk. FACTSDISCUSSIONZALMA OPINION --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Lawyers Fraudulent Billing is not Pre-Litigation Protected Petitioning Activity Post 4772 Strategic Lawsuits Against Public Participation (SLAPP suits) are meritless lawsuits designed to harass parties for engaging in protected activities (the right of petition or free speech). A party can move to dismiss a SLAPP suit by filing an anti-SLAPP motion. The movant must show the purported SLAPP suit arises from its protected activities; if shown, the respondent can defeat the motion by showing its lawsuit has merit. In OC Media Tower, L.P. et al. v. Louis Galuppo et al., G062372, California Court of Appeals, (March 28, 2024) the Court of Appeals resolved the dispute. Plaza Del Sol Real Estate Trust (Plaza) made $67 million in loans to OC Media Tower, L.P., and OCR Land LLC (collectively, OC Media). The loans were secured by deeds of trust and promissory notes in which OC Media agreed to pay Plaza's attorney fees for any needed collection efforts. OC Media defaulted on its loans. Plaza agreed to accept a lower payoff amount (about $50.5 million), contingent on OC Media selling its encumbered real estate. During escrow, attorney Galuppo submitted an invoice stating its fees (about $25,000) for its client Plaza. At the close of escrow, Plaza was paid the agreed upon payoff amount and Galuppo was paid its stated attorney fees. Plaza later sued OC Media for fraud and other causes of action. Plaza alleged it learned after the close of escrow that OC Media had made false statements about its real estate sale to induce Plaza to accept less than what it was owed. OC Media filed a cross-complaint against Plaza and Galuppo for fraud and another cause of action. OC Media alleged Galuppo's attorney fees were false and unsupported. Galuppo filed an anti-SLAPP motion to dismiss OC Media's cross-complaint. Galuppo asserted its invoice stating Plaza's attorney fees was a prelitigation demand for payment (protected petitioning activity). The trial court denied Galuppo's anti-SLAPP motion because "an allegedly false invoice for payment generally does not constitute petitioning activity under the anti-SLAPP statute." In an anti-SLAPP motion, the trial court should distinguish between speech or petitioning activity that is mere evidence related to liability and liability that is based on speech or petitioning activity. The Court of Appeals found that the record does not support Galuppo's assertion that its invoice was a prelitigation demand for payment. Further, the basis of OC Media's cross-complaint is not that Galuppo made a tortious demand for payment. Rather, OC Media claims the amount of attorney fees actually billed by Galuppo was fraudulent. Appellants claimed the demand for $24,433.08 in attorney fees was a communication preparatory to and in anticipation of filing litigation. In an anti-SLAPP motion, the movant bears the burden of establishing the challenged claims arise from its protected activity. The essential elements of fraud that give rise to a cause of action for deceit or intentional misrepresentation are: misrepresentation (false representation, concealment, or nondisclosure); knowledge of falsity (or scienter); intent to defraud, i.e., to induce reliance; actual and justifiable reliance; and resulting damage. OC Media and OCR Land LLC sued Plaza, Galuppo, and Morris Cerullo World Evangelism for fraud and the common count of money had and received. OC Media alleged that prior to the close of escrow it had asked Galuppo to provide the amount of attorneys' fees and costs that Plaza had incurred in connection with the sale of the Property at 625 N. Main. OC Media stated that on October 16, 2020, Galuppo transmitted by email a document purporting to be an invoice through which it was represented that Plaza had incurred $24,433.08 in legal fees. OC Media alleged that the invoice was fraudulent. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurer Files Interpleader to Allow Claim Payment to Proper Competing Claims Against Funds Post 4773 See the full video at https://rumble.com/v4of8jo-whos-on-first.html  and at https://youtu.be/mCY8rYGqSGc In an interpleader action arising out of a jury trial in Hanover Am. Ins. Co. v Tattooed Millionaire Entertainment, LLC, No. 2:16-cv-02817-JPM-tmp (W.D. Tenn. 2016) (“Hanover I”).  In Hanover I, a jury trial was held on “insurance claims submitted to Hanover [by Defendants in the instant case] in connection with a 2015 arson fire and alleged theft at the House of Blues recording studio located on Rayner Street in Memphis, Tennessee.” In Hanover American Insurance Company v. Tattooed Millionaire Entertainment, LLC, Christopher C. Brown, and John Falls, No. 2:20-cv-02834-JPM-cgc, United States District Court, W.D. Tennessee, Western Division (April 4, 2024) the USDC distributed the available funds. The Hanover I jury held that: Christopher C. Brown (“Brown”) and Tattooed Millionaire Entertainment, LLC (“TME”) were indistinguishable; and Brown/TME made material misrepresentations with the intent to deceive and committed unlawful insurance acts during the claims process, and thus Hanover was entitled to recover the advance payments made to Brown/TME. The Hanover I jury also held that Falls did not make material misrepresentations or commit unlawful insurance acts, and thus awarded him the maximum amount covered by his policy: $2.5 million in Business Personal Property (“BPP”) and an additional $250,000 in Business Income (“BI”). After the jury trial concluded, the USDC granted Hanover’s Rule 50(b) motion for judgment notwithstanding the verdict and entered an amended judgment denying Falls’ recovery. The Sixth Circuit, however, reversed the post-trial ruling and remanded with instructions to reinstate the jury verdict as to Falls, which the USDC did. In the current action: “Hanover II,” Hanover filed its Complaint for interpleader and declaratory relief. Hanover claims that the $2.5 million BPP insurance awarded to Falls is subject to multiple competing claims. Hanover’s Declaratory Relief Complaint seeks a declaration that the $2.5 million BPP award is null and void as a matter of Tennessee public policy. It also pleads in the alternative that the Court must resolve the various competing claims to the BPP insurance proceeds and declare to whom, and in what amount, those funds should be paid. Prior to trial the Parties stipulated to the following facts during pre-trial conference: John Falls leased Studio B at the former House of Blues studio located on Rayner Street in Memphis, Tennessee, and the equipment therein from Christopher Brown who owned TME. Falls obtained insurance from Hanover that included, inter alia, $2.5 million in coverage for BPP and $500,000 in coverage for BI. Brown/TME had a separate policy that covered, inter alia, the structure of the studio building. On November 5, 2015, an arson fire occurred at the House of Blues recording studio located on Rayner Street in Memphis, Tennessee, causing substantial damage to the building and the BPP therein. The evidence presented at the trial of the original action (Hanover I) established that Brown/TME falsified documents and submitted fake invoices, phony receipts, and doctored bank account statements in connection with the insurance claims following the fire. In the appeal regarding the original action, the Sixth Circuit wrote: “The jury awarded Falls $2,500,000 as the amount of insurance he was owed, up to his policy limit, for Business Personal Property coverage …. The BPP payment covers the loss of the gear in Falls’ studio. However, Brown is the ultimate owner of the lost gear, on which Falls had a perpetually renewable leasehold.” --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

“The Passover Seder For Americans”s” My family will, starting on April 22, 2024 will tell the story of the Passover using the book my wife and I wrote for our family. I have published the book on Amazon for the smallest price they would print and ship the book for so you can afford to get enough for your family to run a Seder in English. For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lost the ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah. Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and wonder how did all these wonderful things come into being. Jews believe the force we call G_d created the entire universe and everything in it. Jews feel G_d is all seeing and knowing and although we can’t see Him, He is everywhere and in everyone.We understand that when G_d began to create the world there was nothing and that time, as we know it, had no meaning. G_d created all. Because of the creation we are able to track time and celebrate Passover every year at the same time. We do so based on the lunar calendar used by our ancestors not the Julian calendar modern people use. As a result, we feel G_d gave people a conscience hoping it would help us decide right from wrong, to do our best to make good choices, to try to help others, not hurt others and to try to make right the wrongs we have done to others. The rituals that make up the Jewish holidays help remind us how thankful we are for how much we have accomplished with G_d ’s help and how grateful we are to G_d for everything we have and everything we are. Thea and Barry Zalma have created this English only Seder that works for their family and will allow you and your families to tell the story of the Exodus painlessly and with the joy and celebration it deserves so that no member of our family forgets what G_d did for us when He took us out of slavery in Egypt and led us to a promised land. If you are not Jewish and interested in why Jesus celebrated the Passover at the “Last Supper” with his disciples this show to you what he and the disciples were celebrating. The books are available for only $5.95. Available as a Kindle Book  Available as a Paperback (c) 2023 Barry Zalma & Thea Zalma Barry Zalma, Esq., CFE  is available at http://www.zalma.com and [email protected] --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL Volume 28, Issue 4 The Source for the Insurance Fraud Professional Subscribe here: 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/ The current issue can be read in full at http://zalma.com/blog/wp-content/uploads/2024/02/ZIFL-02-15-2024.pdf and includes the following articles: Do the Crime, Serve the Time Chutzpah: After Pleading Guilty Fraudster Tried to Reduce his Sentence by an Appeal After pleading guilty, Armando Valdes appealed his 60-month sentence for health care fraud, in violation of 18 U.S.C. § 1347. Valdes’s conviction and sentence arose out of his scheme to submit millions of dollars in fraudulent medical claims to United Healthcare and Blue Cross Blue Shield for intravenous infusions of Infliximab, an expensive immunosuppressive drug. These infusions, purportedly given to patients at Valdes’s medical clinic, Gasiel Medical Services (“Gasiel”), were either not provided or were medically unnecessary. Read the full article in Adobe pdf format at http://zalma.com/blog/wp-content/uploads/2024/02/ZIFL-02-15-2024.pdf More McClenny Moseley & Associates Issues This is ZIFL’s twenty fourth 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 in Adobe pdf format at http://zalma.com/blog/wp- California Insurance Commissioner Lara Issues Consumer Fraud Alert As Flood Recovery Begins In San Diego County Following the recent flooding in San Diego which damaged and destroyed hundreds of homes, businesses, and vehicles, Insurance Commissioner Ricardo Lara put the Department of Insurance on alert for potential fraud and illegal actions targeting flood victims. Read the full article in Adobe pdf format at http://zalma.com/blog/wp-content/uploads/2024/02/ZIFL-02-15-2024.pdf Health Insurance Fraud Convictions Guilty in Arkansas Shaona Mizell, 52, of Paragould, Arkansas. in Pulaski County Circuit Court on January 23, Mizell pleaded guilty to Medicaid Fraud, a class A misdemeanor. Read the full article in Adobe pdf format at http://zalma.com/blog/wp-content/uploads/2024/02/ZIFL-02-15-2024.pdf Arson and Restitution CONVICTED ARSONIST MUST PAY RESTITUTION A fire at a residential property destroyed several structures and made nearly all of the owner’s personal property unsalvageable. Insurance Fraud Attempt Defeated THE HAWAIIAN, ATTEMPTED FRAUD DEFEATED BY A THOROUGH INVESTIGATION The following 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. Read the full article in Adobe pdf format at http://zalma.com/blog/wp-content/uploads/2024/02/ZIFL-02-15-2024.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. (c) 2024 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 my substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com  https://www.newsbreak.com/@c/1653419?s=01 Go to X @bzalma; Read the full article in Adobe pdf format at http://zalma.com/blog/wp-content/uploads/2024/02/ZIFL-02-15-2024.pdf --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Hawaiian The following 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. Post 4734 The insured was a contractor in Honolulu. He made an excellent living cheating his customers. The insured’s most lucrative scheme was an electronic vermin killer. It consisted of a long wire and a transformer. The contractor strung the wire around a house and plugged it in a wall. The device, charged with low voltage from the transformer, allegedly repelled vermin. The insured guaranteed that all roaches, flying insects and rodents could not pass the charge in the wire. When it didn’t work and a customer called to complain the insured would ignore the complaints. Since the tropical Hawaiian climate is a prime breeding ground for insects, the insured had no lack of customers. He bought a Ferrari sports car with the profits. After gaining her confidence the adjuster confronted the secretary with the result of his investigation. He told her he knew that the appraisals were not done by the jeweler. He showed her where he had discovered that the typewriter used to type the description of the items of jewelry was different from the typewriter used to type the name of the appraiser. He told her that he liked her and would be very sorry if she was involved in aiding her boss in committing a crime. She began to cry. When he calmed her down, she confessed that she had typed in all of the descriptions and the values of the jewelry. Her boss, the insured, took the print ball out of the IBM Selectric typewriter and smashed it under his shoe. If asked, she was to say that his children broke the typewriter while playing with it. The adjuster thanked her, paid for lunch and suggested she get a new job. He told her he would do what he could to keep her out of criminal problems. He then got permission from his client, the insurer, to deny the claim. He wrote a simple brief, letter to the insured stating as follows: “Your claim is denied because it was presented by you with the knowledge that it was false and fraudulent.” He said nothing more. The adjuster, as required by law, reported his findings to the local police agency and to the U.S. Postal Inspectors. Both promised to complete a prompt criminal investigation and prosecute the insured for insurance fraud. The adjuster waited, patiently, for five years. Every twelve months he would ask the police concerning their investigation. He would always receive the same response “We’re working on it.” Five years elapsed since his conviction. He is still making a living as a contractor in Hawaii defrauding his customers. He paid when the probation officer caught him what he told the probation officer he could afford. In five years the insured paid, on the restitution order that is a condition of his probation, a total of $250.00. His probation is over. The crime did not succeed. He did not collect $500,000. The insurance company did not succeed. It paid out over $10,000 to its investigators which it will never recover and the ordered restitution was never paid. Adapted from my book "Insurance Fraud Costs Everyone" available at Available as a Kindle Book and Available as a Paperback from Amazon.com https://www.amazon.com/Candy-Abel-Murder-Insurance-Money/dp/1976823757/ref=sr_1_1?s=books&ie=UTF8&qid=1517924833&sr=1-1&keywords=%22candy+and+abel%22. Read the full article at https://zalma.com/blog (c) 2024 Barry Zalma & ClaimSchool, Inc. Go to X @bzalma; 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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

It is not Bad Faith Only to Deny a Claim Post 4734 The California Court of Appeals dealt with a claim by Wynzell Lynn, Jr. in a breach of insurance contract case against defendants are AAA Life Insurance Company and its agent, Craigory Webb. Plaintiff appealed from a final judgment of dismissal that was entered after the trial court struck certain causes of action in plaintiff's operative complaint and sustained the defendants' demurrer as to other causes of action, without leave to amend. In Wynzell Lynn, Jr. v. AAA Life Insurance Company et al., F085402, California Court of Appeals, Fifth District (February 9, 2024) explained in a lengthy opinion why the trial court erred. FACTUAL BACKGROUND Plaintiff purchased from defendant AAA Life Insurance Company (AAA) a life insurance policy for himself, along with a child term rider (rider) providing up to $10,000 in coverage per insured child. According to the First Amended Complaint (FAC) plaintiff understood from his prepurchase conversations with Webb that the rider would cover all of the children in plaintiff's household. When plaintiff first contacted Webb within their household were four children under the age of 19. Webb, as the agent for the insurer, stated, "'the rider covers all your children for $7.00." The three-page rider contained the following relevant provisions. The rider "provides term life insurance coverage for each Insured Child." An Eligible Child must be dependent upon the Insured for support and living within the Insured's household or attending an educational institution as a full-time or part-time student. In November 2020, about seven months after plaintiff's policy became effective, tragically, Bowen was fatally shot. On the date of his death, Bowen was 17 years old, unmarried, financially dependent on plaintiff, and living in plaintiff's household. DISCUSSION Breach of Contract (Express Contract Theory) To the extent the rider can reasonably be interpreted to provide coverage for a child with a relationship to the insured akin to Bowen's relationship with plaintiff, the FAC properly pleads the element of breach-the only element the trial court found missing. In addition, in Shade Foods, Inc. v. Innovative Products Sales &Marketing, Inc. (2000) 78 Cal.App.4th 847 (Shade Foods) the Court of Appeals held that an insurance carrier is "bound by its agent's interpretation of coverage under the policy," and an agent's authority to bind the principal "unquestionably extends to giving ambiguous contract provisions an interpretation that the insurer itself might reasonably adopt." As a result, the court concluded, the insurer was "bound by its agent's interpretation of the contract." Breach of the Covenant of Good Faith and Fair Dealing Negligence Accordingly, it concluded the FAC alleges adequate facts to show a special duty of care, breach of that duty, causation, and damages. ZALMA OPINION This case, over a $10,000 dispute, went through a claim denial, a demurrer dismissing the entire action, an appeal, a reversal of the breach of contract claim, and a return to the trial court to allow amendment of a statutory breach claim, if possible, and trial on the breach of contract case. No bad faith because it took the court to find a statute making a person "held out as a son" to be a son even if there is no physical, natural relationship nor a relationship by adoption. This is a case where the concept of "millions for defense and not a dime for tribute" requires reconsideration, mediation and settlement. (c) 2024 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 my substack at https://barryzalma.substack.com/publish/post/107007808 gO to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Legal Conclusions are Not Allegations of Fact Post 4734 Zox LLC ("Zox") appealed the district court's grant of summary judgment in favor of West American Insurance Company. The district court held that West American had no duty to defend or indemnify Zox in an underlying trademark dispute between Zox and a group of entrepreneurs known as the "Zox Brothers" ("the Zox Litigation"). Zox contends the district court erred because the Zox Brothers sought damages for three potentially covered claims: (1) malicious prosecution; (2) disparagement; and (3) use of an "advertising idea." In ZOX LLC, a California Limited Liability Company, v.  West American Insurance Company; et al., No. 23-55125, United States Court of Appeals, Ninth Circuit (February 9, 2024) the Ninth Circuit resolved the dispute. ANALYSIS Under California law, a liability insurer owes a broad duty to defend its insured against claims that potentially seek damages within the coverage of the policy. Coverage turns not on the technical legal cause of action pleaded by the third party but on the facts alleged. While the duty to defend is broad, an insurer will not be compelled to defend its insured when the potential for liability is tenuous and farfetched. To determine whether the duty to defend was triggered, the Ninth Circuit was compelled to compare the allegations in the Zox Brothers' pleadings ("the Pleadings") with the terms of West American's Insurance Policy ("the Policy"). Malicious Prosecution To plead a malicious prosecution claim, the Zox Brothers must plead facts to prove that an underlying action was initiated or maintained (i) by, or at the direction of, [Zox] and pursued to a legal termination in favor of the Zox Brothers; (ii) without probable cause; and (iii) with malice. The Zox Brothers did not plead facts, nor provide extrinsic evidence, to satisfy any of the requisite elements of a malicious prosecution claim. The Pleadings did not trigger coverage for malicious prosecution. Disparagement To plead a disparagement claim, the Zox Brothers must plead facts to show a false or misleading statement that (1) specifically refers to the Zox Brothers' product or business and (2) clearly derogates that product or business. The Ninth Circuit was required to look past labels and at the facts alleged. Zox was unable to cite a single factual pleading in support of a disparagement claim. Appropriation of Advertising Ideas Where there is a duty to defend, there may be a duty to indemnify; but where there is no duty to defend, there cannot be a duty to indemnify. ZALMA OPINION The Ninth Circuit applied the clear and unambiguous language of the policy to the "facts" alleged; found that the allegations were mostly speculative or based on legal conclusions, failure to allege facts to support the three claims failed and, therefore, the Ninth Circuit had no choice but to affirm the summary judgment find no duty to defend nor a duty to indemnify. (c) 2024 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 my substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com  https://www.newsbreak.com/@c/1653419?s=01 Go to X @bzalma; 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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Unrepaid, Unrecoverable, or Outstanding Credit Exclusion Unrepaid, Unrecoverable, or Outstanding Credit Exclusion Unenforceable Post 4731 Huntington National Bank ("Huntington") sued AIG Specialty Insurance Company and National Union Fire Insurance Company of Pittsburgh, Pennsylvania (together, "AIG") alleging breach of contract and bad faith stemming from AIG's denial of insurance coverage for Huntington's settlement of a bankruptcy fraudulent transfer proceeding brought by the trustee of a bankrupt company. In granting summary judgment for AIG, the district court held that: In Huntington National Bank v. AIG Specialty Insurance Co., et al., No. 23-3039, United States Court of Appeals, Sixth Circuit (February 1, 2024) the Sixth Circuit resolved the dispute. FACTS AIG issued to Huntington a bankers professional liability insurance (BPL) policy for that provided coverage up to $15 million, after a $10 million retention. Any liability exceeding the primary policy was covered by an excess policy issued by National Union for the same coverage period, which provided $10 million in excess coverage. The parties do not dispute that these policies apply to Huntington's claim. Following the FBI raid, creditors of Cyberco and Teleservices, both entirely fraudulent companies, discovered that the companies were bankrupt. The trustees of Cyberco and Teleservices filed adversary proceedings against Huntington, claiming that Huntington put its desire to be repaid ahead of its concerns that Watson was committing fraud and, by doing so, perpetuated the Ponzi scheme to its benefit and other lenders' detriment. The bankruptcy proceedings were long and complex, including two trials and multiple opinions.  Huntington argued it was not liable for any repayments before April 30, 2004, and that its liability was thus limited to the $12,821,897.07 in loan repayments for which the Sixth Circuit had already found Huntington liable. THE INSURANCE CLAIM Throughout the bankruptcy litigation, Huntington sent AIG several requests for coverage. AIG disclaimed coverage, acknowledging that there was "potential coverage" under the policy because the Wrongful Acts alleged arose from Huntington's performance of banking services to Cyberco, but citing  exclusions. AIG refused Huntington's claims. Huntington subsequently sued AIG. AIG also moved for summary judgment, asserting that Huntington's settlement payment was not a "Loss" under the policy and, even if it was, Endorsements 5, 7, and 10 precluded coverage. The district court granted AIG's motion for summary judgment. ANALYSIS The Sixth Circuit reversed the district court's grant of summary judgment for AIG on the insurability of Huntington's claim under Ohio law and the exclusion of Huntington's claim under Endorsement 7. ZALMA OPINION Bankruptcy litigation, banking, and fraud upon a bank by a Ponzi schemer who, when caught by the FBI committed suicide, was sued by creditors of the Ponzi scheme because the bank had its loan repaid and they did not. After lengthy litigation the bank settled the bankruptcy suits only to have its insurer refuse to pay based upon an exclusion that was not sufficiently clear to be enforced. AIG will need to pay its limits to its insured and the excess - that followed form with AIG - will probably find it must pay its limits as well. The Sixth Circuit read the full policy and interpreted it in line with Ohio law as should AIG before it rejected coverage. (c) 2024 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 my substack at https://barryzalma.substack.com/publish/post/107007808 Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Unrepaid, Unrecoverable, or Outstanding Credit Exclusion Unenforceable Post 4731 Huntington National Bank ("Huntington") sued AIG Specialty Insurance Company and National Union Fire Insurance Company of Pittsburgh, Pennsylvania (together, "AIG") alleging breach of contract and bad faith stemming from AIG's denial of insurance coverage for Huntington's settlement of a bankruptcy fraudulent transfer proceeding brought by the trustee of a bankrupt company. In granting summary judgment for AIG, the district court held that: In Huntington National Bank v. AIG Specialty Insurance Co., et al., No. 23-3039, United States Court of Appeals, Sixth Circuit (February 1, 2024) the Sixth Circuit resolved the dispute. FACTS AIG issued to Huntington a bankers professional liability insurance (BPL) policy for that provided coverage up to $15 million, after a $10 million retention. Any liability exceeding the primary policy was covered by an excess policy issued by National Union for the same coverage period, which provided $10 million in excess coverage. The parties do not dispute that these policies apply to Huntington's claim. Following the FBI raid, creditors of Cyberco and Teleservices, both entirely fraudulent companies, discovered that the companies were bankrupt. The trustees of Cyberco and Teleservices filed adversary proceedings against Huntington, claiming that Huntington put its desire to be repaid ahead of its concerns that Watson was committing fraud and, by doing so, perpetuated the Ponzi scheme to its benefit and other lenders' detriment. The bankruptcy proceedings were long and complex, including two trials and multiple opinions.  Huntington argued it was not liable for any repayments before April 30, 2004, and that its liability was thus limited to the $12,821,897.07 in loan repayments for which the Sixth Circuit had already found Huntington liable. THE INSURANCE CLAIM Throughout the bankruptcy litigation, Huntington sent AIG several requests for coverage. AIG disclaimed coverage, acknowledging that there was "potential coverage" under the policy because the Wrongful Acts alleged arose from Huntington's performance of banking services to Cyberco, but citing  exclusions. AIG refused Huntington's claims. Huntington subsequently sued AIG. AIG also moved for summary judgment, asserting that Huntington's settlement payment was not a "Loss" under the policy and, even if it was, Endorsements 5, 7, and 10 precluded coverage. The district court granted AIG's motion for summary judgment. ANALYSIS Under Ohio law, an insurance policy is a contract between the insurer and the insured. It is "well-settled" in Ohio law that, where provisions of a contract of insurance are reasonably susceptible of more than one interpretation, they will be construed strictly against the insurer and liberally in favor of the insured. Under the insurance policy, the definition of "Loss" excludes "civil or criminal fines or penalties imposed by law, punitive or exemplary damages . . . or matters that may be deemed uninsurable under the law pursuant to which this policy shall be construed." Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Chutzpah: After Pleading Guilty Fraudster Tried to Reduce his Sentence by an Appeal Post 473o --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

UIM Policy Reduced Limit Reduced by Amount Paid by Other Insurers In an interpleader action involving the insurance coverage for survivors of a tragic auto accident. De Smet Insurance Company of South Dakota (De Smet) proposed distribution of the available insurance funds that had been paid into the Court. Go to X @bzalma; Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

If Policy Says Building Coverage is "Not Provided" There Can be no Claim Post 4728 Plaintiff Kota Me Patates LLC (“KMP”) filed a motion to compel appraisal to abate this insurance coverage dispute. Defendant Nationwide Mutual Fire Insurance Company responded with a separate motion for summary judgment asserting that the policy does not cover KMP's claimed losses. In Kota Me Patates LLC v. Nationwide Mutual Fire Insurance Company, No. 4:23-cv-01573, United States District Court, S.D. Texas, Houston Division (December 21, 2023) the USDC's magistrate judge recommended a resolution of the disputes. BACKGROUND KMP had a business insurance policy with Nationwide (the “Policy”), effective from January 1, 2020 to January 1, 2021. The Policy states that it “includes Buildings ..., Business Personal Property ..., or both, depending on whether a Limit of Insurance is shown in the Declarations for that type of property.” (emphasis added). The referenced Declarations page explicitly states that coverage for KMP's building is “NOT PROVIDED[.]” On January 24, 2022, a year after expiration of the policy a representative from the office of KMP's attorney contacted Nationwide to report a claim for structural damage to KMP's property. The damage allegedly resulted from a plant explosion two years earlier, on January 24, 2020. KMP sued Nationwide in Texas state court. Nationwide removed the suit to the USDC. In the meantime, Nationwide contacted KMP's counsel to obtain more information about KMP's claim. Eventually, KMP's attorney sent a formal notice of claim, stating that KMP intended to invoke the Policy's appraisal provision. Nationwide requested more information, including an opportunity to inspect the asserted damage and a sworn proof of loss. KMP failed to provide the information that Nationwide requested. Nationwide therefore denied coverage for the loss, noting that KMP failed to provide a description of how, when and where the loss or damage occurred, did not provide prompt notice of the loss or damage, and failed to submit a signed, sworn proof of loss as requested. Despite filing the suit months earlier, KMP's attorney finally sent Nationwide a demand letter on October 2, 2022. The letter included an estimate of $92,508.92 to repair KMP's structure. KMP then filed a motion to compel appraisal and abate the suit. Nationwide instead filed a motion for summary judgment. ANALYSIS Nationwide sought summary judgment on KMP's breach of contract claim on multiple grounds, including that the Policy does not cover KMP's claim for damages to its building. Given the clear Policy language, the Court had no need to address Nationwide's alternative contentions. The Policy provides zero coverage for any damage to the building. Because Nationwide did not breach the Policy by denying coverage, it is entitled to summary judgment on KMP's breach-of-contract claim. ZALMA OPINION The KMP claim was incompetent on many bases, not the least of which was a claim for damage to a building that the policy explicitly said in bold print that building coverage was "NOT PROVIDED." Add to that a two year late report, no compliance with policy conditions, and a spurious argument for tort damages and the Magistrate apparently had no choice but to recommend granting Nationwide's motion and sending KMP and its counsel home with a total loss. Counsel for KMP apparently failed to read the Declarations page of the policy. A total waste of time for the litigants and the court. (c) 2024 Barry Zalma & ClaimSchool, Inc. Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Injured by an Aircraft Fuselage Arose Out of Ownership of Aircraft Post 4727 A woman was severely injured while moving an inoperable airplane. She now seeks to recover from her husband's homeowner's insurance policy. The insurance policy excludes injuries "arising out of" the ownership, maintenance, use, loading or unloading of an aircraft. The policy further defines "aircraft" as "any conveyance used or designed for flight." In Lisa Thompson v. United Services Automobile Association and Matthew Mrzena, No. S-18462, Supreme Court of Alaska (January 26, 2024) the Supreme Court resolved the dispute over interpretation of the policy wording. FACTS Claiming that the policy should cover her injury because in her view the aircraft became mere "parts" after her husband removed the wings, elevators, and tail rudder. The superior court disagreed, concluding that the fuselage was still an "airplane" and that, in any event, her injuries arose from her husband's ownership of the aircraft. The court determined that her injuries were therefore not covered by the policy. Around 2011 Matthew Mrzena purchased a 1946 Piper PA-12 airplane (Piper). Mrzena stopped using the Piper in 2014 when it failed an annual inspection and was deemed no longer airworthy. Mrzena removed the wings, tail rudder, and elevators from the fuselage, leaving the remainder of the fuselage and many other parts intact, including the wheeled landing gear, propeller, seats, windows, and engine. Mrzena kept the Piper in a plastic temporary garage at his home in Palmer, Alaska. In 2019, Mrzena purchased a new residence where he planned to live with his now-wife Lisa Thompson. During the summer Thompson and Mrzena were in the process of moving their belongings, including the Piper, to the new home. As part of the move the Piper needed to be pushed out of the garage and onto a trailer. Mrzena was pushing from the back of the Piper, with Thompson at the front, when Thompson became pinned under the Piper's nose. Thompson's resulting injuries were severe. At the time of the injury Mrzena had the Piper registered as an aircraft with the Federal Aviation Administration (FAA). He also held an aircraft owner-specific liability policy on the Piper with Avemco Insurance Company (Avemco). Throughout his ownership of the Piper, Mrzena continued to renew both the Piper's FAA registration and the Avemco aircraft policy. DISCUSSION Interpreting USAA's aircraft exclusion pursuant to the reasonable expectations of the lay insured, the Supreme Court concluded that the policy's exclusion of coverage for injuries arising out of the ownership or maintenance of an aircraft applies to exclude coverage for Thompson's injuries. The USAA policy broadly excludes coverage for bodily injury "arising out of"  ownership and maintenance of an aircraft. This language supports the reasonable expectation that Thompson's injuries would not be covered because Mrzena and Thompson's movement of the fuselage, and her resulting injuries, "ar[ose] out of" Mrzena's ownership and maintenance of the Piper. Reasonable plane owners would not expect that their planes cease to be aircraft solely because the aircraft had been partially disassembled to perform maintenance. . ZALMA OPINION Common sense exists in the Alaska Supreme Court. An aircraft under repair is still an aircraft even if it cannot fly. The Plaintiff was injured while she an her husband were moving the aircraft to a new home where the intended repairs could continue. Therefore, the Plaintiff and her husband were involved in the ownership, maintenance use of an aircraft and the exclusion applies. (c) 2024 Barry Zalma & ClaimSchool, Inc. Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL Volume 28 Issue 3 Post 4726Subscribe AT https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkcitKvwMc3HNWiyrn6jw8ERzpnmgU_oNjTrm1U1YGZ7_ay4AZ7_mCLQBKsXokYWFyD_Xo_zMFYUMovVTCgTAs7liC1eR4LsDBrk2zBNDMBPp7Bq0VeAA-SNvk6xgrgl8dNR0BjCMTm_gE7bAycDEHwRXFAoyVjSABkXPPaG2Jb3SEvkeZXRXPDs%3D 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/ The current issue can be read in full at http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-02-01-2024.pdf and includes the following articles: Fraudulently Submitting Fake Applications Violates Licensing Statutes Insurance Producer Fraudulently Submits Applications to Insurer Read this full article and the entire issue of ZIFL http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-02-01-2024.pdf More McClenny Moseley & Associates Issues This is ZIFL’s twenty third 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. 12/19/2023 $10,170,665.53 Default Judgment Against MMA (Including Interest) Read this full article and the entire issue of ZIFL http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-02-01-2024.pdf Now Available 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. Read this full article and the entire issue of ZIFL http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-02-01-2024.pdf Convictions From the Coalition Against Insurance Fraud Dr. Michael Villarroel, working as a doctor in the US Navy, was sentenced in federal court to one year and one day in custody. Villarroel admitted that from 2012 to at least December 2015, he conspired with other members of the Navy to obtain money from the United States by making claims for life insurance payments based on exaggerated or fake injuries and disabilities. Villarroel certified that he reviewed the records and determined the injuries were legitimate when in fact he knew they were fake or exaggerated. Read this full article and the entire issue of ZIFL here.http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-02-01-2024.pdf Health Insurance Fraud Convictions Four Plead Guilty to Healthcare Offenses, Including Doctors and Lab Owners Mark Rubin, 58, Renee Field, 44, Kelly Nelson, 52, and Carlos Hornedo, 61, were all charged via felony informations in December 2023. Mr. Rubin, on January 17th, and Mr. Hornedo, on January 10th, both pleaded guilty to one count of conspiracy to solicit and receive illegal kickbacks. federal prison, a $250,000 fine, and may be ordered to pay restitution. Read this full article and the entire issue of ZIFL http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-02-01-2024.pdf Lawyer With Unfortunate Name & Advertising Asking that People Should ‘Hire A Dick’ Faces Six Figure Sanctions Eric B. Dick, Esq, for the second time in three months has been ordered to reimburse an insurer more than $100,000 for filing a “frivolous, groundless” lawsuit made “solely for the purpose of harassment.” Read this full article and the entire issue of ZIFL http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-02-01-2024.pdf --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Uncovering Insurance Fraud 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:  Recognizing suspicious claims  Proper investigation procedures  Analysis of laws concerning fraudulent personal and real property claims  Evaluating and settling claims The book also examines recent developments in areas such as arson investigation procedures, bad faith, extracontractual damages, The fake burglary, and Lawyers Deceiving Insurers, Courts & Their Clients During, Catastrophes—A New Type Of Fraud and the appendices includes the NAIC Insurance Information and Privacy Protection Model Act and usuable forms for everyone involved in claims. . Table of Contents CHAPTER 1. INSURANCE AND THE INDICATORS AND ELEMENTS OF FRAUD CHAPTER 2. INVESTIGATION CHAPTER 3. THE “ARSON DEFENSE” CHAPTER 4. CIVIL REMEDIES: RESCISSION AND AVOIDANCE CHAPTER 5. CONDITIONS PRECEDENT CHAPTER 6. AUTOMOBILE MATERIAL DAMAGE FRAUD CHAPTER 7. GOOD FAITH; BAD FAITH CHAPTER 8. ADJUSTING AND PAYING THE SUSPICIOUS CLAIM CHAPTER 9. DISPUTE RESOLUTION—SETTLEMENT AND APPRAISAL CHAPTER 10. CASE HISTORIES CHAPTER 11. RESCISSION AS A TOOL TO DEFEAT INSURANCE FRAUD                            FRAUD IN THE ACQUISITION OF INSURANCE CHAPTER 12. LAWYERS DECEIVING INSURERSCOURTS & THEIR CLIENTS DURING CATASTROPHES—A NEW TYPE OF FRAUD -- McClenny Moseley & Associates & Louisiana 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/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

How to Put Fear of Insolvency Into a Defendant For more than fifty six years I have personally seen the fear in the faces of corporate executives faced with a suit claiming wrongful conduct and punitive damages. Even those who knew that they had acted properly and fairly and that the allegations of the suit were totally spurious, the fear and trembling engendered by a suit seeking punitive damages is patent. The defendant who should be leading a charge like General Patton acts more like Prime Minister Neville Chamberlain. Defendants seem to prefer to appease a plaintiff rather than litigate good and viable defenses. Unless counsel advises a 100% chance of total victory – a statement no trial lawyer will ever make – the defendant does not want to go to trial and is willing to pay more than it owes to avoid the potential of a serious punitive damage judgment. Contrary to common belief the chances of a suit seeking punitive damages actually obtaining an award of punitive damages is very small. Defendants often, incorrectly, concentrate on trial verdicts and overlook that almost all civil litigation matters result in out-of-court settlements. Verdicts are important but punitive damage verdicts are more like the tip of the proverbial iceberg than evidence of a trend. Practical evidence indicates that the small number of trials affect decisions in the vast majority of lawsuits that do not proceed to trial. Verdicts are taken as important signals to the litigants. It is important to first understand the basic dynamics of a lawsuit. Most of the work in pre-trial litigation is designed to provide the litigants with enough information to allow them to reach an amicable settlement. A large punitive damages verdict skews the evidence available to the litigants and causes plaintiffs to demand more than their cases are truly worth and defendants to pay more than they should to resolve a suit seeking punitive damages. Under basic American litigation practice the plaintiff has the opening strategic advantage. A plaintiff with a weak case places the defendant in the position of having to defend himself (and therefore incurring legal costs), or else the defendant will be liable for the full claim on a default judgment. Even a defendant facing a suit that has no merit and no chance of success before a court will often be willing to pay an amount that is less than his prospective defense costs to settle the case and “make it go away.” Appeasement of the plaintiff is, to a corporate defendant, seen to be economically the best solution. Most often a defendant is willing to pay a settlement up to the amount of his defense costs in order to avoid having to respond to the plaintiff's complaint. The Supreme Court's rulings in State Farm Mutual Automobile Insurance Co. v. Campbell, 123 S.Ct. 1513, 155 L.Ed.2d 585 (U.S. 2003) limits, by due process, the multipliers that can be applied when setting punitive damages. In addition, the uncertainty posed by the prospect of unlimited punitive damages, combined with the relative probability of a punitive damage award if a case goes to jury trial, provide litigants who demand punitive damages with potent leverage against risk-averse defendants, like insurance companies or candidates for the presidency, and tip the balance in settlement bargains in favor of litigants with weak or even frivolous cases. Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Fortuity Post 4723 Liability insurance requires that the loss or damage that needs defense or indemnity from an insurer, must be contingent or unknown at the time the policy was acquired. For insurance to apply, on a third party policy, the risk of loss insured against must be fortuitous. Simply stated fortuitous means the loss happened by chance. The doctrine of fortuity (accidental or unintended acts causing injury) requires it be established that the event was a chance event beyond the control of the insured. [Martin/Elias Props., 544 S.W.3d at 643 & Blakeley v. Consol. Ins. Co. (Ky. Ct. App. 2021)] A "fortuitous event" is defined as: "[A]ny occurrence or failure to occur which is, or is assumed by the parties to be, to a substantial extent beyond the control of either party." Thus, the requirement of a fortuitous loss is a necessary element of insurance policies based on either an "accident" or "occurrence." The insured has the initial burden of proving that the damage was the result of an "accident" or "occurrence" to establish coverage where it would not otherwise exist [Northville Indus., 89 N.Y.2d at 634).] Once coverage is established, the insurer bears the burden of proving that an exclusion applies. [Consolidated Edison Co. v. Allstate Ins., 774 N.E.2d 687, 746 N.Y.S.2d 623, 98 N.Y.2d 208 (N.Y. 2002)] Insurance is designed to protect against unknown, fortuitous risks, and fortuity is a requirement of all policies of insurance. [Burlington Ins. Co. v. Tex. Krishnas, Inc., 143 S.W.3d 226, 230 (Tex. App.-Eastland 2004, no pet.); Scottsdale Ins. Co. v. Travis, 68 S.W.3d 72, 75 (Tex. App.-Dallas 2001, pet. denied); Two Pesos, Inc. v. Gulf Ins. Co., 901 S.W.2d 495, 502 (Tex.App.-Houston [14th Dist.] 1995, no writ) (op. on reh'g).] An insured cannot insure against something that has already begun and which is known to have begun. [Summers v. Harris, 573 F.2d 869, 872 (5th Cir.1978).] The fortuity doctrine precludes coverage for two categories of losses: known losses and losses in progress. A "known loss" is one that the insured knew had occurred before the insured entered into the contract for insurance. [Burch v. Commonwealth County Mut. Ins. Co., 450 S.W.2d 838, 840-41 (Tex.1970)] A "loss in progress" involves those situations in which the insured knows, or should know, of a loss that is ongoing at the time the policy is issued. [Warrantech Corp. v. Steadfast Ins. Co., 210 S.W.3d 760 (Tex. App. 2006)] In determining whether an event constitutes an accident courts must analyze this issue according to the doctrine of fortuity: whether the insured intended the event to occur; and whether the event was a chance event beyond the control of the insured. Policy language insuring against accidents applies only if the insured did not intend the event or result to occur. [Blakeley v. Consol. Ins. Co. (Ky. Ct. App. 2021)] Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL Volume 28 Issue 3 Post 4726Subscribe AT https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkcitKvwMc3HNWiyrn6jw8ERzpnmgU_oNjTrm1U1YGZ7_ay4AZ7_mCLQBKsXokYWFyD_Xo_zMFYUMovVTCgTAs7liC1eR4LsDBrk2zBNDMBPp7Bq0VeAA-SNvk6xgrgl8dNR0BjCMTm_gE7bAycDEHwRXFAoyVjSABkXPPaG2Jb3SEvkeZXRXPDs%3D 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/ The current issue can be read in full at http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-02-01-2024.pdf and includes the following articles: Fraudulently Submitting Fake Applications Violates Licensing Statutes Insurance Producer Fraudulently Submits Applications to Insurer Read this full article and the entire issue of ZIFL http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-02-01-2024.pdf More McClenny Moseley & Associates Issues This is ZIFL’s twenty third 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. 12/19/2023 $10,170,665.53 Default Judgment Against MMA (Including Interest) Read this full article and the entire issue of ZIFL http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-02-01-2024.pdf Now Available 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. Read this full article and the entire issue of ZIFL http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-02-01-2024.pdf Convictions From the Coalition Against Insurance Fraud Dr. Michael Villarroel, working as a doctor in the US Navy, was sentenced in federal court to one year and one day in custody. Villarroel admitted that from 2012 to at least December 2015, he conspired with other members of the Navy to obtain money from the United States by making claims for life insurance payments based on exaggerated or fake injuries and disabilities. Villarroel certified that he reviewed the records and determined the injuries were legitimate when in fact he knew they were fake or exaggerated. Read this full article and the entire issue of ZIFL here.http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-02-01-2024.pdf Health Insurance Fraud Convictions Four Plead Guilty to Healthcare Offenses, Including Doctors and Lab Owners Read this full article and the entire issue of ZIFL http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-02-01-2024.pdf Lawyer With Unfortunate Name & Advertising Asking that People Should ‘Hire A Dick’ Faces Six Figure Sanctions Read this full article and the entire issue of ZIFL http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-02-01-2024.pdf New Book Now Available from Barry Zalma Property Investigation Checklists: Uncovering Insurance Fraud, 14th Edition Read this full article and the entire issue of ZIFL http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-02-01-2024.pdf Other Insurance Fraud Convictions Life Insurance Fraud in South Africa Onthatile Sebati and her co-accused and cousin Tumelo Mokone with Mokone's brother Kagiso, were found guilty of killing her parents, sister and brother in 2016. (c) 2024 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 my substack at https://barryzalma.substack.com/publish/post/107007808 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

To Obtain Coverage Insured Must Pay a Premium Erie Insurance Exchange (Erie Insurance) claims that the trial court erred in granting partial summary judgment in favor of Icon, d/b/a Allure on the Lake (Icon), on Icon's complaint for breach of contract. Erie Insurance contends that the trial court improperly determined as a matter of law that the commercial insurance policy (the Policy) it issued to Icon was ambiguous and entitled Icon to additional income protection coverage after a fire had destroyed Icon's building. In Erie Insurance Exchange v. Icon, Inc., d/b/a Allure on the Lake, et al., No. 23A-PL-664, Court of Appeals of Indiana (January 12, 2024) the Court of Appeals interpreted the entire policy. FACTS On June 3, 2019, a fire in Chesterton, Indiana destroyed a banquet hall (the Hall) that Icon owned. At the time of the fire, the Hall was insured by Erie Insurance. The Policy stated that "in return for your timely premium payment, your compliance with all of the provisions of this policy . . . [Erie Insurance agrees] to provide the coverages you have purchased." [emphasis added] The Declarations page specifically directed the insured to refer to the Supplemental Declarations to find additional information about included coverages under the Policy.  Income protection coverage-as identified in "Coverage 3" of the Declarations-is defined as loss of "income" and/or "rental income" you sustain due to partial or total "interruption of business" resulting directly from "loss" or damage to property on the premises described in the "Declarations" from a peril insured against. "Loss" or damage also includes property in the open, or in a vehicle, on the premises described in the "Declarations" or within 1,500 feet thereof. The Supplemental Declarations specifically indicate what "amount of insurance" the Policy provides for by displaying a dollar amount under the "amount of insurance" column. The Policy further provided that when additional income coverage is not purchased by the insured, a minimal, i.e., "standard" protection coverage is provided as part of the basic package. CLAIM PAYMENTS Erie Insurance paid both the property damage and building contents portion of Icon's claim, it maintained that the maximum income protection afforded under the Policy was $25,000 and not $1 million because Icon did not pay a premium for additional income protection coverage. REFUSAL TO PAY INCOME LOSSES breach of contract and bad faith. The trial court granted Icon's cross-motion for partial summary judgment, concluding that the Policy was ambiguous as to the available amount of income protection coverage to which Icon was entitled. DISCUSSION AND DECISION Insurance policies are contracts subject to the same rules of judicial construction as other contracts. Insurance policies must be read as a whole. The trial court’s conclusion was reversed and the trial court was instructed to enter partial summary judgment for Erie Insurance and to conduct further proceedings consistent with this opinion. ZALMA OPINION Insurance contracts must be read before accepting the offer from an insurer to insure. In this case the insured, Icon, either failed to read the coverages provided or decided to not purchase income coverages. The Court of Appeals found that since Icon did not pay a premium for the income coverage it had no coverage. Regardless of why it did not pay the premium by not doing so Icon recovered the minimal coverage for Income but not the coverages they wanted after a real loss. (c) 2024 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 my substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com  https://www.newsbreak.com/@c/1653419?s=01 Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurance Fraud Costs Everyone 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. The story that follows are designed to help everyone Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators than any Other Crime. The insurance industry, unintentionally, instructs its insureds how to successfully perpetrate insurance fraud. Insurers encourage fraud by: 1. decimating its professional claim staff by short-sighted cost cutting. 2. by selling insurance to persons unknown to the company or the broker. 3 by accepting the word of new applicants without a pre-risk survey. 4 by allowing threats of bad faith lawsuits to intimidate the company into a quick settlement. Why A Retail Baseball Card Store Was an Invitation to Fraud The husband and wife had failed in several tries to conduct a profitable retail business. They simultaneously closed their comic book store and opened a new business called Out In Left Field where they sold baseball cards in the 1980’s at the apex of the baseball card fad. They located in a new, strip shopping center, in a residential area of Fresno, California. This type of loss will continue to occur as long as insurers fail to maintain adequately trained claims and underwriting staff. If insurers continue to accept insureds at face value without any pre-risk inspections or investigation this type of loss will multiply. Insurance agents and brokers will have their loss ratios increase logarithmically. Profits will fall because they did not inspect and control the risks they insure. Adapted from my book, Insurance Fraud Costs Everyone Available as a Kindle Book and a Paperback from Amazon.com. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL Volume 28, Issue 2 Read the full January 15, 2024 issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-01-15-2024.pdf Subscribe here: https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkcitKvwMc3HNWiyrn6jw8ERzpnmgU_oNjTrm1U1YGZ7_ay4AZ7_mCLQBKsXokYWFyD_Xo_zMFYUMovVTCgTAs7liC1eR4LsDBrk2zBNDMBPp7Bq0VeAA-SNvk6xgrgl8dNR0BjCMTm_gE7bAycDEHwRXFAoyVjSABkXPPaG2Jb3SEvkeZXRXPDs%3D 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/ The current issue includes the following articles: GEICO Takes a Bite Out of Fraud NO FAULT INSURANCE IS A FORMULA FOR INSURANCE FRAUD GEICO, as a pro-active victim of insurance fraud, sued Jean-Pierre Barakat, M.D., et al, alleging that Defendants defrauded GEICO in violation of the Racketeering Influenced and Corrupt Organizations Act (“RICO,” 18 U.S.C. § 1962(c), (d)), by submitting hundreds of fraudulent bills for no-fault insurance charges. Plaintiffs also allege common law fraud and unjust enrichment and seek a declaratory judgment as to all pending bills. In Government Employees Insurance Company, et al v. Jean-Pierre Barakat, M.D.et al No. 22-CV-07532 (NGG) (RML), United States District Court, E.D. New York (January 2, 2024) the USDC provided an injunction. Read the full January 15, 2024 issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-01-15-2024.pdf More McClenny Moseley & Associates Issues This is ZIFL’s twenty first 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 January 15, 2024 issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-01-15-2024.pdf Florida Residential Property Claims and Litigation Report Closed Claims Data for Calendar Year 2022 as of 11/1/2023 The full report is available at https://www.floir.com/docs-sf/default-source/property-and-casualty/other-property-casualty-reports/january-2024-pclr.pdf?sfvrsn=d8c92a4f_4 Read the full January 15, 2024 issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-01-15-2024.pdf Now Available The Compact Book of Adjusting Property Claims – Fourth Edition ALLSTATE TAKES A BITE OUT OF CRIME Another Proactive Insurer Works to Take the Profit Out of Insurance Fraud In Allstate Insurance Company, Allstate Indemnity Company, Allstate Fire & Casualty Insurance Company, and Allstate Property & Casualty Insurance Company v. Bradley Pierre. Insurance Fraud Next to tax fraud, insurance fraud is the most practiced crime in the world. It is perpetrated by members of every race, religion, and nationality. It is found in every profession. The possibility of a tax-free profit when coupled with the commonly held beli Read the full January 15, 2024 issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-01-15-2024.pdf Health Insurance Fraud Convictions New Jersey Laboratory and Its Owner and CEO Agree to Pay Over $13 Million to Settle Allegations of Kickbacks Clinical laboratory RDx Bioscience Inc. (RDx), of Kenilworth, New Read the full January 15, 2024 issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/01/ZIFL-01-15-2024.pdf (c) 2024 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. Go to X @bzalma; Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Bankruptcy of Storage Facility Created a Compensable Loss Plaintiffs insurers sought a declaration that there is no coverage for the insurance claim made under the policy for the loss of soybeans. The Defendants moved for partial summary judgment on its first and second counterclaim. In Endurance American Insurance Company, Zurich American Insurance Company, and, Atain Insurance Company v. Stonex Commodity Solutions, LLC F/K/A FC Stone Merchant Services, LLC, 2024 NY Slip Op 30076(U), Index No. 653234/2022, Motion Seq. No. 004, NYSCEF Doc. No. 108, Supreme Court, New York County (January 8, 2024) the Supreme Court (trial court) resolved the dispute. BACKGROUND ZALMA OPINION Since the evidence showed that there were enough soybeans to cover that deposited by the defendants when EGT was forced into bankruptcy the division of the assets by the court resulted in a loss to the defendants that was not excluded from the coverages provided by the Plaintiffs. (c) 2024 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 my substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com  https://www.newsbreak.com/@c/1653419?s=01 Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Another Proactive Insurer Works to Take the Profit Out of Insurance Fraud Post 4709 In Allstate Insurance Company, Allstate Indemnity Company, Allstate Fire & Casualty Insurance Company, and Allstate Property & Casualty Insurance Company v. Bradley Pierre, Medical Reimbursement Consultants Inc., Marvin Moy, M.D., Rutland Medical P.C. D/B/A Medicalnow, William A. Weiner, D.O., and Nexray Medical Imaging, P.C. d/b/a Soul Radiology Medical Imaging, No. 23-CV-06572 (NGG) (LB), United States District Court, E.D. New York (January 8, 2024) Allstate joins GEICO and other insurers taking a proactive effort against no-fault insurance fraud perpetrators. Plaintiffs Allstate Insurance Company sued Bradley Pierre, et al, CONCLUSION Allstate's motion for preliminary injunctive relief was GRANTED. Consequently: all pending no-fault collection arbitrations by Rutland (or its agents) against Plaintiffs are stayed. Rutland is enjoined from filing any further no-fault collection arbitrations or lawsuits against Allstate pending resolution of the instant federal action. Allstate's request that the court waive their obligation to post security was also GRANTED. ZALMA OPINION Allstate, like many other insurers writing no-fault auto insurance in New York state find that they are victims of fraudulent schemes like the one described by Allstate in its lengthy and well documented law suit. The court faced with overwhelming evidence, including the fact that one of the defendants is under indictment by the federal Department of Justice. This lawsuit indicates a complete failure of the no-fault insurance system and the inability of the state of New York to police the crime. Allstate, like GEICO, should be honored and emulated for their action in an attempt to take the profit out of insurance fraud. (c) 2024 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 my substack at https://barryzalma.substack.com/publish/post/107007808 Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

LIFE INSURANCE FRAUD FOR FUN & PROFIT "This following 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. The story is one of many designed to help the public Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators than any Other Crime." “George,” Adam said, “The only way we can get out of this financial mess is our life insurance policies.” “I don’t want to die to collect,” George said. “Neither do I,” Adam replied. “But I still want to collect.” “Do you propose to murder me.” “No, George, I propose that we find a homeless person who physically resembles one of us and kill him. We can plant identification on the corpse and then share in the $6,000,000 double indemnity payment.” “My,” replied George, “that’s a brilliant, although evil and criminal, plan.” “I see no other way out. It’s either the death of a useless human being or total financial catastrophe for us.” “Adam, they have a death penalty in this state.” “So, what, the plan is perfect. No one will know. We’ll retire in luxury.” “Okay, I’ll go along with it, but I don’t like it. This is dangerous.” The partners began to travel skid row. They needed a homeless person who physically resembled one of them in height, weight and coloring. It took them a week to find the right person. They befriended him with a bottle of wine and a free meal. They told him that they had just completed a twelve-step program and part of that program was to help a person in need. Together, they took the homeless person to Adam’s house. The partners washed off the grime in Adam’s massive master bath, dressed him in Adam’s clothes, and outfitted him with accessories until he looked like a Century City lawyer about to meet an important client. Although she considered Adam to be a prodigious lover, the young lady was more interested in cash than love. From the hotel, she drove directly to the West Los Angeles station of the Los Angeles Police Department and introduced herself to a detective. She knew that a life insurance claim had been made and wanted the police to know that the person whose murder they were investigating was presently sound asleep in his hotel room at the Four Seasons Hotel in Beverly Hills. She explained to them how Adam, after twenty minutes of horizontal Rhumba, explained to her how he had defrauded an insurance company out of $6,000,000. She explained to the police that she would never be a party to such a crime and wanted it noted in their report that she was the source of the information and the person to whom any rewards posted by the insurance company should be paid. Adam and George were arrested and tried for the murder of Fuzzy as well as several counts of insurance fraud. The testimony of the young lady, the presence of Adam and the Los Angeles Airport recording of George’s license plate on entry and exit from the airport parking lot made their defense impossible. They were convicted. Adam and George are now spending the remainder of their lives in the State Penitentiary. The insurer recovered $4,000,000 of the $6,000,000 (George and Adam had lived well for that year and a half) and paid the lustful young woman a $400,000 reward. She lived happily ever after. Adapted from my book, Insurance Fraud Costs Everyone (c) 2024 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 my substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com  https://www.newsbreak.com/@c/1653419?s=01 Go to X @bzalma; Gnce-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

CONCURRENT CAUSE REQUIRES SEGREGATION OF COVERED FROM NON COVERED LOSSES --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Violation of Statute Allows Suit for Negligent Failure to Resolve Insurance Claim Post 4706 Christine Moody, individually, and in her capacity as the Personal Representative of the Estate of Steven "Troy" Moody, Deceased v. Oregon Community Credit Union, aka OCCU, an Oregon entity, association, union, or corporation et al., Defendants, and Federal Insurance Company, an Indiana corporation, 371 Or. 772, SC S069409, Supreme Court of Oregon (December 29, 2023) Plaintiff, whose husband was accidentally shot and killed during a camping trip, brought this action against defendant, a first-party life insurer, claiming, among other things, that defendant had negligently failed to investigate and pay her claim for policy benefits, causing her to have fewer financial resources to navigate the loss of a bread-winning spouse and, consequently, to suffer economic harm and emotional distress. FACTS In the case now before the Supreme Court it must consider whether plaintiff has alleged a legally protected interest sufficient to subject defendant to liability for emotional distress damages. To decide whether that alleged interest is a legally protected interest sufficient to subject defendant to liability for emotional distress damages. Plaintiff has alleged a viable common-law negligence claim against defendant for emotional distress damages. Therefore, the trial court erred in granting defendant's motions to dismiss plaintiffs negligence claim and in striking her claim for emotional distress damages. ZALMA OPINION The state of Oregon, like many states, has enacted statutes punishing insurers for bad faith claims handling. The insurer, after a change in allegations, paid the plaintiff the $3,000 life insurance limit, only to find itself sued for negligent claims handling. The suit was dismissed by the trial court and reversed by the Court of Appeals and the Oregon Supreme Court. Since the statute requires fair claims handling the plaintiffs allegations allowed it to sue the insurer for emotional distress damages when it initially refused to pay because of an exclusion.  This is a limited decision and stretches the obligations of an insurer beyond fairness and even with a clear and unambiguous exclusion it can be sued for emotional distress. (c) 2024 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. Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Equitable Indemnity Only Available to One Without Fault In Martha M. Fountain and Curtis Fountain v. Fred's, Inc. and Wildevco, LLC v. Tippins-Polk Construction, Inc. and Rhoad's Excavating Services, LLC, of whom Tippins-Polk Construction, Inc. is the Petitioner, Appellate Case No. 2020-000651, Opinion No. 28086, 436 S.C. 40, 871 S.E.2d 166, Supreme Court of South Carolina (Filed March 2, 2022) established the requirements for obtaining equitable indemnity. FACTS Respondent Fred's was a Tennessee corporation that operated a chain of discount general merchandise stores in several states, including South Carolina. In April 2005, Wildevco entered into a contract with general contractor Tippins-Polk for the construction of the Fred's store and adjoining strip center. The construction contract between Wildevco and Tippins-Polk included drawings prepared by an architect, as well as site plans prepared by an engineer. The contract specifically stated that Tippins-Polk was responsible for "All Site Work," including "[g]rading, concrete curbing, utilities & paving [p]er site plans." Wildevco provided Tippins-Polk with two sets of construction drawings—the architectural drawings, which established the design elements including the sidewalk surrounding the store, and the site plans, which controlled the grading, elevations, pavement, and underground utilities. If an inspection had taken place, it would have been visible to the naked eye that an elevation change in the sidewalk existed and was not painted yellow. Five years after the Fred's store opened, Ms. Fountain hit her head and hand on the glass door and fell to her knees. I The case was set for a date certain trial in March 2016. On the eve of trial, Wildevco and Fred's settled with the Fountains for $290,000, with Wildevco paying $250,000 and Fred's paying $40,000. The general theory of the third-party claim was that Tippins-Polk deviated from the site plans and improperly constructed the entrance curbing, which was the sole proximate cause of Ms. Fountain's injuries. As to the relevant elements of equitable indemnification, the trial court found a special relationship existed between Fred's and Tippins-Polk. EQUITABLE INDEMNIFICATION South Carolina has long recognized the principle of equitable indemnification.  Indemnity is that form of compensation in which a first party is liable to pay a second party for a loss or damage the second party incurs to a third party. Tippins-Polk argued that it was error to affirm the finding that Wildevco and Fred's were without fault. Special Relationship As a matter of equity, a party is entitled to indemnity if the relation between the parties is such that either in law or in equity there is an obligation on one party to indemnify the other, as where one person is exposed to liability by the wrongful act of another in which he does not join. The trial court and court of appeals found the connection between Without Fault Since there was no evidence in the record that either Fred's or Wildevco warned of or attempted to remedy the trip hazard identified by their own safety expert, despite the condition existing for almost five years before the accident occurred. In sum, Fred's and Wildevco failed to establish they were without fault in the Fountains’ premises liability action. Because the Supreme Court found Respondents failed to establish they were without fault in the underlying action, the trial court verdict was reversed. ZALMA OPINION (c) 2023 Barry Zalma & ClaimSchool, Inc. Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

No Fault Insurance is a Formula For Insurance Fraud Post 4703 GEICO, as a pro-active victim of insurance fraud, sued Jean-Pierre Barakat, M.D., et al, alleging that Defendants defrauded GEICO in violation of the Racketeering Influenced and Corrupt Organizations Act ("RICO," 18 U.S.C. § 1962(c), (d)), by submitting hundreds of fraudulent bills for no-fault insurance charges. Plaintiffs also allege common law fraud and unjust enrichment and seek a declaratory judgment as to all pending bills. In Government Employees Insurance Company, et al v. Jean-Pierre Barakat, M.D. No. 22-CV-07532 (NGG) (RML), United States District Court, E.D. New York (January 2, 2024) the USDC provided an injunction. BACKGROUND GEICO, faced with at least 43 allegedly fraudulent no-fault claims from health care providers, moved for a preliminary injunction to stay all 43 pending no-fault insurance collection arbitrations commenced against GEICO by or on behalf of Defendants. In New York, an insurer is required to provide certain no-fault insurance benefits ("No-Fault Benefits") to the individuals that they insure ("Insureds"). No-Fault Benefits cover up to $50,000 of necessary healthcare expenses that result from automobile accidents. These benefits are provided to ensure that injured victims of motor vehicle accidents have an efficient mechanism to pay for and receive the health care services that they need. Insurers are only given 30 days to review and investigate claims before paying those claims to avoid risk of penalty for denying or delaying a claim. Operation of the Alleged Scheme GEICO alleged that in 2021 Defendant Barakat was recruited by the John Doe Defendants to participate in a complex fraudulent insurance scheme Between February 15,2021 and March 3, 2022, Barakat and the John Doe Defendants used Defendant Patriot Medical to bill GEICO and other New York automobile insurers for an experimental treatment called ESWT.   Moreover, Defendants submitted bills seeking more than Evidence of the Alleged Scheme In support of its fraud claims, GEICO has submitted a "representative sample" chart, totaling 1,371 entries of allegedly fraudulent no-fault claims submitted by the Barakat Practices. GEICO asserts that it has paid at least $183,000.00 to the Barakat Practices in no-fault claims. DISCUSSION The showing of irreparable harm is perhaps the single most important prerequisite for the issuance of a preliminary injunction, and the moving party must show that injury is likely before the other requirements for an injunction are considered. The harm must be shown to be actual and imminent, not remote or speculative. CONCLUSION For the foregoing reasons, GEICO's motion to stay all pending no-fault insurance collection arbitrations by or on behalf of Defendants Patriot Medical and JPB Medical waive their obligation to post security were granted. ZALMA OPINION GEICO must be honored for its proactive conduct against fraud perpetrators since it appears the state of New York is not concerned about fraud against insurers and will not prosecute the fraudsters. Using RICO not only will allow GEICO to work to defeat the fraudulent claims but will take the profit out of the crime by forcing the fraudsters to pay the insurers for their fraudulent conduct. Other insurers, facing the same fraud, should jump in with GEICO to make the fraud perpetrators understand that they will lose their criminal profits and may find they will pay the insurers more than they stole. (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 my substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com  https://www.newsbreak.com/@c/1653419?s=01 Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurer has no Obligation to Pay More than an Aggregate Limit of Liability Post 4702 Denis Mucha sustained injuries after he was assaulted by employees at defendant MDF 92 River Street, LLC d/b/a Wild Moose Saloon and The Birch (MDF) (the bar) in Hoboken, New Jersey while a patron. Plaintiff Watford Specialty Insurance Company (Watford) insured MDF. Watford filed a declaratory judgment action seeking a declaration that its obligation to provide insurance coverage to MDF arising out of Mucha's lawsuit were satisfied under its endorsement for assault and battery claims, and Watford's $1,000,000 limit of liability had been exhausted. The Court of Appeal concluded that the trial court's decision was correct when if awarded Watford summary judgment. ZALMA OPINION Watford lived up to its mistake to insure the bar against assault and battery and paid out its policy limit of $1,000,000 to five different victims of the insured's bouncers. Adding insult to the injury, Mr. Mucha tried to get around the assault and battery limit by claiming he was wrongfully evicted from the premises to obtain access to a different policy limit. The trial failed since throwing him down a flight of stairs was a clear battery and fit within the limit. (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 my substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com  https://www.newsbreak.com/@c/1653419?s=01 Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

FOR COVERAGE TO EXIST ON A HOMEOWNERS POLICY THE INSURED MUST RESIDE AT THE RESIDENCE Post 4700 The USDC was asked to grant dueling motions for summary judgment: (1) Motion for Summary Judgment filed by Defendant Nationwide Mutual Fire Insurance Company (“Nationwide”); and (2) Motion for Partial Summary Judgment filed by Plaintiff Maurice Heh, substituted by Perry Rutter and Mary Jane Urbanec, Executor and Executrix of Heh's Estate (hereinafter collectively referred to as “Heh”). In Perry Rutter And Mary Jane Urbanec, Executor And Executrix Of The Estate Of Maurice Heh, Deceased v. Nationwide Mutual Fire Insurance Company, Civil Action No. 20-1581, United States District Court, W.D. Pennsylvania (December 22, 2023) the USDC resolved the dueling motions. BACKGROUND Heh owned a home at 206 Parklane Drive in Braddock, Pennsylvania. At all times relevant to this case, Nationwide insured the risks of loss to the structure and contents of the home. NATIONWIDE INSURANCE POLICY Heh's Nationwide Homeowner Policy names Heh as the insured and lists the Property on its Declarations under “Residence Premises Information.” At Page A1 of the Policy, under “Insuring agreement,” Nationwide avers that coverage is contingent on “compliance with all the policy provisions.” Coverage A (Dwelling) is described as coverage of “[t]he dwelling on the residence premises used mainly as your private residence, including attached structures and attached wall-to-wall carpeting.” Coverage C (Personal Property) is described as the coverage of “personal property owned or used by an insured at the residence premises.” The term “residence premises” is defined as the “one, two, three or four-family dwelling, other structures and grounds located at the mailing address shown on the Declarations unless otherwise indicated.” THE PROPERTY Heh purchased the Property in 1990 and resided there with his wife until her passing. On January 1, 2019, Heh agreed to rent the Property and he and tenants entered a leasing agreement. There were indicia in the record that the agreement between Heh and his tenants provided for the possibility that the tenants would rent to own. There were also indicia in the record that Heh included his furniture-either for the tenants' use during their occupancy or for the tenants to own-in the agreement. After Heh leased the Property he moved to Point Pleasant Retirement Community. Once he moved into Point Pleasant, it is undisputed that Heh did not at any point move back to the Property. FIRE AT THE PROPERTY On February 3, 2020, before the tenants had fully moved out of the Property, there was a fire that resulted in significant physical damage to Heh's home and the personal property inside of it.  Heh sued Nationwide and alleged that an adjuster had determined that the loss caused by the fire resulted in damages over the Policy limit of $172,400.00. DISCUSSION Nationwide established that there was no factual debate about whether Heh was living at the Property. Coverage A (Dwelling Nationwide's Motion for Summary Judgment was granted and Heh's Motion for Partial Summary Judgment was denied. ZALMA OPINION Anyone who reads a homeowners policy - as did the USDC - will see that it only provides coverage if the insured actually lives at the property that is the subject of the insurance. Heh left the residence and moved into a retirement facility. He did not tell his insurer of his move or attempt to obtain coverage for the property as a rental property that is commonly available. As a result of his decision to move Mr. Heh paid for insurance that provided no coverage for the loss to the property although it did provide liability coverage.  I, as was the court, am not unsympathetic to the loss incurred by Mr. Heh, he has no one to blame for his loss but himself. (c) 2023 Barry Zalma & ClaimSchool, Inc. Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Zalma’s Insurance Fraud Letter (ZIFL) continues its 25th 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/ FREE subscriptions are provided to clients and friends of Barry Zalma, Inc., clients of ClaimSchool, Inc. Please feel free to forward ZIFL to anyone you know engaged in the efforts to reduce fraud. If you want to be on the free mailing list as a subscriber to ZIFL please connect and subscribe below. If you want to be removed from the list click on the link at the end of the notice that the new edition of ZIFL is available and your subscription will be deleted. ZIFL will be posted for a full month in pdf and full color and in text format. You can subscribe to ZIFL by clicking on this link. The comments made in each issue of ZIFL are for information only and are not intended as legal advice. If this has been forwarded to you by a colleague Register with Zalma’s Insurance Fraud Letter at this link to receive the latest news directly to your inbox regularly. Subscribe at this link. ZIFL will be posted here for a full month in pdf and in full color. Zalma’s Insurance Fraud Letter — Published in Adobe pdf format effective December  15, 2023Zalma’s Insurance Fraud Letter — Published in Adobe pdf format effective January 1, 2024The comments made in each issue of ZIFL are for information only and are not intended as legal advice.Subscribe here: Zalma’s Insurance Fraud Letter (ZIFL) continues its 25th 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/ FREE subscriptions are provided to clients and friends of Barry Zalma, Inc., clients of ClaimSchool, Inc. Please feel free to forward ZIFL to anyone you know engaged in the efforts to reduce fraud. If you want to be on the free mailing list as a subscriber to ZIFL please connect and subscribe below. If you want to be removed from the list click on the link at the end of the notice that the new edition of ZIFL is available and your subscription will be deleted. ZIFL will be posted for a full month in pdf and full color and in text format. You can subscribe to ZIFL by clicking on this link. The comments made in each issue of ZIFL are for information only and are not intended as legal advice. If this has been forwarded to you by a colleague Register with Zalma’s Insurance Fraud Letter at this link to receive the latest news directly to your inbox regularly. Subscribe at this link. ZIFL will be posted here for a full month in pdf and in full color. The comments made in each issue of ZIFL are for information only and are not intended as legal advice. Zalma’s Insurance Fraud Letter — Published in Adobe pdf format effective December  15, 2023Zalma’s Insurance Fraud Letter — Published in Adobe pdf format effective January 1, 2024 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Policy only Applies to Risks Taken by Insurer Post 4699 Plaintiffs in multiple consolidated actions appeal the Judgment granting the Motion for Summary Judgment in favor of defendant, The Burlington Insurance Company ("TBIC") based upon a clear and unambiguous exclusion. In Cameron Soule v.  Woodward Design + Build, LLC, et. al., Nos. 2022-CA-0352, 2022-CA-0353, 2022-CA-0354, 2022-CA-0355, 2022-CA-0356, Court of Appeals of Louisiana, Fourth Circuit (December 21, 2023) Louisiana resolved the dispute. STATEMENT OF FACTS Program ("CCIP") policy or "Wrap-Up" policy from Houston Casualty Company ("HCC") for the insurance on the Project. Regarding insurance, Eagle's Subcontract stated, in pertinent part, that Woodward "has arranged for the Project to be insured under a controlled insurance program (the "CCIP" or "Wrap-Up")." In connection with the accident, plaintiffs filed suit against various parties and TBIC, Eagle's own commercial general liability ("CGL") insurer. TBIC denied coverage for Eagle, maintaining that its CGL policy contained a"Wrap-Up Exclusion" which precluded coverage to Eagle for all claims arising from the Project. The Wrap-Up Exclusion provided, in pertinent part, that coverage is excluded in "[a]ll locations where you perform or have performed work that is or was to be insured under a consolidated (wrap-up) insurance program as described below." (Emphasis added). On April 24, 2017, the Administrator sent a letter advising Eagle that it was not covered "under the General Liability Contractor Controlled Insurance Program for the trade of Hoist Rental and Service - the Standard Project." TBIC maintained that the CCIP policy was intended to cover Eagle under two distinct provisions: 1) as a lessor of equipment under the above mentioned "Additional Insured" endorsement; and 2) as an enrolled contractor, (for Eagle's work pursuant to the Subcontract to erect, dismantle, and provide preventative maintenance for the hoist) under the Wrap-Up endorsement. The latter endorsement provided that Woodward's "enrolled contractors" are insured "only while performing duties related to the project." Interpretation of Insurance Contracts An insurance policy is a contract between the parties and should be construed using the general rules of interpretation of contracts set forth in the Civil Code. The judicial responsibility in interpreting insurance contracts is to determine the parties' common intent. An insurance policy should not be interpreted in an unreasonable or a strained manner so as to enlarge or to restrict its provisions beyond what is reasonably contemplated by its terms or so as to achieve an absurd conclusion. If after applying the other general rules of construction an ambiguity remains, the ambiguous contractual provision is to be construed against the insurer and in favor of coverage. Under this rule of strict construction, equivocal provisions seeking to narrow an insurer's obligation are strictly construed against the insurer. ANALYSIS Woodward's Subcontract with Eagle specifically provides that Woodward Moreover, the plain language of the Wrap-Up Exclusion stated  that coverage for Eagle is excluded in "[a]ll locations where you perform or have performed work that is or was to be insured under a consolidated Accordingly, the Wrap-Up Exclusion must be enforced as written. ZALMA OPINION Courts are required to read the entire policy at issue and interpret the policy as its wording relates to the facts of the incident that resulted in bodily injury to the plaintiffs. The court did so and ignored the creative, yet unconvincing, arguments made by the plaintiffs. The policy excluded the incident. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Coverage Limited to What the Insured Pays For at Inception Post 4691 The Eleventh Circuit Court of Appeals was asked to resolve whether two residential homes destroyed by a fire while under construction were covered under an insurance policy (the "Policy") issued by Travelers Property Casualty Company of America ("Travelers") to its named insured, Talcon Group LLC ("Talcon"). Talcon is an underground utility contractor for sewer, storm drains, and treatment plants and never told Travelers it was building two residential buildings. In Travelers Property Casualty Company Of America v. Talcon Group LLC, No. 22-13547, United States Court of Appeals, Eleventh Circuit (December 20, 2023) the Eleventh Circuit decided the extent of the coverage available to Talcon. TWO RESIDENTIAL HOMES Talcon was to benefit from the sale of the two residential homes by becoming a "local vendor" in the county where the homes were being constructed, entitling it to a 5% advantage with other contractors when bidding on future projects in the county. Wildfire Peril In May 2020, a wildfire completely destroyed the two residential homes. At that time, the residential homes were mostly complete but did not have certificates of occupancy. THE POLICY In 2019  Talcon, through an insurance agent, submitted a '"Commercial Insurance Application" with Travelers. Talcon's application was for a renewal of a 2018 policy with Travelers. In an application field titled "Description of Primary Operations," Talcon listed "[u]nderground utility contractor." Travelers  covered "Installation" property from direct physical loss or damage. The Policy "Definitions" section defined "Installation" as "[p]roperty described in the Declarations under 'Installation' owned by you or property of others for which you are legally liable, that you or your subcontractors will install, erect or fabricate at the job site.'" DISCUSSION Under Florida law every insurance contract shall be construed according to the entirety of its terms and conditions as set forth in the policy and as amplified, extended, or modified by any application therefor. While Rick and Zack testified that Talcon constructed multiple residential homes in recent years, Talcon's renewal application did not include this past residential work or indicate the prospect of future residential construction. Even though Talcon had begun constructing the two residential homes at the time of the renewal application, it misrepresented to Travelers that it was not engaged in any residential construction. Talcon, in fact, stated that 0% of its current work was "Residential" and 100% was "Municipal/Government." ZALMA OPINION The covenant of good faith and fair dealing requires that neither party to the contract of insurance will do anything to deprive the other of the benefits of the contract nor misrepresent or conceal material facts from the other. In this case Talcon lied when it submitted its application by claiming it did no residential construction work at the time that it was, in fact, constructing two residential properties. Since it is true that liars never prosper the lie about the work being done defeated its claims. (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 my 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 Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Fraudster Must Serve Time and Lose His Residence to Pay Restitution Post 4698 Armando Valdes appealed his 60-month sentence for health care fraud after he pleaded guilty. Valdes's conviction and sentence arose out of his scheme to submit millions of dollars in fraudulent medical claims to United Healthcare and Blue Cross Blue Shield for intravenous infusions of Infliximab, an expensive immunosuppressive drug. These infusions, purportedly given to patients at Valdes's medical clinic, Gasiel Medical Services ("Gasiel"), were either not provided or were medically unnecessary. In United States Of America v. Armando Valdes, No. 22-12837, United States Court of Appeals, Eleventh Circuit (December 19, 2023) the Eleventh Circuit disposed of the arguments asserted by Valdes. LOSS AMOUNT Federal Courts sentence convicted defendants based upon offense levels set by federal statutes. The sentences are increased with the amount of "loss" caused by the offense. In Valdes's case, his base offense level was increased by 22 levels because the district court found that the loss amount was $38 million, and thus more than $25 million. Section 2B1.1(b)(1)(L) provides that a defendant's base offense level is increased by 22 levels if the loss from the fraud offense was more than $25 million but less than $65 million.  Intended loss includes harm "that would have been impossible or unlikely to occur." ANALYSIS Valdes did not show the Eleventh Circuit that the district court's loss amount of $38 million was clearly erroroneous. Valdes admitted that through Gasiel, he submitted approximately $33 million in fraudulent claims to United Healthcare and approximately $5 million in fraudulent claims to Blue Cross Blue Shield. Even if United Healthcare was unlikely to reimburse Valdes for the entire amount billed or for duplicate claims those claims were nonetheless properly included in the intended loss amount. At the sentencing hearing, Valdes's own fraud analyst testified that, even accounting for duplicate claims, the total loss amount was above $25 million, the threshold for the 22-level increase in Valdes's offense level. Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Largest Residential Burglary of All Time This is a Fictionalized True Crime Stories of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help Everyone to Understand How Insurance Fraud in America is Costing Those who Buy Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators than any Other Crime. To obtain the insurance he concealed from the American insurers that he was, at the time he purchased the insurance: an alien a court had ordered deported; that in his home country he was a wanted criminal; that he had left his home country with over $60,000,000.00 in checks unpaid; that every insurer at Lloyd’s, London had refused to insure him; that all of his property was appraised for more than twice its actual retail replacement value; and that most of the antiques he had insured in reliance on an “appraisal” attesting to a $3,500,000 value, were fakes. Within seven days of the delivery of his policy, a “burglary” was reported. A total of $7,000,000.00 of specifically identified and scheduled personal property was reported stolen. He claimed an additional $2,000,000 in unscheduled diamonds were stolen from their hiding place in one of his 50 suit coats hanging in his master bedroom closet. The insurers refused to pay because they believed the insured made material misrepresentations and he concealed material facts in the purchase of the insurance. The Insured retained a prestigious plaintiff’s bad faith lawyer to represent his interests. Because of the reputation of counsel for the Insured and the fear of an extra-contractual judgment, the insurers (against the advice of three different defense firms) settled for more than $4,000,000.00 of the $7,000,000.00 claim. The Insured’s lawyer took a contingent fee of 50%, the insured’s creditors took 20%, and the Insured took what remained. Because the IRS was unable to assert its multi-million-dollar lien in time, it got nothing. After a trip to China to take an examination under oath of the insured’s sister – who was also named as an insured – and two years of discovery, counsel for the insurers moved the court for summary judgment confirming rescission of the policy. The evidence available of multiple misrepresentations and the concealment of material facts, rescission was warranted and counsel was confident the court would agree. The day before the insurers’ counsel were to appear for oral argument on the motion for summary judgment the insurers and the insured’s lawyer settled the suit without communicating with defense counsel and against the recommendations of defense counsel. To recover the money lost by paying the Insured the insurers could only pass the payment on to other, honest, insureds and the reinsurers. Once an insurer gets a reputation for paying for fraudulent claims rather than fighting with all of its assets those who perpetrate fraudulent claims will gather like vultures over a rotting carcass ready to pick the bones clean. The reverse is also true: when an insurer makes it clear it will never pay a fraudulent claim, regardless of cost, those who earn their living by fraud will stay away. It is time that prosecutors learn that the victim is not the giant insurance company but each and every person who buys 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 my substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01 Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurance Fraud as a State Crime https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurance Agent Defrauded Clients by Taking Premium Money and Keeping it for Personal Expenses When a criminal defendant's valid guilty plea includes a waiver of the right to appeal, the Fourth Circuit Court of Appeals generally enforces the waiver by dismissing any subsequent appeal that raises issues within the scope of the waiver. However, even if an appeal waiver is valid and applicable, the Fourth Circuit will review a claim that a district court's sentence or restitution order exceeded the court's statutory authority. In United States Of America v. Glenda Taylor-Sanders, Nos. 21-4136, 20-4604, United States Court of Appeals, Fourth Circuit (December 12, 2023) the Defendant sought a change of the sentence and restitution order. FACTS From February 2017 through May 2019, Taylor-Sanders took advantage of her role as a licensed insurance agent to defraud several trucking companies and the insurance finance company BankDirect Capital Finance. She defrauded the trucking companies by misappropriating funds that the companies provided her to pay for their insurance policy premiums and BankDirect Capital Finance by obtaining loans under the guise of nonexistent insurance policies. Instead of using the funds she obtained to pay insurance policy premiums or to pay back BankDirect Capital Finance for the legitimate loans it made to the trucking companies, Taylor-Sanders spent the funds on personal expenditures including cars, football tickets, and mortgage payments. Predictably, some of the trucking companies' insurance policies ZALMA OPINION Fraud perpetrators have no honor. Even after obtaining a plea agreement that saved her years in prison, Taylor-Sanders took up the time of the District Court and the Fourth Circuit to hear a spurious motion to withdraw her guilty plea after knowingly entering into the plea agreement and waiving her right to appeal. She will pay restitution and spend an appropriate time in jail. (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 my 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 Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Christmas Gift of Insurance Fraud --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurer May Never Subrogate Against its own Insured Zurich American Insurance et al sued their coinsurers - Appellant Certain Underwriters at Lloyd's, London Subscribing to Policy Number B12630308616 (Lloyd's) and Defendant Arch Insurance Company (Arch) - seeking a declaratory judgment that Lloyd's is barred under New York law from bringing a common law indemnification or contribution claim against a party insured by Zurich, Arch, and Lloyd's. The district court granted Zurich's motion for summary judgment, holding that New York's anti-subrogation rule precludes Lloyd's from bringing that claim. In Zurich American Insurance Company, American Zurich Insurance Company v. Certain Underwriters at Lloyd's of London Subscribing to Policy Number B12630308616, Arch Insurance Company, No. 22-2697, United States Court of Appeals, Second Circuit (December 12, 2023) the Second Circuit resolved the dispute. Many Layers of Insurance This dispute arose from a large construction project at LaGuardia Airport. Pursuant to the contract, Skanska and LGA obtained a Contractors Controlled Insurance Program for the project, which included a "tower" of general liability insurance with $300 million of coverage in three layers. Zurich underwrote the base layer of coverage, Arch provided a first layer of excess coverage, and then Lloyd's provided a second excess policy, i.e. a third layer of coverage on top of Arch's. Zurich arranged for counsel to represent Port Authority and LGA beginning in August 2018. Roughly three years later, Lloyd's contacted that counsel and requested that LGA and Port Authority commence a third-party claim for common law indemnification or contribution against Skanska. Counsel analyzed the feasibility of such a claim but concluded that New York's anti-subrogation rule would bar it. The Anti-Subrogation Rule New York courts have established an anti-subrogation rule that is an exception to an insurer's usual right of subrogation against third parties. It provides that an insurer has no right of subrogation against its own insured for a claim arising from the very risk for which the insured was covered. The anti-subrogation rule is needed both to prevent the insurer from passing the incidence of loss to its own insured and to guard against the potential for conflict of interest that may affect the insurer's incentive to provide a vigorous defense for its insured. ZALMA OPINION Subrogation is an equitable remedy where, when an insurer pays a debt owed by its insured, fairness requires the insured to provide the insurer with the insured's rights against third parties to recoup its payment on behalf of the insured. Regardless, it is unfair for an insurer to seek damages from its own insured because doing so violates the public policy of the state of New York and is, on its face, unfair. When two people are in a simple auto accident but are insured by the same insurer, they will both be paid regardless of who is at fault since the insurer can't subrogate against its own insured. (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 my 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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Zalma's Insurance Fraud Letter - December 15, 2023 Merry Christmas,  Happy Hanukah, and May the Winter Solstice be Peaceful & Mild --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

When Appraisers Fail to Agree on Umpire Court Must Appoint One When a claim for damages due to a hurricane was disputed the parties demanded appraisal and appointed their respective appraisers. However, the appraisers could not agree on an umpire for reasons unclear and bad faith litigation ensured. Because of the inability of the appraisers to agree on an umpire the parties went to the District Court to appoint an umpire so the appraisal process can proceed. In DORIAN THEODORE v. ALLIED TRUST INSURANCE COMPANY, Civil Action No. 22-951-SDD-RLB, United States District Court, M.D. Louisiana (October 18, 2023) the parties moved the USDC in Louisiana to appoint an Appraisal Umpire. The parties submitted separate lists of proposed umpires and their respective CVs for the Court's consideration. The lawsuit involves claims for damage to property located in Gonzales, Louisiana as a result of Hurricane Ida.  Dorian Theodore (“Plaintiff”) sought coverage and statutory bad faith damages related to claims made under an insurance policy (the “Policy”) issued by Allied Trust Insurance Company (“Defendant”). The parties represent that the Policy provides the following language with respect to appraisals, including the appointment of an umpire: Appraisal If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will choose a competent and impartial appraiser within 20 days after receiving a written request from the other. The two appraisers will choose an umpire. If they cannot agree upon an umpire within 15 days, you or we may request that the choice be made by a judge of a court of record in the state where the "residence premises" is located. The appraisers will separately set the amount of loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon will be the amount of loss. If they fail to agree, they will submit their differences to the umpire. Any outcome of the appraisal will not be binding on either party. Each party will: 1. Pay its own appraiser; and 2. Bear the other expenses of the appraisal and umpire equally. Prior to the filing of this lawsuit, the parties selected their initial appraisers when Defendant demanded an appraisal of the loss. Plaintiff designated Matthew Addison as Plaintiff's appraiser, and Defendant designated Ronald West as its appraiser. After the filing of this lawsuit, Plaintiff designated Mike Deckelman as Plaintiff's appraiser.  The parties' appraisers were unsuccessful in jointly selecting an umpire in accordance with the Policy. As ordered, the parties submitted separate lists of proposed umpires for potential appointment. There is no dispute between the parties that the appraisal provision in the Policy is enforceable. The parties have jointly sought court appointment of an umpire in accordance with the appraisal provision in the Policy. If Mr. Cole declines to serve as umpire in this matter, then the Court selects Joel Moore as umpire. His resume demonstrates that he is As discussed above, although both Mr. Cole and Mr. Moore were proposed by the Plaintiff, the Court has no reason to suggest that both can fulfill this role in a fair, neutral and impartial manner. Insurance claims resulting from hurricanes that have struck Louisiana have become aggressive, unfair and unreasonable. For two appraisers to fail to pick an umpire is an indication of litigation game playing forcing the District Court to appoint an umpire. This litigation requiring a judge to do what insurance appraisers do every day with little or no discussion reflects a desire to make the process more expensive and difficult rather than fulfill its purpose to quickly and fairly resolve the quantum of a loss. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Foreclosure Changes Insurable Interest from Borrower to Lender Post 4787 In this contested residential mortgage foreclosure, defendants Mitchell and Deanna Minchello appealed from the entry of summary judgment. Defendants contended that plaintiff violated the covenant of good faith and fair dealing by "refusing to disburse defendants' insurance proceeds and forcing defendants' home to remain in disrepair" and that the trial court applied an improper standard. In Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, as owner trustee of the Residential Credit Opportunities Trust V v. Mitchell Minchello and Deanna Minchello, and J Hofert Company, FIA Card Services NA, Schumann Hanlon LLC, Discover Bank, Vanz LLC-December 10 Series01, Mri-West Morris Associates, and State Of New Jersey, No. A-3522-21, Superior Court of New Jersey, Appellate Division (December 8, 2023) the issues were resolved. FACTS The essential facts were undisputed. Defendants borrowed $522,000 in January 2007, secured by a thirty-year purchase money mortgage on their home in Mt. Arlington. Defendants stopped making their loan payments in 2010, and in 2012 they stopped paying the taxes and insurance on the property. In 2014 the lenders asserted its rights by suing for foreclosure in March 2015. Defendants filed a bankruptcy petition under Chapter 13. The following day, December 7, defendant Deanna Minchello drove her car into defendants' home, resulting in structural damage. The only insurance was forced placed insurance in the name of the lender. ANALYSIS The trial judge granted plaintiff's motion for summary judgment. The judge found no dispute over the validity of the note and mortgage, defendants' default in 2010 and plaintiff's standing to foreclose the mortgage. Whether the lender allowed the insurance money to go to repair the structure was irrelevant since the foreclosure put the insurable interest in the lender and the lender was the only person insured. Although the procedural history is long and complicated with the parties' appendices exceeding 800 pages, the legal issues are straightforward, and the Court of Appeals had no hesitation in holding plaintiff established its entitlement to both summary judgment. CONCLUSION The trial court's orders that plaintiff established its right to foreclose the mortgage, that defendants did not succeed in establishing plaintiff should be barred from asserting that equitable remedy, and that final judgment of foreclosure was properly entered against defendants. ZALMA OPINION When borrowers fail to pay mortgage payments, insurance premiums and taxes they have no insurance in their name, only the insurance acquired by the lender to protect its interests. The lendER can apply the insurance to repair or simply apply it to reduce the debt. It took some unmitigated gall to sue the lenders in this after defaulting in every obligation owed by a property owner that pledged the property as security for the loan. The court found it necessary to read and analyze all 800 pages and still found the trial court's judgment in favor of the lender to be appropriate. Why the court did not sanction the borrowers and their attorneys is confusing to me. (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 my 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 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Appraisal Required to Resolve Extent of Loss Post 4786 In an insurance dispute stemming from Hurricane Ian. The parties agree that their case should go to appraisal to determine the extent of the loss. When an insurance policy contains an appraisal provision, “the right to appraisal is not permissiv e but is instead mandatory, so once a demand for appraisal is made, ‘neither party has the right to deny that demand.'” [McGowan v. First Acceptance Ins. Co., Inc., 411 F.Supp.3d 1293, 1296 (M.D. Fla. 2019) (quoting United Cmty. Ins. Co. v. Lewis, 642 So.2d 59, 60 (Fla. 3d DCA 1994)]. Like other stipulations about dispute resolution, the Court enforces contractual appraisal provisions by non-dispositive order. Therefore, in Buena Vista Of Deep Creek Condominium Association, Inc. v. Clear Blue Specialty Insurance Company, No. 2:23-cv-957-SPC-KCD, United States District Court, M.D. Florida (November 27, 2023) the court concluded that because appraisal will not dispose of any claims or defenses, the Court did not treat the motion to compel appraisal as one for summary judgment. Since the parties agreed that appraisal is appropriate, their request was granted. Further, the parties requested a stay during appraisal which was also granted because the Hurricane Ian Scheduling Order contemplates such relief if the parties agree that appraisal is appropriate. Thus, the case will be stayed. All deadlines and events in the Hurricane Ian Scheduling Order are suspended. The parties have agreed that the appraisal panel must itemize the awarded damages by coverage, to be accompanied by a supporting estimate. Though the parties cite no contractual provision that requires such an award, because the parties agree, their request will be granted. According, it is hereby ORDERED: The Joint Stipulation for Appraisal and Stay of the Case was GRANTED, and the appraisal panel must itemize the awarded damages by coverage, to be accompanied by a supporting estimate. This case is STAYED pending appraisal, and the Clerk must add a stay flag to the file and administratively close the case. The parties are DIRECTED to file a joint report on the status of appraisal on or before February 26, 2024, and every ninety days thereafter until appraisal has ended. Within 15 days of a signed appraisal award, the parties are directed to jointly notify the Court of (a) what issues, if any, remain for the Court to resolve; (b) whether the stay needs to be lifted; and (c) how this action should proceed, if at all. ZALMA OPINION The Appraisal condition of a first party property policy is an extra-judicial means of resolving disputes between an insurer and an insured about the amount of loss. Since the parties agreed that appraisal was an appropriate manner of resolving that limited dispute they moved to stay the action in hopes that the appraisal result will allow the parties to resolve all their differences. The court understood and issued orders to fulfill the agreement of the parties. (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 my 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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

No Coverage for Loss After Policy Cancelled In an action for declaratory judgment to determine whether the plaintiffs had a duty to defend and indemnify the defendants under certain insurance policies for injuries sustained in a motor vehicle accident, where the trial court granted the plaintiffs' motion for summary judgment. In Liberty Insurance Corporation et al. v. Theodore Johnson et al., No. AC 45933, Court of Appeals of Connecticut (December 5, 2023) the Court of Appeals resolved the dispute.FACTSThe defendants, Theodore Johnson (Theodore) and Kim Johnson (Kim), appealed from the judgment rendered by the trial court following its granting of a motion for summary judgment filed by the plaintiffs, Liberty Insurance et al and Safeco Insurance Company of Illinois (Safeco). The primary issue is duty to defend a separate action that stemmed from a motor vehicle accident in which the defendants' son, Aaron Johnson (Aaron), was driving a motor vehicle owned by Theodore when he lost control of the vehicle and struck a telephone pole, causing serious injuries to a passenger in the vehicle, Jordan Torres.At some point prior to 1:33 a.m. on December 26, 2019, Aaron left the defendants' house and operated a 1997 Audi A4 2.8 Quattro (Audi) owned by Theodore. Torres was a passenger in the Audi at the time. As Aaron attempted to navigate a curve, he lost control of the Audi, crossed into the westbound lane of traffic, and left the roadway, striking a telephone pole.Torres sustained personal injuries in the accident and sued a bar in Newington and its backer, as well as Theodore, Kim and Aaron. In the Torres action, Torres alleged that, on December 25, 2019, Aaron, a minor, consumed alcohol at the bar, after which he went to the defendants' house in Glastonbury, where he was visibly intoxicated and consumed more alcohol. Following the commencement of the Torres action, the defendants sought coverage from the plaintiffs for Torres' claims under three policies of insurance:a homeowners insurance policy issued to the defendants by Liberty Insurance (homeowners policy);an automobile insurance policy issued to the defendants by Safeco (automobile policy); andan umbrella insurance policy issued to the defendants by Liberty Mutual (umbrella policy). Thereafter, the insurer plaintiffs sued seeking a judgment declaring that the plaintiffs are not obligated to defend or indemnify the defendants with respect to Torres’ action.Specifically, the insurers based that argument on an exclusion in the homeowners policy that excludes coverage for" 'bodily injury' or 'property damage' . . . arising out of (1) [t]he ownership, ... of motor vehicles ... operated by or rented or loaned to an 'insured' [motor vehicle exclusion] . . . ." --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Equally Fair Interpretation Favors Insured WCPP Risk Purchasing Group, Inc. ("WCPP") asserted coverage claims under a Commercial General Liability Policy ("Policy") issued by Defendant, Lexington Insurance Company, on behalf of Village of Stoney Run, LLC ("Village of Stoney Run") seeking defense and indemnity from an insurer who claimed a mold exclusion defeated coverage. In WCPP Risk Purchasing Group, Inc. v. Lexington Insurance Company, Civil Action No. CAM-L-1025-22, Superior Court of New Jersey, Law Division, Camden (November 29, 2023) the Superior Court resolved the coverage dispute. BACKGROUND The Underlying Action alleges negligence, breach of the warranty of habitability, and breach of contract, asserting injury and damage claims against Village of Stoney Run due to toxic fungus/mold infestation in Pratt's apartment. It is asserted that the mold caused the death of Pratt and damaged her personal property. Plaintiff purchased the Policy on behalf of Village of Stoney Run as part of a joint purchasing group. WCPP is a risk purchasing group for primarily habitation and commercial real property locations. The Underlying Action was initiated by Brian Pratt and Dawn Pratt ("Underlying Plaintiffs"), the co-administrators of the Estate of Darlene Pratt ("Decedent") against the Village of Stoney Run, an apartment complex owned by a Bleznak Organization. As part of the action, Underlying Plaintiffs asserted claims of negligence, breach of warranty, and breach of contract arising out of allegations that Plaintiff failed to properly maintain and repair Decedent's apartment at the Village of Stoney Run, resulting in dangerous living conditions, including mold. Suit in the underlying action was forwarded to Lexington Insurance Company. AIG Claims, Inc. issued a disclaimer of coverage on behalf of AIG Property Casualty, Inc. That policy of insurance disclaimed coverage based upon the fungus/mold exclusion contained in the insurance policy. ANALYSIS The court must enforce the clear and unambiguous terms of the policy of insurance. A policy of insurance is ambiguous only where reasonably intelligent persons would differ regarding its meaning. The court places the obligation on the insurance carrier to draft clear and unambiguous contracts. Where the policy language will support two interpretations, only one of which will support a finding of coverage, the court will choose the interpretation favoring the insured and find that coverage exists. Lexington asserts that the policy of insurance contains a mold exclusion which precludes coverage for the claims in the underlying suit. The claims in this case arose from water leaks which resulted in the conditions about which plaintiffs decedent in the underlying complaint bases the cause of action. The court concluded that the interpretation of the mold exclusion by plaintiff that the loss was due to the water leaking, not mold per se, is equally reasonable to that interpretation of the defendant insurers. Under the circumstances it is the interpretation most favorable to the insured which controls. Accordingly, the court concluded that coverage exists for the exposure to mold as a result of water leakage. ZALMA OPINION Courts interpret insurance contracts differently than other contracts. If a court finds an ambiguity or, as here, an interpretation of an exclusion by the insured and the insurer are equally reasonable, the interpretation of the insured will be enforced. Paraphrasing George Orwell in his novel Animal Farm, all litigants are equal, some - the insured suing an insurer - are more equal than the insurer. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe to my substack at https://barryzalma.substack.com/publish/post/107007808 Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Claim Against State Must be Filed in Accord with Statute In Angela Erika Cantu v. California Department Of Transportation et al., F084601, California Court of Appeals (November 30, 2023) Angela Cantu sued the California Department of Transportation (Caltrans) and James Hinson for alleged injuries sustained in a motor vehicle incident. Because she failed to file a proper and timely claim the trial court granted summary judgment to Caltrans and Hinson and Cantu appealed.. FACTUAL BACKGROUND Angela Cantu and James Hinson, a Caltrans employee, were involved in a motor vehicle collision on State Route 168 in Fresno.  Two months later, on August 17, 2018, Caltrans received, via facsimile, a letter from counsel retained by Angela Cantu. Richard Maynard, an analyst with the California Department of General Services, responded to Cantu's "letter of representation dated 8-17-2018," and shortly thereafter informed Cantu's attorneys that he would be "handling this file for the State of California." Maynard advised counsel that "The State of California has a six-month statute of limitation. If your claim is not resolved within six months from the date of loss, California law requires you to file a formal claim with the Government Claims Program (GCP) (Government Code 900, et seq.). Cantu's counsel took no further action until January 8, 2020, over 18 months after the underlying traffic collision. In the meantime, the six month claim period lapsed on December 19, 2018. Eventually, on January 8, 2020, Cantu's counsel filed a Government Claim form, along with the $25 filing fee and an application to file a late claim. Thereafter Cantu filed a complaint in the Fresno County Superior Court. Caltrans and James Hinson filed a motion for summary judgment on grounds that Cantu had failed to file an appropriate claim under the Government Claims Act, a mandatory prerequisite to filing a lawsuit. Judgment was subsequently entered in favor of Caltrans and James Hinson. Cantu appealed. DISCUSSION Trial Court Properly Granted Summary Judgment Based on Cantu's Failure to Comply with the Government Claims Act The trial court found Cantu had not complied with the claim presentation requirement of the Government Claims Act in this matter. Since plaintiff's counsel's letter does not touch on many of the required elements of a claim as specified in Government Code section 910, there was no substantial compliance. Cantu's Claims are Barred Under the Government Claims Act The California Government Claims Act (Gov. Code, § 900 et seq.) requires a plaintiff seeking money damages against public entities and public employees acting within the scope of their employment, to file an initial claim with the relevant public entity. http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ontractor Needs Permission of Insurer to be Protected by an Owner-Controlled Insurance Program Team Industrial Services, Inc. (Team) found it had incurred a $222 million judgment against it in a wrongful-death lawsuit arising out of a steam-turbine failure in June 2018 at a Westar Energy, Inc. (Westar) power plant. Team sought indemnity for the judgment from Westar, Zurich AmeCrican Insurance Company (Zurich), and two other insurance companies, arguing that it was, or should have been, provided protection by Westar's Owner-Controlled Insurance Program (OCIP) through insurance policies issued by Zurich and the two other insurers. In Team Industrial Services, Inc. v. Zurich American Insurance Company, et al, No. 22-3275, USCA, Tenth Circuit (November 29, 2023) resolved the dispute acknowledging that Team's arguments were well reasoned and creative.BACKGROUNDIn 2013 Westar instituted its OCIP, through which contractors and subcontractors could obtain insurance protection for work performed at covered locations. Westar had discretion to decide which contractors would be eligible to enroll in the OCIP. Eligible contractors had to complete enrollment forms to be considered for participation. During the time relevant to this dispute, insurance was provided by a Zurich policy, whose premiums were paid by Westar. According to Zurich's policy, an enrolled contractor's "rights and duties under this policy may not be transferred without [Zurich's] written consent." (emphasis added)Westar never made Team eligible to enroll in the OCIP.  Team never submitted an enrollment application, and it was never enrolled. Team's parent company acquired Furmanite's parent company.Although Team and Furmanite became "sister companies," they were distinct legal entities and never merged. Team assumed Furmanite's workload at the power plant. Furmanite's insurance coverage under the Westar OCIP continued even though its service contract had been retired. Furmanite's coverage continued, even after it perhaps should have ended.Team argued to the District Court that it inherited Furmanite's coverage under the OCIP.The District Court ruled that Change Order No. 2 unambiguously retired Furmanite's MSA and left Team's MSA as the sole governing document. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Contractor Needs Permission of Insurer to be Protected by an Owner-Controlled Insurance Program Team Industrial Services, Inc. (Team) found it had incurred a $222 million judgment against it in a wrongful-death lawsuit arising out of a steam-turbine failure in June 2018 at a Westar Energy, Inc. (Westar) power plant. Team sought indemnity for the judgment from Westar, Zurich American Insurance Company (Zurich), and two other insurance companies, arguing that it was, or should have been, provided protection by Westar's Owner-Controlled Insurance Program (OCIP) through insurance policies issued by Zurich and the two other insurers. In Team Industrial Services, Inc. v. Zurich American Insurance Company, et al, No. 22-3275, USCA, Tenth Circuit (November 29, 2023) resolved the dispute acknowledging that Team's arguments were well reasoned and creative.BACKGROUNDIn 2013 Westar instituted its OCIP, through which contractors and subcontractors could obtain insurance protection for work performed at covered locations. Westar had discretion to decide which contractors would be eligible to enroll in the OCIP. Eligible contractors had to complete enrollment forms to be considered for participation. During the time relevant to this dispute, insurance was provided by a Zurich policy, whose premiums were paid by Westar. According to Zurich's policy, an enrolled contractor's "rights and duties under this policy may not be transferred without [Zurich's] written consent." (emphasis added)Westar never made Team eligible to enroll in the OCIP.  Team never submitted an enrollment application, and it was never enrolled. Team's parent company acquired Furmanite's parent company.Although Team and Furmanite became "sister companies," they were distinct legal entities and never merged. Team assumed Furmanite's workload at the power plant. Furmanite's insurance coverage under the Westar OCIP continued even though its service contract had been retired. Furmanite's coverage continued, even after it perhaps should have ended.Team argued to the District Court that it inherited Furmanite's coverage under the OCIP.The District Court ruled that Change Order No. 2 unambiguously retired Furmanite's MSA and left Team's MSA as the sole governing document. DISCUSSION Team ignored that the enrollment in Westar's OCIP was not automatic. Since Team never enrolled nor was it even invited to enroll in Westar's OCIP, nor did Zurich ever give written approval to a transfer of coverage from Furmanite to Team, coverage did not exist.The Change Order did not contain a mention of insurance coverage or the OCIP. There is no ambiguity in the language of the change order from Finally, Team raises a perfunctory claim of promissory estoppel.  Since there was no allegation that Westar knew about the reporting it could hardly have expected to induce Team's reliance. Nor was there any evidence of a promise by Zurich to provide insurance coverage to Team.The Tenth Circuit affirmed the judgment. ZALMA OPINION When Team's parent company acquired Furmanites parent company and took over the work originally done by Furmanite it assumed that it was covered under the OCIP but did nothing to confirm the fact, proving that breaking it up into its component part and will cost Team $222 million. Insurance, even a contract as complex as an OCIP, must be fulfilled and to gain the coverage Westar needed to allow them to apply, Team needed to file an application with Zurich and Zurich had to agree. None of those things happened and Team had no coverage. (c) 2023 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this blog and the videos --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Claim of Disability Because of Stress of Arrest & Conviction Fails Jason Brand ("Brand") appealed from the judgment of the district court entered on September 30, 2021, challenging the court's dismissal of Brand's counterclaims for breach of contract and breach of the implied covenant of good faith and fair dealing. Brand's claimed Principal Life Insurance Company ("Principal Life") failed to pay him benefits under his disability insurance policy (the "Policy"). --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL - Volume 27 Issue 23 The Resource for the Insurance Claims and Insurance Fraud Professionals This, the 22nd issue of the 27th Year of ZIFL includes articles and reports relating to insurance fraud, including: Some Red Flags of Insurance Fraud Over the last two centuries insurers, insurance investigators, Special Investigative Unit Investigators, insurance lawyers, and insurance management have developed lists of indicators of potential insurance fraud. The indicators are known as the Red Flags of Fraud and are used to determine if it is necessary to begin a thorough investigation of an insurance claim to determine if a fraud is being attempted. To be able to work to deter or defeat attempts at insurance fraud the insurance claims person and the SIU investigators must be conversant in the red flags or indicators of insurance fraud. Read the full 21 pages of this issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/11/ZIFL-12-01-2023-1.pdf More McClenny Moseley & Associates Issues This is ZIFL’s nineteenth 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 21 pages of this issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/11/ZIFL-12-01-2023-1.pdf Litigation Financing Although this report from Texas lawyer Steven Badger deals with the litigation around the MMA debacles it is more important for fraud investigators to understand what is happening in litigation financing. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Why an Amateur's Attempt at Fraud Failed "This is a fictionalized true crime story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is presented to help a reader to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators than any Other Crime." --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Fraud in Inception Allows Insurer to Rescind Lamin Fatty appealed the trial court's order granting summary disposition to Farm Bureau on the basis of finding Fatty's fraud was grounds for contract rescission and reimbursement of benefits paid. In Lamin Fatty v. Farm Bureau Insurance Company Of Michigan, No. 363888, Court of Appeals of Michigan (November 21, 2023) the Court of Appeals resolved the dispute. FACTS After a motor vehicle accident where Fatty sustained bodily injuries the issue of rescission was raised when it was discovered that at the time of the accident, Fatty was insured by Farm Bureau under the no-fault act. Fatty obtained insurance with Farm Bureau on July 17, 2019. On the application for insurance, Fatty answered the following question in the negative: "Are any vehicles to be insured used to carry persons for a fee?" Uber records indicated that Fatty began working as an Uber driver in early May 2019 (before he applied for the insurance) and drove for Uber on the day of the accident. Fatty's drive log shows he picked up a rider at 6:05 p.m. and dropped them off at 6:30 p.m. Fatty picked up another rider at 6:38 p.m. and dropped them off at their destination at 6:50 p.m. Fatty continued picking up riders and completing trips that night until 8:17 p.m. After this discovery, Farm Bureau filed a counterclaim on the basis of fraud, requesting reimbursement of benefits paid to or on behalf of Fatty with regard to the accident. The trial court granted Farm Bureau's motion for summary disposition of the counterclaim, including its request for reimbursement of $104,730.82 for benefits paid, because the policy was rescinded under the doctrine of fraud in the procurement. The trial court also found Fatty's fraud entitled Farm Bureau to attorney fees under the no-fault act, and costs. Specifically, the trial court found the requested costs of $2,599.50 were reasonable and awarded $10,000 in attorney fees. Fatty appealed. SUMMARY DISPOSITION OF THE CLAIM The trial court properly rescinded the insurance policy because Fatty committed fraud in the procurement of the contract by explicitly denying using his vehicle to carry passengers for a fee. Because of this rescission, summary disposition of Fatty's claims was appropriate, without regard to whether Fatty was driving for Uber at the time of the accident. Fraud in the inducement to enter a contract renders the contract voidable at the option of the party deceived. An insurer has a reasonable right to expect honesty in the application for insurance. Rescission abrogates the contract and restores the parties to their relative positions had the contract never been made. A court must not hold an insurance company liable for a risk that it did not assume. SUMMARY DISPOSITION OF THE COUNTERCLAIM Reimbursement of the PIP benefits paid to Fatty was an appropriate remedy following rescission. Because the claim was fraudulent and Farm Bureau was the prevailing party, the award of attorney fees and costs was also proper. The trial court properly awarded attorney fees to Farm Bureau. Farm Bureau was forced to defend against a claim pursued under a policy that was procured by fraud. Therefore, the award is within the range of reasonable and principled outcomes and was not an abuse of discretion. Accordingly, the award of attorney fees and costs to Farm Bureau was proper. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Fraud in Inception Allows Insurer to Rescind Lamin Fatty appealed the trial court's order granting summary disposition to Farm Bureau on the basis of finding Fatty's fraud was grounds for contract rescission and reimbursement of benefits paid. In Lamin Fatty v. Farm Bureau Insurance Company Of Michigan, No. 363888, Court of Appeals of Michigan (November 21, 2023) the Court of Appeals resolved the dispute. FACTS After a motor vehicle accident where Fatty sustained bodily injuries the issue of rescission was raised when it was discovered that at the time of the accident, Fatty was insured by Farm Bureau under the no-fault act. Fatty obtained insurance with Farm Bureau on July 17, 2019. On the application for insurance, Fatty answered the following question in the negative: "Are any vehicles to be insured used to carry persons for a fee?" Uber records indicated that Fatty began working as an Uber driver in early May 2019 (before he applied for the insurance) and drove for Uber on the day of the accident. Fatty's drive log shows he picked up a rider at 6:05 p.m. and dropped them off at 6:30 p.m. Fatty picked up another rider at 6:38 p.m. and dropped them off at their destination at 6:50 p.m. Fatty continued picking up riders and completing trips that night until 8:17 p.m. After this discovery, Farm Bureau filed a counterclaim on the basis of fraud, requesting reimbursement of benefits paid to or on behalf of Fatty with regard to the accident. The trial court granted Farm Bureau's motion for summary disposition of the counterclaim, including its request for reimbursement of $104,730.82 for benefits paid, because the policy was rescinded under the doctrine of fraud in the procurement. The trial court also found Fatty's fraud entitled Farm Bureau to attorney fees under the no-fault act, and costs. Specifically, the trial court found the requested costs of $2,599.50 were reasonable and awarded $10,000 in attorney fees. Fatty appealed. SUMMARY DISPOSITION OF THE CLAIM The trial court properly rescinded the insurance policy because Fatty committed fraud in the procurement of the contract by explicitly denying using his vehicle to carry passengers for a fee. Because of this rescission, summary disposition of Fatty's claims was appropriate, without regard to whether Fatty was driving for Uber at the time of the accident. Fraud in the inducement to enter a contract renders the contract voidable at the option of the party deceived. An insurer has a reasonable right to expect honesty in the application for insurance. Rescission abrogates the contract and restores the parties to their relative positions had the contract never been made. A court must not hold an insurance company liable for a risk that it did not assume. SUMMARY DISPOSITION OF THE COUNTERCLAIM Reimbursement of the PIP benefits paid to Fatty was an appropriate remedy following rescission. Because the claim was fraudulent and Farm Bureau was the prevailing party, the award of attorney fees and costs was also proper. The trial court properly awarded attorney fees to Farm Bureau. Farm Bureau was forced to defend against a claim pursued under a policy that was procured by fraud. Therefore, the award is within the range of reasonable and principled outcomes and was not an abuse of discretion. Accordingly, the award of attorney fees and costs to Farm Bureau was proper. The trial court properly rescinded the contract because Fatty committed fraud in the procurement by explicitly denying he used his vehicle to carry passengers for a fee. Because the claim was fraudulent and Farm Bureau was the prevailing party, the award of attorney fees and costs was also proper. ZALMA OPINION Rescission is an equitable remedy that allows a contract to be voided from its inception as a result of fraud in the inception. Farm Bureau was deceived by Fatty who lied about a material fact. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Read the full article at https://lnkd.in/gC_ym3gF and see the full video at https://lnkd.in/gCF37aWz and at https://lnkd.in/gEf-yAff and at https://zalma.com/blog plus more than 4700 posts. Read the full article at https://lnkd.in/gC_ym3gF and see the full video at https://lnkd.in/gCF37aWz and at https://lnkd.in/gEf-yAff and at https://zalma.com/blog plus more than 4700 posts. The underwriting of an insurance policy requires evaluation of risks of loss faced by the proposed insured. When a proposed insured advises the underwriter that it has received an intent to sue from customers of the insured a prudent underwriter will exclude the known risk faced by the Sunnyside Mobile Estate was excluded. California Capital Insurance Company (CCIC), who defended and indemnified its insured Sunnyside Mobile Estates appealed from a judgment rendered in favor of Gotham Insurance Company (Gotham) on CCIC’s complaint for equitable contribution toward funds it paid. In California Capital Insurance Company v. Gotham Insurance Company, F084350, California Court of Appeals, Fifth District (November 6, 2023) the Court of Appeals interpreted the competing insurance policies. On April 8, 2016, mobilehome park residents, by and through one of the residents, sent Ormond a Notice of Intention to Commence Action dated March 1, 2016 (the “notice of intention to sue”) pursuant to the Mobilehome Residency Law (MRL). Equitable contribution apportions costs among insurers sharing the same level of liability on the same risk. The Ormond Insureds’ Insurance and Their Tender of Defense and Indemnity of the Alonso Action to CCIC and Gotham The Gotham policy contained an endorsement titled “Failure to Maintain Exclusion, Mobile Home Parks-California” addressed in the notice of intention to sue. Moreover, each and every cause of action asserted in the Alonso complaint was premised, at least in part, on provisions of the MRL. As the California Supreme Court has said, “where there is no duty to defend, there cannot be a duty to indemnify.” If Sunnyside Mobile Estates did not tell Gotham of the notice of intent to sue Gotham could have rescinded the policy for misrepresentation of material facts. Sunnyside did not and, as a result, Gotham excluded the type of loss that resulted in the Alonso suit. CCIC knew about the loss before its policy expired and Gotham knew of it before it happened and the Alonso suit was filed before the inception of the policy. There was no equity involved in this attempt at equitable indemnity and CCIC attempted to force Gotham to pay that which it did not owe. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Go to Newsbreak.com https://lnkd.in/g8azKc34; Subscribe to my substack at https://lnkd.in/gcZKhG6g; https://lnkd.in/gV9QJYH; Go to the Insurance Claims Library – https://lnkd.in/gwEYkxD. Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos. Go to Newsbreak.com https://lnkd.in/g8azKc34; Subscribe to my substack at https://lnkd.in/gcZKhG6g; https://lnkd.in/gV9QJYH; Go to the Insurance Claims Library – https://lnkd.in/gwEYkxD. Go to Newsbreak.com https://lnkd.in/g8azKc34; Subscribe to my substack at https://lnkd.in/gcZKhG6g; https://lnkd.in/gV9QJYH; Go to the Insurance Claims Library – https://lnkd.in/gwEYkxD. Underwriting Against a Certain Loss and Claim is AppropriateFACTUAL AND PROCEDURAL BACKGROUNDZALMA OPINION(c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

USDC Should Have Considered the Intentional Act Statute --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Breach of Condition Precedent Defeats Policy Blog Post 4673 Plaintiff appealed the trial court's order granting summary disposition in favor of defendant. In 23771 Blackstone, LLC v. Conifer Insurance Company, No. 364333, Court of Appeals of Michigan (November 16, 2023) the Plaintiff sought to avoid the fact it breached the material condition requiring it to maintain a fire sprinkler system as a protective safeguard. FACTS A fire occurred at plaintiff's building in Warren, Michigan. The building housed a marijuana growing operation. Defendant insured the property against fire and other hazards under a commercial property insurance policy that defendant originally issued in 2017 and renewed annually thereafter. The parties did not dispute that defendant's policy included a Protective Safeguards Endorsement (PSE), which provided, in pertinent part that the policy required as a condition precedent that the insured was "required to maintain the protective devices or services listed in the Schedule. The protective safeguards to which the endorsement applied was an Automatic Extinguishing System. After the fire, plaintiff filed a claim under the policy, but defendant denied the claim because the property did not have an automatic extinguishing system (AES). Plaintiff sued alleging that defendant had repeatedly inspected the property and "was aware, or should have been aware, from the inspection and other sources, that the property did not have an automatic sprinkler system." The insurer moved for summary disposition arguing that the policy language was clear and unambiguous, and that because plaintiff did not have an AES on its property, it was precluded from recovering fire protection benefits under the terms of the policy. Plaintiff faced with an obvious failure of a condition responded that that defendant should be estopped from denying coverage for lack of an AES because the PSE was ambiguous since  it did not actually define the system. The trial court ruled that the insurer was entitled to summary disposition because the policy unambiguously precluded coverage if the insured property did not have an AES, and it was undisputed that there was no AES on plaintiff's property. AMBIGUITY Initially, plaintiff argued that the language of the policy was ambiguous and that it should be construed against defendant and in favor of coverage because an AES is not defined in the PSE. Finding that the language of the PSE was not ambiguous the Court of Appeals noted that the PSE refers to a definition of an "automatic sprinkler system," stating that it means: “a. any automatic fire protective or extinguishing system, including connected: (1) Sprinklers and discharge nozzles; (2) Ducts, pipes, valves, and fittings; (3) Tanks, their component parts and supports; and (4) Pumps and private fire protection mains. b. When supplied from an automatic fire protective system; (1) Non-automatic fire protective systems; and hydrants, standpipes, and outlets." [Emphasis added.] Accordingly, the court concluded that the PSE is not ambiguous because it adequately explained the meaning of an AES. However, the mere fact that defendant and plaintiff may have been aware that the property did not have an AES does not establish that the parties mutually understood and agreed that an AES was not required as a condition of coverage. ZALMA OPINION Insurance policies are contracts. They agree to indemnify an insured against multiple risks of loss but never every potential risk faced by the insured. When an insurer requires protective safeguards like fire sprinklers or burglar alarms it reduces its premium because of the fact that the risk of loss is lessened by the protective safeguard. Failure to maintain a protective safeguard, a condition precedent, eliminates coverage because the risk of loss was not as promised. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

My Family and I are Thankful to Share This Thanksgiving with You My family and I have much to be thankful for this year, not the least of which are the care provided by my daughter, Stephanie, who cares 24/7 for my wife and her mother, Thea who continues to recover her memory. I am personally in good health, walking four to five miles a day, with the assistance of my new aortic heart valve that was inserted with a transcatheter heart valve (TVR). I am thankful for you, my friends, clients and readers of “Zalma’s Insurance Fraud Letter,” my blog “Zalma on Insurance,” my Substack publications, my videos on Rumble.com and YouTube.com and my books and other writing including the new Third Edition of the ten volumes of my treatise, “Zalma on Insurance Claims.” Please allow me this opportunity to explain to you all the things I, and my family, can give thanks for: 1. I have loved my wife of 55 years since we first met when she was nine and I was twelve. 2. I am thankful that she still loves me and lets me make clear every day that I love her more now than I did when she ignored me when I was 12. 3. My three adult children who are successes in their own right. 4. That my three children, my almost seven-year-old granddaughter live nearby, put up with my wife and I, and are healthy, successful, and mostly happy in what they do. 5. That my grandson graduated from Puget Sound University in Washington state and is now working full time for a major business in Los Angeles. 6. My clients who, for the more than 55 years have allowed me to earn a living doing what I love: practicing law until I let my license go inactive, acting as a consultant, testifying as an expert witness, writing materials to help others provide excellence in claims services and creating videos to help every member of the insurance profession learn more about insurance and insurance claims handling. 7. My publishers the American Bar Association, Full Court Press, Fastcase.com, Thomson Reuters and Amazon.com. 8. My dearly departed parents and grandparents for having the good sense to leave the Ottoman Empire at the beginning of the 20th Century so we could avoid the Holocaust and I could be born American. 9. My country for giving me a place to live and work in peace and complain about it without fear. 10. The state of California, where I was born, and have lived for 81 years, for allowing me to have my home and grow my family, and the ability to pay the high taxes for the privilege. 11. Those of you who read what I write and gain something from it. 12. Eighty one years of mostly good health, but for a small heart attack, clogged arteries and a deteriorated aortic heart valve, that gave me the ability to continue to work – albeit at a reduced rate because of the skills of my cardiologists and the St. John’s hospital in Santa Monica. 13. Allowing me the health and ambition to avoid my cardiologist by walking every day and working on my garden and bonsai. 14. The hundreds of friends I have never met but with whom the Internet has allowed me to communicate in parts of the world I have never visited. 15. The wonder of the Internet that allows me to publish E-books, Zalma’s Insurance Fraud Letter (ZIFL) and my blog instantly on line. 16. That my family can get together to express our thanks for each other and our happiness this year again without a need for anything but enjoying each other’s company. 17. That most of you who I know only by my publications can also gather with your families to express your thanks. 18. To those friends I meet almost every day as I walk along the Ballona Creek bike path. I hope, on this Thanksgiving weekend, that you can join my family and me remembering that it is more important to think about our blessings and those things that we have to be thankful for than to get in line for “Black Friday” to buy an inexpensive flat screen t.v. or tablet. Enjoy the holiday and your family as I will. (c) 2023 Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Speculation About Extraneous Facts Does Not Trigger Duty to Defend AutoDistributors, Inc. and Steven Schneider (collectively "AutoDistributors") appealed the district court's order granting judgment on the pleadings in favor of Scottsdale Insurance Company, Nationwide E&S Specialty, Scottsdale Indemnity Company, and National Casualty Company (collectively "Defendants"). In Autodistributors, Inc. et al v. Nationwide E&S Specialty; et al., No. 22-16445, United States Court of Appeals, Ninth Circuit (November 17, 2023) the Ninth Circuit interpreted the insurance policy. Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Florida Refuses to Offset Tort Damages with Bad Faith Damages from an Underinsured Motorist Insurer The Florida Supreme Court was asked to resolve a certified question from a lower court about whether a personal injury damages award must be reduced by a payment the plaintiff received to settle a bad faith claim against his uninsured motorist insurance carrier. In Alberta S. Ellison v. Randy Willoughby, No. SC2021-1580, Supreme Court of Florida (November 2, 2023) the Supreme Court answered the questions posed. FACTS Respondent/plaintiff Randy Willoughby was badly injured in a car crash. After the accident, he sued Petitioner/defendant Alberta Ellison, bringing a vicarious liability claim based on Ellison's co-ownership of the other car in the crash. Willoughby also sued his own uninsured motorist insurance carrier to recover policy benefits and for statutory bad faith damages. Willoughby and his insurer settled before trial for $4 million. The subsequent trial against Ellison resulted in a $30 million jury verdict for Willoughby. Ellison then asked the trial court to set off the $4 million insurance settlement against the damages award, but the court denied the motion. The Second District Court of Appeal affirmed the denial of the set off request. It also certified this two-part question as one of great public importance. Is a settlement payment made by an uninsured motorist insurer to settle a first-party bad faith claim subject to set off under section 768.041(2) or a collateral source within the meaning of section 768.76? The court answered no to both parts of the question, holding that neither statute authorized a set off in this case. The Second District explained that, writing on a blank slate, it would have found Ellison entitled to a set off under section 768.041(2), but it decided that the Supreme Court's case law precluded that result. Based on the parties' arguments and the Supreme Court's review of the record, the Supreme Court determined that Ellison did not ask the trial court for a set off under section 768.041(2) and refused to consider the issue. The Supreme Court rephrased the question posed to it to read: “Is a settlement payment made by an uninsured motorist insurer to settle a first-party bad faith claim a collateral source within the meaning of section 768.76(2)(a)2.?” Although Willoughby sued his uninsured motorist insurance carrier both for the $10,000 limit allowed under his policy and for bad faith damages, his $4 million insurance settlement was undifferentiated (as to claims and categories of damages). Subject to certain exceptions, section 768.76(1) mandates damage award reductions for sums that the plaintiff has received from "collateral sources." The Supreme Court noted that bad faith damages are not "benefits" for purposes of the collateral source definition in section 768.76(2)(a)2. First-party bad faith claims like Willoughby's are a creature of statute, not of the underlying insurance contract between the parties. In particular, the damages recoverable in an uninsured motorist insurance bad faith claim are set out in a statute to be "the total amount of the claimant's damages, including the amount in excess of the policy limits, any interest on unpaid benefits, reasonable attorney's fees and costs, and any damages caused by a violation of a law of this state." The Florida Supreme Court characterized statutory bad faith damages as a penalty. By "extracontractual," the Supreme Court meant that first-party bad faith damages are over and above the amount owed pursuant to the express terms and conditions of the policy after all of the conditions precedent of the insurance policy in respect to payment are fulfilled. The Supreme Court answered its rephrased question with a "no" ZALMA OPINION The $30 Million verdict was not offset by the $4 Million bad faith (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

My Family and I are Thankful to Share This Thanksgiving with You My family and I have much to be thankful for this year, not the least of which are the care provided by my daughter, Stephanie, who cares 24/7 for my wife and her mother, Thea who continues to recover her memory. I am personally in good health, walking four to five miles a day, with the assistance of my new aortic heart valve that was inserted with a transcatheter heart valve (TVR). In my semi-retirement I continue working only six to eight hours a day doing what I love the most, writing about insurance, insurance claims, insurance law and acting as an insurance claims consultant and expert witness. As a first generation American I am honored to join with all Americans the ability to celebrate Thanksgiving that started when the United States was a dream and just a colony of Great Britain to give thanks for the good things in life at least once a year. It took Abraham Lincoln, our greatest President, to make it an official holiday. Please allow me this opportunity to explain to you all the things I, and my family, can give thanks for: 1. I have loved my wife of 55 years since we first met when she was nine and I was twelve. 2. I am thankful that she still loves me and lets me make clear every day that I love her more now than I did when she ignored me when I was 12. 3. My three adult children who are successes in their own right. 4. That my three children, my almost seven-year-old granddaughter live nearby, put up with my wife and I, and are healthy, successful, and mostly happy in what they do. 5. That my grandson graduated from Puget Sound University in Washington state and is now working full time for a major business in Los Angeles. 6. My clients who, for the more than 55 years have allowed me to earn a living doing what I love: practicing law until I let my license go inactive, acting as a consultant, testifying as an expert witness, writing materials to help others provide excellence in claims services and creating videos to help every member of the insurance profession learn more about insurance and insurance claims handling. 7. My publishers the American Bar Association, Full Court Press, Fastcase.com, Thomson Reuters and Amazon.com. 8. My dearly departed parents and grandparents for having the good sense to leave the Ottoman Empire at the beginning of the 20th Century so we could avoid the Holocaust and I could be born American. 9. My country for giving me a place to live and work in peace and complain about it without fear. 10. The state of California, where I was born, and have lived for 81 years, for allowing me to have my home and grow my family, and the ability to pay the high taxes for the privilege. 11. Those of you who read what I write and gain something from it. 12. Eighty one years of mostly good health, but for a small heart attack, clogged arteries and a deteriorated aortic heart valve, that gave me the ability to continue to work – albeit at a reduced rate because of the skills of my cardiologists and the St. John’s hospital in Santa Monica. 13. Allowing me the health and ambition to avoid my cardiologist by walking every day and working on my garden and bonsai. 14. The hundreds of friends I have never met but with whom the Internet has allowed me to communicate in parts of the world I have never visited. 15. The wonder of the Internet that allows me to publish E-books, Zalma’s Insurance Fraud Letter (ZIFL) and my blog instantly on line. 16. That my family can get together to express our thanks for each other and our happiness this year again without a need for anything but enjoying each other’s company. 17. That most of you who I know only by my publications can also gather with your families to express your thanks. h. Enjoy the holiday and your family as I will. (c) 2023 Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

, a large barn with an adjacent milk house, several sheds or smaller barns, and a small country church. The underlying case arises from a fire on Scafella's real property. The insurance claims Scafella made following that fire loss did not provide the result he desired and litigation followed. THE POLICY The property was insured under a homeowner's policy of insurance issued by Erie, identified as the "ErieSecure Home Insurance Policy" ("policy"). The policy contained a standard business pursuits exclusion, which excluded loss to property “1. used in whole or in part for "business" purposes …; or 2. used to store "business" property.” It was undisputed that Mr. Scafella's then fiance (Ms. Lisa Smith), obtained two insurance quotes from Erie for the property, one including an incidental farming endorsement and one without the endorsement. Ultimately, Mr. Scafella chose the insurance quote that did not include the incidental farming endorsement, a less costly option. Despite indicating to the contrary in his application for insurance, a business, Olivia's, LLC ("Olivia's"), was a retail store selling meat, cheese, and sandwiches. There is no question that the February 2, 2019, fire caused significant structural damage to the large barn and resulted in the loss of numerous items of Mr. Scafella's personal property. THE CLAIMS Shortly after the fire loss, Mr. Scafella filed an insurance claim with Erie for that loss. Ms. Smith who, during a recorded statement taken by Mr. Geho, described Olivia's as being "in a different part of the [barn] building," but "in the barn itself." Erie denied the portion of the fire loss claim for the structure of the large barn, under the business pursuits exclusion of the Other Structures provision of the policy, as Mr. Scafella was operating a business (Olivia's) out of the structure. The circuit court found that the "milk house and the barn are one structure" and the court concluded that the evidence on the record did not support Mr. Scafella's claims. DISCUSSION The Court of Appeals concluded that Mr. Scafella failed to meet his burden to establish waiver, the court of appeals found no error in the circuit court's award of summary judgment to Erie and Mr. Geho. Other Structures Provision The Court of Appeals concluded that the large barn area where the fire occurred and the milk house (where Mr. Scafella operated Olivia's) are the same structure. In fact, when providing a recorded statement to Erie after the fire loss, Ms. Smith identified the barn and the milk house as being part of one building. Claw-Back Provision Here, Mr. Scafella represented that the property within the large barn was his personal property to collect $67,640.80 under the personal property coverage in his Erie policy, possibly to avoid the $2,500.00 limit to "business" personal property under the SPECIAL LIMITS - Personal Property Coverage section of policy. The Court of Appeals concluded that to permit Mr. Scafella to change his classification of the property at issue to recover under corresponding portions of the policy is impermissible and would permit him a windfall and coverage for which he did not pay. Finding no error the trial court's decision was affirmed. ZALMA OPINION When a person is given a choice of available coverages and chooses the one less expensive he or she is gambling that the loss will fit within the lesser coverages, and misrepresents the facts at the site of loss to obtain the less expensive coverage the insured is committing fraud. After the loss Scafella attempted to change the policy he purchased into the policy he refused to pay for, with multiple legal machinations that the courts of West Virginia refused to honor. The moral: always tell the truth to your prospective insurer and never buy a policy that does not provide coverage for the risks the property faces. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL – Volume 27 Issue 22 The Resource for the Insurance Claims and Insurance Fraud Professionals This, the 22nd issue of the 27th Year of ZIFL includes articles and reports relating to insurance fraud, including: Insurance Fraud is a Violent Crime Plea of Guilty of Murder for Insurance Cannot Be Withdrawn In State of Ohio v. Darin Brusiter, No. 112410, 2023-Ohio-3794, Court of Appeals of Ohio, Eighth District, Cuyahoga (October 19, 2023) Darin Burster (“Brusiter”) appealed for the third time from the trial court’s denial of his post-sentence motion to withdraw his guilty plea. FACTS In April 2011, Brusiter was charged with two counts of aggravated murder, with murder-for-hire and firearm specifications, kidnapping, insurance fraud, and tampering with evidence in relation to the killing of Asia Harris (“Harris”). Harris’s husband Samuel Wilson was also charged in the same indictment. Brusiter filed a motion to suppress the statements he made to the police as being in violation of Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966). On May 2, 2012, the court denied Brusiter’s motion and that same day he pled guilty to one count each of aggravated murder, kidnapping, insurance fraud, and tampering with evidence. The court sentenced Brusiter to an agreed term of “33 years to life” in prison. Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/11/ZIFL-11-15-2023.pdf More McClenny Moseley & Associates Issues This is ZIFL’s eighteenth 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 damage to the public of the state of Louisiana. February 14, 2023 Looking back in time, attorney William P. Gibbens, representing MMA advised USDC Judge Michael B. North, that McClenny, Moseley & Associates admits to instances where MMA told Carriers they represented the insured when they in fact represented Apex Roofing & Restoration. MMA’s Counsel William P. Gibbens admits MMA told insurers that they represent the homeowner, when they actually represent Apex Roofing. They also admit to receiving funds from carriers after making these false statements. November 7, 2023 Louisiana State Police Investigators Told WWL-TV They Are Starting Their Investigation with Five St. Tammany Parish Cases and Expanding From There. Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/11/ZIFL-11-15-2023.pdf How an Agent Defrauded the Insurer She Represented In Destiney Kashia Xiong v. Security National Life Insurance Company, No. 2019AP2320, Court of Appeals of Wisconsin, District III (February 22, 2022) the Court of Appeal resolved the issues raised and allowed the case to go to trial with the insurer asserting a fraud defense. Read the full article and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/11/ZIFL-11-15-2023.pdf Health Insurance Fraud Convictions Addiction Treatment Center Supervisor Admits to Participating in a Scheme to Defraud Federal, State, and Private Health Care Insurers Recovery Connections Centers of America Social Worker Admits to Leadership Role In Scheme To Bill Insurers For More Full Client Sessions Than Could Be Provided In A 24-Hour Day Mi Ok Song Bruining, 63, of Warwick, RI, a clinical social worker on November 9, 2023, admitted to a federal judge that she helped devise and execute a scheme that shortchanged Rhode Island and Massachusetts substance abuse disorder patients out of counseling. Read the full article and reports of dozens of convictions and the full issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/11/ZIFL-11-15-2023.pdf Insurance Fraudster Was a Very Bad Man Insurance Fraudsters Convicted of Other Crimes In my experience those who commit property or casualty insurance fraud are seldom arrested. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Failing to Understand the Contract it Wrote Cost the White Sox --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Failing to Understand the Contract it Wrote Cost the White Sox --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Ambiguous Policy Wording Results in Adoption of Continuous Trigger of Coverage The United States Court of Appeals for the Fourth Circuit certified a question to the Supreme Court of Appeals of West Virginia  asking: "[a]t what point in time does bodily injury occur to trigger insurance coverage for claims stemming from chemical exposure or other analogous harm that contributed to the development of a latent illness?" In Westfield Insurance Company v. Sistersville Tank Works, Inc.; et al, No. 22-848, Supreme Court of Appeals of West Virginia (November 8, 2023) the Court answered the question.  The Supreme Court answered the question with the conclusion that a "continuous-trigger" theory applies to the policy, as the policy is ambiguous as to when coverage is triggered. OPINION The gateway to coverage under every standardized, commercial general liability (or "CGL") policy issued in the United States since 1966 is proof that a bodily injury or property damage has "occurred." FACTUAL BACKGROUND Sistersville Tank Works ("STW") has, since late 1984, been a family-owned and -operated West Virginia corporation. STW manufactures, installs, and repairs various types of tanks at industrial sites throughout world, including at several chemical plants in West Virginia. At different points in 2014, 2015, and 2016, three men were diagnosed with various forms of cancer. In 2016 and 2017, the "claimants" (the men with cancer and/or their spouses) sued STW in three separate lawsuits in West Virginia state courts. The claimants alleged the cancers were, in some part, caused by STW's tanks. STW asked Westfield to provide a defense and indemnification to the three lawsuits under its previously purchased CGL policies. Westfield denied coverage under its CGL policies for the three suits and, in June 2018, filed a complaint against STW for declaratory relief  and after discovery, the parties filed competing motions for summary judgment. The Supreme Court had never addressed the question raised before the district court. Nevertheless, the district court calculated that this Court would apply the continuous-trigger theory to clarify the ambiguous language in Westfield's policy. DISCUSSION Occurrence-based CGL policies provide coverage if the event insured against takes place during the policy period, irrespective of when a claim is presented. The certified question raises a different, more complicated set of circumstances. Westfield contends that manifestation of a disease is the sole trigger of coverage under its occurrence-based CGL policies. The Policy Language Supports A Continuous Trigger The reasoning of the Supreme Court’s recognition of the continuous trigger of coverage has the effect of spreading the risk of loss widely to all of the occurrence-based insurance policies in effect during the entire process of injury or damage. As one court said, the continuous trigger theory is the most efficient doctrine for allocation of liability amongst insurers for toxic waste cases, because it encourages all insurers to monitor risks and charge appropriate premiums. Therefore, an occurrence based CGL policy covers all injuries, sicknesses, or diseases that occur during coverage, not merely those that become manifest. s ZALMA OPINION It is axiomatic that when a court finds an ambiguity in an insurance policy it must be interpreted in favor of coverage for the insured. West Virginia found the policy was ambiguous as to trigger and therefore, overruling a strenuous dissent, and applied the continuous trigger expanding the coverages available to STW for the claims of the plaintiffs that STW was responsible for the illnesses because under the continuous-trigger theory of coverage every moment from the first exposure to the harmful chemicals up to and including the date of diagnosis would be covered by Westfield's policy.  (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Plea of Guilty of Murder for Insurance Cannot Be Withdrawn In State Of Ohio v. Darin Brusiter, No. 112410, 2023-Ohio-3794, Court of Appeals of Ohio, Eighth District, Cuyahoga (October 19, 2023) Darin Brusiter ("Brusiter") appealed for the third time from the trial court's denial of his post-sentence motion to withdraw his guilty plea. FACTS In April 2011, Brusiter was charged with two counts of aggravated murder, with murder-for-hire and firearm specifications, kidnapping, insurance fraud, and tampering with evidence in relation to the killing of Asia Harris ("Harris"). Harris's husband Samuel Wilson was also charged in the same indictment. Brusiter filed a motion to suppress the statements he made to the police as being in violation of Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966). On May 2, 2012, the court denied Brusiter's motion and that same day he pled guilty to one count each of aggravated murder, kidnapping, insurance fraud, and tampering with evidence. The court sentenced Brusiter to an agreed term of "33 years to life" in prison. Brusiter filed a direct appeal of the trial court's denial of his motion to suppress and the Court of Appeals earlier affirmed Brusiter's convictions, finding that he waived his right to appeal pretrial rulings when he pled guilty.  In finding that Brusiter waived his right to challenge the denial of his motion to suppress, the Court of Appeals also concluded that "the record on appeal affirmatively demonstrates that [Brusiter] entered a voluntary, knowing and intelligent guilty plea as required by Crim.R. 11." Brusiter filed a second motion to withdraw guilty plea. In this motion, Brusiter argued that there are two, apparently specious, reasons he should be allowed to withdraw his guilty plea. The trial court summarily denied both motions to withdraw guilty plea ANALYSIS Appellate courts review a trial court's ruling on a motion to withdraw a guilty plea for an abuse of discretion. The presumption of prejudice recognized in precedent applies regardless of whether a defendant has signed an appeal waiver. Brusiter's 2020 motion to withdraw his guilty plea, which alleged ineffective assistance of counsel and the improper denial of his motion to suppress, is barred by the doctrine of res judicata. Brusiter filed a direct appeal in which he challenged the trial court's denial of his motion to suppress. The Court of Appeals three times affirmed Brusiter's convictions, finding that he waived his right to challenge the denial of his motion to suppress by pleading guilty. The Court of Appeals also found that Brusiter's guilty plea was voluntary, knowing, and intelligent. Therefore, the trial court did not abuse its discretion by denying Brusiter's motion to withdraw his guilty plea without holding a hearing. The motion was filed almost nine years after he pled guilty to aggravated murder and other offenses associated with the death of Harris. ZALMA OPINION Although life insurance fraud by murder is a seriously and violent crime Mr. Brusiter decided it was important to plead guilty with a guaranteed sentence of only 33 years rather than a death sentence, he abused the kindness of the courts of Ohio by filing multiple motions and appeals to withdraw his plea. Since he's in jail for at least 20 more years it made no sense to punish him further or seek monetary sanctions he could not pay, but any further appeals or motions should be summarily dismissed without an opinion. (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 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Florida Refuses to Offset Tort Damages with Bad Faith Damages from an Underinsured Motorist Insurer The Florida Supreme Court was asked to resolve a certified question from a lower court about whether a personal injury damages award must be reduced by a payment the plaintiff received to settle a bad faith claim against his uninsured motorist insurance carrier. In Alberta S. Ellison v. Randy Willoughby, No. SC2021-1580, Supreme Court of Florida (November 2, 2023) the Supreme Court answered the questions posed. FACTS Respondent/plaintiff Randy Willoughby was badly injured in a car crash. After the accident, he sued Petitioner/defendant Alberta Ellison, bringing a vicarious liability claim based on Ellison's co-ownership of the other car in the crash. Willoughby also sued his own uninsured motorist insurance carrier to recover policy benefits and for statutory bad faith damages. Willoughby and his insurer settled before trial for $4 million. The subsequent trial against Ellison resulted in a $30 million jury verdict for Willoughby. Ellison then asked the trial court to set off the $4 million insurance settlement against the damages award, but the court denied the motion. The Second District Court of Appeal affirmed the denial of the set off request. It also certified this two-part question as one of great public importance. Is a settlement payment made by an uninsured motorist insurer to settle a first-party bad faith claim subject to set off under section 768.041(2) or a collateral source within the meaning of section 768.76? The court answered no to both parts of the question, holding that neither statute authorized a set off in this case. The Second District explained that, writing on a blank slate, it would have found Ellison entitled to a set off under section 768.041(2), but it decided that the Supreme Court's case law precluded that result. Based on the parties' arguments and the Supreme Court's review of the record, the Supreme Court determined that Ellison did not ask the trial court for a set off under section 768.041(2) and refused to consider the issue. The Supreme Court rephrased the question posed to it to read: “Is a settlement payment made by an uninsured motorist insurer to settle a first-party bad faith claim a collateral source within the meaning of section 768.76(2)(a)2.?” Although Willoughby sued his uninsured motorist insurance carrier both for the $10,000 limit allowed under his policy and for bad faith damages, his $4 million insurance settlement was undifferentiated (as to claims and categories of damages). Subject to certain exceptions, section 768.76(1) mandates damage award reductions for sums that the plaintiff has received from "collateral sources." The Supreme Court noted that bad faith damages are not "benefits" for purposes of the collateral source definition in section 768.76(2)(a)2. First-party bad faith claims like Willoughby's are a creature of statute, not of the underlying insurance contract between the parties. In particular, the damages recoverable in an uninsured motorist insurance bad faith claim are set out in a statute to be "the total amount of the claimant's damages, including the amount in excess of the policy limits, any interest on unpaid benefits, reasonable attorney's fees and costs, and any damages caused by a violation of a law of this state." --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurance Fraudsters Convicted of Other Crimes INSURANCE CRIME DOES NOT PAY In my experience those who commit property or casualty insurance fraud are seldom arrested, even more rarely are they tried and convicted. Roberto Torner was an insurance criminal who avoided arrest for his insurance fraud activities but, because he was a serious criminal and dangerous, was arrested, tried and convicted of violent crimes. He filed a motion to vacate his conviction and sentence in United States Of America v. Roberto Torner, CRIMINAL No. 3:17-343, United States District Court, M.D. Pennsylvania (November 1, 2023) and the USDC kept Torner in Prison. BACKGROUND In June 2015, the Luzerne County Drug Task Force commenced an investigation into Roberto Torner after receiving information about his heroin trafficking and firearms activity from a confidential informant (C.I.). Investigators subsequently used the C.I. to conduct a controlled purchase of approximately five grams of heroin from Torner, his girlfriend Liza Robles, and his associate David Alzugaray-Lugones. The controlled buy and conversations leading up to the event were captured in a series of recorded phone calls and body camera videos obtained by the C.I. The ATF commenced an investigation into Torner, Robles, and Alzugaray-Lugones involving suspected arson, insurance fraud, and firearms offenses. On August 28, 2017, after obtaining information about Robles's historical firearms purchases and activities, and after interviewing witnesses who reported recent instances of Torner possessing firearms, the ATF executed search warrants at Torner's properties. During the execution of those warrants, the ATF recovered multiple firearms and ammunition.  The ATF interviewed additional witnesses, who relayed accounts of Torner possessing firearms. Torner was granted pretrial release after being charged in a criminal complaint and subsequent indictment. Thereafter, the ATF obtained information from witnesses that Torner possessed C-4 explosives while on pretrial release. On January 5, 2018, law enforcement officials executed a search warrant at one of Torner's properties, where they recovered approximately 1.5 pounds of stolen U.S. military C-4 plastic explosives. Following a 12-day trial, Torner and his codefendants were convicted of all counts and Torner was sentenced to 270 months of imprisonment, five years of supervised release, and a $20,000 fine. Torner challenged his conviction and sentence on direct appeal, only to have Third Circuit Court of Appeals affirm his conviction and sentence. Torner alleged that counsel provided ineffective assistance at trial for failing to seek suppression of recordings. DISCUSSION A review of the motion and the government's brief, as well as the law and the claims make it clear that Torner's claims are without merit.  Torner has not shown either the denial of a constitutional right nor that jurists of reason would disagree with this court's resolution of his claims and  the court denied Torner's motion to vacate. ZALMA OPINION I have spent the last 55 years working to help insurers and police authorities to defeat those who commit insurance fraud and disabuse authorities of the fact that insurance fraud is a non-violent crime and a crime without victims. Judges have been known to say from the bench that an insurance company can't be a victim. In this case the ATF took on an insurance fraudster and convicted him of crimes of violence and possession of weapons and stolen explosives. His activities defrauding insurers and dealing drugs were ignored and his other criminal conduct stopped the fraud by putting Torner and his co-defendants in prison and stopped his work as an insurance fraud perpetrator. A small victory for the defrauded insurers. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Ambiguous Policy Wording Results in Adoption of Continuous Trigger of Coverage The United States Court of Appeals for the Fourth Circuit certified a question to the Supreme Court of Appeals of West Virginia  asking: "[a]t what point in time does bodily injury occur to trigger insurance coverage for claims stemming from chemical exposure or other analogous harm that contributed to the development of a latent illness?" In Westfield Insurance Company v. Sistersville Tank Works, Inc.; et al, No. 22-848, Supreme Court of Appeals of West Virginia (November 8, 2023) the Court answered the question.  The Supreme Court answered the question with the conclusion that a "continuous-trigger" theory applies to the policy, as the policy is ambiguous as to when coverage is triggered. OPINION The gateway to coverage under every standardized, commercial general liability (or "CGL") policy issued in the United States since 1966 is proof that a bodily injury or property damage has "occurred." FACTUAL BACKGROUND Sistersville Tank Works ("STW") has, since late 1984, been a family-owned and -operated West Virginia corporation. STW manufactures, installs, and repairs various types of tanks at industrial sites throughout world, including at several chemical plants in West Virginia. At different points in 2014, 2015, and 2016, three men were diagnosed with various forms of cancer. In 2016 and 2017, the "claimants" (the men with cancer and/or their spouses) sued STW in three separate lawsuits in West Virginia state courts. The claimants alleged the cancers were, in some part, caused by STW's tanks. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Plea of Guilty of Murder for Insurance Cannot Be Withdrawn In State Of Ohio v. Darin Brusiter, No. 112410, 2023-Ohio-3794, Court of Appeals of Ohio, Eighth District, Cuyahoga (October 19, 2023) Darin Brusiter ("Brusiter") appealed for the third time from the trial court's denial of his post-sentence motion to withdraw his guilty plea. FACTS In April 2011, Brusiter was charged with two counts of aggravated murder, with murder-for-hire and firearm specifications, kidnapping, insurance fraud, and tampering with evidence in relation to the killing of Asia Harris ("Harris"). Harris's husband Samuel Wilson was also charged in the same indictment. Brusiter filed a motion to suppress the statements he made to the police as being in violation of Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966). On May 2, 2012, the court denied Brusiter's motion and that same day he pled guilty to one count each of aggravated murder, kidnapping, insurance fraud, and tampering with evidence. The court sentenced Brusiter to an agreed term of "33 years to life" in prison. Brusiter filed a direct appeal of the trial court's denial of his motion to suppress and the Court of Appeals earlier affirmed Brusiter's convictions, finding that he waived his right to appeal pretrial rulings when he pled guilty.  In finding that Brusiter waived his right to challenge the denial of his motion to suppress, the Court of Appeals also concluded that "the record on appeal affirmatively demonstrates that [Brusiter] entered a voluntary, knowing and intelligent guilty plea as required by Crim.R. 11." Brusiter filed a second motion to withdraw guilty plea. In this motion, Brusiter argued that there are two, apparently specious, reasons he should be allowed to withdraw his guilty plea. The trial court summarily denied both motions to withdraw guilty plea ANALYSIS Appellate courts review a trial court's ruling on a motion to withdraw a guilty plea for an abuse of discretion. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Not Wise to Burden Appellate Court with Multiple Frivolous Motions \ After appellant Donya Entertainment, Inc. noticed a "very significant . . . water intrusion" in a restaurant it had owned and operated for several months, Donya submitted a claim to its insurer, respondent Farmers Insurance Exchange. Farmers denied the claim, asserting it was not covered under Donya's policy. Donya sued Farmers alleging Farmers insufficiently investigated the claim before denying it. Farmers moved for summary judgment, arguing that the policy excluded claims for water seepage that had been occurring for 14 days or more, and the undisputed evidence demonstrated the water seepage had been occurring for at least a year. The trial court granted Farmers' motion, holding there could be no liability for a defective investigation if there was no coverage under the policy. In Donya Entertainment, Inc. v. Farmers Insurance Exchange, B315381, California Court of Appeals (October 27, 2023) the Court of Appeals dealt with multiple incompetent appellate motions and ruled in favor of Farmers. FACTUAL BACKGROUND In May 2020, Donya sued Farmers, alleging that Donya operated a franchise restaurant in Rancho Cucamonga. Donya claimed it purchased the operation from Bacon-Up Corporation in July 2019. Donya alleged Bacon-Up had an insurance policy issued by Farmers when it operated the restaurant, and that Donya had also insured itself with Farmers "under policy number 0606749543," which "provided coverage for Donya with respect to losses caused by water intrusion." Several months after Donya began operating the restaurant, "a very significant experience of water intrusion occurred [,] adversely affecting the kitchen and dining areas." Donya submitted a claim to Farmers. Donya also alleged that "during this time," it learned the restaurant "had experienced similar water intrusion during the ownership and operation" of Bacon-Up, and that Bacon-Up "had made alterations to the physical structure of the flooring in relation to that previous water intrusion." In July 2020, Farmers filed its verified answer. Farmers Moves for Summary Judgment --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Not Wise to Burden Appellate Court with Multiple Frivolous Motions \ After appellant Donya Entertainment, Inc. noticed a "very significant . . . water intrusion" in a restaurant it had owned and operated for several months, Donya submitted a claim to its insurer, respondent Farmers Insurance Exchange. Farmers denied the claim, asserting it was not covered under Donya's policy. Donya sued Farmers alleging Farmers insufficiently investigated the claim before denying it. Farmers moved for summary judgment, arguing that the policy excluded claims for water seepage that had been occurring for 14 days or more, and the undisputed evidence demonstrated the water seepage had been occurring for at least a year. The trial court granted Farmers' motion, holding there could be no liability for a defective investigation if there was no coverage under the policy. In Donya Entertainment, Inc. v. Farmers Insurance Exchange, B315381, California Court of Appeals (October 27, 2023) the Court of Appeals dealt with multiple incompetent appellate motions and ruled in favor of Farmers. FACTUAL BACKGROUND In May 2020, Donya sued Farmers, alleging that Donya operated a franchise restaurant in Rancho Cucamonga. Donya claimed it purchased the operation from Bacon-Up Corporation in July 2019. Donya alleged Bacon-Up had an insurance policy issued by Farmers when it operated the restaurant, and that Donya had also insured itself with Farmers "under policy number 0606749543," which "provided coverage for Donya with respect to losses caused by water intrusion." Several months after Donya began operating the restaurant, "a very significant experience of water intrusion occurred [,] adversely affecting the kitchen and dining areas." Donya submitted a claim to Farmers. Donya also alleged that "during this time," it learned the restaurant "had experienced similar water intrusion during the ownership and operation" of Bacon-Up, and that Bacon-Up "had made alterations to the physical structure of the flooring in relation to that previous water intrusion." In July 2020, Farmers filed its verified answer. Farmers Moves for Summary Judgment In February 2021, Farmers moved for summary judgment. As to Donya's claim on its own insurance policy, Farmers contended "[t]here can be no tort liability in the absence of coverage" and "the undisputed material facts establish that no coverage exists under the Policy" for Donya's claim. Farmers claimed that the water leaking had been going on for at least a year before Plaintiff reported it." As to Donya's claim against Farmers on Bacon-Up's policy, Farmers argued the obvious: that "a third-party claimant cannot sue the insurer of its litigation adversary for breach of contract or bad faith, or failure to properly investigate." Relevant here are the "Back Up of Sewers or Drains Coverage Endorsement" and the "Limited Coverage for Fungi, Wet Rot, Dry Rot and Bacteria --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Statute of Limitations Bars Bad Faith Action PPO Health Insurance Policy Refusal to Pay Starts Running of Statute of Limitation Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Resource for the Insurance Claims and Insurance Fraud Professionals What a Great Country! This article 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. The story is posted to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators than any Other Crime. How Insurance Fraud Can Succeed Wo Ping Chen was trained as a physician in Hong Kong. Until Hong Kong was returned by the United Kingdom to the Peoples Republic of China, he was the best-known Orthopedist in the Crown Colony. Fearing problems with the new government he emigrated to Vancouver, British Columbia, Canada as a citizen of the commonwealth. He worked as an employee of the National Health Service for a year and then obtained a work visa to the U.S. and crossed the border into the U.S. only to find he could not work as a physician without a license from a U.S. state and attended a U.S. based medical school. After one year of medical school, one year of internship in a Seattle hospital and one year as a resident Chen was able to restart his life. Read this article and the full 20 pages of this issue at ZIFL in pdf at http://zalma.com/blog/wp-content/uplo... More McClenny Moseley & Associates Issues This is ZIFL’s seventeenth 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. Access Restoration Services U.S., Inc. and MMA Scheme Alleged in Detailed New Orleans Court Pleading and more. Read this article and the full 20 pages of this issue at ZIFL in pdf at http://zalma.com/blog/wp-content/uplo... After Avoiding Prison Fraudster Appeals Unsuccessfully False Lightning Strike Claim Results in Fraud Conviction Read this article and the full 20 pages of this issue at ZIFL in pdf at http://zalma.com/blog/wp-content/uplo... Health Insurance Fraud Convictions Tampa Pain Management Physician Edward Lubin Agrees to Pay $1.5 Million To Settle False Claims Act Liability for Receiving Bribes and Writing Unnecessary Fentanyl Prescriptions Read this article and the full 20 pages of this issue at ZIFL in pdf at http://zalma.com/blog/wp-content/uplo... Other Insurance Fraud Convictions Claims Adjuster Will Serve Prison Time for Fraud Scheme Paul Richard Massey, of Shady Spring, West Virginia, a former Allstate claims adjuster, will spend one year and a day in prison, forfeit his beach house and pickup truck to the federal government after pleading guilty to wire fraud and money laundering. Read this article and the full 20 pages of this issue at ZIFL in pdf at http://zalma.com/blog/wp-content/uplo... Other Insurance Fraud Convictions Claims Adjuster Will Serve Prison Time for Fraud Scheme Paul Richard Massey, of Shady Spring, West Virginia, a former Allstate claims adjuster, will spend one year and a day in prison, forfeit his beach house and pickup truck to the federal government after pleading guilty to wire fraud and money laundering. Read this article and the full 20 pages of this issue at ZIFL in pdf at http://zalma.com/blog/wp-content/uplo... (c) 2023 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues about this Newsletter, blog and the videos and let them subscribe to the blog and the videos. Read this article and the full 20 pages of this issue at ZIFL in pdf at http://zalma.com/blog/wp-content/uplo... --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Routine Business Not Protected Work Product In Aerojet Rocketdyne, Inc. v. Global Aerospace, Inc., et al., No. 2:17-cv-01515-KJM-AC, United States District Court, E.D. California (October 25, 2023) an insurance coverage dispute wastes the time of the court and are admonished by the court. FACTUAL BACKGROUND In a long-running insurance coverage dispute that was prolonged for several years by defendant Global Aerospace Inc.'s refusals to produce evidence in response to requests from plaintiff Aerojet Rocketdyne, Inc. The root of the disagreement was Global's assertion of attorney-client privilege and work-product protections. The Magistrate Judge determined the disputed evidence was not protected by the attorney-client privilege or work product doctrine, and the court denied Global's repeated requests to revisit that decision. In short, although attorneys were involved in the disputed investigation, communications with them were not privileged, and their work product was not protected; the investigation was part of the company's routine business. It was not conducted in anticipation of litigation. Several defendants, including Global, have now moved for summary judgment. Briefing is ongoing. The exhibits are excerpts of transcripts from two depositions marked “confidential” under the terms of a discovery protective order. The witnesses were Katherine Posner and Wendy Grossman, two attorneys at the center of the dispute about privilege and work product. The defendants argued the transcripts are “sensitive” and must be sealed because they “would ordinarily be protected by the attorney-client privilege and work product doctrine.” The courts of this country recognize a general right to inspect and copy public records and documents, including judicial records and documents. Although that right is not absolute, a strong presumption in favor of access is the starting point. This presumption is based on the need for federal courts, although independent-indeed, particularly because they are independent-to have a measure of accountability and for the public to have confidence in the administration of justice. When documents are filed with motions more than tangentially related to the merits of a case, such as alongside a motion for summary judgment, a party who asks to keep them secret must meet the high threshold of showing that compelling reasons that support that request. This standard applies even if the documents have previously been filed under seal or are covered by a generalized protective order, including a discovery-phase only protective order. Once confidential discovery documents are made part of a dispositive motion they lose their status of being raw fruits of discovery. They no longer enjoy protected status without some overriding interest DOCUMENTS UNDER SEAL --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Withholding Coverage for Criminal Acts Disincentivizes Criminal Conduct --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Failure to Plead a Viable Complaint after Four Tries Stops Everything Scott Manley moved the USDC to dismiss the two claims plaintiff Mark Esquibel asserted against him in the Third Amended Complaint (TAC) for wrongful termination in violation of public policy (“Tameney claim”) and for promissory fraud. In Mark Esquibel v. Kinder Morgan, Inc., et al., No. 21-cv-02510-WHO, United States District Court, N.D. California (October 17, 2023) the USDC explained why its patience had been exhausted. ANALYSIS Esquibel asked for leave to amend to assert totally new claims against Manley, including eavesdropping in violation of California Penal Code section 632 and invasion of privacy, harassment under California's Fair Employment and Housing Act (FEHA), and claims for intentional and negligence infliction of emotional distress based on the alleged eavesdropping and harassment.d warned Esquibel that the last order was his "last chance." Ignoring the warning Esquibel tried a new way to allege a case that had nothing to do with his first three tries. His failure ended the court's patience and the order was dismissed. Why the court did not sanction Esquibel under Rule 11 is difficult to understand. Court's need to control their calendar and not be so patient. (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 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Most Public Adjusters are Honorable Professionals 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. The stories help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators than any Other Crime. Unfortunately, like Every Profession, Some are not Honorable and This Story is Presented to Warn Insurers and Professional Public Adjusters How to Recognize the Amoral Members of the Profession The amoral public adjuster also has in his office computers a schedule of household goods. Whatever claim he adjusts; the same list of household goods is presented to the insurance company adjuster. The list always contains ten cans of Libby peas, four cans of Libby string beans, five cans of Del Monte tomato sauce, and twenty can of Campbell pea soup. Every schedule prepared by the amoral public adjuster shows a thirteen-inch Sony Trinitron color television with remote control in the kitchen and a 50 inch HD TV in the family room. The living room always contains a complete entertainment center with sixty inch televisions hung on the wall, a TiVo, a stereo and a CD player. The amoral public adjuster does not even attempt to find out what was actually in the insured’s house. Invariably, because of the extent of the list of personal property, the insured’s claim is invariably greater than their policy limit. The amoral public adjuster is happiest when the loss exceeds the policy The amoral public adjuster’s success relied on the fact that the company’s adjuster is overworked, underpaid and under-trained. The fraud was perfect. The perpetrators and the victims alike, were satisfied. If the insurance industry believes it is saving money by under staffing, under paying and failing to properly train its adjusters, it is sorely mistaken. I submit that the most effective means of defeating fraudulent insurance claims would be for the insurance industry to recognize that its staff of adjusters must be highly trained professionals who earn the best wage in the insurance company and who are motivated and rewarded for good work. Adjusters must be compensated and rewarded for the quality of their work, not the quantity. Very few public adjusters are amoral. In fact, their national organization, requires they submit to the NAPIA code of ethics. [http://www.napia.com] If the amoral public adjuster followed the NAPIA code he would be the Moral Public Adjuster. This article was adapted from my book Insurance Fraud Costs Everyone  (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 Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-l --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

UIM Statute Limited Coverage to Same as UM Coverage THE STATUTE CONTROLS Majdoleen A. Khattab, Administratrix of the Estate of Affan Mohamad Khattab, ("Appellant" or "the Estate"), appealed the district court's order granting summary judgment for Berkley Regional Insurance Company and Integon General Insurance (collectively, "the insurers"), and entering an order of declaratory judgment in favor of the insurers. In Majdoleen A. Khattab, Administrator, Estate of Affan Mohamad Khattab v. Berkley Regional Insurance Company; Integon General Insurance Corporation, No. 22-1462, United States Court of Appeals, Fourth Circuit (October 19, 2023) the Fourth Circuit interpreted the clear language of the statute and UM/UIM coverages. ISSUES At issue is an insurance policy issued by Berkley Regional Insurance Company. The policy has a general liability limit of $1,000,000 and an uninsured motorist coverage limit of $70,000. This case solely turns on the legal question of what the relevant coverage limit under the insurance policy is for an accident caused by a motorist whose insurance coverage is less than the amount of claimed damages and less than the amount of the general liability limit, but greater than the amount of the uninsured motorist coverage limit. Virginia mandates that an insurance policy's uninsured motorist coverage limits must match the policy's liability limits unless any one named insured rejects the additional uninsured motorist coverage by notifying the insurer as provided in the statute. There is no dispute that Berkley complied with the notice requirement for "uninsured/underinsured coverage limits" pursuant to the statute. There was no dispute that the insured properly limited the uninsured coverage to $70,000. With respect to underinsured coverage the statute provides that the policy shall also provide underinsured motorist insurance coverage with limits that shall be equal to the uninsured motorist insurance coverage limits and shall obligate the insurer to make payment for bodily injury or property damage caused by the operation or use of an underinsured motor vehicle to the extent the vehicle is underinsured. Appellant argues, the underinsured coverage limit remained at $1,000,000, equal to the policy's general liability limit. However, Appellant did not pay for a UIM coverage of $1 million. Appellant overlooks that the statutory default sets underinsured motorist coverage equal to uninsured motorist coverage, not the policy's general liability limit. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Courts May Never Assume They Must Deal in Facts ZALMA OPINION Whenever an insured or a court assumes facts or coverages exist without applying the actual language of the policy they must break the word "assume" into its component parts and Roosters and the trial court's assumption of coverage made an ass out of the insured and the circuit court. Although few actually read an insurance policy that is no excuse for any insured who did not pay someone to read it for them if they were unable to do it personally. The Court of Appeal had no choice, it read the policy and applied it as written. (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-l --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

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ZIFL Volume 27, Issue 20 This, the twentieth 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. Man Bites Dog: GEICO Bites Fraudsters Don’t Ty to Defraud GEICO It Bites Back GEICO (collectively, “GEICO” or “Plaintiffs”) sued Defendants ALP Supply, Inc. (“ALP”), PV Supply, Inc. (“PV”), and Pal Vakula, alleging common law fraud and unjust enrichment claims. Read the full issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2023/10/ZIFL-10-15-2023.pdf McClenny Moseley & Associates Issues This is ZIFL’s sixteenth 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 issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2023/10/ZIFL-10-15-2023.pdf Evidence Required to Prove Fraud Insurer Not Required to Disclose How it Selects Limits and Premium Ira Trocki sued Pennsylvania National Mutual Casualty Insurance Company (“Penn National”) for fraud related to certain insurance policies. The District Court granted summary judgment for Penn National. In Ira Trocki, trading as Jack Trocki Development, LLC v. Penn National Mutual Casualty Insurance Company, No. 22-1483, United States Court of Appeals, Third Circuit (September 13, 2023) the Third Circuit explained what is needed to prove fraud. Read the full issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2023/10/ZIFL-10-15-2023.pdf Good News From The Nerik Ilyayev and Mukhiddin Kadirov have pleaded guilty for multiple cases of insurance fraud. The pair of fraudsters admitted to HIV medication fraud, no-fault automobile insurance fraud, and money laundering schemes totaling over $6M. Ilyayev pled guilty to conspiracy to commit healthcare fraud for using two different pharmacies to defraud Medicare and Medicaid in connection with HIV medication claims and to defraud no-fault automobile insurance providers in connection with other medication claims. Meanwhile, Kadirov laundered several million dollars in fraud proceeds in connection with the HIV fraud scheme. T Read the full issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2023/10/ZIFL-10-15-2023.pdf Not Wise to Explain Scheme to Defraud to FBI Informants Insurance Fraudster Tries Multiple Bases for Appeal & Still Goes to Jail Brian Higgins diverted for personal use funds he received from his mortgage servicer to repair damage to his home caused by a broken fish tank. He also filed a lawsuit against two witnesses for the prosecution, accusing them of misdirecting the funds instead of himself. For his conduct, a jury convicted Higgins on three counts of mail fraud under 18 U.S.C. §§ 1341-42 and two counts of retaliating against a witness, victim, or an informant under 18 U.S.C. § 1513(e). He appealed. Read the full issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2023/10/ZIFL-10-15-2023.pdf California Conference of Arson Investigators Training Seminar As One of the Speakers, I encourage you to SIGN UP TODAY FOR THE OCTOBER 16 – 19, 2023 CCAI Fire Investigation Training Seminar  - where you can learn How Insurers and Arson Investigators Have Taken the Profit from Arson-for-Profit from Attorney Barry Zalma, Esq. Register today by calling 909 865-5004 Or click here to register online. Health Insurance Fraud Convictions Husband And Wife Sent to Prison For $8M Health Care Fraud Vincent Nwabeke, 72, pleaded guilty April 20, 2023, to false statements in a health care matter, while Victoria Nwabeke, 70, admitted to conspiracy to commit health care fraud September. 16, 2019. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

No Right to UM Coverage if You are not an Insured WRIT PRACTICE OFTEN UNSUCCESSFUL BUT NOT ALWAYS The Louisiana Court of Appeals was asked to do what it normally would not do: determine if the trial court erred in denying a motion for summary judgment filed by Employers Mutual Casualty Company ("Employers Mutual"). In Lee Mallahan, III v.  Employers Mutual Casualty Co., et al, No. 55,136-CW, Court of Appeals of Louisiana, Second Circuit (September 27, 2023) Employers received its request. FACTS On June 1, 2020, Erick Guevara ("Guevara"), drove to Mallahan’s house who was standing in the driveway picking up worms from the pavement and throwing them into the grass, only to strike Mallahan with Guevera’s truck. Mallahan alleged the pickup truck knocked him into the air and caused him to lose consciousness. Mallahan sued on April 21, 2021 and named as defendants Guevera and Employers Mutual. As the managing member and an employee of Tadpole, LLC ("Tadpole"), Mallahan alleged that Employers Mutual provided "insurance coverage, excess coverage, umbrella coverage, or other coverage" for Mallahan's damages. Employers Mutual filed a motion for summary judgment and urged no uninsured/underinsured ("UM") coverage existed for Mallahan's injuries under the terms of the commercial auto policy or the commercial umbrella policy issued to Tadpole. The trial court ordered that Mallahan raised genuine issues of material fact and denied the motion. Employers Mutual Sought a writ from the Court of Appeals to order the trial court to grant its motion for summary judgment. DISCUSSION Employers Mutual urged that, because it made a showing that Mallahan was not an insured under the policies issued to Tadpole there was no genuine issue of material fact to preclude the granting of summary judgment. A genuine issue is one about which reasonable people could disagree.  A material fact is one that potentially ensures or precludes recovery, affects the ultimate success of the litigant, or determines the outcome of the dispute. Because it is the applicable substantive law that determines materiality, whether a particular fact in dispute is material for summary judgment purposes can be seen only in light of the substantive law applicable to the case. Summary judgment declaring a lack of coverage under an insurance policy may not be rendered unless there is no reasonable interpretation of the policy, when applied to the undisputed material facts shown by the evidence supporting the motion, under which coverage could be afforded. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Duty to Defend and Indemnify Inviolate Four insurers (collectively, the appellants) appealed the district court's order finding they are required to provide insurance coverage for an incident at Hampton Inn-Albany, a hotel owned by Albany Downtown Hotel Partners, LCC (Albany), and managed by Banyan Tree Management, LCC (Banyan). The four insurance companies-Citizens Insurance Company of America and Massachusetts Bay Insurance Company (collectively, Hanover), Westfield Insurance Company (Westfield), and Starr Indemnity &Liability Company (Starr)-issued commercial general liability insurance to Banyan and Albany. In Citizens Insurance Company Of America, Massachusetts Bay Insurance Company, Westfield Insurance Company, Intervenor v. Banyan Tree Management, LLC, Albany Downtown Hotel Partners, LLC, Jane Doe, Starr Indemnity &Liability Company, No. 22-13581, United States Court of Appeals, Eleventh Circuit (September 28, 2023) the Eleventh Circuit affirmed. FACTS In 2015, an employee of Hampton Inn-Albany secretly recorded a hotel guest while she was showering in the hotel bathroom. Years later, the video was circulated, and the guest sued Banyan and Albany for negligence, premises liability, and vicarious liability, alleging she suffered emotional and subsequent physical injury (Underlying Complaint). Banyan and Albany subsequently sought coverage from their insurance providers, who disputed their duty to cover this injury, primarily arguing that the Underlying Complaint did not include allegations of "personal and advertising injury" arising out of Albany's "legitimate business," and that their policy exclusions precluded coverage. DISCUSSION Georgia law makes clear that ambiguities are to be resolved in favor of the insured noting that if the policy exclusions are ambiguous, the purported reservation of rights must be construed strictly against the insurer and liberally in favor of the insured. The appellants failed to even make a showing of ambiguity, let alone definitively establish that the Underlying Complaint falls outside their policies or that an exclusion precludes coverage. The Eleventh Circuit found unpersuasive the arguments that the hotel guest's right to privacy was not violated, and that the recording did not arise out of Banyan and Albany's business. While filming a showering guest is clearly not a "legitimate" hotel practice, when a hotel employee-who would not have had access to the room but for his authority-places the camera in the bathroom and circulates the video, the injury was undoubtedly imputed to the hotel. Accordingly, the Eleventh Circuit affirmed the district court's decision. ZALMA OPINION Hotel employees should not have the access to film a guest while she showered and then distribute the video to the world as she, believing she was taking a private shower, was clearly an illegitimate hotel practice performed by an employee who was given access by the hotel to include a camera where the victim showered. No exclusion applied and coverage was clearly applicable. (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 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurer Should Get Premium for Waiver of Subrogation https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL – Volume 27, Issue 19, October 1, 2023 This, the nineteenth 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. Zalma’s Insurance Fraud Letter – October 1, 2023Volume 27, Issue 19, October 1, 2023Barry ZalmaOct 2, 2023 Share Leave a comment Read the full article at https://lnkd.in/gSwZcFtw, see the full video at https://lnkd.in/geXk8tvN and at https://lnkd.in/gyWx2-zm, Read the full article and the full 22 pages of ZIFL at https://lnkd.in/gY5fRg9E and at https://zalma.com/blog plus more than 4650 posts. See the full video at https://rumble.com/v3ltkfq-zalmas-insurance-fraud-letter... and at Forty-four years ago, today I left the world of the employed and became an entrepreneur by opening my own law firm. The law practice was incorporated shortly thereafter as Barry Zalma, Inc. When I opened for business on October 1, 1979, I had no clients and no certainty that I would have any in the future. I borrowed money from the bank to carry me through the first six months, rented a small office with my wife’s grandmother’s dining room table as my first desk and my secretary brought her own typewriter. I was concerned about my ability to pay the loan with my third child about to be born. Much to my surprise, and pleasure, on October 1, 1979, at 8:10 a.m., the best claims handler in the London market, Alan Warboys, called from London and provided me with my first case as an independent lawyer to represent Certain Underwriters at Lloyd’s, London. He, and the Lloyd’s Underwriters he represented, showed faith in me as a lawyer and insurance expert. Alan is now retired but will forever be, my law firm’s first client and a good friend. Read the full article and the full 22 pages of ZIFL at https://zalma.com/.../uploads/2023/09/ZIFL-10-01-2023.pdf This is ZIFL’s Fifteenth 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 the full 22 pages of ZIFL at https://zalma.com/.../uploads/2023/09/ZIFL-10-01-2023.pdf When committing fraud, it is usually good practice not to do it right in front of a camera. However, this Colorado hail contractor just couldn’t help himself. The sales manager for a Colorado construction company says he may have been “too aggressive” after a surveillance camera caught him appearing to fabricate hail damage during a recent damage inspection of a home in Parker. Witnesses say David Kuntz was trying to drum up business in the Newlin Meadows neighborhood of Parker, offering to inspect homes for hail damage. He said he was unaware of a surveillance camera that was rolling as he inspected one home. Read the full article and the full 22 pages of ZIFL at https://zalma.com/.../uploads/2023/09/ZIFL-10-01-2023.pdf by Barry Zalma on October 19, 2023 = https://netforumpro.com/eweb/Shopping/Shopping.aspx... Obiageriaku Iheanacho, 36, of Baltimore, pleaded guilty and was sentenced according to Maryland Attorney General Anthony G. Brown on September 19, 2023, announced the plea and sentencing for the death of 75-year-old Ellsworth Johnson-Bey. Iheanacho pleaded guilty to first degree assault and abuse of a vulnerable adult in the first degree for her role in the assault and subsequent death of Mr. Johnson-Bey. Read the full article and the full 22 pages of ZIFL at https://zalma.com/.../uploads/2023/09/ZIFL-10-01-2023.pdf Dam Ngoc Luong, 70, a Dorchester woman was sentenced in federal Read the full article and the full 22 pages of ZIFL at https://zalma.com/.../uploads/2023/09/ZIFL-10-01-2023.pdf --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Don't Ty to Defraud GEICO It Bites Back See the full video at  https://rumble.com/v3mou6r-man-bites-dog-geico-bites-fraudsters.html  and at https://youtu.be/KrGnHftnDaA GEICO (collectively, “GEICO” or “Plaintiffs”) sued Defendants ALP Supply, Inc. (“ALP”), PV Supply, Inc. (“PV”), and Pal Vakula, alleging common law fraud and unjust enrichment claims. In Government Employees Insurance Company, GEICO Indemnity Company, Geico General Insurance Company, and GEICO Casualty Company v. ALP Supply, Inc.; PV Supply, Inc.; and Pal Vakula, No. 22-CV-79 (LDH)(MMH), United States District Court, E.D. New York (September 29, 2023) GEICO sought, and obtained, default judgments against health care fraud perpetrators. The GEICO Plaintiffs' moved the USDC for default judgment pursuant to Federal Rule of Civil Procedure 55(b)(2). For the reasons set forth below, the Magistrate Judge  recommended that Plaintiffs' motion should be granted as to their common law fraud claims. The Court further recommended that Plaintiffs should be awarded damage. From July 2019, Vakula used ALP and PV to submit and cause to be submitted to GEICO thousands of fraudulent no-fault insurance claims for medically unnecessary, illusory, and otherwise non-reimbursable DME and OD. Defendants not only submitted claims to GEICO knowing that they included materially false information but also hired law firms to pursue collection of the fraudulent claims from GEICO, which resulted in expensive and time-consuming litigation against GEICO if the charges were not promptly paid in full. In the Second and Fourth Causes of Action in the Complaint, GEICO alleges that Defendants committed common law fraud. Under New York law, a plaintiff asserting a claim of common law fraud must plausibly allege: a material misrepresentation or omission of fact made by defendant with knowledge of its falsity intent to defraud; reasonable reliance on the part of the plaintiff; and resulting damage to the plaintiff. Here, GEICO established that an actual controversy exists and that a declaratory judgment would afford specific and conclusive relief as to pending claims with respect to all Defendants. GEICO alleges that ALP and PV have pending bills submitted to GEICO that GEICO has no obligation to pay. Additionally, GEICO has submitted documentation of pending collections actions that ALP and PV are actively prosecuting against GEICO in New York state courts. GEICO has provided a list of the actions, including the amounts involved, the claim numbers, and the status of each action. In sum, Plaintiffs established liability on their common law fraud claims only. The Magistrate judge recommended: a default judgment should be entered against Defendants for common law fraud; Plaintiffs should be awarded compensatory damages in the amounts of a declaratory judgment should be entered that Plaintiffs have no obligation to pay any pending claims submitted by ALP Supply, Inc. and PV Supply, Inc. ZALMA OPINION GEICO seems to have given up on Departments of Insurance and prosecutors to defeat insurance fraud by proactively suing fraudsters and taking the profit out of the crime of insurance fraud. Its success in this case and others should be emulated by the insurance industry who sits back and allows fraudsters to profit from claims. (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 Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Chutzpah: Plead Guilty to Fraud, Receive Probation and Appeal the Conditions Raymundo Gonzalez appealed the condition of probation imposed after he pled no contest to one felony count of insurance fraud. In March 2016, defendant was examined by Dr. Stephen Choi regarding his ongoing claim. Defendant told Choi he had not suffered any prior injuries. Following a clinical exam, Choi was unable to make any specific findings regarding defendant's left arm and right foot. A new evaluation was completed in February 2018, after surveillance footage from November 2013, April 2015, June 2015, and September 2015 was considered. Choi asked for this reevaluation after seeing the footage, which showed defendant walking and moving as if he was injury free. Choi observed defendant working hard, picking things up from the ground, and bending and twisting his body without trouble. Choi concluded these movements should not have been possible if he truly had lower back and shoulder pain. This new evaluation determined defendant did not have any impairment or disability and did not require future medical care. A further investigation revealed defendant filed various claims for injuries while employed with other companies between 2001 and 2011. Defendant claimed he was not able to stand or walk for long periods of time and could not lift anything or bend. Defendant further stated he had never filed a worker's compensation injury claim and never suffered an on-the-job injury. . Defendant was charged  with three counts of insurance fraud and one count of perjury. Defendant entered a plea of no contest on count 1 and counts 2 through 4 were then dismissed under the plea agreement. On August 3, 2022, the trial court sentenced defendant to probation following the plea. A trial court may impose and require any or all of the terms of imprisonment, fine, and conditions as it determines are fitting and appropriate. A condition of probation will not be held invalid unless it has no relationship to the crime of which the offender was convicted, relates to conduct which is not in itself criminal, and requires or forbids conduct which is not reasonably related to future criminality. Because defendant's trial counsel did not object Gonzalez claimed ineffective assistance of counsel. To establish ineffective assistance of counsel defendant must show counsel's representation fell below an objective standard of reasonableness under prevailing professional norms, and counsel's deficient performance was prejudicial The possible reasons discussed provide a satisfactory explanation for trial counsel's decision not to object here. The type of evidence that might be found on a computer or other electronic devices would support the condition. Defendant's intent to travel outside the jurisdiction while on probation could also be monitored through those devices, if probation had reason to suspect he traveled or was planning to travel without obtaining permission first. Moreover the decision not to object to the electronic devices condition could be related to the decision by the trial court not to impose a jail sentence. The facts established that Mr. Gonzalez was a serial workers' compensation fraudster who was not injured but had successfully defrauded multiple employers only to be caught and prosecuted on his last attempt because investigators acquired video proving he had lied about his condition and work history. When his doctor saw the video he was offended and cut him off. To complain about the terms of probation and take up the time of the court of appeals was unmitigated gall (Chutzpah!) and should have resulted in more than a loss of the appeal but show a violation of probation sufficient to cause him to serve jail time. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

When an Obvious Arson is Just an Accident "This is a Fictionalized True Crime Story of Suspected Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The stories help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators than any Other Crime." THE FIRE Sometimes, what looks like an obvious arson for profit turns out to be an accidental fire. The insured lived near the ocean within the city limits of San Luis Obispo. Recently divorced she lived alone for many months. The divorce had caused her much emotional trauma. After twenty-five years of marriage, her husband announced he could not live with her anymore and moved out. She sought treatment for her depression. She visited with multiple psychiatrists and psychologists, who only made her life more miserable. When the divorce was final and she gained absolute title to the land and house the book store owner moved into the house with her. As they, and their friends, concentrated their psychic energies, they became convinced that a major earthquake would strike California and destroy all who lived in San Luis Obispo. Shortly before escrow closed, while the insured and her book store owner lover, slept in the master bedroom, a fire broke out in the second bedroom of the house. Awakened by a sound like a heavy rainstorm, they discovered the fire and escaped naked through the bedroom window into their backyard. Neighbors called the fire department who quickly extinguished the fire after all its contents and most of the structure were destroyed. THE INVESTIGATION The investigation by the fire department revealed that the fire was suspicious. No specific cause could be found for the fire. It did burn very hot. There were marks on the floor in the second bedroom that seemed to show a flammable liquid was spread. The insurer was concerned. It demanded the examinations under oath of the insured and her book store owner lover. Both testified clearly, concisely and honestly that they had no idea why the fire occurred. The insurer conducted a thorough investigation and retained the services of an experienced fire cause and origin investigator. He sifted through the debris and found in the debris an electrically operated bed, equipped with a polyurethane foam mattress. The investigator advised the insurer that, after examining the bed and after reviewing the testimony of the insured and her lover at the examination under oath, it was his conclusion that the fire was the result of a short circuit in the bed motor which ignited the highly flammable (and now banned) polyurethane foam mattress. He explained that polyurethane foam, when heat is applied to it, liquefies and burns vigorously. The liquefied polyurethane foam flows on floor surfaces and leaves a trail similar to that left by the spreading of a flammable petrochemical accelerant. The mystery solved; the insurer paid the insured the loss she incurred to her personal property. The two insurers split the cost of rebuilding the structure. The insured and her lover used the proceeds of the sale of the house and the insurance claim to move to the house they had found in Tennessee. They now live in a large home on ten acres of land where they have gathered with them other believers in the occult and the power of the mind.  Since both the insured and her lover were ministers of the Universal Life Church, they performed their own wedding. Adapted from my book "Insurance Fraud Costs Everyone" available from Amazon.com as a paperback or a Kindle book (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Jurisdiction Chosen by Contract of Insurance Must be Followed Clear & Unambiguous Policy Conditions 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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

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. 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 The Policy determines whether National had a duty to defend. 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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

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. 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/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

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. 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." 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 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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

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. 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, 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. 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. 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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Attorneys May Not Be Sued for the Tort of Bad Faith --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

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 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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL Volume 27, Number 18 https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Arson for Profit Scheme Defeated by RescissionPosted on September 14, 2023 by Barry Zalma Rescission of Insurance for Innocent Misrepresentation of Material Facts See the full video at https://rumble.com/v3hdpj2-arson-for-profit-scheme-defeated-by-rescission.html  and at https://youtu.be/CAarrB84t6E 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. 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). 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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Clear & Unambiguous Exclusion https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

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. 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 concluded that no exclusions from coverage applied, but because it was a close question it was therefore ambiguous. PUBLIC POLICY 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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

If Insurer Agrees to Defend Insured May Not Expect it to Pay Independent Counsel https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

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. 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. 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. 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. 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. 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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

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 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). 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 be followed 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. 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.  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 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 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

“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. 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 The trial record completes the picture. Hussein received up to $1,500 per patient he recruited, which satisfies the pecuniary-gain requirement. 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. 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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

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. 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'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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

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. On June 16, 2021, Philadelphia also sought an EUO of BAS in accordance with the Policy's EUO condition. BAS presented Susan Rodrigues as its designee to attend the EUO. 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. 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. 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. FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Agent for Insurer Only an Order Taker https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Every Exclusion Must be Read as a Part of an Entire Policy https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

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. 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 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). 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. 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. 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. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library\ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

False Medical History Defeats No Fault Claim This case arose out of an accident that occurred in 2019. Plaintiff was hit by a car at around 8:15 p.m. while riding a bicycle in Flint, Michigan. Plaintiff sustained serious injuries, including multiple broken bones and lacerations, blunt force trauma to the chest and abdomen, and a traumatic brain injury. However he submitted a claim with false representations about his past medical history and his suit was dismissed. Ronnie Fields appealed the trial court's order granting summary disposition to defendant, Nationwide Mutual Fire Insurance Company. In Ronnie Fields and Anderson Medical Supplies v. National General Insurance Company, Integon National Insurance Company, Garlando Doxie, Kanesha Marzette, and Michigan Automobile Insurance, Defendants, and Nationwide Mutual Fire Insurance Company, No. 361959, Court of Appeals of Michigan (August 17, 2023) the Court of Appeals gave effect to the allegations of fraud. FACTUAL BACKGROUND In relation to the accident, plaintiff submitted two applications for personal protection insurance (PIP) benefits through the Michigan Automobile Insurance Placement Facility (MAIPF). The applications stated that plaintiff did not have any of the same injuries prior to the accident, that he had no preexisting medical conditions, and that he had not applied for social security benefits before or after the accident.  However, his second application noted that plaintiff was eligible for social security benefits, contrary to the information from the October 4, 2019 application. Each of the applications contained a fraud warning. Plaintiff sued in February 2020 the MAIPF was required to assign his claim to an insurer. N The trial court entered an order granting Nationwide's motion for summary disposition. FRAUD A person commits a fraudulent insurance act when: (1) the person presents or causes to be presented an oral or written statement, (2) the statement is part of or in support of a claim for no-fault benefits, and (3) the claim for benefits was submitted to the MAIPF. Further, (4) the person must have known that the statement contained false information, and (5) the statement concerned a fact or thing material to the claim. THE LIES Finding no dispute that the two applications for benefits erroneously indicated that plaintiff had no preexisting medical conditions and had not sustained any prior injuries that might be relevant to his claim for benefits. ANALYSIS Plaintiff's medical records could be considered as evidence of fraud even though the medical records were obtained by Nationwide during discovery, the information contained in them concerned incidents that occurred well before plaintiff applied for PIP benefits through the MAIPF. Plaintiff signed the applications, suggesting that they must be considered his own. He argued that it is unclear whether he knew what he was signing, as he was legally blind at the time and would have needed someone to read the document to him. Moreover, since plaintiff signed the applications-particularly the November 4, 2019 application-and has provided no evidentiary proof to support the argument that he lacked the capacity to do so, that he did so by mistake, or that he was coerced or defrauded in this case, the trial court's ruling was affirmed. ZALMA OPINION Even no-fault insurance statutes remove the right to benefits if the person seeking the benefits commits fraud in seeking the benefits. There is no question that the Plaintiff filed two applications for benefits that contained false statements. As a result, even though he was seriously injured, his fraudulent statements defeated his claim, proving that liars in Michigan will never prosper from the no-fault system. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurers, Agents and Brokers Sophisticated Relationships Expensive Three sophisticated commercial parties in the insurance industry entered into what appears, in hindsight, to be a somewhat unsophisticated business arrangement. That arrangement led to complex litigation, which generally isn't a good thing for a business arrangement to lead to. In American Builders Insurance Company v. Keystone Insurers Group and Ebensburg Insurance Agency, No. 4:19-CV-01497, United States District Court, M.D. Pennsylvania (August 4, 2023) plaintiff American Builders Insurance Company (“ABIC”) sued Defendant Ebensburg Insurance Company (“Ebensburg”) for its allegedly tortious misrepresentations in an application to ABIC for workers' compensation insurance coverage on behalf of Ebensburg's customer, Custom Installations Contracting Services, Inc. (“Custom”). On Custom's application, Ebensburg indicated that Custom didn't engage in roofing work and only operated at fifteen feet above the ground or lower. On that basis, ABIC issued Custom a workers' compensation insurance policy. Later, a Custom employee fell twenty-five feet from a rooftop while working on a commercial roofing job. The employee filed for workers' compensation benefits, which ABIC unsuccessfully opposed. BACKGROUND Keystone essentially operated as a sort of “matchmaker,” connecting ABIC to its network of Retail Agencies. Ebensburg is one of the Retail Agencies that is part of the Keystone association. Its relationship with Keystone is governed by a Franchise Agreement. Custom's Relationship with Ebensburg Because Custom had never sought workers' compensation insurance before, it obtained a policy through the Commonwealth's State Workers' Insurance Fund (“SWIF”). The SWIF ACORD application indicated that: In 2015, Custom approached Ebensburg again to inquire about switching to a private workers' compensation insurer for more favorable rates The James Scott Injury In September 2015, Custom was engaged in a commercial roofing job in New Galilee, Pennsylvania. James Scott had just began working for Custom. He stepped through a skylight and fell from over twenty feet to the ground, incurring serious injuries. The Western District Litigation and Workers' Compensation Proceeding Following Judge Gibson's order dismissing ABIC's federal claims, the workers' compensation litigation continued. Judge Gallishen ultimately denied ABIC's petitions. The Pennsylvania Workers' Compensation Appeals Board later affirmed Judge Gallishen's decision. ANALYSIS ABIC argued that the limitations period on its claims should be tolled under either the fraudulent concealment or inherent fraud doctrine. On the day Scott was injured ABIC was aware that Scott “fell through a roof.” On September 14, 2015, ABIC became aware of the misrepresentations in Custom's application. The Court concluded that those facts are sufficient to give ABIC inquiry notice of its potential claims against Ebensburg because it knew that Ebensburg had sole access to the mechanism that caused its injury. The common thread in these elements is that ABIC knew that the alleged misrepresentation negligently or fraudulently came from two potential sources, Custom or Ebensburg (or both), and it knew that Ebensburg had access to eQuotes, the mechanism that caused its injury. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Man Bites Dog Story = Allstate May Sue on Behalf of State for Insurance Fraud Qui Tam Actions May Proceed to Trial https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Waiver of Sovereign Immunity Does Not Apply to Federal Statutory Claims The doctrine of sovereign immunity is an "ancient" concept. It is the long-established view that a sovereign, such as a state, is "infallible," and, thus, immune from suit "absent the State's consent." The General Assembly provided such consent in the Maryland Tort Claims Act which waives the State's immunity. In Michele Williams v. Morgan State University, et al., No. 9-2022, Maryland Supreme Court (August 14, 2023) the Supreme Court advised the Fourth Circuit of its evaluation of the states statute waiving the State's immunity to a tort action in a court of the State. As to her federal claims against MSU, Appellant alleges that her termination by MSU was impermissible retaliation for disclosing that the University, primarily Dean Wickham, had overstated "the University's operating costs to the Corporation for Public Broadcasting and the United States Department of Education and . . . attempted to influence the 2016 Baltimore mayoral race by violating FCC regulation[s]." Eventually, the Fourth Circuit certified a question of law to the Supreme Court: “Does Maryland's waiver of sovereign immunity for ‘a tort action’ under the MTCA extend to federal statutory claims?” BACKGROUND Under the MTCA, a party injured by the negligent act or omission of a state officer or employee within the scope of the officer's or employee's public duties may obtain compensation for that injury from the State. By its plain terms, the statute provides that the scope of the State's waiver of sovereign immunity is not waived for, among other things, "[a]ny tortious act or omission of State personnel that: (i) [i]s not within the scope of the public duties of the State personnel; or (ii) [i]s made with malice or gross negligence[.]" The other central component of the MTCA, in addition to its waiver of the State's sovereign immunity for tortious acts or omissions by State personnel, is a corresponding immunity from suit and from liability in tort for State personnel. The MTCA also contains certain limitations on the scope of the waiver of the State's sovereign immunity beyond those that are dependent on the actions of the State personnel. ANALYSIS The Supreme Court concluded, and so advised the USCA that the MTCA does not waive the State's sovereign immunity for federal statutory claims. Concluding that the General Assembly did not intend for "a tort action" under the MTCA to include federal statutory causes of action the Supreme Court noted that the MTCA's waiver provision contains no express language indicating such a result, and the General Assembly knows how to effectively waive the State's immunity, if that is its goal. Furthermore, extending the scope of the waiver provision to federal statutory claims is inconsistent with both the key, neighboring provisions concerning the interplay between the State and a State employee's immunity in certain suits, as well as the MTCA's role as a gap-filler scheme.  The certified question posed by the Fourth Circuit, and slightly rephrased by the Supreme Court is whether "a tort action" under the MTCA includes federal statutory claims. The Supreme Court's answer was "no." It so held because, after assessing the plain language of the MTCA, there is no evidence that the General Assembly intended to include federal statutory claims within the scope of the MTCA. ZALMA OPINION Every person dealing with insurance for public entities, the MSU, must understand the application of sovereign immunity that limits the need of such public entities to secure insurance to protect the governmental entity from charges that have not been waived. Insurance calculations should be limited to the needs of the entity to protect against those things where the state has waived sovereign immunity and not where sovereign immunity was not waived. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

INTENTIONAL MISCONDUCT EXPOSED INSURER TO PUNITIVE DAMAGES https://zalma.com/bloghttps://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

No Right to Change After Agreeing to a Settlement INSURER'S INSTIGATION OF SETTLEMENT IS EVIDENCE OF GOOD FAITH After parties to a suit resolved the suit by settlement one or more of the parties tried to renege on the agreement and appealed the trial court's order to enforce the parties' settlement agreement. The parties' settlement agreement required them to dismiss all claims, counterclaims, and crossclaims  with prejudice.  In Shorewood Forest Utilities, Inc. v. Rex Properties, LLC and Don Blum, No. 22A-PL-2345, Court of Appeals of Indiana (August 11, 2023) the Court of Appeals resolved the claims concerning the Settlement Agreement. FACTS AND PROCEDURAL HISTORY Shorewood is a nonprofit corporation that provides sewer service to more than 1000 residents in Porter County. Rex Properties is a property developer, and Blum is the sole managing member of Rex Properties. In 2017, Shorewood and Rex Properties entered into an agreement for Shorewood to expand into a new Rex Properties development and service the homes there according to certain terms, rates, and fees. Not long thereafter, Shorewood concluded that its agreement with Rex Properties was not enforceable, and Shorewood declined to participate in the project. By mid-2019, the only claim remaining in the instant cause was Rex Properties' approximately sixteen-million-dollar counterclaim against Shorewood for breach of contract. Shorewood sought to amend its complaint to allege claims of fraud, fraud in the inducement, unjust enrichment, and criminal deception against Rex Properties. In March 2020, the trial court permitted Shorewood's requested amendment. In the spring and summer of 2020, the parties attempted to settle out of court. On June 8, counsel for Shorewood sent counsel for Rex Properties an email stating that Shorewood's insurance carrier, Stratford Insurance, had agreed to pay Rex Properties $950,000 for Shorewood and Rex Properties to settle and dismiss all claims, counterclaims, and crossclaims in this cause. Mr. Blum approved the settlement with the terms set forth in the offer email. Over the next several weeks, the parties' attorneys worked on drafting a Settlement Agreement.  Counsel drafted an agreement but Shorewood refused to sign it. THE ISSUES The central issue in this appeal is whether the email exchange between the parties on June 8 represented the offer and acceptance of an enforceable settlement agreement. The trial court concluded that the parties' June 8 email exchange created an enforceable settlement agreement. Shorewood had made an offer, Rex Properties accepted the offer, there was more than ample consideration between them and Stratford Insurance, and all parties had a meeting of the minds over definite and certain essential terms. The trial court's denial of Rex Properties' motion for judgment on the pleadings and its motion for summary judgment resulted in a settlement agreement between Shorewood and Rex Properties, and their settlement rendered the trial court's prior judgments moot. The trial court’s judgment was affirmed. ZALMA OPINION Courts invariably prefer settlement agreements. Insurers, like Stratford, prefer settlements. In this case Stratford put up almost $1 million to settle, the parties agreed by e-mail and an agreement to memorialize the agreement with a formalized agreement. The contract was made by the e-mail exchange of offer, acceptance and consideration. The formalized agreement was not necessary and the good work of the insurer resulted in a solution to an extensive case and protected its insured. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Issue 27 Number 16: ZIFL-08-15-2023 See the full video at  and at https://youtu.be/x0EJFKVdjwQ Lawyer Paying for Clients Guilty Experienced Lawyer Claiming Ignorance of Law Is No Defense Robert Irving Slater was a practicing worker’s compensation attorney when he entered into an agreement that cost him his freedom. Read the full article and the full ZIFL at http://zalma.com/blog/wp-content/uploads/2023/08/ZIFL-08-15-2023-1.pdf More McClenny Moseley & Associates Issues This is ZIFL’s Twelfth 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 the full ZIFL at http://zalma.com/blog/wp-content/uploads/2023/08/ZIFL-08-15-2023-1.pdf Free Insurance Videos Barry Zalma, Esq., CFE has published five days a week videos on insurance claims, insurance claims law, insurance fraud and insurance coverage matters at https://www.rumble.com/zalma.https://rumble.com/c/c-262921. Good News From the Alex Murdaugh accomplice Russell Laffitte gets 7 years for fraud.  He will spend seven years in federal prison for helping convicted murderer Alex Murdaugh steal nearly $2M from clients’ legal settlements. Laffitte was sentenced Tuesday after a jury found him guilty of six charges related to wire and bank fraud back in November. Read the full article plus many more convictions and the full ZIFL at http://zalma.com/blog/wp-content/uploads/2023/08/ZIFL-08-15-2023-1.pdf Moral Hazard Every insurance fraud investigator must understand what a moral hazard is and why it is important to insurance underwriters. The moral hazard is the increase in uncertainty caused by personal acts of individuals. Read the full article and the full ZIFL at http://zalma.com/blog/wp-content/uploads/2023/08/ZIFL-08-15-2023-1.pdf Health Insurance Fraud Convictions Former CEO of Whittier Clinic Pleads Guilty to Defrauding Medi-Cal Family Planning Program Through Multimillion-Dollar Scheme Vincenzo Rubino, 58, of Valencia, the former president and CEO of a Whittier medical clinic pleaded guilty August 3, 2023, to submitting fraudulent billings to a Medi-Cal health care program and two counts of aggravated identity theft. Read the full article and the full ZIFL at http://zalma.com/blog/wp-content/uploads/2023/08/ZIFL-08-15-2023-1.pdf Another Insurer Bites the Dust Missouri’s Cameron Mutual Placed into Rehabilitation Read the full article and the full ZIFL at http://zalma.com/blog/wp-content/uploads/2023/08/ZIFL-08-15-2023-1.pdf Other Insurance Fraud Convictions Nassau County, NY, Collision Repair Shops Owner Convicted of Tax Fraud Jose Cardona, 45, of Oceanside, NY, was sentenced August 2, 2023, for felony tax fraud related to his ownership and operation of two Nassau County collision repair shops, New York State officials announced. Read the full article and the full ZIFL at http://zalma.com/blog/wp-content/uploads/2023/08/ZIFL-08-15-2023-1.pdf It’s Time to Subscribe to Locals or Substack For Subscribers Only I Have Published Special Insurance Articles and Videos Read the full article and the full ZIFL at http://zalma.com/blog/wp-content/uploads/2023/08/ZIFL-08-15-2023-1.pdf Barry Zalma Barry Zalma, Esq., CFE, is available at http://www.zalma.com and [email protected] Library – https://zalma.com/blog/insurance-claims-library/ to consider more than 50 volumes written by Barry Zalma on insurance and insurance claims handling. Go to Zalma’s Insurance Fraud Letter at https://zalma.com/zalmas-insurance-fraud-letter-2/  Read the full article and the full ZIFL at http://zalma.com/blog/wp-content/uploads/2023/08/ZIFL-08-15-2023-1.pdf --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Promissory Warranty Must Be Fulfilled Ralph Young owned and lived on a seventy-four-foot motor operated vessel named the SUMMER STAR (“the vessel”). Mr. Young insured the vessel with Yachtinsure Services, Inc. from 2013 through 2019. As a result the USDC was asked to resolve an issue of the voidability of a marine insurance policy under principles of federal maritime law. In Transpac Marine, LLC v. Yachtinsure Services, Inc., Civil Action No. 20-10115-DPW, United States District Court, D. Massachusetts (February 13, 2023) followed the precedent establishing the inviolability of a promissory warranty. BACKGROUND Mr. Young's Renewal Application On April 16, 2019, Mr. Young applied for the renewal of his marine insurance policy to Yachtinsure to renew his existing policy, Mr. Young was obligated to submit an updated application form and a Hurricane Plan for review by Yachtinsure's underwriters. The Hurricane Plan included a warranty by Mr. Young that the vessel will be secured with “10 lines, 3/4 inch Nylon braid.” The applicant was warned that the Hurricane Plan contains “statements upon which underwriters will rely in deciding to accept this insurance” and that the Hurricane Plan “will form the basis of” any insurance contract between the parties. After an inquiry from the insurer Mr. Young confirmed that in the event of a named/numbered storm, mooring lines will be doubled.  Mr. Young's email representation that he would double the mooring lines on the vessel in the event of a named windstorm was incorporated into his policy agreement with Yachtinsure. Events Preceding the Destruction of the Vessel During an examination under oath conducted by Yachtinsure Mr. Young testified he decided to sail to Crown Bay in St. Thomas, U.S. Virgin Islands where the storm was expected to pass with windspeeds below thirty-miles-per-hour. Mr. Young resolved to wait out the storm.  On August 26, he purchased two, new, one-inch diameter mooring lines from the local chandlery in preparation for the storm. Beyond securing the vessel with those two additional mooring lines and moving upholstery below deck, Mr. Young made no further safety preparations. Just after noon, high winds from Hurricane Dorian parted Mr. Young's mooring lines, causing the vessel to drift out to sea. However, the anchor's chain became entangled with a sailboat operated by a third-party mariner, Dan Radulewicz. Plaintiff's Claim and Defendant's Denial Mr. Young filed a claim declaration with Yachtinsure on September 3, 2019. DISCUSSION The court found the Hurricane Plan to be unambiguous. Mr. Young responded to the Hurricane Plan with what is, in essence, a stipulation that he would secure the SUMMER STAR with the mooring configuration he identified when the policy took effect and during its continuance. Thus, this provision of the Hurricane Plan constitutes an unambiguous promissory warranty to secure the SUMMER STAR with ten nylon mooring lines that were 3/4 inch diameter in normal circumstances (i.e., in the absence of a named or numbered storm) and with 20 in a named and numbered storm. Consequences of Breach of Promissory Warranties Under both federal law and New York law, a breach of a promissory warranty will permit the insurer to void a marine insurance contract. Simply material compliance will not satisfy the insured's obligations. Plaintiff's Breach The court concluded that Yachtinsure established beyond reasonable factual dispute that Mr. Young failed to meet his obligation of strict compliance with his warranties under the Hurricane Plan. Mr. Young's admission that he did not use twenty 3/4 inch nylon braid lines to secure his boat during Hurricane Dorian - and thereby satisfy a prophylactic condition the policy called for - is sufficient to prevent him from recovering under the policy. Summary judgment granted to Yachtinsure. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Private Limitations of Action Provision of Policy Defeats Late Law Suit Knox Mediterranean Foods, Inc. (Knox) appealed the trial court's grant of Appellee Amtrust Financial Services (Amtrust)'s motion for traditional summary judgment on Amtrust's affirmative defense of limitations. In one issue, Knox contends that summary judgment was improper because there was a genuine issue of material fact as to when its claim accrued. DISCUSSION While Knox's brief wholly fails to cite the record, the record comprises 425 pages, roughly 300 of which is the insurance policy. The sole issue in this appeal required the Court of Appeals to consider whether Amtrust's June 13 letter constituted a denial of Knox's claim. That letter is a little over a page long and easily located in the record. LIMITATIONS The time in which a plaintiff must file suit is defined, as the name suggests, by statute. Parties may contract for a shorter limitations period, provided that the contractual limitations period is not shorter than two years. A cause of action accrues, and the limitations period begins to run when facts come into existence that authorize a party to seek a judicial remedy. In first-party insurance actions, the insured's cause of action accrues when the insurer denies a claim. There is no dispute that the insurance policy at issue sets a limitations period of two years and one day from the date of accrual. When an insurer denies a claim, its mere willingness to reconsider that denial does not restart the limitations period. Therefore, Amtrust's June 13 letter to Knox unequivocally communicated a decision to deny coverage. Amtrust established as a matter of law that Knox's claim accrued-and the contractual limitations period began to run-on June 13, 2017. Because Knox filed this lawsuit on May 20, 2020, nearly three years after its claim accrued, its claim was time-barred. ZALMA OPINION The covenant of good faith and fair dealing applies to the insurer and the insured equally. When an insured fails or refuses to prove its loss it leaves the insurer no choice but to deny the claim rather than continue to beg the insured to fulfill its promises. Since Knox did nothing for almost three years after it was told Amtrust would pay no more its suit was time barred. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Sexual Abuse of a Child is, by Definition, an Intentional Act Gustavo Beltran, Alma Beltran, and child A.B. appealed the district court's pretrial adjudication of their counterclaims against Farmers Insurance Exchange (Farmers). In. A.B., Gustavo Beltran, and Alma Beltran v. Agave Health, Inc.; et. al.; Farmers Insurance Exchange, et al., No. A-1-CA-39620, Court of Appeals of New Mexico (August 1, 2023) the Court of Appeals resolved the dispute by considering whether the acts alleged were fortuitous. BACKGROUND The Appellants sued Manuel and Delfina Preciado (the Preciados) alleging that Manuel sexually abused A.B. and that Delfina negligently failed to supervise A.B. while he was in the Preciados' foster care service. The Preciados stipulated to the entry of money judgments, and Farmers- which insured the Preciados with a homeowner's insurance policy-filed a complaint in intervention for declaratory judgment seeking a determination of no indemnity coverage under the policy for the claims against the Preciados. The district court granted the summary judgment motion, finding that the insurance policy did not cover the claims based on Manuel's intentional conduct. DISCUSSION The district court granted Farmers' motion to dismiss for failure to state a claim pursuant to the finding that Appellants lacked standing to bring their countercomplaint against Farmers and that the acts complained of were intentional. The Court of Appeal concluded that Farmers had a right to refuse the insurance claim without exposure to a bad faith claim because it successfully challenged the coverage of Appellants' claim in its motion for summary judgment. In the order granting summary judgment, the district court found that the policy at issue was "an occurrence policy, which applies, for coverage purposes, only to accident and non-intentional behavior." The insurance policy had an unambiguous exclusion to the insurance policy. The exclusion stated that the policy does not cover "bodily injury, property damage, or personal injury arising from, during the course of or in connection with the actual, alleged, or threatened molestation, abuse or corporal punishment of any person by anyone, including . . . any insured." Any injuries or damages arising from Delfina's negligent supervision stemmed  from the uninsured risk of sexual misconduct, and thus there was no duty to defend a claim for negligent supervision. The district court properly found that the policy's unambiguous exclusion precluded coverage for claims against the Preciados, including for the acts of Manuel and the negligent supervision against Delfina, thus Farmers had the right to refuse to settle the claim without exposure to a bad faith claim. ZALMA OPINION Liability insurance is, by definition, a contract of indemnity for unintentional and fortuitous acts. Allowing coverage for intentional conduct, like the abuse of a child, would encourage people to commit such evil conduct because there would be no financial effect to the abuser. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Lawyer is not a Super Adjuster I became a lawyer in 1972. Before that I was an insurance adjuster and investigator. Since 1972 I have never been, nor acted as, an adjuster or an investigator. Of course, part of being a lawyer requires some investigation because failing to do so would be a breach of the fiduciary duty of a lawyer to his or her client. I learned immediately upon entering law school and later in the practice of law, that an attorney’s failure to investigate potential defenses constitutes a denial of effective assistance of counsel. In fact, as the Supreme Court of Oregon stated: “To fulfill the role assigned to defense counsel under our adversarial system of criminal justice, a lawyer must investigate the facts and inform himself or herself with respect to the law ‘to the extent appropriate to the nature and complexity of the case[.]’ The attorney-client privilege protects the client from disclosure of private communications with counsel. The investigation conducted by a lawyer as part of his or her duty to properly represent a client is the work of a lawyer and is and should always be protected by the attorney client privilege and the work product protection. Some Privileges are More Equal Than Others With regard to insurance matters some courts have ignored the duties owed by a lawyer to the client and have eliminated the attorney client privilege and the work product protection for most documents created by those lawyers who provide advice to insurers. For most of the more than 45 years I have been involved providing legal advice to insurers I have been accused of being a “super adjuster” rather than a lawyer to allow insureds to gain an advantage against an insurer, and gain access to the private legal advice given to the represented insurer. In Cadaret Grant & Co. v. Great American Insurance Company, No. CV 21-6665 (GRB)(AYS), USDC, E.D. New York (July 25, 2023) the USDC has decided to compel an insurer to produce documents that include the legal advice provided by a lawyer to an insurer since it concluded that the lawyer involved with the requested documents was acting as an investigator or adjuster rather than as a lawyer. The documents at issue reveaedl that as early as April of 2019, GAIC had retained outside counsel Graziano to discuss claims under the Bond. The Decision The Cadaret Grant & Co court refused to provide the attorney client privilege to documents created by the lawyer except a document that showed the lawyer, Graziano’s, legal analysis and opinions. ZALMA OPINION  A lawyer giving legal advice to an insurer faced with a claim is required, to properly serve his or her client, to conduct a thorough legal investigation into the issues presented by the insurer for assistance and legal advice. That advice can include many different things, but none changes the lawyer into an investigator or a claims adjuster. Had counsel sat silent and only wrote a coverage opinion without using his or her skill, legal knowledge and skill to obtain, directly or by asking for additional information, to prepare the coverage opinion that the court found was privileged but all other documents were not, is in error. The  Cadaret opinion is an insult to the lawyer who acted as a coverage lawyer. The lawyer needed to obtain sufficient information from the insurer client so that he or she could provide a thorough, well-reasoned and researched coverage opinion that was not within the ken of the insurance adjuster who had enough knowledge and experience to recognize that he or she needed the assistance and legal analysis of an experienced insurance coverage lawyer.  The “super adjuster” theory that no investigative work of a lawyer can be part of the lawyer’s analysis that is protected by the attorney client privilege and/or the work product protection is simply in error and a false conclusion. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

No Right to Insurance Proceeds After Sale of Property NO INSURABLE INTEREST Thomas Spoon and Maria Spoon appealed from the Pulaski County Circuit Court order granting summary judgment in favor of Chester Lee Bolds and Linda Bolds in the Boldses' civil suit for damages related to insurance proceeds because the Spoons did not own the damaged house at the time of the alleged loss. In Thomas Spoon And Maria Spoon v. Chester Lee Bolds And Linda Bolds, 2023 Ark.App. 244, No. CV-22-277, Court of Appeals of Arkansas, Division II (April 26, 2023) the Spoons' claimed entitlement to insurance proceeds paid on an insurance claim on a house after the Spoons sold the house to the Boldses. The Boldses purchased the Spoons' house by warranty deed on July 2, 2020. In November 2020, the Boldses filed an insurance claim because they discovered the roof was leaking. The Boldses' insurance coverage would not pay because there was preexisting damage to the roof. The Boldses then filed a claim against the Spoons' homeowner's insurance. That insurer accepted the claim but paid the money in dispute ($5,219.48) to the Spoons. When the Spoons failed to turn the money paid on the insurance claim over to the Boldses they sued raising claims of breach of contract, declaratory judgment, and unjust enrichment. The Spoons also contended they were entitled to the money because they were the owners of the property at the time of loss. They claim that unjust enrichment cannot equitably apply because the Boldses did not pay for the insurance policy. The court's order found that any and all interest the Spoons may have had in the house was terminated and extinguished upon the sale of the house to the Boldses, and it ordered the Spoons to reimburse the Boldses for the roof repairs. ANALYSIS Arkansas law is well settled that summary judgment is to be granted by a circuit court only when there are no genuine issues of material fact to be litigated, and the party is entitled to judgment as a matter of law. If one has money belonging to another, which, in equity and good conscience, he ought not to retain, it can be recovered although there is no privity between the parties. It was undisputed that the Spoons received the insurance money that was distributed for repair of the roof of a house they no longer have an interest. Unjust enrichment amounted to an alternative, independent basis for the circuit court's ruling, which has gone unchallenged by the Spoons. Accordingly the Boldses were entitled to the reimbursement. ZALMA OPINION It is axiomatic that to obtain benefits from an insurer the person insured must have an insurable interest in the property at the time of the loss. Since the loss occurred after the Spoons sold the property to the Boldses their insurable interest was eliminated. They should have recovered nothing, but they were paid by their insurer who decided it was better to pay than fight over a small claim. The Spoons  had no right to the money and since the Boldses suffered the loss it was allowed to recover the money paid by the insurer to the Spoons since it would be wrong to profit from the error of the insurer because the Spoons incurred no 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 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 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

"The Hello Dolly" Was Not Where the Owner Promised it Would be When it Sunk in Breach of Warranty Great Lakes Insurance, S.E. insured the Hello Dolly VI, a boat owned by Gray Group Investments, L.L.C. The Hello Dolly sank in Pensacola, Florida, during a hurricane. Gray Group filed a claim under the insurance policy, Great Lakes denied coverage, and Great Lakes then sought a declaratory judgment that it properly did so. In Great Lakes Insurance, S.E. v. Gray Group Investments, L.L.C., No. 22-30041, United States Court of Appeals, Fifth Circuit (August 1, 2023) Hurricane Sally struck the Gulf Coast in September 2020. In its path lay the Hello Dolly VI (hereafter, the Vessel), which was moored behind Gray Group's eponymous member Michael Gray's house in Pensacola, Florida. The Vessel sustained damage during the storm and sank at its mooring. Great Lakes denied coverage, asserting that Gray Group had breached several warranties. The Warranties Great Lakes contended that Gray Group breached the "hurricane protection plan" (the HPP) that Gray Group had submitted in response to Great Lakes's "hurricane questionnaire" (the HQ). The HQ requested the Vessel's location during hurricane season and asked a series of questions regarding Gray Group's contingency plans in the event of a hurricane. In the HPP, Gray Group stated that the Vessel would be located at the Orleans Marina in New Orleans, Louisiana, and detailed the protective measures Gray Group would take when a hurricane approached. At the time the Vessel sank it was not even near Louisiana nor did Gray Group comply with the HPP. The district court agreed with Great Lakes and granted it summary judgment. Specifically, the district court held that the phrase "application for insurance" was ambiguous but that extrinsic evidence showed that the parties intended "application for insurance" to encompass the HPP. Continuing the analysis, the court concluded that Gray Group's statement in the HPP that the Vessel was to be located at the Orleans Marina during hurricane season was also ambiguous. Gray Group had thus breached its warranty, justifying Great Lakes's denial of coverage. ANALYSIS The Court of Appeals of New York has long recognized the concept of incorporation by reference. For nearly as long as New York has recognized incorporation by reference, its Court of Appeals has allowed parol evidence to prove the identity of the paper that the parties attempted to incorporate. Gray Group's HPP, with its representation that the Vessel's "marina or residence" location during hurricane season was the Orleans Marina, was included in the policy's ambiguous incorporation of Gray Group's application for insurance. Under a bolded header labeled "WARNING," the HQ, which prompted Gray Group's submission of the HPP, advised that "this declaration and warranty shall be incorporated in its entirety into any relevant policy of insurance." The district court concluded that the HPP's representation regarding the Vessel's "marina or residence" location was a warranty such that Gray Group's breach of it voided the policy. The Hello Dolly VI never got to where she belonged. Gray Group's representations to the contrary were validly incorporated into the policy as warranties, and Gray Group's breach of its warranties justified Great Lakes's denial of coverage when the Hello Dolly sank. ZALMA OPINION A warranty is a promise made by an insured that must be kept in its entirety for the policy to be effective. When, during hurricane season the Vessel was docked in Florida rather than the promised marina in Louisiana with special protections from hurricanes, the promise was not kept and the warranty was breached, Not only did the vessel sink, the breach of warranty sunk the claim. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Delivery of Policy Starts the Running of the Statute of Limitations Wooten purchased seven Northwestern Mutual insurance policies. Three are disability income policies. Four are various whole-life policies. Wooten purchased and reviewed the last of the policies in December 2005. He sued claiming he was deceived about what he bought ten years before the suit. In Wrenn Wooten v. The Northwestern Mutual Life Insurance Company, Jimzara, And Patrick Matthews, No. 05-20-00798-CV, Court of Appeals of Texas, Fifth District, Dallas (July 31, 2023) the Court of Appeals resolved Wooten's complaint that the trial court's grant of summary judgments in favor of appelees, was wrong. BACKGROUND On April 17, 2018 Wooten sued. He alleged he was sold policies based on misrepresentations on coverage and benefits, wrongfully advised him, and concealed misrepresentations. Wooten bought the disability policies to provide income if he became He alleged a waiver-of-premium term would have allowed him to receive disability income without paying premiums. Wooten has not filed a disability claim under the policies. The suit alleged claims for fraud, negligent misrepresentation, breach of fiduciary duty, and violations of the Texas Insurance Code and the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA). Wooten alleged he did not discover the injury "and/or" misconduct that forms the basis of this lawsuit until within two years of his filing the lawsuit. The trial court granted Northwestern Mutual's traditional motion for summary judgment. STATUTE OF LIMITATIONS Wooten alleged causes of action with two- and four-year periods of limitation. The statute of limitations for Wooten's claims for negligent misrepresentation and for violation of the Texas Insurance Code and the DTPA is two years. The court concluded that the appellees carried their summary judgment burden of conclusively proving Wooten's claims for violations of the Insurance Code and DTPA, negligent misrepresentation, and fraud accrued at the time Wooten purchased each policy. Much to the surprise of Mr. Wooten and most insureds,  an insured has a duty to read the policy, and failing to do so, is charged with knowledge of the policy's terms and conditions. Appellees conclusively demonstrated Wooten purchased his last Northwestern Mutual policy in December 2005. The longest applicable statute of limitations for his claims on that policy-and all his policies-is four years. The Discovery Rule Even in a breach of fiduciary duty case where a fiduciary's misconduct is inherently undiscoverable, a breach of fiduciary duty claim accrues when the claimant knows or in the exercise of ordinary diligence should know of the wrongful act and resulting injury. The Court of Appeals concluded that by 2005, at the latest, Wooten knew, or exercising reasonable diligence, should have known of the facts giving rise to the cause of action. An insurance agent has no duty to explain policy terms to an insured. Instead, an insured has a duty to read the policy, and failing to do so, is charged with knowledge of the policy terms and conditions. Therefore, appellees carried their summary judgment burden to conclusively prove Wooten's last claim accrued in December 2005 and to negate applicability of the common-law discovery rule to his common-law claims of fraud, negligent misrepresentation, and breach of fiduciary duty. ZALMA OPINION An insured has a duty to read a policy to confirm that it received the coverage the sales person represented. Although Wooten was neither dead or disabled, he sought damages against the insurer and sales persons when, ten years late, he found the policies did not cover the events he was promised. He sat on his rights well past the running of every applicable statute of limitations. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Immediate Notice Requirement Defeats Claim IHC Construction Companies, LLC ("IHC") and MA Rebar Services, Inc. ("MA Rebar"), appealed a final summary judgment entered in favor of Westfield Insurance Company ("Westfield") in Westfield's declaratory judgment action against IHC, MA Rebar, and Wayne McClure.   In  Westfield Insurance Company v. MA Rebar Services, Inc., IHC Construction Companies, LLC, and Wayne Kelly McClure, No. 1-23-0161, 2023 IL App (1st) 230161-U, Court of Appeals of Illinois, First District, Fourth Division (July 27, 2023) the Court of Appeals resolved the dispute. FACTS In 2016 IHC was the general contractor for a municipal construction project ("the Project") and that IHC had hired MA Rebar as a subcontractor on the Project. As a condition of its subcontract, MA Rebar was required to obtain liability insurance. In accordance with the subcontract, MA Rebar obtained the required insurance from Westfield and provided IHC with a certificate of insurance confirming such compliance. Wayne McClure filed a complaint against IHC alleging that he was injured as a result of IHC's negligence while working on the Project as an employee of MA Rebar. IHC promptly notified its insurance carrier, Hartford Insurance Company, of the suit, but it did not provide any notice to Westfield at that time. In July 2018, IHC filed a motion to dismiss McClure's complaint. After the circuit court denied the motion in October 2018, IHC filed a third-party complaint against MA Rebar seeking indemnification and contribution. Approximately three months later MA Rebar notified Westfield of IHC's third-party complaint against it. Westfield then sued for declaratory judgment  seeking declarations (1) that it has no duty to defend and indemnify MA Rebar and (2) that it owed no coverage obligation to IHC due to the six-month delay between the time that IHC learned of the McClure lawsuit and the time that Westfield received notice of the suit. The circuit court issued a final order granting Westfield's motion for summary judgment and denying IHC and MA Rebar's cross-motion. The circuit court below determined that IHC's notice to Westfield was untimely because IHC had not provided a justifiable excuse for its three- to six-month delay in notifying Westfield of McClure's claim. IHC failed to provide Westfield with notice of the suit for six months after it received service of the complaint. IHC's only justification for the delay in providing notice is that it was attempting to negate the need for insurance coverage by seeking dismissal of the case, but that does not justify the delay. Westfield was entitled to be informed of the suit "immediately," precisely to allow it to participate in defense actions like motions to dismiss.  IHC denied Westfield that contractual right by withholding notice while pursuing the motion to dismiss. The court concluded that the Insured failed to comply with the terms of an insurance policy notice provision requiring "immediate" notice of any claims when the insurer did not receive notice of a lawsuit against the insured until six months after service of the complaint on the insured. ZALMA OPINION The insured tried to reduce its premium, by moving to dismiss without reporting a claim, found itself to be its own worst enemy. Its scheme to save future premium increases resulted only to eliminate its insurance for McClure's claimed injury and lost over $10 million in available coverage and the unlimited defense costs. Ignorance can be cured but stupid attempts to save insurance premiums is not curable. (c) 2023 Barry Zalma & ClaimSchool, Inc. Please tell your friends and colleagues abo --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Experienced Lawyer Claiming Ignorance of Law Is No Defense PHOTOCOPY COMPANY ACTED AS A PASS THROUGH TO PAY THE CAPPER Robert Irving Slater was a practicing worker's compensation attorney when he entered into an agreement with the owner of USA Photocopy who paid a third party to perform intake interviews with clients of defendant's practice, saving a significant amount of his the lawyer's own employees time and money. In exchange, defendant used USA Photocopy's services during all workers' compensation proceedings on those cases. The law prohibits referring workers' compensation clients for remuneration. Defendant was ultimately convicted of conspiracy, submitting false and fraudulent claims against insurers, and 21 counts of insurance fraud. He was sentenced to probation for two years in The People v. Robert Irving Slater, G061331, California Court of Appeals, Fourth District, Third Division (July 17, 2023) and appealed his conviction. FACTS USA Photocopy provided attorney services, including photocopying and sending subpoenas for records for workers' compensation cases. The company would then bill insurance carriers for its services Peter Ayala worked as a "legal investigator performing intake services." Ayala's role was to meet with the potential "workers' compensation client to fill out the intake retainer . . . and also get the retainer signed for the claim." Ayala estimated he performed intake services for about 2,000 clients for defendant, and USA Photocopy was the only copy service used for those clients. Ayala did not perform any service for USA Photocopy other than the services he performed for the lawyer defendant. Defendant was convicted of conspiracy submitting a false and fraudulent claim; and 21 counts of insurance fraud based on concealing or failing to disclose information that affects a person's right to an insurance benefit. Verdict and Sentencing The jury convicted defendant on all 23 counts. The jury also found the enhancement regarding the pattern of fraudulent conduct true. The court sentenced defendant to serve a total of 183 days, with 182 of those days suspended on the successful completion of two years of supervised probation. Six months of the probation term was to be served with an ankle bracelet. The court also ordered defendant to pay $356,175.24 in victim restitution in addition to statutory fines and fees. DISCUSSION In reviewing the sufficiency of the evidence to support a conviction, the Court of Appeal applied the test whether substantial evidence, of credible and solid value, supported the jury's conclusions. Appellate courts simply consider whether any rational trier of fact could have found the essential elements of the charged offenses beyond a reasonable doubt.  The standard of review is the same even when the case relies on circumstantial evidence and the appellate court must accept logical inferences that the jury might have drawn from that evidence. Further, the very oddness of the scheme involved here - where Ayala was paid by USA Photocopy, rather than by defendant himself - a type of scheme the experienced workers' compensation attorney and retired Judge Hernandez had never heard of - suggested that something was not aboveboard. The jury was entitled to infer from the oddity of the scheme that defendant, as an experienced attorney, was aware it was illegal. ZALMA OPINION Slater, an experienced lawyer, should have known - and the jury found he did - that the scheme with the photocopy service and Mr. Ayala, was an attempt to hide capping - causing insurers to pay for the illegal referrals to a lawyer of clients - a crime  in California and most states. He received a kind sentence with no jail time and payment of restitution. If he doesn't pay it he will go to jail. Creativity in hiding the scheme did not work and his conviction properly stands. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Construction and Development Activities Exclusion Unambiguous In Grenadier Realty Corp., et al. v. RLI Insurance Company, appellant, et al., No. 2020-06795, Index No. 502159/18, 2023 NY Slip Op 03910, Supreme Court of New York, Second Department (July 26, 2023) a New York Supreme Court (trial court) order requiring RLI Insurance Company to defend its insured was appealed by RLI. The trial court order granted the plaintiffs' motion for summary judgment declaring that certain losses were covered under a general liability insurance policy issued by RLI Insurance Company and that RLI Insurance Company was obligated to indemnify the plaintiffs in connection with the underlying action entitled Gargiso v Howland Hook Housing Co., Inc. UNDERLYING ACTION AND INSURANCE CLAIM In July 2012, Michael Gargiso allegedly was injured when he stepped in a trench which was dug as part of a construction project that had been left unfinished. Gargiso sued the  property owner, Howland Hook Housing Co., and the property manager, Grenadier Realty Corp. Grenadier, which had purchased a general liability insurance policy from the defendant RLI effective March 1, 2012 (the subject policy), sought to obtain coverage from RLI. RLI denied coverage based upon an exclusion in an endorsement to the subject policy for "bodily injury" arising out of "Construction and Development Activities." Thereafter, the plaintiffs sued RLI to recover damages for breach of the subject policy and for a judgment declaring that RLI is obligated to provide coverage under the policy and to indemnify the plaintiffs in connection with the underlying action. The plaintiffs moved for summary judgment on their causes of action against RLI alleging breach of contract and for a judgment declaring that RLI was obligated to provide insurance coverage to them under the policy and to indemnify them. RLI cross-moved for summary judgment dismissing the complaint insofar as asserted against it and for a judgment declaring that it has no duty to indemnify the plaintiffs. ANALYSIS In determining a dispute over insurance coverage, the appellate court first looks to the language of the policy. As with any contract, unambiguous provisions of an insurance contract must be given their plain and ordinary meaning. The insurer has the burden of proving the applicability of an exclusion. If the language is doubtful or uncertain in its meaning, any ambiguity will be construed in favor of the insured and against the insurer. However, the plain meaning of a policy's language may not be disregarded to find an ambiguity where none exists. The RLI policy provided coverage for, among other things, damages because of "bodily injury." The policy, however, includes a construction and development exclusion, which, as is relevant, excludes from coverage "bodily injury" resulting from "Construction and Development Activities." Gargiso was injured when he stepped into a trench which had been dug as part of the construction activities in a parking lot on the property. Therefore, RLI established that it did not have a duty to indemnify the plaintiffs in connection with the underlying action. CONCLUSION The Supreme Court should have denied plaintiffs' motion for summary judgment and should have granted RLI's cross-motion for summary judgment dismissing the complaint insofar as asserted against it and for a judgment declaring that RLI is not obligated to indemnify the plaintiffs in connection with the subject underlying action --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL - 08/01/2023 https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Negligent Broker Saved by Exclusion Boulevard RE Holdings, LLC, (Boulevard) sued Mixon Insurance Agency, Inc., (Mixon), alleging breach of contract and negligent procurement of insurance only to find that if the policy had been issued protecting Boulevard there would be no coverage because of a clear and unambiguous exclusion requiring operative fire sprinkler systems. In Boulevard RE Holdings, LLC v. Mixon Insurance Agency, Inc., No. 22-1895, United States Court of Appeals, Eighth Circuit (July 20, 2023) the Eighth Circuit applied Missouri law to resolve the dispute. FACTUAL HISTORY Boulevard owned commercial property in which BMG Service Group, LLC, (BMG) operated a bar (Property). Boulevard entered into a contract for deed with BMG for the sale of the Property for $1,275,000. Under the contract, Boulevard retained the Property's legal title until BMG paid the purchase price in full. The contract also obligated BMG to obtain, at its own expense, fire insurance in the amount of the purchase price. The insurance was to be issued in Boulevard's name. BMG asked its broker, Mixon, to have Boulevard listed as a "named insured, loss payee, additional insured, and mortgagee" on the insurance policy. Mixon procured the policy from Berkley Assurance Co. The policy was issued and contained an endorsement called the Fire Protective Safeguard Endorsement (Endorsement). The Endorsement required the insured to maintain a working automatic sprinkler system on the Property. The Endorsement also excluded all coverage for loss or damage by fire if the sprinkler system was inoperative. The policy, as issued, did not list Boulevard as a "named insured, loss payee, additional insured, and mortgagee." Approximately one year later, the Property was destroyed by fire. At the time of the fire, the sprinkler system was inoperative. Boulevard submitted a proof of loss to Berkley Assurance, claiming to have an interest in the property as a "lender." The district court held that Boulevard was not entitled to recover as a mortgagee because sellers in a contract for deed are not mortgagees under Missouri law. The district court also concluded that even if Boulevard was an insured or a mortgagee, noncompliance with the Endorsement barred recovery. BOULEVARD'S COMPLAINT AGAINST MIXON The operative complaint raises two causes of action against Mixon: negligent failure to procure insurance and breach of contract. Under Missouri law, both causes of action require showing that the defendant caused the plaintiff to suffer damages. The Eighth Circuit noted that on the record facts, even if Boulevard had been named as a mortgagee, coverage would still be barred because of the Endorsement. The Endorsement required the Property to have a working sprinkler system. The Property was destroyed by a fire that occurred while the Property lacked a working sprinkler system. Indeed, had Mixon procured the Policy in precisely the manner requested by BMG, and had the Policy issued with Boulevard listed as a mortgagee or other additional insured, Boulevard would nonetheless be in the same position in which it found itself. If the policy had issued listing Boulevard as requested, the Endorsement would still have barred coverage. ZALMA OPINION It is usual for insurers of restaurant and bar risks to require the presence of fire sprinkler systems. The bar that burned had no operative fire sprinkler systems and, as a result, had no available coverage for damage by fire. Boulevard, who sold the property under contract tried to avoid the condition precedent and its own negligence by failing to review the policy or insist on the fire sprinklers, by suing the broker for not naming it as an insured. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Ninth Circuit Is Exhausted by Covid Insurance Claims Suit --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurers Should Avoid Suing Each Other --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Ninth Circuit Is Exhausted by Covid Insurance Claims Suit Khatchik Hairabedian d/b/a Kris Mobil ("Khatchik") appealed from the district court's order granting Defendant Security National Insurance Company's ("Security") motion to dismiss this action for insurance coverage in Khatchik Hairabedian, Dba Kris Mobil v. Security National Insurance Company, a Texas Corporation, No. 22-55355, United States Court of Appeals, Ninth Circuit (July 21, 2023) applied its precedent. THE CLAIM Khatchik sought coverage from its insurer, Security, for COVID-19 related economic losses. However, the policy had a virus exclusion that provides: Security "will not pay for loss or damage caused by or resulting from any virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease." The virus exclusion "applies to all coverage under all forms and endorsements," in the policy, including "forms or endorsements that cover business income, extra expense or action of civil authority." Khatchik argued that the virus exclusion does not apply because government orders, not COVID-19, caused the losses. Here COVID-19 is the efficient proximate cause of Khatchik's alleged losses. Khatchik also contended that the virus exclusion does not apply to pandemics because Security chose not to use a publicly available "pandemic exclusion" in its policy. The Ninth Circuit disagreed. Arguing that the Virus Exclusion does not apply to bar coverage for losses stemming from the COVID-19 pandemic defies the plain and unambiguous text of the Policy and is akin to arguing that a coverage exclusion for damage caused by fire does not apply to damage caused by a very large fire. ZALMA OPINION It is time that courts stop dealing with lawsuits seeking insurance coverage resulting from Covid-19. They continue to fill the trial and appellate courts and they continue to lose. They are causing unnecessary expense to the plaintiffs, the insurers and the courts. Considering the volume of precedent it is beginning to be considered a frivolous law suit that would subject the parties and their lawyers to sanctions. (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 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurers Should Avoid Suing Each Other The United StatesCourt of Appeals for the Ninth Circuit certified to the California Supreme Court, the following question for our review: "Under California's Motor Carriers of Property Permit Act (Veh. Code, § 34600 et seq.; the Act), does a commercial automobile insurance policy continue in full force and effect until the insurer cancels the corresponding Certificate of Insurance on file with the Department of Motor Vehicles (DMV or Department), regardless of the insurance policy's stated expiration date?" The Supreme Court in Allied Premier Insurance v. United Financial Casualty Company, S267746, Supreme Court of California (July 24, 2023) the California Supreme Court logically advised the court of its opinion based on the statute and California precedent. The certified question arose only in the context of claims for equitable contribution and subrogation between two insurance companies. It bears repeating that the plaintiffs in the underlying lawsuit were compensated to the full limits of Allied's policy under the terms of their settlement and that, at all relevant times, Porras, the trucker, properly maintained an active operating permit. BACKGROUND A carrier can satisfy that requirement by obtaining a policy of insurance. If a carrier does so, the insurer must submit a certificate of insurance to the Department as evidence that the "protection required under [section 34631.5,] subdivision (a)" is provided. The Act requires that proof of financial responsibility be continued in effect during the active life of the permit issued to the motor carrier. This requirement prohibits cancellation of a certificate of insurance without notice to the DMV by the insurer. United appealed to the Ninth Circuit, which certified the question of law to the Supreme Court. If the Act requires a commercial auto insurance policy to remain in effect indefinitely until the insurer cancels the certificate of insurance on file with the DMV, then Allied must prevail. If not, United must prevail. DISCUSSION Equitable contribution assumes the existence of two or more valid contracts of insurance covering the particular risk of loss and the particular casualty in question. The Act Does Not Extend the Policy Beyond the Term Contained in the Contract As to cancellation of a policy, the HCA provided that protection against liability shall be continued in effect during the active life of the trucker's permit, and that the policy of insurance or surety bond shall not be cancelable on less than 30 days' written notice to the PUC, except in the event of cessation of operations as a highway carrier as approved by the PUC. An uncancelled certificate of insurance that remains on file with the DMV does not cause the corresponding insurance policy to remain in effect in perpetuity. But that is not to say that an uncancelled certificate of insurance imposes no obligation of any kind on the responsible insurer. CONCLUSION Under the Act, a commercial automobile insurance policy does not continue in full force and effect until the insurer cancels a corresponding certificate of insurance on file with the DMV. The duration of the policy's coverage is regulated by its terms and those of any endorsement or amendment to the policy itself. The terms of an insurance contract generally determine the duration of the policy's coverage. Although an endorsement can amend the policy, neither the Act nor the specific endorsement requires extending coverage beyond the underlying policy's expiration date. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Mutual Benefit Insurance Defeats Subrogation Effort Typically, an insurer that pays a claim to an insured as a result of the negligent acts of a third party an insurer has the right, in the name of its insured, to sue the responsible party in the name of its insured. The right to sue in the name of the insured results from the equitable remedy of subrogation and is effective as long as the insured has not waived the right of its insurer to subrogate. In Delaware there is an exception to the equitable remedy because landlords and tenants are presumed to be co-insureds under the landlord's fire insurance policy unless a tenant's lease clearly expresses an intent to the contrary. If the rule applies, the fact that the landlord's insurance is presumed to be for the mutual benefit of the landlord and the tenant, and the insurer cannot pursue the tenant for the landlord's damages by way of subrogation. The Superior Court ruled in the tenants' favor at summary judgment that the rule applied because the lease did not clearly express an intent to hold the tenants liable for the landlord's damages. In Donegal Mutual Insurance Company A/S/O Seaford Apartment Ventures LLC T/A The Villages Of Stoney Brook Apartments v.Thangavel and Muthusamy, No. 379, 2022, Supreme Court of Delaware  (July 18, 2023) the apartment's insurer sued the tenants for the $77,704.06 to repair the water damage they caused. The Superior Court ruled in the tenants' favor at summary judgment that the rule applied because the lease did not clearly express an intent to hold the tenants liable for the landlord's damages. ANALYSIS In Delaware landlords and tenants are presumed to be co-insureds under the landlord's fire insurance policy unless a tenant's lease clearly expresses an intent to the contrary. If the rule applies, the landlord's insurer cannot pursue the tenant for the landlord's damages by way of subrogation. The tenants who leased an apartment from Seaford Apartment Ventures, LLC, Donegal's insured, were considered to be coinsueds since the lease did not express an intent to the contrary. The complaint alleged that the tenants hit a sprinkler head while they flew a drone inside the apartment. Water sprayed from the damaged sprinkler head and caused damage to the apartment building. The Superior Court granted the tenants' summary judgment motion. It concluded that the lease in this case was substantially similar to the leases in three other Delaware all of which found that the leases did not clearly express an intent to the contrary. CONCLUSION The Supreme Court concluded that the Superior Court correctly found that the apartment lease did not clearly express an intent that the tenants were responsible for the water damage in this case. Since the Seaford Apartment lease did not specifically address liability for fire or water damage caused by the tenant's negligence the policy issued by Donegal was issued for the mutual benefit of the insured and the tenant and Donegal had no right to subrogate.. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

There Must be a Claim for Coverage Under a Claims Made Policy Homeland Insurance Company of New York (Homeland) issued Plaintiff a claims made  liability insurance policy covering errors and omissions, effective January 16, 2019 to January 16, 2020.  Plaintiff eQHealth AdviseWell, Inc., f/k/a eQHealth Solutions, Inc., a Louisiana corporation that provides health care management services to Medicaid agencies, commercial healthcare payers, third-party administrators, and self-insured employer groups. In Eqhealth Advisewell, Inc. v. Homeland Ins. Co. Of N.Y., Civil Action No. 22-00050-BAJ-EWD, United States District Court, M.D. Louisiana (July 15, 2023) the USDC resolved the dispute over coverage. BACKGROUND Homeland issued a Managed Care Organizations Errors and Omissions Liability Policy (“the Policy”) to Plaintiff. The Policy covered “Damages and Claim Expenses in excess of the Retention that [Plaintiff is] legally obligated to pay as a result of a Claim ...” A “Claim,” as defined by the Policy, “means any written demand from any person or entity seeking money or services or civil, injunctive, or administrative relief from [Plaintiff].” Plaintiff Authorizes Treatment For B.N., A Florida Resident, In Oklahoma One of Plaintiff's contracts was to provide Medicaid management services to the State of Florida. Under this contract, Plaintiff's primary operational contact was Florida's Agency for Health Care Administration (“AHCA”), which is the state agency responsible for administering Florida's Medicaid program. Plaintiff's Communications To Defendant Regarding B.N.'S Treatment At Brookhaven The lawyer stated that “[n]o lawsuit has been filed, at least as yet.”  Plaintiff and Florida AHCA's Settlement with Brookhaven At the point of a settlement eQHealth had virtually no choice but to settle on the terms agreed by AHCA and Brookhaven. The settlement agreement was signed by the last parties on September 20, 2019, and pursuant to it, eQHealth paid Brookhaven $262,500. Defendant denied coverage on February 3, 2020, stating that: “[n]o Claim against eQHealth was reported to Homeland, eQHealth did not ask for consent to settle any Claim, and Homeland did not provide prior written consent for the settlement, or for any expense, payment, liability, or obligation eQHealth may have had in relation to this matter. Therefore, no coverage is available for the settlement payment eQHealth made to Brookhaven.” DISCUSSION Homeland expressly conditioned coverage of all claims under the Policy on the filing of notice of a “Claim” against Plaintiff. When considering what constitutes a “claim” to trigger coverage under a “claims-made” insurance policy, the court relied on the Fifth Circuit that instructs trial courts to differentiate the “mere threat of a claim” from an “actual claim.” The USDC concluded that despite the numerous communications between the parties and relevant third parties, no communication rose to the definitional level of a “Claim” such that coverage under the Policy was triggered. ZALMA OPINION Homeland included in its policy wording a definition of the word "claim." For the insured to obtain defense or indemnity it must establish that a claims, as defined, happened. Without question threats were made. A settlement was reached and the insured paid money to fund the settlement. Yet, no one made a "claim" as defined, the insurer was not advised of the settlement nor was it advised of the insured's intent to pay until after it paid although the decision to pay was a "business" decision since no one made a demand in writing that they pay for a cause of loss insured against, there could not be coverage for a claim or loss triggered under the policy's clear and unambiguous definition of the word "claim." (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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Exclusion Defeats Claim for Defense and Indemnity Duckworth roofing, while repairing a roof for LGO Properties caused a fire at the Tulane Building while using hot torches to repair the roof. In Certain Underwriters At Lloyd's Of London As Subrogee Of L.G.O. Properties, LLC  v.  Duxworth Roofing And Sheetmetal, Inc., No. 2022-CA-0821, Court of Appeals of Louisiana, Fourth Circuit (July 18, 2023) the defendant sought coverage when the  defendant's insurer denied coverage because of an exclusion called the Torch Down Roofing Exclusion. FACTS L.G.O. Properties, L.L.C. entered into a contract with Duxworth to perform roofing work at 4033 Tulane Avenue (hereinafter "the Tulane Building"). Duxworth's roofing work included the use of hot tools and the installation of a process called "torch down roofing" to repair a leak on the roof of the Tulane Building. On December 9, 2016, the Tulane Building was damaged in a fire (hereinafter "the December 2016 fire"). James River, Duckworth's insurer, filed a motion for summary judgment arguing that the Commercial General Liability insurance policy precludes Duxworth from receiving coverage. DISCUSSION Duxworth asserts multiple assignments of error challenging the trial court's ruling on the motion for summary judgment. The Language Of The Torch Down Roofing Exclusion Is Not Ambiguous The Louisiana Court of Appeals found that the Torch Down Roofing Exclusion precludes Duxworth from receiving coverage from James River. A Court must give words and phrases their general meaning. Mr. Duxworth's deposition revealed that he was a part of the crew that was present and performing torch down roofing repairs to the Tulane Building on the day of the December 2016 fire. Since Mr. Duxworth testified that his team was instructed to repair a leak to the Tulane Building's roof which required the use of hot tools and torches, also known as "torch down" roofing, and since Mr. Duxworth concedes that hot tools and torches were used to install a flat torch down roof to the Tulane Building the exclusion applies. Given the plain, ordinary, and generally prevailing meaning of the words "arise out of," it was clear to the Court of Appeals that Lloyd's of London's claims against Duxworth arose out of and are derived from the property damage caused by the fire that occurred during the time Duxworth was performing ongoing torch down roofing installation. Duty to Defend A duty to defend is determined solely from the plaintiff's pleadings and on the face of the policy. James River's CGL policy provides: "we will have no duty to defend the insured against any 'suit' seeking damages for 'bodily injury' or 'property damage' to which this insurance does not apply." Lloyd's of London's petition alleges that Duxworth failed to safely use hot torches to perform roofing work on the Tulane Building. The Torch Down Roofing Exclusion unambiguously excluded the claims against Duckworth. The trial court properly sustained James River's motion for summary judgment and determining that the Torch Down Roofing Exclusion prevents coverage from the use of torch down roofing operations. ZALMA OPINION Everyone who is sued wants to use other people's money to defend the suit. Duckworth bought a policy with a "Torch Down Roofing Exclusion" that obviously applied after the insured testified he and his staff were using torches to repair the building at the time it caught fire. Using that type of roofing with a policy that excludes it accepted the full risk of loss and will have to use his own funds to pay off the Lloyd's Underwriters' subrogation action. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Suing for Unfair Competition and an Injunction to Avoid Private Limitation of Action Provision Dismissed Katherine Rosenberg-Wohl had a homeowners insurance policy with State Farm Fire and Casualty Company (State Farm), providing coverage on her home in San Francisco. The policy has a limitation provision that requires lawsuits to be "started within one year after the date of loss or damage." In Katherine Rosenberg-Wohl v. State Farm Fire And Casualty Company, A163848, California Court of Appeals, First District, Second Division (July 11, 2023) she sought indemnity to remedy a defect in the home. State Farm refused to pay because there was no insurable event and because the suit was filed more than a year after the alleged loss. FACTS In late 2018 or early 2019, plaintiff noticed that on two occasions an elderly neighbor stumbled and fell as she descended plaintiff's outside staircase and learned that the pitch of the stairs had changed and that to make the stairs safe the staircase needed to be replaced. In late April 2019, plaintiff authorized the work and contacted State Farm, and on August 9, she submitted a claim for the money she had spent. The denial was based on the investigation findings and concluded there was no evidence of a covered cause for accidental direct physical damage to the property. Plaintiff submitted a claim to State Farm for her construction expenses, which by then were approximately $52,600, with another $16,800 in anticipated expenses for additional work. By letter dated August 26-plaintiff alleged, without any investigation-State Farm denied the claim. The letter also specifically referenced "the suit limitation period" as a "policy defense." The second suit before the the Superior Court purports to allege a claim for violation of California's unfair competition law. This case was also resolved against plaintiff, also based on the limitation provision, when the trial court sustained a demurrer to the second amended complaint without leave to amend. Plaintiff appealed. On October 22, 2020-some 18 months after she had replaced the staircase, 14 months after State Farm had denied her claim the first time, and nearly six months after the one-year limitation period of the policy had expired-plaintiff filed two lawsuits in San Francisco County Superior Court. State Farm filed a demurrer and a motion to strike the SAC. On July 29, Judge Massullo entered her order sustaining the demurrer without leave to amend, a comprehensive order indeed, eight pages of thoughtful analysis. DISCUSSION The one-year limitation provision in the State Farm policy is there because it was required by statute. [Califonria Insurance Code section 2071] The one-year limitation provisions have long been held valid as mandated by statute. The One-Year Policy Limitation Provision Applies An insured cannot plead around the one-year limitations provision by labeling her cause of action something different than breach of contract which, of course, includes claims for bad faith. Conduct by the insurer after the limitation period has run cannot, as a matter of law, amount to a waiver or estoppel. ZALMA OPINION The Court of Appeal spent many pages resolving this fairly simple dispute. The plaintiff sued to collect benefits she believed were owed under a policy of insurance only to find that the suit was filed to late. To avoid that problem she amended the suit to allege unfair business practices and sought an injunction, all of which were seen to be an alternative way to obtain policy benefits and failed again. For more than 120 years the California Supreme Court and Courts of Appeal have upheld the private limitation of action provision required by statute and no amount of creative pleading can avoid its effect. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

State Farm Obtains Injunction Against Doctor to Stop Fraudulent No Fault Accident Claims In State Farm Mutual Automobile Insurance Company, State Farm Fire and Casualty Company v. Herschel Kotkes, M.D., P.C., Herschel Kotkes, M.D., No. 22-cv-03611-NRM-RER, United States District Court, E.D. New York (July 13, 2023) Plaintiffs, various State Farm insurers sued Herschel Kotkes and Herschel Kotkes, M.D., P.C. (“Kotkes”), alleging that Dr. Kotkes defrauded State Farm by submitting hundreds of fraudulent bills for no-fault insurance charges on behalf of insured patients who were involved in automobile accidents. State Farm alleged common law fraud and unjust enrichment, seeking damages for benefits paid under no-fault insurance policies to Kotkes. State Farm also sought a declaratory judgment establishing that, among other things, it is not obligated to pay unpaid, pending claims submitted by Kotkes. BACKGROUND An insured may assign their claim to their provider, who then bills the insurers directly. Factual Allegations Defendants are Dr. Herschel Kotkes (“Kotkes”) and his medical practice, Herschel Kotkes, M.D., P.C. Kotkes is a pain management specialist, whose practice includes treating insureds who have been involved in automobile accidents. The insureds assign their policies to Kotkes, who bills State Farm for the treatment purportedly rendered. The random sample of eighty-six patients also reveals that Kotkes provided the same prognosis for 98% of those he treated and recommended the same combination of treatment methods for nearly all patients. COMMON LAW FRAUD Under New York law, to state a claim for fraud, a plaintiff must demonstrate 1 a material misrepresentation or omission of fact; 2 which the defendant knew to be false; 3 which the defendant made with the intent to defraud; 4 upon which the plaintiff reasonably relied; and 5 which caused injury to the plaintiff. State Farm points to Kotkes's own testimony, from an examination under oath in a state court collection action, where he testified, for one, that he does not believe that certain procedures are medically valuable, but that he performs them as a matter of course. Kotkes also testified that it is his practice to perform a percutaneous discectomy and an IDET-two mutually exclusive procedures-at the same time and using the same needle. Common law fraud is sufficiently pled and Kotkes's motion to dismiss the common law fraud count was denied. MOTION FOR A PRELIMINARY INJUNCTION State Farm alleges that, as of March 23, Kotkes initiated 103 arbitrations and 95 state court lawsuits seeking payment on claims that State Farm has refused to pay since uncovering the alleged fraudulent scheme and initiating the instant federal lawsuit. As of March 24, 2023, approximately $1,188,841.32 in unpaid claims was at issue in pending state court litigation and arbitrations, and $1,787,989.98 of Kotkes's billed-unpaid amount was not yet the subject of pending collections litigation or arbitration. New York courts routinely stay collection actions pending declaratory judgment proceedings. Accordingly, State Farm's request that the USDC stay pending no-fault collection actions in state court was granted. State Farm's motion for a preliminary injunction was granted in full. ZALMA OPINION Because insurance fraud - especially with regard to individual small amounts - the only means of deterring or defeating insurance fraud relating to no-fault insurance claims assigned to less than scrupulous health care providers is to sue the providers for fraud. State Farm should be commended for its proactive work against Dr. Kotkes and was properly provided an injunction stopping further claims while litigating the declaratory relief and fraud suit. The evidence appears overwhelming and I look forward to reading about the results at trial. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Lie to Your Insurer and You Will Lose Plaintiffs Richard Converse and Stephanie Converse own the property. Defendant State Farm Fire and Casualty Company (“State Farm”) insured the property at the relevant time. After a fire on December 8, 2019, Plaintiffs sought coverage under the insurance policy. Plaintiffs brought this action when Defendant denied coverage for much of the claim. In Richard Converse, and Stephanie Converse v. State Farm Fire And Casualty Company, No. 5:21-CV-457 (TJM/ATB), United States District Court, N.D. New York (July 12, 2023) the USDC was asked to rule on cross-motions for summary judgment. BACKGROUND State Farm insured the Converses against the risk of loss to a rental property under a homeowners policy. The parties agree that Plaintiff Stephanie Converse sent a letter to Joseph Pelton on or about November 8, 2019 that stated: “Joe, ... Having issues with my house again. Need help this time! I will pay $5,000 cash when I get the insurance. The back door will be unlocked and open to the basement. That's where the access to utilities are. Make look like electrical. I will come up after it happens so I will meet up with you. ... It's a mint green house with garage. Love you, See you soon.  Stephanie.” While Plaintiffs admit that Stephanie Converse mailed the letter, they “deny any implication or allegation that Stephanie Converse committed insurance fraud, paid anyone to commit arson on the property, or was in any way involved in the fire that caused the loss on the property.” Stephanie Converse filed a claim on December 8, 2019 for the loss caused by the fire. State Farm mailed Stephanie Converse a blank Sworn Statement in Proof of Loss and a return envelope. Defendant denied Stephanie Converse's claim on October 7, 2020 and Plaintiffs sued. ANALYSIS The materiality requirement is satisfied if the false statement concerns a subject relevant and germane to the insurer's investigation as it was then proceeding. The undisputed evidence before the Court indicated, Stephanie Converse told an investigator that she had made no such request. Defendant does not argue that Plaintiff dissembled about the cause of the fire at the home, committed arson herself, or paid Joseph Pelton to set the home on fire. The Court found that as a matter of law Plaintiff made these misrepresentations willfully. Stephanie Converse made material misrepresentations to insurance investigators as a matter of law and breached the insurance contract and Defendant is entitled to summary judgment in this respect. Failure to Cooperate Testifying falsely can also breach the condition of cooperation.  Stephanie Converse admitted to Lee County Sheriff's Office investigators that she had written the letter she had denied to State Farm. Converse thus made misrepresentations about facts material to State Farm's investigation.misrepresentations were not willful.  Proof of Loss There is no dispute that the Plaintiff did not return a sworn statement of proof of loss until March 12, 2020, well after the date specified by State Farm in correspondence to Stephanie Converse. Defendant has an absolute defense to Plaintiffs' claims. Defendant's motion for summary judgment, was granted and Plaintiffs' motion for summary judgment was denied. ZALMA OPINION An insured who seeks to hire a person to set fire to her house for a fee paid from insurance proceeds is offering to pay for a felonious act. If the person refuses to set the fire, has an alibi when an arson fire actually occurred, performed by a person unknown, and the insured lies about her offer to burn her house, the lie is sufficient to deny the claim in accordance with the terms and conditions of the policy. This case proved the old saw that "liars never prosper." (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Lie to Your Insurer and You Will Lose Plaintiffs Richard Converse and Stephanie Converse own the property. Defendant State Farm Fire and Casualty Company (“State Farm”) insured the property at the relevant time. After a fire on December 8, 2019, Plaintiffs sought coverage under the insurance policy. Plaintiffs brought this action when Defendant denied coverage for much of the claim. In Richard Converse, and Stephanie Converse v. State Farm Fire And Casualty Company, No. 5:21-CV-457 (TJM/ATB), United States District Court, N.D. New York (July 12, 2023) the USDC was asked to rule on cross-motions for summary judgment. BACKGROUND State Farm insured the Converses against the risk of loss to a rental property under a homeowners policy. The parties agree that Plaintiff Stephanie Converse sent a letter to Joseph Pelton on or about November 8, 2019 that stated: “Joe, ... Having issues with my house again. Need help this time! I will pay $5,000 cash when I get the insurance. The back door will be unlocked and open to the basement. That's where the access to utilities are. Make look like electrical. I will come up after it happens so I will meet up with you. ... It's a mint green house with garage. Love you, See you soon.  Stephanie.” While Plaintiffs admit that Stephanie Converse mailed the letter, they “deny any implication or allegation that Stephanie Converse committed insurance fraud, paid anyone to commit arson on the property, or was in any way involved in the fire that caused the loss on the property.” Stephanie Converse filed a claim on December 8, 2019 for the loss caused by the fire. State Farm mailed Stephanie Converse a blank Sworn Statement in Proof of Loss and a return envelope. Stephanie Converse appeared for an examination under oath (“EUO”) in connection with her insurance claim on March 13, 2020. Stephanie Converse affirmed during the examination that “everything as far as you can recall [was] truthful about what you told Mr. Loarca[.]” Defendant denied Stephanie Converse's claim on October 7, 2020 and Plaintiffs sued. ANALYSIS The materiality requirement is satisfied if the false statement concerns a subject relevant and germane to the insurer's investigation as it was then proceeding. The undisputed evidence before the Court indicated, Stephanie Converse told an investigator that she had made no such request. Defendant does not argue that Plaintiff dissembled about the cause of the fire at the home, committed arson herself, or paid Joseph Pelton to set the home on fire. The Court found that as a matter of law Plaintiff made these misrepresentations willfully. Stephanie Converse made material misrepresentations to insurance investigators as a matter of law and breached the insurance contract and Defendant is entitled to summary judgment in this respect. Failure to Cooperate Testifying falsely can also breach the condition of cooperation.  Stephanie Converse admitted to Lee County Sheriff's Office investigators that she had written the letter she had denied to State Farm. Converse thus made misrepresentations about facts material to State Farm's investigation.misrepresentations were not willful.  Proof of Loss Defendant's motion for summary judgment, was granted and Plaintiffs' motion for summary judgment was denied. ZALMA OPINION An insured who seeks to hire a person to set fire to her house for a fee paid from insurance proceeds is offering to pay for a felonious act. If the person refuses to set the fire, has an alibi when an arson fire actually occurred, performed by a person unknown, and the insured lies about her offer to burn her house, the lie is sufficient to deny the claim in accordance with the terms and conditions of the policy. This case proved the old saw that "liars never prosper." (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Arsonist-Killer Not Eligible for Elderly House Confinement Program Jack Ferranti, acting as his own attorney, appealed the District Court's orders denying his petition for habeas relief under 28 U.S.C. § 2241 and his motion to reconsider. FACTS Ferranti was responsible for causing a fire at his business that resulted in the death of a firefighter. The trial judge sentenced him to 435 months' imprisonment. See United States v. Ferranti, 928 F.Supp. 206, 21316 (E.D.N.Y. 1996). His conviction and sentence were affirmed on appeal. See United States v. Tocco, 135 F.3d 116 (2d Cir. 1998). In Jack Ferranti v. Warden Allenwood LSCI, No. 22-1892, United States Court of Appeals, Third Circuit (June 30, 2023) noted that Ferranti was convicted in the United States District Court for the Eastern District of New York of arson homicide, arson conspiracy, 16 counts of mail fraud, and witness tampering, based on an insurance-fraud scheme. The Third Circuit resolved the request for release to the elderly home confinement program (EOHDP). In 2020, Ferranti argued that he met the criteria for the EOHDP, and he asked for the District Court to order the BOP to process his application and place him in the program. ANALYSIS As the District Court explained, federal courts do not have the authority to grant the relief that Ferranti requested to order his placement in the EOHDP. The executive branch, not the courts, have control over an inmate's placement. Moreover, even if the ability to challenge the BOP's actions were available through habeas, Ferranti did not establish that he qualified for the program. The statute disqualifies those whom "the Bureau of Prisons, on the basis of information the Bureau uses to make custody classifications, and in the sole discretion of the Bureau, [determines] to have a history of violence." Further, even if he did qualify, the BOP would not be required to place him in the EOHDP because, again, the statute leaves placement as a matter of discretion for the BOP. In any event, the BOP did not err by concluding that Ferranti's history of violence-comprised of the underlying conduct for his convictions as well as disciplinary infractions in prison-disqualified him from participating in the EOHDP. ZALMA OPINION In an example of Chutzpah, Ferranti sought release from prison into the EOHDP in violation of the program's requirement that only a non-violent prisoner is allowed into the program. Just being elderly, especially after the arson-for-profit scheme resulted in the death of a firefighter, was denied by the District Court and the Third Circuit without hesitation. (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 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL Volume 27, Issue 14 The Source For Insurance Fraud Professionals This, the fourteenth 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: No Coverage Under a False Name - Liars May Never Prosper Cheryl Tisdale had a great deal of chutzpah (unmitigated gall) to be fired by Uber for cause, rejoining Uber under a false name, and then claim a right to benefits from the Uber policy. Tisdale was punished by her lies and was not allowed to profit from her fraud. Read the full issue of ZIFL at ZIFL-07-15-2023 http://zalma.com/blog/wp-content/uploads/2023/07/ZIFL-07-15-2023.pdf More McClenny Moseley & Associates Issues This is ZIFL’s tenth 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 issue of ZIFL at ZIFL-07-15-2023 http://zalma.com/blog/wp-content/uploads/2023/07/ZIFL-07-15-2023.pdf Ethics for Independent Insurance Adjusters Independent insurance adjusters serve insurance companies who do not have sufficient claims staff to handle insurance claims on behalf of those various insurers without staff in every jurisdiction where there is property the risk of loss of which was insured. Read the full issue of ZIFL at ZIFL-07-15-2023 http://zalma.com/blog/wp-content/uploads/2023/07/ZIFL-07-15-2023.pdf Good News From the Coalition Against Insurance Fraud This fraudster worked with a former school principal to scam healthcare benefits; now, he’s gotten schooled by a jury for his fraud. Matthew Puccio from Randolph, New Jersey, has been convicted of scheming to defraud public health benefits plans. Read the full issue of ZIFL at ZIFL-07-15-2023 http://zalma.com/blog/wp-content/uploads/2023/07/ZIFL-07-15-2023.pdf How to Add to the Professionalism of The Insurance Claims Profession Read the full issue of ZIFL at ZIFL-07-15-2023 http://zalma.com/blog/wp-content/uploads/2023/07/ZIFL-07-15-2023.pdf California Commissioner Lara Announced Over $50.5 Million In Grants Awarded Statewide to Assist Law Enforcement in Fighting Fraud Press release from the California Department of Insurance Read the full issue of ZIFL at ZIFL-07-15-2023 http://zalma.com/blog/wp-content/uploads/2023/07/ZIFL-07-15-2023.pdf Health Insurance Fraud Convictions Diversicare and Two Occupational Therapy Assistants to Pay Over $1.3 Million Read the full issue of ZIFL at ZIFL-07-15-2023 http://zalma.com/blog/wp-content/uploads/2023/07/ZIFL-07-15-2023.pdf New California Bar Rule California Supreme Court Approves New Rule Requiring Attorneys to Report Professional Misconduct New California Rule Compelling Attorneys to Report Misconduct by Other Attorneys to Circulate for Public Comment In late June, the California Supreme Court approved a new Rule of Professional Conduct, rule 8.3, that will require California lawyers to report misconduct by other California attorney. The rule is operative August 1, 2023. Read the full issue of ZIFL at ZIFL-07-15-2023 http://zalma.com/blog/wp-content/uploads/2023/07/ZIFL-07-15-2023.pdf Other Insurance Fraud Convictions Former Santa Rosa Agent Sentenced to Prison After Stealing from Consumers Christopher Ramos, 45, of Santa Rosa, was sentenced to four years in prison. Read the full issue of ZIFL at ZIFL-07-15-2023 http://zalma.com/blog/wp-content/uploads/2023/07/ZIFL-07-15-2023.pdf The Effect of the Tort of Bad Faith It is indisputable that in the 1950’s, 1960’s and 1970’s the insurance industry abused some insureds to avoid paying legitimate claims. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Bad Faith in Arkansas Requires Proof of Dishonest, Malicious, or Oppressive Conduct Including Hatred, Ill Will, a Spirit of Revenge Owners Insurance Company moved for summary judgment as to a claim of bad faith. Separately, Owners argued the Court should make a finding that there no evidence to support a punitive damages instruction. In RMS Warehouse 1315, LLC v. Owners Insurance Company, No. 5:22-CV-5114, United States District Court, W.D. Arkansas, Fayetteville Division (July 7, 2023) the USDC resolved the bad faith issue. BAD FAITH The tort of bad faith is established in Arkansas when an insurance company affirmatively engages in dishonest, malicious, or oppressive conduct in order to avoid a just obligation to its insured. The tort requires evidence of a state of mind characterized by hatred, ill will, or a spirit of revenge. Importantly, bad faith does not arise from a mere denial of a claim; there must be affirmative misconduct. Plaintiff RMS contends its two claims of loss should have been covered under the policy of insurance it had with Owners. The first loss occurred on May 4, 2020, following a hailstorm that caused damage to RMS's warehouse. The second loss was in February 2021, after a winter storm event. RMS narrows its bad-faith claim to Owners's treatment of the winter-storm claim and explicitly states that Owners did not act in bad faith with respect to the hailstorm claim. The only evidence RMS cited in support of its bad-faith claim is the denial letter sent by insurance adjuster Brian Doherty. RMS believes Mr. Doherty “misrepresented” in the letter what the insurance policy actually provided and omitted reference to crucial portions of the policy that provided coverage. The standard for establishing a claim for bad faith is, and always should be, rigorous and difficult to satisfy. RMS betrayed a fundamental misunderstanding about the tort when, at one point in its briefing, it characterizes Owners' actions as “[a]t best... a mistake,” Neither a mistake nor a “refusal to pay a disputed claim” is tortious behavior according to Arkansas law. Summary judgment on Count II, the tort of bad faith, was therefore granted. As a consequence, RMS is not entitled to a punitive damages instruction. The Motion was granted as to Count II, and the claim of bad faith was dismissed with prejudice; as a result, RMS will not be entitled to an instruction on punitive damages. ZALMA OPINION Acting as its own worst enemy the insured's brief admitted that the insurer erred. A mistake may be sufficient to establish a breach of contract but is insufficient to prove the tort of bad faith and the right to seek punitive 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 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; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Condo Association are Birthplaces of Litigation Plaintiff, Nationwide Mutual Insurance Company (Nationwide), brought a declaratory judgment action against insureds, Beverly Glen Homeowners' Association (Association) and members of the board of directors asking the court to declare that Nationwide had no duty to defend or indemnify defendants against claims made by the Association residents in a derivative suit. The trial court granted Nationwide's motion for judgment on the pleadings, finding that res judicata and collateral estoppel barred defendants from seeking a defense in the derivative suit where judgment rendered in a prior case determined that Nationwide had no duty to defend. In Nationwide Mutual Insurance Company v. Beverly Glen Homeowners' Association, et al, No. 3-22-0089, 2023 IL App (3d) 220089-U, Court of Appeals of Illinois, Third District (July 7, 2023) BACKGROUND This lawsuit arises out of an ongoing dispute between defendants and Teresa and Katarzyna Jagiello, two Association residents. On April 14, 2020, the trial court granted Nationwide's motion. It held that "There are no material issues of fact in dispute and it is clear, as a matter of law, that the lack of cooperation on the part of the insured and its counsel has relieved Nationwide of its duties under its policy .... Nationwide's insured failed to cooperate with Nationwide, relieving Nationwide of its duties under the policy, and Nationwide owes nothing to its insured...  for any legal services. As such, Nationwide owes neither a duty to defend nor indemnify its insured in this matter." ANALYSIS Res Judicata and Collateral Estoppel The doctrine of res judicata serves to bar actions in which: (1) there was a final judgment on the merits rendered by a court of competent jurisdiction; (2) there is an identity of cause of action; and (3) there is an identity of parties or their privies in both actions. Res judicata prevents the relitigation of issues that could have been decided in the first action along with those issues that were actually decided. The directors of a Condo Association act as the arms of the Association and for all intents and purposes are one and the same. In other words, there exists a legal relationship in which the directors, acting within their corporate authority, bind the Association. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Multi-Unit Construction Exclusion Eliminates Coverage Midvale Indemnity Company (“Midvale”) sued Arevalos Construction Corp. (“Arevalos”), Victor Siguenza Zuniga (“Zuniga”), 625 Halsey LLC (“Halsey”), D&G Construction NY Inc. (“D&G”), and RM Construction and Development Corp. (“RM”) seeking a declaratory judgment relating to a commercial general liability insurance policy Midvale issued to Arevalos and an underlying lawsuit in New York state court, captioned Victor Siguenza Zuniga v. 625 Halsey LLC, Index No. 525911/2018 (the “Underlying Action”). In Midvale Indemnity Company v. Arevalos Construction Corp., et al, No. 22-CV-97 (FB) (RML), United States District Court, E.D. New York (July 5, 2023) was asked to overturn the report and recommendations of the Magistrate Judge to acknowledge the default and order no coverage for defense or indemnity of anyone named in the Underlying action. FACTS D&G and Zuniga timely objected to the report of the Magistrate judge. These objections triggered the US District Judge's de novo review. D&G, a subcontractor of Arevalos claiming coverage and a right to indemnification by Arevalos' insurer Midvale, and Zuniga, the injured tort claimant in the Underlying Action, has been named as defendants in this declaratory action by Midvale. D&G and Zuniga object to the Magistrate's finding that none of the named defendants was owed coverage under the policy. DISCUSSION D&G and Zuniga object to the conclusion that they lack standing to oppose Midvale's motion, its finding that none of the named defendants were entitled to coverage, and the scope of its declaratory relief. The Magistrate recommended finding that D&G's subcontractor agreement with Arevalos imposed no duty on Midvale, a “stranger to that contract,” to D&G. He also found that “D&G does not claim to be a third-party beneficiary of the Policy,” that “the Policy does not indicate an intent to confer a benefit upon D&G or any other individual or entity other than Arevalos,” and that “Zuniga is not a named insured or third-party beneficiary under the Policy.” --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Homeowners Policy Requires Insured to Reside at Premises Shanice Currie had a homeowners insurance policy with State Auto Property & Casualty Insurance Company (State Auto). After two fires severely damaged her duplex in Milwaukee, Currie sought payment from State Auto. State Auto denied the request for coverage, claiming that the duplex was not a "residence," and therefore was not covered by the policy. Currie sued State Auto. The district court granted summary judgment to State Auto. In Shanice Currie v. State Auto Property & Casualty Insurance Company, No. 22-2517, United States Court of Appeals, Seventh Circuit (July 5, 2023) the USCA for the Seventh Circuit explained the meaning of the terms "residence premises" and "reside." BACKGROUND Currie purchased the previously abandoned duplex (the Property) from the City of Milwaukee in the spring of 2018. She proceeded to install electricity and fill the bedroom with a dresser, mirror, clothing, and a bed. Yet, at the time she acquired the policy the property had no running water, kitchen appliances, no chairs or sofas in the living room, or a front door. Where a door should be, there was a wooden board that Currie would have to unscrew to enter the Property. Strangers came and went, and Currie took no action to eject them. Apart from sleeping at the Property two or three nights per month, Currie did not stay there. She bathed, prepared meals, kept personal belongings, and received mail at her two other addresses in Milwaukee. THE POLICY The homeowners policy Currie purchased from State Auto for the Property covered “residence premises,” which the policy defined as: “The two-, three-, or four-family dwelling where you reside in at least one of the family units . . . on the inception date of the policy period shown in the Declarations and which is shown as the ‘residence premises’ in the Declarations. Because the policy's inception date was September 15, 2018, Currie needed to reside in one of the units on the Property on that date for coverage to attach. She did not. THE FIRES On October 31 and on November 2, 2018, fires broke out at the Property, causing extensive damage. Currie informed State Auto that the Property was a total loss and sought full replacement value. State Auto denied Currie's claim, explaining that the Property was never her residence. DISCUSSION Currie sued. The district court granted State Auto's motion for summary judgment. The address was not listed on her driver's license and her mail was sent to a different location. Most telling, the Property was not secure. It had no door nor facilities to support normal life. As a matter of law, Currie's Property was not a residence on the policy's inception date nor any time before or after. It was not covered by the insurance policy, and the district court's grant of summary judgment to State Auto was proper. ZALMA OPINION Insurers will issue fire insurance on vacant property but will not do so on a homeowners policy form. To protect the insurer the homeowners policy requires the insured to reside on the property. Since the property was not sufficiently equipped for a person to reside in because it had no door, no water and no other facilities to support normal life, Currie failed to fulfill the basic requirement for coverage: residence. Had the insurer been told the truth about the condition of the property it would never have agreed to the coverage. Because of the residence condition there was no need for the insurer to accuse the insured of fraud. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Potentially Compromised Embryos not a Direct Physical Loss Modern science allows an embryo to be created outside the body of a woman and later implanted and grown to term. The in vitro fertilization process allows more than one viable embryos to be created and they can be stored for use later in a cryogenic tank. Sherlene and Lawrence Wong (the Wongs) had stored some embryos at a facility that kept them in a cryogenic tank that failed to maintain the temperature necessary to store the embryos, following which the Wongs's fertility doctor told them they should consider the embryos "compromised" and "no longer viable, and lost." In Sherlene Wong et al. v. Stillwater Insurance Company, A162893, California Court of Appeals, First District, Second Division (June 30, 2023) the Wongs attempted to recover the value of the embryo's from a homeowners insurance policy they maintained with  Stillwater Insurance (Stillwater). The policy was a specified perils policy that only insured for "direct physical loss" that was "caused by any of the following perils," going on to list 16 specified perils. The Wongs made a claim for property damage, which Stillwater denied. The Wongs sued, and Stillwater moved for summary judgment, on two bases: the Wongs could not submit evidence of (1) "direct physical loss" or (2) that "one of the sixteen specified perils occurred." The trial court granted summary judgment. BACKGROUND Beginning in 2014, the Wongs pursued in vitro fertilization, working with Aimee Eyvazzadeh, M.D., as their doctor. In 2015, the Wongs completed an in vitro fertilization (IVF) cycle, and obtained four viable embryos, one of which was implanted. As to the other three, as Dr. Eyvazzadeh put it, after discussion with the Wongs they determined to "bank the rest," which they did at Pacific Fertility Center (Pacific Fertility or PFC), a facility in San Francisco that included several cryogenic storage tanks that used liquid nitrogen to store human embryos at very low temperatures. Specifically, the embryos were stored in Tank 4, which also contained embryos belonging to other people. On or about March 4, 2018, Tank 4 failed to maintain the temperature necessary to store embryos, as a result at least some (and possibly all) of the embryos stored in that tank partially or totally thawed. The Stillwater policy provided coverage for personal property the Wongs "owned or used" while "anywhere in the world," with policy limits for personal property of $502,720. The policy was a "specified perils" policy, The Proceedings Below Stillwater filed a motion for summary judgment. Eventually, the trial court filed its order granting the motion for summary judgment concluding that Stillwater met its burden of demonstrating that the causes of action alleged in the Wongs' complaint cannot be established. Judgment was entered in favor of Stillwater, from which the Wongs filed an appeal. DISCUSSION The burden is on the insured to prove facts establishing the claimed loss falls within the coverage provided by the policy's insuring clause. No Evidence of Any Specified Peril The Stillwater policy was, as noted, a "specified perils" policy. ZALMA OPINION Stillwater conceded that the embryos were "personal property" that could be insured under the homeowners policy, although arguments could have been made that they were not property any more than a child born from the embryo would be property. Regardless, it effectively argued that there was no evidence that the embryos were damaged or destroyed when the temperature in the cryogenic chamber rose nor was there evidence that the embryos suffered direct physical damage only that they were "worthless" to an IVF doctor. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Anti-Stacking Provision Clear & Unambiguous Plaintiffs, Mark and Karen Kuhn (the Kuhns) sued seeking a declaratory judgment of the available liability insurance covering an accident between a semitruck owned by Jason Farrell and a school bus driven by Mark. In Mark Kuhn and Karen Kuhn v. Owners Insurance Company; et al, No. 4-22-0827, 2023 IL App (4th) 220827, Court of Appeals of Illinois, Fourth District (June 28, 2023) the semitruck was insured under a policy issued by Owners Insurance Company (Owners), and that policy also insured six other vehicles-two other semitrucks and four trailers- that were not involved in the accident. Each vehicle had a limit of $1 million per accident. The Kuhns sought a declaration that the coverage limits for all of the covered vehicles should be aggregated, or "stacked," resulting in a total of available liability insurance of $7 million for the accident. The trial court entered a written judgment in favor of the Kuhns, concluding that (1) the policy was ambiguous; (2) because the ambiguity should be construed against Owners, stacking of the policy's coverage limits was permitted; and (3) the aggregate limit of insurance for liability coverage under the policy was $7 million. Accordingly, the court granted the Kuhns' motion for summary judgment and entered judgment against Owners. Owners appealed BACKGROUND "Stacking” ordinarily involves combining or aggregating the policy limits applicable to more than one vehicle where the other vehicles are not involved in the accident. The Insurance Policy at Issue The policy provided "Combined Liability" coverage on each of the seven vehicles of up to "$1 Million each accident." The Kuhns argued that the wording of the policy and accompanying declarations were ambiguous pursuant to Illinois case law because the coverages and premiums set forth in the declarations were repeated for each insured vehicle. Owners argued that the policy declarations were consistent with each other and not ambiguous. In particular, subsection 5 explicitly stated that the limits for the same or similar coverage applying to other vehicles could not be added to determine the amount of coverage for an accident. ANALYSIS In general, antistacking provisions in insurance policies are not contrary to public policy. In Illlinois, an unambiguous antistacking clause will be given effect by a reviewing court. The coverages varied based on the vehicle insured; for example, the premiums for vehicle 1 and vehicle 2 (both semitrucks) were identical for liability, UIM/UM coverage, and medical payments, but only vehicle 1 had comprehensive and collision coverage. The Antistacking Clause Even if some ambiguity existed, the policy's antistacking clause cleared up any possible confusion. Instead of applying the Policy's clear anti-stacking provision, the trial court engaged in the very sort of tortured and strained reading of the Policy to find an ambiguity that this Court and the Illinois Supreme Court have repeatedly rejected. This was error, the trial court’s order was reversed and the case remanded with directions to enter summary judgment in favor of Owners. ZALMA OPINION It should be axiomatic that a trial court should never engage in tortured or strained reading of a policy to find an ambiguity that did not exist. A clear and unambiguous policy wording that refuses to allow stacking of coverages that apply to more than one vehicle insured when only one vehicle is involved in an accident, should be enforced as written. The Illinois Court of Appeals read the entire policy and found no ambiguity and insisted on enforcing the contract of insurance as written. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

No Coverage Under a False Name Cheryl Tisdale was injured in an automobile collision while she was driving her own vehicle containing passengers while logged into the Uber Technologies ("Uber") application as a paid driver. Tisdale served Farmers Insurance Exchange with the complaint, seeking underinsured motorist ("UM") coverage pursuant to an insurance policy Farmers issued to Raiser, LLC, a subsidiary of Uber. In Tisdale v. Farmers Insurance Exchange, No. A23A0616, Court of Appeals of Georgia (June 27, 2023) Farmers moved for summary judgment, arguing that Tisdale did not qualify as an insured under the Uber policy, or, in the alternative, that she was barred from seeking coverage because she intentionally concealed or misrepresented material facts and committed fraud by using a false identity in her Uber driver application and while using the app. The trial court granted summary judgment to Farmers. Tisdale appealed. FACTS Tisdale was an Uber driver from 2015 to 2017. According to her deposition, at some point Uber "stopped [her] from driving because they did a background check [,] and something popped up on there . . . they didn't agree with." In 2019, because she did not believe that Uber would hire her under real name, Tisdale applied to work for Uber using the name "Annie Mollie." Uber approved "Mollie's" application, and Tisdale began driving for Uber as Annie Mollie. In April 2020, Tisdale was involved in an automobile accident with Graves while driving her own car, which was registered under her legal name, and while logged into the driver version of the Uber app as Annie Mollie. Tisdale gave a recorded statement to Farmers as "Annie Mollie." In May 2020, Tisdale sued Graves for damages arising out of the accident, alleging that he rear-ended her, pushing her vehicle into the path of another vehicle, which struck her, and that she incurred in excess of $184,000 in medical expenses. At the time of the accident, Tisdale had not entered into a contract to use the Uber app in her own name/capacity, and Uber had not authorized her to drive as an Uber driver; instead, Tisdale operated her vehicle while logged into the Uber app using a false identity. Under these circumstances, Tisdale did not qualify as an insured under the policy Farmer's issued to Uber. ANALYSIS The hallmark of contract construction is to ascertain the intention of the parties, as set out in the language of the contract. As a result, when the language of an insurance policy defining the extent of an insurer's liability is unambiguous and capable of but one reasonable construction, the courts must enforce the contract as written and agreed to by the parties. Tisdale served her own UM carrier - State Farm Fire and Casualty Company - and Farmers with a copy of the complaint and discovery requests. Farmers, in response, alleged that coverage for Tisdale under Uber's UM policy was void. Tisdale concedes that she intentionally misrepresented her identity and presented Uber with a false driver's license and a false insurance registration card in order to become a driver. This misrepresentation and fraud provided her coverage under the Farmer's policy, which clearly bars the payment of damages to a driver who commits fraud or intentionally misrepresents or conceals a material fact relating to coverage. Therefore, the trial court properly granted summary judgment to Farmers. ZALMA OPINION It takes a great deal of chutzpah (unmitigated gall) to be fired by Uber for cause, rejoining Uber under a false name, and then claim a right to benefits from the Uber policy. Tisdale was punished by her lies and was not allowed to profit from her fraud. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Arbitrator Must Decide No Fault Fraud Claims This case is about the relationship between New Jersey healthcare providers and the insurance companies that pay those providers for treating patients for injuries arising from automobile accidents. In GEICO In v. Caring Pain Management PC a/k/A Careon Pain Management, Jinghui Xie, M.D., First Care Chiropractice Center, L.L.C., and Konstantine Fotiou, D.C., No. 2:22-cv-05017(BRM)(JSA), United States District Court, D. New Jersey (May 31, 2023) the insurer attempted to defeat fraudulent claims under the New Jersey no-fault law. BACKGROUND Multiple GEICO insurers (the "Plaintiffs) alleged a series of fraudulent schemes, including unlawful compensation in exchange for patient referrals, misrepresentation of the nature, extent, and results of patient examinations, and false representation regarding compliance with pertinent healthcare laws. MOTION TO DISMISS In deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a district court is required to accept as true all factual allegations in the complaint and draw all inferences from the facts alleged in the light most favorable to the non-moving party. DECISION The Insurance Fraud Prevention Act (“IFPA”), which was enacted roughly a decade after the No-Fault Law, provides that an “insurance company damaged as the result of a violation of any provision of this act may sue therefor in any court of competent jurisdiction.” In part, the New Jersey Legislature enacted the IFPA to address rising insurance rates resulting from widespread fraud with the clear objective to confront aggressively the problem of insurance fraud in New Jersey by facilitating the detection of insurance fraud and eliminating the occurrence of such fraud through the development of fraud prevention programs. A person or practitioner violates the IFPA by presenting or preparing false or misleading statements in connection with an insurance claim, or by failing to disclose the occurrence of an event that affects an individual's entitlement to insurance benefits or the amount of benefits THE COMMON LAW FRAUD, UNJUST ENRICHMENT, AND RICO CLAIMS The No-Fault Law's language, legislative intent and application cover Plaintiffs' claims for common law fraud, unjust enrichment and RICO. The plain language of the No-Fault statute provides that “[a]ny dispute regarding the recovery of . . . benefits provided under personal injury protection coverage . . . arising out of the operation, ownership, maintenance or use of an automobile may be submitted to dispute resolution on the initiative of any party to the dispute.” (emphasis added) Plaintiffs' claims involve: a dispute by [Plaintiffs] involving Defendants' recovery of PIP Benefits that one party wishes to send to arbitration. Consequently, Plaintiffs' common law fraud, unjust enrichment, and RICO claims fall within the statute's arbitration provision. New Jersey IFPA Claim The plain meaning of the New Jersey Insurance Fraud Prevention Act (IFPA) requires insurers' claims for damages under the IFPA be judicially resolved. To the extent Plaintiffs seek a declaration that Defendants violated RICO, committed common law fraud, or are liable for unjust enrichment, an arbitrator shall decide that issue. ZALMA OPINION Clearly, the health care providers who were accused by GEICO of fraud felt that they had a better chance of success with an arbitrator rather than a federal judge. The judge found the statutes allowed for arbitration and sent the fraud to an arbitrator. I would like to be that arbitrator and hope the parties get an arbitrator who dislikes insurance fraud as much as I do, and find they would have done better with a federal judge. GEICO should be honored for working to defeat fraud by attempting to take the profit out of the fraud. c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL - Volume 27, Issue 13 - http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-07-01-2023-1.pdf The Source For Insurance Fraud Professionals From https://zalma.com/blog, this, the Thirteenth 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: Fraud in Inception is Ground for Rescission No Restitution from Defrauded Insurer Esurance Property & Casualty Insurance Company (Esurance) appealed the trial court’s order granting summary disposition in favor of Nationwide Mutual Fire Insurance Company (Nationwide) and denying Esurance’s request for summary disposition. In Nationwide Mutual Fire Insurance Company v. Esurance Property & Casualty Insurance Company, and Derek Allen Gregory and Blair Gregory, No. 361298, Court of Appeals of Michigan (June 15, 2023) Read the full text of ZIFL in Adobe .pdf format at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-07-01-2023-1.pdf More McClenny Moseley & Associates Issues This is ZIFL’s ninth installment of the saga of McClenny, Moseley & Associates. June 14, 2023 US Magistrate Judge Michael North held a hearing to advise insurers on how to handle thousands of Hurricane Ida claims affected by alleged fraud by Texas law firm McClenny Moseley & Associates. It’s standing room only, more than 200 lawyers in court. One fainted. Read the full text of ZIFL in Adobe .pdf format at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-07-01-2023-1.pdf Ethics And the Public Insurance Adjuster An example of a public insurance adjuster and the lawyer who failed to follow the requirements set out by National Association of Public Insurance Adjusters (NAPIA). Read the full text of ZIFL in Adobe .pdf format at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-07-01-2023-1.pdf Good News From the Coalition Against Insurance Fraud When faced with a fraud conviction, this woman couldn’t stop herself from doing it again. Tanea Bouma, who had been court-ordered not to obtain employment or a volunteer role involving financial authority. Read the full text of ZIFL and many more reports of convictions in Adobe .pdf format at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-07-01-2023-1.pdf Order Limiting Cross-Examination Fair and Appropriate In The People v. Renae Louise Witt, G061305, California Court of Appeals, Fourth District, Third Division (June 5, 2023) a jury had convicted Renae Louise Witt of committing seven counts of medical insurance fraud in violation of Penal Code section 550, subdivision (a)(6). The trial court suspended imposition of sentence and placed Witt on two years of formal probation and ordered her to serve 364 days in jail and yet, she appealed. Read the full text of ZIFL in Adobe .pdf format at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-07-01-2023-1.pdf Health Insurance Fraud Convictions Gloucester County Man Admits Healthcare Fraud Christopher Gualtieri, 50, of Franklinville, New Jersey, pleaded guilty before U.S. District Judge Robert B. Kugler to one count of an indictment charging him with conspiracy to commit health care and mail fraud and one count charging him with obtaining oxycodone through fraud. Gualtieri, a Gloucester County, New Jersey, man on June 12, 2023 admitted defrauding his employer’s health insurance plan out of more than $4 million by submitting fraudulent claims for medically unnecessary compounded medications. Other Insurance Fraud Convictions Clegg Gifford Shuns Over £7 Million Worth of Fraudulent Claims Insurance broker Clegg Gifford (CG) has successfully identified and avoided more than £7 million worth of fraudulent motor trade claims over a period of four years with the help of the counter-fraud team at law firm DAC Beachcroft (DACB).  --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Suing All State Farm Insurers Unconscionable State Farm Mutual Automobile Insurance Company (“State Farm Auto”) and Defendant State Farm General Insurance Company (“State Farm General”) moved the court to dismiss all Plaintiff's claims against the entities. The motion was regarded as unopposed. In Bridget Butler v. State Farm Fire And Casualty Company, State Farm General Insurance Company, And State Farm Mutual Automobile Insurance Company, No. 3:22-Cv-03433, United States District Court, W.D. Louisiana, Lake Charles Division (June 23, 2023) a Bridget Butler whose home was damaged by two hurricanes sued three State Farm Insurance companies when only one insured her against the risk of loss of her property. INTRODUCTION Hurricane Laura made landfall near Lake Charles, Louisiana then Hurricane Delta made landfall near Lake Charles, Louisiana. During the relevant time period, Plaintiff Bridget Butler owned property in Monroe, Louisiana. An entity of State Farm provided a policy of insurance to Plaintiff. Plaintiff alleged that Defendant failed to timely and adequately compensate Plaintiff for her substantial losses pursuant to the Policy. In turn, Plaintiff filed suit against State Farm Auto, State Farm General, and State Farm Fire and Casualty Company (“State Farm Fire and Casualty”) claiming liability for damages for breach of contract plus general damages and for statutory violations and penalties under Louisiana Revised Statutes. State Farm General and State Farm Auto moved for dismissal of the claims against them. Plaintiff filed no response to the motion. RULE 12(b)(6) STANDARD Rule 12(b)(6) allows for dismissal when a plaintiff “fail[s] to state a claim upon which relief can be granted.” LAW AND ANALYSIS The Complaint alleges that the “Defendant” issued and maintained a Policy insuring Plaintiff's Property. The Complaint does not provide a specific policy number, and the Complaint asserts a policy number was unable to be identified because “Defendant” did not comply with Plaintiff's request for production of the policy number. Attached to their Motion to Dismiss State Farm General and State Farm Auto put forth an insurance policy with the policy number 99-CC-X642-7, and both companies assert that the attached policy is the Policy referenced in the Complaint. The attached policy is from State Farm Fire and Casualty and names Plaintiff as insured and the Property as the location of premises insured with a policy period of twelve months beginning August 25, 2020. State Farm General and State Farm Auto are not listed as parties in the attached policy. Additionally, both State Farm General and State Farm Auto maintain that neither entity has issued a policy to Plaintiff. Under Louisiana law, no action for breach of contract may lie in the absence of privity of contract between the parties. State Farm General and State Farm Auto are not parties to the attached policy, and each assert it did not provide Plaintiff with any insurance coverage. CONCLUSION Defendants State Farm General Insurance Company and State Farm Automobile Insurance Company's Motion to Dismiss was granted. Plaintiff maintains claims against State Farm Fire and Casualty Insurance Company. ZALMA OPINION There should be no excuse for a plaintiff to require the State Farm entities that did not insure Ms. Butler to move the court for dismissal. A telephone call from defense counsel to plaintiff's counsel informing Ms. Butler of the proper defendant and voluntarily dismiss the wrong State Farm entities. The decision of the court was easy but Judge Cain has more important things to do than deal with an unnecessary motion. Sanctions against Plaintiff's attorney could have been warranted. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Settlement Based on Mutual Mistake Must be Rescinded https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Guilty Pleas Support to Crimes Against Family & Friends Deserves Consecutive Sentences Jon Settlemire ("Settlemire"), appealed the judgment of sentence imposing consecutive sentences only to find an appeals court with no mercy. When the Marion County Grand Jury returned a 45-count indictment charging Settlemire with a variety of felony-level crimes Settlemire entered a plea of not guilty to the indictment. After pre-trial proceedings Settlemire entered a negotiated plea of guilty to five crimes. In State Of Ohio v. Jon M. Settlemire, 2023-Ohio-1852, No. 9-22-33, Court of Appeals of Ohio (June 5, 2023) Settlemire pled guilty to a charge of Theft in violation, a fourth-degree felony; a charge of Forgery, a fifth-degree felony; a charge of Forgery in violation of, a fifth-degree felony; a charge of Theft, a fourth-degree felony; and amended to a charge of Forgery a third-degree felony. In exchange for the guilty plea the prosecution dismissed the remaining counts of the indictment. On April 28, 2022, a sentencing hearing was held. At that time, the trial court imposed a sentence and that all counts be served consecutively, for an aggregate sentence of 86 months in prison. In the sole assignment of error, Settlemire argueD that the trial court erred in ordering that the sentences in this case be served consecutively. Specifically, Settlemire assertd that the aggregate sentence here is disproportionate and overly severe when compared to the criminal conduct of which he was convicted. If multiple prison terms are imposed on an offender for convictions of multiple offenses, the court may require the offender to serve the prison terms consecutively if the court finds that the consecutive service is necessary to protect the public from future crime or to punish the offender and that consecutive sentences are not disproportionate to the seriousness of the offender's conduct and to the danger the offender poses to the public. In State v. Gwynne,___ Ohio St.3d ___, 2022-Ohio-4607, the Supreme Court of Ohio noted that defendants may appeal consecutive sentences, and that a statute states that an appellate court may increase, reduce, or otherwise modify a sentence or that it may vacate the sentence and remand the case for resentencing when it clearly and convincingly finds that the record does not support the sentencing courts decision. The appellate court’s review of Settlemire's sentences reflects that the trial court made the requisite consecutive-sentence findings pursuant to the statute at the sentencing hearing and incorporated those findings into the judgment entry of sentencing. The trial court noted when imposing sentence, and as confirmed by the record, Settlemire's multiple crimes of Theft and Forgery resulted in a loss of nearly $50,000.00 to the various victims, and the multiple victims in this case suffered serious economic harm. Settlemire's relationship with the victims facilitated the offenses, with one of those victims being Settlemire's elderly mother. Finally, as the trial court noted, Settlemire was initially charged with 45 felony counts in this case, and a sentencing court may consider charges that have been dismissed or reduced pursuant to a plea agreement. The number of consecutive sentences and the aggregate sentence here were not disproportionate or overly severe when compared to the criminal conduct of which Settlemire was found guilty. Having found no error prejudicial to the defendant-appellant in the particulars assigned and argued, the judgment of the Marion County Court of Common Pleas s affirmed. Bad people who are convicted of multiple crimes deserve punishment. No fraud perpetrator is more deserving of punishment than a man who defrauds his elderly mother and relatives. The Ohio court properly sentenced Settlemire to spend the next 86 months in an Ohio State prison.   --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Fraud in Inception is Ground for Rescission https://zalma.com /blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Notice-Prejudice Rule Does not Apply to Claims Made and Reported Policy The Kentucky Supreme Court was asked to determine if the claims-made-and-reported management liability policy ("Policy") Allied World Specialty Insurance Company ("Allied World"), issued to Kentucky State University ("KSU") provided coverage because KSU did not comply with the Policy's notice provisions. The trial court applied the notice prejudice rule and the Court of Appeal reversed. in Kentucky State University v. Darwin National Assurance Company N/K/A Allied World Specialty Insurance Company, No. 2021-SC-0130-DG, Supreme Court of Kentucky (June 15, 2023) FACTS The Policy KSU purchased from Allied World was for the period from July 1, 2014 to July 1, 2015. The Policy allows claims made against KSU within the policy period to be reported to Allied World up to ninety days after the end of the policy period. The Policy expired July 1, 2015, and the 90-day extended reporting period ended September 29, 2015. During the policy period two professors submitted Notices of Charges of Discrimination to the United States Equal Employment Opportunity Commission ("EEOC") and Kentucky Commission on Human Rights (collectively, "EEOC Charges") . KSU eventually sued Allied World and both moved for summary judgment. The circuit court granted summary judgment in favor of KSU. The circuit court concluded that the notice-prejudice doctrine applied. The Court of Appeals determined that the notice-prejudice rule does not apply to the Policy in this case. ANALYSIS The primary issue before the Supreme Court was whether the circuit court properly interpreted the notice provisions within the claims-made-and-reported insurance policy issued by Allied World to KSU and then, based upon that interpretation, correctly assessed the role, if any, that the notice-prejudice rule plays in this case. THE POLICY. The Policy provisions which explain the insurer's coverage obligations in relation to the insured's reporting obligations and which present the notice requirements are found in three clauses all of which require notice no later than ninety days after the end of the policy period. Furthermore, with regard to reporting beyond the policy period, the Policy also provided KSU the right to purchase a Discovery Period after the expiration of the Policy. KSU did not purchase Discovery Period coverage. THE NOTICE-PREJUDICE RULE. The Policy expressly informed KSU that a condition of coverage - a condition precedent - was giving written notice of a claim as soon as practicable, but in no event was such notice of any claim to be provided to Allied World later than ninety days after the end of the Policy period. The Policy unambiguously informed KSU that if the notice provisions were not met, Allied World had no obligation to KSU under the Policy. Unlike the circuit court, the Supreme Court concluded that the Policy provisions at issue are unambiguous. The Supreme Court concluded: "A claims-made-and-reported policy provides coverage only for claims made against the insured and reported to the insurer during the life of the policy regardless of when the underlying incident occurred. Timely notice of a claim is the event that not only triggers coverage, but also defines its scope." ZALMA OPINION The claims made and reported liability insurance policy was designed to avoid long-term liability exposure faced by an "occurrence" policy and to avoid the insured's ability to extend reporting requirements by use of the notice-prejudice rule that allowed a late report as long as the insurer was not prejudiced by the delay. In this case a three day delay would not cause prejudice to the insurer but breached the clear and unambiguous condition precedent to coverage. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Notice-Prejudice Rule Does not Apply to Claims Made and Reported Policy The Kentucky Supreme Court was asked to determine if the claims-made-and-reported management liability policy ("Policy") Allied World Specialty Insurance Company ("Allied World"), issued to Kentucky State University ("KSU") provided coverage because KSU did not comply with the Policy's notice provisions. The trial court applied the notice prejudice rule and the Court of Appeal reversed. in Kentucky State University v. Darwin National Assurance Company N/K/A Allied World Specialty Insurance Company, No. 2021-SC-0130-DG, Supreme Court of Kentucky (June 15, 2023) FACTS The Policy KSU purchased from Allied World was for the period from July 1, 2014 to July 1, 2015. The Policy allows claims made against KSU within the policy period to be reported to Allied World up to ninety days after the end of the policy period. The Policy expired July 1, 2015, and the 90-day extended reporting period ended September 29, 2015. During the policy period two professors submitted Notices of Charges of Discrimination to the United States Equal Employment Opportunity Commission ("EEOC") and Kentucky Commission on Human Rights (collectively, "EEOC Charges") . KSU eventually sued Allied World and both moved for summary judgment. The circuit court granted summary judgment in favor of KSU. The circuit court concluded that the notice-prejudice doctrine applied. The Court of Appeals determined that the notice-prejudice rule does not apply to the Policy in this case. ANALYSIS The primary issue before the Supreme Court was whether the circuit court properly interpreted the notice provisions within the claims-made-and-reported insurance policy issued by Allied World to KSU and then, based upon that interpretation, correctly assessed the role, if any, that the notice-prejudice rule plays in this case. THE POLICY. The Policy provisions which explain the insurer's coverage obligations in relation to the insured's reporting obligations and which present the notice requirements are found in three clauses all of which require notice no later than ninety days after the end of the policy period. Furthermore, with regard to reporting beyond the policy period, the Policy also provided KSU the right to purchase a Discovery Period after the expiration of the Policy. KSU did not purchase Discovery Period coverage. THE NOTICE-PREJUDICE RULE. The Policy expressly informed KSU that a condition of coverage - a condition precedent - was giving written notice of a claim as soon as practicable, but in no event was such notice of any claim to be provided to Allied World later than ninety days after the end of the Policy period. The Policy unambiguously informed KSU that if the notice provisions were not met, Allied World had no obligation to KSU under the Policy. Application of the Notice-Prejudice Rule to Claims-Made-and-Reported Policies. The Supreme Court concluded: "A claims-made-and-reported policy provides coverage only for claims made against the insured and reported to the insurer during the life of the policy regardless of when the underlying incident occurred. Timely notice of a claim is the event that not only triggers coverage, but also defines its scope." ZALMA OPINION The claims made and reported liability insurance policy was designed to avoid long-term liability exposure faced by an "occurrence" policy and to avoid the insured's ability to extend reporting requirements by use of the notice-prejudice rule that allowed a late report as long as the insurer was not prejudiced by the delay. In this case a three day delay would not cause prejudice to the insurer but breached the clear and unambiguous condition precedent to coverage. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Appeal Back to District Court on Coverage Claim by Injured --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Mutual Fire Insurance Company (New York Central) is obligated to provide plaintiff with coverage, defense, and indemnification for an August 29, 2021 car accident where he negligently injured his wife. New York Central moved for an order granting summary judgment dismissing plaintiff's complaint and for a declaratory judgment declaring that it is not obligated to provide plaintiff with a defense or indemnification for the motor vehicle accident that is alleged to have occurred onAugust 29, 2021, as no Supplemental Spousal Liability coverage exists for this claim. In Eric Levy v. New York Central Mutual Fire Insurance Company, Index No. 66227/2021, 2023 NY Slip Op 23183, the New York Court found in favor of the insurer. FACTUAL AND RELEVANT PROCEDURAL BACKGROUND On August 29, 2021, while driving his car, plaintiff accidentally struck his wife Lisa Grauer (Grauer), and Grauer allegedly suffered serious including a fracture. At the time of the accident, plaintiff had an active motor-vehicle insurance policy through New York Central with bodily-injury liability limits of $250,000.00 per person injured. Grauer filed a claim against plaintiff to New York Central, alleging that she was injured as a result of plaintiff's negligence. Plaintiff alleged that New York Central is liable for breach of contract in the amount of $250,000.00 for failing to provide plaintiff with coverage, a defense and indemnification. Plaintiff moved for summary judgment on his amended complaint and is requesting a declaratory judgment, as set forth in the first cause of action. Plaintiff submitted an affidavit, describing the events that transpired and alleges that he was not provided with proper notice of SSL coverage. New York Central avered that no SLL coverage exists for plaintiff's policy, that it did comply with all notification requirements, and that plaintiff declined to purchase SLL coverage. New York Central issued a revised renewal policy adding an additional vehicle and included an SSL endorsement. The additional premium for the SSL coverage was $78.00 and plaintiff declined to purchase it. Supplemental spousal liability insurance provides bodily injury liability coverage under a motor vehicle insurance policy to cover the liability of an insured spouse because of the death of or injury to his or her spouse, even where the injured spouse must prove the culpable conduct of the insured spouse. DISCUSSION Insurance Law § 3420 (g) was amended by Chapter 584 of the Laws of 2002, to require insurance carriers to offer their insureds supplemental spousal liability (SSL) insurance for an additional premium. Since Plaintiff declined to purchase the SLL an insurer is not required to provide insurance coverage for injuries sustained by an insured's spouse. It was undisputed that plaintiff did receive notification of the availability of the supplementary spousal liability insurance, and he refused to pay the extra $78 premium. Accordingly, it was ordered that plaintiff Eric Levy's motion was denied it its entirety. New York Central Mutual Fire Insurance Company's cross motion for an order granting summary judgment dismissing plaintiff's complaint and for a declaratory judgment, is granted; and it was further ordered that defendant New York Central, because, as no Supplemental Spousal Liability coverage existed; and it was further ordered that the case was dismissed, and the Clerk was directed to enter judgment accordingly. ZALMA OPINION Insurers do not like, because of the potential for fraud, to insure against injury to a family member of the insured. New York passed a law requiring insurers to provide coverage for injury caused to a spouse as long as the insured pays an additional premium. Mr. Levy refused to pay the extra $78 and, by so doing, refused the coverage that only after the accident he wanted. No luck since he got the offer and the charge and refused it. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Failure of Proposed Insured Stay Alive Until Policy Delivered Costs Fiance Almost $5 Million On January 27, 2021, Dr. Travis Richardson completed an application for an individual life insurance policy with Pacific Life seeking $4,816,949.00 in coverage. Blevins was Dr. Richardson's fiancé and was listed as the primary beneficiary of the policy. Lamar Breshears was the insurance agent for Pacific Life. Champion Agency (“Champion”) handled details. Dr. Richardson died unexpectedly before the policy was delivered and the insurer refused to pay. In Pacific Life Insurance Company v. Katie Blevins, No. 3:21-CV-00143 JM, United States District Court, E.D. Arkansas, Northern Division (June 15, 2023} the USDC resolved the claim of the beneficiary. FACTS On February 1, 2021, Champion transmitted Dr. Richardson's application to Pacific Life with the instructions to process the application and to mail the policy to Champion at its office in Albuquerque, New Mexico. Pacific Life received Dr. Richardson's application on February 2, 2021. On March 11, 2021, Pacific Life's underwriting department approved Dr. Richardson for Policy and the initial monthly premium of $16,668.68 was paid. On March 12, 2021, Dr. Richardson emailed Breshears and asked him when the policy was active. Breshears responded the same day, stating, “Today. If you were to die today, the policy would pay out a death benefit.” Breshears was wrong because Dr. Richardson died unexpectedly on March 14, 2021. The physical policy was received by Champion March 15, 2021. Pacific Life refunded the initial premium payment on March 25, 2021, taking the position that the policy was not “in force” at the time of Dr. Richardson's death because it had not been “delivered” as required by the application and policy. ANALYSIS It was undisputed that delivery of the policy was a valid condition precedent to Blevins being entitled to receive payment under the policy. The application states that: “[c]overage will take effect when the Policy is delivered and the entire first premium is paid only if at that time each Proposed Insured is alive, and all answers in this Application are still true and complete.” (emphasis added.). The policy, which incorporates the application, states that a Policy is in effect and provides a Death Benefit on the Insured on the date the Policy and associated riders become effective. The Policy Date for this policy was March 11, 2021 a date before Dr. Richardson died. The fact that the challenged terms are not defined does not make them vague and ambiguous. Breshears testified that he understood delivery of the policy to mean “physically sending the policy to the client,” and that a “hundred percent of his policies have been delivered by paper.” Pacific Life has established that it physically mailed the policy to Champion pursuant to the instructions it received with the transmittal of Dr. Richardson's application. Included with the mailed policy were a delivery receipt and an amendment to the application to correct minor inaccuracies. Blevins did not establish that there is a genuine issue of material fact on the issue of constructive delivery of the policy. The Court has no doubt that Dr. Richardson, Breshears, and Blevins believed that Dr. Richardson was covered under the policy as of March 11, 2021. However,  Pacific Life's motion for summary judgment  was granted. ZALMA OPINION People buy life insurance because they recognize that life is a disease from which all humans suffer. We all, eventually, die. Dr. Richardson wanted to protect his fiance and applied for a life insurance policy that he expected to have for many years only to die before the policy was delivered to him. Insurance policies must be read as a whole. In this case, the policy never came into effect because he was not alive when the policy was delivered. A sad result but on its face a correct decision. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Fictionalized True Insurance Fraud A Story of Life Insurance Fraud This is a fictionalized True Crime Story of Insurance Fraud to explain why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is intended to  help you to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators than any Other Crime. The Hungarian owned and operated a board and care facility for the aging in Carson City, Nevada. He brought his younger brother over from Hungary in 1975 to help him in the business. It was only a twenty-bed facility and with little help, the two could manage the entire business. His younger brother maintained the facility, cooked the meals for the residents, doubled as a nurse and ran the business. The doctor acted like royalty. The younger brother suffered from severe hypertension. After the doctor had paid the first monthly premium on the life insurance policy, he explained to his brother that the hypertension drugs prescribed for him were dangerous. Within two weeks of taking his brother’s drugs, the younger brother was found by his wife apparently dead, on his kitchen floor. They put the brother in an ambulance and began racing toward the emergency hospital with red lights and siren. The doctor followed and almost sideswiped the ambulance twice. They called for police help on their radio. They could not revive the younger brother. They pronounced him dead one hour after arrival at the hospital. The doctor convinced the wife there should be no autopsy. His brother, her husband, had a severe heart condition that was well documented. He explained that there should be no reason to cut his body to satisfy a local ordinance. The doctor convinced the brother’s family physician to sign the death certificate showing the cause of death as a heart attack. The family physician did so without evidence of such a heart attack. The family physician had not even seen the deceased within six months of his death. The family physician clearly violated the law. He thought the death certificate would help the family who appeared adamantly against the invasive procedures of an autopsy. The widow was not an intelligent woman. She had limited education in her country of birth, Hungary. She could barely read or write the English language and spoke it with a thick accent. She relied totally on her brother-in-law. He handled the disposition of her husband’s estate. She signed whatever papers he put before her. One paper he put in front of her was a claim form making claim on the life insurance policy. The claim form did not use the sister-in-law’s address but, rather, a P.O. box held in secret by the doctor. The insurance company, presented with an appropriate claim form signed by the widow and what appeared to be a proper death certificate, immediately issued its check for $100,000 plus interest, made payable to the widow, the sole beneficiary named in the policy. The doctor received the check. He signed the widow’s name to it and deposited the money in his account. He used the money to pay the debts of the board and care facility and to buy a new home for himself on five acres of desert property outside Carson City. She met a blackjack dealer at a casino and married him so she would have some means of support. The doctor lived in luxury for a year off the proceeds and then began planning his next insurance fraud. He has no other brothers to kill, so he decided to obtain life insurance on the residents of the board and care facility none of whom had a long life expediency. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL - 6-15-2023 - Volume 27, Issue 12 The Source For Insurance Fraud Professionals This, the Twelfth issue of the 27th year of publication Zalma’s Insurance Fraud Letter provides multiple articles on how to deal with insurance fraud in the United States. The issue begins with: Restitution Order Can’t Be Discharged in Bankruptcy After Frayba Tipton and William Tipton pled guilty to committing insurance fraud, they were ordered to pay victim restitution to Nationwide Insurance Company of America (Nationwide). The trial court granted Nationwide’s petition and entered civil judgments against the defendants. In Nationwide Insurance Company Of America v. Frayba Tipton et al., C095606, California Court of Appeals. See the full issue at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-06-15-2023.pdf More McClenny Moseley & Associates Issues This is ZIFL’s eighth installment of the saga of McClenny, Moseley & Associates and its problems with the federal courts in the State of Louisiana and what appears to be an effort to profit from what some Magistrate and District judges indicate may be criminal conduct. See the full issue at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-06-15-2023.pdf Another Insurer Bites the Dust Friday Health Plans of Nevada faces the Nevada District Court to place it under regulatory supervision. See the full issue at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-06-15-2023.pdf Bad News from The Public A new survey shows it’s, like, totally cool to exaggerate damages on an insurance claim or, like, totally awesome to say you hurt yourself at work when you didn’t. See the full issue at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-06-15-2023.pdf Health Insurance Fraud Convictions Fifteen Year Sentence in $134 Million COVID-19 Health Care Fraud and Money Laundering Scheme Billy Joe Taylor, age 44, pleaded guilty to conspiracy to commit health care fraud and money laundering on October 27, 2022. According to court documents, Taylor and his co-conspirators submitted more than $134 million in false and fraudulent claims to Medicare in connection with diagnostic laboratory testing, including urine drug testing and tests for respiratory illnesses during the COVID-19 pandemic. See the full issue and dozens more convictions at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-06-15-2023.pdf Florida Judge Slams SFR Contractor for Misrepresentation, Fraud in Tower Hill Case SFR Services, a Florida restoration firm made famous by its volume of claims litigation and its charges that United Property & Casualty Insurance Co. had instructed desk adjusters to alter their estimates, now finds itself in some legal trouble of its own. See the full issue at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-06-15-2023.pdf Other Insurance Fraud Convictions Man Sentenced to Prison for Staged Arson and Insurance Fraud Denis Vladmirovich Molla falsely reported that his camper had been intentionally set on fire the 30-year-old Minnesota resident has been handed a 30-month prison sentence, followed by one year of supervised release, for filing fraudulent insurance claims related to a staged arson incident. See the full issue and more convictions at http://zalma.com/blog/wp-content/uploads/2023/06/ZIFL-06-15-2023.pdf The Baseball Card Scam This is a Fictionalized True Crime Story of Insurance Fraud from my experience as an Insurance Fraud Expert and is provided to explain why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is true, only the names and places were changed to protect the guilty. Qui Tam and Insurance Fraud The qui tam portion of the California Insurance Frauds Prevention Act, like that in many other states, has a qui tam provision. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Umbrella Policy Always Excess Over Primary Policy Two insurance companies argued who must indemnify an insured for a settlement involving their mutual insured. Great American Insurance Company paid subject to a reservation and sued the primary insurer, Allied World Assurance Company, alleging that because it was the umbrella insurer it only owed after Allied World as the primary insurer, paid its limits. The district court agreed, granting summary judgment in Great American's favor. In Great American Insurance Company v. Allied World Assurance Company, Inc., No. 22-12496, United States Court of Appeals, Eleventh Circuit (May 31, 2023) determined who was on first to the obligation to indemnify the insured, Tribridge Residential. Three different insurance companies insured Tribridge. AmTrust International Underwriters DAC, an insurance company that issued Tribridge a primary commercial general liability policy, paid out its policy limit toward the settlement. Then, Allied World and Great American disagreed about which policy was the priority coverage for the rest of the settlement. ALLIED WORLD POLICY Allied World issued Tribridge a commercial general liability policy. Allied World issued a "primary policy," it contains an excess clause purporting to render its coverage excess of other insurance when liability arises from Tribridge's property management activities. GREAT AMERICAN POLICY Great American issued a "Commercial Umbrella Coverage" policy which includes Tribridge as an additional insured. The policy covers "those sums in excess of the 'Retained Limit' that the 'insured' becomes legally obligated to pay imposed by law or . . . because of 'bodily injury.'" Great American paid the rest of the settlement against Tribridge and sued Allied World, seeking equitable contribution and a declaratory judgment that its coverage obligation is not triggered until Allied World's policy limit is exhausted. ANALYSIS Georgia law delineates between a "primary" insurance policy "written to provide primary coverage"- and an "umbrella" policy- operating as true excess over and above any type of primary insurance. All primary coverage must be exhausted before umbrella policy coverage is triggered. Primary policies precede umbrella policies even when the primary policy includes an applicable "excess clause." Umbrella policies, almost without dispute, are regarded as true excess over and above any type of primary coverage, excess provisions arising in regular policies in any manner, or escape clauses. Primary policies take priority to umbrella policies, even when the primary policy includes an applicable excess clause. Great American's commercial umbrella coverage policy only covers those sums in excess of listed underlying insurance. The Allied World policy is written to provide primary coverage and the Great American policy is the true excess policy. Accordingly, Allied World's primary policy must be exhausted before the Great American umbrella policy applies. In sum, Allied World is first in the pecking order as the "primary insurer." Summary judgment was affirmed for Great American but the court reversed the award of attorney's fees. ZALMA OPINION The great comedians Abbot & Costello created the "Who's on First Routine" that brought laughter to the question of who is in control. In this case a primary insurer, even with an "excess" and/or "escape" clause the primary is always on first and the umbrella only owes after the primary - the insurer on first - pays its limit and then the umbrella, on second base pays whatever is needed after the primary pays its limit. Allied World tried to avoid its obligation, failed, and is required to reimburse Great American. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Kona Coffee Must be From the Big Island of Hawaii L&K Coffee claimed its various insurance companies erroneously denied coverage to defend it against a Lanham Act false-advertising lawsuit brought by Hawaiian coffee growers. The district court concluded the applicable insurance policies did not obligate a defense and entered summary judgment in the insurance companies' favor. In L&K Coffee LLC, dba Magnum Roastery; Kevin Kihnke v. LM Insurance Corporation; Liberty Insurance Corporation; Selective Way Insurance Company; Valley Forge Insurance Company; Continental Casualty Company, No. 22-1727, United States Court of Appeals, Sixth Circuit (June 1, 2023) the Sixth Circuit resolved the coverage dispute. FACTS L&K Coffee, LLC, a Michigan-based company, roasts and sells coffee products throughout the United States. Defendants are insurance companies from whom L&K purchased general commercial liability and umbrella insurance policies. Coffee growers from the Kona region of the Island of Hawai'i sued L&K and other coffee companies for "false designation of origin, false advertising, and unfair competition" in violation of the Lanham Act, 15 U.S.C. § 1125(a), in the Western District of Washington. These "Kona Plaintiffs" alleged that the defendants falsely designated the origin of the coffee they branded and distributed as "Kona" coffee "when most of the coffee beans contained in the coffee products were sourced from other regions of the world." The Kona Plaintiffs' operative complaint summarized their contentions as to L&K as follows: "L&K falsely designates the geographic origin of its "Kona" coffee products with the prominent placement of KONA on the front of the packaging." ANALYSIS The duty of an insurance company to provide a defense depends upon the allegations in the complaint and extends to allegations which even arguably come within the policy coverage. An insurer's duty to defend does not depend solely upon the terminology used in a plaintiff's pleadings. Rather, it is necessary to focus on the basis for the injury and not the nomenclature of the underlying claim in order to determine whether coverage exists. The term "disparage" means an untrue statement directed towards another's property. A disparagement claim requires a company to make false, derogatory, or disparaging communications about a competitor's product." (emphasis in the opinion) The Kona Plaintiffs alleged L&K violated the Lanham Act's prohibition on false designation of one's own product. See 15 U.S.C. § 1125(a)(1). The Sixth Circuit concluded that this is not "disparagement." ZALMA OPINION It never pays to lie to your customers. When doing so harms someone else you are subject to damages from those your lie harms. By falsely designating its product of "Kona" coffee when L&K claimed its cheap, generic coffee was "Kona" Coffee it was involved in a tort that was not covered by the policies of 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 and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 Go to Newsbreak.com  https://www.newsbreak.com/@c/1653419?s=01 Barry Zalma, Esq., CFE, is available at http://www.zalma.com and [email protected] Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurance Fraudster and Killer Wastes the Court's Time With Frivolous Action Pro Se Party Has a Fool for a Client In State Of Delaware v. Ryan Shover, ID No. 1511001640, Superior Court of Delaware (May 15, 2023) the appellate court dealt with proceedings by convicted murderer and insurance fraudster, Ryan Shover who acted as his own attorney. F ACTS Ryan Shover was found guilty of two counts of Murder First Degree, two counts of Possession of a Deadly Weapon During the Commission of a Felony, First Degree Conspiracy, and Insurance Fraud.  The Supreme Court of Delaware issued its Mandate affirming the judgment of the Superior Court. Defendant then filed a pro se Motion for Post-conviction Relief and Motion for Appointment of Counsel and the Superior Court granted the Motion for Appointment of Counsel. The appointed Counsel filed a Motion to Withdraw and informed the Court that, after a thorough review of the record, Defendant's claims lacked merit and there were no additional meritorious claims that he could ethically present. Defendant then filed pro se a Motion for Reconsideration of his Post-conviction Motion and a second pro se Motion to Compel. The Court denied Defendant's second Motion to Compel as moot on the same basis that it denied his first Motion to Compel. ANALYSIS Appointed Counsel advised the court that he concluded that Defendant's claims lacked sufficient merit to the point that he could not ethically advocate Defendant's position. In the Motion to Withdraw, appointed Counsel engaged in a detailed analysis of Defendant's claims before concluding that they were devoid of merit. With respect to Defendant's Motion for Post-conviction Relief, Superior Court Criminal Rule 61(a) states such motions must be based on a sufficient factual or legal basis. Superior Court Criminal Rule 61(b)(2) requires that post-conviction motions "specify all grounds for relief which are available to the movant . . . and shall set forth in summary form the facts supporting each of the grounds thus specified." After a review of the Motion for Post-conviction Relief and Motion to Withdraw, in addition to the applicable legal authorities, it was evident to the appellate court that Defendant's grounds for relief had no merit. In addition, the court concluded that Defendant's constitutional right to confront witnesses was not violated by a witness refreshing his recollection with the FBI agent's typewritten notes of that witness' prior out of court statement because the State was permitted to refresh a witness' recollection in this manner pursuant to Delaware Rule of Evidence 612. It was the witness' in court testimony, not the typewritten notes of that witness' prior statement, that constituted the evidence that went to the jury. Therefore, appointed Counsel's Motion to Withdraw was granted and Defendant's Pro Se Motion for Post-conviction Relief was summarily dismissed. ZALMA OPINION Courts tend to protect the rights of a pro se party, even a convicted murderer, but should reconsider that tendency. The Delaware court provided an attorney to deal with the defendant's motion for post-conviction relief only to have that lawyer move to be relieved because there was no basis in fact or law for the relief sought and it would be unethical for counsel to represent Ryan Shover. Bending over backwards the appellate court considered the spurious arguments, wrote a detailed opinion, and denied relief. Shoyer will serve his full sentence. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insured Must Reside at Dwelling for Homeowners Policy Coverage to Apply Plaintiff alleged that, on October 28, 2020, Hurricane Zeta caused significant damage to his property. Plaintiff alleged that Southern conducted an inspection which constituted “satisfactory proof of loss,” but that Southern failed to adjust the claim or provide compensation to Plaintiff following the inspection.  Plaintiff alleged that he was forced to hire his own experts, and repair estimates. In Todd M. Korbel v. Republic Fire And Casualty Insurance Company And Southern Underwriters Insurance Company, No. 2:21-CV-2214, United States District Court, E.D. Louisiana (May 31, 2023) BACKGROUND Plaintiff sued seeking damages. Southern generally denied  the allegations and asserted a number of affirmative defenses including that Plaintiff did not “reside” at the Property, and that he is therefore not entitled to coverage under the Policy. APPLICABLE LAW Residence under the Policy The plain, ordinary and generally prevailing meaning of the word “reside” requires more than purchasing a home or intending to move into it. Plaintiff argued that he received mail, including correspondence from Southern, at the Property, that he paid water and electric bills for the Property in his name, that he was at the Property every day performing work or checking on the Property, that he had stored some belongings at the Property, and that he had a homestead exemption on the Property. As the Fifth Circuit has previously explained to Plaintiff himself in a previous lawsuit, this evidence is insufficient to create an issue of material fact as to whether Plaintiff resided in or at the Property. In an earlier case Plaintiff brought similar claims for damages and statutory bad faith penalties under Louisiana law after a house that he had purchased, but not moved into, was damaged during Hurricane Katrina. The insurer raised the same lack of coverage defense to Plaintiff's claims for certain damages, arguing that Plaintiff did not reside at the property as was required under the insurance coverage contract. Although Korbel clearly spent a great deal of time working on the house and intended it to be his residence in the future, this evidence was insufficient to establish residence. Given that Plaintiff kept only a minimal amount of furniture there and did not engage in leisure activities at the house, but rather went to the Property to work on or check on the house the facts establish he did not reside there. In fact, Plaintiff admitted in his deposition that he did not move into the Property but was still living at another location at the time the Property was impacted by Hurricane Zeta. Accordingly, Plaintiff did not ‘reside' at the Property, and is not entitled to coverage under the Policy. ZALMA OPINION Homeowners policies require that the insured reside at the premises that is the subject of the policy. Since the evidence established Korbel did not reside at the premises but only visited for purposes other than residence and it was in no condition to live in, he did not meet the requirement of residence as he did not in a previous case he brought to the Fifth Circuit Court of Appeals. He could have purchased a policy for a property in the course of construction but did not. Once he lost with the same argument it was unwise to make the same losing argument to the to the USDC that had failed on an appeal to the Fifth Circuit. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Breach of Contract is not an Occurrence In American Home Assurance Company v. Superior Well Services, Inc., No. 22-1498, United States Court of Appeals, Third Circuit (May 31, 2023) American Home Assurance Co. ("American Home") appealed the District Court's order grant of summary judgment for policy holder Superior Well Services, Inc. ("Superior"). BACKGROUND The Underlying State Law Claim U.S. Energy contracted with Superior for hydraulic fracking services to extract natural gas from wells owned by U.S. Energy. In November 2007, Superior notified its insurance provider, American Home, about the potential claim for damage to wells. In February 2008, American Home agreed to provide Superior with defense counsel, but it also sent Superior a letter reserving its right to contest insurance coverage. U.S. Energy sued Superior in New York state court, alleging that Superior had damaged 97 of its wells. After trial the jury found that Superior breached the contract by failing to perform services with reasonable care, skill and diligence.  The jury found Superior had damaged 53 of the 97 wells and specified that Superior "fail[ed] to perform its contract with U.S. Energy in a workman like manner" and that this "failure" was "a substantial factor in causing damage to the U.S. Energy wells[.]" Accordingly, it awarded U.S. Energy $6.16 million, a figure that was increased to approximately $13.18 million after the state court tabulated interest. THE DISPUTE BETWEEN SUPERIOR AND AMERICAN HOME Superior's policy provided coverage for "property damage" arising out of an "occurrence." The policy defined "property damage" as both "[p]hysical injury to tangible property, including all resulting loss of use of that property." Superior also purchased an "underground resources and equipment coverage" ("UREC") endorsement that amended the CGL policy to provide additional coverage "against risks associated with well-servicing operations[.]" Specifically, the endorsement "added" coverage "with respect to 'property damage' included within the 'underground resources and equipment hazard' arising out of the operations performed by [Superior] or on [Superior's] behalf[.]" American Home sued seeking a declaratory judgment that Superior's policy does not indemnify Superior for any damages that might be awarded to U.S. Energy and which were caused by Superior's breach of contract. THE DISTRICT COURT'S OPINION The District Court granted summary judgment for Superior and, by extension, for U.S. Energy, and it ordered American Home to indemnify Superior for the state court judgment. The Court concluded that each of the 53 damaged wells gave rise to a separate occurrence, triggering an independent coverage limit for each respective well. DISCUSSION The definition of "accident" required to establish an "occurrence" under the policies cannot be satisfied by claims based upon faulty workmanship. Such claims simply do not present the degree of fortuity contemplated by the ordinary definition of "accident" or its common judicial construction in this context. The Third Circuit Court of Appeal concluded that the endorsement does not displace the underlying policy's occurrence requirement and reversed the District Court's summary judgment order and remanded the case to the District Court with instructions to enter judgment for American Home. ZALMA OPINION The key to every liability insurance policy is that for coverage to apply the loss must be fortuitous, that is neither expected nor intended by the insured, and must fit within the generally understood meaning of the term "accident." Under no definition of fortuity is faulty workmanship by the insured. Since the jury found the insured responsible for its breach of contract by means of faulty workmanship there was no occurrence and no coverage (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

California's Dumbest Criminals Must Pay Restitution --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Westlake Chemical Corporation (Westlake) tendered claims to Berkley Regional Insurance Company (Berkley) and Zurich American Insurance Company (Zurich) seeking coverage for $16,000,000 in losses resulting from the payment of fraudulent invoices for shipping bags used to export Westlake’s products. BACKGROUND Westlake manufactures polyethylene and polyvinyl chloride products, which it sells internationally. From 2007 until 2014, Westlake purchased plastic shipping bags and other supplies to export its products from John Tinkle ("Tinkle") through his company Tinkle Management Inc. ("TMI"), a supplier of shipping bags to chemical companies. TMI delivered Westlake's plastic shipping bags to a warehouse owned by Packwell, Inc. ("Packwell"), a plastic bagging and logistics company, and Packwell used the supplies to package and ship Westlake's chemical products overseas. After the shipping supplies were delivered by TMI, Tinkle would submit an invoice to Westlake for payment of the supplies. In April 2017, Tinkle pleaded guilty and was sentenced to 48 months in prison and ordered to pay restitution to Westlake in the amount of $15,633,403.98. INSURANCE CONTRACTS Westlake purchased a Commercial Crime Insurance Policy from Berkley that provided coverage of $10,000,000 for each occurrence of computer fraud ("Berkley Policy") and a Crime Insurance Excess Policy from Zurich American Insurance Company that provided Westlake an additional $5,000,000 in coverage ("Zurich Policy"). Berkley Policy Berkley promised to “pay for loss of or damage to ‘money’, ‘securities’ and ‘other property’ resulting directly from the use of any computer to fraudulently cause a transfer of that property from inside the ‘premises’ or ‘banking premises’: a. To a person (other than a "messenger") outside those premises; or b. To a place outside those ‘premises’.” Zurich Policy The Zurich Policy's "Insuring Clause" was excess of the Berkley Policy. In no event shall coverage under this policy be broader than coverage under the Berkley Policy. After Westlake discovered Tinkle's fraud in October 2014, Westlake tendered timely notices of its discovery and Proof of Loss . DISCUSSION The Insurers carried their burden to prove that coverage is excluded under the Policy. The Insurers argued that Tinkle was Westlake's "authorized representative" and thus, whether or not the loss originated from "Computer Fraud," Westlake's loss is excluded from coverage based on Section D.1.c of the Berkley Policy, which excludes coverage for "Acts Of Employees, Managers, Directors, Trustees Or Representatives." As part of its summary judgment evidence, the Insurers submitted deposition testimony from Westlake's Corporate Representative Christopher Anderson ("Anderson"), Westlake's interrogatory responses, and a letter from Westlake responding to Berkley's questions about Westlake's loss prepared as part of the claims process. Relying on these exhibits, the Insurers argue that "Westlake admit[ted] that Tinkle was its 'authorized representative' because Westlake admit[ted] that it empowered [Tinkle] to act on its behalf."   ZALMA OPINION Insurance covers many risks of loss but no insurance policy covers every possible risk of loss. Westlake trusted its supplier, Tinkle to act on its behalf and deliver necessary shipping materials for Westlake to deliver its product to its customers. It was cheated by someone it trusted and who acted on its behalf. The exclusion was clear and unambiguous and no matter how much Tinkle overcharged it did so with authority and was excluded. Westlake's only hope now is to recover on the restitution order which will be difficult for Mr. Tinkle to pay as he is in prison. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The publication for insurance fraud professionals. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Two Years Is Not "As Soon as Practical" Plaintiff appealed the trial court order granting summary disposition in defendant's favor (no genuine issue of material fact) and the trial court order granting in part and denying in part defendant's motion for costs and attorney fees. Defendant cross appeals the trial court order granting in part and denying in part its motion for costs and attorney fees. In Maple Manor Rehabilitation Center, LLC v. Evanston Insurance Company, No. 359147, Court of Appeals of Michigan (April 27, 2023) resolved the disputes. FACTS Dorothy Irvine, 88 years old, was admitted to plaintiff, Maple Manor Rehabilitation Center ("Maple Manor"), on November 25, 2014, after a hospital stay. On or about December 11, 2014, she was found lying on the floor at the rehabilitation center. She passed away at the Hospital on December 16, 2014. On June 7, 2019, Maple Manor reported the Irvine lawsuit to it broker. On June 12, 2019, defendant denied the request, stating it was not notified of the claim in a timely manner as required by the insurance policy. Maple Manor then filed a complaint against the defendant for breach of contract. Defendant thereafter moved for attorney fees in the amount of $26,581.60 plus costs in the amount of $491.20, based primarily on its assertion that Maple Manor's lawsuit was frivolous. T SUMMARY DISPOSITION Maple Manor made a conscious, deliberate decision not to inform defendant of the Irvine lawsuit until June 7, 2019. It was not by accident, oversight, mistake, inadvertence, or belief that it did not have coverage. Prejudice to the insurer is a material element in determining whether notice is reasonably given, and the burden is on the insurer to demonstrate prejudice. However, that principle developed in the context of "occurrence" insurance policies not a claims made policy. The delay in giving notice here was approximately two years and delays of far less have been found to be prima facie failure to give notice as soon as practicable. CONCLUSION The Court of Appeals concluded that the trial court did not err in finding that there was no material questions of fact on these issues and that the defendant was thus entitled to summary disposition. The purpose of imposing sanctions for asserting frivolous claims is to deter parties and attorneys from filing documents or asserting claims and defenses that have not been sufficiently investigated and researched or that are intended to serve an improper purpose. The grant of summary disposition was affirmed. The trial court's order awarding only part of defendant's requested attorney fees was reversed and the case was remanded for entry of an order awarding defendant all of its requested attorney fees. ZALMA OPINION Maple Manor was its own worst enemy. It paid for insurance to cover the Irvine lawsuit but decided to retain its own lawyers to defend the suit without advising its insurer that the lawsuit existed. It then lied when trying, belatedly, to get coverage although its first report to the insurer was almost two years after the suit was served and almost a year after they cancelled the claims made policy. The report was not made during the effective dates of the policy, not as soon as reasonably practical, and the suit it filed was frivolous requiring it to pay the insurer's legal fees. (c) 2023 Barry Zalma & ClaimSchool, Inc. 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 Barry Zalma, Esq is available at http://www.zalma.com and [email protected] Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

No Good Deed Goes Unpunished Why A New Market for Insurers to Protect Small Businesses is Needed The Americans with Disabilities Act (ADA) was signed into law by President George H. W. Bush on July 26, 1990 with the good intentions of helping people with disabilities. It is a federal civil rights law that prohibits discrimination against people with disabilities in everyday activities. The ADA guarantees that people with disabilities have the same opportunities as everyone else to enjoy employment opportunities, purchase goods and services, and participate in state and local government programs. The stated goal of the ADA was to eliminate discrimination against individuals with disabilities. A major source of discrimination suffered by disabled individuals is the inability to gain access to public accommodations such as restaurants, hotels, movie theaters, gas stations and the facilities of other small businesses. In truth, the ADA advocates and their lawyers litigated under the ADA with the sole purpose of making money. Most had no intention or concern about the needs of those with disabilities. They took advantage of the provisions of the statute that allow individuals to enforce the accessibility requirements to bring a private right of action against individual businesses and property owners. Under the private right of action allowed by the ADA an aggrieved party can seek injunctive relief remedying the violation and attorney's fees and costs. Monetary damages are not available to private parties seeking to enforce the requirements of the ADA. By providing differing remedies for private and public enforcement revealed to abusers a method to profit from the underlying intent of Congress to prevent private plaintiffs from recovering monetary relief under the ADA. Although the ADA sets its intent clearly, Small business owners have found they are added to the growing evidence of abuse of the private remedies provided by the ADA where, as a small business and small property owner, he or she either must litigate with the ADA advocates or succumb to the abusive lawsuit with a settlement. If they contact a lawyer, they will be advised that they will lose the litigation if there is even small technical errors of compliance and be required to pay fines and attorney’s fees to the advocates and their lawyers.  The litigants and their lawyers know this and will offer to settle for a sum close to reasonable so that they can negotiate down to a reasonable amount. The complaints, and discovery are all computer generated by the advocate’s lawyers with only the names of the plaintiff, defendants and non-compliant part of the property, changed. The litigation expense for the plaintiff and counsel is minimal and for the defendant it is excessive. Small business people don’t have the funds necessary to protect themselves from an action legally filed under the ADA and concurrently pay to bring the property into compliance.  Agreeing to an offer of settlement is the only choice available to a small business owner because no liability policy provides coverage for the defense or indemnity of the suit brought under the ADA. The abuse of the ADA started with its enactment. The abuse of the ADA is well known to Federal District Court and state judges, who see the same plaintiffs over and over again. There is nothing the judges can do, because of the clear language of the ADA statutes, require that the judge fulfill the requirements of the statute. Attempts have been made to curb the abuse. For example, in 2006, the Hastings Womens Law Journal, 17 Hastings Women's L.J. 93 2006 published an article entitled Private Enforcement of the Americans with Disabilities Act via Serial Litigation: Abusive or Commendable? by Carri Becker, then a JD candidate. Read the full article and the proposal to market coverage at https://zalma.com/blog. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

No Insurable Interest - No Right to Insurance Proceeds Thomas Spoon and Maria Spoon appealed from the Pulaski County Circuit Court order granting summary judgment in favor of appellees Chester Lee Bolds and Linda Bolds in the Boldses' civil suit for damages related to insurance proceeds. FACTS In Thomas Spoon And Maria Spoon v. Chester Lee Bolds And Linda Bolds, 2023 Ark.App. 244, No. CV-22-277, Court of Appeals of Arkansas, Division II (April 26, 2023) The Boldses purchased the Spoons' house by warranty deed on July 2, 2020. In November 2020, the Boldses filed an insurance claim because they discovered the roof was leaking. The Boldses' insurance coverage would not pay because there was preexisting damage to the roof. The Boldses then filed a claim against the Spoons' homeowner's insurance. That insurer accepted the claim but paid the money in dispute ($5,219.48) to the Spoons. When the Spoons failed to turn the money paid on the insurance claim over to the Boldses, the Boldses filed suit, raising claims of breach of contract, declaratory judgment, and unjust enrichment. The Boldses then moved for summary judgment because the Spoons’ had no insurable interest. The Spoons contended they are entitled to the money because they were the owners of the property at the time of loss. They claim that unjust enrichment cannot equitably apply because the Boldses did not pay for the insurance policy. The court's order found that any and all interest the Spoons may have had in the house was terminated and extinguished upon the sale of the house to the Boldses, and it ordered the Spoons to reimburse the Boldses for the roof repairs. The Spoons argued that summary judgment was not proper because the court did not address the issues of privity of contract, standing, statute of frauds, or timing. To support their argument, they contend the general rule is that insurance policies are personal contracts between the insured and the insurer and that the Boldses were not a party to the original contract or privy to it. ANALYSIS The issues of breach of contract, unjust enrichment, and declaratory judgment were briefed to the circuit court. To find unjust enrichment, a party must have received something of value to which he or she is not entitled and which he or she must restore. There must also be some operative act, intent, or situation to make the enrichment unjust and compensable. One who is free from fault cannot be held to be unjustly enriched merely because he or she has chosen to exercise a legal or contractual right. Further, if one has money belonging to another, which, in equity and good conscience, he ought not to retain, it can be recovered although there is no privity between the parties. It was undisputed that the Spoons received the insurance money that was distributed for repair of the roof of a house in which they no longer had an interest. Unjust enrichment amounted to an alternative, independent basis for the circuit court's ruling, which has gone unchallenged by the Spoons. Accordingly, the Boldses were entitled to the reimbursement. ZALMA OPINION The insurer erred in paying the Spoons since the had no insurable interest. The Spoons kept the money to which they were not entitled and owed the Boldses for selling them a house with a leaky roof. The Spoons were clearly unjustly enriched and owed the Boldses for the cost of fixing their roof. What the court did not consider, because it was not a party, the insurer who paid the Spoons did not owe indemnity to them and paid a claim it did not owe. Since the insurer did not care and the Boldses did care, they were entitled to the funds. (c) 2023 Barry Zalma & ClaimSchool, Inc. Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808 Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Title Insurer Subrogated to Rights of Defrauded Buyer In Lewis v.  Fidelity National Title Insurance Company, No. A23A0030, Court of Appeals of Georgia, Fifth Division (April 26, 2023) Torriel Deyon Lewis appealed the grant of summary judgment to Fidelity National Title Insurance Company in Fidelity's fraud action against him. FACTUAL BACKGROUND When a party moves for summary judgment and supports his or her motion by submitting affidavits, depositions, or answers to interrogatories, the nonmoving party may not rest upon the mere allegations and must set forth specific facts showing that there is a genuine issue for trial. In 2007 an entity called House Rescue 911 L.L.C. ("old House Rescue 911 L.L.C.") acquired a parcel of real property. In 2010, old House Rescue 911 L.L.C. was administratively dissolved by the secretary of state. The records of the Georgia Secretary of State show that on February 3, 2017, an entity named House Rescue 911 LLC ("new House Rescue 911 LLC") was formed. New House Rescue 911 LLC's name was identical to old House Rescue 911 L.L.C.'s name except for the absence of periods between the letters LLC. Lewis was listed as the registered agent of new House Rescue 911 LLC. New House Rescue 911 LLC and Lewis were not affiliated in any way with old House Rescue 911 L.L.C. Three weeks after it was formed, new House Rescue 911 LLC purported to sell and to convey by limited warranty deed the parcel of real property that old House Rescue 911 L.L.C. had acquired in 2007. Lewis and new House Rescue 911 LLC had no basis for claiming ownership of the property and had no right to convey any rights to the property. In 2019, the purchaser of the property, Fidelity's insured, was named as a defendant in a petition to quiet title brought by the members of the administratively dissolved old House Rescue 911 L.L.C. The superior court quieted title in the petitioners' favor, and Fidelity paid its insured $66,000 under the title policy. Fidelity then sued new House Rescue 911 LLC and Lewis. The trial court entered a default judgment against new House Rescue 911 LLC and granted Fidelity's motion for summary judgment against Lewis. Lewis filed this pro se appeal. FRAUD The tort of fraud has five elements: a false representation by a defendant, scienter, intention to induce the plaintiff to act or refrain from acting, justifiable reliance by plaintiff, and damage to plaintiff. Inducement In the owner's affidavit, Lewis attested that he was making the affidavit "to induce [the purchaser] to purchase said real property, and to induce FIDELITY NATIONAL TITLE INSURANCE COMPANY to issue a . . . title insurance policy." And, of course, Fidelity did issue a title insurance policy. Justifiable Reliance Fidelity presented undisputed evidence that the chain of title showed that title to the property was vested in "House Rescue 911 L.L.C." Personal Liability An LLC member may be held individually liable if he or she personally participates or cooperates in a tort committed by the LLC or directs it to be done. The undisputed evidence is that Lewis was a member of new House Rescue 911 LLC, that he falsely represented that new House Rescue 911 LLC owned the property, and that he signed the limited warranty deed and the owner's affidavit on behalf of new House Rescue 911 LLC. The trial court did not err in finding that he is personally liable. The judgment was affirmed. ZALMA OPINION Fraud perpetrators are not honest or reliable. They lie. Clearly new House Rescue 911 LLC, and its manager, lied to the buyer of a piece of real property it did not own and also intentionally deceived the title insurer. Mr. Lewis was personally responsible to reimburse the title insurer for the money it was required to pay to its insured and was entitled to subrogate against the fraud perpetrator. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL 05-01-2023, Volume 27 Issue 9 Restitution Required John James Succi appealed pro se from the order dismissing his “Motion to Vacate Restitution/Sentencing.” In Commonwealth Of Pennsylvania v. John James Succi, No. 229 EDA 2022, No. J-S22022-22, Superior Court of Pennsylvania (February 28, 2023) the Superior Court gave consideration to the pro se motions of the convicted felon and ordered him to make restitution. Victims of crime must make certain that the state prosecutor, after convicting the criminal, like Succi, must demand restitution. The victims did so in this case and the prosecutor effectively obtained, at sentencing, an order of restitution. Succi, sentenced to many years in prison, may never be able to pay the ordered restitution unless there are assets that could be taken to pay the restitution. Regardless, convicted felons have nothing but time so he wasted the appellate courts time by bringing this pro se motion which failed. He will remain in the Gray Bar Hotel for the next 15 to 30 years. Read the full 22 page issue in Adobe pdf format ZIFL-05-01-2023 McClenny Moseley & Associates Issues This is ZIFL’s fifth installment of the saga of McClenny, Moseley & Associates (MMA) 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 22 page issue in Adobe pdf format at http://zalma.com/blog/wp-content/uploads/2023/04/ZIFL-05-01-2023.pdf Another Florida Insurer Bites the Dust Florida Commercial Insurer Capacity Insurance Company Now in Runoff. Read the full 22 page issue in Adobe pdf format at http://zalma.com/blog/wp-content/uploads/2023/04/ZIFL-05-01-2023.pdf Chutzpah! Fraudster Sues Twice Res Judicata Requires Fraudster to Lose Again After It Sues Again Forcing Two Courts to Deal With a $366.64 Fraudulent Claim is Chutzpah Read the full 22 page issue in Adobe pdf format at http://zalma.com/blog/wp-content/uploads/2023/04/ZIFL-05-01-2023.pdf Good News From the Coalition Against Insurance Fraud More than 18 months after he pleaded guilty to absconding with almost $5M in premiums, a Florida insurance agent has been sentenced to 14 years in prison. John M. Thomas, 52, the former owner of Thomas Insurance Agency in Pensacola, also must pay more than $8M in restitution. Read the full 22 page issue in Adobe pdf format at http://zalma.com/blog/wp-content/uploads/2023/04/ZIFL-05-01-2023.pdf Investigation Into Misleading Home Warranty Mailers Results in Refunds to Consumers California Insurance Commissioner Ricardo Lara announced that an insurance company offering home warranties will refund Californians deceived by a misleading mailer sent to hundreds of thousands of consumers. Read the full 22 page issue in Adobe pdf format at http://zalma.com/blog/wp-content/uploads/2023/04/ZIFL-05-01-2023.pdf Like Al Capone Marlin Construction Avoided Insurance Fraud but was Convicted of Tax Fraud David T. Aaron and Russell Ultes, co-owners of Marlin Construction Group LLC, cashed millions of dollars of customer checks at check-cashing businesses in order to underreport earnings and avoid federal taxes. Read the full 22 page issue in Adobe pdf format at http://zalma.com/blog/wp-content/uploads/2023/04/ZIFL-05-01-2023.pdf Health Insurance Fraud Convictions Read the full 22 page issue in Adobe pdf format at http://zalma.com/blog/wp-content/uploads/2023/04/ZIFL-05-01-2023.pdf Other Insurance Fraud Convictions Jarod Hirbar, age 44, of Kellogg, pled guilty Read the full 22 page issue in Adobe pdf format at http://zalma.com/blog/wp-content/uploads/2023/04/ZIFL-05-01-2023.pdf (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

INSURANCE POLICY MEANS WHAT IT SAYS The Eleventh Circuit Court of Appeal was asked to resolve what a court is to do when all the surest proof of contracting parties' subjective intentions and expectations flatly contradict the clear words of the issued policies of insurance. In Shiloh Christian Center v. Aspen Specialty Insurance Company, No. 22-11776, United States Court of Appeals, Eleventh Circuit (April 13, 2023) the Eleventh Circuit followed the generally accepted rules of insurance contract interpretation. SUBJECTIVE INTENT v. POLICY WORDING Aspen Specialty Insurance Company, a billion-dollar insurance conglomerate, had essentially all of the subjective-intent evidence on its side. The policyholder-Shiloh Christian Center, a small Florida church-had the policy text. The district court found the evidence of the parties' subjective intent overwhelming and  granted summary judgment to Aspen. FACTS In 2016 and 2017, respectively, Hurricanes Matthew and Irma tore through Melbourne, Florida, pummeling Shiloh Christian Center. On both occasions, the storms peeled back the church's roof, allowing rain to soak the exposed structure. In 2015, the year before Matthew hit, Shiloh's property-insurance policy with Aspen Specialty Insurance Company covered losses resulting from hurricanes. In the middle of that year, though, Shiloh specifically asked Aspen to stop covering named-windstorm-related losses. Aspen agreed and issued an endorsement implementing the requested change: "THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.... It is understood and agreed effective 7/16/2015, the following change is made to this policy: Named Windstorm coverage is removed from this policy." Reflecting the amendment, Aspen reduced Shiloh's premium and even refunded its past payments for named-windstorm coverage. Aspen then issued the 2016 policy. The cover page described the 2016 policy as a "renewal of" its 2015 predecessor. But the two policies' terms differed in material respects. For one thing, the 2016 policy was about $10,000 cheaper per year than the amended 2015 policy. Far more significantly the 2016 policy contained no exclusion for losses caused by named windstorms. A "Named Windstorms" exclusion was conspicuously absent from the policy as issued. In October 2016, a named windstorm-Hurricane Matthew-blew through Melbourne, ripping the roof off Shiloh's building. Aspen denied the claim because Shiloh's policy excluded coverage for losses caused by named windstorms. The district court granted summary judgment to Aspen. ANALYSIS The general rules governing the interpretation of insurance policies under Florida law are clear that the cardinal principle is that a policy's text is paramount. INTERPRETATION OF THE POLICIES First, the Irma Policy unambiguously covers named windstorms. The expressio unius canon applies with particular force because the Irma Policy's catalogue of exclusions is so detailed. On its face the Irma Policy clearly doesn't exclude- and thus covers-losses resulting from named windstorms. The court concluded: "Whatever the evidence of the contracting parties' subjective intentions and expectations, the Irma Policy's plain language unambiguously covers losses caused by named windstorms." ZALMA OPINION Aspen failed to properly underwrite and issue the two relevant policies to Shiloh by not incorporating the named windstorm exclusion it had originally. There was no question that the parties intended to exclude windstorms, the premium was reduced as a result of the intent, but Aspen left the exclusion out of the two policies in effect at the time of the two hurricanes. For reasons not described in the opinion Aspen failed to move to reform the two policies to provide the coverages the parties agreed to issue and was compelled to pay the claims neither party expected to cover Shiloh's property. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Biological Damage Cover Must Overcome Mold Exclusion In Clay Buchholz; Lindsay Buchholz v. Crestbrook Insurance Company, doing business as Nationwide Private Client, No. 22-50265, United States Court of Appeals, Fifth Circuit (April 18, 2023) Clay and Lindsay Buchholz sued their insurer after recovering $745,778 for damage to their ten-thousand-square-foot house in Austin, Texas. The Buchhholz' insured their home with Crestbrook Insurance Company. Their policy included "Biological Deterioration or Damage Clean Up and Removal" coverage ("mold coverage"). The Buchholz family discovered a widespread mold infestation in their home. Although Crestbrook covered many of their losses, it denied a generalized claim for mold growing in the Buchholzes' walls and heating, ventilation, and air conditioning system.  A magistrate judge issued a report and recommendation in favor of Crestbrook, and the district court adopted the magistrate judge's conclusions. FACTS Crestbrook asserted that the sixth claim for general mold growth and mold in the HVAC system was excluded. The Buchholz family retained MLAW Forensics, Inc., to investigate the cause of their mold infestation. Based on MLAW's causation report Crestbrook denied Appellants' mold claim. ANALYSIS Under Texas law, when deciding a dispute regarding insurance coverage, the court first looks to the language of the policy because it presumes parties intend what the words of their contract say. The court must give the policy's words their ordinary and generally accepted meaning unless the policy shows the words were meant in a technical or different sense. A disagreement between the parties regarding the meaning of policy terms or interaction between terms does not create ambiguity. The Insured's Burden In a coverage dispute, the insured has the burden first to prove that their loss falls within the terms of the contract. Once the insured demonstrates this, the burden shifts to the insurer, who, to avoid liability, must show that the loss falls into an exclusion to the policy's coverage. The Fifth Circuit Conclusion The Fifth Circuit concluded that the magistrate judge correctly laid out the Texas insurance dispute burden-shifting framework in her report and recommendation. In its motion for summary judgment, Crestbrook argued that mold infestation is an excluded peril under the policy. Applying the Texas insurance burden-shifting framework, the Fifth Circuit agreed with Crestbrook that the mold exclusion bars coverage for the Buchholz family's claim. Under the Texas insurance dispute framework, the Buchholzes must first show a direct physical loss as required under their all-risk policy. Then Crestbrook can identify any exclusions to coverage of that loss. The policy excluded coverage for "loss to any property resulting directly or indirectly from any of the following . . . Biological Deterioration or Damage, except as provided by [the mold coverage]." The Buchholzes showed they suffered a mold infestation, nothing more. Their theory is that water intrusion causes mold. But water intrusion as such is not a loss covered by the policy when its only manifested harm to covered property is fungal growth. Consequently, the Buchholzes did not show that their mold coverage serves as an exception to the mold exclusion. So, their generalized mold claim is excluded by the terms of their policy. ZALMA OPINION The Fifth Circuit concluded that it was required to interpret the insurance policy as it was written and that the generalized mold claim was clearly and unambiguously excluded. Nothing more need be said. The Buchholzes should not have sued their insurer they should have sued the contractor, designer or manufacturer of the defective HVAC system. In fact they should join with their insurer in seeking damages from those who were responsible for the defects that caused the mold infestation. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Felon Must Pay Restitution to Each Victim John James Succi appealed pro se from the order dismissing his "Motion to Vacate Restitution/Sentencing." In Commonwealth Of Pennsylvania v. John James Succi, No. 229 EDA 2022, No. J-S22022-22, Superior Court of Pennsylvania (February 28, 2023) the Superior Court gave consideration to the pro se motions of the convicted felon. FACTS In a prior appeal, a panel of the Pennsylvania Superior Court summarized the facts leading to the underlying convictions as follows: Succi was a residential and commercial contractor. Beginning in 2005 and continuing through 2013, Succi entered into thirteen contracts to build, remodel, or construct additions on certain properties located in Bucks County, Pennsylvania, Philadelphia County, Pennsylvania, and Margate, New Jersey. In each instance, Succi either failed to finish the work, failed to obtain necessary permits, failed to perform under the contract, claimed he was insured when he was not, or provided fraudulent receipts. It was also typical for Succi to quote a price for a particular project and then increase the costs. If the homeowner challenged Succi's work practices, he threatened them with legal proceedings that would financially cripple the homeowners. In at least two instances, Succi placed mechanic's liens on homeowners' properties. [Commonwealth v. Succi, 480 EDA 2015 (unpub. memo. at 1-2) (Pa. Super. Jan. 5, 2017).] Succi was charged with multiple counts of home improvement fraud, theft by deception, and deceptive business practices, and one count of insurance fraud. Succi was convicted of 12 counts each of deceptive business practices and theft by deception, two counts of home improvement fraud, and one count of insurance fraud. SENTENCING HEARING The sentencing hearing proceeded with victim impact testimony presented by the Commonwealth, and character evidence presented by Succi. The trial court sentenced Succi to an aggregate term of 15 to 30 years' imprisonment, imposing consecutive sentences with respect to each victim. After announcing the sentence for each criminal conviction, the court imposed restitution, as requested by the Commonwealth. Succi filed a direct appeal and argued: several convictions were barred by the statute of limitations; jurisdiction and venue in the Bucks County Court of Common Pleas was improper; and the "life sentence" imposed by the trial court was unconstitutional and illegal. The Appellate Court affirmed the judgment of sentence, and the Pennsylvania Supreme Court denied allocatur review. THE PRO SE MOTION The trial court entered an order denying Succi relief. The court explained that it considered Succi's motion to be a second, untimely PCRA petition, and it had no jurisdiction to address Succi's claim. Moreover, the May 20, 2015, order - which Succi claims the court, belatedly and without conducting a hearing, added restitution to his sentence - makes no mention of any restitution amounts which had been set at sentencing. The trial court's order was affirmed. ZALMA OPINION Victims of crime must make certain that the state prosecutor, after convicting the criminal, like Succi, must demand restitution. The victims did so in this case and the prosecutor effectively obtained, at sentencing, an order of restitution. Succi, sentenced to many years in prison may never be able to pay the ordered restitution unless there are assets that could be taken to pay the restitution. Regardless, convicted felons have nothing but time so he wasted the appellate courts time by bringing this pro se motion which failed. He will remain in the Gray Bar Hotel for the next 15 to 30 years. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Lloyd's Marine Policy Only Insured Against Loss of Property in Transit https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Reporting Suspected Insurance Fraud is Subject to a Qualified Privilege in Oklahoma Sue Chimento sued claiming defamation, negligence, intentional interference with business relations, false representation, constructive fraud, and conspiracy against Gallagher Benefit Services, Inc., and Scott McCoy, based on allegations they made to the Tulsa Police Department, Tulsa County District Attorney's Office, and the Oklahoma Insurance Department that she had embezzled money while under their employment. The trial court granted partial summary judgment to Defendants, finding that their statements to the police and district attorney were subject to an absolute privilege and their statements to Oklahoma Insurance Department were subject to a qualified privilege under 36 O.S. § 363. In Sue Chimento v. Gallagher Benefit Services, Inc., and Scott Mccoy, Individually, Nos. 120089, 120101, 2023 OK 22, Supreme Court of Oklahoma (March 21, 2023) resolved the dispute. BACKGROUND Petitioner, Sue Chimento would pay individual premiums on behalf of the client Native American Tribes' employees out of the Tribal Account. Given how the Tribal Account was utilized, it was typical for the Tribal Account to have a zero balance. In March 2017, Midfirst Bank found that the Tribal Account was overdrafted. Shortly after management's Mr. McCoy inquired of Chimento as to why the account was overdrafted, Chimento resigned her employment with AJG. McCoy then filed a report with the Tulsa Police Department ("TPD") alleging that Chimento embezzled approximately fifty-one thousand dollars ($51,000.00). Shortly thereafter the Tulsa County District Attorney filed a criminal information charging Chimento with one count of felony embezzlement. The District Attorney later dismissed the charges against Chimento for insufficient evidence. IMMUNITY DEFENSES Defendants asserted that any of their statements to TPD, the District Attorney's Office, and the OID were subject to an absolute privilege, and thus, to the extent any of Chimento's claims were based on these statements, the claims must fail. The trial court granted summary judgment to AJG/GBS on all of Chimento's remaining claims. The trial court found that Defendants' statements to TPD and to the District Attorney's office were subject to an absolute privilege under 12 O.S. § 1443.1 and their statements to the OID were subject to a qualified privilege under 36 O.S. § 363. DISCUSSION The Supreme Court concluded that Defendants' statements to law enforcement were entitled to a qualified privilege. Statements to law enforcement are entitled to a qualified privilege. Any statements Defendants made to TPD and the District Attorney's Office only enjoy a qualified privilege. Defendants' Statements To The Oklahoma Insurance Department Are Entitled To A Qualified Privilege. The Supreme Court concluded that the clear and unambiguous intent of § 363 is to provide qualified immunity from civil actions for individuals who furnish information to the OID regarding fraudulent insurance activity. Therefore, Defendants statements to TPD and the District Attorney's Office are entitled to a qualified privilege. Likewise, Defendants statements to the Oklahoma Insurance Department are entitled to a qualified privilege under 36 O.S.Supp.2012 § 363. ZALMA OPINION State law requires insurers to report to the Oklahoma Department of Insurance (OID) suspected insurance fraud and by statute an insurer is provided an immunity from certain suits like those made by the Plaintiff if the suit is based upon the report to the OID. The report to police, if made in good faith, usually provides an absolute immunity but Oklahoma no makes the immunity qualified. Whether qualified or absolute the immunity protects the defendants. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Res Judicata Requires Fraudster to Lose Again After it Sues Again Forcing Two Courts to Deal With a $366.64 Fraudulent Claim is Chutzpah Integrated Pain Management, PLLC, sought $366.64 in no-fault insurance benefits for medical services it rendered to assignor Mikwan Murphy on August 16, 2018 although the insurer had already obtained a judgment that the claim was fraudulent. In Integrated Pain Management, PLLC, as assignee of Mikwam Murphy v. Empire Fire & Marine Insurance Company, 2023 NY Slip Op 50219(U), Index No. CV-712234-21/BX, Civil Court of the City of New York, Bronx County (March 22, 2023) the services allegedly provided by Integrated consisted of treatment for injuries Murphy allegedly sustained in an automobile accident on July 22, 2018. Defendant moved for summary judgment contending that plaintiff was barred by the doctrines of res judicata, collateral estoppel, and law of the case from relitigating the issue of coverage for this claim. Plaintiff ignored the motion. PRIOR ACTION In 2019, Empire Fire commenced a declaratory judgment action in Kings County Supreme Court against Integrated Pain Management and Murphy, among others. In that case, Empire Fire alleged that Integrated Pain Management and Murphy participated in an insurance fraud scheme in which rented vehicles would intentionally get into "accidents" with unsuspecting third-party drivers. The drivers and passengers in the rented vehicles would receive payments of up to $1,500, and in exchange for those payments would seek medical treatment from certain designated medical providers, who would seek reimbursement under Empire Fire's no-fault insurance policy. On April 8, 2021, Supreme Court granted default judgment for Empire Fire, ruling in relevant part that Empire Fire was not contractually obligated to reimburse Integrated Pain Management for the services it rendered to Murphy arising from the July 22, 2018 accident because the alleged losses were not the result of an "accident" as contemplated by the insurance policy. DISCUSSION Given Supreme Court's ruling that contractually there is no no-fault coverage for the July 22, 2018 purported "accident." Since Integrated Pain Management and Murphy were both parties to the Brooklyn Action and the claims again from the very same "accident" at issue in that case. Under res judicata, or claim preclusion, a valid final judgment bars future actions between the same parties on the same cause of action. The doctrine applies if the issue in the second action is identical to an issue which was raised, necessarily decided and material in the first action, and the plaintiff had a full and fair opportunity to litigate the issue in the earlier action. The Court found that defendant met its prima facie burden for summary judgment under the doctrines of res judicata and collateral estoppel. Plaintiff sought to wrongfully relitigate the identical issue raised and decided against it in the Brooklyn Action. Defendant's motion for summary judgment seeking dismissal of the complaint was granted and the case was dismissed with prejudice. ZALMA OPINION Fraud perpetrators in the state of New York, like the Plaintiff, have the unmitigated gall to sue an insurer twice for the same fraudulent scheme, waste the time of the courts by causing the courts to rule twice on the same issue and, in my opinion, should face sanctions and punishment from the court and a referral to the prosecutors for criminal prosecution. (c) 2023 Barry Zalma & ClaimSchool, Inc. 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 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Duty to Defend is Less than Duty to Indemnify Massachusetts Bay Insurance Company (MBIC) seeks reimbursement of $2 million that it paid under a reservation of rights to settle litigation brought against its insured, Neuropathy Solutions, Inc. (Neuropathy). In Massachusetts Bay Insurance Company v. Neuropathy Solutions, Inc., dba Superior Health Centers, and Rigoberto Bernal, an individual; et al., No. 22-55272, United States Court of Appeals, Ninth Circuit (April 3, 2023) the Ninth Circuit determined who owed the settlement payment. The District Court Decision On cross-motions for judgment on the pleadings, the district court held that MBIC had a duty to defend and indemnify Neuropathy in the underlying case (the Bernal action), and that MBIC was thus not entitled to any reimbursement. MBIC satisfied the prerequisites for seeking reimbursement of the amount it paid to settle the Bernal action on Neuropathy's behalf. To seek reimbursement under California law, an insurer must provide (1) a timely and express reservation of rights; (2) an express notification to the insured of the insurer's intent to accept a proposed settlement offer; and (3) an express offer to the insured that it may assume its own defense in the event that the insured does not wish to accept the proposed settlement. The Reservation of Rights MBIC provided a timely and express reservation of rights and informed Neuropathy of its intention to settle the claims for the $2 million policy limit, subject to Neuropathy's approval and MBIC's reservation of rights. This letter also informed Neuropathy of its "right to assume the further handling of this matter going forward" if Neuropathy did not wish to settle the claims for $2 million. Neuropathy signed the settlement agreement on May 28, 2021. Contrary to Neuropathy's argument, MBIC gave Neuropathy sufficient time to consider the proposed settlement. The District Court Erred The Ninth Circuit concluded that the district court erred by invoking the broader duty-to-defend standard (potentiality of coverage) to require MBIC to cover not just the cost of defending the underlying Bernal suit but also the $2 million paid to settle it. To the extent that the underlying Bernal action falls within the coverage provisions of the insurance policy coverage is excluded under the policy's "Professional Services" exclusion. That provision excludes: “’Bodily injury’, ‘property damage’, [and] ‘personal and advertising injury’ caused by the rendering of or failure to render any professional service, advice or instruction: (1) By [the insured]; or (2) On [the insured's] behalf; or (3) From whom [the insured] assumed liability by reason of a contract or agreement, regardless of whether any such service, advice or instruction is ordinary to any insured's profession.” Then Ninth Circuit concluded that based on California case law, the insurance policy's text, and the operative complaint in the Bernal action, Neuropathy's liability in Bernal fell within the "Professional Services" exclusion. Neuropathy's liability in the Bernal action was thus excluded from coverage, and MBIC is entitled to reimbursement of the $2 million it paid to settle that lawsuit. ZALMA OPINION Liability insurance provides a very broad duty to defend an insured that is more than the duty to indemnify. In this case MBIC paid to defend its insured and properly gave the insured to take over the defense if it did not want to settle. It refused and the Ninth Circuit required the insured to reimburse the insurer for the $2 million paid to settle. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Breach of Contract & Intentional Act Not Insured Carl Hemphill asked the Third Circuit to find that his liability insurer, Landmark American Insurance Co., is obligated to defend him in a lawsuit by a former employee. That employee brought a panoply of claims against Hemphill in his original complaint. None is covered by Hemphill's policy with Landmark. In Carl Hemphill; MJC Labor Solutions, LLC v. Landmark American Insurance Company, No. 20-2544, United States Court of Appeals, Third Circuit (April 5, 2023) applied the four corners rule to resolve the dispute. FACTS Carl Hemphill and MJC Labor (together, Hemphill) provide temporary employee placement and visa application processing services to workers from Mexico and Central America. Hemphill is insured by a miscellaneous professional liability (MPL) policy with Landmark, covering claims "arising out of [] negligent act[s], error[s] or omission[s]" "in the rendering or failure to render . . . permanent and/or temporary placement services[.]" Former MJC client Jose Castillo sued Hemphill (the Castillo Lawsuit), alleging violations of federal human trafficking, wage-and-hour, and unfair trade practices laws, as well as claims for breach of contract and unjust enrichment. The parties have since settled the Castillo Lawsuit, but the reimbursement of legal defense costs, incurred in the underlying suit, remain in dispute. ANALYSIS Landmark declined to defend Hemphill on the grounds that Castillo's allegations arose from Hemphill's intentional actions, occurring after Castillo had been placed as an employee, rather than from negligent actions in providing placement services. If the underlying complaint avers facts that might support recovery under the policy, coverage is triggered, and the insurer has a duty to defend. Under Pennsylvania law, the question of whether a claim against an insured is potentially covered is answered by comparing the four corners of the insurance contract to the four corners of the complaint. Courts applying Pennsylvania law must not stray from the operative complaint in determining duty-to-defend issues, even when later proceedings reveal the existence of a covered claim. The District Court Conclusion The District Court found that: "Hemphill could not expect Landmark to cover him for any claim not listed in the Landmark policy, and Castillo's complaint does not allege a covered claim." Insured's Reasonable Expectations An insured's reasonable expectations may occasionally prevail over the express terms of a contract, but only in very limited circumstances to protect non-commercial insureds from policy terms not readily apparent and from insurer deception. Hemphill claims that the fact that Landmark defended a different lawsuit created a reasonable expectation that it would defend the Castillo Lawsuit. Landmark subjected its defense of the earlier Lawsuit to a complete reservation of rights. The Duty to Defend An insurer's duty to defend is determined solely from the language of the complaint against the insured. It is the potential, rather than the certainty, of a claim falling within the insurance policy that triggers the insurer's duty to defend. As for Castillo's start date, his allegations amount to nothing more than a breach-of-contract claim: he alleges that his contracted-for start date was delayed and that he lost money and employment opportunities as a result. Landmark expressly carved out breach-of-contract claims in its policy with Hemphill. It has no duty to defend this one, or any other claim in Castillo's suit. ZALMA OPINION The four corners rule allowed the insurer to refuse to defend or indemnify its insured because Castillo's suit was basically for breach of contract and did not meet any of the requirements of the policy which limited its coverages and did not promise to defend a claim of breach of contract. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

It's Hard to Sue the U.S. Government Without Its Permission RobeIrta Jean Champlin appealed a decision from the United States Court of Federal Claims dismissing for lack of subject matter jurisdiction her claim that the United States must pay damages for the nonpayment of life insurance proceeds from her deceased former husband's Federal Employees Group Life Insurance policy. In Roberta Jean Champlin v. United States, No. 2022-1402, United States Court of Appeals, Federal Circuit (April 10, 2023) Ms. Champlin sought payment of a Federal Employees' Group Life Insurance (FEGLI) policy after he ex-husband died because her divorce decree granted her half ownership in the policy. BACKGROUND The Federal Employees' Group Life Insurance Act (FEGLIA) establishes a group life insurance program for federal employees. The United States Office of Personnel Management (OPM) is responsible for managing FEGLI polices and has entered a contract with Metropolitan Life Insurance Company (MetLife) to provide insurance to federal employees. FEGLI proceeds are to be paid in the following order of precedence: (1) designated beneficiaries; (2) widowed spouse; (3) children or descendants; (4) parents of deceased; (5) executor or administrator of the estate; and (6) next of kin. Factual & Procedural Background Lewis Dean Champlin, during and after his marriage to Ms. Champlin, had life insurance through a FEGLI policy. In September 2012, the Champlins divorced. As part of their divorce proceedings, Ms. Champlin obtained from the Alaskan state divorce court "award[ed Ms. Champlin] the option to continue maintaining a one-half interest in that policy . . . [while Mr. Champlin] ha[d] the option of paying the other half of the policy and c[ould] designate whoever he chooses to be beneficiary to the other half of the policy benefits." Ms. Champlin paid for half of the policy thereafter. On January 3, 2016, Mr. Champlin died. Ms. Champlin did not receive her half of the proceeds of his life insurance policy. Instead the proceeds were paid to Mr. Champlin's designated beneficiary at the time of his death-Marilyn Susano. Ms. Champlin sued the United States in the Court of Federal Claims, alleging that she is entitled to half of Mr. Champlin's issued life insurance coverage and further requesting a judgment directing the United States to pay her half of the FEGLI proceeds. The OPM authorized MetLife to provide life insurance, and MetLife established an administrative office, which is responsible for administering FEGLI claims. The Court of Federal Claims noted that it found that Ms. Champlin's complaint made no claim for a breach of a legal duty, only a claim to obtain money due under the FEGLI policy. (c) 2023 Barry Zalma & ClaimSchool, Inc. 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 Barry Zalma, Esq., CFE is available at http://www.zalma.com and [email protected] Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257 Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Litigants May Not Try Again After Losing https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Litigants May Not Try Again After Losing The plaintiffs in this action are a group of special-purpose entities that acquired various commercial properties and funded those acquisitions with loans. The loans required the plaintiffs, as borrowers, to obtain residual value insurance policies guaranteeing payment of the outstanding loan to the lenders if the borrowers did not satisfy the loan at maturity. The defendants are the insurers under those policies and related entities. The parties litigated the dispute to final judgment in Michigan and Idaho and filed a new suit in Delaware seeking the remedies they were not allowed to receive in Michigan and Idaho. In PVP Aston LLC, et al v.  Financial Structures Limited, et al., C. A. No. N21C-09-095 AML CCLD, Superior Court of Delaware (March 31, 2023) the court was faced with a claim of collateral estoppel – that is – once you lose in one court you cannot go to another court for a different result on the same issue. Plaintiffs are thirty-four special-purpose entities that obtained commercial loans (each, a “Loan”) from several lenders or agents of lenders (each, a “Lender”) to finance the sale and leaseback of properties formerly owned by Rite-Aid drugstores (each, a “Property”). The Loans were evidenced and secured by a mortgage, note, and related instruments for each Property (the “Loan Documents”). Each Loan required a considerable “balloon” payment when the Loan matured in 2020 or 2021. The Michigan and Idaho courts both disagreed with the Borrowers’ position that the parties intended the Insurer’s right to a Loan assignment to be conditioned on the performance of an appraisal. The Michigan Court also rejected Plaintiff’s effort to recover breach of contract damages because the Policy provides that “the [Insurer] shall have no liability to [the Plaintiff] except to make payment to the Additional Insured in accordance with this Policy.” The Idaho Court similarly found that the breach of contract claim was futile. In addition, having concluded the ICA was enforceable, the Idaho Court rejected the claim that FSL allegedly sold unenforceable agreements. Under Delaware law, a Delaware court will give the judgments of another state court the same preclusive effect as would a court in that state. Collateral estoppel law in Idaho and Michigan is substantially the same as the law in Delaware. Delaware follows the majority rule that an appeal does not render a judgment non-final for purposes of res judicata or collateral estoppel. Michigan and Idaho law control the question of finality for purposes of this Court’s collateral estoppel analysis, and Michigan and Idaho also follow the majority rule. Finally, it is apparent that the parties had a full and fair opportunity to litigate the issues addressed in the Michigan and Idaho actions. The decisions issued by those courts describe the cases’ procedural history and reflect that the parties had the opportunity to fairly present their positions. Those courts fully analyzed and considered the parties’ multifaceted arguments. The Michigan Borrower moved for reconsideration of the April 22, 2022 decision but did not argue that it had lacked an opportunity to fully litigate the issues. Rather, it argued the Court erred in its analysis of the law regarding clogging the equity of redemption. Defendants’ Motion to Dismiss is Granted. Accordingly, Plaintiffs’ Motion for Partial Summary Judgment is Denied As Moot. The old children’s motto that says one must try and try again when they fail does not apply to litigation. The insurers in this case were entitled to their subrogation rights to require payment of the loan and get title to the property. Once the plaintiffs’ lost in Idaho and Michigan they did not have the right to bring the same claims in Delaware and were prevented by the application of the collateral source doctrine. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL - Volume 27, Issue 8 - The Source For Insurance Fraud Professionals Obesity, Diabetes and Covid Not Basis For Compassionate Release The US Congress, feeling sorry for federal prisoners, amended the law to create The First Step Act to allow a District Court to shorten a sentence when there exist extraordinary and compelling reasons to release the Prisoner.  Read the full issue of ZIFL-04-15-2023 at http://zalma.com/blog/wp-content/uploads/2023/04/ZIFL-04-15-2023-1.pdf The Special Investigative Unit Investigator The experienced claims investigator is usually a part of, or vendor to, a Special Investigative Unit (SIU) set up to protect the insurer and mandated by most states as a means to reduce the amount of fraud perpetrated against insurers. Read the full issue of ZIFL-04-15-2023 at http://zalma.com/blog/wp-content/uploads/2023/04/ZIFL-04-15-2023-1.pdf More McClenny Moseley & Associates Issues This is ZIFL’s fourth installment of the saga of McClenny, Moseley & Associates and its problems with the federal courts in the State of Louisiana. “Chutzpah” is a Yiddish term that has found its way into the English language. It is defined as “unmitigated gall” and is usually explained as a person convicted of murdering his parents who pleaded with the judge for mercy because he is an orphan. The latest actions by McClenny Moseley & Associates are a better definition of the term. Read the full issue of ZIFL-04-15-2023 at http://zalma.com/blog/wp-content/uploads/2023/04/ZIFL-04-15-2023-1.pdf Free Insurance Videos Barry Zalma, Esq., CFE has published five days a week videos on insurance claims, insurance claims law, insurance fraud and insurance coverage matters at https://www.rumble.com/zalma.https://rumble.com/c/c-262921. Read the full issue of ZIFL-04-15-2023 at http://zalma.com/blog/wp-content/uploads/2023/04/ZIFL-04-15-2023-1.pdf The Problem with Different Degrees of Crime Fraud by any Other Name is Still Fraud In State Of New Jersey v. Randi Fleischman, A-4 September Term 2006, Supreme Court of New Jersey (March 26, 2007) the Supreme Court of New Jersey was provided with its first opportunity to construe N.J.S.A. 2C:21-4.6’s penalizing of a false “statement” as an “act of insurance fraud” that can be accumulated to elevate insurance fraud to a second-degree offense. Read the full issue of ZIFL-04-15-2023 at http://zalma.com/blog/wp-content/uploads/2023/04/ZIFL-04-15-2023-1.pdf Good News From the A home healthcare company has paid $9M for allegedly submitting false claims. United Energy Workers Healthcare, Corp. and related entities settled a claim. Read the full issue of ZIFL-04-15-2023 at http://zalma.com/blog/wp-content/uploads/2023/04/ZIFL-04-15-2023-1.pdf OBLIGATION OF LAWYERS WHEN A CLIENT IS SUSPECTED OF FRAUDULENT CONDUCT A lawyer who suspects that his or her client is lying about the facts to cover up fraudulent or criminal activity the lawyer is placed in a professional dilemma. The client may be faking injuries after an automobile accident or fabricating the cause of a fire at his or her home. Or the client provides the lawyer with intentionally vague information about their finances to avoid reporting the information to the IRS or other governmental agency. Read the full issue of ZIFL-04-15-2023 at http://zalma.com/blog/wp-content/uploads/2023/04/ZIFL-04-15-2023-1.pdf --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Determine Whether Property Damage Occurred A first party property policy does not insure property: it insures a person, partnership, corporation or other entity against the risk of loss of the property. Before an insured can make a claim for indemnity under a policy of first party property insurance the insured must prove that there was damage to property the risk of loss of which was insured by the policy. The obligation imposed on the insured by the policy is often relatively easy to fulfill. For example, in the case of a fire the charred building need only be shown to the insurer. Other situations may not be as easy to prove. Is a building overhanging a newly created cliff damaged? Has a church that is permeated with a gasoline odor sustained property damage? Was missing property stolen? Has a building showing signs it may collapse, subject to an insured peril called “collapse?” Often, an insurer needs the wisdom of Solomon to reach a correct and fair result. The first party property adjuster is charged with the duty of helping the insured establish the existence or nonexistence of property damage due to a risk of loss insured against and not excluded and work to keep all of the promises made by the insurance policy. When a first party property policy insures against the risk of physical loss to certain real or personal property, whether the policy is a named peril, all risk, special risk, or direct risk of physical loss policy, the insured must first prove there is damage to the property. An insured may also make claim for loss of use of the property that is the subject of the insurance. The Insured can retain the property and sustain a constructive loss of use by denial of access or danger of imminent destruction. In Hughes v. Potomac Insurance Co., 199 Cal. App. 2d 239 (1962), the court found coverage after the land next to the house slid away causing the undamaged house to overhang a cliff. The California Court of Appeal found that damage to a structure existed if it was not a safe place for people to live even though all the walls stood and the roof kept out the rain. While a loss of use may, in some cases, entail a physical loss, “loss of use” and “physical loss or damage” are not synonymous. Indeed, interpretation of physical loss as requiring only loss of use stretches “physical” beyond its ordinary meaning and may, in some cases “render the word ‘physical’ meaningless.” In Source Food Tech., Inc. v. U.S. Fidelity and Guar. Co., 465 F.3d 834, 835 (8th Cir.2006) the court found no coverage under a policy covering “direct physical loss to property” when property was meat which was not allowed to cross the border into the United States and was thus treated as unusable but in fact suffered no spoilage or contamination. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

UM/UIM Statute Makes a Motorcycle Into an Automobile Progressive Classic Insurance Company contested the trial court's entry of summary judgment in favor of plaintiff. The sole question to the Court of Appeals was whether the insurer was required by statute to provide coverage for "newly acquired vehicles," such as plaintiffs motorcycle, notwithstanding an insurance policy term that excluded transportation devices with less than four wheels. The trial court granted plaintiffs motion and denied defendant's motion. In Steven Cantu v. Progressive Classic Insurance Company, 325 Or.App. 184, A175784, Court of Appeals of Oregon (April 5, 2023) the Court interpreted Oregon's UM/UIM statute. FACTS Plaintiff was insured by defendant for three automobiles. The policy at issue did not list any motorcycles on the declaration page. About eight days after purchasing a motorcycle, plaintiff was severely injured when another driver negligently made a left turn in front of plaintiff. As a result of the injuries, plaintiff sought damages in excess of the liability limits of the other driver. Defendant denied underinsured motorist bodily injury benefits based on specific terms of the insurance policy that excluded vehicles with less than four wheels. The trial court granted summary judgment to plaintiff, after concluding that the relevant definitions in the insurance policy impermissibly provided underinsured motorist benefits that are less favorable to the insured than the terms of ORS 742.504 required. A motorcycle, under a common understanding of the term, is a "device" "upon or by which any person" "may be transported *** upon a public highway" and is not "moved by human power" or "used exclusively upon stationary rails or tracks." A motorcycle is therefore a v --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insured May Not Deprive Insurer of Right to Subrogation https://zalma.com/bloghttps://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

How an Insurer Can Succeed With Professional Claims Handlers Read the full article here: http://zalma.com/blog/wp-content/uploads/2023/04/EXCELLENCE.pdf. The Need for Change The insurance business must change—this time for the better—if it is to survive. Insurers must rethink the firing of experienced claims staff and reductions in training to save “expenses” recognizing that the expense to train, educate and maintain a staff of professional claims handlers, is a small part of the money that flows out of an insurer’s coffers. The major expense is the cost to pay claims. When inadequate or inexperienced adjusters pay claims the insurer did not owe, refuse to pay claims it did owe, or pays more than is appropriate, the potential for an insurer to make a profit is reduced much more than is saved by reducing the expense incurred by paying a professional claims staff. Insurers should, if they wish to succeed, adopt a program to promote excellence in claims handling. Only with a staff of claims handlers dedicated to excellence in claims handling can insurers promptly, fairly and in good faith keep the promises made by the insurance policy and avoid charges of breach of contract and the tort of bad faith in both first and third party claims. Insurers must understand that they cannot adequately fulfill the promises they make to their insureds and their obligations under fair claims practices acts without a professional, well trained and experienced claims staff. An insurer must work vigorously and intelligently to create a professional claims department or recognize it will lose its market and any hope of profit. A Proposal to Create Claims Professionals To avoid claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers must, in my opinion, maintain a claims staff dedicated to excellence in claims handling. They must recognize that they, as representatives of the insurer, are obligated to assist the policyholder and the insurer to fulfill all the promises made by the insurer in the wording of the policy. An insurer can create a claims staff dedicated to excellence in claims handling by, at least: If any experienced claims professionals exist on the insurer’s staff, the insurer must cherish and nurture them and use their experience and professionalism to train new claims people. If none are available, the insurer has no option but to train its people from scratch using available materials produced by the National Association of Insurance Commissioners, the State’s Department of Insurance, Insurance associations, and professionals who have – for a reasonable fee – the ability to properly and effectively train claims personnel. (C) 2023 Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Failure to Report, Acknowledge and Make Claim to Your Client's Insurer is Legal Malpractice David Quaknine and several of his companies sued their former attorney and his law firm for alleged malpractice connected to a 2014 suit. The district court granted the defendants' motion to dismiss. It ruled that the two-year limitations period, which at the latest began to run in September 2019, expired before the plaintiffs sued in December 2021. In Concepts Design Furniture, Inc., et al. v. Fisherbroyles, LLP and Alastair J. Warr, No. 22-2303, United States Court of Appeals, Seventh Circuit (March 31, 2023) the Seventh Circuit resolved the dispute. FACTS The parties called Comptoir, which did business from Quebec, Canada, were sued for intellectual-property infringement in 2014. Over a year later, Comptoir hired Alastair Warr and his law firm to negotiate a settlement or, failing that, represent Comptoir in court. Comptoir told Warr that it had a policy with Intact Insurance Company that potentially could cover defense costs and indemnify it for claims. Warr did not advise Comptoir to submit a claim to Intact nor did it do so on its own. The lawsuit did not go well and the disclosures in the suit stated that Comptoir had "no insurance agreement." A jury eventually found against Comptoir with a judgment over three million dollars in damages. In February 2018, Comptoir-through other counsel-told Intact about the attorney's fees. The notice, four years after the suit, was the first time Intact learned of the intellectual-property suit. Comptoir reorganized after the adverse judgment. The bankruptcy court declared Comptoir bankrupt and discharged the judgment debt from the 2014 litigation. Intact denied coverage on September 10, 2019. When it demanded coverage, Comptoir sent to Intact (apparently for the first time) a copy of the complaint in the 2014 suit. In denying Comptoir's demand in September 2019, Intact gave three reasons: the suit against Comptoir was not covered under the policy. because Comptoir "failed to promptly notify Intact of the [2014] Complaint and to immediately upon receipt thereof, deliver to Intact a copy of the Complaint," it violated the policy and forfeited its right to and was "time barred" from reimbursement. Comptoir listed its defense fees "as amounts due to creditors," which implied that only the bankruptcy trustee could collect them. Intact sued seeking a declaration in Cook County Circuit Court that it was not obligated to pay defense fees or indemnify Comptoir. Comptoir made its defense-fees claim outside the three-year statute of limitations applicable under Quebec law. Thus, Comptoir's complaint and subsequent demand for reimbursement of fees was time barred. On December 17, 2021, refusing to admit is errors and failure to promptly act, Comptoir sued Warr and FisherBroyles for legal malpractice. The district court granted Warr and FisherBroyles's motion to dismiss the suit as untimely under Illinois law. Once a malpractice plaintiff is aware of injury the plaintiff is not required to wait for a court's judgment certifying that the plaintiff's attorneys erred. Thus, the limitations clock for Comptoir started when it reasonably should have known of the alleged malpractice and that occurred, at the latest, when Intact sent its letter in September 2019 denying coverage to Comptoir. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurers Must Demand & Prove Restitution Required to Make Them Whole Defendants Alfredo Ayala and Juan Luis Ayala owned farm labor contracting businesses and shared business offices and office staff. Defendants were charged with insurance and tax fraud by underreporting their payroll amounts. Alfredo and Juan pleaded no contest to workers' compensation insurance fraud and tax fraud, agreed to pay restitution to the Employment Development Department (EDD), and requested a restitution hearing to determine restitution owed to their workers' compensation insurance companies. After a hearing, the trial court awarded restitution to the insurance companies measured by the amount of lost premiums caused by defendants' false payroll reporting. In The People v. Alfredo Ayala, The People v. Juan Luis Ayala, F083941, F083974, California Court of Appeals, Fifth District (March 16, 2023) a lengthy opinion reviewing facts in detail and evidence from the defrauded workers' compensation insurers affirmed the restitution orders based on the evidence presented by the insurers. FACTUAL BACKGROUND Defendants stipulated to a factual basis for their pleas based on police reports and grand jury proceedings. Juan pleaded no contest to workers' compensation fraud and tax evasion by false statement, Alfredo pleaded no contest to tax evasion by false statement. PREMIUM FRAUD Typical workers' compensation insurance policies are based on estimates. The experience modification is determined by comparing a specific employer's payroll and losses to other similar employers. The experience modification can lower the premium if the employer has good safety practices but can result in a higher premium if the employer has a negative history of accidents. TRIAL COURT RULING The trial court stated that restitution should make the victims whole and not entitle them to profit but, in this case, the trial court used the findings of the insurance company auditors whom "[q]uite frankly, [it] just felt ... were more credible." DISCUSSION California crime victims have a constitutional and statutory right to receive full restitution for economic losses suffered as a result of a defendant's criminal conduct. When a defendant is convicted and sentenced to state prison, section 1202.4 limits restitution to losses caused by the criminal conduct for which the defendant was convicted. The Trial Court Did Not Abuse Its Discretion In Determining that Defendants' Criminal Conduct Was Responsible for the Insurance Companies' Lost Premiums and the Amounts of those Losses. The Court of Appeals, therefore, concluded that the trial court did not abuse its discretion in calculating restitution in this case and affirm the judgments. ZALMA OPINION Insurance fraud convictions, especially workers' compensation insurance fraud convictions are rare. The fraudsters often get away with their crime. When there is a conviction, like that of the Ayala brothers, must make restitution to the workers' compensation insurers who they admitted they defrauded. The court reviewed the testimony of each insurer and ordered restitution based upon the evidence from the insurers about the premiums they should have received. Those insurers should be emulated by every insurer that is the victim of insurance fraud and provide evidence and demand full restitution, as did the insurers who were defrauded by the Ayalas. Restitution is often paid because failure to pay defeats probation and the defendants go directly to jail. (c) 2023 Barry Zalma & ClaimSchool, Inc. Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Obesity, Diabetes, and Covid Not Basis for Compassionate Release The US Congress, feeling sorry for federal prisoners amended the law to create The First Step Act to allow a District Court to shorten a sentence when there exists extraordinary and compelling reasons to release the Prisoner.  In United States Of America v. Earl Lee Planck, Jr., Criminal No. 5:20-CR-24-KKC-MAS-1, United States District Court, E.D. Kentucky, Central Division, Lexington (March 1, 2023) Earl Lee Planck, Jr  moved the USDC for compassionate release under the statute. Planck was originally sentenced Planck to a prison term of 56 months after he pleaded guilty to conspiring to defraud the United States Crop Insurance Fund, and tax evasion. He is scheduled for release on March 4, 2025. The First Step Act allows the court to grant a motion for compassionate release filed by the defendant himself after the defendant has fully exhausted all administrative rights to appeal a failure of the Bureau of Prisons to bring a motion on the defendant's behalf or the lapse of 30 days from the receipt of such a request by the warden of the defendant's facility, whichever is earlier. The compassionate release statute permits the Court to “reduce the term of imprisonment” and “impose a term of probation or supervised release with or without conditions that does not exceed the unserved portion of the original term of imprisonment.” The Court may grant this relief only if it finds that “extraordinary and compelling reasons" warrant such a reduction, and the reduction is consistent with applicable policy statements issued by the Sentencing Commission. Planck did not set forth any circumstances that the Court could find extraordinary and compelling. He stated he has various medical conditions that put him at an increased risk of serious complications if he contracts COVID-19, including heart disease, high blood pressure, sleep apnea, diabetes, and obesity. The USDC noted that the Court sentenced Planck below the advisory guideline range of 78 to 97 months. He has not yet served even half of the sentence imposed by the Court and he has available treatment for his conditions and the availability of vaccines. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

After Rescission an Insurer May be Required Only to Pay an Innocent Injured Person On rare occasions bus accidents create a temptation to passengers to claim injuries as soon as it looks like insurance may apply. When the passengers on a bus insured by West Bend Mutual Insurance Company (West Bend), their injuries appeared like magic. As a result of its attempted investigation of a bus accident, West Bend moved for summary judgment and defendant Citizens Insurance Company of the Midwest's (Citizens) responded and filed a counter motion for summary judgment. In West Bend Mutual Insurance Company v. Affiliated Diagnostic Of Oakland, LLC, et al., Civil Action No. 21-cv-11007, United States District Court, E.D. Michigan, Southern Division (February 21, 2023) the USDC weighed the equities and resolved the dispute between two insurers. BACKGROUND West Bend's amended complaint states that multiple individuals (“claimants”) allege that they were involved in an automobile accident on February 3, 2020. West Bend insured Kristy's Early Childhood Development Center, Inc. (Kristy's), pursuant to which West Bend undertook to insure Kristy's solely against risks associated with the childcare business. At the time of the accident, West Bend alleged that the vehicle was not being used for the childcare business but was instead being used by a separate business entity, DLB Transportation LLC, which had held the vehicle out for hire to the claimants. West Bend determined that Kristy's had made material misrepresentations or concealed material facts when the policy was issued in so far as DLB would be using the vehicle in connection with its business. West Bend sought rescission of the policy and a declaration that the policy was void ab initio. Only one defendant appeared in this matter and now remains: Citizens is the assigned claims plan insurer for the claims arising out of the underlying accident. In its motion for summary judgment, West Bend seeks to extend rescission of the policy as to 16 natural person defendants and certain medical providers who allegedly provided services to natural person defendants. ANALYSIS Rescission Of An Insurance Policy As To Innocent Third Parties Under Michigan Law Requires A Balancing Of The Equities Rescission as to innocent third parties is not an absolute right. When two equally innocent parties are affected, the court is required, in the exercise of its equitable powers, to determine which blameless party should assume the loss. West Bend demonstrated that it did not have any notice or opportunity to discover the true use of the vehicle. An insurer has a reasonable right to expect honesty in the application for insurance. WEST BEND'S ADDITIONAL FACTORS WEIGH IN FAVOR OF RESCISSION West Bend offers two additional arguments in support of rescission. As Citizens acknowledges: West Bend urged that natural person defendants have repeatedly stonewalled and thwarted West Bend's efforts to investigate their claims and alleged injuries and that their failure to participate in this litigation has resulted in a substantial increase in time and cost for West Bend to prosecute this case. The bus passengers' refusal to participate in litigation regarding rescission of the policy as against them suggests either ambivalence or acquiescence in the relief sought by West Bend. ZALMA OPINION It was clear that the insured lied on the application and rescission was appropriate. Whether the injured and the insurer who paid their no-fault benefits - innocent of the misrepresentation - were entitled to recover. Their default and refusal to submit to an examination under oath placed the equities in favor of West Bend who had been defrauded and the 14 people on the bus who claimed injuries only after a police officer arrived made the case a classic bus jumping case that protected West Bend. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL Volume 27, Issue 7 The Source For Insurance Fraud professionals https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

No Contract Compelling Arbitration Between Insurer and Insured No Arbitration In Alex Weingarten v. Certain Underwriters At Lloyd's, London Subscribing To Policy Number IML-0114N0-190029, B321148, California Court of Appeals, Second District, Fourth Division (March 23, 2023) Certain Underwriters at Lloyd's, London (Lloyd's Underwriters) appealed from the trial court's order denying their motion to compel arbitration of plaintiff Alex Weingarten's complaint for breach of implied covenant of good faith and fair dealing, intentional infliction of emotional distress, and negligent misrepresentation. FACTUAL BACKGROUND The Underlying Malpractice Action In 2013, Adam Levin, Tristen Lazareff, and Criterion Capital Partners, LLC, retained Weingarten Brown LLP to defend them in the case entitled MXB Holdings LP, et al. v. Adam Levin, et al (the MXB action). The retainer agreement (the Levin/Weingarten retainer agreement) contained an arbitration provision. Adam Levin and Criterion Capital Partners, LLC, filed an action in the Los Angeles Superior Court for legal malpractice and breach of fiduciary duty against Weingarten et al (the malpractice action). The complaint alleged Weingarten negligently represented the defendants in the MXB action. The parties later stipulated to arbitration before JAMS based on the arbitration provision in the retainer agreement. Weingarten notified Lloyd's Underwriters about the malpractice action, and Lloyd's Underwriters accepted the defense of the Weingarten defendants. The arbitrator found in favor of Adam Levin and Criterion Capital Partners, LLC, and issued an award that exceeded Weingarten's insurance coverage. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Intoxicated Driving Not in the Course and Scope of Employment https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Satisfaction of Mortgage Eliminates Right of Mortgagee to Recover from Homeowners Policy In Thomas P. Williams, Sr. v. Nationwide Insurance a/k/a Nationwide Mutual Insurance Company, Civil Action No. 22-1090, United States District Court, E.D. Pennsylvania (March 24, 2023) Nationwide denied the claim of its insured because they failed to comply with the Policy's post-loss duties by failing to appear for scheduled examinations, not producing requested documents, making material misrepresentations to Nationwide and because Nationwide's investigation of the fire revealed that it was “intentionally set.” The homeowners sold the fire-damaged property to the plaintiff. The money from the sale was used to satisfy the entirety of the homeowners' outstanding mortgage with a bank. The plaintiff requested that the insurer reimburse him for the amount he claims he paid toward satisfying the homeowners' mortgage. He based his request on a standard mortgage clause in the homeowners' insurance policy, which stated that a denial of the homeowners' claim would not preclude payment to a valid claim of the mortgagee. The insurer refused to pay the plaintiff's claim and the plaintiff sued. PROCEDURAL HISTORY The plaintiff Thomas P. Williams alleged that he had purchased a fire-damaged property and paid off the mortgage encumbering the property. FACTUAL BACKGROUND The Ruchs owned property located in Albrightsville, PA (“the Property”). They had insured the Property for property damage under a policy with Nationwide (“the Policy”) and had a mortgage on the Property with PNC Bank NA (“PNC”). A fire caused damage to the Property. The Ruchs submitted a claim to Nationwide under the Policy, and Nationwide eventually determined that the amount of the adjusted claim was $103,000.00. However, Nationwide later denied the claim because of breach of condition and fraud. At the time of the sale, the Ruchs owed $135,490.13 on the mortgage to PNC and used the funds from the sale to satisfy the outstanding balance. At that time, Nationwide had not made any payment to PNC pursuant to the mortgage clause. After receiving the payment, PNC filed a Satisfaction of Mortgage with the Carbon County Recorder of Deeds. DISCUSSION Williams argued that because his funds paid to the Rauch's satisfied the mortgage on the Property and because Nationwide would have had to pay PNC if it fulfilled the policy conditions, he stepped into the shoes of PNC. There was no evidence demonstrating Williams assumed any legal rights under the mortgage. While Williams novel argument demonstrates a logical creativity, he cites no case law, and the court found none to support his contention that a purchaser of a property steps into the shoes of the mortgagee when the funds from the purchase are used to satisfy an outstanding mortgage. Duty to Pay Pursuant to the Mortgage Clause --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Forum Non Conveniens Dismissal Is Not A Judgment On The Merits The Fifth Circuit Court of Appeals resolved insurance issues concerning cable-damage in the Arabian Gulf by recognizing the difference between a broker and an agent, the place where - and to whom - a policy was delivered, and how to deal with the issue personal jurisdiction the court has over the parties and that a forum non conveniens dismissal is not a judgment on the merits; it is, instead a determination that the merits should be adjudicated elsewhere. In Dynamic Industries, et al v. Walaa Cooperative Insurance Company; Marsh & McLennan et al, No. 22-30033, United States Court of Appeals, Fifth Circuit (March 13, 2023) the disputes were resolved. CLAIM OF INSUREDS The insureds (Dynamic) assert that their insurance brokers (Marsh) failed to procure adequate insurance coverage from the insurer (Walaa), or in the alternative, that Walaa breached the insurance policy by declining coverage for an incident involving undersea cable-damage in the Arabian Gulf. DISCUSSION First, as for Marsh, Louisiana law requires insureds who wish to sue their insurance broker to do so "within one year from the date that the alleged act, omission, or neglect . . . should have been discovered." [La. Rev. Stat. § 9:5606]. Case Against Broker Dynamic sued Marsh after Walaa denied coverage. But Dynamic received a copy of the insurance policy from Walaa almost 18 months earlier. When Dynamic received that copy, it also received constructive notice of any deficiencies that the policy contained. Dynamic's claims against Marsh are therefore untimely. Choice of Jurisdiction --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Occupancy Provision Prevents Coverage for Insured Injured as a Pedestrian George Mims was injured when he was struck by an automobile while walking toward his own vehicle. At the time of the accident Mims had no contact with his vehicle, either before or after the accident, and there was no causal connection between his vehicle and the injuries he suffered. In George Mims; Cecilia Mims v. USAA Casualty Insurance Company, No. 21-1654, United States Court of Appeals, Fourth Circuit (March 21, 2023), George and Cecilia Mims appealed the district court's orders granting USAA Casualty Insurance Company's motion for summary judgment and denying the Mimses' subsequent motion to alter or amend the judgment or for certification of questions to the South Carolina Supreme Court on the Mimses' declaratory judgment action related to the stacking of underinsured motorist coverage under their insurance policy with USAA. SOUTH CAROLINA LAW Summary judgment is only warranted if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Under South Carolina law, stacking allows an insured motorist to recover damages under more than one policy until he satisfies all of his damages or exhausts the limits of his available policies. An insured may stack unless limited by statute or a valid provision in his insurance policy. South Carolina law limits stacking of underinsured motorist coverage if none of the insured's or named insured's vehicles is involved in the accident. Instead, coverage is available only to the extent of coverage on any one of the vehicles with excess or underinsured coverage. THE RECORD The record made clear that Mims had no contact with his vehicle, either before or after the accident, and established that there was no causal connection between his vehicle and the injuries he suffered. Mims was walking to his vehicle at the time he was struck but, according to his own testimony, he had not yet reached his vehicle or physically engaged with it besides unlocking it remotely from across the parking lot. ANALYSIS Regardless of whether the Mims' policy provision broadens or narrows the circumstances in which stacking is allowed, the circumstances here are not encompassed by the provision, as Mims was not "in, on, getting into or out of" his vehicle at the time of the accident. Under South Carolina law, act of getting to or approaching a vehicle is beyond terms of insurance policy with occupancy provision. ZALMA OPINION Although stacking is important to a person injured by an uninsured or underinsured motorist, when there is a policy that requires the insured to occupy his vehicle for there to be coverage, the right to stacking becomes irrelevant. since Mr. Mims was not "in, on, getting into or out of his vehicle" at the time of the accident. When there is no coverage at all there is no need to stack coverages. (c) 2023 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Forum Non Conveniens Dismissal Is Not A Judgment On The Merits The Fifth Circuit Court of Appeals resolved insurance issues concerning cable-damage in the Arabian Gulf by recognizing the difference between a broker and an agent, the place where - and to whom - a policy was delivered, and how to deal with the issue personal jurisdiction the court has over the parties and that a forum non conveniens dismissal is not a judgment on the merits; it is, instead a determination that the merits should be adjudicated elsewhere. In Dynamic Industries, et al v. Walaa Cooperative Insurance Company; Marsh & McLennan et al, No. 22-30033, United States Court of Appeals, Fifth Circuit (March 13, 2023) the disputes were resolved. CLAIM OF INSUREDS The insureds (Dynamic) assert that their insurance brokers (Marsh) failed to procure adequate insurance coverage from the insurer (Walaa), or in the alternative, that Walaa breached the insurance policy by declining coverage for an incident involving undersea cable-damage in the Arabian Gulf. DISCUSSION First, as for Marsh, Louisiana law requires insureds who wish to sue their insurance broker to do so "within one year from the date that the alleged act, omission, or neglect . . . should have been discovered." [La. Rev. Stat. § 9:5606]. Case Against Broker Dynamic sued Marsh after Walaa denied coverage. But Dynamic received a copy of the insurance policy from Walaa almost 18 months earlier. When Dynamic received that copy, it also received constructive notice of any deficiencies that the policy contained. Dynamic's claims against Marsh are therefore untimely. Choice of Jurisdiction Dynamic argued that the Walaa policy's choice of Saudi Arabian law is unenforceable, under Louisiana law, if the policy was "delivered" in Louisiana. Dynamic says that it received delivery in Louisiana from Walaa's agent - a Marsh affiliate known as Marsh KSA. Walaa responded that Marsh KSA was actually Dynamic's agent, and that delivery therefore occurred in Saudi Arabia (where Walaa delivered the policy to Marsh KSA). The Fifth Circuit agreed with Walaa since Marsh, as a broker, is an agent of the insured not the insurer. Under Louisiana law, an insurance broker is generally deemed to be the agent of the insured rather than the insurer. A broker who is asked by the client to procure coverage wherever possible at the best price is not the agent of the insurer. Marsh KSA "approached" multiple insurers looking for a "competitive price" for Dynamic. Marsh KSA was thus Dynamic's agent. After conducting an independent assessment of the clause's enforceability, the district court properly concluded that delivery occurred in Saudi Arabia to the agent of the insured. LACK OF PERSONAL JURISDICTION Separately, the district court concluded that it lacked personal jurisdiction over a Marsh affiliate known as Marsh & McLennan Companies, Inc. ("Marsh Inc.). Yet the district court's judgment dismissed Dynamic's claims against Marsh Inc. "with prejudice" - that is, on the merits. " A federal court generally may not rule on the merits of a case without first determining that it has jurisdiction over the parties i.e., personal jurisdiction. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Claims Made Policy May Not Respond to Claims Made After Expiration of the Policy Twin City Fire Insurance Company sold a malpractice insurance policy to John S. Xydakis, an attorney and one of the Defendants. Xydakis made claims under the policy based on lawsuits and motions filed against him in Illinois state court. Twin City sought a declaratory judgment that it owes no insurance coverage to Defendants for these claims or, in the alternative, rescission of the policy. In Twin City Fire Insurance Company v. Law Office Of John S. Xydakis, P.C., et al., No. 18 C 6387, United States District Court, N.D. Illinois, Eastern Division (March 20, 2023) the USDC resolved the dispute. BACKGROUND Underlying Lawsuits The Chen Lawsuit. Fiona Chen Consulting Company (“Chen Consulting”) sued Xydakis for failing to pay retained expert witness fees. All the acts and conduct related to the Chen Lawsuit occurred between January 2012 and November 2012. The Spiegel Motions for Sanctions. Litigants in a separate set of lawsuits (collectively the “Spiegel Lawsuits”) brought three motions for sanctions The presiding Cook County judge ruled on all three motions and entered judgment against Spiegel and Xydakis for over $1,000,000. The Klein Lawsuit. On August 14, 2019, Tiberiu Klein filed a complaint against Twin City and Xydakis alleging legal malpractice, breach of contract, and breach of fiduciary duty. The Twin City Insurance Policy In December 2016, Xydakis applied for legal malpractice insurance coverage from Twin City. Twin City underwrote and issued a claims-made-and-reported Lawyers' Professional Liability Policy to the Law Office of John S. Xydakis (the “Policy”). DISCUSSION Under Illinois law, the insurer's duty to defend arises when the facts alleged in the underlying complaint fall within, or potentially within, the policy's provisions. The insured bears the burden of proving that its claim falls within the policy's coverage. Once the insured has established coverage, the burden shifts to the insurer to prove that a limitation or exclusion applies. Xydakis had until March 27, 2018 to make claims under the Policy. The Chen Lawsuit, the Spiegel Motions for Sanctions, and the Klein Lawsuit each fall outside the Policy's scope of coverage, either for underlying conduct occurring before its retroactive date or for claims made after its expiration. ESTOPPEL Xydakis argued that a genuine issue of material fact exists as to whether Twin City should be estopped from denying coverage. Estoppel only applies where the insurer has breached its duty to defend. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

California Insurance Code § 533 Prohibits Insurance for Wilful Acts of the Insured Aspen Specialty Insurance Company appealed from the district court order dismissing its complaint against Miller Barondess, LLP, and several of its partners (collectively "MB"). Aspen appealed to the Ninth Circuit in Aspen Specialty Insurance Company v. Miller Barondess, LLP Louis R. Miller; James Goldman; Alexander Frid; Jason Tokoro, No. 22-55032, United States Court of Appeals, Ninth Circuit (March 15, 2023) who interpreted California Insurance Code § 533. DISCUSSION Under California statutory law, "[a]n insurer is not liable for a loss caused by the wilful act of the insured." [Cal. Ins. Code § 533.] Section 533 is considered a statement of the public policy of the state of California. It was enacted to prevent encouragement of wilful torts. Section 533 is a codification of the jurisprudential maxim that no man shall profit from his own wrong. It is an implied exclusionary clause which, by statute, must be read into all insurance policies. As a result, the parties to an insurance policy cannot contract for such coverage. THE TRIAL COURT The district court concluded that § 533 did not apply because there was no final adjudication that the insureds engaged in malicious prosecution. The California Court of Appeal had concluded that § 533 precluded indemnification for an underlying malicious prosecution action, even though the matter had been settled without a final adjudication. California precedent confirmed that courts examine the allegations of the underlying complaint, not whether there has been an adjudication of the allegations, in determining whether § 533 bars coverage. Insurance coverage is precluded by Insurance Code § 533 as a matter of law. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

MCS-90 Is a Surety Agreement Different from the Insurance Policy https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

No Coverage if Person Fails to Qualify as an Insured  Plaintiff CSAA Fire & Casualty Insurance Company (CSAA) sued Roman  Ramirez and eventually filed a Motion for Summary Judgment. In CSAA Fire  & Casualty Insurance Company v. Roman Ramirez, No. 2:22-cv-00318-RFB-EJY,  United States District Court, D. Nevada (March 10, 2023) the USDC  resolved the coverage issue.  Where the record taken as a whole could not lead a rational trier of  fact to find for the nonmoving party, there is no genuine issue for  trial. If a party fails to properly support an assertion of fact or  fails to properly address another party's assertion of fact the court  may:  give an opportunity to properly support or address the fact; consider the fact undisputed for purposes of the motion; grant summary judgment if the motion and supporting materials -  including the facts considered undisputed - show that the movant is  entitled to it; or issue any other appropriate order.  FACTUAL BACKGROUND   The Court accepted the following facts as undisputed, based on  Plaintiff's Motion for Summary Judgment and the supporting materials in  the record.  Plaintiff is an insurance company who maintains a homeowner's insurance  policy (“The Policy”) held by the named insured, Maria M. Armendarez. The policy was in full force and effect on May 4, 2017, and covers the  property located at 2421 Old Forge Lane, Unit 104, Las Vegas, Nevada  89121 (“Unit 104”). While the property covered by the policy was Unit 104, the policy  agreement lists Ms. Maria Armendarez's residence at a different  location, namely 219 La Paz Avenue, Henderson, Nevada 89015.  An incident took place on May 4, 2017 (“the Incident”) involving  Defendant that resulted in an underlying state court case being filed  against him by Mr. Juan Severin. At the time of the Incident, Unit 104  was being rented out by Ms. Maria Armendarez to an unrelated family of  three individuals: Loraine Gonzalez, Tony Gonzalez, and their child Luke  Gonzalez. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Investigation of Suspected Fraud   See the full article at https://zalma.com/blog Every first-party property adjuster will face in his or her career  attempts to defraud the insurer for whom the adjuster works. It is  necessary that the adjuster is aware of each type of property insurance  fraud he or she may encounter. Some, but surely not all, fraud types  follow:  Arson-for-Profit.  Arson is the intentional burning of property. It no longer is limited to  specific types of property. Although perhaps the most dangerous of all  methods of insurance fraud, people continue to attempt insurance fraud  by burning their homes, vehicles, and business structures. The FBI  advises that:  In 2010, 15,475 law enforcement agencies provided 1-12 months of arson  data and reported 56,825 arsons.  Of the participating agencies, 14,747  provided expanded offense data regarding 48,619 arsons.  Arsons involving structures (e.g., residential, storage, public, etc.)  accounted for 45.5 percent of the total number of arson offenses. Mobile  property was involved in 26.0 percent of arsons, and other types of  property (such as crops, timber, fences, etc.) accounted for 28.5  percent of reported arsons.  The average dollar loss due to arson was $17,612. Arsons of industrial/manufacturing structures resulted in the highest  average dollar losses (an average of $133,717 per arson). Arson offenses decreased 7.6 percent in 2010 when compared with arson  data reported in 2009.... Nationwide, there were 19.6 arson offenses for every 100,000  inhabitants.  By use of technical devices, chemical analysis, and even trained dogs it  has become more difficult for the arsonist to cause a fire that appears  to a trained investigator to be accidental.  Arson is not excluded in any first party fire policy.  It is, in fact, a  specifically covered peril: fire. There is no arson defense available to  an insurer. The defense for an arson caused by an insured to defraud an  insurer is misrepresentation, concealment, or fraud, an exclusion in  every fire policy.  There is rarely direct evidence that a fire was set by an insured.  Without an eyewitness or other direct evidence, the insurer can prove  the insured was involved in an arson-for-profit circumstantially by  presenting evidence of the insured’s motive, opportunity and ability to  cause the fire. Motive is not required to prove arson although showing a  trier of fact a motive makes it easier for the trier of fact to believe  the insured caused the fire to occur to defraud the insurer.  In Fitzgerald v. Great Central Insurance Co., 842 F.2d 157 (6th Cir.  03/18/1988) following a fire, plaintiffs’ claim for benefits was denied.  The insurers claimed that Gerald Fitzgerald set or procured the setting  of the fire. Plaintiffs then filed a complaint against Aetna and Great  Central for breach of contract.  On the night of the fire, Gerald Fitzgerald, his son and the family dog,  who lived in the apartment above the tavern, were all absent from the  building. Gerald Fitzgerald spent the night at the Coho Club in Traverse  City and left his son and dog with a friend. Michael Husby, who also  lived in Fitzgerald’s apartment and had recently bought into the  corporation, visited the bar during the evening but spent the rest of  the night at his girl-friend’s house.  Staged Theft --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

No Compelling Reason to Release Convicted Arsonist and Murderer Read the full blog at https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

"Caused by" is Synonymous with "Arises From" Read the full blog post at https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

In Martinique Properties, LLC v. Certain Underwriters at Lloyd's of  London, Subscribing to Policy Number W1551E160301; Beazley Lloyd's  Syndicate 2623; Beazley Lloyd's Syndicate 623, No. 21-3561, United  States Court of Appeals, Eighth Circuit (March 1, 2023) the Eighth  Circuit interpreted the Federal Arbitration Act as applied to an  insurance appraisal.  Read the full blog at https://zalma.com/blog  FACTS  Martinique Properties, LLC sued the Certain Underwriters at Lloyd's,  London (Underwriters) seeking to vacate an arbitration award. The  district court dismissed the complaint for failure to state a claim for  vacatur. Martinique Properties appealed.  Martinique Properties owned apartments in Omaha, Nebraska, for which it  had property insurance coverage through Underwriters. In May 2016, while  the policy was in effect, the apartments sustained hail and wind  damage. Martinique Properties submitted an insurance claim for  reimbursement of its repair costs and the Underwriters and Martinique  disputed the amount owed for the repairs.   The insurance policy included an appraisal provision, which governed the  process for resolving disagreements as to the amount of loss or the  value of the property. Under the provision, a panel of appraisers was to  evaluate the property damage and determine the amount of loss. If the  panel came to a decision, its agreed-upon appraisal award would be  binding on the parties.  Martinique Properties invoked the appraisal provision. A panel of  appraisers agreed on a binding appraisal award in June 2020. The suit  against Underwriters sought a declaration that the appraisal process and  award were invalid. According to Martinique Properties, the award  incorporated incorrect figures and measurements.  The district court granted Underwriters' motion to dismiss, finding that  none of Martinique Properties' allegations presented appropriate  grounds for vacatur.  ANALYSIS  The Arbitration Act is a congressional declaration of a liberal federal  policy favoring arbitration agreements. Under the Act a court may only  vacate an arbitration award in four limited circumstances, and in the  absence of one of these grounds, the award must be confirmed. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Failure to Fulfill Protective Safeguards Endorsement Defeats Fire Claim   See the full blog post at https://zalma.com/blog In Frankenmuth Mutual Insurance Company v. Fun F/X II, Inc. and Cao  Enterprises II, LLC, No. 22-1933, United States Court of Appeals,  Seventh Circuit (February 28, 2023) the insurer rejected a fire claim  because the named insured knew, and didn't tell, Frankenmuth, that the  sprinklers in his warehouse had no water, a material condition precedent  of the policy.  Fun F/X II, Inc. and Cao Enterprises II, LLC (collectively "FUN”) sought  insurance coverage after a warehouse fire. The relevant insurance  policy issued by appellee Frankenmuth Mutual Insurance Company provides  that it does not cover losses if prior to the fire the policy holder  knew of a suspension or impairment in an automatic sprinkler system yet  failed to notify Frankenmuth of the issue. Based on this policy  exclusion, the district court granted summary judgment for Frankenmuth.   UNDISPUTED FACTS  FUN is a costume and theatrical supply retailer that stored its  inventory in a warehouse in South Bend, Indiana owned by Cao Enterprises  II, LLC. Victor Cao is the sole member of Cao Enterprises II, LLC and  the sole stockholder of FUN. Cao purchased the warehouse in 1999. It  then had a Functional sprinkler system with a working supply of water.  Cao replaced the sprinkler heads around 2004 and hired inspection  companies for routine system testing. In 2016, an inspector from Legacy  Fire Protection found no problems.   THE FIRE  A fire destroyed the warehouse and all of its contents on July 26, 2019.  FUN claimed losses exceeding $7 million. The sprinkler system still did  not have any water flowing to it. After the fire, the source of the  problem was discovered:  The city apparently had cut and capped the pipe supplying the sprinkler  system in April 2017 when the building next door was demolished. Cao was  told that the worker cutting the pipe incorrectly believed the FUN  warehouse was being demolished as well.  Frankenmuth Mutual Insurance Company’s policy contained an exclusion  providing that Frankenmuth "will not pay for loss or damage caused by or  resulting from fire if, prior to the fire, you: 1. Knew of any  suspension or impairment in any protective safeguard listed in the  Schedule above and failed to notify us of that fact." --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Being a good neighbor is hard work.  Read the full article at https://zalma.com/blog Sometimes it’s impossible. Marsha  was not a good neighbor. She would “borrow” things from her neighbors  and never return them. Most of her small kitchen appliances arrived  because of such loans. Marsha had an extensive collection of CDs and  long-playing records, none of which she purchased. Marsha would invite  herself to lunch, but never invite her neighbors to her home for lunch.  She would play her stereo at its highest volume level at all hours of  the day and night. Everyone who lived within six houses of Marsha lost  sleep because of her actions. None of her neighbors liked Marsha.  Marsha kept a bull terrier named “Jaws” whom she did not allow in her  house.  Jaws, however, would escape the backyard weekly. Neighborhood  cats, rabbits and small dogs disappeared with some regularity.  The entire neighborhood universally detested Marsha and Jaws. If Marsha  ever decided to move, the neighbors would throw a going away party to  which they would not invite her. Everyone in the neighborhood was afraid  of Marsha and Jaws. They tolerated her because they did not know how to  remove her from the neighborhood.  One summer evening while Marsha was attending a concert, burglars  entered her house. Jaws, sensing the burglars in the house, barked  furiously but could do nothing since Marsha tied him up in the backyard.   The neighbors ignored Jaw’s barking since they were afraid to offend  Marsha by complaining about the noise. Marsha lost her jewelry, two  television sets, two VCR’s, her stereo set and her microwave oven.  Marsha’s neighbors had other plans. Harry and Louise, who lived next  door, looked up the address of the insurance company in their telephone  book. They then sat at an old Underwood manual typewriter and wrote a  letter to the insurance company that said: --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Suing an Insurer & its Chairman as Racist for Denial of Claim is not Viable https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ERISA Plan Must be Enforced as Written   When Anthony Hayes' employment ended, so did his employer-provided life  insurance. Hayes then missed the deadline to convert his coverage to an  individual policy. After Hayes died, his surviving spouse filed suit  seeking relief under a provision of the Employee Retirement Income  Security Act allowing "a participant or beneficiary" of an employee  benefit plan "to recover benefits due" "under the terms of [the] plan."   In Kathy Hayes v. Prudential Insurance Company Of America, No. 21-2406,  United States Court of Appeals, Fourth Circuit (February 23, 2023) Ms.  Hayes sought benefits under an employee life insurance policy based on  equity - that the decedent was too ill to convert his employee life  policy to a personal policy even though he did not comply with the  requirement of the ERISA plan.  FACTS  Hayes worked as an environmental engineer for DSM North America, Inc.,  and had an employer-provided life insurance policy with defendant  Prudential Insurance Company. Prudential was both the insurer and the  administrator of the employer-provided benefit plan. The plan gave  Prudential "the sole discretion to interpret [the plan's] terms . . .  and to determine eligibility for benefits." --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurance Agent Who Kept Premium Money Loses License --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL Volume 27, Issue Number 5   Read the full text of ZIFL at http://zalma.com/blog/wp-content/uplo....   McClenny Moseley & Associates & Insurance Fraud  The McClenny Moseley & Associates (MMA) series of lawsuits, court hearings and insurance department actions have brought about some very serious problems for MMA, including court orders, lawsuit dismissals, administrative cease and desist orders and litigation, all of which have created a poster child for Zalma’s Insurance Fraud Letter.  Since MMA has admitted that it reported a claim to various insurers, including Allied Insurance, that it was presenting claims against Allied and at least 856 claims to Allied and other insurers, that it represented the insured when, in truth and fact, it did not represent the insurer’s insureds.  Therefore, it appears, subject to the review of the Louisiana Attorney General and/or local prosecutors, MMA violated Louisiana fraud statutes, and each insurer who is a victim of one or more of the minimum of 856 fraudulent claims where MMA represented it was the attorney of the insurers’ insureds was a criminal fraudulent act.   There will be more hearings in March 2023 that will be reported in the March 15, 2023 issue of ZIFL.  Read the full article and the full ZIFL at http://zalma.com/blog/wp-content/uplo.... --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ERISA Plan Must be Enforced as Written   When Anthony Hayes' employment ended, so did his employer-provided life insurance. Hayes then missed the deadline to convert his coverage to an individual policy. After Hayes died, his surviving spouse filed suit seeking relief under a provision of the Employee Retirement Income Security Act allowing "a participant or beneficiary" of an employee benefit plan "to recover benefits due" "under the terms of [the] plan."   In Kathy Hayes v. Prudential Insurance Company Of America, No. 21-2406, United States Court of Appeals, Fourth Circuit (February 23, 2023) Ms. Hayes sought benefits under an employee life insurance policy based on equity - that the decedent was too ill to convert his employee life policy to a personal policy even though he did not comply with the requirement of the ERISA plan.  FACTS  Hayes worked as an environmental engineer for DSM North America, Inc., and had an employer-provided life insurance policy with defendant Prudential Insurance Company. Prudential was both the insurer and the administrator of the employer-provided benefit plan. The plan gave Prudential "the sole discretion to interpret [the plan's] terms . . . and to determine eligibility for benefits."  In 2015, Hayes lost his job because of medical issues and his employer-provided life insurance coverage ended. The terms of the plan, however, allowed former employees to convert employer-provided coverage to an individual policy. To do so, the plan required Hayes to initiate the conversion process "by the later of" 31 days after his employer-provided coverage ended or 15 days after receiving "written notice of the conversion privilege."   Hayes did not contact Prudential about converting his life insurance policy until 26 days after the conversion deadline. Hayes' health continued to deteriorate, and he died in June 2016.  Plaintiff submitted a request for benefits, which Prudential denied. The claim administrator explained Hayes' employer-provided "coverage terminated on 11/16/15," and although Hayes "was eligible to convert his Group Basic Life Insurance," "there is no conversion policy on file."  The district court entered judgment for Prudential.   ANALYSIS  ERISA regulates employee benefit plans by establishing standards of conduct, responsibility, and obligation for fiduciaries of those plans, and by providing for appropriate remedies, sanctions, and ready access to the federal courts. ERISA creates a wide range of public and private enforcement mechanisms.  Plaintiff countered that she is not asserting that the plan terms should be rewritten. Instead, she asks the Court to apply the doctrine of equitable tolling to allow for an exception to the life insurance conversion deadline set forth in the policy because Hayes was incapacitated during the conversion period. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Suing an Insurer & its Chairman as Racist for Denial of Claim is not Viable --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Being a good neighbor is hard work.  Sometimes it’s impossible. Marsha was not a good neighbor. She would “borrow” things from her neighbors and never return them. Most of her small kitchen appliances arrived because of such loans. Marsha had an extensive collection of CDs and long-playing records, none of which she purchased. Marsha would invite herself to lunch, but never invite her neighbors to her home for lunch.   She would play her stereo at its highest volume level at all hours of the day and night. Everyone who lived within six houses of Marsha lost sleep because of her actions. None of her neighbors liked Marsha.  Marsha kept a bull terrier named “Jaws” whom she did not allow in her house. Jaws, however, would escape the backyard weekly. Neighborhood cats, rabbits and small dogs disappeared with some regularity.   The entire neighborhood universally detested Marsha and Jaws. If Marsha ever decided to move, the neighbors would throw a going away party to which they would not invite her. Everyone in the neighborhood was afraid of Marsha and Jaws. They tolerated her because they did not know how to remove her from the neighborhood.  One summer evening while Marsha was attending a concert, burglars entered her house. Jaws, sensing the burglars in the house, barked furiously but could do nothing since Marsha tied him up in the backyard. The neighbors ignored Jaw’s barking since they were afraid to offend Marsha by complaining about the noise. Marsha lost her jewelry, two television sets, two VCR’s, her stereo set and her microwave oven.  Marsha’s neighbors had other plans. Harry and Louise, who lived next door, looked up the address of the insurance company in their telephone book.  They then sat at an old Underwood manual typewriter and wrote a letter to the insurance company that said:  “We are neighbors of Marsha, the person you insure. We know she has reported a burglary at her house to the police and is making claim for losses due to that burglary.  “The claim is a fraud. Marsha’s house was not burglarized. She did not have the items she is claiming stolen.  They then signed their names. Three other neighbors did the same.  The SIU investigator interviewed Harry and Louise and all of the other neighbors. They convinced the investigator that Marsha was not a credible person. The investigator believed Marsha was a despicable person. He knew she was the one who the three neighbors spoken to believed to be a fraud. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Failure to Fulfill Protective Safeguards Endorsement Defeats Fire Claim   In Frankenmuth Mutual Insurance Company v. Fun F/X II, Inc. and Cao Enterprises II, LLC, No. 22-1933, United States Court of Appeals, Seventh Circuit (February 28, 2023) the insurer rejected a fire claim because the named insured knew, and didn't tell, Frankenmuth, that the sprinklers in his warehouse had no water, a material condition precedent of the policy.  Fun F/X II, Inc. and Cao Enterprises II, LLC (collectively "FUN”) sought insurance coverage after a warehouse fire. The relevant insurance policy issued by appellee Frankenmuth Mutual Insurance Company provides that it does not cover losses if prior to the fire the policy holder knew of a suspension or impairment in an automatic sprinkler system yet failed to notify Frankenmuth of the issue. Based on this policy exclusion, the district court granted summary judgment for Frankenmuth.  UNDISPUTED FACTS  FUN is a costume and theatrical supply retailer that stored its inventory in a warehouse in South Bend, Indiana owned by Cao Enterprises II, LLC. Victor Cao is the sole member of Cao Enterprises II, LLC and the sole stockholder of FUN. Cao purchased the warehouse in 1999. It then had a Functional sprinkler system with a working supply of water. Cao replaced the sprinkler heads around 2004 and hired inspection companies for routine system testing. In 2016, an inspector from Legacy Fire Protection found no problems.  THE FIRE  A fire destroyed the warehouse and all of its contents on July 26, 2019. FUN claimed losses exceeding $7 million. The sprinkler system still did not have any water flowing to it. After the fire, the source of the problem was discovered:  The city apparently had cut and capped the pipe supplying the sprinkler system in April 2017 when the building next door was demolished. Cao was told that the worker cutting the pipe incorrectly believed the FUN warehouse was being demolished as well.  Frankenmuth Mutual Insurance Company’s policy contained an exclusion providing that Frankenmuth "will not pay for loss or damage caused by or resulting from fire if, prior to the fire, you: 1. Knew of any suspension or impairment in any protective safeguard listed in the Schedule above and failed to notify us of that fact."  It was undisputed that Cao never notified the insurer after he learned in September 2017 that the sprinkler system lacked a working water supply. It is also undisputed that no one ever told Cao before the fire that the water flow had been restored.  Frankenmuth sued seeking a declaratory judgment that it did not owe insurance coverage to FUN for losses from the fire.  The court found the sprinkler system had no water flowing to it-and that FUN, through Cao, knew of this impairment yet failed to notify Frankenmuth. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Conviction for Second-Degree Reckless Homicide Could be an Accident   When there is a severe injury, like the criminal death of a child,  litigation results in an attempt to collect from an insurer since the  convict will have little or no assets to pay for the loss.   In Lindsey Dostal, Individually and as Special Administrator of the  Estate of Haeven Dostal v. Curtis Strand and ABC Insurance Company,  State Farm Fire and Casualty Company, Intervening, No. 2020AP1943, 2023  WI 6, Supreme Court of Wisconsin (January 26, 2023) the Wisconsin  Supreme Court was asked to allow the mother of the child to seek the  criminal whose conduct - the father of the child - accidentally caused  the death so that State Farm, the convicted father's insurer, must pay  the mother for the loss of her child.  FACTS  Lindsey Dostal (Dostal) sought review of a court of appeals decision  affirming the circuit court's grant of summary and declaratory judgment  in favor of State Farm.   Dostal sued Strand for negligence and wrongful death.  Strand tendered  the matter to State Farm, his homeowner's insurer, seeking defense and  indemnification.   The insurance policy in this case sets forth that coverage is provided  for an "occurrence." An "occurrence," in turn, is defined under the  policy as an "accident," which results in, as relevant here, "bodily  injury."   RESIDENT RELATIVE EXCLUSION  The parties' submissions demonstrate that there are genuine issues of  material fact as to the question of whether Haeven was a resident  relative of Strand. Accordingly, summary judgment was inappropriate on  this issue.   INTENTIONAL ACT EXCLUSION  If the conduct is intentional and if the conduct is substantially  certain to cause injury, the Supreme Court could infer intent to injure  only if the degree of certainty that the conduct will cause injury is  sufficiently great to justify inferring intent to injure as a matter of  law.  However, the Supreme Court cannot infer intent to injure as a matter of  law merely because the insured's intentional act violated the criminal  law. Conviction of a crime gives rise to an inference that an insured  intended injury as a matter of law in two circumstances, but only: (1)  if intent to injure is an element of the crime, and (2) if the crime in  question involves the insured committing an intentional act that carries  with it a substantial risk of injury or death. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Third Party Insurance Only Protects Damage to Other than the Insured   Finger Oil &Gas, Inc. ("Finger Oil"), the insured, and Mid-Continent  Casualty Company ("Mid-Continent") disputed coverage and the magistrate  judge granted Mid-Continent's motion for summary judgment, and Finger  Oil appealed the dismissal of its misrepresentation and breach of  contract claims.   In Finger Oil & Gas, Incorporated v. Mid-Continent Casualty Company,  No. 22-50432, United States Court of Appeals, Fifth Circuit (January  27, 2023) Finger Oil demanded coverage to its property because it was  told it had coverage for damage to third parties. The Fifth Circuit  resolved the dispute.  FACTS  Finger Oil is an insured under a policy issued by Mid-Continent, which  provides general liability insurance. Because Scrimger was unfamiliar  with the policy, she reached out to an underwriter at Mid-Continent  requesting that it "confirm that this insured has Blow Out and Cratering  coverage and advise the limit." Mid-Continent's underwriter replied in  an email stating: “The policy ML1419 Oil & Gas Endorsement IV  Blow-Out and Cratering has a box to X if the coverage is excluded. The  ML1419 for this policy is not X'd. ...”  Based on this response, Scrimger emailed Finger Oil as follows: “Per the  underwriter regarding coverage, the Blowout and Cratering are included  within the limit of insurance. Limits are $1M occurrence/$2M aggregate.  Please note that each claim is based on its own merit and this is just  verifying the coverage in place.”  Finger Oil, without reading the policy or seeking advice interpreting  the coverage, relying on Scrimger's email as confirmation that it was  covered for the incident, hired several contractors to work on the well  and incurred bills for these services in the amount of $641,590.90.   THE CLAIM DENIAL Mid-Continent subsequently denied Finger Oil's insurance claim, which  was for expenses incurred while repairing property from the well blow  out and the costs to bring the well under control. Mid-Continent  determined that there was no coverage under the policy for these damages  based on two exclusions. First, Mid-Continent stated that the policy  included an exclusion for damage to property owned by the insured which  excluded from coverage "property damage" to: “Property you own, rent, or  occupy, ...”   The policy also excluded "any loss, cost or expense incurred by you or  at your request or by or at the request of any ‘Co-owner of the Working  Interest’ in connection with controlling or bringing under control any  oil, gas, or water well.”  DISCUSSION The Fifth Circuit agreed with the Magistrate that MidContinent's  statement that blow out coverage existed did not amount to an actionable  misrepresentation. Finger Oil's agent asked MidContinent whether it had  blow out and cratering coverage, to which MidContinent correctly  replied that it did. MidContinent's statement was more akin to a general  statement that the policy included such coverage, rather than it was to  a misrepresentation of specific policy terms. Indeed, Finger Oil was  warned in the same email to "[p]lease note that each claim is based on  its own merit and" that the statement was "just verifying the coverage  in place." The summary judgment evidence, therefore, did not support  Finger Oil's misrepresentation claims. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

GOOD CAUSE FOR IME ESTABLISHED  THE INDEPENDENT MEDICAL EXAMINATION AS A TOOL TO DEFEAT FRAUD   In Costa Rwagasore v. Grange Property & Casualty Insurance Co., No.  2022-CA-0413-MR, Court of Appeals of Kentucky (January 27, 2023) the  insurer sought an Independent Medical Examination (IME) of the claimant,  Rwagasore and the claimant claimed there was no good cause for an IME.  FACTS  After the insurer sought a medical examination of the claimant.  Costa  Rwagasore appealed from an order of the Jefferson Circuit Court granting  the petition of Grange Property and Casualty Insurance Company (Grange)  to appear for a medical examination by a physician of its choice as a  part of its investigation of Rwagasore's insurance claim. Rwagasore  argued that Grange failed to present evidence showing "good cause" in  support of its petition as required by the provisions of Kentucky's  Motor Vehicle Reparations Act (MVRA), KRS 304.39-010 et seq. KRS  304.39-270(1).  On October 19, 2020, Rwagasore was driving in Louisville. While he was  stopped at a traffic signal, his vehicle was rear-ended by a vehicle  that immediately fled the scene.  The accident report prepared by an  officer of the Jeffersontown Police Department indicated: "no injuries,  no pictures taken, and no vehicles were towed."  Eleven days later, Rwagasore sought treatment at a medical clinic. He  complained of pain in his back, chest, neck, shoulder, left knee, right  leg, and right foot. Ultimately, Rwagasore received extensive medical  care and treatment from numerous medical providers.  Upon evaluating the claim, Grange suspected that the injuries allegedly  sustained were not caused by the motor vehicle accident. After it  received the results of the peer review of the records, Grange requested  that the court order Rwagasore to appear for a medical examination.  Grange argued that Rwagasore put his physical condition at issue and  that a real dispute surrounded whether the allegedly significant  injuries arose from the minor motor vehicle accident.  It observed that Rwagasore had an extensive medical history of  pre-existing issues with his right knee; that he had been involved in  four prior motor vehicle accidents in a short span of time.  Following a hearing, the trial court found that Grange had demonstrated  good cause to warrant a physical examination pursuant to the statute and  ordered the examination.   THE APPEAL  DISCUSSION --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

There Must be an Actual Change in the Appearance, Shape, Color, Or Other  Material Aspect Of The Property for Coverage to Apply   Plaintiff MTDB Corporation d/b/a Striker Lanes (MTDB) sued seeking  declaratory judgment action against defendant, American Auto Insurance  Company (AAIC), seeking a declaration that AAIC owed it coverage for  alleged business losses and property damage due to the COVID-19  pandemic.  In MTDB Corporation D/B/A Striker Lanes v. American Auto Insurance  Company, 2022 IL App (1st) 210979-U, No. 1-21-0979, Court of Appeals of  Illinois, First District, Sixth Division (December 30, 2022) the  Illinois Court of Appeal followed the Illinois Supreme Court requiring  actual physical damage to property and refused coverage to the  plaintiff.   BACKGROUND   MTDB sought coverage under the property coverage and the civil authority  endorsement provisions of the policy.  The policy at issue provided property, general liability, and automobile  coverages for the policy period of August 19, 2019, to August 19,  20202. The relevant portions of the policy and Section A of the business  income coverage form states that:  "[w]e will pay for the actual loss  of business income you sustain due to the necessary suspension of your  operations during the period of restoration. The suspension must be  caused by direct physical loss of or damage to property at the premises  described in the Declarations, including personal property in the open  (or in a vehicle) within 100 feet, caused by or resulting from any  Covered Cause of Loss." --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL - Volume 27, Issue 2 - The Source For Insurance Fraud Professionals --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

NEITHER BATTERY NOR FAILURE TO REMOVE INTOXICATED PATRON IS AN OCCURRENCE   In Crum & Forster Specialty Insurance Company v. Spike's Pub & Grub, d/b/a Vincint Von Hart LLC, and Devin Elliott, No. 3:21-CV-1722-NJR,  United States District Court, S.D. Illinois (January 4, 2023) Plaintiff  Crum & Forster Specialty Insurance Company (“CFSIC”) sought an  order declaring that it owes no duty to defend or indemnify Defendant  Spike's Pub & Grub, d/b/a Vincint Von Hart LLC (“Spike's”), in a  case pending in the Circuit Court of St. Clair County, Illinois.  BACKGROUND  Devin Elliott (“Elliott”) sued Spike's Public House, LLC, d/b/a Spike's  Pub & Grub (the “Underlying Action”). In the Underlying Action,  Elliott alleges that on March 18, 2021, Spike's sold or gave alcoholic  beverages to Corey Lyell, causing Lyell's intoxication. While  intoxicated, and as a result of his intoxication, Lyell attacked Elliott  and stabbed him multiple times, inflicting severe injury upon Elliott.   AVAILABLE INSURANCE   Spike's was insured under a Commercial General Liability policy issued  by CFSIC (“the Policy”). CFSIC, however, advised Spike's in writing that  it owed no obligation to defend or indemnify Spike's based on the terms  of the Policy.  CFSIC filed a Complaint for Declaratory Judgment seeking a declaration  that it has no duty to defend or indemnify Spike's under the Policy.  Both Spike's and Elliott failed to answer the Complaint, and the Clerk  of Court entered default pursuant to Federal Rule of Civil Procedure  55(a) as to both Defendants on July 22, 2022. CFSIC then moved for  Default Judgment.  LEGAL STANDARD  Rule 55(a) requires the clerk to enter default when a party against whom  a judgment for affirmative relief is sought has failed to plead or  otherwise defend and that failure is shown by affidavit or otherwise.   DISCUSSION  A duty to defend arises if the allegations in the complaint fall within  or potentially within the coverage of the policy. This is known as the  “eight corners” rule: the court compares the four corners of the  underlying complaint with the four corners of the insurance policy to  determine whether facts alleged in the underlying complaint fall within  or potentially within coverage. If they do, the insurer has a duty to  defend. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Death of Defendant Limits Recovery of Damages to Insurance Unless Timely  Claim to Estate of Decedent   In Maryland, to facilitate the prompt settlement of decedents' estates, a  person must "present" a claim against an estate within six months after  the decedent's death or two months after the personal representative  mails or delivers proper notice of the need to file a claim within two  months, whichever comes first. Maryland Code § 8-103(a) of the Estates  and Trusts Article ("ET").  In general, if a claimant fails to meet those  statutory deadlines, the claim is "forever barred."  In Nicholas Shanefelter v. James Edward Hood, Jr., No. 1913-2021, Court  of Special Appeals of Maryland (January 4, 2023) the Court of Appeals  resolved the dispute by recognizing that if the decedent had insurance  coverage for the claim, the claimant need not present a timely claim  against the estate, as long as the claimant files suit against the  estate before the applicable statute of limitations has run. In that  event, a judgment against the estate is not limited to the amount of  insurance coverage, but the amount of the judgment that is recoverable  from the estate is limited to the amount of the policy. In essence, the  case becomes an action against the insurance policy.  In this case, the Circuit Court for Anne Arundel County employed ET §  8-104(e)(2) to limit the amount recoverable from an estate to the limits  of the decedent's automobile insurance policy.   FACTUAL BACKGROUND   On December 1, 2018, appellant Nicholas Shanefelter was involved in an  automobile accident with the late James Hood, Jr. At the time of the  accident, State Farm Mutual Automobile Insurance Co. insured the car  that Hood was driving.  Hood died on August 4, 2019, of causes unrelated to the accident. On  September 30, 2019, Hood's wife opened an estate on his behalf with the  Register of Wills for Anne Arundel County.  On February 20, 2020, Shanefelter filed suit against Hood in the Circuit  Court for Anne Arundel County. On March 6, 2020, seven months after  Hood's death, Shanefelter filed a claim against Hood's estate with the  Register of Wills for Anne Arundel County. The claim was untimely.  TRIAL COURT VERDICT  After a two-day trial in October 2021, a jury returned a verdict in  favor of Shanefelter and against the estate in the amount of  $285,977.69. One week after the verdict, the estate filed a motion and  asked the court to limit the amount of the judgment that was recoverable  from the estate to the policy limits of $100,000.00. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Intentionally Building Houses on Contaminated Property Excluded   POLLUTERS FORCED INTO BANKRUPTCY   Plaintiffs Victor Rosario, Nilda Maldonado, Jose Flores, and Noemi  Flores appealed from three Law Division orders dismissing their second  amended complaint against the defendant insurance carriers on  dispositive cross-motions on whether insurance coverage applies. Having  obtained a nearly $2 million judgment against the bankrupt developer of  their residential properties – for failing to disclose their homes were  built on contaminated properties – plaintiffs sought the proceeds of the  comprehensive general liability (CGL) policies and lost.   Victor Rosario, Nilda Maldonado, Jose Flores, and Noemi Flores v. The  Hartford Fire Insurance Co., and The Western World Insurance Co., No.  A-1968-20, Superior Court of New Jersey, Appellate Division (January 4,  2023) resolved the dispute.  The Plaintiffs purchased a single-family homes from developer Marco  Construction and Management, Inc. in 2006.  Unbeknownst to plaintiffs, automotive fluids and waste oil were  discharged into floor drains and the soil. In 1988, the underground  storage tanks were removed from the site without proper notice to the  authorities. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Crop Insurer Can Recover Over payments from Farmer   One of the maxims of farming is the imperative each year to risk the  "up-front costs" of sowing in return for the never-guaranteed prospect  of "back-end revenue" from reaping. The Federal Crop Insurance Act helps  farmers to manage these uncertainties through a crop insurance system,  which the Federal Crop Insurance Corporation oversees. Under this  federal program, farmers can purchase insurance from the Insurance  Corporation or from an approved insurance provider that the Insurance  Corporation reinsures.   In Edgar Miller  v. United States Department Of Agriculture; Risk  Management Agency; Federal Crop Insurance Corporation, No. 22-1209,  United States Court of Appeals, Sixth Circuit (January 3, 2023) the  Sixth Circuit was asked to be the last word on a series of disputes over  payments and over-payments of crop insurance claims.  For years Edgar Miller purchased crop insurance, hoping to protect his  farm from poor harvests. While the insurance for the most part served  that purpose, it also brought him three federal lawsuits, an  arbitration, and an adverse agency determination from the Federal Crop  Insurance Corporation. Miller challenged this last decision-the agency's  decision-under the Administrative Procedure Act. The district court  rejected the challenge. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

It is Time For Insurers to be Proactive Against Fraud  There has been much hand wringing and wailing over the malfeasance of the  corporate officers and directors of FTX Crypto Exchange, Enron,  WorldCom and others. No one, however, has gone to the root causes of the  situation.  It should be a foremost duty of the insurance industry to do  whatever it can to defeat insurance fraud and work to compel  prosecutors, police officers, fraud division of fraud bureau  investigators, SIU investigators, and claims handlers to work to deter  or defeat insurance fraud.  It is not that some corporate executives, suddenly turned to the dark  side and became evil. It is not that police and prosecutors have turned  to the dark side. It is, I submit, because they were all trained by the  Department of Justice and local prosecutors to believe that there was  almost no penalty for their crimes.  White-collar crime, especially insurance fraud, has been ignored for the  last three decades as a serious crime.  A crime unpunished emboldens others who might never consider a life of  crime to pursue wealth the easy way.   Prosecution of what the Coalition Against Insurance Fraud contends is a  $308 billion annual insurance fraud take, the massive crime perpetrated  against insurers and government “insurance” programs like Medicare are  miniscule, to the point of non-existence. Fraud is rampant and almost  universally unpunished. Every year more than $100 billion is stolen from  Medicare and Medicaid programs across the country while private  property and casualty insurers lose a similar loss closer to $200  billion every year to insurance criminals. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurer Committed Fatal Sin by Sitting Back and Doing Nothing   Failure to Conduct a Full and Thorough Investigation to Protect the  Insured Caused a Bad Faith Judgment in Favor of one Insurer Against  Another --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

How Laid Off Workers Innocently Become Fraud Perpetrators.   The story that follows is fiction. It is based, however, on a true  situation faced by employers and workers’ compensation insurers in  Californian where I live.  Ralph was a good employee. He arrived for work every day on time.  He  did his job eight hours a day and never goofed-off.  He was loyal to his  employer.  His diligence got him raises and promotions.   In December 2022 Ralph’s boss came to him and said, regretfully: “The  market fall has hit me hard. I can’t afford to keep paying you. You are  laid off.”  He was shocked.  He could say nothing.  He could do nothing to keep his  job.  He packed up his personal belongings, said “goodbye” to his boss  and left.  The next day, he went to the state unemployment office.   He filed the  first claim in his life for unemployment benefits.  He was ashamed but  had no choice.  Coming out of the unemployment office he met a pleasant man who offered  him a cup of coffee.  Having nothing better to do, he accepted the man’s  offer of a cup of coffee and sat, drinking it, on a bus bench and  talked about his troubles.  The man asked detailed questions about Ralph’s job.  He explained that  the employer was not alone.  Other people were suffering just like he  was.  He explained there was a way to tide Ralph over better than  unemployment insurance.  The employee was dumbfounded.  “Are you offering me a job?” he asked. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

How Laid Off Workers Innocently Become Fraud Perpetrators.   The story that follows is fiction. It is based, however, on a true  situation faced by employers and workers’ compensation insurers in  Californian where I live.  Ralph was a good employee. He arrived for work every day on time.  He  did his job eight hours a day and never goofed-off.  He was loyal to his  employer.  His diligence got him raises and promotions.  In December 2022 Ralph’s boss came to him and said, regretfully: “The  market fall has hit me hard. I can’t afford to keep paying you. You are  laid off.”   He was shocked.  He could say nothing.  He could do nothing to keep his  job.  He packed up his personal belongings, said “goodbye” to his boss  and left.  The next day, he went to the state unemployment office.  He filed the  first claim in his life for unemployment benefits.  He was ashamed but  had no choice.  Coming out of the unemployment office he met a pleasant man who offered  him a cup of coffee.  Having nothing better to do, he accepted the man’s  offer of a cup of coffee and sat, drinking it, on a bus bench and  talked about his troubles.  The man asked detailed questions about Ralph’s job.  He explained that  the employer was not alone.  Other people were suffering just like he  was.  He explained there was a way to tide Ralph over better than  unemployment insurance.  The employee was dumbfounded.  “Are you offering me a job?” he asked.  “No.  I am only offering a way to make yourself some money without any  effort.”  “Is this legal,” the employee asked.  “Of course.” The kind man replied.  “I will refer you to a lawyer I know  who will help you file a very legal claim before the Workers’  Compensation Appeals Board.” --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Tort of Bad Faith   The implied covenant of good faith and fair dealing is a concept of  insurance law at least three centuries old. It first appeared in British  jurisprudence in a case decided by Lord Mansfield sitting in the House  of Lords as the highest court in Britain. In Carter v. Boehm. 3 Burrow,  1905, Lord Mansfield explained that insurance is a contract upon  speculation; the special facts upon which the contingent chance is to be  computed, lie, most commonly, in the knowledge of the insured only. The  underwriter trusts to his representation, and proceeds upon confidence  that he does not keep back any circumstance in his knowledge, to mislead  the underwriter into a belief that the circumstance does not exist, and  to induce him to estimate the risk as if it did not exist.  The keeping back such circumstance is a fraud, and therefore the policy  is void. Although the suppression should happen through mistake, without  any fraudulent intention, yet still the underwriter is deceived, and  the policy is void; because the risk run is really different from the  risk understood and intended to be run, at the time of the agreement.  [The Chicago v. Thompson, 19 Ill. 578, 1858 WL 5993, 9 Peck 578 (Ill.  1858)] and the contract of insurance is founded on good faith.  Lord Mansfield stated the rule still followed to this day:  Good faith forbids either party by concealing what he privately knows,  to draw the other into a bargain, from his ignorance of that fact, and  his believing the contrary.   THE DUTY TO ACT IN GOOD FAITH  ' The implied covenant explains that no party to a contract of insurance  should do anything to deprive the other of the benefits of the contract.  For insurance to work; for each insurer to properly evaluate the risks  presented; for each insurer to obtain the insurance desired; and for  each insured and insurer resolve all claims fairly and equitably they  must treat each other with the utmost good faith and do nothing to  deprive the other of the benefits of the contract.  Each party to the contract of insurance is expected to treat the other  fairly in the acquisition and performance of the contract. For example,  the prospective insured is required to answer all questions about the  risk he, she or it are asking the insurer to take and about the person  the insurer is asked to insure. Similarly, the insurer must honestly,  clearly and in good faith explain to the insured(s) the risks the  insurer is willing to take and the terms, conditions and provisions of  the contract of insurance.   THE CREATION OF THE TORT OF BAD FAITH --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Claim that $16 Extra Premium on Renewal is Bad Faith Fails  Peter Gottlieb claimed that the price he agreed to pay Amica Mutual  Insurance Company to insure his home was $16 too high because it was  based on an excessive coverage limit. Claiming as well that other Amica  insureds paid too much to insure their homes, he filed this putative  class action. After the district court dismissed part of Gottlieb's  complaint for failure to state a claim and entered summary judgment he  appealed.  In Peter Gottlieb, individually and on behalf of all persons similarly  situated v. Amica Mutual Insurance Company, No. 22-1074, United States  Court of Appeals, First Circuit (December 30, 2022) disposed of the  class action claims.  FACTUAL BACKGROUND  Gottlieb owns a home in Burlington, Massachusetts. In 2015, he purchased  a homeowners insurance policy from Amica that covered him from March  10, 2015, through March 10, 2016. The coverage limit for replacing his  house in the event of a loss was $311,000, for which Gottlieb paid a  $730 premium. The policy also contained an endorsement providing  additional coverage of up to 130% of the coverage limit if Gottlieb  agreed to certain conditions, including that Amica could adjust the  coverage limit and the premium "in accordance with" "property  evaluations [Amica] make[s]" and "[a]ny increases in inflation." The  policy contained no other language allowing Amica to increase coverage  limits. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Payment of Renewal Premium is Acceptance of Policy as Written   Ronald Morgan and Cheryl Morgan appealed from the trial court's grant of  summary judgment in favor of Dickelman Insurance Agency, Inc.,  Dickelman Insurance, Inc., Jason Dickelman, and State Farm Fire and  Casualty Co. (collectively Defendants) on the Morgans' complaint for  breach of contract, promissory estoppel, negligence and fraud.  In Ronald Morgan and Cheryl Morgan v. Dickelman Insurance Agency, Inc.,  Dickelman Insurance, Inc., Jason Dickelman, and State Farm Fire and  Casualty Co., No. 22A-PL-892, Court of Appeals of Indiana (December 30,  2022) the Court of Appeal of Indiana made clear that an insured is  required to protect their rights by reading the renewal notice of a  policy.  FACTS  The facts most favorable to the Morgans as the nonmovants show that in  2007, they purchased a log home in Lafayette, Indiana. In 2008, they  acquired homeowners insurance with State Farm. The Morgans paid  insurance premiums through escrow funds held by their mortgage company.  Each year, State Farm mailed the Morgans "renewal notices." The insureds  did not recall looking at the notices.  In 2015 the Morgans submitted a claim to State Farm for extensive water  damage to their home with a repair estimate of $712,000 to $800,000.  Ultimately, State Farm paid the Morgans $330,034.88 for the claim, which  represented their dwelling coverage limit for the policy period April  4, 2015, to April 4, 2016, plus inflation guard protection and the cost  of debris removal.  On September 20, 2017, the Morgans sued Defendants alleging breach of  contract, promissory estoppel, negligence, and fraud. The trial court  issued an order granting summary judgment for Defendants on all of the  Morgans' claims.   DISCUSSION AND DECISION   In their complaint, the Morgans alleged that Defendants breached an oral  agreement to increase their dwelling coverage by $150,000. In an  affidavit, Dickelman attested that the Morgans never authorized  Dickelman Insurance to increase the dwelling limits. Thus, Defendants'  designated evidence established that they did not commit breach of  contract.  In this case, State Farm mailed renewal certificates to the Morgans that  clearly and unambiguously informed them of the amount of their policy  dwelling coverage.  In Indiana, "[I]nsureds have a duty to read and to know the contents of  their insurance policies." [Safe Auto Ins. Co. v. Enter. Leasing Co. of  Indianapolis, 889 N.E.2d 392, 397 (Ind.Ct.App. 2008).]  A casual scan by an unsophisticated customer of the first page of the  two-page 2013 renewal certificate would inform that person that the  dwelling coverage was limited to $297,100 and that the premium charged  was for this amount of coverage. By retaining the policy and paying the  premium through an escrow account held by their mortgage company, the  Morgans accepted the offer to renew.  DUTY TO READ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

New Book for the New Year   To start off the New Year I published my newest insurance coverage and  claims book entitled: A Compact Book on How Judges Read, Understand,  Interpret and Rule on Insurance Policy Issues: Every Person Who is  Insured Needs to Understand How Judges interpret Insurance Policies.  The book provides those who are insured, insurance claims people,  insurance claims executives, underwriters, insurance agents, insurance  brokers, insurance coverage lawyers and policyholders lawyers an ability  to understand how they should emulate the courts when interpreting an  insurance policy to avoid taking untenable positions with regard to  claims.  Understanding the Terms and Conditions of an Insurance Policy   The challenge faced by every person insured when making a claim is to  determine what was insured and what was not insured. Similarly, every  insurance claim professional when faced with the need to resolve a claim  presented by an insured is required to determine if the insurance  policy, by its wording, provides coverage to indemnify the insured or  does not. To do so the insured and the insurance claim professional must  read, understand, and interpret the policy and apply the wording of the  policy to the facts determined by the claims investigation.   To present or investigate a claim fairly both those insured and those  representing the insurer must understand what insurance is and its  history of indemnifying those who incur losses as a result of a  fortuitous event.  An insurance policy is a contract. It is a written agreement between the  person named as insured and the insurer. Each party to the insurance  contract make promises to each other. The insured, for example, promises  to pay the premium charged and in the event of a claim cooperate in the  investigation of the insurer and will do nothing to deprive the insurer  of the benefits of the policy.  The insurer, on the other hand, promises  to thoroughly investigate each claim presented by the insured fairly  and in good faith and to do nothing that will prevent the other to  obtain the benefits of the contract.  The Contract of Adhesion  Since insurance policies are often contracts of adhesion written by the  insurer that are available to an insured who is given two choices: to  accept or reject the policy as written. Adhesion contracts are usually  interpreted carefully to favor the insured since the insured had no  choice regarding the promises made by the policy. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

There is More Than One Way to Skin A Fraudster   DELAYED RESCISSION FAILS BUT EXCLUSION APPLIES   Evanston Insurance Company appealed from a bench trial on an  insurance-coverage dispute. After determining that Evanston failed to  timely rescind the policy after learning that the insured lied on the  application to avoid discovery of his embezzlement scheme, and that a  policy exclusion did not apply, the district court required Evanston to  continue defending Desert State Life Management against a class action  arising from its former CEO's embezzlement scheme.   In Evanston Insurance Company v. Desert State Life Management;  Christopher Moya, et al, No. 21-2145, United States Court of Appeals,  Tenth Circuit (December 30, 2022) the Tenth Circuit issued what it  believed to be a Solomon-like decision that did justice to Evanston and  Desert State.  BACKGROUND  Desert State Life Management was a New Mexico trust corporation that  acted as a trustee for disabled individuals. From 2008 to March 2017,  Donisthorpe served as its CEO. In October 2016, Donisthorpe applied for  an Evanston professional-liability insurance policy on Desert State's  behalf.  Donisthorpe's response to the following application question was  a lie:  “Is the applicant [Desert State] or any principal, partner,  owner, officer, director, employee, manager or managing member of the  Applicant or any person(s) or organization(s) proposed for this  insurance aware of any fact, circumstance, situation, incident or  allegation of negligence or wrongdoing, which might afford grounds for  any claim such as would fall under th[e] proposed insurance?"  WARRANTY  Donisthorpe, by the application warranted that he understood and  accepted the notice and that the information contained in the  application was true and that it "shall be the basis of the policy and  deemed incorporated therein."  Based on Donisthorpe's application  responses, Evanston issued Desert State a professional-liability  insurance policy.  Despite the notices, coverages, and exclusions, Donisthorpe completed  Evanston's application while running an embezzlement scheme that exposed  Desert State to liability. Donisthorpe intentionally misappropriated  and commingled over $4.9 million of Desert State's client funds for his  own use. Donisthorpe hid his scheme by presenting fraudulent reports to  Desert State's board of directors and to New Mexico regulators.  In November 2017, Donisthorpe pleaded guilty to a two-count federal  felony information charging him with wire fraud and money laundering. He  was sentenced to 144 months in prison and was ordered to pay $6.8  million in restitution and a $4.8 million money judgment. Donisthorpe's  criminal case triggered demands for restitution among former Desert  State client --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL January 1, 2023 - Volume 27, Issue 1   The Source for the Insurance Fraud Professional   Starting the 27th year of publication of Zalma's Insurance Fraud Letter,  ClaimSchool, Inc., Barry Zalma and the Zalma family wish you a happy  and prosperous new year.  Read the full pdf version of ZIFL at http://zalma.com/blog/wp-content/uploads/2022/12/ZIFL-01-01-2023.pdf  New Florida Statutes  The state of Florida proposed new statute to make insurance and insurance claims more fair is over 105 pages available at https://www.flsenate.gov/Session/Bill/2022A/2A/BillText/er/PDF.  Lawmakers in Florida passed legislation to abolish controversial  assignments of benefits on property claims. The provisions become law  when signed by the Governor, which is expected as early as today. For  those wishing more information on the new law, Coalition Against  Insurance Fraud law firm member Greenberg Traurig has provided a  detailed summary.   Read the full pdf version of ZIFL at http://zalma.com/blog/wp-content/uploads/2022/12/ZIFL-01-01-2023.pdf  Report From the California Department of Insurance About New Law Relating to Fraud  Read the full pdf version of ZIFL at http://zalma.com/blog/wp-content/uploads/2022/12/ZIFL-01-01-2023.pdf   Scot Strems Disbarred & Public Adjuster Facing Loss of License Florida Lawyer Who Used Cappers & Runners to Build a Practice Failed  to Serve the Clients  The Supreme Court of Florida on December 22, 2022, disbarred attorney  Scott Strems who it found guilty of professional misconduct. You can  read the full opinion here. The court’s reasoning included:  Strems was the sole partner and owner of the Strems Law Firm, P.A.   Read the full pdf version of ZIFL at http://zalma.com/blog/wp-content/uploads/2022/12/ZIFL-01-01-2023.pdf --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

EXCLUSION FOR LOSSES WHEN DRIVER UNLICENSED IS ENFORCED --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Building Must Actually Fall Down for Collapse to be Covered  Windcrest Owners Association filed a lawsuit against Allstate Insurance  after the company declined a claim for property damage to a building in  its condominium development. Allstate moved for summary judgment,  alleging that the property damage was not covered as a "collapse" and  was excluded from coverage because it resulted from faulty construction  and maintenance. The trial court granted summary judgment dismissing  Windcrest's claims.   In Windcrest Owners Association, a Washington nonprofit corporation v.  Allstate Insurance Company, an Illinois company, State Farm Fire And  Casualty Company, an Illinois company, No. 82836-3-I, Court of Appeals  of Washington, Division 1 (December 12, 2022) Windcrest sought payment  to repair a building in severe distress as a result of wear, tear, and  defective construction under a "collapse" coverage. The Court of Appeals  read the full policy and applied its language to the facts presented by  construction experts. FACTS   Windcrest Condominiums, which consists of 15 units in two buildings, was  completed in 1995. Allstate provided a commercial property insurance  policy from November 2002 through 2017.  Allstate, conducting a good faith investigation of the claim, retained  construction consultants from Madsen, Kneppers & Associates, Inc.  (MKA) to conduct an inspection and evaluation of causation of the damage  at Windcrest. MKA concluded that there were sites of noted decay of  structural components but no evidence of collapse "defined as an abrupt  falling down or caving in," as required for coverage by Allstate's  policy.  Windcrest sued Allstate, alleging breach of contract and bad faith.  Allstate moved for summary judgment; the trial court granted the motion  and dismissed the claims with prejudice.  ANALYSIS  An insured has the burden of proving that coverage is triggered, while  the insurer has the burden of proving that an exclusion applies.  Collapse Coverage --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurer's $25,000 Assault and Battery Limit Applied to Stabbing on Hotel  Property Great American E & S Insurance Company obtained a trial court  judgment that it is only obligated to provide coverage up to a limit of  $25,000 under a policy of insurance issued to the defendant Commack  Hotel, LLC, doing business as Howard Johnson, in an underlying action  where Stanley Earl Davis, Jr. was stabbed to death at the hotel  prop --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Innocent Wife Has No Right to Recover for Criminal Conduct of Husband  Causing Damage   Public Policy of State Requires Exclusion of Criminal Conduct  On October 14, 2019-while the Safeway policy was in effect-Mr. Moon  backed the Vehicle into a police vehicle while attempting to flee from  the police (the "Incident"). In Kristen Moon v. Safeway Insurance  Company Of Louisiana, No. 2022-CA-0455, Court of Appeals of Louisiana,  Fourth Circuit (December 6, 2022).   FACTUAL BACKGROUND   Safeway issued an automobile liability policy to Ms. Moon covering a  vehicle that she personally owned (the "Vehicle"). Ms. Moon's husband,  Herbert Moon, was listed on the policy as a permissive user.  The  following day, the police informed Ms. Moon that her husband had been  arrested and that the Vehicle had been towed. Thereafter, Ms. Moon filed  a claim with Safeway for the property damages to the Vehicle that  occurred as a result of the Incident. Safeway denied Ms. Moon's claim  based on the criminal and intentional acts exclusions (the "Exclusions")  in its policy.  Following Safeway's denial of her claim, Ms. Moon sued Safeway. Ms. Moon  prayed for not only property damages, but also penalties for bad faith  refusal to pay her claim.  After answering the suit, Safeway filed a summary judgment motion based  on the Exclusions. Safeway supported its summary judgment motion with an  affidavit from its representative, Rhonda Marshall; and a copy of the  deposition of the investigating officer, Christopher Bassil. Attached to  Ms. Marshall's affidavit was a certified copy of Safeway's policy. The  criminal charges included aggravated criminal damage to property, a  violation of La. R.S. 14:55, for striking the police vehicle.  DISCUSSION  Whether an insurance policy provides for-or precludes-coverage as a  matter of law is an issue that can be resolved within the framework of a  summary judgment motion. In analyzing insurance policies, the following  elementary legal principles apply:  An insurance policy is a contract between the parties and should be  construed by using the general rules of interpretation of contracts set  forth in the Civil Code.[3]  THE POLICY  The Safeway policy language at issue provides that under Part  IV-Physical Damages-the policy does not apply to  criminal or  intentional acts.  The Exclusions, as applied are clear and unambiguous; and the  applicability of the Exclusions to the facts on which the suit is based -  the Incident - is not in dispute. Rather, Ms. Moon's contention is that  the Exclusions are contrary to public policy and, for that reason,  should not be enforced because she was innocent and had nothing to do  with the criminal conduct of Mr. Moon. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

To Allege IFPA Fraud Plaintiff Need only Plead the Defendants Knowledge, Falsity, and Materiality of Insurance Claim Go to https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL Volume 26 Number 24   Merry Christmas, Happy Hanukah & May The Winter Solstice be Peaceful  & Mild  Read the full Newsletter http://zalma.com/blog/wp-content/uploads/2022/12/ZIFL-12-15-2022-1.pdf.  A Christmas Fable of Fraud  ZIFL Publishes This Story At Christmas Time Every Year. I Hope You Like  It Again.  The story that follows is fiction based, in part, on a true case worked  on by me. Any similarity to real people is unintentional. It is meant  only to educate fraud professionals about how some unscrupulous people  use the crime of insurance fraud for fun and profit during the Christmas  season.  Raymond Alexander had no religion. He cared only for himself and the  money he could take from good-hearted people.  Raymond loved the Christmas season.  The marks were in such a kind and giving mood it wasn’t even work to  take their money.   English Solicitor Jailed For 12 Years After Private Prosecution for  Fraud  Stephen Jones, 63, senior partner at London firm Jirehouse Partners,  pleaded guilty at Southwark Crown Court to two counts of fraud by abuse  of his position of trust as a solicitor in relation to money intended to  be used by his clients to buy a Scottish castle.  Read the full ZIFL at http://zalma.com/blog/wp-content/uploads/2022/12/ZIFL-12-15-2022-1.pdf  Editorial – Anti-Fraud Resolutions  In 2009 ZIFL posted an editorial with New Year’s Resolutions for every  person involved in the business of insurance. I repeat it again, with  some modification, in this issue and add some thoughts for 2023.  Read the full Newsletter at http://zalma.com/blog/wp-content/uploads/2022/12/ZIFL-12-15-2022-1.pdf   How to Defeat Insurance Fraud  An Article I Wrote for the CPCU Society’s “Insights” Magazine  The preponderance of attempted insurance fraud is staggering and costly.  But perhaps even more startling, and certainly more avoidable, is the  often-muted response to such crime.  Read the full story at http://zalma.com/blog/wp-content/uploads/2022/12/CPCUSociety_INSIGHTS_Winter2022_Insurance_Fraud.pdf   Good News from The Coalition Against Insurance Fraud  My client duped me, a banker desperately contended in court after  helping disbarred personal-injury attorney Alex Murdaugh steal money  from insurance settlements of clients in South Carolina.  Russell  Laffitte was convicted anyway.  Read the full Newsletter http://zalma.com/blog/wp-content/uploads/2022/12/ZIFL-12-15-2022-1.pdf.  Florida Session Agenda Calls for Claims Process Changes, More Oversight of Insurers.  --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Courts Must Read the Full Policy to Determine Coverage Plaintiffs  Joshua and Rachel Dow purchased their home at 1017 Moss Creek Drive in  Hurricane, WV in March of 2018.  This property is contiguous to the  Valley Park Wave Pool. After Plaintiffs purchased the home, they entered  into a contract for first party insurance with Defendant Liberty  Insurance Company. As of June 2018, Plaintiffs noticed water entering  their property and leaking into the crawl space of their home. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Chubb Must Pay for Cancellation of Tina Turner Concert Because of Order  of State of New York   Tina Turner Musical LLC v. Chubb Insurance Company of Europe SE, Appeal  No. 16804, Index No. 651607/21, Case No. 2022-02269, Supreme Court of  New York, First Department (December 6, 2022)  In an appeal from an order of the Supreme Court, New York County (Andrew  Borrok, J.), entered on or about December 30, 2021, that denied  defendant's motion to dismiss the complaint, the New York Appellate  Court unanimously affirmed the decision of the trial court.  New York appellate courts are noted for the brevity of their opinions,  and this one is no exception.   The appellate court concluded that the trial court, the Supreme Court,  New York County, correctly concluded that plaintiff's losses resulting  from the cancellation of its Broadway show during the COVID-19 pandemic  did not fall within the communicable disease exclusion in the insurance  policy.  The exclusion precluded from coverage:  any loss directly or indirectly arising out of, contributed to by, or  resulting from... any communicable disease or threat or fear of  communicable disease... which leads to: [1] the imposition of quarantine  or restriction in movement of people or animals by any national or  international body or agency; [2] any travel advisory or warning being  issued by a national or international body or agency.   The appellate court noted that the exclusion did not clearly and  unmistakably preclude from coverage losses caused by communicable  diseases that were of such a systemic nature as to lead to quarantine or  travel advisory orders by a national or international body or agency.  Rather, giving the exclusion a strict and narrow construction, and  resolving any ambiguities against defendant, the appellate court found  that it precluded from coverage losses resulting from quarantine or  travel advisory orders issued by a national or international body or  agency in response to a communicable disease.  Since plaintiff's losses stemmed from Executive Orders issued by the New  York State Governor and New York City Mayor banning performances and  gatherings in theaters, the exclusion did not apply.   ZALMA OPINION   Whenever there is an issue of whether an insurance policy must provide  coverage to an insured it is necessary to read the full policy. The New  York Appellate court did just that: it read the exclusion relied upon by  Chubb to refuse coverage to Ms. Turner, and found that her losses  resulted from Executive Orders issued by the Governor of New York state  and the mayor of New York City. Since the exclusion only excluded orders  of a: "national or international body or agency," and since neither the  Governor nor the Mayor were national or international bodies or  agencies, the exclusion did not apply. (c) 2022 Barry Zalma & ClaimSchool, Inc.  Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

No Good Deed Goes Unpunished  GEICO Advantage Insurance Company and GEICO Choice Insurance Company  (collectively "GEICO") appealed a decision of the Circuit Court of the  City of Richmond granting summary judgment to Liosha Miles ("Miles") on  the issue of whether each of the two insurance policies at issue  provided separate tranches of insurance for uninsured motorist ("UM")  coverage and underinsured motorist ("UIM") coverage. GEICO contended  that the statute and each of the applicable policies provide only a  single tranche of coverage applicable to both UM and UIM claims.   In GEICO Advantage Insurance Company And GEICO Choice Insurance Company  v. Liosha Miles, No. 220004, Supreme Court of Virginia (December 1,  2022) the Supreme Court interpreted the statute and the policies  wording.  BACKGROUND  On April 18, 2019, Miles sustained extensive personal injuries in a  single automobile accident caused by the negligence of two different  drivers. One driver, Carlos Figuero, was insured under an automobile  insurance policy issued by Integon General Insurance Company ("Integon")  with a liability limit of $25,000. The second driver ("Doe") did not  stop at the scene of the accident and was never identified, and thus, is  considered an uninsured motorist pursuant to Code § 38.2-2206(B).  At the time of the accident, Miles was insured under two policies: she  was the named insured under a GEICO Advantage policy covering her  vehicle and also was a covered insured under her brother's GEICO Choice  policy by virtue of her being a "resident relative" of the named  insured.  A cap on UM coverage with no corresponding cap on UIM coverage-would  represent an anomaly bordering on an absurdity. Although the conclusion  was compelled by the words of the statute, the Supreme Court noted that  it also was consistent with its prior cases addressing the UM/UIM  statute.   The circuit court's interpretation of the statute not only fails to  address the evil sought to be corrected by the legislature it leads to  the very anomaly that the 1982 statutory amendment was designed to  eliminate. Under the circuit court's interpretation, Miles would be in a  better position from an insurance coverage perspective because she was  hit by one underinsured motorist and one uninsured motorist as opposed  to two underinsured motorists.  Both the text of the Code § 38.2-2206(A) and prior cases interpreting  the statute lead inexorably to the conclusion that UIM coverage is a  constituent part of UM coverage. Concluding that the circuit court erred  in granting Miles' motion for summary judgment and denying GEICO's  cross-motion for summary judgment the Supreme Court reversed the  judgment of the circuit court and final judgment was entered in favor of  GEICO. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Chubb Must Pay for Cancellation of Tina Turner Concert Because of Order  of State of New York   Tina Turner Musical LLC v. Chubb Insurance Company of Europe SE, Appeal  No. 16804, Index No. 651607/21, Case No. 2022-02269, Supreme Court of  New York, First Department (December 6, 2022)  In an appeal from an order of the Supreme Court, New York County (Andrew  Borrok, J.), entered on or about December 30, 2021, that denied  defendant's motion to dismiss the complaint, the New York Appellate  Court unanimously affirmed the decision of the trial court.   New York appellate courts are noted for the brevity of their opinions,  and this one is no exception.  The appellate court concluded that the trial court, the Supreme Court,  New York County, correctly concluded that plaintiff's losses resulting  from the cancellation of its Broadway show during the COVID-19 pandemic  did not fall within the communicable disease exclusion in the insurance  policy.  The exclusion precluded from coverage:  any loss directly or indirectly arising out of, contributed to by, or  resulting from... any communicable disease or threat or fear of  communicable disease... which leads to: [1] the imposition of quarantine  or restriction in movement of people or animals by any national or  international body or agency; [2] any travel advisory or warning being  issued by a national or international body or agency.  The appellate court noted that the exclusion did not clearly and  unmistakably preclude from coverage losses caused by communicable  diseases that were of such a systemic nature as to lead to quarantine or  travel advisory orders by a national or international body or agency.  Rather, giving the exclusion a strict and narrow construction, and  resolving any ambiguities against defendant, the appellate court found  that it precluded from coverage losses resulting from quarantine or  travel advisory orders issued by a national or international body or  agency in response to a communicable disease. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Title Policy Terminated Regardless of Counsel's Misconduct Making  Personal Attacks on the Court and Counsel   Jay Shah appealed from a judgment entered in favor of Fidelity National  Title Insurance Company after the trial court granted summary judgment.  After two trials and a second appeal the Court of Appeals dealt with  improper and contumacious conduct by plaintiff's counsel. In Jay C. Shah  v. Fidelity National Title Insurance Company, A165816, California Court  of Appeals, First District, First Division (November 30, 2022) resolved  the title insurance issue based on the evidence and California Codes  and precedent.  BACKGROUND  In 1959, non-party Mary Silva acquired a life estate in the property  that is the subject of this action near Quimby Road in San Jose,  California (the property). In December 1995, Shah entered a contract to  purchase the property from Silva for $350,000. Silva transferred her  interest in the property via a grant deed to "Jay C. Shah, Living Trust  Dated June 8, 1993," (the Trust) as grantee. When he purchased the  property, Shah did not know that Silva held only a life estate.  Fidelity issued the title insurance policy in connection with Shah's  1995 purchase. The title policy was effective December 29, 1995.  Schedule A of the title policy listed the named insured as the Trust.  The title policy stated that the "estate or interest in the land  described herein and which is covered by this policy is: A Fee."   Suit Against Fidelity   The trial court granted Fidelity's motion for summary judgment and  determined Shah's motion for summary adjudication was moot. The court  concluded that Fidelity met its burden to show coverage terminated under  section 2(b) of the title policy before Shah's 2009 tender because Shah  had voluntarily transferred the property to his parents in 2002, and  the transfer became effective by operation of law in May 2007 when Shah  obtained fee title through adverse possession, under the after acquired  title doctrine (Civ. Code, § 1106).  The Court of Appeal, concluding that it was not at liberty to rewrite  the policy to achieve the result Shah sought & Fidelity met its  initial burden to demonstrate coverage under the title insurance policy  terminated under section 2(b) when Shah voluntarily transferred the  property to his parents in the 2002 grant deed and subsequently acquired  fee title by adverse possession in May 2007. Because Shah failed to  present evidence raising a triable issue of material fact, Fidelity was  entitled to judgment as a matter of law.  CIVILITY  In addition to deciding the insurance issue the California Court of  Appeal concluded that they were obligated to admonish Shah's counsel,  Craig J. Bassett, for making repeated, unfounded personal attacks on the  trial court and opposing counsel in his appellate papers, apparently  because he disagreed with the trial court's decision. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Summary Judgment Fails for Lack of Convincing Evidence   Plaintiff Craig Finch owns parcels of real property in Broome County,  New York, the relevant ones for our purposes being one on Kennedy Road  (hereinafter the subject premises) and another on Bishop Road. A  single-family home was situated on the subject premises, while a second  home was situated about 1,000 feet away on the Bishop Road property. The  homeowner's insurance policy for the subject premises was procured  through defendant Erie Insurance Company and named Finch as the insured.  Erie contended Finch did not live at the Dwelling and denied his claim  on that ground.  In Craig Finch v. Erie Insurance Company, No. 534429, 2022 NY Slip Op  06851, Supreme Court of New York, Third Department (December 1, 2022)  Erie appealed the denial of its Motion for Summary Judgment and a New  York Appellate Court resolved the dispute.   FACTS   A fire seriously damaged the subject premises on the evening of November  22, 2016. Plaintiff notified defendant of the loss, stating that warm  ashes in a vacuum cleaner on the back porch had caused the fire, and the  ensuing investigation conducted on defendant's behalf confirmed that  the fire was accidental and had begun on the back porch. The  investigator did not determine the cause of the fire but could not rule  out the vacuum cleaner.  Defendant disclaimed coverage upon the grounds that plaintiff did not  reside at the subject premises as required and that, by installing a  pellet stove where the warm ashes had originated, he had substantially  increased the hazards present there. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Representative of Five Dead Seek to Hold Owner of Vehicle's Insurer  Responsible for Deaths and Injuries   In Motorists Commercial Mutual Insurance Company v. Roger Hartwell;  Lynnway Auto Auction, Inc., Safety Insurance Company; et. al.  Nos.  21-1603, 21-1636, United States Court of Appeals, First Circuit  (November 23, 2022) the plaintiff claimed it owed neither defense nor  indemnity to persons not insured by it to claims that a vehicle the  named insureds' owned while driven by the employee of an auctioneer  killed five people and injured many.  FACTUAL BACKGROUND  The dispute arose from an auction at which a motor vehicle being  displayed for bidding suddenly accelerated into a group of attendees,  killing five and injuring many others. Defendants include those who  claim an interest in Motorists' coverage: the victims, the auctioneer,  and its employee. Both sides moved for summary judgment. The district  court granted the motion for summary judgment in favor of Motorists.   Nashua Automotive, LLC is a New Hampshire car dealership that sells new  and used cars. It is owned by a dealership group called AutoFair, Inc.  and operates under the name "AutoFair Volkswagen of Nashua." ("Nashua.")  While Nashua sells most of their vehicles "retail" (to the public),  about 8% or 9% of their revenues come from vehicles sold "wholesale"  (online or at an auction). For its vehicles sold wholesale, Nashua  primarily engages with a company called Lynnway Auto Auction, Inc.,  which operates an auction facility in Billerica, Massachusetts. Neither  AutoFair nor Nashua owns Lynnway, and Lynnway does not own Nashua or  AutoFair. At the time of the accident, Lynnway employee Roger Hartwell was seated  in the driver's seat of the Jeep, though he claims that the vehicle  accelerated uncontrollably despite his efforts to stop it.  In due course, the victims and their estates filed a series of lawsuits  in Massachusetts state court, alleging several theories of liability  against Lynnway, Hartwell, Nashua and AutoFair, as well as other related  individuals and entities.  THE MOTORISTS' POLICIES  All defendants moved for summary judgment, prompting a cross-motion from  Motorists. Motorists pointed to the auto business exclusion which  Motorists contended foreclosed coverage under the Primary Policy. It  also argued that its Umbrella Policy's Following Form Endorsement  provides auto coverage that is no broader than that provided for in the  Primary Policy. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

When a seriously injured person is injured by a person with a policy  providing minimal limits the plaintiff's lawyer will invariably attempt  to set up the insurer for a bad faith case by making a policy limits  demand with a short period of time to respond.  In David Grant Orndorff  v. Erie Insurance Exchange, No. 1318-2021, Court of Special Appeals of  Maryland (November 21, 2022) Mr. Orndorff had a leg amputated as a  result of an accident and sought to set up Erie Insurance, the other  driver's insurer.  David Grant Orndorff ("Mr. Orndorff") was seriously injured when the  motorcycle he was riding struck another vehicle attempting to make a  left turn. The driver was insured by Erie Insurance Exchange ("Erie")  under a policy with a liability coverage limit of $30,000. Five months  after the accident, Mr. Orndorff rejected Erie's offer of its insured's  policy limits in full settlement of his claims against the insured. Two  years later, when Mr. Orndorff sued Erie for bad faith in failing to  settle sooner, the Circuit Court for Prince George's County granted  summary judgment to Erie.   BACKGROUND Erie then assigned a claims adjuster who began a thorough investigation  of the claim the next day.  Maryland has not adopted comparative negligence. If an injured person  contributes to the accident - for example by speeding - he or she cannot  recover anything because of his or her contributory negligence.  On November 8, 2016, thirty-four days after the accident, Mr. Orndorff  demanded that Erie settle his claim" . . . for the full insurance  policy, or any and all insurance policy or policies covering your  insured for this accident." Mr. Orndorff (perhaps as part of a plan) did  not supply any of the requested documents or description of his  injuries that Erie said were necessary to determine liability and settle  the claim. Mr. Orndorff indicated he would release Erie's insured from  liability if Erie delivered a check no later than 5 p.m. EST on December  8, 2016.  Mr. Orndorff's Motor Tort Complaint  On January 9, 2017, Mr. Orndorff sued Erie's insured in the Circuit  Court for Prince George's County and later served Erie's insured. On  January 30, 2017, Mr. Orndorff's counsel emailed the claims adjuster  that all prior settlement offers were withdrawn and that its insured had  been served.  On March 17, 2017, Erie, through the attorney assigned to represent its  insured in the motor tort suit, offered to settle Mr. Orndorff's claim  for the full limit of the insured's policy. On April 26, 2017, having  not heard from Mr. Orndorff, Erie reiterated its policy limits offer to  Mr. Orndorff.  The Liability-Only Trial Aftermath  On October 27, 2017, Erie again offered its insured's policy limits to  settle Mr. Orndorff's claim against Erie's insured. Mr. Orndorff did not  accept this offer.  Before the trial on damages Plaintiff's counsel notified the circuit  court that they had settled Mr. Orndorff's claim with the entry of  consent judgment against Erie's insured for $2,870,000.   Orndorff v. Erie Insurance Exchange (This Case) --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Minnesota Statute Does not Require Insurer to Pay to Bring Church  Property up to Code From Damage Predating Loss   St. Matthews Church of God and Christ (St. Matthews) is located in St.  Paul, Minnesota sued State Farm Fire and Casualty Company (State Farm)  who insured St. Matthews. The policy provided replacement cost coverage  for damage to St. Matthews's buildings.  In St. Matthews Church of God and Christ v. State Farm Fire and Casualty  Company, No. A21-0240, Supreme Court of Minnesota (November 23, 2022)  St. Matthews sought payment for damaged masonry wall when covered peril  only damaged drywall covering the masonry that was cracked as a result  of old age.   FACTS   In June 2017, a storm damaged the property of St. Matthews, including  the building's drywall.  At issue is the interpretation and application of Minn. Stat. § 65A.10,  subd. 1 (2020) (“the statute”). The statute requires replacement cost  insurance to cover the cost of repairing any "damaged property in  accordance with the minimum code as required by state or local  authorities." In "the case of a partial loss," replacement cost  insurance is required to cover only "the damaged portion of the  property."  St. Matthews's policy provided replacement cost coverage, meaning that,  in the event of a loss, the insurer agreed to compensate for that loss  without taking into account depreciation.     By December 2018, State Farm paid St. Matthews $107,053, an amount that  included the cost of replacing and repairing the drywall.  St. Matthews was required to obtain a building permit from the City to  make the necessary repairs, including replacing the drywall. The City  was concerned about the defects in the existing masonry wall which  rendered the wall out of code. St. Matthews subsequently requested State  Farm to pay the cost of bringing the masonry up to code. In response,  State Farm hired a consultant to evaluate the damaged masonry and  determine the cause of damage. The consultant concluded that the  "cracked and out-of-plumb condition . . . was a longterm condition  unrelated to the storm ...."  On cross-motions for summary judgment, the district court granted  summary judgment to State Farm.   ANALYSIS   The parties agree that the damaged property at issue is a partial loss  and that, before the drywall can be repaired, St. Paul's city code  requires that the masonry be repaired sufficiently to bring it in  accordance with minimum code.  All parties agreed that the damage to the masonry was not caused or  impacted by the storm. Accordingly, the damage to the masonry was not  independently covered by State Farm's policy. Viewing the project from  the perspective of a drywall installer there was nothing in the  condition of the masonry that prevented the installation of new drywall.  The Supreme Court concluded that under a plain reading of the statute in  the case of a partial loss, replacement cost coverage applies only to  the damaged portion of the property covered by a cause of loss. Only the  drywall was damaged because of the storm, but the masonry was not.  Therefore, only the damaged drywall is subject to the statute's  code-compliance provision. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

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ZIFL Volume 26, Issue 23  The December 1, 2022 issue contains articles and reports of insurance  fraud convictions for every insurance claims professional, SIU  investigators and everyone interested in the efforts to defeat or deter  insurance fraud. The December 1, 2022 issue includes:   It Doesn't Pay to Try to Cheat Your Insurance Company   Sigismondi Foreign Car Specialists, Inc. appealed the U. S. District  Court's summary judgment in favor of State Auto Property and Casualty  Insurance Company on State Auto's declaratory judgment action and  statutory insurance fraud claim.  In State Auto Property And Casualty Insurance Company v. Sigismondi  Foreign Car Specialists, Inc., No. 21-2435, United States Court of  Appeals, Third Circuit (November 18, 2022) the Third Circuit Court of  Appeal dealt with the allegations of the insurer that Sigismondi  attempted insurance fraud.  Read the full article at http://zalma.com/blog/wp-content/uploads/2022/11/ZIFL-12-01-2022.pdf New California Law Means New Obligations for Insurance Agents &  Brokers  California Governor Gavin Newsom has signed into law Senate Bill 1242,  written by the Senate Insurance Committee and aimed at protecting   California consumers by imposing a variety of requirements upon  producers.  Reporting Fraud  At the start of the year, agents and brokers will be required to report  fraud to the California Department of Insurance (CDI). More  specifically, SB 1242 amends the California Insurance Code to require  producers who suspect or know a fraudulent application for insurance is  being made to submit to the DOI Fraud Division   Read the full article at http://zalma.com/blog/wp-content/uploads/2022/11/ZIFL-12-01-2022.pdf   Crime Doesn't Pay - It Leads to Bankruptcy  North Carolina’s Wake County Superior Court judge ordered the  liquidation of two life insurance companies in rehabilitation operated  under billionaire insurance and finance executive Greg Lindberg.   Read the full article at http://zalma.com/blog/wp-content/uploads/2022/11/ZIFL-12-01-2022.pdf   Good News From the Coalition Against Insurance Fraud   A pain doc stuck patients with unneeded injections for knees and other  body parts in a $240M scheme in San Antonio, Tex. Area. Dr. Jorge  Zamora-Quezada falsely diagnosed patients with degenerative diseases  such as rheumatoid arthritis.   Read the full article about multiple insurance fraud convictions at http://zalma.com/blog/wp-content/uploads/2022/11/ZIFL-12-01-2022.pdf --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Plaintiffs claimed that the policy's "natural disaster" provision  was rendered a nullity; it would allow for coverage in instances when  all the resorts in a state closed indefinitely for a natural disaster  but reopened one month later thus not ceasing ski operations altogether  for the season which is not what eliminated the Plaintiffs desire to  ski.  The trial court’s decision was affirmed.  ZALMA OPINION  The Ninth Circuit, unlike the Plaintiffs, the lawyers for the  Plaintiffs, and the District Court, read the full policy and found that  it did not matter whether the Plaintiffs were quarantined because their  loss happened after the policy, by its terms, had expired.  (c) 2022 Barry Zalma & ClaimSchool, Inc.  Subscribe and receive videos limited to subscribers of Excellence in  Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe.   Go to substack at substack.com/refer/barryzalma Consider subscribing to  my publications at substack at substack.com/refer/barryzalma   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 [email protected]  Write to Mr. Zalma at [email protected]; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

No Coverage for Theft by Persons Entrusted   When the plaintiff turned her restaurant over to two restaurateurs when  she became ill they took out of the restaurant and converted it to their  possession. The restaurateurs  claimed they purchased the equipment  from plaintiff and she claimed they took advantage of her illness and  stole the property.   In Tomazina Johnson, d/b/a Zing Zing's Wings & More, LLC v. State  Farm Fire & Casualty Company, No. 2:20-cv-02912-cgc, United States  District Court, W.D. Tennessee, Western Division (November 23, 2022) the  USDC resolved the dispute by reading the full policy and applying its  language to the facts established by State Farm's motion.   INTRODUCTION  Plaintiff's Circuit Court Complaint alleged two claims: breach of  contract and bad-faith refusal to pay an insurance claim pursuant to  Tennessee Code Section 56-7- Plaintiff argued that the Policy provides coverage for accidental  physical loss of business personal property and that she has met her  initial burden of establishing that an accidental, direct loss during  the Policy period.  THE INSURANCE POLICY  State Farm issued a businessowner's insurance policy that was in full  force and effect insuring Plaintiff's restaurant business, Zing Zing's  Wings & More, LLC (“Zing Zing's”). The Policy provides that State  Farm insures for the “accidental direct physical loss to Covered  Property.” However, “Section I - EXCLUSIONS” and the “Property Subject  to Limitations” provisions limited the coverages available to the  Plaintiff. The policy contained the following exclusion:  Evidence of Events Relevant to Plaintiff's Claims  Plaintiff opened her restaurant Zing Zing's. Its grand opening took  place in February of 2019. However, while Plaintiff was operating the  restaurant, it was operating at a loss.  On the advice of counsel Plaintiff dealt with two individuals-Curtis  Braden (“Braden”) and Rayford Burns (“Burns”)- who were to take over  Zing Zing's while she was ill. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Impossible to Sue Insurers who are Part of the Same Group of Insurers   John R. Parrish sued alleging claims for breach of contract, breach of  the duty of good faith and fair dealing, and fraud against the three  defendant insurance companies. The claims arose out of defendants'  handling of an insurance claim submitted by plaintiff for storm damage  to his home.  In John R. Parrish v.  Liberty Mutual Insurance Company, et al., No.  CIV-22-0802-HE, United States District Court, W.D. Oklahoma (November  18, 2022) the homeowner's policy that plaintiff relies on was issued by  defendant American Economy Insurance Company.  The other two defendants,  Liberty Mutual Insurance Company and Safeco Insurance Company of  America, are alleged to have handled various dealings with plaintiff and  to have participated in the claims handling process.  All three defendants moved to dismiss the purported fraud claim arguing  that Oklahoma law does not recognize a fraud claim in the alleged  circumstances. Defendants Liberty Mutual and Safeco also moved to  dismiss the contract and bad faith claims as to them since they did not  insure Parrish.  A court will grant a motion to dismiss if the complaint fails to allege  enough facts to state a claim to relief that is plausible on its face.  The court accepts all well-pleaded factual allegations of the complaint  as true and views them in the light most favorable to the nonmoving  party. A claim is facially plausible when the plaintiff pleads factual  content that allows the court to draw the reasonable inference that the  defendant is liable for the misconduct alleged.   THE FRAUD CLAIM  Claims for fraud in the inducement of the contract or as to the types  and amount of coverage are examples of fraud allegations allowed with  regard to insurance matters in Oklahoma. But that is not the  circumstance alleged by Parrish. The petition raised no issue as to the  formation of the insurance contract involved. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

My Thanksgiving Wishes from My Family and I to You and Yours   A Blog and Video Blog Explaining Why I am Thankful   My family and I have much to be thankful for this year, not the least of  which are the care provided by Dr. Wright, the cardiologist who cares  for me and my wife, Thea.  I am personally in good health, walking four to five miles a day, and in  retirement from the practice of law, working only six to eight hours a  day doing what I love the most, writing about insurance, insurance  claims, insurance law and acting as an insurance claims consultant and  expert witness.   Contrary to what was done in the insurance industry at the time,  Fireman's Fund allowed me to study law at night while I worked as a  full-time insurance adjuster with the Fireman’s Fund. I was fortunate  enough to work for a claims manager – Coleman T. Mobley – who did not  require me to go out of state to adjust major storm claims if it  interfered with my law school studies. Since I was in law school 50  weeks a year the only storm duty I was required to work was a fire storm  that burned from the San Fernando Valley to the ocean at Malibu.   Because of Mr. Mobley and the Fireman’s Fund I was able to complete my  studies and pass the California Bar late in 1971 that allowed me to be  admitted to the California Bar on January 2, 1972.  I took a cut in pay to get my first job as an Associate Attorney with a  law firm that was willing to teach me to be a lawyer handling every kind  of problem a new lawyer could face from wills, tort claims, divorce,  drunk driving, trials, depositions, and dozens of orders to show cause  in multiple courts around the Inland Empire of California. By doing so,  the first two years after I started practicing law in 1972 I was able to  become a lawyer who could deal with any issue brought to me.  I was fortunate enough to move to an insurance law firm in Century City  where I was assigned to a coverage lawyer who was trying to deal with  over 500 active matters who, when I arrived, assigned me 250 of the  matters and pointed me to the firm’s library to learn what to do. At the  time new technology was an IBM Selectric typewriter that could erase  errors from the keyboard without the need to use white-out paint.  I did  legal research in the firm’s large library which, when it was inadequate  for the task, I had to drive to the County Law Library in downtown Los  Angeles. Research in a large library took days to find support for an  issue.  In 1979 I decided it was time to be my own boss. I started a law firm  called Barry Zalma, Inc. with a secretary who came from my last firm and  brought an IBM Selectric typewriter with her into a small windowless  office. I had obtained a line of credit from a bank that I hoped would  carry us until the practice started since the only case I had was my  sister’s rear-ender from which I could not take a fee. The office was  furnished with a file cabinet from my father-in-law’s dental practice  and a dining room table from my wife’s grandmother who had passed away. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Court Refuses to Strain to Find Ambiguity That Did Not Exist   In ERIE INSURANCE EXCHANGE v. DRAGANA PETROVIC, No. 1-21-0628, 2022 IL  App (1st) 210628-U, Court of Appeals of Illinois, First District, Second  Division (November 15, 2022) the circuit court properly granted summary  judgment in favor of the insurer declaring that it had no duty to  indemnify or defend the insureds because the underlying accident  occurred while the insured was operating his personal vehicle during the  scope of employment, triggering the "auto exclusion" provision of the  policy.   Erie Insurance Exchange (Erie) sued the defendants, Aral Construction  Company (Aral) and Arunas Alasevicius (Alasevicius) and  Dragana  Petrovic (Petrovic), seeking a declaration that Erie was not obligated  to defend or indemnify Aral or Alasevicius in the underlying negligence  claim brought by Petrovic. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

IT DOESN’T PAY TO TRY TO CHEAT YOUR INSURANCE COMPANY   Legitimate Claim Destroyed by Creating Fake Invoices Sigismondi Foreign Car Specialists, Inc. appealed the U. S. District  Court's summary judgment in favor of State Auto Property and Casualty  Insurance Company on State Auto's declaratory judgment action and  statutory insurance fraud claim.  In State Auto Property And Casualty Insurance Company v. Sigismondi  Foreign Car Specialists, Inc., No. 21-2435, United States Court of  Appeals, Third Circuit (November 18, 2022) the Third Circuit Court of  Appeal dealt with the allegations of the insurer that Sigismondi  attempted insurance fraud.  FACTS  State Auto issued a commercial insurance policy that provided coverage  for Sigismondi's car repair shop.  Sigismondi requested an insurance  payment for water damage, but State Auto denied the claim, citing fraud.  The misrepresentations asserted as a defense by State Auto occurred  during the claims-adjustment process. Sigismondi and State Auto retained  adjusters to value the damaged inventory. The adjusters first created a  joint inventory-a list of all the damaged items for which Sigismondi  sought insurance proceeds. State Auto's adjuster, Chad Foster, then  researched prices of the same or similar products to determine either a  "replacement value" (if Sigismondi replaced the item) or an "actual cash  value" (if not). Sigismondi's adjusters, or Sigismondi itself, likewise  valued the items.   Sigismondi valued certain items higher than Foster estimated or could  verify. Sigismondi presented what appeared to be original invoices from  various vendors trying to convince State Auto to pay more than its  adjuster calculated.  In truth, a Sigismondi employee had scanned at least some of the  invoices into the computer and then used editing software to change the  items and prices listed by the vendors. After Foster alerted State Auto  to this issue, State Auto sent Sigismondi a reservation of rights  letter, requesting further documentation and highlighting a policy  provision stating the policy would be void if any insureds  "intentionally conceal or misrepresent a material fact concerning . . .  [a] claim under this policy." --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

CAST IRON PIPES RUST & LEAK   Marisol Rosa ("Rosa") appealed a final summary judgment entered in favor  of Safepoint Insurance Company ("Safepoint").  In Marisol Rosa v.  Safepoint Insurance Company, No. 5D21-3005, Florida Court of Appeals,  Fifth District (November 14, 2022) the Court of Appeals interpreted an  exclusion for damages caused by an act of nature.  The Insurance Policy  Safepoint insured Rosa's dwelling pursuant to a homeowners insurance  policy. The dwelling was damaged by the overflow of water from the  plumbing system.  The parties agree that the loss resulted from the  deterioration of cast iron pipes that was caused by "rust or other  corrosion." After investigating the damage, Safepoint determined the  loss was excluded from coverage under the policy's Water Damage  Exclusion Endorsement. Rosa then sued seeking to recover the costs she  incurred in repairing her dwelling due to the water damage.   The Issue   The issue in this appeal is whether the policy covers the subject loss,  and the answer depends on the meaning of the term "act of nature" in the  policy. The introductory paragraph of the policy's Exclusions section states  that the policy does "not insure for loss caused directly or indirectly  by any of the following. Such loss is excluded regardless of any other  cause or event contributing concurrently or in any sequence to the loss.  . . ." The definition of "Water Damage" following that introductory  language was replaced by an endorsement to the policy, the Water Damage  Exclusion Endorsement, which defines "Water Damage" as including: “d.  Accidental or intentional discharge or overflow of water or steam from  within a plumbing, heating, air conditioning or automatic fire  protective sprinkler system or from within a household appliance; . . . .  Caused by or resulting from human or animal, forces or any act of  nature.” (emphasis added)  Thus, if the rust or other corrosion that caused this loss was an act of  nature, Safepoint correctly denied coverage. But, if the rust or other  corrosion was not an act of nature, the Water Damage Exclusion  Endorsement did not preclude coverage. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Arson Requires Jail & Restitution   Following a fifteen-day trial, a jury agreed with the State's claims  that defendant Terrence L. Strothers' year-long dispute over a woman  with another man, Shane Stevens, resulted in defendant assaulting Shane  by firing a flare at Shane's car; and later that same day recruiting  some friends to aid in his retribution who fired two flares at Shane's  family's home, causing its destruction.   In STATE OF NEW JERSEY v. TERRENCE L. STROTHERS, No. A-5157-18, Superior  Court of New Jersey, Appellate Division (November 15, 2022) he  attempted to avoid jail and the convictions that the jury found obvious.  JURY VERDICT  In reaching its verdict, the jury found defendant guilty of eleven of  the State's thirteen charges. Defendant was convicted of:  third-degree conspiracy to commit arson as a lesser-included offense of  second-degree conspiracy to commit aggravated arson; third-degree arson, as a lesser-included offense of second-degree  aggravated arson; third-degree conspiracy to commit criminal mischief; third-degree criminal mischief; third-degree conspiracy to commit  aggravated assault as a lesser-included offense of second-degree  conspiracy to committed aggravated assault; third-degree aggravated assault as a lesser-included offense of  second-degree aggravated assault; second-degree aggravated assault; two counts of third-degree possession of a weapon for unlawful purposes;  and three counts of fourth-degree unlawful possession of a weapon. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Claims Commandment XI   Thou Shall Empathize With the Claimant  Everyone in a claim situation is unhappy, disturbed, shocked, injured  either in body or emotionally and needs help. The adjuster must  recognize the difference between sympathy and empathy.   Empathy is identification with and understanding of another’s situation,  feelings, and motives. It is the ability to understand another person’s  circumstances, point of view, thoughts, and feelings.  Sympathy, on the other hand, is the sharing of another’s emotions,  especially of sorrow or anguish and includes pity and compassion. It is  the fact or power of sharing the feelings of another, especially in  sorrow or trouble. Sympathy must be limited to the needs of relatives or  clergy, not a professional relationship.  The adjuster should avoid sympathy and work to convince the insured or  claimant that the adjuster empathizes with the claimant’s situation.  Empathy can be shown if the adjuster can honestly express one or more of  the following similarities between the adjuster and the claimant and  simultaneously establish rapport: --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

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Claims Commandment Number IV   Thou Shall Understand The Policy  In this the fourth of Fifteen Claims Commandments we deal with the need  for every insurance claims professional to read and understand the terms  and conditions of the policy that made promises to an insured who is  presenting a claim.   Insurance Policies are Contracts  Insurance policies are contracts. To understand insurance claims the  adjuster must understand how all contracts, and specifically insurance  contracts, are interpreted. Rules of contract interpretation have  developed over the last 300 years and are applied by courts with the  intent to fulfill the desires of all parties to the contract.  People and judges who are not conversant in insurance and the  interpretation of insurance contracts believe that the insurance policy  is difficult to read and understand. They are wrong. However, as one  court said in Delancy v. Rockingham Farmers Mutual, 52 N.H. 581 (1873):  This [policy], if read by an ordinary man, would be an inexplicable  riddle, a mere flood of darkness and confusion … should some extremely  eccentric person attempt to examine the involved and intricate net in  which he was to be entangled, he would find that it is printed in such  small type and in lines so long and crowded as to make the perusal of  the document physically difficult, painful and possibly injurious.  Since 1873 insurance policies are printed in large print and in  language, by statute, that anyone with a fourth grade education can  understand. Still, there seem to regularly be disputes taken to court  about the meaning of terms, conditions and limitations of the policy of  insurance.   The following rules govern the construction of contracts of insurance:  If the terms of a promise are in any respect ambiguous or uncertain, it  must be interpreted in the sense in which the promisor believed at the  time of making it, that the promisee understood it. If a written contract is so worded that it can be given a definite or  certain legal meaning, then it is not ambiguous. However, if the  language of a policy or contract is subject to two or more reasonable  interpretations, it is ambiguous. When a policy is interpreted, the provisions of an endorsement control  the interpretation over the body or declarations of a policy when the  two are in conflict. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Claims Commandment III - Thou Shall Communicate Often With The Third  Party Insured and the Claimant   Insurance claims is a service business. The claims person – whether  acting for the insurer or the insured – provides a service to the  insured and the insurer. Communication is essential to providing the  service promised by the insurance policy.  In some states, like California, communications are required by  regulation:  Every insurer shall disclose to a first party claimant or beneficiary,  all benefits, coverage, time limits or other provisions of any insurance  policy issued by that insurer that may apply to the claim presented by  the claimant. When additional benefits might reasonably be payable under  an insured’s policy upon receipt of additional proofs of claim, the  insurer shall immediately communicate this fact to the insured and  cooperate with and assist the insured in determining the extent of the  insurer’s additional liability. [10 CCR 2695.4 (a)] --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL - Volume 26 Issue 21   In this the 21st issue of the 26th year of publication of Zalma's  Insurance Fraud Letter you will find articles that discuss the following  insurance fraud issues:   When an Insured Lies to his Insurer the Claim May Be Denied  In Cesar Benitez v. Universal Property And Casualty Insurance Company,  No. 4D21-3281, Florida Court of Appeals, Fourth District (October 12,  2022) Cesar Benitez appealed the trial court’s entry of final summary  judgment in favor of Universal Property and Casualty Insurance Company  (“Insurer”) in a first-party property insurance dispute over a water  damage claim.  In his application for a policy with the Insurer, Benitez reported no  previous losses on his property. However, after Benitez filed a claim  for new damage, the Insurer’s inspector found signs of pre-existing  damage and repairs. The Insurer denied Benitez’s claim but continued to  collect premiums from him for several years. Benitez then sued for  breach of contract, and Insurer asserted an affirmative defense based on  section 627.409, Florida Statutes (2019).  Read the full article and the full issue at: ZIFL-11-01-2022    Chutzpah: Insurance Criminals Conduct on Release Must Stay in Jail Conduct After Post Conviction Relief Requires Jail.  In Monnie Villareal v. State Of Mississippi, No. 2021-CP-00440-COA,  Court of Appeals of Mississippi (October 11, 2022), the Court of Appeals  of Mississippi dealt with a request to avoid jail after conviction for  insurance   Read the full article and the full issue at: http://zalma.com/blog/wp-content/uploads/2022/10/ZIFL-11-01-2022.pdf   Good News From the Coalition Against Insurance Fraud   This issue includes information about convictions like: Roshanak Khadem ran clinics that provided beauty and spa services.   Read the full article and the full issue at: http://zalma.com/blog/wp-content/uploads/2022/10/ZIFL-11-01-2022.pdf  How to Add to the Professionalism of Your Claims Staff  The insurance industry has been less than effective in training its  personnel. Their employees, whether in claims, underwriting or sales,  are hungry for education and training to improve their work in the  industry.  Read the full article and the full issue at:http://zalma.com/blog/wp-content/uploads/2022/10/ZIFL-11-01-2022.pdf    How To Defeat or Deter Insurance Fraud Insurers Must be Proactive Against Insurance Fraud Insurers Must Stop the Logarithmic Growth of Insurance Fraud  Read the full article and the full issue at :http://zalma.com/blog/wp-content/uploads/2022/10/ZIFL-11-01-2022.pdf   Health Insurance Fraud Convictions New York Doctor Settles Improper Billing and Controlled Substance Act Claims  Physician Admits Upcoding of Services [Plus dozens of other convictions]  Read the full article and the full issue at: http://zalma.com/blog/wp-content/uploads/2022/10/ZIFL-11-01-2022.pdf   A False Statement at EUO Voids Coverage  Where a plaintiff admits to making false statements with the intent that  his insurer relies on those statements, the issue of whether such false  statements were made need not be tried to a judge or jury. Similarly,  whether a false statement was made knowingly and with the intent to  deceive the insurer is usually a question of fact but may be decided as a  matter of law where the insured admits that he made knowingly false  statements with the intent that the insurer rely upon them because that  is, by definition, fraud. [Ram v. Infinity Select Ins., 807 F. Supp. 2d  843 (N.D. Cal. 2011)]  Read the full article and the full issue at: http://zalma.com/blog/wp-content/uploads/2022/10/ZIFL-11-01-2022.pdf   Other Insurance Fraud Convictions --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Thou Shall Always Conduct A Thorough Investigation   This is the second in a series of fifteen claims commandments that I  believe must be followed by every insurance claims professional.   INVESTIGATION   Investigation is a search for truth. It is an art form where facts are  established. It has been defined by the state of California, for  example, as follows:  “Investigation” means all activities of an insurer, or its claims agent  related to the determination of coverage, liabilities, or nature and  extent of loss or damage for which benefits are afforded by an insurance  policy, obligations or duties under a bond, and other obligations or  duties arising from an insurance policy or bond. [California Code of  Regulations, 10CFR2695.2(k)]  Courts will not subject an insurance company to a choice between  liability under a bad-faith-failure-to-investigate theory for  publication of a denial of coverage without an adequate investigation.   Liability can be imposed for a constructive denial imposed after the  insurer has conducted a more thorough investigation that confirms an  earlier determination of no coverage, on the theory of delay coupled  with a wrongful intent.  Courts, state statutes and regulations require that an insurer complete a  thorough investigation before it decides the resolution of a claim for  property damage, bodily injury, personal injury, or for defense and/or  indemnity under a liability insurance policy. Initial conclusions based  on a bare reading of a lawsuit or initial investigative interview are  not enough. Rather, the insurer is required to perform a thorough  investigation before deciding on a claim.  Even though an insurance company is entitled to make a thorough  investigation to determine whether there is coverage under its policy of  insurance, the company acts at its peril in refusing to defend its  insured. If it is subsequently determined that the company erroneously  denied coverage, the company will be liable for damages for breach of  its agreement under the policy, but if done in good faith it will not be  required to pay exemplary damages.  Insurers should conduct their thorough investigation as soon as  possible. If a defense is required before the investigation can be  completed, the prudent insurer will provide a defense to the insured  under a reservation of rights, including a reservation to withdraw the  defense and seek reimbursement for moneys expended in providing the  defense under reservation. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Thou Shall Confirm Coverage  How to Confirm Coverage  When I was a young adjuster, I worked for the Fireman’s Fund Insurance  Company. Occasionally confused insureds and brokers would report to the  Fireman’s Fund a claim meant for Fireman’s Insurance of Newark. The  claim would often be adjusted and paid before anyone realized an error  had been made. Notice provisions in insurance policies serve the important function of  allowing the insurer the opportunity to make a timely and thorough  investigation of the insured’s claim. American States Insurance Co. v.  National Cycle, 260 Ill. App. 3d 299, 310-11, 631 N.E.2d 1292, 197 Ill.  Dec. 833 (1994); Twin City Fire Insurance Co., 266 Ill. App. 3d at 7. When a loss or claim is reported to an insurance company the first task  required of the insurer and its claim personnel is to confirm the  existence of a policy. The task today is much simpler than it was when I  was an adjuster where we had to pull out the actual underwriting file  and review the daily report. Now, coverage can be confirmed by computer. If the insurer’s computer system shows that a policy was in effect at  the time the insured reported that a loss occurred, the first step of  confirming coverage was completed. Next, if available digitally, the  entire policy must be accessed including the declarations page and all  policy wordings, all endorsements and modifications to the standard  policy language.  For example: 1. If the policy is a property policy that insures the insured against  the risk of loss of a dwelling by fire, lightning, windstorm and hail,  and nothing more and the insured reports a claim for damage caused by  earthquake the existence of a policy is confirmed but the existence of  coverage is not. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Material Misrepresentation About Prior Health Care Supports Rescission   An ERISA Policy May be Rescinded  In Provident Life & Accident Insurance Company v. Bradley D. Mckinney, No. 3:19-CV-1325  (SVN), United States District Court, D. Connecticut (September 9, 2022)  the USDC was called upon to determine if an insurer can rescind an  ERISA policy.   FACTUAL BACKGROUND   Bradley McKinney applied for and obtained a disability insurance policy  with Provident Life Accident & Insurance Company (“Provident Life”).  McKinney subsequently filed a claim for disability benefits under the  policy, but Provident Life rejected his claim on the ground that  McKinney made material misrepresentations in his application for the  policy. Provident Life sued seeking rescission of the insurance policy,  and McKinney counterclaimed seeking an order directing Provident Life to  pay him all benefits due under the policy.   McKinney's employer, Anderson Tax LLC, maintained a Supplemental  Individual Disability Insurance Plan. McKinney applied for supplemental  insurance through the plan. In completing the application, McKinney  answered various questions about his medical history and agreed that his  answers were “true and complete and correctly recorded to the best of  [his] knowledge and belief.” In September of that year, Provident Life  issued him an insurance policy providing all three available disability  coverages. The policy provided that “[o]missions and misstatements in  the application could cause an otherwise valid claim to be denied or  [the policy] to be rescinded.”  In answering questions 6 and 8 of the application McKinney represented  that he had not received diagnosis or treatment from a physician for  memory loss, confusion, or speech disruption in the five years preceding  his application. Second, in answering question 3(a), he represented  that he had not missed one or more days of work or been admitted to a  medical facility due to sickness or injury in the 180 days preceding his  application. Upon reviewing McKinney's medical records, Provident Life  concluded that his answers to those questions were untruthful and that  its denial of his claim and rescission of his policy were proper.  ERISA  The parties do not dispute that a plan fiduciary may obtain “equitable  rescission of an ERISA-governed insurance policy that is procured  through the material misstatements or omissions of the insured.”  [Shipley v. Ark. Blue Cross & Blue Shield, 333 F.3d 898, 902 (8th  Cir. 2003).]  An ERISA plan fiduciary's right to obtain equitable  rescission is well grounded in federal common law.   Rescission Due to Material Misrepresentation Under the federal common law that has developed pursuant to ERISA, an  insurer can rescind a policy where the insured knowingly made a material  misrepresentation in an application for an ERISA-governed insurance  policy.  DISCUSSION   In denying McKinney's appeal of the original denial, Provident Life  explained that McKinney also untruthfully answered question 3(a), which  concerned time off work due to admission to sickness or injury in the  relevant time frame.  The Court concluded that McKinney's claims of ignorance of the fact that  he had been treated for confusion and speech disruption during his 2016  hospitalization was not innocent.   The court concluded that McKinney's ignorance about the facts of his  2016 hospitalization was not reasonable.   The court also concluded that there is no genuine dispute that  McKinney's untrue answers to questions 6 and 8 were material to  Provident Life's issuance of the policy. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurer May Deny a Claim When Insured Lies on Application   Rescission Requires Return of Premium Denial of Claim Does Not   Cesar Benitez appealed the trial court's entry of final summary judgment  in favor of Universal Property and Casualty Insurance Company  ("Insurer") in a first-party property insurance dispute over a water  damage claim.  In Cesar Benitez v. Universal Property And Casualty Insurance Company,  No. 4D21-3281, Florida Court of Appeals, Fourth District (October 12,  2022) the Court of Appeals was asked to interpret a statute and the  policy wording.   FACTS   In his application for a policy with Insurer Benitez reported no  previous losses on his property. However, after Benitez filed a claim  for new damage, Insurer's inspector found signs of pre-existing damage  and repairs. Insurer denied Benitez's claim but continued to collect  premiums from him for several years. Benitez then sued for breach of  contract, and Insurer asserted an affirmative defense based on section  627.409, Florida Statutes (2019). The statute provides:  (1) Any statement or description made by or on behalf of an insured or  annuitant in an application for an insurance policy or annuity contract,  or in negotiations for a policy or contract, is a representation and  not a warranty. Except as provided in subsection (3), a  misrepresentation, omission, concealment of fact, or incorrect statement  may prevent recovery under the contract or policy only if any of the  following apply:  (a) The misrepresentation, omission, concealment, or statement is  fraudulent or is material to the acceptance of the risk or to the hazard  assumed by the insurer. § 627.409(1)(a), Fla. Stat. (2019) (emphasis  added).   Additionally, Insurer's policy allowed denial of coverage if Benitez  "[i]ntentionally concealed or misrepresented any material fact or  circumstance; (2) [e]ngaged in fraudulent conduct; or (3) [m]ade  material false statements; relating to this insurance."  The Insurer also moved for dismissal based on fraud on the court or, in  the alternative, for summary judgment pursuant to section 627.409 based  on material misrepresentations.  At a hearing on that motion, Benitez did not dispute his failure to  disclose the prior claim in both his policy application and discovery  responses to interrogatories and sworn statements in his deposition.  Benitez instead argued the Insurer could not claim rescission as an  affirmative defense because the Insurer had continued to collect  premiums from him for approximately two years after learning of the  prior undisclosed claim. The Insurer contended it sought only to deny  coverage under section 627.409 and not to rescind the policy --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Plaintiffs' and their Counsel's Bad Faith Defeats Suit Against Insurer   No Good Deed Goes Unpunished -   Plaintiffs Abused the Tort of Bad Faith  Julio Palma and Miriam Cortez (the Plaintiffs) appealed an order  granting summary judgment in a bad faith insurance case against Mercury  Insurance Company (Mercury). Mercury insured Frank McKenzie, who killed  Plaintiffs' son in a car crash. Plaintiffs obtained a $3 million  judgment in a wrongful death action against McKenzie. McKenzie then  assigned Plaintiffs his rights against Mercury, and Plaintiffs brought  the present action against Mercury on the basis that it failed to accept  their reasonable offer to settle their wrongful death claims. The trial  court granted Mercury's motion for summary judgment after determining  Plaintiffs never offered to settle their claims.   In Julio Palma et al. v. Mercury Insurance Company, B309063, California  Court of Appeals, Second District, Third Division (August 23, 2022) the  Court of Appeals refused to buy plaintiffs' claims of bad faith.  FACTUAL BACKGROUND   In September 2012, Frank McKenzie was driving a vehicle that struck and  killed Oscar Palma, who was riding a moped. At the time, McKenzie was  insured under a Mercury insurance policy with bodily injury liability  limits of $15,000 and property damage limits of $10,000. On October 15, 2012, attorney Paul Zuckerman sent Mercury a settlement  letter that identified "Oscar Palma (deceased) Estate of Oscar Palma" as  "Our Clients" and states: "Oscar Palma (deceased) Estate of Oscar  Palma, demands that Mercury Insurance tender full policy limits to Oscar  Palma (deceased) Estate of Oscar Palma to resolve their claim.   The letter stated the offer was to remain open for 14 days, until  October 29, 2012.  Mercury retained attorney Jeffrey Lim and instructed him to accept the  offer. On October 19, 2012, Lim faxed the Carpenter firm a letter  stating Mercury "is tendering to the estate and all heirs of Oscar Palma  Mr. McKenzie's $15,000 policy limits.   Between March and July 2013, Mercury sent the Carpenter firm six letters  "reiterat[ing]" its offer of the $15,000 bodily injury policy limits.  Plaintiffs' Wrongful Death Action Against McKenzie   On August 28, 2013, the Carpenter firm filed a lawsuit against McKenzie  on behalf of Plaintiffs, Ana Guzman-Palma, and the "Estate of Oscar F.  Palma, a deceased individual." Following a jury trial, the court entered  judgment against McKenzie and in favor of Plaintiffs for $3 million on  their wrongful death claims. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Occurrence Must be an Accident   https://zalma.com/blog Beverly Weathersby appealed the trial court's order awarding summary  disposition under MCR 2.116(C)(10) to plaintiff, Meemic Insurance  Company (Meemic), and denying its insured, defendant Randal S. Ritchie,  personal liability coverage under his homeowner's insurance policy.  In Meemic Insurance Company v. Randal S. Ritchie, and Beverly  Weathersby, No. 358929, Court of Appeals of Michigan (October 20, 2022)  the Court of Appeals was asked to resolve the issue of coverage for a  claimed assault under a homeowners policy.   FACTUAL BACKGROUND   The case arose out of an unfortunate encounter between two strangers,  whose stories of the incident vastly differ. As Weathersby tells it,  while making a home visit in rural Coldwater as part of her job as a  social worker, she became lost and her GPS erroneously sent her to  Ritchie's house. She pulled her car into Ritchie's driveway and  approached the home. Then, according to Weathersby, Ritchie came out of  his house, approached her, and aggressively confronted her while  pointing a gun directly at her at close range.  Fearing for her life,  Weathersby returned to her car and drove away.  Weathersby brought a civil action against Ritchie, asserting that  Ritchie committed the intentional tort of assault. She also claimed that  Ritchie was negligent in an apparent effort to dip into Ritchie's  insurance since is always intentional.  She sought damages for the emotional distress and injury she sustained  as a result of Ritchie's conduct. At the time of the incident, Ritchie  was insured under a homeowner's policy issued by Meemic. The trial court  denied coverage, ruling that Ritchie's act was not an "occurrence."  LEGAL ANALYSIS  The interpretation of an insurance contract is a question of law that is  reviewed de novo. An insurance policy is an agreement between parties  that a court interprets much the same as any other contract to best  effectuate the intent of the parties and the clear, unambiguous language  of the policy. The terms of a contract must be enforced as written  where there is no ambiguity. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Appellants should have filed their action no later than October 3, 2016,  which they did not do.   The October letter stated that UIM coverage is not available under the  policy. Even Appellants' counsel admitted that upon receipt of the  letter in 2012, he interpreted the letter as a denial of coverage.  Therefore, the record supported the finding of a concession by counsel  and an obvious failure to sue timely which defeated the suit.  ZALMA OPINION  When the lawyer for the plaintiff concedes that there was a denial in  2012 and the suit was not filed until 2018 he has conceded the statute  of limitations applied and the suit was untimely probably because he  agreed there was no coverage under the MBIC policy. When a plaintiff has  a viable cause of action against an insurer there is no excuse for  failing to sue within a four year statute of limitations.   (c) 2022 Barry Zalma & ClaimSchool, Inc.   Barry Zalma, Esq., CFE, is available at http://www.zalma.com and [email protected] and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe.Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurers Must be Proactive Against Insurance Fraud   Insurers Must Stop the Logarithmic Growth of Insurance Fraud  Fraud is taking more money every year from the insurance buying public.  The Coalition Against Insurance Fraud recently revised its estimates  from $80 billion a year to announce that insurance fraud takes over $308  billion a year from the insurance industry. The US Department of  Justice working with various federal police agencies have taken an  active role to investigate, prosecute and convict those who defraud U.S.  health programs and federally funded insurance like flood insurance and  crop insurance. Yet, the arrests and prosecutions that happen are only  creating a small dent in the amount of money stolen from private and  federally funded insurance.  Insurers have good reason to complain. They are universally ignored by  police agencies when they report the crime.  When insurance criminals are  caught in the act they are seldom arrested, even less often prosecuted  and almost never punished.  Insurance is the Only Crime Where The Victim Is Required To Pay For  Investigation & Prosecution of the Criminal Or No Investigation Will  Be Done  Similar businesses in the financial sector, who are also regular victims  of fraud and other crimes are not taxed or compelled to investigate  crimes committed against them. No one demands that the Bank of America  or Wells Fargo or Chase pay for prosecuting embezzlers or bank robbers.  No one demands that Southland Corporation pay for prosecuting people who  hold up 7-11 stores. No Regulator requires stockbrokers to investigate  money laundering or fraudulent transactions. The imposition upon the  insurance industry – and the attendant cost passed to the insurance  consumer – is unique.  Insurers are treated differently than all other businesses in the United  States.  George Orwell was right when, to paraphrase, he had a character in his  novel “Animal Farm” say that “all businesses are equal, some are more  equal than others.”  Clearly, insurers are less equal with regard to crimes perpetrated  against them than are other businesses.  Insurance fraud prosecutions and investigations are anemic.  What Can Insurance People Do to Change The Statistics?  Work within the system we have: --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

No UM/UIM Coverage Supports Denial & Starts Running of Limitations   Statute of Limitations Ran From Denial of Claim   In Glenna L. Novak And Estate Of Jeffery Leonard Novak, A/K/A Estate Of  Jeffery L. Novak By And Through Glenna L. Novak, Executrix v. Mutual  Benefit Insurance Company, No. 1592 MDA 2021, No. J-S23016-22, Superior  Court of Pennsylvania (October 14, 2022) when the plaintiffs lawyer  admitted a letter was a denial of a UM/UIM claim that denial started the  running of the statute of limitations.  Glenna L. Novak and the Estate of Jeffrey Leonard Novak (collectively  "Appellants") appealed from the order granting summary judgment in favor  of Mutual Benefit Insurance Company ("MBIC").   FACTS   In June 2011, Jeffrey Leonard Novak ("Decedent") was operating a  motorcycle when a vehicle driven by Roy E. Wright made a left turn  across Decedent's lane of travel, causing the motorcycle to strike the  vehicle. Decedent was thrown from his motorcycle and sustained injuries,  including severe head trauma, which resulted in death.  Appellants sought recovery from Wright, who had an insurance policy  through Progressive Specialty Insurance Company ("PSIG"). Wright's  policy had a bodily injury limit of $50,000, which PSIG tendered.  Appellants also submitted a claim for underinsured motorist ("UIM")  coverage under Decedent's motorcycle policy ("motorcycle policy"). The  motorcycle policy was issued by Progressive Advanced Insurance Company  ("PAIC"). PAIC informed Appellants that Decedent had rejected UIM  coverage. Appellants sued, contending the UIM rejection was ineffective,  and they eventually reached an agreement to resolve the suit for  $20,000.  Appellants' counsel wrote to MBIC, which had issued insurance on two of  Appellants' other vehicles, a car and a truck, seeking consent to settle  the two claims. In a letter dated October 3, 2012, MBIC stated the  motorcycle that Decedent was driving at the time of the accident was not  insured by MBIC. Therefore, MBIC explained, UIM coverage was not  available under its policy and its consent was not required for  settlement.  Appellants later made a claim to MBIC for UIM coverage under the  personal auto policy. MBIC denied UIM coverage, stating it had  previously denied coverage in the October 2012 letter, when it explained  that its consent was unnecessary for the settlements. Appellants sued  in February 2018 (six years after the first denial), and they filed a  complaint in May 2019. They alleged breach of contract, sought a  declaratory judgment, and requested damages for bad faith. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

When You Sue & Lose You Can’t Sue the Same Defendants Again   In DAB Three, LLC, et al. v. Sandra Fitzpatrick, Allen Fischer et al. v.  Lawyers Title Corporation et al., No. AC 44393, Court of Appeals of  Connecticut (October 18, 2022) the plaintiff attempted to avoid the  effect of the doctrine of res judicata.  FACTS   After a suit to recover damages for fraudulent concealment the trial  court granted the defendant’s motion for summary judgment in the first  action and the defendant Lawyers Title Insurance Corporation’s motion  for summary judgment in the second action and rendered judgments from  which the plaintiff Alan Fischer appealed.  OPINION   Alan Fischer appealed and claimed that the court incorrectly determined  that both of his complaints were barred by the doctrine of res judicata.  The plaintiff was the sole owner, designee, managing partner, and  assignee of DAB Three, LLC (DAB Three), and he was the sole person  acting through and for DAB Three. In August, 2006, DAB Three sued (the  2006 action) against seven defendants.  The gravamen of the 2019 suits is that the defendants are liable for the  $2,049,185.62 judgment rendered in the 2006 action because the  defendants failed to procure adequate insurance coverage with respect to  the property. The plaintiff alleged that, prior to and throughout the  2006 action, the defendants intentionally misrepresented and  fraudulently concealed which of the 2006 defendants was:   1   the broker of the policy,  2   Fitzpatrick’s employer, and  3   the party financially liable to the plaintiff.  The plaintiff alleged that the defendants “withheld” the identity of the  individual or entity that brokered the policy so as to force DAB Three  “to try the case and obtain a judgment in the [2006 action] against a  defendant purportedly without assets.” Both of the complaints in the  2019 actions assert three claims:      fraudulent concealment pursuant to General Statutes § 52-595,     common-law fraud, and     violation of Connecticut Unfair Trade Practices Act (CUTPA)  The defendants moved for summary judgment in the 2019 actions on at  least eight different grounds, including res judicata. The court granted  both motions for summary judgment and overruled the plaintiffs  objections.   DISCUSSION   The doctrine of res judicata provides that a valid, final judgment  rendered on the merits by a court of competent jurisdiction is an  absolute bar to a subsequent action between the same parties upon the  same claim or demand. Res judicata prevents a litigant from reasserting a  claim that has already been decided on the merits. Moreover, claim  preclusion prevents the pursuit of any claims relating to the cause of  action which were actually made or might have been made. Res judicata is  based on the public policy that a party should not be able to  relitigate a matter which it already has had an opportunity to litigate.  In order for res judicata to apply, four elements must be met:    1  the judgment must have been rendered on the merits by a court of  competent jurisdiction;  2   the parties to the prior and subsequent actions must be the same or  in privity;  3   there must have been an adequate opportunity to litigate the matter  fully; and  4   the same underlying claim must be at issue. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Pedestrian's No Fault Claim Belongs to Insurer Assigned  Insurers are professional litigants.  They are sued and sue often.  Usually they avoid suing other insurer for fear of making precedents  that will effect the entire industry. In Beth Bracy, Plaintiff, and ZMC  Pharmacy, LLC, Riverview Macomb Home & Attendant Care, and Michigan  Spine and Pain, Intervening Plaintiffs v. Yolanda Yvette Nichols,  Defendant, and Farmers Insurance Exchange,  Defendant/Cross-Plaintiff-Appellant, and GEICO Indemnity Company,  Defendant/Cross-Defendant-Appellee, No. 359397, Court of Appeals of  Michigan (October 13, 2022) the insurers involved should have avoided  the litigation against each other and voluntarily resolved the dispute  with the injured.   FACTUAL BACKGROUND   On March 7, 2012, Geico issued an automobile insurance policy to Marcus  Nichols (Marcus). Three years later, Marcus added a 1993 Chevrolet  Lumina owned by his mother, defendant, Yolanda Nichols (Nichols), to the  policy. Nichols was identified as a driver on the policy, but she was  not a named insured on the policy. Nichols was driving the Lumina when  she was involved in an automobile accident with plaintiff, Beth Bracy, a  pedestrian, on August 23, 2014. Bracy sought personal protection  insurance (PIP) benefits under the Michigan no-fault act, MCL 500.3101  et seq., through the Michigan Assigned Claims Plan (MACP). MACP assigned  the claim to Farmers, and Farmers paid Bracy PIP benefits for her  accident-related injuries.  Bracy filed a complaint against Farmers and Nichols, alleging bodily  injury liability against Nichols, and alleging Farmers had unreasonably  and unlawfully refused to pay her PIP benefits in accordance with the  no-fault act. Farmers filed a third-party complaint against Geico for  reimbursement under MCL 500.3172. Later, Farmers sought summary  disposition against Geico, contending Geico was highest in priority for  Bracy's benefits. Geico also filed a motion for summary disposition  against Farmers, arguing that Farmers was highest in priority for  Bracy's benefits. The trial court granted Farmers' motion.  Geico appealed to the Michigan Court of Appeal which remanded to the  trial court for entry of an order granting summary disposition in favor  of Geico "because GEICO was not the insurer of the owner, registrant, or  operator of the Lumina and, therefore, had no obligation to pay Bracy's  PIP benefits under MCL 500.3115(1)."   NO-FAULT COVERAGE  Farmers contended that Nichols' vehicle was insured under Marcus's Geico  automobile insurance policy, and thus, Bracy was entitled to recover  no-fault benefits under that policy.  LAW AND ANALYSIS  An uninsured pedestrian who suffers accidental bodily injury must seek  PIP benefits from insurers in the following order of priority:  (a) Insurers of owners or registrants of motor vehicles involved in the  accident.  (b) Insurers of operators of motor vehicles involved in the accident.  When no such insurer exists, the uninsured pedestrian may seek PIP  benefits through the MACP. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Trade Dress Infringement is Different From Trademark Infringement  In State Farm Fire And Casualty Company v. Jason Hines, Individually and  doing business as Dedicated Business Systems International LLC;  Dedicated Business Systems International, LLC; Tri-State Communication  Services LLC, doing business as U.S. Voice and Data, LLC Jason Hines;  Dedicated Business Systems International, LLC, No. 21-2354, United  States Court of Appeals, Third Circuit (October 14, 2022) an insurer  found no duty to defend because of a trade mark infringement exclusion.   FACTUAL BACKGROUND   An insurance coverage dispute arose concerning the scope of two  commercial liability insurance policies was presented to the Third  Circuit. The policies cover advertising injuries arising out of  infringement upon another's trade dress, but they exclude injuries  arising out of trademark infringement.  When the insured was sued for trademark infringement, the insurer  initially agreed to defend the insured with reservations, but now the  insurer wishes to withdraw from that representation. The insurer sued,  seeking a declaratory judgment, and the District Court entered summary  judgment in its favor: the policies' coverage of trade dress  infringement claims did not extend to the suit for trademark  infringement.  The Insurance Policies   The two commercial insurance policies at issue were issued by State  Farm. In 2013, both policies used the same language in providing  coverage for "personal and advertising injury." That coverage included  the obligation to defend against suits arising out of infringement "upon  another's copyright, trade dress or slogan in your 'advertisement.'"  (emphasis added). But that advertising injury coverage excluded claims  "[a]rising out of the infringement of copyright, patent, trademark,  trade secret or other intellectual property rights." (emphasis added).  Under both policies, that exclusion did not apply to infringement in an  advertisement "of copyright, trade dress or slogan." (emphasis added).  Dedicated Business Systems International ('DBSI') purchased those  policies from State Farm for itself and its officers when conducting  DBSI business.  The Underlying Lawsuit  For a time, DBSI was an authorized reseller of Avaya communications  technology. The authorized-reseller arrangement terminated in 2013, but  DBSI and one of its officers allegedly continued to access Avaya  software license portals afterwards - without Avaya's authorization. By  doing so, they were allegedly able to distribute pirated licenses to  customers for a handsome profit, all the while using Avaya's trade name  and marks to falsely represent that the software was "valid and  authorized by Avaya."  Believing that DBSI engaged in a "massive illegal software piracy  operation," Avaya sued DBSI and its officer. Avaya's eight-count  complaint included federal claims for trademark infringement and  copyright infringement.    Consistent with that reservation of rights, State Farm sued for a  judgment declaring that it did not have to defend or indemnify DBSI and  its officer in the Avaya lawsuit. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

No Duty to Defend or Indemnify Intentional Acts or Person not Insured   Norma Hudson and the Hudson Revocable Trust (the Trust) appealed from a  summary judgment entered in favor of Farm Bureau Mutual Insurance  Company of Arkansas, Inc. (Farm Bureau). In the summary-judgment order,  the trial court found as a matter of law that Farm Bureau had no duty of  defense or indemnification to the appellants arising from a lawsuit  filed against the Trust by Dewayne Evans, Mark White, and Billy Taylor.  In Norma Hudson And Hudson Revocable Trust v. Farm Bureau Mutual  Insurance Company Of Arkansas, Inc., No. CV-21-396, Court of Appeals of  Arkansas, Division II (October 5, 2022) the Court of Appeal resolved the  coverage dispute.   FACTS  Benjamin Hudson (Norma's adult grandson) shot and killed two coon dogs  and allegedly traumatized a third on property owned by the Trust. The  dog owners sued Benjamin Hudson (Benjamin) and the Trust, raising claims  for destruction of property, negligence, and tort of outrage and  seeking compensatory and punitive damages. The allegations in the  complaint against the Trust were that Benjamin was employed to oversee  the Trust property, that he was acting in a scope of that authority, and  that his outrageous conduct was ratified by the Trust.  Norma has two insurance policies with Farm Bureau. One policy is a  homeowner's policy that insures the property where the shootings  occurred, and the other is a property owner's policy. After the dog  owners' sued Norma and the Trust made a claim with Farm Bureau for  coverage under the insurance policies. Farm Bureau subsequently sued  seeking a declaratory judgment that it owed no duty to defend or  indemnify Benjamin, Norma, or the Trust based on exclusionary language  in the policies relating to bodily injury or property damage arising out  of intentional acts.   The policies provided that Farm Bureau provided that there is no  coverage for "bodily injury or property damage caused intentionally by  you or any covered person or at the direction of you or any covered  person" and that "[t]he expected or unexpected results of such acts are  not covered." (Emphasis added.)  Farm Bureau asserted that the dog owners' complaint alleged that  Benjamin was acting as an agent of the Trust when he shot the dogs. Farm  Bureau argued that because the insurance policies expressly excluded  liability coverage for damage arising out of an intentional act, it had  no duty to defend or indemnify Norma or the Trust and that it should be  granted summary judgment.  The trial court agreed and entered an order granting Farm Bureau's  summary-judgment motion. Specifically, the trial court found:  Liability insurance coverage is expressly and unambiguously excluded  under both the Homeowner Policy and the Property Owners Policy for  bodily injury or property damage arising out of the intentional conduct  of an insured.  ANALYSIS  Once the moving party has established a prima facie entitlement to  summary judgment, the opposing party must meet proof with proof and  demonstrate the existence of a material issue of fact. On appellate  review, the appellate court must determine if summary judgment was  appropriate based on whether the evidentiary items presented by the  moving party in support of the motion leave a material fact unanswered. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

137 Years in Prison for Insurance Fraud & Arson   How to Deter Insurance Fraud   A prisoner seeking relief from a lengthy sentence failed after multiple  efforts as a pro se applicant. In Ali Darwich v. Warden Lewisburg USP;  Attorney General United States Of America, No. 22-2280, United States  Court of Appeals, Third Circuit (October 14, 2022), Ali Darwich, a  federal prisoner currently confined at the United States Penitentiary in  Lewisburg, Pennsylvania (“USP Lewisburg”), appealed pro se from the  District Court’s order dismissing his petition for a writ of habeas  corpus under 28 U.S.C. § 2241.  FACTS  In 2013, a jury in the Eastern District of Michigan convicted Darwich of  thirty-three counts related to arson and insurance fraud, including  seven counts of using fire to commit fraud in violation of 18 U.S.C. §  844(h)(1). He was sentenced to a total term of 1647 months or 137 years  of imprisonment.  He tried multiple times to avoid the sentence only to have the United  States Court of Appeals for the Sixth Circuit affirmed, and the United  States Supreme Court denied Darwich’s petition for a writ of certiorari  in United States v. Darwich, 574 Fed.Appx. 582 (6th Cir. 2014), cert.  denied, 574 U.S. 1200 (2015). Darwich then moved to vacate, set aside,  or correct his sentence under 28 U.S.C. § 2255. The District Court  denied the motion, in United States v. Darwich, No. 2:10-CR-20705, 2016  WL 146662 (E.D. Mich. Jan. 13, 2016), and the Sixth Circuit denied  Darwich’s request for a certificate of appealability, in Darwich v.  United States, No. 16-1151 (6th Cir. August 5, 2016) (order). Darwich  continued to file numerous unsuccessful motions for authorization to  file second or successive § 2255 motions.  In 2022, Darwich filed a petition for relief under § 2241, which the  District Court construed as raising three claims: (1) that Darwich’s  conviction and sentence are unlawful under United States v. Davis, 588  U.S.__, 139 S.Ct. 2319 (2019), Bailey v. United States, 516 U.S. 137  (1995), and Deal v. United States, 508 U.S. 129 (1993); (2) that he was  subjected to selective prosecution because of his race or ethnicity; and  (3) that the sentencing court erred by imposing consecutive sentences.  The District Court dismissed the petition, concluding that Darwich  failed to show that § 2255 was an “inadequate or ineffective” remedy so  that his claims could be considered under § 224.  ANALYSIS  Motions pursuant to 28 U.S.C. § 2255 are the presumptive means by which  federal prisoners can challenge their convictions or sentences. A habeas  corpus petition under § 2241 accordingly “shall not be entertained”  unless a § 2255 motion would be “inadequate or ineffective to test the  legality of [petitioner’s] detention.” A § 2255 motion is inadequate or  ineffective only where the petitioner demonstrates that some limitation  of scope or procedure would prevent a § 2255 proceeding from affording  him a full hearing and adjudication of his wrongful detention claim.  The Third Circuit agreed with the District Court’s determination that  Darwich failed to make the showing necessary to meet the safety-valve  exception. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

It is Frivolous to File Same Suit Against Another Defendant After First  is Dismissed   Dimitri Enterprises, Inc. ("Dimitri") and its attorney, Richard J.  Flanagan, appealed from the district court's June 24, 2021 order  imposing $24,675.00 in sanctions pursuant to Federal Rule of Civil  Procedure 11. Dimitri, a roofing contractor, filed this lawsuit in  connection with a dispute regarding insurance coverage for an employee's  injuries on a construction project.  In Dimitri Enterprises, Inc. v. Spar Insurance Agency LLC, NIF Services  of New Jersey, Inc., and Scottsdale Insurance Company, No. 21-1722-cv,  United States Court of Appeals, Second Circuit (October 6, 2022) the  complaint asserted claims against defendant Scottsdale Insurance Company  ("Scottsdale"), which was Dimitri's commercial general liability  insurance carrier, and defendant NIF Services of New Jersey, Inc.  ("NIF"), which was originally alleged to be Dimitri's broker.  ORIGINAL CLAIM DISMISSED AS TIME BARRED  The district court granted NIF's motion to dismiss both claims against  it, reasoning that the negligence claim was time-barred, and the breach  of contract claim was inadequately pled because Dimitri did not allege  any contractual terms that NIF breached. Dimitri then filed a second  amended complaint (the "SAC") against an additional defendant, Spar  Insurance Agency, LLC ("Spar"), which was the retail insurance broker  for Dimitri's policy.  In its SAC, Dimitri brought claims against Spar for negligence and  breach of contract that were identical to the negligence and breach of  contract claims that the district court already dismissed against NIF.  The district court granted Spar's Motion to dismiss.  In addition, the district court granted Spar's subsequent motion for  sanctions, explaining that "plaintiff's counsel knew or should have  known that the claims against Spar were likewise subject to dismissal"  because "identical claims against NIF were previously dismissed as  either time-barred or inadequately pled."   DISCUSSION  The Second Circuit reviewed the district court's imposition of sanctions  pursuant to Rule 11 of the Federal Rules of Civil Procedure for an  abuse of discretion. This deferential standard is applicable to the  review of Rule 11 sanctions because the district court is familiar with  the issues and litigants and is thus better situated than the court of  appeals to marshal the pertinent facts and apply a fact-dependent legal  standard. An abuse of discretion only occurs if the district court based  its ruling on an erroneous view of the law or on a clearly erroneous  assessment of the evidence or rendered a decision that cannot be located  within the range of permissible decisions.  RULE 11 SANCTIONS  Rule 11 explicitly and unambiguously imposes an affirmative duty on each  attorney to conduct a reasonable inquiry into the viability of a  pleading before it is signed. The standard for triggering the award of  fees under Rule 11 is objective unreasonableness and is not based on the  subjective beliefs of the person making the statement.  Under Rule 11, a litigant's obligations with respect to the contents of  filings are not measured solely as of the time they are filed with --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL - 10/15/2022 available at  http://zalma.com/blog/wp-content/uploads/2022/10/ZIFL-10-15-2022-1.pdf   Short teases about the articles in this issue can be read at  ZIFL-10-15-2022   Ethics & Insurance Fraud  Insurance fraud is a crime in most jurisdictions. In California it is a  felony subject to five years in prison upon conviction. By definition a  person who commits the crime of insurance fraud is not acting ethically.  In State v. Whitaker, 175 P.3d 136, 117 Hawai'i 26 (Haw. App.  12/31/2007)  Whitaker, after presenting a claim to his insurer, was  indicted, convicted, and sentenced for Insurance Fraud in violation of  Hawaii Revised Statutes (HRS) ' 431:10C‑307.7(a)(1) and (b)(2) (2005),  and Attempted Theft in the Second Degree (Attempted Theft 2) in  violation of HRS ' 708‑831(1)(b) (Supp. 2000) and HRS ' 705‑500 (1993).   RICO Judgment Allows Disgorgement Damages Fraudsters Must Disgorge Profits of Crime - In Diane Creel and Lynn Creel v. Dr. Says, LLC, et al., Civil Action No. 4:18-CV-00615,  United States District Court, E.D. Texas, Sherman Division (September  27, 2022) the plaintiffs obtained a verdict against Defendants Dr. Yupo  Jesse Chang; MD Reliance, Inc.; Universal Physicians, PA; Dr. Says, LLC;  Office Winsome, LLC; and Yung Husan Yao (aka Angela Yao) for violations  of the civil Racketeer Influenced and Corrupt Organization Act (“RICO”)  and RICO conspiracy. The Court, after the verdict, needs to enter its  findings of fact and conclusions of law regarding equitable  disgorgement.  New California Fraud Statutes  SB 1040, authored by Senator Susan Rubio, authorizes the Insurance  Commissioner to order restitution from persons who sell insurance  without the necessary license from the Department of Insurance,  including “extended vehicle warranties” sold illegally through robocalls  and misappropriation of consumers’ and businesses’ premiums, among  other insurance scams.  Good News From the Coalition Against Insurance Fraud  Dead patients couldn’t stop Thomas G. O’Lear from billing taxpayers  $3.7M for fraudulent X-rays in the Indianapolis area. O’Lear ran a  portable-X-ray firm that zapped patients in nursing homes, skilled  nursing facilities and long-term care facilities. He billed for  thousands of X-rays that he and his business did not perform. That  included 151 X-rays on dates after the patients had died. He also billed  Medicare and Medicaid for services at nursing facilities on dates when  patients were either hospitalized and not on-site at the facilities.  O’Lear took multiple X-rays in one visit and falsely claimed that each  was done on a different day, requiring separate reimbursement for  transporting the portable equipment on each date. And he falsely billed  for multiple images of patients when only one image was done — thus  requiring a higher reimbursement. O’Lear covered up his scheme by  forging medical records, falsifying X-ray images and forging signatures  of his employees and the doc he said had ordered X-rays. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurance Coverage Dispute Alone Not Bad Faith   The tort of bad faith requires, for an insured to recover, that the  insurer act intentionally to deprive the insured of the benefits of the  policy of insurance.   Garo Alexanian (d/b/a) Vet Mobile and Companion Animal Network, Inc.  (“CAN,” and together with Alexanian, “Plaintiffs”) sued GEICO and  Travelers  seeking a declaration that Defendants have a duty to defend  and indemnify Alexanian against counterclaims filed against him New  York, plus tort damages for the insurers bad faith denial of his claim  for defense.   In Garo Alexanian d/b/a Vet Mobile and Companion Animal Network, Inc. v.  Government Employees Insurance Company and Travelers Casualty Insurance  Company Of America. No. 21-CV-05427 (LDH) (TAM), United States District  Court, E.D. New York (September 30, 2022) dealt with both the claims  for defense and the allegations allowing extracontractual damages.   BACKGROUND  The Travelers Policy excluded from coverage, however, personal injury to  a person “arising out of . . . employment-related practices, policies,  acts or omissions, such as coercion, demotion, evaluation, reassignment,  discipline, defamation, harassment, humiliation or discrimination  directed at that person.” Alexanian also purchased an umbrella policy  from GEICO (the “GEICO Policy”).  On January 15, 2021, Alexanian sued Rosa Morales claiming back rent, and  alleged that Morales was “an employee of [Alexanian] and [Alexanian's]  business from September 2015 until October 2019.” It also referred to  Morales as a tenant.  Morales filed a counterclaim alleging that Alexanian defamed her.  Travelers refused to defend Alexanian since Morales was an employee.   DISCUSSION The duty to defend is exceedingly broad and an insurer will be called  upon to provide a defense whenever the allegations of the complaint  suggest a reasonable possibility of coverage.   The Court must determine only whether, assuming Alexanian's allegations  are true, the defamation claim is solely “within the policy exclusion.”  The answer to that question is no. Thus, the breach of contract claim  cannot be dismissed.   In short, Travelers failed to establish that the Underlying Action falls  within the employment practice related exclusion or is otherwise  outside the Travelers Policy, and therefore, the motion to dismiss  Alexanian's breach of contract claim must be denied.  Breach of the Covenant of Good Faith and Fair Dealing, Common Law Bad  Faith, and Common Law Fraud --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Hitting Plaintiff on Head with Metal Pole is a Battery & Even With  Assault & Battery Coverage Exclusion Applies   Paul Semien ("Semien"), appealed the district court's dismissal of his  breach of contract claim for defense and indemnity against the  Burlington Insurance Company ("Burlington") after he was injured by a  convenience store employee who hit him on the head with a metal pole. In  Paul Semien v. The Burlington Insurance Company, No. 22-20195, United  States Court of Appeals, Fifth Circuit (October 3, 2022) the Fifth  Circuit applied the Eight Corners Rule and resolved the dispute in favor  of the insurer.   BACKGROUND Semien, a customer at a convenience store became embroiled in a dispute  with the store's clerk, Tam Truong, over Semien's entitlement to store  credits based on awards that he won from the store's video poker  machines. Truong left his post behind a glass-enclosed counter and hit  Semien on the head with a metal pole, causing Semien severe injuries.  Semien sued T&T and Truong in Texas state court (the "Underlying  Lawsuit") for negligence and assault against both Truong and his  employer.  T&T had a general commercial liability insurance policy issued by  Burlington (the "Policy.) "Coverage D" of the Policy provides for  coverage up to $100,000 for assault and battery. But, Coverage D also  excluded coverage when the assault or battery is "committed by any  insured or agent of any insured." The Policy defines "insured" to  include T&T's employees, but "only for acts within the scope of  their employment by [T&T] or while performing duties related to the  conduct of [T&T's] business."  Burlington denied that it had a duty to defend or indemnify T&T and  Truong in the Underlying Lawsuit. Semien subsequently entered into a  settlement agreement with T&T and Truong. As part of the settlement  agreement, they assigned Semien "all rights they have jointly or  separately to pursue claims and remedies under [their] insurance  contract with The Burlington Company."  Semien then sued Burlington. The district court granted the motion.  Plaintiff timely appealed. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

New Book from Barry Zalma The Compact Book on Ethics How Ethical Doctrines from the Beginning of the Written Word to the  Present Resulted in the Incorporation of the Covenant of Good Faith Every Person Involved in the Business of Insurance Must Act Ethically in the Business of Insurance Insurance  is, by definition, a business of the utmost good faith. This means that  both parties to the contract of insurance must act fairly and in good  faith to each other and do nothing that will deprive the other of the  benefits the contract of insurance promised. Without the covenant  of good faith and fair dealing, and ethical people who work in the  insurance industry applying and fulfilling the covenant, effective  insurance to spread the risk of loss to a large community of insurance  professionals, is impossible. One cannot act fairly and in good faith  without being a person with a well-formed ethical compass. In  1776, Lord Mansfield acting as an appellate judge serving in the House  of Lords of Britain (the predecessor of the United Kingdom) for the  first time referred to the covenant of good faith and fair dealing. In  the case designated: Carter v. Boehm S.C. 1 Bl. Burr 1906, 11th May  1766. 593, 3 Lord Mansfield in the British House of Lords stated the  rule of uberrimae fide (Latin for utmost good faith). Ethics & Ethical Behavior are Essential to Every Insurance Professional --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

SHOOTING A PERSON IN THE BACK TWICE IS NOT AN ACCIDENT   Great American Alliance Insurance Company ("GAAIC") was granted summary  judgment when the trial court determined that a GAAIC umbrella insurance  policy did not cover an insurance claim made by Star Residential, LLC  ("Star"), and Terraces at Brookhaven, LLC ("Terraces," collectively, the  "Insureds"), based on a shooting injury suffered by Manuel Hernandez  (collectively with the Insured, the "Claimants").   In Hernandez v. Great American Alliance Insurance Company Star  Residential, LLC et al. v. Great American Alliance Insurance Company,  Nos. A22A1147, A22A1211, Court of Appeals of Georgia, Third Division  (October 4, 2022) the Court of Appeals resolved the dispute.  The Issue  The Claimants argued that the trial court erred by ruling that the  umbrella policy did not cover the Insureds' claims because:  GAAIC's conduct waived its policy defenses, and the GAAIC umbrella policy did not "follow form" to certain underlying  insurance that excluded coverage for events using firearms.  Facts   The undisputed record showed that Star and Terraces own and/or operate  an apartment complex where Hernandez lived. In May 2017, Hernandez was  shot twice in the back by two assailants as he approached the door to  his apartment one night. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

RICO Judgment Allows Disgorgement Damages   DISGORGEMENT IS AKIN TO EXEMPLARY DAMAGES   In Diane Creel and Lynn Creel v. Dr. Says, LLC, et al., Civil Action No. 4:18-CV-00615,  United States District Court, E.D. Texas, Sherman Division (September  27, 2022) the plaintiffs obtained a verdict against Defendants Dr. Yupo  Jesse Chang; MD Reliance, Inc.; Universal Physicians, PA; Dr. Says, LLC;  Office Winsome, LLC; and Yung Husan Yao (aka Angela Yao) for violations  of the civil Racketeer Influenced and Corrupt Organization Act (“RICO”)  and RICO conspiracy. The Court, after the verdict, needs to enter its  findings of fact and conclusions of law regarding equitable  disgorgement.  FINDINGS OF FACT  Plaintiff Lynn Creel (“Lynn”) accompanied his wife, Plaintiff Diane  Creel (“Diane”) (collectively, “the Creels”), to the Behavioral Hospital  of Bellaire (“BHB”) in August 2017.  The Creels arrived at BHB planning  to receive information on the hospital's advertised “outpatient group  women-centric grief counseling.”  Upon the nurse's return, the Creels said they were leaving because they  did not like the treatment plans that BHB had offered. The nurse  informed the Creels that they were not allowed to leave because BHB had  “filed an emergency warrant for [Diane's] detention” and Diane would be  placed under a 72-hour hold. The Creels then realized that the BHB  medical staff had locked both the door out the front of the building and  the door to the intake room. Diane was taken to the psychiatric unit  against her will. BHB did not permit Lynn to visit Diane in person. In  all this time, neither Lynn nor Diane ever saw the warrant for her  detainment or even a shred of paperwork.   The Defendants' Scheme  The scheme underlying the Creels' experience began with the business  activity of Dr. Yupo Jesse Chang (“Chang”), a family physician who has  spent much of his career managing other medical practices. As Chang's  only notary, Yao kept a detailed notary book. The physician recommending  commitment of a patient signed off on the notarized documents-but the  physician was never physically in front of Yao, the notary, when he or  she signed the document.  The notary documents reveal that in just three days between, August 6,  and August 10, 2017, a psychiatrist employed by BHB signed applications  for the involuntary commitment of twelve different patients.  The Lawsuit  Twelve plaintiffs sued twenty-two defendants, alleging various causes of  action based upon their involuntary confinement and stay at BHB. The  jury found that Defendants, (1) were employed or associated with a RICO  enterprise (2) had participated, either directly or indirectly, in the  conduct of the affairs of the enterprise, and (3) had participated  through a pattern of racketeering activity. The jury assessed  Plaintiffs' compensatory damages at $300,000.00. The jury also found  that all Defendants conspired together to violate RICO.   Equitable Disgorgement --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Lies During Litigation do not Violate Policy's Fraud Provision   Mariana Gracia appealed the trial court's grant of final summary  judgment in favor of Security First Insurance Company ("Security  First"). The trial court found Gracia had made affirmative  misrepresentations regarding the pre-loss condition of her property,  warranting forfeiture of coverage under the concealment or fraud  provision of her homeowner's insurance policy.  Mariana Gracia v.  Security First Insurance Company, No. 5D21-1456, Florida Court of  Appeals, Fifth District (September 9, 2022)  FACTS  Security First insured Gracia for the risks of loss to her home located  in Orlando, Florida. Gracia reported a loss due to roof damage allegedly  caused by a storm. Security First investigated the claim and extended  approximately $11,000 in coverage for damages. However, Gracia then  submitted a sworn proof of loss, claiming more damages than what  Security First had covered.   After Security First denied the supplemental claim, Gracia sued alleging  breach of contract and seeking additional damages to cover roof repairs  and interior water damage. During her deposition, Gracia revealed that a  home inspection had been performed in 2015, prior to her purchasing the  property. When asked the results of the inspection, she stated,  "Everything was good" and that the "roof was in good condition."  After Security First obtained the 2015 inspection report, it amended its  affirmative defenses to include the concealment or fraud provision of  the policy, as the inspection report indicated that the property had  roof and interior ceiling damage in 2015. The inspection report  contained photographs revealing the damage and specifically noted roof  leaks around the chimney, water damage in the attic, and interior  ceiling damage caused by water-areas consistent with those noted by  Gracia in her instant claim.  Security First moved for summary judgment on several grounds but focused  exclusively on its concealment or fraud defense at the summary judgment  hearing. The trial court agreed with Security First. To obtain summary  judgment Security First was required to establish that Gracia's  statements regarding the pre-loss condition of her property were made  with the intent to mislead. Because this case was decided under the new  Florida Rule of Civil Procedure 1.510, summary judgment is appropriate  when "the evidence is such that a reasonable jury could not return a  verdict for the nonmoving party."  In re Amends. to Fla. R. Civ. P.  1.510, 317 So.3d 72, 75 (Fla. 2021) (citing Anderson v. Liberty Lobby,  Inc., 477 U.S. 242, 248 (1986)).  The trial court interpreted this new standard as allowing it to weigh  and judge the credibility of the evidence. Credibility determinations  and weighing the evidence are jury functions, not those of a judge, when  ruling on a motion for summary judgment.  ANALYSIS  The Court of Appeal found it important to highlight the distinction  between misrepresentation during the insurance application --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Man Bites Dog Story - GEICO Sues Health Care Providers for Fraud https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

CIGNA Obtains $14,371,384.95 Judgment Against Fraudulent Health Care  Provider Since police, prosecutors and state insurance fraud investigators are  seldom willing to arrest or prosecute insurance fraud perpetrators it is  necessary for insurers to be proactive and sue those who attempt or  succeed in defrauding insurers.  In Connecticut General Life Insurance Company and CIGNA Health And Life  Insurance Company v. Mike Ogbebor and Stafford Renal LLC, No. 3:21-cv-00954  (JAM), United States District Court, D. Connecticut (September 6, 2022)  CIGNA successfully sued a fake provider and obtained a default judgment  for almost $15 million against the corporate defendant and its alter  ego individual. FACTS  Stafford Renal LLC (Stafford) and its owner Mike Ogbebor, received  insurance payments from the plaintiffs, Connecticut General Life  Insurance Company and Cigna Health and Life Insurance Company  (collectively, “Cigna”), for dialysis Stafford claims to have  administered to two Cigna plan members. Cigna alleged that Stafford was  not licensed to provide, and in fact, did not provide these dialysis  treatments.  After Cigna filed its complaint Ogbebor submitted an answer on behalf of  both defendants. The trial judge struck this answer with respect to  Stafford because Ogbebor as a non-lawyer could not represent in court a  limited liability company such as Stafford. Cigna then moved for a  default entry against Stafford, which was granted based on Stafford’s  failure to appear or respond.  As for Ogbebor, he has failed to object or respond in any way to Cigna’s  discovery requests. Ogbebor  also failed to respond to a motion to  compel discovery, despite the Court’s discovery order warning him that  such failure might result in sanctions including default judgment. Cigna  now moves for default judgment against both Stafford and Ogbebor.  DISCUSSION  When a defendant defaults, it thereby admits all well-pleaded factual  allegations contained in the complaint. The trial court found that  default judgment is the appropriate sanction in this case and that any  lesser sanction would be futile in light of Ogbebor’s willful and total  refusal to cooperate with this litigation since he was first served in  February 2022 with discovery requests concerning information in his  possession that is essential for the resolution of Cigna’s claims  against him. CONCLUSION  Judgment was entered against Mike Ogbebor and Stafford Renal LLC in the  joint and several amount of $14,371,384.95, as well as a declaratory  judgment that the plaintiffs are absolved of any liability to pay past  or future claims submitted by Stafford Renal LLC. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Physicians Cheat Insurer for Covid Testing --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Stupid Plea Bargain Destroys Insurer’s Right to Restitution --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurers, working without legislative or judicial direction, created a  working definition of the term “actual cash value.” Insurers recognized that ACV in a fire insurance policy was designed to  establish a dollar value for items of destroyed property that were not  new at the time of loss. Since the insurers had no easy means to  establish the used value of property, they selected the following as  their working definition of “actual cash value”: “Actual cash value is  the cost to replace with like kind and quality less physical  depreciation.” [Jefferson Insurance Company of N.Y. v. Superior Court, 3  Cal. 3d 398 (1970).]  The working definition, although it did not always provide the complete  indemnity contemplated by the insureds and by the various legislatures,  was eminently practical. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

In Huntington Ingalls Industries, Inc. et al. v. Ace American Insurance  Company et al, No. 2021-173, 2022 VT 4 Supreme Court of Vermont  (September 23, 2022) the Supreme Court of Vermont reversed a decision  refusing to allow an insured ship builder to recover business  interruption losses as a result of government orders dealing with  Covid-19 and remanded the case to the trial court to determine if Covid  caused direct physical damage to property.  FACTS   Insured, Huntington Ingalls Industries, Inc., is the largest military  shipbuilding company in the United States and provides professional  services to government and industry partners. It employs over 42,000  people, the majority of whom work at its shipyards in Virginia and  Mississippi.  In March 2020, insured purchased a property insurance policy (Global  Policy) from insurer Huntington Ingalls Industries Risk Management LLC,  its captive insurance subsidiary and a Vermont corporation.   The insured kept its shipyards open but made changes to its operations  to comply with CDC guidance and protect employees. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL - Volume 26 Issue 19   Read the full issue at http://zalma.com/blog/wp-content/uploads/2022/09/ZIFL-10-01-2022-1.pdf  Insurer Proactive Against Fraud CIGNA Obtains $14,371,384.95 Judgment Against Fraudulent Health Care  Provider  Since police, prosecutors and state insurance fraud investigators are  seldom willing to arrest or prosecute insurance fraud perpetrators it is  necessary for insurers to be proactive and sue those who attempt or  succeed in defrauding insurers.  In Connecticut General Life Insurance Company and CIGNA Health And Life  Insurance Company v. Mike Ogbebor and Stafford Renal LLC, No. 3:21-cv-00954  (JAM), United States District Court, D. Connecticut (September 6, 2022)  CIGNA successfully sued a fake provider and obtained a default judgment  for almost $15 million against the corporate defendant and its alter  ego individual.  Read the full story at  http://zalma.com/blog/wp-content/uploads/2022/09/ZIFL-10-01-2022-1.pdf  Another Florida Insurer Is Insolvent  FedNat Insurance Co. is now insolvent and must be liquidated – the sixth  Florida property insurer this year to throw in the towel.  The Florida Department of Financial Services filed a consent agreement  with the Leon County Circuit Court, detailing the extent of FedNat’s  financial troubles and asking the court to approve DFS as the receiver  for the insurer.   The move was not unexpected, after FedNat agreed in May to cancel  policies, transfer others to a sister company and wind down operations  with what regulators hoped would be an orderly runoff. The Demotech  financial rating firm also withdrew its stability rating for FedNat on  August 1, 2022.  Read the full story at  http://zalma.com/blog/wp-content/uploads/2022/09/ZIFL-10-01-2022-1.pdf --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

General Contractor Has No Standing  to Allege Insurance Fraud   Steven Hester Hall appealed from an order granting Defendants' motion to  dismiss Hall's claims for insurance fraud, breach of implied covenant  of good faith and fair dealing..   In Steven Hester Hall v. Brunswick Plantation Property Owners  Association, Greg Mayol, Cathy Six, And Community Association Management  Services, No. COA21-748, 2022-NCCOA-604, Court of Appeals of North  Carolina (September 6, 2022) Hall wanted to build a house without the  bond required by the Community Associations' regulations.  FACTUAL BACKGROUND  Hall is a general contractor and the CEO of Eco Lakes Construction, LLC.  Eco Lakes owns real property at 649 Covington Drive NW, Calabash, NC  ("property"), in the Brunswick Plantation and Golf Course Community  ("Community"). Defendants are the Brunswick Plantation Property Owners  Association ("Association"); Community Association Management, the  property management company for the Association; Greg Mayol, the  Community Association Manager for the Community; and Cathy Six, the  Administrator for the Architectural Standards Committee for the  Association.   The Contract Performance and Master Deportment Agreement ("Master  Deportment Agreement") is a contract between the Architectural Standards  Committee and a general contractor on a construction project in the  Community. The Master Deportment Agreement requires the general  contractor to provide to the Association a $5,000 bond to be held as  security for the performance of the construction project in accordance  with the community governing documents-the Brunswick Plantation  Architectural Plan and Residential Design and Construction Standards,  and the Amended and Restated Master Declaration and Development Plan for  Brunswick Plantation. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Lack of Insurable Interest Makes Life Policy Void from Inception   Policy Acquired as Part of a STOLI Fraud Never Existed as a Matter of  Law   RELEVANT FACTS AND BACKGROUND  On July 11, 2007, the fictitious Mansour Seck Irrevocable Life Insurance  Trust (the "Seck Trust") applied to MetLife Investors USA Insurance  Company (Brighthouse's predecessor) for a $5 million universal life  insurance policy insuring the life of a fictitious man identified as  Mansour Seck (the "Policy"), with a birthday of January 1, 1933.  Seck  was identified as a French citizen residing at 170 Academy Street,  Jersey City, New Jersey.  After confirming that its procedures and guidelines were met, MetLife  issued the Policy on or around July 24, 2007.  Pape Seck's Arrest and Prosecution  In 2010, Pape Seck was the subject of numerous press releases issued by  the State of New Jersey and other insurance industry publications; they  stated that Pape Michael Seck, a New York City insurance agent, had been  arrested and prosecuted for fraudulent insurance schemes. Pape Seck  pleaded guilty to two counts of insurance fraud concerning fraudulent  applications for Mansour Seck. T  Litigation and the Superior Court Ruling In its opinion, the trial court declared the Policy void ab initio. The  court denied Geronta's request for rescission and disgorgement, holding  that rescission is not available where a contract is void because there  is no contract to "unmake." After trial, the Superior Court ruled that  Geronta was only entitled to restitution of the premiums it paid after  it informed Brighthouse that the Policy was void for lack of an  insurable interest. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Judgment in Favor of Insurer Because of Plaintiff’s Sloth Read the full article at https://lnkd.in/gVRkNvR2 and see the full video at https://lnkd.in/gfgqe9nM and at https://lnkd.in/gmGuUhXs and at https://zalma.com/blog plus more than 4300 posts. Judgment in Favor of Insurer Because of Plaintiff’s Sloth See the full video at https://rumble.com/v1j7gb7-untimely-suit-dismissed.html and at Michelle J. Pollard, appealed from the summary judgment rendered by  the trial court in favor of the defendant, Geico General Insurance  Company, on the plaintiffs complaint seeking to recover underinsured  motorist benefits. On appeal, the plaintiff claimed that the court  improperly determined that the accidental failure of suit statute,  General Statutes § 52-592 (a), did not apply to revive her otherwise  time barred action. In Michelle J. Pollard v. Geico General Insurance Company, No. AC  44560, Court of Appeals of Connecticut (September 6, 2022) the defendant  argued that judgment was appropriately rendered and asserted, as an  alternative ground contended that the plaintiff’s action was barred  because she failed under the terms of the parties’ insurance policy to  commence suit timely or to invoke the policy’s tolling provision. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Apple Annie Suffered no Direct Physical Damage   It's Time to Quit Trying to Get Business Interruption Payments from  Insurers for Covid  The COVID pandemic and ensuing lock down have generated a host of legal  issues. One of the most momentous, in terms of the potential monetary  liability, is whether businesses ordered by government decree to close  or suspend operations could get compensation under the business income  coverage of the standard comprehensive commercial liability policy.  In Apple Annie, LLC v. Oregon Mutual Insurance Company, A163300,  California Court of Appeals, First District, Second Division (September  2, 2022) the California Court of Appeal refused to be swayed by the  Marina Pacific decision.   BACKGROUND   Apple Annie, LLC, operated restaurants in Marin, San Francisco, and  Santa Barbara counties. Defendant Oregon Mutual Insurance Company issued  Apple Annie a comprehensive commercial liability and property insurance  policy that, as relevant here, promised in general to "pay for direct  physical loss of or damage to Covered Property at the [insured]  premises," and in particular to "pay for the actual loss of Business  Income you sustain due to the necessary suspension of your 'operations'  during the 'period of restoration. The suspension must be caused by  direct physical loss of or damage to property at the described premises.  The loss or damage must be caused by or result from a Covered Cause of  Loss."   DISCUSSION  After a comprehensive survey of the subject, the court concluded that a  business that closed pursuant to a government shut-down order had not  suffered "direct physical . . . damage to" the business's property. This  was a matter of plain English:  The presence of COVID-19 on Plaintiff's property did not cause damage to  the property necessitating rehabilitation or restoration efforts  similar to those required to abate asbestos or remove poisonous fumes  which permeate property. Instead, all that is required for Plaintiff to  return to full working order is for the [government orders and  restrictions to be lifted.  By contrast, the losses here arose from closures intended to limit the  spread of a virus that can carry great risk to people but no risk at all  to a physical structure. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

FLOOD EXCLUSION APPLIES TO DEFEAT CLAIM   Insured Admits Loss Caused by Flood Sufficient to Deny Claim Virginia Sosa appealed from the county court’s orders granting summary  judgment in favor of appellee Auto Club Indemnity Co. (“Auto Club”) and  denying Sosa’s motion for new trial. The court granted summary judgment  on several grounds raised by Auto Club, including that Sosa’s claims  were barred by limitations and by the exclusion in her homeowner’s  insurance policy for damages caused by flood and surface water. In  Virginia Sosa v. Auto Club Indemnity Co., No. 01-21-00312-CV, Court of  Appeals of Texas, First District (August 30, 2022) the Court of Appeal  resolved the dispute because Sosa did not,  challenge the summary  judgment ground that her claims were caused by flood or surface water,  which is expressly excluded from coverage under her homeowner’s policy. BACKGROUND  Sosa’s house was damaged during Hurricane Harvey on August 26, 2017.   Shortly thereafter, Sosa filed a claim with Auto Club, which insured her  house. Sosa reported that two feet of floodwater had entered her home,  her roof was missing shingles and was leaking, and she had sustained  interior damage. Auto Club determined that her damage was caused by  flood water, which was expressly excluded from coverage under Sosa’s  homeowner’s insurance policy that was in effect during Hurricane Harvey.  On September 26, 2017, Auto Club denied her claim. On November 11, 2020,  almost three years after the denial and more than three years after the  damage, Sosa filed suit against Auto Club for breach of the insurance  policy.  Sosa filed a first amended petition, which was her live pleading when  the county court entered summary judgment against her. Sosa’s amended  petition was identical to her original petition except that it changed  the date of loss from August 26, 2017, to June 28, 2019. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

FLOOD EXCLUSION APPLIES TO DEFEAT CLAIM  Insured Admits Loss Caused by Flood Sufficient to Deny Claim Virginia Sosa appealed from the county court’s orders granting summary  judgment in favor of appellee Auto Club Indemnity Co. (“Auto Club”) and  denying Sosa’s motion for new trial. The court granted summary judgment  on several grounds raised by Auto Club, including that Sosa’s claims  were barred by limitations and by the exclusion in her homeowner’s  insurance policy for damages caused by flood and surface water.  In  Virginia Sosa v. Auto Club Indemnity Co., No. 01-21-00312-CV, Court of  Appeals of Texas, First District (August 30, 2022) the Court of Appeal  resolved the dispute because Sosa did not,  challenge the summary  judgment ground that her claims were caused by flood or surface water,  which is expressly excluded from coverage under her homeowner’s policy.  BACKGROUND   Sosa’s house was damaged during Hurricane Harvey on August 26, 2017.   Shortly thereafter, Sosa filed a claim with Auto Club, which insured her  house. Sosa reported that two feet of floodwater had entered her home,  her roof was missing shingles and was leaking, and she had sustained  interior damage. Auto Club determined that her damage was caused by  flood water, which was expressly excluded from coverage under Sosa’s  homeowner’s insurance policy that was in effect during Hurricane Harvey.  On September 26, 2017, Auto Club denied her claim. On November 11, 2020,  almost three years after the denial and more than three years after the  damage, Sosa filed suit against Auto Club for breach of the insurance  policy.  Sosa filed a first amended petition, which was her live pleading when  the county court entered summary judgment against her. Sosa’s amended  petition was identical to her original petition except that it changed  the date of loss from August 26, 2017, to June 28, 2019.  AUTO CLUB’S MOTION FOR SUMMARY JUDGMENT   The county court granted Auto Club’s summary judgment motion. The court  also found that Auto Club had disproved several elements of Sosa’s  breach of contract action; flood and surface water damages were not  covered under the policy; and all flood and surface water damages were  excluded from coverage. The court ordered that Sosa take nothing and  dismissed her claims with prejudice.  SUMMARY JUDGMENT  Sosa, as an appellant must challenge each independent ground that could  fully support the trial court’s challenged ruling. When an unchallenged  ground supports a complained-of ruling or judgment, the Court of Appeal  must accept the validity of that unchallenged independent ground, and  thus any error in the grounds challenged on appeal is harmless because  the unchallenged independent ground fully supports the complained-of  ruling or judgment. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

When You Win it is Best to Shut Up and Accept It  As a young lawyer one of the first things I learned was never argue with  a judge whose tentative ruling is to grant your motion. Insurers often  seek, when there is a dispute of insurance coverage, declaratory relief  from the court about its duty to defend or indemnify the insured.  However, when there is no claim, it is a waste of the time of counsel,  the insured and the courts to bring a declaratory relief action.   The axiom to never argue over a win was explained by the USDC for the  Eastern District of Virginia, in Hanover Insurance Company, et al. v. C.  David Venture Management, LLC, et al., Civil Action No. 1:21-cv-790  (RDA/JFA), United States District Court, E.D. Virginia, Alexandria  Division (August 30, 2022). Hanover sought a ruling it owed neither  defense nor indemnity to the defendants. The defendants, David Venture  Management, LLC and Venture Street, LLC's (“Defendants”) moved to  dismiss The Hanover American Insurance Company's (“Plaintiffs” or  “Hanover”) suit.   BACKGROUND   The lawsuit for Declaratory Judgment implicates Hanover's potential  duties to defend or indemnify Defendants in a putative class action  brought in the U.S. District Court for the District of Colorado.  Beginning on December 9, 2017, Hanover issued the first of several  Commercial General Liability (“CGL”) policies to CDVM. Hanover also  issued Commercial Follow Form Excess and Umbrella Policies  (“Excess/Umbrella Policy”) for the same effective dates. Defendant  Venture Street was added as an additional named insured on the CGL and  Excess/Umbrella Policy effective May 29, 2019. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Making Sick Horse Well is not a Breach of Horse Mortality Policy  The parties sued over an insurance dispute concerning a champion show  horse named Thomas. Thomas is alive and well, but Thomas's owner, Julie  Greenbank, sued her insurer, Great American Assurance Company, for  failing to provide mortality coverage for Thomas.  In Julie Greenbank v.  Great American Assurance Company, No. 21-2622, United States Court of  Appeals, Seventh Circuit (August 30, 2022) Greenbank alleged that Great  American breached the insurance policy and acted in bad faith by  unreasonably withholding consent for Thomas's authorized humane  destruction, opting instead to perform a tenotomy that destroyed  Thomas's use as an athletic show horse.  She also alleged that Great American's continued care and control over  Thomas, long after the policy terminated, constitutes conversion and  theft. The district court dismissed her claims at summary judgment, and  Greenbank appealed.   THE INSURANCE POLICY  In September 2017, Greenbank purchased an American Saddle bred gelding  horse named Awesome whose barn name was "Thomas" for $500,000. Greenbank  intended to use Thomas as an athletic show horse for competitive  purposes.  Shortly after this purchase, Greenbank obtained a mortality insurance  policy with Great American for Thomas's full purchase price. The policy  provided coverage in the event of Thomas's "death" or "authorized humane  destruction."   Under the policy, a horse's death or authorized humane destruction must  result, in part, from an illness, injury, or specific surgery.  To obtain coverage in the event of Thomas's death or authorized humane  destruction, the policy required Greenbank to meet certain conditions  precedent. One condition precedent required Greenbank to immediately  notify Great American if Thomas becomes ill. The policy notes that  failure to provide immediate notice of Thomas's illness "will invalidate  any claim under the policy." If Thomas becomes ill, the policy allows  Great American to, with Greenbank's permission, assume control over  Thomas's treatment.  In addition to mortality coverage, the policy also includes a "Major  Medical Endorsement" (MME) and a "Guaranteed Renewal Endorsement" (GRE). --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A site for the insurance claims professional and anyone who wants to  know something about insurance, insurance claims, insurance fraud, insurance coverage,  and insurance law. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Convicted of Acting as a Pill Mill & Doubling as an Insurance Fraud  Scheme   In UNITED STATES OF AMERICA v. PATRICK EMEKA IFEDIBA, NGOZI JUSTINA  OZULIGBO, Nos. 20-13218, 20-13303, United States Court of Appeals,  Eleventh Circuit (August 25, 2022)  Patrick Ifediba and Ngozi Justina  Ozuligbo appealed their convictions for health care fraud and related  crimes. Ifediba, a physician, operated a clinic called CCMC and employed  Ozu-ligbo, a licensed practical nurse, there.  Convicted of Acting as a Pill Mill & Doubling as an Insurance Fraud  Scheme   The evidence at trial showed that CCMC prescribed large quantities of  opioids to patients who had no medical need for them and ran an  allergy-testing and treatment scheme in which it required insured  patients to undergo allergy testing and prescribed them medication  despite their negative allergy tests. The clinic billed Medicare and  private insurers for the tests and treatments.  Ifediba and Ozuligbo were indicted on substantive counts of health care  fraud, conspiracy to commit health care fraud, money laundering of the  clinic's unlawful proceeds and conspiracy to commit that crime. Ifediba  was indicted for unlawfully distributing controlled substances for no  legitimate medical purpose and for operating CCMC as a "pill mill" to  distribute the controlled substances to patients who had no medical need  for them.   After a three-week trial featuring testimony by CCMC patients, medical  experts, and law enforcement officials, the jury convicted Ifediba and  Ozuligbo on all counts. The court sentenced Ifediba to 360 months of  imprisonment and Ozuligbo to 36 months.  BACKGROUND CCMC Operated as a Pill Mill and Required Insured Patients to Undergo  Allergy Testing and Treatment.  Ifediba and his wife, Uchenna Ifediba ("Uchenna"), also a physician,  were the only physicians at CCMC. Neither Ifediba nor his wife  specialized in pain-management medicine, but they wrote many  prescriptions for controlled substances-opioids. CCMC attracted patients  who were willing to wait over three hours in a dirty, crowded waiting  room to receive prescriptions for controlled substances.  Besides its opioid distribution, CCMC roped patients who had insurance  into an allergy fraud scheme. The scheme was a simple one. Every insured  patient who came to CCMC had to fill out a questionnaire on allergy  symptoms before seeing the doctor. No matter the patient's answers, an  allergy technician performed a skin-prick allergy test on the patient.  Regardless of whether the test results were positive or negative,  Ifediba prescribed immunotherapy to treat allergies and directed the  technicians to order the medication. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Lawyer Should Never Sue an Insurer When There is Obviously no Coverage   This case involves an insurance dispute in which Appellant, Benjamin G.  Dusing (Dusing), alleges that a 2016 leased Mercedes was properly  insured by Appellee, Metropolitan Property & Casualty Insurance  Company (Metropolitan). Metropolitan disclaims coverage for the vehicle,  which was destroyed by fire on June 25, 2016.  In Benjamin G. Dusing v. Metropolitan Property & Casualty Insurance  Company, No. 2021-CA-0200-MR, Court of Appeals of Kentucky (August 26,  2022) Dusing claimed he was driving the vehicle at the time it caught  fire.  As a of Metropolitan’s refusal to pay Dusing sued for declaratory  judgment in Kenton Circuit Court on June 21, 2017. The court  subsequently granted what is styled as Metropolitan's "Motion for  Judgment," on the basis that there was no coverage pursuant to the terms  of insurance policy with Metropolitan (hereafter, the Policy).   in granting a judgment in favor of Metropolitan, the circuit court  reasoned as follows: "On March 31, 2016, BGD Law, a law firm owned by  [Dusing] leased the 2016 Mercedes for a period of five years or 60,000  miles. That lease also provided a 24-month service agreement. The lease  also charged BGD Law fees for license and registration of the vehicle."  Dusing asserted  that he is entitled to coverage for the loss of the  2016 Mercedes, claiming that that vehicle was a "non-owned" vehicle  under the policy. In response Metropolitan takes the position that the  2016 Mercedes could not qualify as a "non-owned" vehicle for several  reasons. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Michigan Allows Fraudster to Receive PIP Benefits but no UM/UIM Benefits  Plaintiff appealed the trial court’s order granting summary disposition  in favor of defendants Home-Owners Insurance Company (“Home-Owners”),  American Country Insurance Company (ACIC), and Hartford Accident and  Indemnity Company (“Hartford”), with respect to plaintiff’s claims for  uninsured or underinsured motorist benefits and first-party personal  protection insurance (PIP) benefits under the no-fault act, MCL 500.3101  et seq. Although defendants disputed their priority to pay PIP  benefits, the trial court did not decide the priority issue, but instead  dismissed all claims on the basis of antifraud provisions in  defendants’ respective policies --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Substantial Compliance with Statute Transfers Title to Vehicle  SERIOUS INJURY ALWAYS BRINGS LITIGATION --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Substantial Compliance with Statute Transfers Title to Vehicle   SERIOUS INJURY ALWAYS BRINGS LITIGATION   When an accident results in serious injuries the lawyers for the injured  parties seek other defendants, no matter how weak the argument may be  to bring in additional defendants.  In Delores Zepeda v. Central Motors, Inc., No. 2021-SC-0204-DG, Supreme  Court of Kentucky (August 18, 2022) the Kentucky Supreme Court was faced  with an argument that a car dealer who sold a vehicle to another and  was a few days short on filing all of the transfer of title paperwork,  should be held to be the owner of the vehicle and, therefore,  responsible for the injuries. This appeal was solely concerned with determining the statutory  ownership of the BMW between Garcia and Central Motors which controlled  whether Zepeda could dip into Central Motors' insurance.   FACTS    Dolores Zepeda (Zepeda) was grievously wounded in an automobile  accident. She filed a claim against Central Motors, Inc. (Central  Motors) alleging it was the statutory owner of the 2002 BMW in which she  was a passenger at the time of the accident. The trial court granted  summary judgment in favor of Central Motors, holding it had  substantially complied with KRS 186A.220 when it sold the vehicle to  Juan Garcia (Garcia) and was no longer the statutory owner of the  vehicle. Zepeda appealed and the Court of Appeals affirmed the lower  court's ruling.  Though Morales did not possess a valid driver's license, Garcia let  Morales drive the vehicle. On August 14, 2014, Morales was driving the  2002 BMW when he caused it to crash in a single vehicle accident.  Morales had a blood alcohol level (BAC) of 0.145. The accident killed  Morales and left his passenger, Zepeda, paralyzed. The title was issued  in Garcia's name the next day on August 15th and the registration was  completed on the 18th, three days later.  Zepeda sued the Estate of Morales seeking compensatory and punitive  damages; against Garcia for negligent entrustment; against Allstate  Property & Casualty Insurance Company (Allstate) for underinsured  motorist coverage; and against Central Motors as the purported statutory  owner of the vehicle.  Therefore, the trial court reasoned, under the Kentucky Supreme Court’s  decision in Travelers Indem. Co. v. Armstrong, 565 S.W.3d 550 (Ky.  2018), that there was substantial compliance with KRS 186A.220. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Michigan Allows Fraudster to Receive PIP Benefits but no UM/UIM Benefits   Plaintiff appealed the trial court’s order granting summary disposition  in favor of defendants Home-Owners Insurance Company (“Home-Owners”),  American Country Insurance Company (ACIC), and Hartford Accident and  Indemnity Company (“Hartford”), with respect to plaintiff’s claims for  uninsured or underinsured motorist benefits and first-party personal  protection insurance (PIP) benefits under the no-fault act, MCL 500.3101  et seq. Although defendants disputed their priority to pay PIP  benefits, the trial court did not decide the priority issue, but instead  dismissed all claims on the basis of antifraud provisions in  defendants’ respective policies.  In Jonathan Jones v. Home-Owners Insurance Company, American Country  Insurance Company, And Hartford Accident & Indemnity Company, and  Sharneta Henderson, No. 355118, Court of Appeals of Michigan (August 18,  2022) the Court of Appeal produced a Solomon-like decision. BASIC FACTS This case arises from a motor vehicle accident on October 28, 2017, in  which plaintiff’s vehicle was struck by a vehicle driven by defendant  Sharneta Henderson in Detroit. Plaintiff alleges that he was operating a  2009 Ford Crown Victoria and was stopped at a red light when  Henderson’s vehicle, traveling at a high rate of speed, drove through a  red light and struck his vehicle.  Plaintiff sued all three insurers for recovery of no-fault PIP benefits  and also uninsured or underinsured motorist benefits. All three insurers  filed motions for summary disposition, asserting that plaintiff’s  claims were barred by antifraud provisions in the respective policies.   SUMMARY DISPOSITION PRIORITY UNDER MCL 500.3114   Initially, the Court of Appeal concluded that the trial court erred by  failing to address which insurer had priority to pay PIP benefits under  MCL 500.3114. The general rule is that one looks to a person’s own insurer for  no-fault benefits unless one of the statutory exceptions applies. An  individual may be entitled to PIP benefits mandated by the no-fault act  even if the person is not a named insured “under a no-fault policy, and  such a person is not subject to the policy’s antifraud provision.”  Because the plaintiff’s entitlement to no-fault benefits was governed by  statute, the exclusionary provision in the defendant’s no-fault policy  did not apply and could not operate to bar the plaintiff’s claims.   POST-PROCUREMENT FRAUD --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

When Insurer Let's Insured Unilaterally Choose Additional Insureds it  has no Standing to Complain   An insurer, by drafting an open-ended additional insured endorsement  that allowed its insured, by entering into contracts under which the  insurer would be obligated to provide a defense to people unknown to the  insurer and which did not require that its insured to obtain the  insurer's approval of the contracts or require its insured to disclose  the identities of the third parties or require that named insured name  those parties as additional insureds. The insurer assumed the  responsibility of providing defenses for certain unknown and unnamed  third-party beneficiaries.  In Westfield Insurance Company v. Walsh/K-Five Jv (I-14-4208);  Walsh/K-Five Jv (I-14-4209); Walsh Construction Company Ii, Llc/K-Five  Construction Company Jv, a Joint Venture; Walsh Construction Company Ii,  Llc; K-Five Construction Corporation; Arch Insurance Company; and Royce  Brown, Defendants, Walsh/K-Five JV (I-14-4208), Walsh/K-Five JV  (I-14-4209), Walsh Construction Company II, LLC/K-Five Construction  Company JV, a Joint Venture, Walsh Construction Company II, LLC, and  K-Five Construction Corporation, 2022 IL App (1st) 210802-U, No.  1-21-0802, Court of Appeals of Illinois, First District, Third Division  (August 17, 2022) compelled the insurer to live up to its agreements. FACTS  Westfield Insurance Company (Westfield) filed a declaratory judgment  action seeking a determination that it owed no duty to defend or  indemnify defendants in an underlying personal injury lawsuit that  occurred at a construction site at which Walsh and K-Five were operating  a joint venture. In the underlying lawsuit, Royce Brown (Brown), an  employee of VMR Contractors, Inc. (VMR), a subcontractor at the  construction site, injured himself carrying rebar.  Coverage under the Policy  That's what occurred in this case. Because the plain language of the  Contractors Endorsement mandates that the endorsement does not apply to  "any person or organization covered as an additional insured on any  other endorsement now or hereafter attached," the joint venture  exclusion therein did not negate coverage for Walsh, K-Five or the Joint  Venture, as additional insureds under the Additional Insured  Endorsement.  The Court of Appeal affirmed the circuit court's rulings that granted  defendant Walsh Construction Company II, LLC's motion for a partial  judgment on the pleadings, granted defendants Walsh/K-Five JV  (I-14-4208), Walsh/K-Five JV (I-14-4209), Walsh Construction Company II,  LLC/K-Five Construction Company JV and K-Five Construction  Corporation's motions for partial summary judgment and denied plaintiff  Westfield Insurance Company's motions for summary judgment where  plaintiff had a duty to defend defendants.  ZALMA OPINION  Insurers who give away their underwriting pen to others have learned its  decision was expensive. In this case the insurer gave the insured the  right to make anyone with whom it contracted additional insureds. By so  doing Westfield gave away its right to underwrite its obligation to  insure and found it was insuring multiple people it had no idea, when it  issued the policy, it insured. Cases like this one should cause  insurers to reconsider whether it has sufficient premium to cover the  risk it is letting its named insured to impose on it by entering into a  contract with others.  (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Judgment Eliminating Defamation Coverage Defeats Coverage   Although the duty to defend is exceedingly broad the obligation of an  insurer to defend and insured is not unlimited. In University Of  Louisville v. Kentucky School Boards Insurance Trust And Cyril William  Helm, No. 2021-CA-1066-MR, Court of Appeals of Kentucky (August 19,  2022) the University of Louisville (the "University") appealed from the  summary judgment in favor of Kentucky School Boards Insurance Trust  (KSBIT) regarding KSBIT's duty to provide a defense and indemnification  in a separate circuit court case pursuant to a policy of insurance.  The underlying matter began with a suit for a declaratory judgment by  KSBIT , in January 2021 related to the policy.  In this action, KSBIT  sought a declaration that it did not have any obligation under the  insurance policy to defend or indemnify the University as a result of a  Kentucky Whistleblower Act claim filed by Dr. Cyril Helm (Helm v.  University of Louisville, Jefferson Circuit Court Case No. 15-CI-01410).  FACTS  Dr. Helm's dispute with the University began in 2009, after his  colleagues had alleged he had committed plagiarism or other misconduct  in his research. Dr. Helm went on to file several lawsuits against the  University and his colleagues arising from the misconduct allegations  and the University's investigation into whether he had engaged in  misconduct, including the one noted above.  Because Dr. Helm's claims for back pay and attorney fees did not arise  from a personal injury as defined in the policy, KSBIT alleged that  there was no longer any factual or legal basis under the policy  requiring it to defend or indemnify the University in Dr. Helm's  underlying suit. Therefore, KSBIT sought a declaration that it did not  have an obligation to further defend or indemnify the University for the  claims Dr. Helm asserted in his underlying action. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Judgment Eliminating Defamation Coverage Defeats Coverage   Although the duty to defend is exceedingly broad the obligation of an  insurer to defend and insured is not unlimited. In University Of  Louisville v. Kentucky School Boards Insurance Trust And Cyril William  Helm, No. 2021-CA-1066-MR, Court of Appeals of Kentucky (August 19,  2022) the University of Louisville (the "University") appealed from the  summary judgment in favor of Kentucky School Boards Insurance Trust  (KSBIT) regarding KSBIT's duty to provide a defense and indemnification  in a separate circuit court case pursuant to a policy of insurance.  The underlying matter began with a suit for a declaratory judgment by  KSBIT , in January 2021 related to the policy. In this action, KSBIT  sought a declaration that it did not have any obligation under the  insurance policy to defend or indemnify the University as a result of a  Kentucky Whistleblower Act claim filed by Dr. Cyril Helm (Helm v.  University of Louisville, Jefferson Circuit Court Case No. 15-CI-01410). --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

It's Not Nice to Lie in a Pleading   Earnest A. Davis sued a car repair shop, its manager, and his car  insurance company alleging they engaged in a ploy to damage his  convertible Porsche so that he couldn't afford to repair it and another  customer of the repair shop could purchase it. On appeal, he challenges  the trial judge's rulings sustaining the defendants' demurrers and  dismissing his lawsuit in its entirety.   In Earnest A. Davis v. Government Employees Insurance Company et al.,  E074317, California Court of Appeals, Fourth District, Second Division  (August 15, 2022) the trial court gave the plaintiff four chances to  plead a cause of action against the defendants although he admitted to  accrual and a suit filed after running of the statute of limitations.  FACTS  Before his claims were dismissed on demurrer, Davis filed four  complaints over the course of his litigation. For a short time-to defend  against the first round of demurrers-Davis was represented by counsel.  For the remainder of the litigation, he represented himself, as he does  on appeal.  The First Amended Complaint (FAC)  The FAC, filed on July 2, 2018, makes the same basic allegations of  misconduct against Walter's but asserts a total of 12 causes of action.  Like the original complaint, the FAC did not name GEICO as a defendant  or make any allegations of wrongdoing against the insurance company.  Rather, Davis alleged only that GEICO had authorized and paid for the  repairs, and later, had declared the car a total loss with the DMV in  reliance on misinformation from Walter's. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

When Insurer Refuses Defense Fees Incurred by Insured Are Presumed to be Reasonable & Necessary   Insurer Should Consider Defense Under a Reservation Rather than Refuse Defense --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Assuming that Coverage Exists Does not Make a Contract Barry A. Lindsten appealed a circuit court order dismissing his action  against Astronautics Corporation of America (Astronautics) and Robertson  Ryan &Associates, Inc. and Michael R. Schulte (Robertson Ryan).  In Barry A. Lindsten, Sarah M. Lindsten v. Astronautics Corporation of  America, Mayo Medical Plan, Trumbull Insurance Company, Hartford  Casualty Insurance Company and Hartford Fire Insurance Company,  Defendants, Robertson Ryan &Associates, Inc. and Michael R. Schulte,  ABC Insurance Company, No. 2021AP115, Court of Appeals of Wisconsin,  District I (August 16, 2022) the Court of Appeals resolved the issues  raised by Lindsten. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

After Reaching a Settlement of multiple claims presented against her  insurer that was also the insurer of the third party, Connie Humes sued  for bad faith and violation of the Unfair Trade Practices Act (UTPA).  Humes appealed trial rulings by the trial court, excluding evidence of  certain settlement amounts paid by Farmers Insurance Group, in a trial  of her injury claims.  In Connie Humes v. Farmers Insurance Exchange and Mid-Century Insurance  Company, 2022 MT 148, No. DA 21-0422, Supreme Court of Montana (July 26,  2022) the Montana Supreme Court resolved the dispute.  THE ISSUE BEFORE THE MONTANA SUPREME COURT  Did the District Court abuse its discretion by excluding evidence of  settlement amounts paid in a global settlement of multiple claims by  Farmers Insurance Group in a subsequent trial of claims under the UTPA?  FACTUAL BACKGROUND  Barney Benkelman rear-ended Humes' vehicle at a stoplight in Helena,  causing injury to Humes. Benkelman was covered by Farmers Insurance  Exchange (FIE) for bodily injury liability. Humes was insured by  Mid-Century Insurance Company (Mid-Century), including underinsured  motorist coverage (UIM) with a $250,000 limit, and medical payment  coverage (med-pay) with a $50,000 limit. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Vaccination Eliminates Compassionate Release   https://zalma.com/blog Felon must stay in jail. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Rape by a Priest is not Part of a Charitable Function https://zalma.com/blog. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

WITHDRAWAL OF FRAUDULENT PORTION OF CLAIM DOES NOT ELIMINATE FRAUD Star Casualty Insurance Company appealed a summary final judgment and  attorney fee award entered in favor of Gables Insurance Recovery, Inc.,  as assignee of Star Casualty's insured, Ana Maria Correa. Star Casualty  alleges that the trial court erred by granting summary judgment due to  genuine issues of material fact concerning whether Correa's medical  bills for diagnostic imaging procedures were medically necessary and  related to the underlying accident for purposes of section 627.736,  Florida Statutes. Additionally, Star Casualty alleged that the trial  court reversibly erred by striking four affirmative defenses from its  amended answer that could have exempted it from liability for the claim. Star Casualty Insurance Company v. Gables Insurance Recovery, Inc.,  a/a/o Ana Maria Correa, Nos. 3D21-0033, 3D21-0377, Florida Court of  Appeals, Third District (July 20, 2022) FACTS   Correa was involved in a vehicle accident on January 19, 2009 and  sustained injuries. Subsequently, Correa received diagnostic imaging  procedures costing a total of $3,375.00, and Gables, as her assignee,  submitted a claim to the insurer for reimbursement of eighty percent of  the reasonable medical expenses pursuant to section 627.736(1)(a). After  the insurer paid only $400.71 and denied the remainder of the claim,  Gables sued to recover the remaining costs.   Star Casualty proffered an affidavit by Edward A. Dauer, M.D., opining  that the charges were not medically necessary or related to the  accident. This affidavit also noted that three of the imaging procedures  performed on Correa appeared to have been improperly upcoded or  unbundled with other procedures.   Based on Dr. Dauer's affidavit, Star Casualty also amended its answer to  add affirmative defenses asserting that it was exempt from paying the  entire because the three charges were fraudulent, upcoded, or unbundled.  Prior to the summary judgment hearing, Gables voluntarily withdrew its  claims for reimbursement of the three charges Star Casualty based its  affirmative defenses on. Gables then moved to strike the defenses from  Star Casualty's answer, alleging that the withdrawal of the claims for  those three charges made the corresponding defenses irrelevant and moot.    The trial court, concluding that Dr. Dauer's affidavit related solely to  the reasonableness of the charges and did not create any genuine  dispute of material fact as to relatedness and necessity, granted  partial summary judgment on the relatedness and necessity issues and  granted Gables' motion to strike the affirmative defenses. Star Casualty  then stipulated to the remaining issue of reasonableness, and the court  entered a final judgment and an award of attorney fees and costs in  favor of Gables soon after. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

What is a Man in the Middle Attack? --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Failure to Advise Insurer of New Car Fatal to Claim --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Beating an Employee With a Pistol for Four Hours is Excluded  State Farm Fire and Casualty Company filed a motion for summary  Judgment, arguing that it owed no duty to defend or indemnify  defendants, Hamdallah, L.L.C., et al. ("the LLCs"), against the claims  asserted by plaintiff, Nixon Calix. The trial court granted for summary  judgment and dismissed all claims against State Farm with prejudice.  In Nixon R. Calix v. Ideal Market # 6, Hamdallah, L.L.C., Kaki And Son,  LLC, Hamdallah Hasan "Mario" Kaki, Muwafak "Mike" Kaki, Monadel "Cory"  Elbarqa, Nofal "George" Haifa John Does 1-4, El Cortez Foods, LLC, And  ABC & XYZ Insurance Company, No. 21-CA-555, Court of Appeals of  Louisiana, Fifth Circuit (July 13, 2022) explained the right to rely on a  clear and unambiguous exclusion. FACTS  On May 28, 2015, Nixon Calix sued for damages against Ideal Market #6,  and others, alleging that while employed at Ideal Market #6, he was  assaulted and battered by fellow employees who also threatened his life.  The Intentional Beating  According to the facts alleged Mr. Calix was an employee in the meat  department at Ideal Market #6, where Mario Kaki, Mohammad Kaki, and  Muwafak Kaki were also employed in managerial capacities. Mohammad Kaki  and Cory Elbarqa transported Mr. Calix to 2309 L & A Road. There,  Mr. Calix was accused of stealing meat from Ideal Market #6 and was  "subjected to a violent physical assault and/or battery" by Mario Kaki,  Mohammad Kaki, and Cory Elbarqa. Mario Kaki brandished a firearm,  pointed it at Mr. Calix, and threatened to kill him if he did not  confess to the alleged theft. When Mr. Calix refused to confess, Mario  Kaki used the firearm as well as his fists and legs to beat Mr. Calix's  head, face, and body for approximately four hours. Mr. Calix claimed  that he was "severely beaten, punched, kicked, abused, and terrorized"  by Mario Kaki while Mohammad Kaki and Cory Elbarqa watched and prevented  him from leaving. As a result, Mr. Calix alleged that he suffered  severe mental and physical injuries. The Allegations  Mr. Calix alleged his injuries were caused by the intentional acts of  the defendants, assault, battery, kidnapping, false imprisonment, and  intentional infliction of emotional distress. Additionally, Mr. Calix  claimed that the LLCs were vicariously liable under the doctrine of  respondeat superior for the derivative liability, negligence, and fault  of its employees, and were liable individually, jointly, severally, and  in solido through their own negligence, specifically for negligent  hiring, negligent training, negligent supervision, and negligent  retention.   The trial court signed a written judgment granting the motion for  summary judgment and dismissing all of Mr. Calix's claims against State  Farm with prejudice.  The trial court found that regardless of the legal theory argued by Mr.  Calix, the intentional actions of the owners/managers of the defendant  companies, in particular the actions of Mario Kaki, are the essential  cause of Mr. Calix's alleged damages. Coverage for these actions was  specifically excluded by the policies.   ANALYSIS  The Court of Appeal concluded that reasonable minds could not disagree  that, accepting the allegations as true, Mario Kaki's actions of using a  firearm as well as his fists and legs to beat Mr. Calix's head, face,  and body for approximately four hours were expected or intended to cause  bodily injury. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

What is a Man in the Middle Attack?   After an unknown individual (“fraudster”) gained unauthorized access to  Fishobowl’s accountant, Ms. Wendy Williams’ e-mail account. Once inside  Ms. Williams’ e-mail account, the fraudster created certain “rules” to  redirect certain e-mail communications within the e-mail system. One  rule redirected e-mail communications containing certain keywords to an  e-mail account that is not associated with Fishbowl. Another rule marked  e-mail communications sent from “fedins.com” as having already been  “read, ” and automatically stored them in the “RSS Subscriptions”  folder.  These rules prevented Ms. Williams from noticing certain e-mail  communications, including e-mails from Federated Insurance regarding  invoice payments.  In Fishbowl Solutions, Inc. v. The Hanover Insurance Company, No.  21-cv-00794 (SRN/BRT), United States District Court, D. Minnesota (May  9, 2022) it became clear that the purpose of the scheme was to trick  Fishbowl’s customers into paying invoices to the fraudster without  Fishbowl noticing. Pursuant to this scheme, the fraudster directed six  of Fishbowl’s customers to change how and where to make their payments.  By employing a variety of techniques to conceal the scheme, the  fraudster posed as Ms. Williams when communicating by e-mail with  Federated Insurance. The fraudster also posed as Federated Insurance  when communicating by e-mail with Ms. Williams. As a result of the  scheme, Federated Insurance made two payments to the fraudster, totaling  $176,962. The fraudster was a classic man in the middle who attacked  Fishbowl to the tune of more than $176,962. Fishbowl discovered the scheme and informed the six customers about the  scheme, five of them were able to recall or redirect their payments.  However, Federated Insurance was unable to do so. Although the United  States Secret Service recovered $29,035.79 of the monies paid by  Federated Insurance to the fraudster, Fishbowl suffered a loss of the  difference, which totaled $147,926.21.   The Minnesota Legislature has created a private cause of action to  penalize bad faith denial of benefits by insurance providers. Under the  statute, a party, after commencing a civil suit, may make a motion to  amend the pleadings to claim recovery of taxable costs. The applicable  legal basis for establishing a claim under the statute is a two-prong  test, which is as follows:  The court may award as taxable costs to an insured . . . if the insured  can show:  (1) the absence of a reasonable basis for denying the benefits of the  insurance policy; and  (2) that the insurer knew of the lack of a reasonable basis for denying  the benefits of the insurance policy or acted in reckless disregard of  the lack of a reasonable basis for denying the benefits of the insurance  policy.  At this stage of the proceedings, plaintiff needs to plausibly plead  facts that demonstrate each prong of the test. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

This is Not a Ruling on Evidence & Is Not a Win for Insureds   In Marina Pacific Hotel And Suites, LLC, et al. v. Fireman’s Fund  Insurance Company, B316501, California Court of Appeals, (July 13, 2022)  the Court of Appeals was faced with a ruling on a demurrer without  leave to amend when the complaint alleged all elements required to  allege a cause of action.  For more than two years the courts understanding of COVID-19, the  infectious disease caused by the SARS-CoV-2 virus and its many variants,  has evolved. Courts now think they know how it spreads, how to protect  against it and how best to treat those who have it. When a pleading  alleges facts sufficient to constitute a cause of action, what we think  we know-beliefs not yet appropriately subject to judicial notice- has  never been a proper basis for concluding, as a matter of law, those  alleged facts cannot be true and, on that ground, sustaining a demurrer  without leave to amend.  Governing Law: Interpretation of Insurance Policies  In general, interpretation of an insurance policy is a question of law  that is decided under settled rules of contract interpretation   The insureds’ appeal requires analysis of the allegations in their first  amended complaint primarily in terms of one insuring provision  -coverage for business interruption due to “direct physical loss or  damage to” covered property-and one exclusion-for “mortality and  disease.”  The Insureds Adequately Alleged Direct Physical Loss or Damage Caused by  the COVID-19 Virus and a Cause of Action for Breach of Contract by  Fireman’s Fund  The elements of a cause of action for breach of contract are      the existence of the contract,     plaintiff’s performance or excuse for nonperformance,     defendant’s breach, and     the resulting damages to the plaintiff.  Fireman’s Fund’s demurrer did not challenge elements (1), (2) or (4),  contending only it did not breach its obligation to pay benefits under  the policy because the insureds, having failed to allege any direct  physical loss or damage to property, failed to allege a covered loss. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL – Volume 26, Number 14  THE COURTS ARE BACK CONVICTING FRAUD PERPETRATORS WITH VIGOR – READ  ABOUT THE CONVICTIONS IN THIS ISSUE OF ZIFL!   The July 15, 2022 issue contains articles available FREE at Subscribe to  e-mail Version of ZIFL, it’s Free!   Greg Lindberg Gets a New Trial  Jury Instruction Misled Jury by stating that an “Official Act” Existed  as a Matter of Law  Greg E. Lindberg and John D. Gray were convicted of honest services  fraud and federal funds bribery in connection with a series of payments  and offers of payment, in the form of campaign contributions, made to  Mike Causey, the elected Insurance Commissioner for North Carolina.  The  jury found that these payments were made in exchange for Causey  assigning a different Deputy Commissioner to oversee the affairs of  Lindberg’s insurance companies.  In United States Of America v. Greg E. Lindberg, Nos. 20-4470, 20-4473,  United States Court of Appeals, Fourth Circuit (June 29, 2022) the  Fourth Circuit granted a new trial. Criminal Lawyers Should be Disbarred  Lawyer Convicted of Insurance Fraud Only Suspended for Two Years  Insurance fraud is considered, universally, as a crime of moral  turpitude. Regardless, the New York State Bar was only asked to join  with the New Jersey State Bar who suspended a lawyer, after he was  convicted for insurance fraud and other wrongful conduct, for two years  rather than being disbarred.  In the Matter of Neal Meredith Pomper, an attorney and counselor-at-law.  (Attorney Registration No. 1726363); 2022 NY Slip Op 04173; No.  2021-02031; Supreme Court of New York, Second Department (June 29, 2022)  Chutzpah: Admit Fraud & Claims Fraud Exclusion is Ambiguous --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Drug Dealer Chiropractor Not Allowed into Pretrial Intervention Program --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL – Volume 26, Number 14  THE COURTS ARE BACK CONVICTING FRAUD PERPETRATORS WITH VIGOR – READ  ABOUT THE CONVICTIONS IN THIS ISSUE OF ZIFL!   The July 15, 2022 issue contains articles available FREE at Subscribe to  e-mail Version of ZIFL, it’s Free!  and  Read last two issues of ZIFL  here. Greg Lindberg Gets a New Trial  Jury Instruction Misled Jury by stating that an “Official Act” Existed  as a Matter of Law  Greg E. Lindberg and John D. Gray were convicted of honest services  fraud and federal funds bribery in connection with a series of payments  and offers of payment, in the form of campaign contributions, made to  Mike Causey, the elected Insurance Commissioner for North Carolina. The  jury found that these payments were made in exchange for Causey  assigning a different Deputy Commissioner to oversee the affairs of  Lindberg’s insurance companies. In United States Of America v. Greg E. Lindberg, Nos. 20-4470, 20-4473,  United States Court of Appeals, Fourth Circuit (June 29, 2022) the  Fourth Circuit granted a new trial. Criminal Lawyers Should be Disbarred  Lawyer Convicted of Insurance Fraud Only Suspended for Two Years  Insurance fraud is considered, universally, as a crime of moral  turpitude. Regardless, the New York State Bar was only asked to join  with the New Jersey State Bar who suspended a lawyer, after he was  convicted for insurance fraud and other wrongful conduct, for two years  rather than being disbarred.   In the Matter of Neal Meredith Pomper, an attorney and counselor-at-law.  (Attorney Registration No. 1726363); 2022 NY Slip Op 04173; No.  2021-02031; Supreme Court of New York, Second Department (June 29, 2022) Chutzpah: Admit Fraud & Claims Fraud Exclusion is Ambiguous  Insured Convicted of Fraud But Still Sought UIM Benefits  “Chutzpah” is a Yiddish term meaning “unmitigated gall” where, for  example, a defendant convicted of murdering his parents asks for  clemency because he is an orphan. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Punching a Person in the Face is an Excluded Intentional Act   https;//zalma.com/blog Alphonso Williams, appealed a judgment granting the motion for summary  judgment of the defendant, ANPAC Louisiana Insurance Company ("ANPAC").  The trial court dismissed plaintiff's claims against ANPAC, finding the  intentional act exclusion in the insurance policy precluded coverage for  the injury caused by the insured, Christopher Hart.   In Alphonso B. Williams v. Christopher L. Hart & ABC Insurance  Company, No. 54,604-CA, Court of Appeals of Louisiana, Second Circuit  (July 6, 2022) the Court of Appeal looked to the video of a battery when  Hart Punched Williams in the face without hesitation.  FACTS  On February 2, 2020, Alphonso Williams and Christopher Hart attended a  Super Bowl event at a Holiday Inn hotel in Shreveport. At approximately 7:30  p.m., Hart violently punched Williams in the face, knocking him down.  A  surveillance camera recorded the incident.  At the time of the incident, Hart was insured by a homeowner's policy  issued by ANPAC. The insurance policy contains an exclusion of coverage  for bodily injury "which is caused intentionally by . . . any insured,  even if the resulting injury or damage is different than expected or  intended. This exclusion shall not apply to an intentional act arising  out of any insured's use of lawful force to protect persons or  property."  ANPAC denied Williams’ insurance based on the exclusion.  Williams sued for damages against the defendants, Christopher Hart and  ANPAC. After taking the depositions of Williams and Hart, ANPAC filed a  motion for summary judgment alleging the insurance policy did not  provide coverage because plaintiff's injuries were caused by the  intentional act of the insured.  The trial court granted ANPAC'S motion for summary judgment based on the  policy language, the video and the applicable law. The trial court  granted summary judgment in favor of ANPAC, dismissing plaintiff's  claims against ANPAC.  --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Place to Learn Excellence in Claims Handling   Every Insurer is Obligated to Maintain a Professional Claims Staff   Your support will ensure Zalma on Insurance & ClaimSchool, Inc. can  continue to be produced with the quality you’ve come to expect, but also  to grow, expand, and evolve as well. You’ll be supporting ideas and  values you believe in, and directly supporting the Zalma on Insurance  team, and the flexibility to navigate the future as the digital  landscape changes.   Subscribe to the Excellence in Claims Handling program at  zalmaoninurance.locals.com. and receive the videos limited to  subscribers of Excellence in Claims Handling at locals.com by clicking  on the following link https://zalmaoninsurance.locals.com/subscribe.  Subscribe to become a supporter. Get access to all content and interact  with Barry Zalma, Esq., CFE and the Zalma on Insurance Community.  See the introductory video at https://youtu.be/kLSSBG7kZy0 and at https://rumble.com/vrhaka-excellence-in-claims-handling.html  There are presently six videos posted with hundreds to come.  Insurance is a business. It must change if it is to survive. It must  rethink the firing of experienced claims staff and reductions in  training to save “expense.”  --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Workers' Compensation Fraudster Settles Exposure & Find Failure to  Pay is Expensive  Arch-Concept Construction, Inc. and its president Dusan Lazetic appealed  from the Law Division's April 1, 2021 order enforcing the parties'  settlement agreement. Judge Linda Grasso Jones entered the order after  determining that defendants' performance of its obligations under the  agreement was not excused by the doctrine of impossibility, that she  could not rewrite the parties' agreement, and that the damages  stipulated in the agreement were enforceable liquidated damages. In  Hartford Underwriters Insurance Company v. Arch-Concept Construction,  Inc. and Dusan Lazetic, individually and as President of Arch-Concept  Construction, Inc., No. A-2430-20, Superior Court of New Jersey,  Appellate Division (June 29, 2022) the New Jersey appellate court  resolved the dispute. The defendants argued that the doctrine of  impossibility applies to its inability to perform under the settlement  agreement, that the judge should have extended a forbearance as a matter  of equity, and that the damages awarded under the parties' agreement  and a consent judgment are an unenforceable penalty. FACTS Plaintiff Hartford Underwriters Insurance Company provided  worker's compensation insurance to Arch-Concept from May 2012 through  January 2016. On November 4, 2016, plaintiff filed a complaint against  defendants to recover what it alleged were unpaid premiums based upon  Arch-Concept understating its payrolls and misclassifying certain  workers. It also sought relief under the New Jersey Insurance Fraud  Prevention Act (IFPA), N.J.S.A. 17:33A-1 to -34. Plaintiff alleged that  audits estimated defendants owed plaintiff $583,665 in unpaid premiums  and that it was also entitled to treble damages for defendants'  violation of the IFPA. Caught, without a defense, Arch-Concept and  Hartford, avoiding a lengthy trial, agreed to settle plaintiff's claims  pursuant to a written settlement agreement. The agreement  required plaintiff to accept and defendants to pay $275,000 (half of  what was obtained by fraud) over twelve quarterly installments. In the  event defendants breached the agreement, they agreed to the entry of a  consent judgment in favor of plaintiff and against defendants in the  amount of $425,000, less any payments made under the agreement. The  parties attached to the agreement a form of consent judgment signed by  defendants that reflected the default provision in their agreement. An  obviously great deal for the defendant who was exposed to a judgment  (with treble damages) of over $2 million. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Jury Instruction Misled Jury by stating that an "Official Act"  Existed  as a Matter of Law   https://zalma.com/blog Greg E. Lindberg and John D. Gray were convicted of honest services  fraud and federal funds bribery in connection with a series of payments  and offers of payment, in the form of campaign contributions, made to  Mike Causey, the elected Insurance Commissioner for North Carolina. The  jury found that these payments were made in exchange for Causey  assigning a different Deputy Commissioner to oversee the affairs of  Lindberg's insurance companies.   In United States Of America v. Greg E. Lindberg, Nos. 20-4470, 20-4473,  United States Court of Appeals, Fourth Circuit (June 29, 2022) the  Fourth Circuit granted a new trial  FACTS  Greg E. Lindberg served as chairman of Eli Global LLC, an investment  company, and as owner of Global Bankers Insurance Group, an insurance  management company, during the relevant period from April 2017 to August  2018. Lindberg owns several insurance businesses subject to regulation  in North Carolina. John D. Gray worked as a consultant for Lindberg  during the relevant period. Lindberg and Gray ("defendants") were  convicted of conspiring to commit honest services wire fraud and federal  funds bribery for offering millions of dollars in campaign  contributions to Mike Causey, the Commissioner of the North Carolina  Department of Insurance, in exchange for the reassignment of a Senior  Deputy Commissioner assigned to review Lindberg's insurance companies.  In November 2016, Mike Causey was elected as North Carolina's  Commissioner of Insurance. Several weeks after he was elected, Causey  was scheduled to meet with Lindberg and other members of Eli Global's  leadership. Prior to the meeting, he received a phone call from his  campaign treasurer notifying him that he had received a $10,000 donation  from Lindberg. Causey testified that he thought the contribution was  "unusual" both because of the size and the timing, and he decided to  return the donation. At the meeting, Gray explained that Eli Global was  in the process of purchasing another insurance company based in Michigan  and asked Causey to call his counterpart in Michigan "to put in a  positive word." Causey agreed and made the phone call.  Causey testified at trial that Gray then called him to state that  OFLindberg had donated $500,000 to the North Carolina Republican Party  ("NCGOP") with $110,000 to be sent to Causey's campaign and that Gray  and Lindberg wanted to host a fundraiser for Causey in December. Causey  later reached out to the Federal Bureau of Investigation ("FBI") to  express concerns about these offers of donations and agreed to cooperate  with an FBI investigation into Lindberg and his associates.  Over the course of several meetings, they discussed Lindberg creating an  independent expenditure committee and donating substantial amounts,  between $500,000 and $2,000,000 to Causey's reelection campaign. The day  after the meeting, Causey's campaign received $230,000 from the NCGOP.  In total, Causey received $250,000 in donations funneled through the  party.  (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL Volume 26 Number 13  ZIFL-07-01-2022.   The July 1, 2022 issue of Zalma's Insurance Fraud Letter you will be  able to read the full text of articles including:  Bases for Rescission   Rescission Is an Equitable Remedy First Created in The Ecclesiastical  Courts of Elizabethan England.  When the United States was conceived in 1776 the founders were concerned  with protecting their rights under British common law.   Common Law is a form of law developed by judges through tribunals and  decisions of courts rather than executive branch action and legislative  statutes.  Following the common law tradition, legal principles were referred to  courts of equity to “mitigate the rigor” of the common law.  The new United States of America adopted British common law as the law  once the U.S. Constitution was adopted in 1789. British common law was  only modified by the limitations placed on the central government by the  Constitution.  The viability and ability to enforce contracts was recognized as  essential to commerce. Courts of law, following the British Common Law,  were charged with enforcing legitimate contracts and rendering money  judgments against the party who breached the contract.   Another Florida Insurer Goes Broke  Southern Fidelity Insurance Company has entered into receivership and is  being liquidated, according to the Florida Office of Insurance  Regulations (FLOIR) --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Umbrella Insurance is Only Obligated After Underlying Insurance is  Exhausted  Anthony DeSmet appealed from the summary judgment granted to Scottsdale  Insurance Company on his claim alleging that Scottsdale had acted in bad  faith in refusing to fulfill its responsibilities under the excess  uninsured-motorist coverage in its umbrella policy.  In Anthony Clarence Desmet v. Scottsdale Insurance Company, No. 21-6143,  (D.C. No. 5:20-CV-00330-J) (W.D. Okla.), United States Court of  Appeals, Tenth Circuit (June 24, 2022) the Tenth Circuit was called Upon  to Determine if an Umbrella Policy that provided excess uninsured  motorist coverage was auto insurance.   Scottsdale, in its motion for summary judgment, invoked a provision in  its policy that excused it from liability until DeSmet exhausted his  uninsured-motorist coverage under his primary motor-vehicle liability  policies. The USDC for the Western District of Oklahoma held that the  exhaustion provision in Scottsdale's policy was valid and enforceable  and that even if it was not, Scottsdale's reliance on the provision was  not in bad faith.  BACKGROUND  On March 5, 2018, DeSmet suffered severe bodily injuries when his  vehicle was rear-ended by a vehicle driven by William Akehurst.  Akehurst's only automobile-liability coverage was a policy issued by  State Farm Mutual Automobile Insurance Company, which promptly paid its  $50,000 policy limit. This was insufficient to fully cover DeSmet's  damages.  If the liability limits of a motor vehicle are less than the amount of  the injured insured's claim, that vehicle is classified as uninsured.   Such tortfeasor drivers are commonly referred to as underinsured  motorists.  At the time of the accident, DeSmet had three separate motor-vehicle  liability policies covering several motor vehicles. Each policy provided  $500,000 in uninsured/underinsured motorist coverage.  In addition, DeSmet had an umbrella policy with Scottsdale. An umbrella  policy is a type of "excess insurance policy." Excess coverage is  provided when, under the terms of the policy, the insurer is liable for a  loss only after any primary coverage-other insurance-has been  exhausted. The Scottsdale policy provided $2 million in excess liability  coverage to supplement coverage provided in DeSmet's  automobile-liability and home-owner's policies. An endorsement in the  policy stated:  It is expressly agreed that liability shall attach to [Scottsdale] only  after the insurers of the "underlying insurance" have paid or have been  held liable to pay (whether collectible or not) the full amount of their  respective uninsured motorists and/or underinsured motorists  liability[.] The term underlying insurance referred to existing motor vehicle  liability policies carried by DeSmet that were listed in the Scottsdale  policy's Declarations.  Unhappy with the handling of his claim by one of his motor-vehicle  liability insurers, DeSmet requested that Scottsdale "step down" and pay  the claim itself. Scottsdale responded that per the terms of the  policy, Scottsdale would pay only after the underlying insurance limits wexhausted.  DeSmet filed a petition in Oklahoma state court on March 3, 2020,  alleging that Scottsdale's conduct surrounding its refusal to pay  amounted to a breach of its implied duty of good faith and fair dealing.  The suit DeSmet filed included the following statement:  At the time he sued DeSmet had received no payment on the  uninsured/underinsured-motorist provisions of any of its three  automobile-liability policies. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Videos Explaining the Excellence in Claims Handling Video Program for Subscribers to Locals.com. Starting on July 1, 2022 the Excellence in Claims handling videos will only be available to subscribers at Locals.com although the blog posts will be available to all, at no cost, at my blog, Locals.com. If you wish to subscribe for only $5 a month go to locals.com at https://zalmaoninsurance.locals.com/subscribe  The Locals.com community will publish the new videos. You can see a sample below. [video width="1848" height="1082" mp4="http://zalma.com/blog/wp-content/uploads/2022/06/TEASER2.mp4"][/video] Excellence in Claims Handling is a community created by Barry Zalma, Esq., CFE and ClaimSchool, Inc. to help create a community of insurance professionals dedicated to provide excellence in claims handling to all people insured who present a claim to their insurer. Zalma on Insurance will continue to provide materials on insurance, insurance claims, insurance law and insurance fraud. Material from the blog digesting new insurance law cases will presented free and there will be special Excellence in Claims Handling videos only for subscribers. Excellence in Claims Handling will be a source for the insurance claims person to become an insurance claims professional who can provide excellence in claims handling to the insurance buying public. The Professional Claims Handler In search of profit, insurers have decimated their professional claims staff. They laid off experienced personnel and replaced them with young, untrained, unprepared people. A virtual clerk replaced the old professional claims handler. Process and computers replaced hands-on human skill and judgment. Money was saved by paying lower salaries. Within three months of firing the experienced claims people gross profit increased.The promises made by an insurance policy are kept by the professional claims person. Keeping a professional claims staff dedicated to excellence in claims handling is cost-effective over long periods of time. A professional and experienced adjuster will save the insurer millions by resolving disputes, paying claims owed promptly and fairly, and by so doing avoiding litigation. Every insurer should provide a subscription to their claims staff. The professional claims person is an important part of the insurer’s defense against litigation by insureds against insurers for breach of contract and the tort of bad faith. Claims professionals resolve more claims for less money without the need for either party to involve counsel. A happy insured or claimant satisfied with the results of his or her claim will never sue the insurer. Incompetent or inadequate claims personnel force insureds and claimants to public insurance adjusters and lawyers. Every study performed on claims establishes that claims with an insured or claimant represented by counsel cost more to resolve than those where counsel is not involved because the claim is resolved quickly and fairly. Prompt, effective, professional claims handling saves money for both the insured and the insurer and fulfills the promises made when the insurer sold the policy. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Zalma on Insurance & Excellence in Claims Handling   A Video Explaining the Excellence in Claims Handling Video Program for  Subscribers to Locals.com.  Starting on July 1, 2022 the Excellence in Claims handling videos will  only be available to subscribers at Locals.com although the blog posts  will be available to all, at no cost, at my blog, Locals.com.   If you wish to subscribe for only $5 a month go to locals.com at https://zalmaoninsurance.locals.com/subscribe Excellence in Claims Handling is a community created by Barry Zalma,  Esq., CFE and ClaimSchool, Inc. to help create a community of insurance  professionals dedicated to provide excellence in claims handling to all  people insured who present a claim to their insurer. Zalma on Insurance will continue to provide materials on insurance,  insurance claims, insurance law and insurance fraud. Material from the  blog digesting new insurance law cases will presented free and there  will be special Excellence in Claims Handling videos only for  subscribers.  Excellence in Claims Handling will be a source for the insurance claims  person to become an insurance claims professional who can provide  excellence in claims handling to the insurance buying public. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

How Courts Deal With Defenses to the Tort of Bad Faith  https://zalma.com/blog When the Court found that an insureds claim was debatable, the bad-faith  claim must fail. Bad-faith claims were insufficient as a matter of law  where the status of Kentucky law on the issue was "fairly debatable."  [Willowbrook Invs., LLC v. Md. Cas. Co., 325 F.Supp.3d 813 (W.D. Ky.  2018)  The Tort of Bad Faith Has Served its Purpose   The tort of bad faith, and the punitive damages that seem to go with it,  have, in my opinion, served their purpose. Insurers now have  professional claims departments. Insureds are almost universally treated  with courtesy and respect. More than 90% of all claims are resolved  without litigation or argument. Legitimate claims are paid with  alacrity.  Insurance fraud continues to grow. The amount of money taken from  insurers every year are in the tens or hundreds of billions of dollars.   The fear of punitive damages has made the fight against fraud difficult  and almost impossible. Even when an insured is arrested, tried and  convicted of the crime of insurance fraud, or attempted insurance fraud.  Attempts will still be made to sue the insurer for the tort of bad  faith.  Before I retired from the practice of law, I contended daily with  insurers who wanted to fight fraud but who found they must decide to pay  a claim rather than face the exposure of a punitive damage judgment.  Sometimes, the settlement of bad faith lawsuits, where there has been no  bad faith and an appropriate denial of a claim or refusal to pay a  policy limits demand, the insurer concludes it must pay more to avoid a  potential run-away jury.  However, practical insurance professionals have a need to resolve  litigation as inexpensively as possible to protect the shareholders who  want the insurer to make a profit.  As a result, the insurer will disobey  the millions for defense covenant and will make a business decision to  pay the non-covered loss or the fraud, rather than take a chance on an  adverse verdict.  As with all things in insurance, the attitudes of insurers move in  cycles. More often than not, I am now called upon to testify as an  expert in bad faith cases that the insurer insists on taking to trial by  jury rather than pay off a scofflaw. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Defenses to the Tort of Bad Faith   https://zalma.com/blog A bad faith claim should be dismissed on summary judgment if there was a  genuine dispute on a reasonable factual dispute or an unsettled area of  insurance law. In determining if a dispute is genuine, the court does  not decide which party is “right” as to the disputed matter, but only  that a reasonable and legitimate dispute actually existed. [Chateau  Chamberay Homeowners Ass'n v. Associated Int'l Ins. Co., 90 Cal. App.  4th 335, 348 n.7 (2001), as modified on denial of reh'g (July 30, 2001).  Insurers, afraid of a bad faith judgment, should consider the fact that  there can be no bad faith claim for denial of coverage if the insurer  was correct as a matter of law in denying coverage. [Frog, Switch &  Mfg. Co., Inc. v. Travelers Ins. Co., 193 F.3d 742, 751 n.9 (3d Cir.  1999).]  When a court finds that Great American was not obligated to  provide coverage under the terms of the Policy, the bad faith claim  similarly fails. Before succumbing to the extortionist bad faith suit  and offering up millions to avoid trial the honest insurer who knows it  acted toward its insured fairly and in good faith must consider that an  insurer does not act in bad faith if it declines to pay sums that are  reasonably in dispute. While an insured may present evidence showing  that the insurer knew there might be some question as to whether there  was a legitimate question or difference of opinion over the eligibility,  amount or value of the claim. An insured needs to present some evidence  of a clear entitlement to coverage. If the insurer is convinced the  evidence does not exist providing the insured with an entitlement to  coverage, it must, in good faith, refuse to pay and be willing to  litigate to the highest court available to prove that it acted properly. The tort of bad faith is like the mythical vampire—it hides in the dark.  The law of unintended consequences applies to the situation and the  reasons for its creation – bad acts by insurers costing innocent  insureds to suffer was not cured by the tort of bad faith. Rather,  insurers and their customers were hurt by the fear of the assessment of  tort and punitive damages, increased the cost of insurance across the  country. The truth about the tort of bad faith is that it will die only  if it is put into the light of day. It does not solve the problem  anticipated. Rather, it created a new problem: multiple bad faith suits  brought even when the reason for the denial of all or a part of a claim  were made because there was a genuine dispute between the insurer and  the insured or that the decision to deny was fairly debatable.   Insurers seem to forget, or ignore, the fact that to establish a claim  for bad faith in the insurance context, a plaintiff must show two  elements: (1) the insurer lacked a “fairly debatable” reason for its  failure to pay a claim, and (2) the insurer knew or recklessly  disregarded the lack of a reasonable basis for denying the claim. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

In a typical contract, one party has a duty to perform (construct a  building, deliver goods, convey real estate, pay indemnity) and the  other party has a duty to pay money or perform a task.  Breach by the  performer may take the form of nonperformance, defective performance, or  delay in performance. The primary purpose of damages for breach of a  contract is to protect the promisee’s expectation interest in the  promisor’s performance.  Damages should put the plaintiff in as good a  position as if the defendant had fully performed as required by the  contract. Damages should never provide a profit to the non-breaching  party.  Insurance, like all parts of modern society, is subject to the  deprivations of the law of unintended consequences.  In the USA alone  people pay to insurers more than $1.2 trillion dollars in premiums and  insurers pay out in claims as much or more than they take in. Profit  margins are small because competition is fierce and a year’s profits can  be lost to a single firestorm, earthquake, hurricane, flood or  unexpected bad faith law suit.  Neither the courts nor the governmental agencies seem to be aware that  in a modern, capitalistic society, a healthy and viable insurance is a  necessity.Not all bad faith suits are certain winners. Not every bad faith suit  results in a punitive damages award. In a first party claim in New  Jersey brought by the insured against its own insurance company the  appellate court conclude that to establish an insurer's bad faith, the  insured must demonstrate that coverage was so clear it was not fairly  debatable. If there is a valid question of coverage, i.e., the claim is  fairly debatable, the insurer bears no liability for bad faith.  [Wacker-Ciocco v. Gov't Emp. Ins. Co., 439 N.J. Super. 603, 611 (App.  Div. 2015)].  Insurers in fear of a potential bad faith judgment, a  plaintiff must show the lack of a reasonable basis for denying the claim  or unreasonably delaying its processing, and the insurer's knowledge or  reckless disregard that it was acting unreasonably. [Parko Props., LLC  v. Mercer Ins. Co. of N.J. (N.J. Super. App. Div. 2020)]  Unfortunately, few insurers are willing to take a chance on convincing a  jury that the decision to deny the claim was fairly debatable or that  the decision made was as a result of a genuine dispute. In Louisiana and  Mississippi, for example, multiple millions were paid to settle claims  that flood damage was covered as a result of Hurricane Katrina, although  the policies excluded flood and the plaintiff insureds failed to buy  flood insurance. Mudslides in Southern California from hills denuded by  wildfires, clearly excluded, are being paid because of fear of claims of  bad faith and an aggressive department of insurance that construes a  mudslide as a loss due to fire.   (c) 2022 Barry Zalma & ClaimSchool, Inc --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

HOW THE LAW OF UNINTENDED CONSEQUENCES COSTS THE INSURANCE INDUSTRY   Neither the courts nor the governmental agencies seem to be aware that  in a modern, capitalistic society, insurance is a necessity. No prudent  person would take the risk of starting a business, buying a home, or  driving a car without insurance. The risk of losing everything would be  too great. By using insurance to spread the risk, taking the risk to  start a business, buy a home, or drive a car becomes possible.Insurance  has existed since a group of Sumerian farmers, more than 5,000 years  ago, scratched an agreement on a clay tablet that if one of their number  lost his crop to storms, the others would pay part of their earnings to  the one damaged. Over the eons, insurance has become more  sophisticated, but the deal is essentially the same. An insurer, whether  an individual or a corporate entity, takes contributions (premiums)  from many and holds the money to pay those few who lose their property  from some calamity, like fire. The agreement, a written contract to pay  indemnity to another in case a certain problem, calamity, or damage that  is fortuitous, that is that occurs by accident, is called insurance.In a  modern industrial society, almost everyone is involved in or with the  business of insurance. They insure against the risk of becoming ill,  losing a car in an accident, losing business due to fire, becoming  disabled, losing their life, losing a home due to flood or earthquake,  or being sued for accidentally causing injury to another. The insurers,  insureds, or people damaged by those insured are dependent on one  another.In a country where human interactions are governed solely by the  terms of written contracts, insurance would be a simple means of  spreading risk and providing indemnity based on the promises made by the  contract of insurance. But, in this the real world, insurance contracts  are controlled by statutes enacted to ostensibly protect the consumer  of insurance, regulations imposing obligations on the conduct of  insurers and the decisions of trial and appellate courts interpreting  insurance contracts.A simple insurance contract between two parties  might say: “I insure you against the risk of loss of your engagement  ring valued at $15,000 by all risks of direct physical loss except wear  and tear for a premium paid by you of $15.00.” Anyone who could read  would understand that contract. If something happens to damage, destroy  or lose the ring the insurer will pay you $15,000.00. However, insurers  cannot write such a simple contract because the state requires many  terms and conditions that complicate the policy wording and confuse the  common person. The states and courts that did so had nothing but good  intentions to protect the consumer against the insurer and control the  actions of the insurer. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Business Of Insurance Is Subject To The Law Of Unintended  Consequences As If It Were On Steroids   The law of unintended consequences is not statutory. No state or federal  government has enacted it into law. No executive has signed the law. It  is, rather, a law of the nature of people. It is an adage or idiomatic  warning that an intervention in a complex system always creates  unanticipated and often undesirable outcomes.  General observation requires the hypothesis that actions of people,  especially of governments, will always have effects that are  unanticipated or unintended, has been proved. Economists and other  social scientists have heeded its power for centuries. Regardless, for  just as long, politicians, insurers and popular opinion have largely  ignored the law of unintended consequences to their detriment.   There is no common-law duty for a court, especially in a heavily  regulated sector of the economy like insurance to create new rules.  Every court should be loathe to invent duties unmoored to any existing  precedent. The law of unintended consequences counsels against it.  A good illustration of the law of unintended consequences can be  To find a good illustration of the law of unintended consequences, one  need look no further than the Supreme Court's decision in Williamson  County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473  U.S. 172, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985).  The Court's actual  holding was pedestrian: that Hamilton Bank's takings claim was unripe  because the bank had not exhausted its administrative remedies,  specifically its right to ask the County for a variance to develop the  property in the manner proposed. In dictum, however—dictum in the sense  that the Court's pronouncement was at that point unnecessary to its  decision—the Court went on to say that the bank's claim was "not yet  ripe" for a "second reason. That reason too was couched in terms of  exhaustion: that under state law "a property owner may bring an inverse  condemnation action to obtain just compensation for an alleged taking of  property"; and that, until the bank "has utilized that procedure, its  takings claim is premature." The Court's implicit assurance, of course,  was that once a plaintiff checks these boxes, it can bring its takings  claim back to federal court. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Zalma’s Insurance Fraud Letter   A ClaimSchool™ Publication © 2022, Barry Zalma & ClaimSchool, Inc.,  Go to my blog & Videos at: Zalma on Insurance, and at https://zalma.com/blog       The full issue in Adobe .pdf format is available here.  The following are summaries of some of the articles that can be found in  the current issue. Allianz Subsidiary Pleads Guilty to Defrauding Investors Prosecutors Also Brought Charges Against Three Former Allianz Employees,  With Two Agreeing to Plead Guilty  One of Allianz SE’s ALIZF investing divisions pleaded guilty to  securities fraud and agreed to pay about $6 billion in penalties and  restitution to investors who suffered losses when some of the  subsidiary’s hedge funds tanked during the March 2020 market selloff. Florida Proposes Changes to Reduce Fraud  Florida’s lawmakers are concerned that property insurance for citizens  of the state and intend to work to defeat or deter fraud and abuse by  the means of insured’s assigning benefits (AOB) to public insurance  adjusters, roofers, contractors or lawyers. Florida’s CFO Jimmy Patronis  is leading the effort. Speaking alongside Florida’s Citizens Property  Insurance Corporation’s CEO Barry Gilway, Patronis laid out five key  areas for reforming Florida’s property insurance marketplace.  North Carolina Judge Orders Lindberg to Give Up Control of Firms to  Repay Insurers Other Insurance Fraud Convictions  Guilty of Faking Auto Theft  John Michael Fletcher, 61, was convicted of False Reports and Filing a  False Insurance Claim. Fletcher, a Knoxville man was convicted of  falsely telling police his car had been stolen before attempting to  receive an insurance payment for more than the vehicle’s worth.  On December 7, 2018, Fletcher asked an employee to move his H3 Hummer  motor vehicle. He then told Knoxville Police and his insurance company  that the Hummer had been stolen. Bright and Roberts explained that  Fletcher claimed he had purchased the vehicle for nearly double what he  actually paid for it.  Nearby surveillance video showed the vehicle being moved, and once the  vehicle was found, there were no signs of forced entry or damage to the  ignition showing it had been stolen. At sentencing, prosecutors expect  to seek an enhanced sentence because Fletcher reportedly threatened the  insurance agent when they did not pay the claim. Fletcher also has a  prior conviction for Second Degree Murder out of Washington County,  Tennessee.  False Reports and Filing a False Insurance Claim are both Class D  felonies carrying a punishment between two and four years. Sentencing  for this case will take place on July 16. New Book: Ethics for The Insurance Professional Third Edition --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurance is a business.  https://zalma.com/blog Professional Insurance Adjusting At the turn of the century, insurers, in a search for profit, decimated  their professional claims staff. They laid off experienced personnel and  replaced them with young, untrained and unprepared people.  A virtual clerk replaced the old professional claims handler. Process  and computers replaced skill and judgment. It must change if it is to survive. It must  rethink the firing of experienced claims staff and reductions in  training to save “expense.”  Excellence in Claims Handling  An insurer must understand that it cannot adequately fulfill the  promises it makes to it insured and the Fair Claims Practices Act which  exist in almost every state, when dealing with claimants without  excellence in claims handling. An insurer must work intelligently and  with vigor to create a professional claims department.  Insurance training is available across the country by correspondence, in  local colleges and universities and from law firms that will provide  the training as a marketing tool. None of these sources are directed to  producing insurance claims professionals. They do provide the basic  background information necessary to begin the process of becoming an  insurance claims professional. In that regard, I have created electronic  training programs on professional claims handling that are available  from experfy.com and a different set of courses from illumeo.com.  An excellence in claims handling program can include a series of  web-based lectures supported by text materials like my claims books  available at amazon.com and over the insurance claims library at my web  site at https://zalma.com.  The web lectures must be supplemented by meetings between supervisors  and claims staff on a regular basis to reinforce the information learned  in the lectures.  Every two weeks Zalma’s Insurance Fraud Letter publishes lists of  convictions. The major volume of such convictions deal with Medicare and  Medicaid fraud. Basic property and casualty fraud convictions are  seldom described except when the perpetrator confesses or pleads guilty.  Few go to trial. Those who are convicted usually are sentenced to short  stays in jail or to home confinement.  This is mostly a work of fiction based on the real experiences of a  practicing lawyer and Certified Fraud Examiner.  Go to https://claimschool.com. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

What a Great Country!   Wo Ping Chen was trained as a physician in Hong Kong. Until Hong Kong  was returned by the United Kingdom to the Peoples Republic of China, he  was the best known Orthopedist in the Crown Colony. Fearing problems  with the new government he emigrated to Vancouver, British Columbia,  Canada as a citizen of the commonwealth.   He worked as an employee of the National Health Service for a year and  then obtained a work visa to the U.S. and crossed the border into the  U.S. only to find he could not work as a physician without a license  from a U.S. state and attended a U.S. based medical school. After one  year of medical school, one year of internship in a Seattle hospital and  one year as a resident Chen was able to restart his life.  His first effort upon receiving a license was to apply to the U.S.  Government’s Medicare and Medicaid systems for a medical provider number  which would give the government the ability to deposit funds  electronically into his bank account without having to wait for a check  to be received and collected --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Sweet Little Old Lady & Fraud  https://zalma.com/blog Insurance Fraud is an Equal Opportunity Crime   The Insured was 82 years old and bored. She was born shortly after the  turn of the century to a wealthy family of Connecticut merchants. She  had been a debutante. She lived most of her life in luxury. Now, at 82,  she was a widow living alone.  She had a small income from her husband’s estate and 82-years-worth of  things.  The things bored her. Living alone bored her. Simply passing the  days caused her nothing but unexplainable exhaustion. Her life needed  something to keep her interest. The Insured, regardless of her age, had a  fine and steady hand. Her penmanship was, in these days of computers,  exotic.   The agent responded, with sympathy: “Being burglarized is nothing to be  ashamed of. It happens every day. That’s why you bought insurance. What  was taken?”  “Everything, all my fine things.  They are all gone.”   Lloyd’s directed a local adjuster to investigate the claim. When he  arrived at the Insured’s home he found minimal furniture in relatively  poor condition. He found the Insured to be a pleasant old lady who stood  only five foot one inches tall. She was thin and frail looking and  could not have weighed more than ninety pounds.   She told the adjuster:  I had hired a lady from El Salvador to help me clean my silver. It’s  just too big a job for me now that I’m 82. Her name was Juanita. I don’t  know her last name. I believe her number and name was on a card on the  bulletin board at the Ralphs grocery store.  Juanita and I had been cleaning the silver for about an hour using very  strong ammonia when the fumes began to bother me and I became faint. I  really don’t know what happened, but the next thing I remember I was  waking up on the kitchen floor. Juanita was gone.   Upset at the calumny of the El Salvadorian domestic the adjuster wanted  to help.  He promised to complete his investigation rapidly. He would  make sure her claim was paid as promptly as possible.  The adjuster had been well trained. He knew that Lloyd’s underwriters  expected him to verify the appraisal with Mr. McCarthy. He knew that  they also required that the claims handler verify the values of the  things claimed stolen.   A fraud was thwarted. The Insured put some excitement into the dull life  of an 82-year-old widow. Little harm was done and the adjuster has a  story about a fraudulent claim that will top that of all his  contemporaries. Because they rescinded the policy Lloyd’s returned the  premium.   ZALMA OPINION Insurers must, to conduct a thorough investigation without bias, stop  the criminal actions of sweet old ladies or hardened criminals equally.  If not, crime will succeed.  The innocent ex-convict will lose the  indemnity to which he is entitled.  The criminal grandmother will recover and everyone who buys insurance  will pay more than they should.   (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Am I In Trouble? Bankruptcy Fraud Defeats Legitimate Insurance Claim  https://zalma.com/blog Insurance fraud, like any other profession, improves with practice. The  beginner, unaware of the tools available to an insurer, makes a stupid  error that will destroy him or her.  Abraham MacPherson was an insurance fraud novice. He had succeeded, with  ease, in defrauding his bank by submitting a false financial statement  as part of the application for a loan. He even convinced an FBI Agent,  checking his fraudulent loan application, that he was the victim of a  dishonest loan broker. Success made Abraham bold.  He decided it was time  to branch out into insurance fraud.  The Petition for bankruptcy, like most filed in the Bankruptcy court  showed MacPherson to have no equity in any of his property and no money.  He reported his assets as only $500 in jewelry and the tools of his  plumbing trade since they were exempt from the grasp of his creditors.   What he did not tell the Bankruptcy Court was that MacPherson also owned  a $150,000 twin engine Cessna Aircraft that he used to go on hunting  and ski trips. He did not tell his lawyer about the airplane because he  did not want it sold for the benefit of the judgment creditor whom he  felt cheated him.  The day his debts were discharged Abraham called his insurance broker.   He advised the broker that his home had been burglarized. He claimed the  burglars took all of the jewelry on the schedule. He demanded the  immediate issuance of a check for $41,960 MacPherson stuck to his story. He demanded immediate payment or he would  complain to the California Department of Insurance and file suit.  Moseby reported to his principal, the insurer, who decided to deny the  claim for fraud. Further, following the law, since MacPherson had  admitted to Bankruptcy fraud, the insurer instructed Moseby to pass the  information he had obtained to the FBI.  In addition, as required by  California law he presented the information to the California Department  of Insurance, Fraud Division.  Moseby was right, MacPherson was not in trouble with him. He simply  would not collect on his claim. MacPherson was in serious trouble with  the FBI and the U.S. Department of Justice.   The Special Agent of the Federal Bureau of Investigation was upset that  MacPherson had fooled him. After verifying the results of Moseby’s  investigation the FBI presented the information to a U.S. Attorney.  Prosecution followed charging MacPherson with Bankruptcy Fraud, Mail  Fraud — for the presentation of a false and fraudulent claim to an  insurer by use of the U.S. Postal Service — and for loan fraud.  He went to trial in U.S. District Court in Sacramento on charges of  Bankruptcy fraud.  The trial took five hours to complete and the jury was  instructed on the law at 4:00 p.m. They deliberated for three days and  convicted MacPherson, who was sentenced to serve three years in federal  prison.   ZALMA OPINION   It doesn't pay to lie to an insurance company about a claim. Doing so  can lose your claim. It is worse to lie to a bankruptcy course because  that is a federal crime that could put the liar in jail for as much as  five years. This case proves why it is best to always tell the truth.   (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Don’t Need Your Stinkin’ License!  Yuri Gasparov was 19 years old when he entered the United States from  the old Soviet Republic of Georgia. Although still a teenager he was  strong of will and body. In the old Soviet Georgia he had made his mark  as a thief, extortionist and enforcer. Yuri was 13 years old when he  first killed a man who refused to pay half his earnings to the group  Gasparov joined when he was 11.   When the Soviet Union fell, he emigrated to the U.S. He saw the U.S.,  unlike the new Georgian Republic, as a place of opportunity for his  criminal skills.  Gasparov arrived at Los Angeles International Airport on an immigrant’s  Visa claiming to be a persecuted Russian Jew. He was unusual as an  immigrant. There were gold bars weighing ten Kilograms and 30 carats of  “D” to “H” color diamonds in his luggage. Yuri stepped off an Al Italia  jet from the First Class Cabin wearing an English suit cut by a Saville  Row tailor, a Gold Rolex President watch and Italian alligator leather  shoes. As he waited in the “Nothing to Declare” line at the Bradley  International Terminal women in the line openly stared. They saw a  handsome young man with long black hair, green eyes, an aquiline nose  and a neatly trimmed Van Dyke beard. They assumed he was an Italian  Actor come to try his hand at Hollywood.  A limousine was waiting to pick him up at the curb. The chauffeur held  the door for him as he entered the long, white, stretched Lincoln Town  Car welcoming him to the U.S. in Russian.   Yuri Gasparov had convinced the boss in Georgia that it was necessary to  use the American system to make profit and leave the violent tried and  true methods of making a criminal profit perfected in the old Republic  of Georgia. The American system of civil justice was open to the  devious, the criminal and the unethical for instant wealth.  What he did not know, basking in all the accouterments of immediate  success, that knowledge of the law or how to practice law, was  irrelevant to his success. All that was required of Casparian was to  hang his license on the wall and wait for the profits to roll in. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Someone Stole My Rolls Royce  Investing in California real estate in the 1980’s was fun. Whatever you  bought you could sell for more. The doctrine: “there is always a greater  fool than I,” worked.   Li Chen Hua immigrated to California from Hong Kong in 1981. He did it  legally, winning a lottery for a Green Card. He came to the U.S. with  his savings (converted from Hong Kong dollars to diamonds for ease of  transportation).  Li set himself up in a condominium on Wilshire Boulevard just west of  the community known as Westwood and east of Beverly Hills. It only cost  him $500,000. He bought three other condos in the same building that  first year and paid his mortgages and living expenses from the rent he  collected. In 2008 the bottom fell out of the California real estate market. Mr.  Li, found himself owning real estate mortgaged to over $14,000,000 but  worth only $9,000,000. The rents he collected were not sufficient to pay  the various mortgages and allow him to continue in the life style with  to which he had become accustomed. He needed to make a great deal of  money fast and then, leaving his mortgagees to fend for themselves,  return to Hong Kong for a pleasant retirement.  Mr. Li’s cousin was the number one luxury car dealer in all of the  People’s Republic of China. She had no competition, an almost unlimited  supply of vehicles, and overhead limited to shipping costs.  Li’s account  at CitiBank, Hong Kong was growing. He put his savings in broad-based  stock mutual funds specializing in high risk emerging markets. His  investments doubled in two years.  Li decided it was time to stop while he was ahead. He would ship his  pRoger Parsons, the claims supervisor at Massive and Stoney Insurance  Company, looking out his window at the slow moving, brown Illinois  River, was about to order a check for the settlement when he received a  report from the NICB that the car had been shipped by Li to Hong Kong a  month before the reported theft. Customs officials in Hong Kong reported  the car arrived and was picked up by its consignee.  The NICB had copies  available of the shipping documents with Mr. Li’s signature.  Massive and Stoney retained counsel to examine Mr. Li under oath about  the theft. Li and his attorney appeared at Massive’s lawyer’s office  belligerent, demanding immediate payment of a legitimate insurance  claim.  “Mr. Li is a wealthy and highly respected member of the community. This  examination under oath is a waste of time and an attempt to create  useless and unwarranted delays. If payment is not received immediately,  Mr. Li will sue Massive and Stoney for bad faith” Len Shyster, Li’s  attorney, orated. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

https://zalma.com/blog Nobody’s Been Hurt Dr. Scrooge was eighty-five-years old. He lived with his daughter and  son-in-law in a remodeled tract home outside of Portland, Oregon.  The doctor’s daughter had insisted that he move into her house, even  though he owned one of his own, after his last heart attack. She was  afraid that her father, now a widower, would succumb to his passion for  chocolate fudge ice cream.  Only two months before he moved to his daughter’s house Dr. Scrooge  managed to consume a full gallon of chocolate fudge ice cream at a  single sitting. Shortly after that, as any healthy person under the same  circumstances would, Dr. Scrooge felt serious pain in his chest. There was no question that Dr. Scrooge had a heart condition. It was,  however, a condition that could be controlled by medication.  Dr. Scrooge’s son-in-law was a detective with the Bunco-Forgery Division  of the Portland Police Department. The Portland police provided its  officers with an excellent preferred provider health plan. They could  use any doctor they desired and were only required to pay $5 for every  prescription drug they purchased regardless of the true cost of the  drug.  Dr. Scrooge’s HMO required a payment of up to $25 per  prescription, depending on the cost of the drug.  Since he lived with them, Dr. Scrooge (although he did not actively  practice) still maintained his medical license. He would, at the request  of his daughter, write prescriptions for antibiotics and other benign  drugs requested for the assistance of the family. Occasionally he would  even go to the drug store and pick up the drugs for the family as long  as his daughter gave him a $5 bill for the pharmacist.   Five months after Dr. Scrooge started his plan of saving on prescription  drugs, the detective was called into his captain’s office.   “When was your last physical?”  “About a year ago, Captain. Why do you ask?”  “I’m concerned about your health, Wilson.”  “No reason, Captain, my health is perfect. The doctor gave me a clean  bill and said that I had cholesterol levels equal to a person ten years  younger than me.”  “He did, did he. Wilson, do you use a doctor named Scrooge?”  “Well, I don’t really use him as my physician. He lives in my house.  He’s my father-in-law.”  “Wilson, I have a report here from our health insurance administrator  telling me that Dr. Scrooge has written prescriptions for blood  thinners, blood pressure mediation, diuretics and nitroglycerin, in your  name. These drugs are only prescribed for people with a serious heart  condition. Are you taking those drugs?”   “Dad, have you been writing prescriptions for your heart medicine in my  name?”  “Yes.”  “Why?”  “Because they only cost $5 on your insurance plan, and they cost $25 on  mine.”  “Don’t you remember what I do for a living? Have you no idea what you  have done? You have committed fraud in my name!”  “But no one was hurt, the insurance company pays these bills all the  time.”  Wilson, the next day, was forced to speak to his captain and inform him  that his father-in-law had attempted to save some money on his own  insurance by making his prescriptions out in Wilson’s name.  He convinced  the Captain that, although technically the old man had committed a  crime, it would serve no purpose to put him in prison at his advanced  age. It might even please the old man because, in prison, he would get  the medicine for free. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Levon Sogomonian v. Imperial & Lloyd's  https://zalma.com/blog 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.  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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Rita was five months’ pregnant.  Her entire family greeted her condition  as an opportunity to make sufficient money for a happy Christmas in  sunny Hawaii.  For four generations Rita’s family has lived luxuriously on insurance  claims.  Their last names changed more often than their underwear.  Wherever they go, they carry a small plastic valve of soapy liquid and a  small razor. Depending on the size of the town they are visiting, they  stay a week, a month or a year. One member of the family will claim to  have slipped and fallen in a restaurant or grocery store. With the razor  they will induce bleeding at their hairline or on an arm or leg. They  will be pleasant victims with no interest in profit. Grocers, and their  insurers, rapidly and fairly settle their claims in fear that their  injuries will increase.  Rita had been a professional claimant since she was eight. She fell in  the most luxurious restaurants in Las Vegas, New York City, Baltimore,  Washington, D.C., St. Louis, Missouri, and Beverly Hills, California.  Shortly after she began to walk, her family taught her how to slip and  look like she was hurt without actually causing any physical damage. By  the time she was five she could limp on either leg, hold one arm limp,  wince with pain when touched and give all the symptoms of a severely  injured person.  By the time she was ten she had a clear knowledge of anatomy and knew  all of the symptoms of soft tissue injury. Now, at 22, pregnant with the  child of a sailor she met in San Diego whose name she does not  remember, Rita is ready to move into major, profit making scams. Her  brother Aaron would pose as her husband as they worked the major hotels  and restaurants of Sacramento, California. At the Holiday Inn, she fell  in a puddle of water in the lobby restroom where two innocent women ran  to her assistance.   “Oh, my God!” Rita moaned. “Did I hurt the baby.” Rita’s potential miscarriage brought her family over $100,000 for their  stay in Sacramento. Her brothers, sisters, cousins and nephews falling  all over the city generated another $100,000 in claims payments.   Their welcome in Sacramento worn thin, the family motor homes traveled  west to San Francisco.  The motor homes were parked in a long term secure parking lot and the  entire family boarded airplanes for a three week holiday in Maui.   (c) 2022 Barry Zalma & ClaimSchool, Inc.   Barry Zalma, Esq., CFE,  is available at http://www.zalma.com and [email protected].  Subscribe to Zalma on Insurance at locals.com https://zalmaoninsurance.local.com/subscribe.  Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.  Write to Mr. Zalma at [email protected]; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Golden Taxi   https://zalma.com/blog  Mischa came to Houston in 1990 directly from the old Soviet Union. His  dream was to be a cowboy. He became a cab driver.  Mischa picked up the English language quickly and memorized the  convoluted streets of Houston. Within a year of his arrival, he could  find with ease any hotel, restaurant or bar in the overgrown small town  that was Houston, Texas.  Mischa made a reasonable living driving a cab, making the  forty-five-minute run in from the airport at least three times a day. He  bought a small three bedroom house outside Houston and was building his  way toward the American dream. Mischa was not a criminal. He drove his  cab twelve hours a day, six days a week to support himself and his young  wife. Mischa’s life changed when the dispatcher called him to the home of  Sophie Mendelson. Sophie, an eighty-year-old Medicare patient, needed a  ride to her doctor’s office, four miles from her home.  Upon arrival at the doctor’s office Sophie gave Mischa the information  necessary to bill Medicare direct for his services. He complied and  within weeks received a check from the US Treasury. It seemed all that  Medicare required before it sent a check was information concerning the  patient, a Medicare number, and whatever he wanted for the miles driven.   Mischa satisfied Medicare if the fare reasonably related to the amount  of miles he claimed.  Mischa was an intelligent man. He grew up in the Soviet Union, so he had  no respect for government. In fact, as a child and as an adult living  in the Soviet Union, he learned that the only way to survive was to  deceive the ever-present government.  He was surprised to learn how unlike the Soviet government was the U.S.  government. Rather than expecting deceit from its citizens, the U.S.  government seemed to believe everything told to it by its residents.  T he ride he gave Sophie Mendelson gave Mischa a plan to obtain a  fortune. Mischa advised his dispatcher that he would volunteer to take  all the Medicare, Medicaid, and welfare patient rides called into his  cab. Since the other drivers did not like to wait for the payments from  the government, Mischa received all of the calls. Within a month he had  created a ledger containing 100 names, addresses and Medicare numbers. With a calculator, a tax rate table and a pad of receipts, Mischa  started on his journey to earn his first million dollars. He created  receipts for five doctor visits for every one he actually drove. Mischa  extended the distance to each doctor by a factor of three. In his first  year he collected more than a million dollars from the United States,  state and county governments. The next year his collections (since his  number of welfare and Medicare recipients had increased in his ledger)  had gone to two million dollars.   Mischa sold his three bedroom house and bought a 500-acre ranch with a  four thousand square foot, six bedroom ranch house and stables. He began  to live his dream of being a cowboy. Mischa bought 500 head of long  horn steers and three quarter horses. ZALMA OPINION   When a person is convicted of insurance fraud there is no deterrence  shown if the only punishment is to allow the criminal to be placed on  probation and allow him or her to keep the fruits of the crime. Justice  should never include allowing someone like Mischa to profit from the  crime. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

How a Thorough Fraud Investigation Dealt With False Charges of Fraud   https://zalma.com/blog. Being a good neighbor is hard work. Sometimes it’s impossible. Marsha  was not a good neighbor. She would “borrow” things from her neighbors  and never return them. Most of her small kitchen appliances arrived  because of such loans. Marsha had an extensive collection of CDs and  long-playing records, none of which she purchased. Marsha would invite  herself to lunch, but never invite her neighbors to her home for lunch. The entire neighborhood universally detested Marsha and Jaws. If Marsha  ever decided to move, the neighbors would throw a going away party to  which they would not invite her. Everyone in the neighborhood was afraid  of Marsha and Jaws. They tolerated her because they did not know how to  remove her from the neighborhood.  Marsha’s neighbors had other plans. Harry and Louise, who lived next  door, looked up the address of the insurance company in their telephone  book. They then sat at an old Underwood manual typewriter and wrote a  letter to the insurance company that said:  “We are neighbors of Marsha, the person you insure. We know she has  reported a burglary at her house to the police and is making claim for  losses due to that burglary.  “The claim is a fraud. Marsha’s house was not burglarized. She did not  have the items she is claiming stolen.  Marsha, totally innocent and the victim of a crime, was dumbfounded. Her  insurance company would not pay her claim and insisted on interrogating  her endlessly in front of a court reporter. She could not understand  the reasons for the interrogation. She explained to the lawyer for the  insurance company why her claim was valid. Although SIU investigators are charged with conducting a thorough  investigation to defeat insurance fraud, it is also their obligation to  establish that an honest claim must be paid. I have personally taken  hundreds of examinations under oath at the request of insurers and  found, as a result, that a great majority of those claims - like  Marsha's - was determined to be a claim that needed to be paid. Insurers  should never accept a charge of fraud without corroborating evidence.   (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Flying Carpet   Omar T. Tentmaker had immigrated from Iran shortly before the fall of  the Shah. Persian money was difficult to take out of the country. Omar  purchased an entire inventory of Persian rugs and shipped them, with the  rest of his household goods, to the United States. On arrival he rented  a small shop in Beverly Hills, California and began selling the rugs at  retail.   Omar had purchased nothing but the best. He sold the rugs to his  American customers at a profit. He made a fair living but had difficulty  turning his inventory into sufficient cash to live in the manner he had  grown accustomed to when in Iran as a Minister in the Shah’s  government.   Within six months of his arrival, living in a small apartment in West  Los Angeles, Omar met a fellow immigrant who explained insurance to him.  Insurance was a wonder of American society with which he was totally  unfamiliar. The immigrant informed Omar that for $500 he had purchased a  policy to insure his household goods. When he was the victim of a  burglary, his insurer, with apparent glee, gave him a check for $20,000.  It seemed the insurer paid merely because $20,000 was the first value  he put down for his goods.  Omar and his fellow immigrant both knew that in their tradition one  never opens a negotiation with the number one wishes to receive. His  acquaintance informed him that he had demanded, for his small prayer  rug, $20,000 from his insurer. He expected the insurer to negotiate the  price down to its true value of $2,500. To the great surprise of Omar  and the acquaintance, the insurer paid the amount demanded merely  because a rug dealer had given the acquaintance an appraisal stating  that the value of the prayer rug was $20,000. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Policy Obtained by Fraud Requires Insured to Reimburse Insurer for  Defense and Indemnity   https://zalma.com/blog See the full video at  and at  Diverting from stories where I was personally involved this story comes  from the U.S. Tenth Circuit Court of Appeal.  An insurer asserted claims against its insured for fraud and unjust  enrichment. The Tenth Circuit was asked to determine if Colorado law  permits an insurer to recover a settlement payment made on behalf of its  insured for fraud.   The insured fraudulently obtained an insurance policy for its  inpatient-drug-treatment center, and when the insured was sued by a  former patient, the insurer assumed the insured’s defense, subject to a  reservation of rights. Even after learning that the insured had  fraudulently obtained the policy, the insurer settled with the former  patient under pressure from the insured and threats of bad faith  litigation. The insurer sought to recover from its insured the  settlement payment.  In Evanston Insurance Company v. Aminokit Laboratories, Inc., No.  19-1065, D.C. No. 1:15-CV-02665-RM-NYW, United States Court of Appeals  for The Tenth Circuit (decided March 18, 2020).  Aminokit Laboratories,  Inc., a Colorado Corporation, owned and operated an addiction-treatment  center in Lone Tree, Colorado. On October 19, 2014, Aminokit procured an  insurance policy for this treatment center from Evanston Insurance  Company. The policy covered “outpatient drug/alcohol rehab services[.]”  To secure the policy, Aminokit made several material misrepresentations  and omissions.\ For example, Aminokit failed to disclose that it maintained overnight  beds for its patients, instead claiming that it operated its business  solely between 10:00 a.m. and 5:00 p.m. Aminokit also falsely denied  that any of its employees had ever been evaluated or treated for  alcoholism or drug addiction and misrepresented the circumstances by  which its CEO had lost her chiropractic license.  Brandon Lassley, a former Aminokit patient, sued Aminokit, Dr. Jonathan  Lee (Aminokit’s Medical Director), and Tamea Rae Sisco (Aminokit’s CEO)  in the District of Colorado. Evanston initially declined to provide a  defense to Aminokit, concluding that the claims were outside the scope  of coverage, because they alleged intentional and fraudulent conduct.  Lassley amended his complaint, adding state claims against Aminokit and  Dr. Lee for negligence and breach of fiduciary duty. Evanston, which  again concluded that no coverage was afforded for the Lassley suit but,  because of the amendment, Evanston accepted Aminokit’s defense “subject  to a full reservation of rights—including the right to withdraw the  defense and the right to pursue reimbursement from Aminokit . . . while  it s[ought] a declaration of its rights and duties under the policy.” (c) 2022 Barry Zalma & ClaimSchool, Inc.  Barry Zalma, Esq., CFE,  is available at http://www.zalma.com and [email protected].  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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Lucy and the Tsar   Lucy served as second officer on a 747 operated by Trans-Oceanic  Airlines. Twice a week she flew from Dallas to Leningrad; with brief  layovers in New York and Brussels. She had been a second officer for  five years.  Lucy was looking forward to promotion to first officer. She  would be the second woman to command a 747 for Trans-Oceanic.  Her performance reviews were always exceptional. Never had Trans-Oceanic  Airlines treated her differently than any other pilot. The glass  ceiling seemed nonexistent.  Lucy, as a highly paid professional airline pilot, owned a beautiful  5000 square foot home in Dallas where she lived with her son, daughter  and a full- time housekeeper/nanny. She was happy. Her future was  unlimited. At forty years of age she was approaching the apex of her  professional career.  Her layover in Leningrad was usually two days. Lucy would recover from  the inevitable jet lag by visiting the great museums of the time of the  Tsars.  Her favorite was the Hermitage, which was once the Tsar’s summer  palace.  To the museum she always brought along her Nikon single lens reflex  camera that recorded each picture with very high resolution. She used  the Nikon to photograph the magnificent treasures stolen by the  Bolsheviks from the Tsar. The fast lens and digital enhancement allowed  her to obtain images without using a flash. Lucy would spend evenings in  her hotel sorting her photographs into categories on her lap top. She had collections of close-up shots of Faberge royal Easter eggs; of  oil paintings by Gaugin, Degas, Van Gogh and Picasso; and photos of fine  works of art made by native Russian craftsmen unknown in the West.  Lucy converted the settlement check to US currency Travelers Checks.  She  placed the Travelers Checks in her overnight bag on the airplane. When  she landed, as part of a well-known airline crew, her luggage was not  inspected by the local customs officials. The Travelers Checks, better  than cash, entered the new Russia without hindrance. Lucy immediately  went to the dealer appointed by the Hermitage and purchased the Fabergé  bird she lusted for paying only 200,000 US Dollars in Travelers checks.  With the remaining $50,00 she purchased two Fabergé silver cigarette  cases and a small Picasso drawing in pencil signed and dated by the  artist. The bird is displayed prominently over Lucy’s mantelpiece and  she used the Fabergé cigarette case to hold note papers and a fountain  pen.   Lucy was lucky. If anyone at Edward Lloyd’s Insurance Company had gone  to the Dallas public library, they could have found similar photographs  of the same items in any one of several books on the Hermitage  collection housed at the library. They did not.  Lucy was promoted to Captain.  She now commands a Trans-Oceanic 747 that  flies three times a week nonstop from Dallas to London’s Heathrow  airport.  She is starting a collection of photographs from the Queen’s Museum at  Buckingham Palace.   (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Fraud by Divine Right They were All-American girls.  https://zalma.com/blog Muffy and Buffy met each other as  cheerleaders in high school. They were best friends. They did everything  together. The two young women shared everything from clothes to  boyfriends.  When they graduated from high school, both started to work as trainee  tellers at the Fresno Friendly Loan and Mortgage Corporation.  They  learned to handle money. More than anything else, they learned how to  beat the system. When the need to shop came upon them, they called in  sick simultaneously. They were the antithesis of modern liberated women.  They did not do the same job that men did. They did less. They were  rewarded by their male supervisors more for their tight sweaters and  skinny jeans than their ability as bankers.  Muffy and Buffy needed money so they acquired an insurance policy and  decided to make a fraudulent claim.  Muffy and Buffy, honestly, reported that they had not replaced a single  item they had claimed stolen in their first burglary. The things taken  in this burglary from their vehicle were all items they purchased before  the first loss. They even provided receipts and canceled checks  establishing the purchase and the date of purchase of each item.  After  that the adjuster was convinced. There was no doubt, they had attempted a  fraud. He reported his conviction to the Fraud Division of the  California, Division of Insurance, and to Buffy and Muffy.  Buffy and Muffy admitted to the adjuster that the watches were never  stolen in either claim. They withdrew the claim for the two watches.  They still tried to convince him that the rest of their claim resulted  from a legitimate auto burglary. He was not convinced. He denied the  claim on the spot. He followed up with a written denial.  He reported the claim to the Fraud Division who agreed it was a  fraudulent claim and presented it to the local district attorney. The  District Attorney refused to prosecute on the grounds that there was  insufficient evidence to guarantee a conviction.  Muffy and Buffy went back to work at the bank.  They hired a lawyer who  threatened to sue if the claim was not paid in full. Since there was no  arrest the insurer felt vulnerable. It paid $60,000 to obtain a general  release.  Muffy and Buffy lived comfortably for a while on the money the lawyer  obtained for them.  They were determined to, and continued to, commit  insurance fraud once every few years, to supplement their income.  For Muffy and Buffy crime pays well.   (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Profits Are Where You Make Them On his 50th birthday Louie  concluded he was a failure. For thirty years he sold insurance to the  public. For a $40 commission Louie would often spend hours explaining a  tenants’ homeowners policy to a client. The next year, because another  broker promised to save the client $5 in premiums, they did not renew  and he received no commission. Louie had always been a dedicated  and faithful insurance broker. He put his clients’ interest above his  own. If he could save them money (even if it would cost him a  commission) he placed them with the least expensive insurer. In return  he saw nothing but derision and disloyalty. Louie decided to  change his life now that he was middle-aged and a member of the AARP.  Considering his small earnings, retirement at age sixty-five seemed  almost impossible. He needed a means to make sufficient money in a short  time to retire. His knowledge of insurance and his salesman’s  understanding of the greed of his customers brought him a solution. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Fraud Isn’t Fun Anymore   Not everyone who commits insurance fraud is a hardened criminal. Not all  perpetrators of insurance fraud do so to profit. Some, like the person  who is the subject of this story, do it for fun.  Insurance investigators have an unearned reputation for brilliance in  investigation. Movies and television paint insurance investigators as  tough, highly intelligent, tenacious and almost impossible to fool.  The  average, contrary to the image created by television, insurance  investigator is a 25-year-old graduate of a liberal arts college with  little investigative experience.  The training received by insurance investigators, properly so, is  directed to a determination of how much and how fast a claim should be  paid. Their training in fraud detection is limited by the desire of the  insurer to fulfill its obligation to pay claims fairly and promptly.  The Insured did not know about the lack of experience of the average  insurance investigator.  The Insured believed a person who could succeed  at fraud would be brilliant. A successful fraud would be an exciting  challenge.  He decided to attempt a fraudulent insurance claim. The Insured wanted  the excitement in life he believed was his right to experience.  The broker, based on the excellent quality of the appraisals, had no  difficulty insuring the schedule. With his connections in the Surplus  Line Market the broker placed insurance with a Swiss Insurance Company  he knew to be reinsured 100% by a South African reinsurer.  The Swiss  insurer bound coverage pending a favorable inspection of the art by an  appraiser of its choice.  The Insured emptied his life’s savings and paid the required 10%  installment on the $42,000 premium. He knew that the inspector would  arrive soon. He did not have the rest of the premium or $1,400,000 in  fine arts to show the inspector. It was necessary that the ABC Van and  Storage facility be the victim of a burglary before the inspector  arrived.  If the investigator had recognized the red flags, she would have  interviewed each appraiser. If the appraisers had been interviewed, the  falsity of the appraisals would have been discovered immediately and the  claim could have been denied for fraud.  Reports would have been made to  the Fraud Division. The Insured may even have been arrested for  Insurance fraud, violation of California Penal Code § 550. Instead, the  insured, still bored, has a great deal more money than he could ever  have earned working in a movie house.   (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 [email protected].  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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Car Collector and The Desire for an Antique Vehicle   https://zalma.com/blog Albert Reiche had a passion for old cars. Since the trust fund set up by  his maternal grandparents provided him income of $3,000,000 a year,  Albert never took a job.  He began to collect cars when he turned twenty-one in 1960. He started  with a 1924 Model A Ford. As the years passed, he purchased and restored  for his collection an Auburn, two Duesenberg J’s, a 1928 Cadillac  touring car, a 1918 Dailmer, a Willy’s J, a 1934 Packard limousine, a  1924 Bentley, and many other classic automobiles. He kept his cars in a  climate-controlled warehouse.   By the time Albert turned fifty, he was the proud owner of seventy-five  classic automobiles. Albert had restored all of the automobiles to a  pristine, new car showroom, condition. To Albert they were priceless.  Albert would never consider selling. Estimates by car buffs had valued  his collection at $90,000,000 to $125,000,000. He insured the collection  with a gaggle of British insurance companies with a limit of  $80,000,000.  Everyday Albert would spend time with his cars. He dusted, waxed and  caressed each car. He manufactured, in his own machine shop, the parts  he could not buy for his cars to keep them in new-car condition.  Two months later Albert faced incurable temptation and frustration. One  of his sources informed him that the third Dailmer motor car ever  manufactured was for sale for $6,000,000. It would be the cap stone of  his collection.  Old man Harrah would roll over in his grave to know that  Albert had an automobile that put in shadow all of Harrah’s collection.  Albert did not have $6,000,000 in ready cash. His trust fund was set up  so that he could not tap into the capital, but only accept the income  derived from that capital. He only had a million dollars in ready cash  and needed to raise another five. The seller would never reduce his  demand since he knew the Dailmer was unique. Albert could not bring  himself to sell any of his collection. He was desperate. Then he  remembered that his trustee had required him to purchase insurance to  protect his collection. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Don’t Drive Off a Cliff, It May Not Be Covered   https://zalma.com/blog Jimmy wanted a new pickup truck in the worst way. He decided to  deliberately wreck his old car, make a claim against his insurance  policy and use the proceeds to buy a new F150.  Jimmy disclosed his plan to his best friend, Winifred. She agreed to  help — as a lookout for oncoming traffic —on the night they chose to  destroy the car.  Jimmy, with his friend Winifred as a passenger, intentionally drove his  pickup off the road and over a small cliff at 35 mph. He did not let her  out of the truck to be his “look out” as planned. He thought it would  be more realistic a claim — one that would not be questioned by his  insurance company, if  Winifred was in the car with him.  As planned, the car did not survive the crash. Unfortunately, neither  did Winifred.  The heirs argued they were entitled to Under Insured Motorists (UIM)  benefits under the Farmers and County Mutual policy because Jimmy was  under insured. Furthermore, they claimed Winifred’s death was  “accidental.”   Farmers and County Mutual’s response was, translated from the lawyerese:  “Give us a break.”  The heirs argued that Jimmy and Winifred intended to destroy the truck,  not Winifred. The death was accidental.  In the Winifred’s Heirs v. Farmers & County Mutual arbitration,  Farmers and County argued that interpretation of “accident” in liability  policies is hyper-technical and legalistic and should not apply to the  same term in UIM policies. The arbitrator ruled in favor of the insurer.  The heirs sued, lost at the trial court, that adopted the ruling of the  Arbitrator. The heirs appealed and a Court of Appeals agreed, saying  that, for UIM purposes, an “accident” is an “event” that, from the  insured’s and the underinsured motorist’s perspective, is “unforeseen,  unintended unexpected or the like.”  An injury is not accidental, the appellate court explained, if the  injury-producing event was intended or expected. It is not necessary  that the insured intend or expect the injury.   People who do wrong should not profit from it. Paying Winifred’s heirs  for her death while admitting that she was intentionally a part of a  criminal act is the same as the police paying the heirs of an armed  robber who is shot to death by the police in the course of his armed  robbery. Every person who buys insurance should shout to their insurers – GIVE US  A BREAK!  (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 [email protected].  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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

My Paintings Were Stolen   Lucky Ambrose was about to retire as a flight attendant with Italian  International Airlines. His retirement pay would allow him to live —  barely — in Barstow, California. On a layover in Rome, he found a means  to retire in comfort while browsing the Vatican Art Museum.  He purchased a disposable flash camera at the souvenir shop and started  snapping photographs of works of art in the museum. Of the twelve  pictures he took two came out relatively clear, marred only by a blotch  of white from the flash reflecting off the oils. They were pictures  called:  “San Giorgio Che Occide Il Drago,” Paris Bordone’s 1525 painting of St. George slaying the dragon, and “Madonna Della Pera,” painted by Alessandro Buonvicino, known as Moretto  Diana Brescia, in 1505.  Ambrose reported a burglary at his Barstow home and made claim for  $555,000. Good Neighbor Insurance Company faced with a claimed loss of  two Italian Renaissance paintings stolen from the bedroom of his  California ranch house thought they had no choice but to pay the amount  of the policy.  They were only suspicious since the claim contained multiple red flags  of fraud, like:  The loss was within three weeks of the issuance of the policy; There was no written evidence that the items were purchased by the  insured; The items were unusual and hard to market while his T.V., VCR and Stereo  system were still in the house after the burglary; and The only proof of ownership Ambrose offered when he insured the works  were the two amateurish snapshots of the paintings.  Suspicions and red flags are not enough to deny a claim. Lucky Ambrose  was paid what he asked and signed a subrogation and salvage agreement  assigning all of his rights to the paintings to the insurance company.  The insurance agent who visited Ambrose’s house in Barstow testified he  believed Ambrose when he was told that the paintings were inside the  crates. “We are in a business of utmost good faith,” he said. “Why  shouldn’t I believe him? He had paid his premiums regularly for the last  five years.”  “If (the agent) had any questions about it, if he didn’t feel that  everything was in line before he issued the insurance, we would have  taken whatever steps needed to ensure it was genuine,” a Good Neighbor  Spokesman testified. The Good Neighbor Spokesman also testified that  when the paintings were reported stolen only three weeks after the  policy was issued, they “had suspicions … but having no proof or  anything to base an assumption that something was wrong, we had to go  ahead and pay the claim.”  The jury returned a verdict in favor of Good Neighbor for the amount  paid, interest at the legal rate, and attorneys fees.  The state of California investigated whether to arrest Ambrose but  emulated the actions of the U.S. Attorney. He could go have gone to  jail. His retirement plans could have been destroyed by an Italian cop  who knows art better than the agents, underwriters and claims people at  Good Neighbor Insurance Company.  He sold his house in Barstow and moved to Boise, Idaho before the state  of California and the U.S. Attorney had time to change their mind. He  now lives a quiet, and honest, life on his retirement pay in Boise and  is trying to get used to snow in the winter.  ZALMA OPINION  Even a well trained, experienced fraud investigator, when saving some  money for the insurer cannot help convince a prosecutor that a case can  be proved of fraud beyond a reasonable doubt because it is easier to  convict a person accused of a violent crime against an innocent rather  than a person trying to steal from an insurance company.  (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Brothers Ben-Cohain   https://zalma.com/blog 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.   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.  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!”  Although the salvor spoke no Spanish he understood what was said to him.   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.  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.  (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Bookkeeper   https://zalma.com/blog The bookkeeper was a first generation Russian-American. He was born in  New York City six weeks after his parents were admitted into the United  States as Refugees, escaping the Soviet Russia after the end of the  Second World War. He was the first member of his family to graduate from  any school. He received a scholarship to Columbia University where he  obtained his bachelor of arts degree in business administration. He also  spoke fluent Russian since his parents were more comfortable speaking  their native language at home.  The Bookkeeper came to California in the early 1960’s. He worked in a  large accounting firm as a bookkeeping clerk. After three unsuccessful  attempts at passing the CPA exam, he decided he was not cut out to be a  certified public accountant.  From the late 1950’s until the early 1970’s a great number of Soviet  Russian immigrants were allowed into the United States as refugees. A  large Russian community established itself in the Fairfax District of  Los Angeles and in Glendale, California.   The bookkeeper, because of his ability to speak the language, began  doing the books and tax returns in his spare time for Russian  immigrants. Word of mouth spread throughout the Russian speaking  community and soon his spare time job was taking more time than his real  job. He sat up a bookkeeping service in a storefront and became the  bookkeeper to the Russian community.  He started a business. He bought a furniture manufacturing plant and,  because he had no experience in the operation of a manufacturing  business, he lost all of his investment. Remembering the skills of his  clients, the bookkeeper sold off all of the equipment and inventory of  the manufacturing business and then reported a burglary.  This time, much to the Bookkeeper’s surprise, the insurer investigated.   They discovered the identity of the buyers of the equipment claimed  stolen and put to an end a successful career in fraud.   The Bookkeeper is now serving a five year term in the state prison and  the burned out shell of his dream home was sold by his mortgagee, after  foreclosure, for the value of the land.  The Bookkeeper should have done what he was good at doing, keeping the  books for criminals. But for greed, the bookkeeper would still be  helping others commit fraud at no risk to himself. His error was to try  to be as criminal as his clients.  ZALMA OPINION   Although the Bookkeeper was effective at helping his criminal clients  succeed he was not a dedicated criminal and that is why his attempt at  fraud failed. Insurance fraud requires skill, unmitigated gall, and the  ability to lie effectively. He had the skill and the gall but was not an  effective liar. Fraud failed.   (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

I Didn’t Know the Gun Was Loaded, A Lie to Get Insurance Benefits   Pre-Existing Condition Material to No Fault Claim  No fault insurance plans, like that in Michigan, provide benefits to an  injured person regardless of fault. All the state asks from the injured  party is that he or she is honest in the presentation of the claim.  Misrepresenting material facts in the presentation of a no fault claim  is considered fraud and deprives the person injured of the right to  receive benefits.   In Mark Smith v. Michigan Automobile Insurance Placement Facility, a  Michigan Court of Appeals decision, Smith lied to the Placement Facility  when making his claim and tried to avoid losing benefits by claiming he  forgot his previous condition and did not intentionally lie.  Smith visited his doctor, Dr. Mohamed Ayad, twice complaining of  “chronic” and “acute” back and neck pain. Smith was involved, shortly  thereafter, in an automobile accident that, Smith alleged, injured his  back, neck, and shoulder. Smith then filed an application with the  Michigan Automobile Insurance Placement Facility, for personal  protection insurance (PIP) benefits. In this application, plaintiff  indicated that he did not have any preexisting conditions and did not  seek treatment for such conditions before the accident.  Smith falsely testified that he did see Dr. Ayad before the accident,  but only for general health checkups. Smith’s medical records from Dr.  Ayad, however, showed that Smith visited Dr. Ayad for “chronic” and  “acute” back and neck pain. The insurer claimed that Smith committed fraud when he indicated on his  application that he did not have neck and back issues before the  accident.  Smith, unhappy, sued contending that the insurer unreasonably and  unlawfully neglected to assign an insurer to pay Smith his requested PIP  benefits.  A statement is material if it is reasonably relevant to the insurer’s  investigation of a claim. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

https://zalma.com/blog  I’m Going into the Insurance Business   Most insurance companies are formed by major corporations with  considerable assets. They are capitalized with serious money needed by  the Insurer to cover losses until profits are made. The company is  staffed with insurance professionals who believe in the concept of  spreading risk. The insurers, whether new or old, provide a definite  service to the public.   Betty Bruja wanted to start her own insurance company. She had been an  insurance broker for ten years. In those ten years she had trained  herself with books and training courses from the Insurance Risk  Management Institute, the Society of Certified Property and Casualty  Underwriters, the Insurance Institute and the Insurance Claims Library.  By devoted and lengthy study Betty obtained the designation CPCU in the  minimum time allowed by the Society of CPCU.  She studied underwriting and claims handling. No person, Betty thought,  was as knowledgeable about insurance as she. No insurance company  operated efficiently. Massive profits could be made if she only was put  in control.   For ten years Betty Bruja toiled in the trenches of the insurance  industry obtaining a small income off 5% to 15% commissions. She was  frustrated. She knew she could make money if only there was capital to  fund a new insurance company.  Ms. Bruja hired an independent adjusting company to investigate and  adjust claims. Since none of the policies had any wording, she denied  coverage on most claims by creating a policy exclusion to fit the claim.  During the first year of her program of fraud she paid no claims and  collected $500,000 in premium.   Robin Sleuth was the owner of a small traveling carnival. He had  purchased a policy from Betty and renewed it with PPC. He was pleased  with the premium. He needed a certificate of insurance in the name of  the City of Ojai because his carnival was setting up on an empty lot  owned by the City. Betty was slow in issuing the form. Robin looked at  his insurance file and noticed he never received policy wording from  Betty. He faxed her a letter demanding a complete copy of his policy and  a certificate.  Betty, recognizing a trouble maker, sent Robin a notice advising, since  they could not agree, that his policy was canceled flat and she returned  the premium he had paid. Robin was furious. He was forced to cancel his  appearance in Ojai and scramble to get insurance through another agent.  The premium was twice that he paid to Betty.   PPC immediately hired a private investigator and counsel experienced in  fraud investigation. They flew to Robin Sleuth’s home city and  interviewed him. They obtained copies of all written evidence and  obtained Robin’s promise to maintain the originals in a secure place  that were not to be destroyed.  The lawyer and investigator then flew directly to the city where Betty  did business and arrived at her new paneled offices. They demanded to  see Betty. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurance Frauds Are Not Born, They Are Trained   https://zalma.com/blog Wee Willy never intended to be a criminal. His ambition in life, from  age three, was to be a meat cutter like his dad. Willy cruised through  high school with a solid “C” average. He knew that as a meat cutter he  only needed a steady hand. Literature and mathematics held no interest  for him.  As a child he would visit the store where his father worked and watch  sides of beef turn into chops, steaks and hamburger with rapt attention.  His father, he believed, was an artist who turned ugly chunks of dead  animals into beautiful and delicious food. His ambition was to be the  Picasso of meat cutters.  When Willy graduated from high school his father helped him join the  meat cutters local as an apprentice.  He began his career at a  neighborhood Piggy Wiggly market. As an apprentice Willy was ordered  about by the journeyman meat cutter. The duties of an apprentice  included sweeping up the cuttings, collecting the excess fat so that it  could be sold to the renderer, and lifting and carrying carcasses for  the journeyman. On slow days the journeyman would let Willy practice on the giant band  saw. Willy was happy. Even as an apprentice meat cutter he was doing  what he always wanted to do. He was learning his trade. He also could  bring a few cuts of filet mignon to his girlfriend’s father. When her  father was happy with Willy, his girlfriend was even more loving.   Willy had outfitted his house from the local Goodwill store. By the time  his house was rebuilt, he had a brand new house worth twice as much as  when he bought it, completely furnished with new furniture from quality  stores. He immediately put the house on the market and made a $100,000  profit. With the money, he traded in his car and bought a brand new  Corvette, a gold and diamond ring and a Rolex President with a diamond  face. He gave his old Rolex to his father.  Life was good. Willy decided to go into business for himself. He would  become a builder.  He attended the contractor’s license school for one  day and learned enough to pass the test and become a licensed  contractor. Willy was in business for himself. He really didn’t need to  work. He was going to use the contractor’s license to make more money  off of insurance. Any construction job he did would be paid for  completely by the insurance company.   Willy’s two domestic insurers were members of the National Insurance  Crime Bureau (NICB) and the ISO All Claims database; Lloyd’s was not.  When each insurer submitted their report of Willy’s robbery, the ISO and  NICB advised both insurers of the other claim that appeared to be  similar to their claim. Each insurer had in place a special fraud investigation unit (SIU). The  SIU investigators contacted each other and found that the two claims  were identical and based upon the same appraisals. Lloyd’s, through  their independent investigators, also used the All Claims database and  the adjusters for the three insurers shared information concerning  Willy’s claim.  Within six months Willy fell off an oil tank and broke his leg in three  places. Although it hurt a great deal, Willy was happy. He had workers’  compensation again and, with his disability insurance policies, his take  home pay tripled.  He knew the leg would be slow to heal and he could enjoy a life of  leisure paid for by all of the other stupid people who bought workers’  compensation insurance but did not benefit from it as did Willy.   (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

High-Tech Fraud  Dennis loved computers. He spoke their language fluently. He could  converse as easily in Windows, Basic, COBOL, FORTRAN, machine language,  UNIX and Linux as English. Basic and DOS were child’s play to Dennis.  Computers were his life. Whenever Intel marketed a new chip, Dennis was  first in line to buy faster and more complex computers for his personal  use.  Dennis could never afford every computer he wanted to buy. As a  programmer for WYSIWYG Enterprises he earned only $60,000 a year. He  lived near his work in San Jose. Dennis took the bus from his third  floor walk-up apartment to his office. When he wasn’t working, he was  modifying and upgrading his personal computers and editing software for  his personal use.   Dennis loved working on his HP desktop running Windows 10 and UNIX. He  had available for use a 1200 x 2400-dpi color scanner, a full color  laser printer that printed at 1200 DPI and a 60 inch flat screen  monitor. On the appropriate paper the printer produced photographic  quality images.  “Dennis,” Alain exclaimed, “these are valuable antiques (not to mention  your computer systems). How can you live in that miserable, cheap  apartment without renters’ insurance to protect you against burglary?” “   Dennis took his photographs, which clearly fooled his computer-wise  friend Alain and which he was certain would fool any fine arts  appraiser, and opened the Yellow Pages under “A” for “Appraisers.” He  found a listing of thirty five different names of fine arts and antique  appraisers.  Since Dennis never owned any of the items of value depicted in the  photographs, he was curious to see the true value of the items his  photographs seemed to prove were in his house. He took the photographs  to the first appraiser he found in the telephone book.  That appraiser,  Albert Aisensohn, was the owner of Antique Universe, a retail  establishment selling antiques, used furniture and old estate jewelry.  Aisensohn took the photographs and said, “I can’t give you an appraisal  from just photographs — when can I see the merchandise?”  When Dennis pulled out the five one hundred dollar bills he had in his  wallet Aisensohn immediately sat at an old Underwood upright typewriter  and began to type out an appraisal of the value of the various items  depicted in the photographs Dennis provided to him. He made no comment,  just silently put the bills in his pocket.  Because he only had photographs, Aisensohn estimated age, quality of  craftsmanship and value. The appraiser, more often than not, could only  provide a range of values such as: Chippendale chair, circa 1890,  excellent physical condition, carved from mahogany and covered in a silk  Jacquard print, valued between $30,000 and $40,000. Dennis lived happily ever after, occasionally creating new photographs as the computer industry created new toys.  (c) 2022 Barry Zalma & ClaimSchool, Inc.  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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Medicaid Paid Benefits to the Dead: Incompetence or Fraud?   INDIANA   The state of Indiana paid some $1.1 million in Medicaid-related payments  in  2016 and 2017 to managed-care organizations (MCO) on behalf of  beneficiaries who were dead, according to federal auditors reported by  the United States Department of Justice.  The audit, carried out by the Department of Health and Human Services  Office of Inspector General (OIG) and released on February 13, 2020  revealed that in a random sample of 100 so-called capitation  disbursements made to MCOs, the state of Indiana “made 95 unallowable  payments.”  The Office of the Attorney General found:  Indiana made capitation payments on behalf of deceased beneficiaries. We  confirmed that 70of the 71beneficiaries associated with the 100  capitation payments in our stratified random sample were deceased. Of  the 100 capitation payments, Indiana made 95 unallowable payments  totalling $79,403 ($58,773 Federal share). On the basis of our sample  results, we estimated that Indiana made payments totalling at least $1.1  million ($862,097 Federal share) to MCOs on behalf of deceased  beneficiaries during our audit period.  Indiana did not always fully process Medicaid beneficiaries’ death  information in the MMIS. Although the State agency’s eligibility systems  interfaced with Federal and State data exchanges that identify dates of  death, the State agency did not enter the dates of death in the MMIS  for 48 of our sampled beneficiaries. Additionally, the State agency did  not recover the capitation payments for 22 sampled beneficiaries that  did have a date of death in the MMIS.  The organizations that received the unlawful payments are part of the  Medicaid Managed Care health care delivery system.  Medicaid agencies and managed care organizations (MCOs) that accept a  set per member per month (capitation) payment for these services,” the  Medicaid program site states. MCOs use capitation payments to manage  health care costs, utilization, and quality.  The OIG concluded that the State agency made capitation payments on  behalf of deceased beneficiaries. OIG confirmed that 70 of 71  beneficiaries associated with the 100 capitation payments in our sample  were deceased. Of the 100 capitation payments, the State agency made 95  unallowable payments totalling $79,403 ($58,773 Federal share).  The State agency did not recover any of the 95 sampled capitation  payments. On the basis of the sample results, the DOJ estimated that the  State agency made payments totalling at least $1.1 million10($862,097  Federal share) to MCOs on behalf of deceased beneficiaries for service  dates during the audit period.  Yet aspects of the system have been plagued by problems, with the  Indiana report coming on the heels of others that similarly found that  some states had improperly paid capitation payments on behalf of the  deceased. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud.   People who commit insurance fraud as a profession do so because it is  easy. It requires no capital investment. The risk is low and the profits  are high.  The ease with which large amounts of money can be made from insurance  fraud removes whatever moral hesitation might stop the perpetrator from  committing the crime.  The temptation to do everything outside the law was the downfall of the  brothers Karamazov. The brothers had escaped prison in the old Soviet  Union by immigrating to the United States.  In their hometown of  Volgagrad they were well-known to the local police. The brothers had  conducted a crime wave in the town since they turned ten. They were  involved in burglary, armed robbery, smuggling, drug dealing and  prostitution.   To avoid arrest and a long sentence in a Siberian Gulag, the brothers  invented a Jewish mother. They were then eligible to leave as victims of  religious persecution. Their application for a Visa to the United  States as seekers of religious freedom was accepted immediately. The  “Save Soviet Jewry” organization, who knew nothing of their criminal  background, financed their trip to the United States.  Upon their arrival in the United States they met with acquaintances from  the Soviet criminal class who had also escaped to the United States.  They learned that the police were quite effective at catching and  prosecuting strong armed criminals, but had little concern for  perpetrators of fraud.  People who commit insurance fraud as a profession do so because it is  easy. It requires no capital investment. The risk is low and the profits  are high.   The ease with which large amounts of money can be made from insurance  fraud removes whatever moral hesitation might stop the perpetrator from  committing the crime.  The temptation to do everything outside the law was the downfall of the  brothers Karamazov. The brothers had escaped prison in the old Soviet  Union by immigrating to the United States. In their hometown of  Volgagrad they were well-known to the local police. The brothers had  conducted a crime wave in the town since they turned ten. They were  involved in burglary, armed robbery, smuggling, drug dealing and  prostitution.  To avoid arrest and a long sentence in a Siberian Gulag, the brothers  invented a Jewish mother. They were then eligible to leave as victims of  religious persecution. Their application for a Visa to the United  States as seekers of religious freedom was accepted immediately. The  “Save Soviet Jewry” organization, who knew nothing of their criminal background, financed their trip to  the United States.  Upon their arrival in the United States they met with acquaintances from  the Soviet criminal class who had also escaped to the United States.  They learned that the police were quite effective at catching and  prosecuting strong armed criminals, but had little concern for  perpetrators of fraud.  The chance of the insurers ever recovering any of the $80,000,000 to  $2.3 billion they admit they stole is minuscule. Whatever remains of the  assets they took with then to Mother Russia as well protected in banks  in the Cayman Islands and Switzerland. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Story That Wrote Itself Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud.  On February 27, 1995 the District Attorney filed the following In the  Superior Court of the State of California for the County of San Diego  that writes this chapter for me. The District Attorney stated, as part  of the criminal Information (the charge) as follows:   “COUNT — 1 CONSPIRACY TO COMMIT A CRIME “On or about December 10, 1991  JORGE NOREN HOLLAND did willfully and unlawfully conspire together and  with another person (Armen Al Zennedjian) and persons whose identity is  unknown to commit the crime of Arson of an Inhabited Structure or  Inhabited Property, Penal Code § 451 (b), in violation of Penal Code  Section 182 (a) (1).   “The object of the conspiracy was to set fire to and burn the house  located at 3030 Shelby Drive, in the County of San Diego, which belonged  to and was occupied by JORGE NOREN HOLLAND in an effort for JORGE NOREN  HOLLAND to collect the insurance proceeds as a result of the fire  “Thereafter, in the County of San Diego, State of California, pursuant  to the above conspiracy and in furtherance of the objects thereof: --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud.  People who commit insurance fraud as a profession do so because it is  easy. It requires no capital investment. The risk is low and the profits  are high. People who commit insurance fraud as a profession do so because it is  easy. It requires no capital investment. The risk is low and the profits  are high.  The ease with which large amounts of money can be made from insurance  fraud removes whatever moral hesitation might stop the perpetrator from  committing the crime.  The temptation to do everything outside the law was the downfall of the  brothers Karamazov. The brothers had escaped prison in the old Soviet  Union by immigrating to the United States. In their hometown of  Volgagrad they were well-known to the local police. The brothers had  conducted a crime wave in the town since they turned ten. They were  involved in burglary, armed robbery, smuggling, drug dealing and  prostitution.  To avoid arrest and a long sentence in a Siberian Gulag, the brothers  invented a Jewish mother. They were then eligible to leave as victims of  religious persecution. Their application for a Visa to the United  States as seekers of religious freedom was accepted immediately. The  “Save Soviet Jewry” organization, who knew nothing of their criminal  background, financed their trip to the United States. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

I Did It   https://zalma.com/blogs  Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud.  Arson for Profit Admitted  One of my investigators met with the property manager of an Insured to  start the investigation of a fire claim believed to be arson. Since he  was just starting his investigation with a walk through the burned-out  shell the investigator was making conversation with the property  manager.   “Steve, how long have you managed this property?”   “About six months.”   “It seems the fire started here on the service porch where the damage is  most severe; do you know how it started?”   “Sure,” the manager replied with confidence and no sign of concern “I  pulled a mattress off one of the beds, stacked up against the wall by  the service porch and lit it with a Bic lighter. Once it was burning  well, I left and drove four blocks away and came back in time to see the  flames coming from the building. I heard sirens so I just drove home.”  “Why did you do that?” the investigator asked, incredulous and trying to  stay calm.  “The owner asked me to burn the building and said he would pay me 10% of  whatever he got from the insurance company. When are you going to pay  him? I sure could use the money.”  The investigator of the arson case was experienced. He knew better than  to accept a confession, even one given under oath. The sworn statement  was only usable to defeat the claim if it could be corroborated.  Without  corroboration it was useless. He explained the need for corroboration  to Steve.  Arson is not Excluded - It's Just a Fire  The Insured explained that he had recently been forced to fire Steve  because his work was shoddy and some of the rent Steve collected never  came to the Insured. Steve had threatened to cause harm to the insured  and had almost succeeded.   The insured’s claim was paid in full. Steve, whose attempt to harm his  ex-employer was blatantly stupid, he faced two felony charges: (1)  Arson; and/or (2) perjury. His case was evaluated for possible  prosecution and the prosecutor – since he felt no one was harmed since  the insured was paid – refused to prosecute.  The insurer has also authorized counsel to sue Steve to recover the  money it paid to the Insured. After checking Steve’s lack of assets, a  decision was made not to sue.  ZALMA OPINION  Every claims investigation requires a thorough and complete  investigation.  A confession, like that of Steve in this video, is not  always what it seems. Corroboration was needed and when it did not exist  it turned out that Steve was just trying to hurt his employer. A false  denial of the claims based on Steve's confession would have been wrong  and would have exposed the insurer to a bad faith lawsuit. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Louie the Switch  Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud.Louie made his living buying and selling used cars in Salt Lake  City. He would attend a dealer’s auction and buy a slightly damaged  vehicle, take it to a shop, clean it up, paint it and sell it to  downtown dealers.  Fifty cars would go through Louie’s hands every month. He made a  relatively good living clearing between $500 and $2,000 on each  transaction. Louie was greedy. The Switch had no moral character. Louie  was dishonest. If he could make an extra $1000 on a sale by turning back  the odometer 10,000 miles, he turned it back. If he could sell a car  for an extra $1000 by rubbing grease on the seams where the repairs from  an accident had been done, he crawled under the car and spread the  grease.Everyone liked Louie. He was a friendly sort. Louie had no  trouble making friends.  Everyone at the auto auction knew him. Louie was a professional. He only  bought used cars that he could make look good and sell. He never bought  bad cars. The Switch always paid for his purchases in cash.If Louie had  a weakness, it was skiing. Every winter he would drive from Salt Lake  to the mountains of Utah and ski. He owned a condo in Park City which he  used when he did not have a tenant for the condo. A FRAUD IS BORN What he  saw as the need for the dream cabin drove Louie to crime. One of his  acquaintances, a tow truck operator, told him that a lien sale for  storage charges was about to happen on a four-wheel drive crew cab Chevy  pickup that Louie could buy for $250. The pickup had been declared a  total loss by the insurance company after it was driven head-on into a  sixteen wheeler while going the wrong way on the interstate. Louie  already had in his inventory a four-wheel drive Chevy crew cab. His mind  began to spin with devious criminal thoughts.  THE FRAUD FAILS  The insurance company investigator was ready to pay Louie the full  stated value on the policy until he received a declaration of total auto  theft from Louie. Louie represented in the declaration that the truck  had an automatic transmission and a gasoline engine.  The investigator knew, from his experience with vehicle identification  numbers, that the VIN number identified this truck as having a  five-speed standard transmission and a diesel engine. He was  confused.The investigator then searched the National Insurance Crime  Bureau (NICB) computer for information on the vehicle.   The computer informed the investigator that the vehicle had been in a  major automobile accident only thirty (30) days before Louie insured it.  The vehicle had been declared a total loss by its insurer. NICB  obtained a copy of the prior insurer’s file, including photographs  showing the total destruction of the vehicle.Luck, a knowledgeable  adjuster, the massive database maintained by the National Insurance  Crime Bureau and the resourcefulness of DMV investigators stopped an  almost perfect crime.When news of Louie’s arrest, conviction and  sentence reached the auto market reported thefts in the Salt Lake City  area dropped 10% for the next six months. ZALMA OPINION  Although insurance fraud seems an easy and safe crime to pursue it is  still a crime and failure to effectively pursue a fraudulent claim can  result in prison. This case explained to the public that fraud is not  worth the effort when it can result in jail.   (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Contractor   Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud.   The Failing Fire Reconstruction Contractor  Fire reconstruction is a competitive trade. Work, rebuilding burned out  businesses, commercial structures and homes requires specialized skill.  Obtaining payment from insurers for this specialized work requires a  gregarious personality, a talent at marketing, and the skill to do the  work to perfection.  Willis Rafter was not gregarious, had no talent at marketing and was a  sloppy and unskilled builder. For Willis to be successful as a fire  reconstruction contractor required imagination and a lack of morals.  Willis found he obtained few construction jobs because of his lack of  skill. He never received repeat business. He anticipated bankruptcy.  Rafter Construction was dying.  His best friend in the business, an  adjuster, advised him tell the adjuster that he will give you 10% of the  next job I bid he will receive the job. on will I get it?”  “Of course, silly, I though you would never catch on.” Louise responded,  giggling.  He found, although slightly more expensive, additional sources of  referral in the community of Public Insurance Adjusters. When he  obtained referrals from them, he found it necessary to increase his unit  costs to cover the extra fee. Rafter Construction became a power in the  fire reconstruction business in his community. He had ten estimators  working for him and always operated with four to ten construction  projects going twelve months a year. He cursed his own stupidity for not  learning the simple fee-based method of obtaining business.  Louise, as his best friend in the business — the person who taught him  how to be a success — always received an annual $5,000 bonus.  Willis was shocked when, after a routine IRS audit — six years into his  business career as a successful fire reconstruction contractor — he was  arrested for tax evasion. The IRS concluded that since the payments to  the adjusters and supervisors were illegal in California [a violation of  California Penal Code § 550] he could not deduct them as business  expenses.   ZALMA OPINION   Insurance fraud is fairly easy. Willis, by paying a 10% bribe to  adjusters saved his business. Although not a big time criminal, like Al  Capone, his scheme was brought to an end by the IRS because they found  he deducted the bribes as a business expense.   (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Liar, Liar, Pants on Fire Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. If Louie has been born fifty years earlier, he would be called a gigolo.  Louie was a classically handsome man. He stood 6’2” tall, combed his  black hair straight back in a style that would do a Madison Avenue  advertising executive proud. His eyes were an unblinking, watery blue  that seemed to caress any woman at whom he looked. He ran three miles  every morning and maintained a 180-pound, lithe physique.  Louie had a pleasant personality. Everyone he met liked him. He could  drink beer with the boys and sip wine with distinguished and well-bred  women. He wore a tuxedo as if Calvin Klein had his body in mind when it  was designed.  Louie was not smart. Louie graduated from Thomas Jefferson High School  in San Jose with a solid D- average. After leaving high school Louie  worked at various menial jobs from janitor to fry-cook. He seldom held a  job for more than six months.  Louie loved to dance. On weekends he would drive up to San Francisco and  spend every night dancing in the clubs. It was on one of these dancing  adventures in San Francisco that changed Louie’s life. Louie met Toni Di  Battaglia. They danced every dance until the club closed at 4:00 a.m.  They danced disco, waltzes and even country and western line dances.  Toni told him she worked for the Teamsters Union out of New Jersey and  visited San Francisco monthly.  When Toni learned that Louie lived in San Jose, she invited him to her  hotel and their relationship blossomed. Toni was a wealthy and powerful  woman in her own right. She had a husband twenty years her senior who  did not understand her. Louie was her release. They were in love. Toni  did not love Louie for his intelligence. She did not love Louie for his  ability to communicate. Toni loved Louie because he was beautiful, a  good dancer and made her look good whenever they were out together. The lawyer was instructed to examine Louie under oath. The insurance  company hoped the lawyer would gain more detailed descriptions of the  items stolen. They expected, with professional questioning, Louie would  establish the true amount of his loss. They could not pay because their  appraiser told them the loss could be in a range from $40,000 to $1  million.  Louie testified for two days. He was frightened. The lawyer, although  always friendly caused Louie to break out in cold sweats he hoped was  not visible. He did not tell the truth about anything to the lawyer.  Louie limited his descriptions of the property stolen to the list he had  written before he called the insurance company. Despite how detailed  the lawyer’s probing, Louie stuck to the description he had written.  When the lawyer questioned Louie’s ability to earn money to keep up the  condo, he created a story to show that he had a source of income. Louie  told the lawyer that Toni’s “family” sent him, after her death, an  annuity of $10,000 cash every month. The money came each month in a  plain brown baggage via UPS.  Carla took Toni’s place. Louie still lives in his condo surrounded by  antiques. Whenever Carla visits, Louie receives a new bauble. Carla pays  his expenses.  Louie will never again try insurance fraud. Honest people will pay more  for insurance than they should.   (c) 2022 Barry Zalma & ClaimSchool, Inc. 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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Temptation of Fraud   Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.   Why Honest People Commit Fraud Without Compunction  Studies show that insurance fraud is most often a crime of opportunity  rather than serious planning. Honest people, when presenting an  insurance claim, often have their moral compass point south rather than  true north.  A person who would walk a mile to return $5 in extra change received  from a waitress will add $5,000 to an insurance claim without a second  thought. A lawyer whose word is honored throughout his state will,  without compunction, demand payment for “pain and suffering” when he was  rear-ended even though he resolved all his pain with two aspirin. A  judge who has been honored by his peers for his sense of justice and  fair play will claim the theft of computers he never owned. A housewife  and mother who would beat a child’s bottom raw for stealing a 50-cent  candy bar sees nothing wrong with adding $2,500.00 to a claim for smoke  damage in her kitchen.  Insurance fraud is easier than working and, often, more profitable. The  Fraud Division, California Department of Insurance and the industry have  been fighting the rings and professional claimants with vigor. They  have ignored, because there is little profit or publicity value in it,  the small frauds like the plaintiff in the case I described go  unpunished and often succeed.   The IRC report makes it clear that the professional criminals are 10% of  the crime. These professionals should be prosecuted. Only an insurance  industry noted for its short-sighted search for instant gratification,  would put all its fraud fighting dollars against 10% of the problem and  none of its fraud fighting dollars against 90% of the problem.  Insurers need a long-term anti-fraud program that goes against the real  problem, the opportunist. The honest person must be educated — by  punishment if required — that insurance fraud is the same as theft,  burglary or armed robbery. People who build-up a claim or otherwise  defraud an insurer are as much a criminal as the person who robs a bank  with a gun.  Funds that have been cut from insurance claims training must be  restored, investigative efforts must be accelerated, claims handlers  must be encouraged to refer claims to their Special Investigative Units  (SIU) rather than to close as many files as possible.   (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

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The Phantom Rolls Royce  https://zalma.com/blog  Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud.  The Auto Theft Fraud  In many states, before a car can be insured, the agent must photograph  the car and its vehicle identification number. This regulation is an  effective weapon against fraudulent auto theft claims.  The insured managed to purchase material damage insurance on a Rolls  Royce in a state where the regulation was fully effective even though he  never owned a Rolls Royce automobile. His technique was flawless. His  planning immaculate. He was only thwarted in his efforts because of the  actions of a dedicated and thorough investigator.  To start his plan, the insured went to a Beverly Hills classic  automobile dealer and took two Polaroid photographs (slightly out of  focus) of a 1946 Rolls Royce. Unlike modern cars, the vehicle  identification number was not in the windshield of the Rolls. It was,  however, written on the specification sheet provided to him by the  dealer.  He produced a bill of sale purportedly signed by the neighbor reflecting  a $100,000 sale. The insured produced the ownership certificate and the  registration establishing the vehicle existed. He claimed to have  forgotten to bring with him the keys to the vehicle. Counsel then  presented the true documents, item by item.  The insured claimed that the documents recorded at the Department of  Motor Vehicles were filed by the seller and he had no knowledge of the  changes made by the seller. In fact, he could not understand why the  seller had filed such strange documents.  After counsel had established, with certainly in counsel’s mind, that  the insured had sworn falsely, the examination under oath was  terminated. Counsel met with the attorney for the insured, privately,  and explained that the insured’s claim was in great peril.   The attorney for the insured responded:  “The bad faith lawsuit I told you to expect will not be filed by me.”  The insured had made one serious error: he hired an honest lawyer. His  lawyer and counsel for the Classic Car Insurance Company discussed  possible resolution of the matter, including the withdrawal of the claim  or a mutual rescission of the policy. Counsel for the insured promised  to speak with his client and communicate with the insurer.  Fraud Fails but Fraudster Not Punished  Classic Car Insurance Company saved a $100,000 claim. It spent $30,000  investigating the claim and defeating it. It was lucky. No litigation  followed. It reported the loss to the state’s Fraud Bureau who now has  the insured’s name on record. There has been no prosecution.  No prosecution is anticipated or expected. The Fraud Bureau is simply  inundated with fraudulent insurance claims and must limit its  prosecutorial efforts to major crimes that exceed $1,000,000 or rings of  insurance fraud perpetrators who file multiple claims.   (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Golden Tooth   https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud.  A broken tooth is a tragedy to most people. To the waitress a broken  tooth was the beginning of a career.  For fifteen years she waited tables in restaurants varying from small  coffee shops to exclusive French restaurants. S he saw, almost weekly, at  least one customer trying to avoid paying for a meal. They would find  flies in their soup or chunks of metal in their hamburger. Sometimes it  was the fault of the restaurant and sometimes it was blatant fraud. Some  people actually suffered injury because of inadequacies in the kitchen.  One Sunday afternoon, sitting in front of her television munching on a  dish full of almonds, her right upper incisor snapped and she found half  a tooth in her hand. No blood and no pain, just half a tooth in her  hand and a jagged piece in her mouth.  If she were not creative, if she had not been frustrated at seeing her  employers successfully defrauded over the years, she would have made an  appointment with her dentist and had the tooth capped. The waitress was  very creative. She saw the broken tooth as the start of a profit making  venture. Since she had Sunday evening off and no specific plan, the  waitress made a reservation for one at a fine restaurant where she had  once worked.  She took with her to the restaurant, safely tucked in a  compartment of her purse, the broken tooth and a small piece of steel  that she cut from the top of a coffee can.  Her efforts at insurance fraud were successful. However, she became  greedy and eventually, her name and broken tooth story began to appear  in insurance company databases. When she presented a claim to a  restaurant insured by the same company, who had insured the last two  restaurants to whom she had presented a claim, the adjuster refused to  pay her. He reported to the fraud division of the insurance department  in his state the fact that the waitress was apparently making fraudulent  claims for the same tooth to various restaurants. The Fraud Division,  noting that she was claiming only $650 concluded that the claim was too  small to warrant the expenditure of investigative time. No one would  investigate further, or prosecute, the waitress.  Rather than take further chances, she moved to another city where she  continued in her new profession. She is probably having a fine meal in  your town tonight.   (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Shoes on Melrose https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.  How Avoiding Taxes Can Cost a Merchant  It was a successful, trendy, shoe store on Melrose Avenue, West  Hollywood, California. Stocked with electric yellow combat boots and  pink platform shoes his was the most popular shoe store on the Avenue.  The beautiful people provided a good income for Albert Benvenitti, the  owner.  Albert was an honest man. He treated his customers fairly. He never  questioned them when they brought shoes back. Manufacturers admired him  because he paid for his merchandise within 10 days of invoice. Like all  small businessmen, Albert was certain he was overtaxed. Half his income  went to state and federal taxes. No matter how hard he worked it seemed  he made less money every year.  Albert fought back in the only way he could, he didn’t record every cash  sale. The shoes sold for cash simply stayed on his inventory sheet as  unsold merchandise. By putting the cash sales in his pocket his profit  margin — on the books — went down but the real money he took home  increased. By fighting the government, he reduced his tax burden from 50  to 30% of the true net income.  When he became the victim of a burglary his books failed to show the  inventory he actually lost.   Avoiding Taxes Destroyed a Legitimate Insurance Claim  Although Benvenitti knew that he lost — from his first-hand knowledge of  the business — more than $30,000 in shoes he agreed to a $5,000  settlement and promised to cancel his policy and never insure with that  insurer again. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Murder of Homeless Man Pays Fraudsters   https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.   What Happens When the Market Drops   George and Adam were partners. Their business, consulting with aerospace  manufacturers on preparing the reports required by the Department of  Defense, had been immensely successful. For the first five years of  business their billings exceeded $3,000,000 a year.  They lived well. Like the average Americans they were, they spent every  dollar they made and about 10% more than they made. They had no savings.  They did have large credit card balances.  Because they knew how important each was to the success of the  partnership, they purchased Key man life insurance policies with limits  of $3,000,000 each from Trustme Life Insurance Company.   In 2008 the bottom fell out of the aerospace industry with the election  of President Obama who cancelled space programs. Their customers stopped  hiring consultants. The billings of the partnership shrank like Alice  after she bit the mushroom.  A Plan to Profit From Murder  Adam called Fuzzy into Adam’s office at 8:00 that night. He asked Fuzzy  to sit in his desk chair and shot him in the face with a 12-gauge  shotgun at close range. Adam discharged one barrel on each hand to  eliminated all of Fuzzy’s fingerprints.   Adam then placed his wallet with all its money, credit cards and other  identification in the inside coat pocket of his old suit, removed  anything that might identify Fuzzy as being someone other than Adam and  then drove to the airport in George’s 750 IL BMW leaving the Jaguar in  the garage. At the airport, Adam, using cash, purchased a ticket in the  name of Adam Smith to New Orleans, Louisiana. He had already purchased,  from street vendors on Hoover Street in Downtown Los Angeles a driver’s  license in the name of Adam Smith with a birth date five years earlier  than Adam’s true date of birth, a social security card, a MasterCard and  Visa all issued in the name of Adam Smith.   The Crime Fails    Adam and George were arrested and tried for the murder of Fuzzy as well  as several counts of insurance fraud. The testimony of the young lady,  the presence of Adam and the Los Angeles Airport recording of George’s  license plate on entry and exit from the airport parking lot made their  defense impossible. They were convicted.  Adam and George are now spending the remainder of their lives in the  State Penitentiary.  The insurer recovered $4,000,000 of the $6,000,000 (George and Adam had  lived well for that year and a half) and paid the lustful young woman a  $400,000 reward. She lived happily ever after.   (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Magic Wall   https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.   How an Attempt at Fraud Failed   In February 1994 Los Angeles County and those communities with damage  from the Northridge Earthquake of January 17, 1994 announced they would  waive permit fees for earthquake repairs. The announcement gave Wallace  Houston an idea to profit from the disaster.  Wallace, who was seldom cordial and often nasty to his neighbors, always  wanted a seven-foot wall around his home in Agoura. He had been  fortunate in the earthquake. His house was intact. He did not even find a  crack in the stucco.  The day after the announcement he took out a free permit to rebuild a  nonexistent earthquake-damaged wall. The Department of Building and  Safety, swamped with work and anxious earthquake victims, issued the  permit without question. They checked no records. They did not inspect  the property.  Wallace, a construction worker by trade, hired three day laborers off a  street corner in Van Nuys next to the Home Depot. In broken high school  Spanish and sign language he explained that they were to dig a footing  three feet wide by four feet deep for his new wall. In two days, they  dug the trench for the footing, installed a steel cage to stiffen the  concrete and wooden planks placed to hold the concrete. Wallace needed  approval from a city inspector before he could pour the concrete for the  footing.  Three weeks after his call for inspection, the department came out and  approved the footings. Houston was about to call for delivery of the  concrete when it started to rain. As rare as rain is in Southern  California, the year of the earthquake was a wet one, the ground refused  to dry. The rain would stop for a day or two, but not long enough to  allow the ground to dry sufficiently to pour concrete safely. Wallace  was frustrated. His footing became unstable. When the footing was dry,  it was no longer level. Wallace gathered more laborers and started  again.  The next day the aerial photographs came in — one taken, fortuitously,  only two days before the fateful storm. It was clear there was no wall.  The SIU investigator, Pinchorello, took a recorded statement from  Wallace, without explaining his suspicions. He made it clear the  statement was a necessary formality.  Before he could sign the lawyer up, at 6:00 a.m., he was awakened by a  loud knock at his door. Three agents of the fraud division, California  Department of Insurance, put Wallace under arrest and escorted him out  of his house in handcuffs. KCBS, Channel 2 and KTLA, Channel 5,  broadcast the arrest live during their early morning shows.  The easy money fraud had failed. His insurance policy was cancelled.  Within two years Wallace pleaded guilty to one count of insurance fraud  and was placed on probation for three years.  A year later, after the ground dried, he built the wall.  He is still searching for a homeowners insurer willing to insure him.  (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

True Crime of Insurance Fraud Number 37   https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.  Disasters bring out the best in people. Disasters also bring out the  worst in people. Some risk their lives and fortunes to help victims.  Others risk prison to profit for the disaster.  After the January 17, 1994 Northridge earthquake insurance companies  sent teams of experienced claims handlers and billions of dollars to Los  Angeles county California to ease the effect of the earthquake on those  of their customers prudent enough to buy earthquake insurance. Money  was paid out quickly. Because of the extent of the disaster few controls  were in place.  Those who prey on the hardship of others descended on Southern  California as the plague of frogs descended upon Egypt when the Pharaoh  refused to heed Moses’ warning.  Able Carpenter saw the earthquake as an opportunity to make an illegal  fortune without effort. Able had worked for two months before the  earthquake as a laborer on a construction project. He went door to door  in Northridge convincing the residents whose homes were damaged that he  would protect them from their evil insurers and repair their damaged  homes quickly and efficiently.  Able Carpenter now lives comfortably on the dividends. His customers  still have broken homes and insufficient funds to complete repairs.  The homeowners and the insurers were defrauded. Good faith claims  handling hurt everyone but Able.  Neither the homeowners nor the insurers had learned that when a deal  sounds too good to be true it is.  (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

True Crime of Insurance Fraud Number 38   https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.  The most effective tool an insurer has against fraud is the examination  under oath. The right to compel an insured to appear for examination  under oath has been part of the standard fire policy in every state of  the United States that adopted the N.Y. Standard Fire Insurance policy.  The right was recognized by the United States Supreme Court in Claflin.v  Commonwealth Insurance Company, 110 U.S. 81, 3 S.C. 507, 28 L.Ed. 76 a  decision unchanged since it was decided in 1888.  When an Insured is suspected of arson, or some other variation of  insurance fraud, the insurer will almost always require testimony at  examination under oath. The Insured often refuses to appear for  examination under oath — a material condition of the policy — claiming  the insurer’s demand was a bad faith attempt to deprive him of his right  against self-incrimination stated in the Fifth Amendment to the US  Constitution.  In Gruenberg v. Aetna Insurance Co. 9 Cal.3d 566, 108 Cal.Rptr. 480  (1973) the California Supreme Court ruled that an Insured had stated a  cause of action for breach of the covenant of good faith and fair  dealing when the insurer denied the claim for refusal to testify at  examination under oath. In fact, the Insured agreed to testify as soon  as the criminal proceeding was completed.  If Gruenberg stands for the proposition that insurers must wait until  the Insured is exonerated in his criminal proceeding the California  Supreme Court should revisit Gruenberg and adopt the reasoning of the  Massachusetts Supreme Judicial Court in Mello and the California Court  of Appeals in Fremont and Altfillisch to eliminate a long delay that  would make defense of the insured’s suit beyond the ability to prove the  defense of fraud. Insurers, to avoid the problem raised by the  California Supreme Court should never file, in California, a complaint  for declaratory relief against an insured and compel the insured to file  since, as a plaintiff, he would be unable to assert the Fifth Amendment  to prevent a deposition or trial where he may incriminate himself.  (c) 2022 Barry Zalma & ClaimSchool, Inc. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

True Crime & Insurance Fraud Number 35  https://zalma.com/blog Fraud knows no boundaries. It matters not at all where the person comes  from. It matters only that the person has a felonious heart.   Khlaed Amir Fahlavi, born in Tehran, raised in Liverpool, England, and a  resident of Los Angeles, California, USA, had such a mind. He lived in  London and Los Angeles. He earned a living making claim on British and  American insurers. It surprised him how easy it was to commit fraud.    Khlaed’s life of crime started innocently enough. At Heathrow  International Airport, outside London he dropped a few extra pound coins  into a machine and purchased a travel policy from the machine. Although  the trip was uneventful, he tested the policy by reporting the loss of  one bag. With a minimum of effort Khaled received a £1,200 check. An  insurance criminal was born.  On his next trip to London Khaled found two policemen waiting outside  his parents’ flat on Half Moon Street. They arrested him on the spot,  tried him at the Old Bailey and sentenced him to three years in jail for  defrauding the English and North American.   With knowledge of the English trial, the Los Angeles District Attorney  filed criminal charges against the administrators, chiropractors and  therapists at Khaled’s clinics and confiscated $500,000 in cash and  assets gained from his fraud activities.   Khaled served his time. He did not dare return to California where  multiple counts of insurance fraud, mail fraud and tax evasion awaited  him.  Khaled now operates the cash register at the gift shop of the Hard Rock  Cafe - London, on Piccadilly where he earns 3 pounds per hour.  © 2022 – Barry Zalma  B arry 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.  Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome.   You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com,  [email protected] and [email protected] . Mr. Zalma is the first  recipient of the first annual Claims Magazine/ACE Legend Award.  You may find interesting the podcast “Zalma On Insurance” at https://anchor.fm/barry-zalma;  you can follow Mr. Zalma on Twitter at; you should  see Barry Zalma’s videos on https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/featured; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims–library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

True Crime of Insurance Fraud Number 37   Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.   Disasters bring out the best in people. Disasters also bring out the  worst in people. Some risk their lives and fortunes to help victims.  Others risk prison to profit for the disaster.  After the January 17, 1994 Northridge earthquake insurance companies  sent teams of experienced claims handlers and billions of dollars to Los  Angeles county California to ease the effect of the earthquake on those  of their customers prudent enough to buy earthquake insurance. Money  was paid out quickly. Because of the extent of the disaster few controls  were in place.  Those who prey on the hardship of others descended on Southern  California as the plague of frogs descended upon Egypt when the Pharaoh  refused to heed Moses’ warning.  Able Carpenter saw the earthquake as an opportunity to make an illegal  fortune without effort. Able had worked for two months before the  earthquake as a laborer on a construction project. He went door to door  in Northridge convincing the residents whose homes were damaged that he  would protect them from their evil insurers and repair their damaged  homes quickly and efficiently.  Able Carpenter now lives comfortably on the dividends. His customers  still have broken homes and insufficient funds to complete repairs.  The homeowners and the insurers were defrauded. Good faith claims  handling hurt everyone but Able.  Neither the homeowners nor the insurers had learned that when a deal  sounds too good to be true it is.  (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 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 [email protected].  Over the last 54 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created a  library of books and other materials to make it possible for insurers  and their claims staff to become insurance claims professionals.  Subscribe to Zalma on Insurance at locals.com https://zalmaoninsurance.local.com/subscribe. Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome. Write to Mr. Zalma at [email protected]; http://www.zalma.com; http://zalma.com/blog; I publish daily articles at https://zalma.substack.com, Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurance Fraud by Insurance Professionals   True Crime Story of Insurance Fraud Number 35   Bill and Libby were very successful insurance brokers. From their  offices in Walnut Creek, California, the Bill and Libby Agency generated  $100 million in premium volume for fourteen different insurers with  whom they held an agency appointment. They were one of the biggest  retail insurance agencies in northern California.  Success brought the good life. They owned a six thousand five hundred  square foot mini-mansion in the hills of Oakland. They built the house  over a lot purchased from a victim of  the great Oakland Hills fire storm. Bill and Libby furnished the house  with antiques and antique replicas. On every wall Libby hung her  collection of ceramic plates and fine art prints.  On every shelf sat  Lladro sculptures, Hummel figurines and limited-edition sculptures and  plates depicting English country scenes. Their daughter, Sassy, had a  glass display case in her bedroom with a collection of more than 200  antique or collectible dolls.  The home was destroyed by fire. After minimal investigation established  that fraud might have been attempted, the already six inches thick with  invoices and estimates of repair costs were photocopied and delivered to  L.G.L. Eagle. Eagle, appeared to be the twin brother of Gabby Hayes —  with teeth was an effective and experienced insurance lawyer.  After submitting to an examination under oath Libby corrected her  denials to an admission of fraud because her lawyer did not want her  prosecuted for perjury.  Eagle reviewed the items for which Bill and Libby returned the money in  detail. He found that some items he knew were fraudulent were not  admitted to being fraudulent while some items he thought were legitimate  were admitted to be false. He advised Secure and Stable to cash the  check since the fraud had not been cured.  Libby continued to lie to herself and her husband in an attempt to  reduce her wrongdoing. He recommended that the entire claim be denied,  that the policy be declared void for fraud, and that the full amount  paid on the void policy be demanded. If payment was not made instantly  he further recommended that Secure and Stable file a suit in U.S.  District Court under the Racketeer Influenced and Corrupt Organization  Act (RICO) demanding three times the amount paid as punishment.  Secure and Stable could not allow insurance professionals who attempted  to defraud their own insurer to profit from a crime against their  profession.  A business built on the idea of Uberrima fides (utmost good faith) will  not do business with people who have proven they cannot be trusted.  © 2022 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

True Crime of Insurance Fraud Number 34 https://zalma.com/blog --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

True Crime of Insurance Fraud Number 33   Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.  An Evil Insured  The Sleaze was not a nice man. He learned the safe way to steal in  prison. A Superior Court Judge had sentenced him to two years in state  prison for forging his mother’s will.  His cell mate, an armed robber bragged about his successful brother. The  brother had found a new career claiming the theft of small pieces of  jewelry on homeowners’ policies. Insurance companies always paid,  whether he owned the jewelry or not, rather than fight. His cell mate  explained how prosecutors had no interest in this type of crime.  Insurance companies, fearing punitive damages verdicts would pay even  when the claim was fraudulent.  The Sleaze vowed that when he got out of prison he would pursue this  safe form of crime.  The Sleaze was a man of his word. Immediately after leaving prison he  bought a tenant’s homeowners policy. He asked for, and received without  question, a $10,000 jewelry extension from the company. His limit of  liability, instead of the standard $1,000, was $10,000.  Within a month of buying the policy, he reported the probable theft of a  $10,000 ring. He told the adjuster that he was at the Beverly Wilshire  Hotel meeting with a business associate. He removed his ring to wash his  hands in the men’s room. He forgot to replace his ring, returned to his  lunch and realized the ring was missing about the time he finished  lunch. He immediately went back to the restroom but found the ring  missing. He reported the possible theft to the men’s room attendant and  to the hotel security office. He told the adjuster that the ring was a  family heirloom given to him by his father a week before he died. He had  no appraisals or receipts. He had nothing in writing that proved he  owned the ring. He had no photographs showing him wearing the ring. He  was willing, however, to swear that he owned the ring and that it was  probably stolen from the restroom at the Beverly Wilshire Hotel.  The Sleaze would not let the matter rest. He filed suit in Superior  Court naming counsel and the insurance company for fraud in the taking  of his automobile. The insurance company had to retain new counsel to  defend its attorney and itself to this new lawsuit. When that suit was  unsuccessful the Sleaze filed small claims court actions alleging fraud  and hoping that the insurer or its attorney would fail to appear. When  counsel appeared at the small claims court action, the Sleaze, who was  present, faked an illness and begged for a continuance. When this was  unsuccessful, judgment was entered on the small claims court action for  the insurance company and its counsel.  On the surface, the Sleaze was unsuccessful in his fraudulent claims  against the insurance company. He was successful in committing fraud. He  was successful in raising the reasonable costs of defending fraudulent  insurance claims beyond logic. He placed a lawyer in fear of her life  and cost her law firm and the insurer she represented the cost of a body  guard. Anyone who believes that insurance fraud is not a violent crime  never met the Sleaze.  © 2022 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

True Crime Stories of Insurance Fraud Number 30   Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.  As insurance companies become more sophisticated in the tools needed to  defeat insurance fraud, the frauds become more complex. Those who earn a  dishonest living stealing from insurance companies find that the  simple, straightforward fraud, is no longer successful. They have become  insurance scholars to learn better ways to steal from insurance  companies.  The 1942 banking industry wrote a document known as the standard or  union mortgage clause [Form 438 BFUNS] to protect mortgage holders from  dishonest borrowers. The banks were concerned because occasionally their  borrowers committed arson and the insurers refused to pay. The policy  was declared void as a result of the arson and resulting fraud and  neither the insured nor the mortgagee recovered.  As a condition of allowing their borrowers to buy insurance from  particular companies, the banks insisted that the companies attach to  their policies a union mortgage clause. The clause provided that if the  borrower, by act or omission, caused the policy to be void, it would  only be void as to the interest of the borrower and not the lender.  Therefore, even if an insurer proved that its insured burned the  building down, it still must pay the mortgagee its interest. The  contract between the mortgagee and the insurer was a separate and  distinct policy. The insurer could only defeat it if the mortgagee had  knowledge of an increase of hazard.  The union mortgage clause gave security to honest and reputable lenders.  It also gave a dishonest lender the means to commit an arson for profit  without the possibility of loss or criminal prosecution.  The fraud would work with the insurance criminal first buying a  distressed dwelling at a foreclosure sale for less than its true value.  With a coconspirator, he would arrange a mortgage on the dwelling for  three times the amount paid. He would then buy a homeowners policy from  an unsuspecting insurer, naming the mortgagee under a standard or union  mortgage clause.  Before the first installment was due on the premium financing the  dwelling would burn to the ground. Gasoline would be found on the  premises and the local fire arson unit would conclude that the fire was  intentionally set.  The building would be vacant and without contents. The insurer,  convinced that the insured set fire to the dwelling, and unable to reach  him, would be thankful that it had no contents or additional living  expenses to pay. It would write the named insured at his last known  address denying his claim for failure to cooperate. They would pay the  mortgagee’s claim in full.  Usually, the insurer, not wishing to get into the mortgage business,  would not even request an assignment of the mortgage debt. T The  original named insured would share half the proceeds of the insurance  policy with the mortgagee and would also receive 50 percent of the  monies received from the foreclosure sale of the empty lot. The insurer  believed that an arsonist had not succeeded in his crime. The insurer  had no choice but to pay the “innocent” mortgagee. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

True Crime Stories of Insurance Fraud Number 29   Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.  He was a good employee. He arrived for work every day on time. He did  his job eight hours a day and never goofed off. He was loyal to his  employer. His diligence got him raises and promotions.  In 2009 his boss came to him and said: “The recession has hit me hard. I  can’t afford to keep paying you. You are laid off.”  He was shocked. He could say nothing. He could do nothing to keep his  job. He packed up his personal belongings, said “goodbye” to his boss  and left.  The next day, he went to the state office of unemployment. He filed the  first claim in his life for unemployment benefits. He was ashamed, but  had no choice.  Coming out of the unemployment office he met a pleasant man. Having  nothing better to do, he accepted the man’s offer of a cup of coffee.  They sat on a bus bench and talked about his troubles.  The man asked detailed questions about his job. He explained that the  employer was not alone. Other people were suffering just like he was. He  explained there was a way to tide him over better than unemployment  insurance.  The employee was dumbfounded.  “Are you offering me a job?” he asked.  “No. I am only offering a way to make yourself some money without any  effort.”  The solicitor outside the unemployment office received a flat $500 fee  from the lawyer. The doctor, who billed $600 for the complete  examination and evaluation, gave the lawyer $200 as the lawyer’s fee for  the referral. Everybody did very well except the workers’ compensation  insurer and the employer whose business was having enough difficulties  without finding its workers’ compensation premiums increased.  The employee received a bonus on top of his unemployment benefits that  was sufficient to carry him into his new job with a small nest egg.  Rather than burning a building, the person committing insurance fraud  merely signs his name to a claim form. Although most insurance fraud is  not a violent crime, the crime of insurance fraud has become so rampant  that a task force akin to the one used to quell the Los Angeles riots of  1992 and 2019-2020 riots is needed. That such a task force was not  generated after the 1992 riots I doubt it will be started after the 2020  riots and Presidential election.  © 2022 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The jeweler had learned to cut diamonds in Antwerp. For ten years he  worked in a small office grinding facets onto stones of half a carat or  less. The boredom of the job infuriated him. He had no future.  He came to the United States on a tourist visa. He knew that the only  way he could become a legal permanent resident was to have a business in  place. The income he derived from his sales was sufficient to allow him  to live in Southern California, but not set up a business. He needed a  large influx of cash.  After only a month working the wholesale jewelry market, the jeweler  learned about insurance. It seemed to him that when they weren’t talking  about gems all jewelers spoke about insurance. It was expensive. The  insurers required them to install sophisticated alarm systems. The  insurers required them to install safes that far exceeded any need of  reasonable security.  The jeweler saw insurance as a way of setting up a permanent business  and becoming a legal resident of the United States.  He got from his jeweler acquaintances the name of an insurance broker  who asked few questions. He contacted that broker. He told the broker  that he was a diamond salesman who operated his business from his home.  The broker presented an application to Underwriters at Lloyd’s, London  since no American markets would accept such a risk. The Underwriters at  Lloyd’s refused to insure the jeweler because he had insufficient  security at his apartment. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

True Crime Stories of Insurance Fraud Number 27  Riots & Insurance Fraud   Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.  In the spring of 1992, riots broke out in Los Angeles. Arson and looting  persisted for three days until the National Guard was called in to  bring peace to the streets.  The insured, the owner and operator of a failing restaurant saw the  riots as an opportunity. Chez Expensive was in Hollywood. It catered to a  small motion picture and television producers who gather along Highland  Avenue between Third Street and Hollywood Boulevard. The motion picture  business was bad. The television commercial business was bad. Chez  Expensive began to see luncheon crowds of three couples. The insured was  barely grossing enough to pay his rent.  Riots and civil commotion cause everyone hardship. Innocents suffer the  most. Those with criminal intent, however, take advantage of the misery  of others.  This story, unlike all of the stories in this book, is purely fictional.  After more than 53 years in the insurance industry dealing with arson  and insurance fraud almost continuously, I believe I can safely estimate  that at least 10 percent of the six thousand fires set in the 1992 Los  Angeles riots were not caused by the rioters. I assume, similarly, that  about 10 percent of the fires set by BLM and ANTIFA activists in  Portland, Seattle and Minneapolis were not caused by the rioters.  It is a distressing comment on our society that in a time of civil  unrest the innocents suffer, usually honest and honorable people are  tempted to steal from an insurance company, and the criminal’s profit.  © 2022 – 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 practiced law in California for more than 44 years as an insurance  coverage and claims handling lawyer and more than 54 years in the  insurance business.  Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome.   You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com,  [email protected] and [email protected] . Mr. Zalma is the first  recipient of the first annual Claims Magazine/ACE Legend Award.  You may find interesting the podcast “Zalma On Insurance” at https://anchor.fm/barry-zalma;  you can follow Mr. Zalma on Twitter at; you should  see Barry Zalma’s videos on https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/featured; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims–library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

True Crime Stories of Insurance Fraud Number 26   https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.   LIFE INSURANCE FRAUD IS PROFITABLE   The Hungarian owned and operated a board and care facility for the aging  in Carson City, Nevada. He brought his younger brother over from  Hungary in 1975 to help him in the business. It was only a twenty-bed  facility and with little help, the two could manage the entire business.  The oldest brother was the thinker. He got an honorary Ph.D. from the  New World Society of Abundant Consciousness that ran a school in the  desert just north of Pahrump. A fter receiving his honorary degree for a  donation of $15,000, he insisted on the title doctor.  The doctor had no training in any field. He had a high school diploma  and had operated several restaurants before buying the board and care  facility. He believed that the title conferred on him the right to  prescribe medicine, to give psychological advice, and to do anything he  pleased. He would get drugs for his patients from other than legitimate  sources. He would bill their insurers as if they were prescription drugs  prescribed by a staff physician.   The widow was not an intelligent woman. She had limited education in her  country of birth, Hungary. She could barely read or write the English  language and spoke it with a thick accent. She relied totally on her  brother-in-law. He handled the disposition of her husband’s estate. She  signed whatever papers he put before her.  One paper he put in front of her was a claim form making claim on the  life insurance policy. The claim form did not use the sister-in-law’s  address but, rather, a P.O. box held in secret by the doctor. The  insurance company, presented with an appropriate claim form signed by  the widow and what appeared to be a proper death certificate,  immediately issued its check for $100,000 plus interest, made payable to  the widow, the sole beneficiary named in the policy.   The doctor received the check. He signed the widow’s name to it and  deposited the money in his account. He used the money to pay the debts  of the board and care facility and to buy a new home for himself on five  acres of desert property outside Pahrump. The widow was left with  nothing but debts. She sold the home she and her husband lived in since  arriving in the U.S. After paying a commission to the realtor and the  funeral expenses she had only $1,000 left. Her brother-in-law loaned her  $10,000 which she used to buy some secondhand furniture and move into a  small apartment. She met a blackjack dealer at a casino and married him  so she would have some means of support.  The doctor lived in luxury for a year off the proceeds and then began  planning his next insurance fraud. He has no other brothers to kill, so  he decided to obtain life insurance on the residents of the board and  care facility none of whom had a long life expediency.   © 2022 – Barry Zalma Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

True Crime Stories of Insurance Fraud Number 24  https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.  Excessive Rain Tempts Farmer to Attempt Fraud  Northern San Diego County, California is avocado country. Trees grow  everywhere. The heavy green fruit is a cash crop in an area that cannot  resist guacamole.   The hills and valleys of California were once the bottom of the sea.  Bedrock, at best, is sandstone. The soil is thin and porous. It is  perfect soil for growing avocados because it drains well. Avocado  farmers irrigate the roots to have enough, but not too much, water.  The farmers cannot, however, control the rain. If Southern California  receives one of its rare, real, rainstorms, the soil turns to viscous  slime. Gravity moves the hillsides into the valleys.  Insurer Concludes Settlement if Cheaper than Fighting Fraud   The insurer, with evidence that would support a rescission, decided to  be practical rather than aggressively pursue its rights. Counsel met  with the insured, showed that the number of trees counted from the  aerial photographs showed less trees than those for which the claim was  presented. Over a fine restaurant meal, the insured and counsel for the  insurer settled the claim for the value of the tress counted in the  aerial photographs less the value the remaining trees. Both considered  the settlement to be favorable settlement. The underwriters for the  insurer vowed to never insure trees on a hillside again.   This is not the type of fraud insurers’ normally face. There was no  intent of the insured to defraud the insurer when he acquired the policy  and he had no idea of the true number of trees since his purchase did  not list a number of trees and he never did an inventory.  In fact, he did deceive the insurer but he had none of the malice  required to prove fraud with regard to the acquisition of the policy. He  did, however, overstate the number of trees he claimed lost.  Paying his claim was an economic decision. If justice could have been  done, the insured would have been paid nothing. The insurer appeared to  have wasted its assets because it knew it was less expensive to settle  than to fight.   © 2022 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

True Crime Stories of Insurance Fraud Number 24  https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.  Excessive Rain Tempts Farmer to Attempt Fraud  Northern San Diego County, California is avocado country. Trees grow  everywhere. The heavy green fruit is a cash crop in an area that cannot  resist guacamole.   The hills and valleys of California were once the bottom of the sea.  Bedrock, at best, is sandstone. The soil is thin and porous. It is  perfect soil for growing avocados because it drains well. Avocado  farmers irrigate the roots to have enough, but not too much, water.  The farmers cannot, however, control the rain. If Southern California  receives one of its rare, real, rainstorms, the soil turns to viscous  slime. Gravity moves the hillsides into the valleys.  Insurer Concludes Settlement if Cheaper than Fighting Fraud  The insurer, with evidence that would support a rescission, decided to  be practical rather than aggressively pursue its rights. Counsel met  with the insured, showed that the number of trees counted from the  aerial photographs showed less trees than those for which the claim was  presented. Over a fine restaurant meal, the insured and counsel for the  insurer settled the claim for the value of the tress counted in the  aerial photographs less the value the remaining trees. Both considered  the settlement to be favorable settlement. The underwriters for the  insurer vowed to never insure trees on a hillside again.   This is not the type of fraud insurers’ normally face. There was no  intent of the insured to defraud the insurer when he acquired the policy  and he had no idea of the true number of trees since his purchase did  not list a number of trees and he never did an inventory.  In fact, he did deceive the insurer but he had none of the malice  required to prove fraud with regard to the acquisition of the policy. He  did, however, overstate the number of trees he claimed lost.  Paying his claim was an economic decision. If justice could have been  done, the insured would have been paid nothing. The insurer appeared to  have wasted its assets because it knew it was less expensive to settle  than to fight.   © 2022 – 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 practiced law in California for more than 44 years as an insurance  coverage and claims handling lawyer and more than 54 years in the  insurance business.  Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome.   You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com,  [email protected] and [email protected] . Mr. Zalma is the first  recipient of the first annual Claims Magazine/ACE Legend Award. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

True Crime & Insurance Fraud Number 22  https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud.  This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.   THE JEWELER & FRAUD   The jeweler was not an intelligent man. He had tried a manufacturing  jewelry business ten years before and failed.  After his jewelry business failed, he operated a sandwich shop but  stayed near the jewelry business. He located his shop in the basement of  a building dedicated to jewelers in Seattle, Washington. He was fairly  successful and made an adequate living. He still had stored in the  garage of his house his old jewelry table, some molds and a large safe.  One morning, when business at the sandwich shop was slow, he sat down  with a customer to have coffee. They spoke of old times when the jeweler  made fine rings. The customer and the jeweler both came from Yerevan in  Armenia. They talked about growing up under the shadow of Mount Ararat.  They talked about the difficulties of surviving the capitalist society  of Washington state. The friend was a wholesale diamond dealer. The  diamond dealer’s sales dropped 75% during the 2008-2009 recession.  As they drank their Greek coffee, they discussed how an acquaintance,  after a robbery, had easily collected $500,000 from his insurer. They  were surprised that his insurer took his books and records on face  value. They knew that their acquaintance operated a cash business whose  records were kept only to deceive the United States Government.  By their third cup of coffee the jeweler and his friend conceived a  method to create instant wealth. Their plan was simple. It would take  advantage of the insurer’s need to deal fairly and in good faith with  its insureds.   Eventually the one-million-dollar claim settled for a total payment by  the insurer of $750,000. The insurer saved 250,000. The insured got  $750,000 more than he had lost and netted, $740,000.  He had no reason to refuse to sign a general release. Of course, when he  agreed, the insurer and its adjuster were convinced that they were  victims of a fraud they could never prove.  The adjuster was convinced that the claim was fraudulent because, in his  experience, no legitimate insured, suffering a million-dollar loss,  would agree to reduce his claim by 25%. Such knowledge was not  comforting nor could it be presented in evidence at any court.   © 2022 – 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 practiced law in California for more than 44 years as an insurance  coverage and claims handling lawyer and more than 54 years in the  insurance business.  Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

True Crime Stories of Insurance Fraud Number 20 https://zalma.com/blog The Poet Who Tried Insurance Fraud  The insured was a poet. Before immigrating from Soviet Armenia, he was a  member in good standing at the Armenian Poets Union. They paid him for  his work five hundred rubles a month.  He lived in the capital city of Yerevan in the shadow of Mount Ararat.  Here, like all Soviet citizens, before the fall of the Soviet Union, he  supplemented his income by buying and selling in the black market. He  specialized in jewelry and diamonds.   By 1977 he had amassed, off the pain and suffering of others, over 300  carats of diamonds and diamond jewelry. Most of the diamonds were old  mine cut, popular in Russia in the 1890’s, but now out of date. The  wealth he had amassed frightened him. He knew that eventually the Soviet  Police would catch him and send him to a Gulag. He was committing the  most heinous of Soviet crimes. He was a successful entrepreneur.  He went to the American Consulate and got a visa as a refugee. He had  convinced the American Consulate the Soviet Government was censoring his  poetry. He wanted freedom to write.  Poetry is not an essential industry.  The Soviet Government agreed to his  immigration. He came directly to Los Angeles and settled in the  Armenian community in the hills of Glendale, California. He brought with  him all but twenty carats of the diamonds. He needed to use some of his  300 carats to bribe Soviet Customs Officials. The insured went to a new broker. The new insurer did not require an  inspection of the premises by anyone other than the broker. It issued a  million dollar policy. Two weeks later, before the insurer could change  its mind, the poet’s oldest son locked the poet and his mother, the  poet’s wife, and the gallery owner in the small four by four bathroom.  The son then took home all the inventory of Poetry Jewelers.  The three people locked in the bathroom waited ten minutes to make sure  the oldest son had driven away and then pushed the holdup button  secreted in the bathroom because it is common for thieves to lock  jewelry store owners in the bathroom. The three captives also pounded on  the wall to gain the attention of the restaurant owner next door. The  police were called and broke the door down to free the poet, his wife  and the gallery owner.  The loss exceeded a million dollars. After five days of trial with testimony from nine in the morning until  six every night, the jury went off to deliberate. The jury returned with  its verdict in forty-five minutes. The verdict was for the defense. The  jury was convinced that the poet had presented a fraudulent claim and  that the insurance company had properly rescinded the policy.  The result was unusual. The cost was enormous. The investigation cost,  court costs, expert witness fees and attorneys’ fees exceeded $500,000.  The insurer defeated the claim for one million dollars in lost jewelry  and fifty million dollars in punitive damages.  The word went out. This insurance company fights. Do not insure with  them. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A True Crime Story of Insurance Fraud Number 19   No one could be more popular than a person who steals from the rich to  give to the poor. Since the Robin Hood legend was first told in Medieval  England, the noble thief is the most popular fantasy.  The public perceives insurers to be rich. Insurers build the towers  downtown. Insurers are perceived to take premiums from poor  policyholders and never pay claims. When someone steals from an insurer  the public cheers. They want to believe the thief is like the noble  Robin Hood stealing from the rich to give to the poor. Their dislike for  the insurer who refused to pay for the damage to their house when an  earthquake struck clouds their judgment.  An insurance criminal is as much a thief as the person who uses a gun to  take cash out of the convenience store’s register. The insurance  industry, and every person involved in it, must convince the public that  Robin Hood is dead and was just a thief.  The insurance criminal does not steal from rich, impersonal insurance  companies. The insurance criminal steals from every person who buys  insurance. Until the word gets out, the public will continue to make the  fortunes of criminals. It is inevitable that the person we will call  Robin Hood will continue to succeed. Crime against insurers pays well.  Robin was an affluent manufacturer of children’s clothing. He lived in  Beverly Hills in a modest two-million-dollar home without a mortgage.  His line was popular. His personal income was never less than six  figures and, in many years, exceeded seven. He was popular. He hosted a  regular poker game at his house that were attended by his wealthy  neighbors. They always played nickel-dime poker and no one ever lost  much money. They gathered for company and conversation.  One of the poker players was a lawyer who represented major corporations  including insurance companies. During the poker game the lawyer could  not relax. He seemed furious and whether he won or lost would slam his  cards down on the table. Finally, one of the other players asked what  was bothering him.  “The jury system is totally out of control” Coming from a lawyer they  knew always tried cases before juries the statement was a shocking  surprise. The players pressed the lawyer for more information. He said:  “Yesterday, a jury in Compton came in with a $30,000,000 verdict against  one of my clients, Pay Fast Insurance. They asked me to see if the  judgment can be set aside on appeal. I ’think it can, at least  partially. It’s ridiculous. The insured committed fraud. He had a  legitimate burglary but he made claim for the theft of more items that  could possibly fit in his house. The jury even agreed, they found that  the claim he made was for twice what he lost. They still gave him  punitive damages. The jury thought the insurance company gave the  insured a hard time. It’s disgusting. They just want to punish all  insurance companies even if they were right in rejecting the claim. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Volume 26, Issue 4 – February 15, 2022 Go to Barry Zalma videos at Rumble.com at https://rumble.com/zalma A ClaimSchool™ Publication © 2022 Barry Zalma & ClaimSchool, Inc. Go to my blog & Videos at: Zalma on Insurance  And at https://zalma.com/blog   Go to the Insurance Claims Library Listen to the Podcast: Zalma on Insurance Videos from Zalma on Insurance Subscribe to Barry Zalma on Substack.com    Go Directly to Jail, Do Not Pass Go Chutzpah: Convicted of Insurance Fraud Appeals to Avoid Going to Jail Tarek Abou-Khatwa appealed his conviction of a complex, multi-year  insurance fraud scheme. He previously asked the court to delay the start  of his incarceration pending the outcome of that appeal. On January 31,  2022, the court denied his request, explaining that Defendant’s appeal  did not present a “close question” as to each count on which he was  sentenced to prison. In United States of America v. Tarek Abou-Khatwa, Criminal No. 18-cr-67  (TSC), United States District Court, District of Columbia (February 4,  2022) Tarek’s multiple appeals in an attempt to avoid was again brought  to the USDC. Defendant filed an “Emergency Motion” with the USDC stating his intent  to lodge a second appeal, this time challenging the court’s January 31  Order, and he requested that his self-surrender date be postponed  pending the outcome of that new appeal. Defendant’s conviction is presumed valid and he bears the burden of  rebutting that presumption. In his previous motion, Defendant failed to  rebut that presumption because he did not present a “substantial  question of law” as to each count of his conviction for which he faces  imprisonment. Accordingly, the court held Defendant’s self-surrender  date in place. Defendant, undeterred by his losses in the USDC, now argues that his  self-surrender date should be delayed while he appeals that decision. He  contended that his current self-surrender date is not “sufficient to  allow time for briefing before both the district court and the court of  appeals, as the parties originally intended.” He claims that additional  time is necessary for “a motion to the D.C. Circuit appealing this  Court’s order denying release pending appeal [to be] decided by that  Court.”  He also argues that refusal to grant further delay would  “frustrat[e] his appeal rights under Section 3145(c) and Rule 9(b).” The court disagreed that emergency action is necessary to avoid  “frustrating his appeal rights under Section 3145(c) and Rule 9(b).” ANALYSIS First, 18 U.S.C. § 3145(c) pertains to appeals of detention orders, not  release from custody, and so it is inapplicable. Second, nothing in the  court’s January 31, 2022, Order restricts Defendant’s ability to seek  relief from the Court of Appeals. The court, aware that the timeline for  Defendant to both appeal this court’s January 31 Order and receive a  decision on that appeal before his February 10 self-surrender date, is  truncated. However, Defendant-not the court-bears responsibility for  that accelerated schedule.  ZIFL OPINION Tarek’s fraud must have been very successful since he has the funds to  have lawyers bring multiple motions and appeals to avoid incarceration.  The actions are a clear explication of the concept of “chutzpah” or  unmitigated gall. His efforts continue to fail and it is time that he  reports to federal prison and begin his sentence after conviction for  fraud. The USDOJ should consider determining what other crimes he was  involved in that allows him funds to support the multiple motions and  appeals. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

True Crime Stories of Insurance Fraud Number 18   https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim. Sweet Daddy’s Mercedes  She was eighteen and beautiful.  Young men chased her. Old men drooled.  Middle-aged men bought her presents. She graduated from high school with  a solid C minus average. She read on a sixth-grade level. She had a  limited vocabulary and no employable skills. She could type ten words a  minute using one finger on each hand. A computer-controlled telephone  system threw her into a panic and a Voice Over Internet Protocol (VOIP)  system made no sense. Dictating machines confused her. Photocopy  machines hated her. E-mail was an enigma.  She had one skill. She pleased middle-aged men. They felt young in her  presence. She knew, instinctively, what to say to make them happy. They  in turn wanted only to make her happy.  Her one skill got her the job as Big Daddy’s administrative assistant.  She would get Big Daddy coffee in the morning. She would go to the  corner and buy the morning papers. She rubbed his neck when he was tired  and sharpened his pencils. She carried his dictation tapes to his  secretary.  Every Tuesday and Thursday afternoon she and Big Daddy would visit a  local hotel and she would give him pleasure. Big Daddy paid her twice  the salary he paid his professional secretary. He also gave her a  Mercedes Benz 500SL automobile. Big Daddy was so impressed with her  services that he put title to the Mercedes in her name. At age eighteen  she owned a $150,000 automobile and earned $110,000 a year. She lived  comfortably in a two-bedroom apartment in Cambridge. She was happy. When  she was happy, Big Daddy was happy.  Big Daddy had a wife and four children he had no intention of leaving.  So, every night Big Daddy went to his house and she went to hers. She  became lonely. Cambridge is a college town. She would go out to eat in the local  restaurants and sit around the bar watching television and getting to  know the local college boys. She did not understand their discussions of  literature or philosophy but she knew how to make them happy. When Big  Daddy would go away for two weeks on a business trip, she became very  lonely. On those lonely weekends she would sometimes take a college boy  home with her.   © 2022 – 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. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

True Crime Story of Insurance Fraud Number 17   https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.  Career criminals are not the only people who perpetrate insurance fraud.   The temptation has become so great that almost anyone who is given the  opportunity, will try. Those who do not premeditate insurance fraud are  called perpetrators of soft frauds. Most are small. Some are not. The  story that follows is a not a soft fraud but one that was premeditated  for a great deal of money by a person who should have known better.  Some years ago, residents of a hillside community received a letter from  the county engineer informing them that their houses sat on an active  landslide. The engineers concluded that an unusual amount of irrigation  water, water from septic systems, and rainfall lubricated an ancient  landslide under their homes and that the slide was moving. The engineers  were concerned because it was moving at the rate of three inches a  year.  The houses sitting on the landslide were also moving a few inches a  month. Within ten years the houses would be torn apart by the movement  if nothing was done to stabilize the hillside.  Homeowners, living on the hill, noticed cracks in the plaster walls.  Concrete block walls split at the mortar seams. Cracks formed in the  foundation systems. Since the homes on the hill were all valued from  $500,000 and $5,500,000, the monetary value of the potential loss of 300  homes on the landslide was enormous. Many of the homeowners gathered  and hired counsel to pursue persons responsible for their damage.  On advice of counsel, the homeowners reported claims to their insurers.  Most of the insurers denied the claims because of clear and unambiguous  exclusions for earth movement or subsidence. The insurers concluded that  the predominant cause of the damage was the excluded peril of earth  movement. The claims were fairly and reasonably rejected. Some of the  homeowners accepted the decision of their insurers. Some of the  homeowners sued their insurers. The imaginative homeowners, like the  insured, found a better way.  Fraud Defeated by Investigation  As a lawyer the intentional concealment of a material fact with the  intent to deceive an insurer to its detriment is fraud, a criminal act,  and if convicted, grounds for disbarment. For that reason, the insured  accepted the denial and did nothing further about the claim.  Had the insurer not done the minimum investigation and retained the  services of a competent engineer it would have paid the $2,500,000.00  claim. Had the insured’s fraud been presented to a prosecutor he could  have been arrested, tried and convicted of attempted insurance fraud and  would have been disbarred.  He was lucky that the insurer agreed to a mutual rescission of the  policy, a return of the premium, and to forget what was attempted.   © 2022 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

True Crime of Insurance Fraud Number 16  https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.   Too Smart For His Own Good  The insured had no respect for his insurance company. He expected them  to pay any claim he presented. He expected no investigation. Other  members of the same immigrant community had successfully committed arson  fraud. It was so easy for others. He decided to burn his house down.   The insured thought he was highly intelligent. He planned his arson fire  carefully. He arranged for his wife and children to spend the weekend  with their cousins in Oakland. He got four one-gallon cans of gasoline  from four different gas stations over a two-week period. He stored the  gasoline in his garage. He told his wife and children that he would join  them Sunday because he had work to do Saturday in his business. After  driving the wife and children to their cousins’ home in Oakland, he  returned to his home in San Francisco Friday night.   Early Saturday morning he began the preparations for the fire. He  removed all of the valuable contents of the house and stored them in a  rented storage facility. He packed up all of his good clothing in a  suitcase and put them in the trunk of his automobile. He checked the  neighborhood and found a house for rent in his general neighborhood  similar to the house he lived in. He made arrangements with the owner  and signed a month-to-month lease on the house. He did not notice that  the owner recorded the date and time the lease was signed.  © 2022 – 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 practiced law in California for more than 44 years as an insurance  coverage and claims handling lawyer and more than 54 years in the  insurance business.  Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome.   You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com,  [email protected] and [email protected] . Mr. Zalma is the first  recipient of the first annual Claims Magazine/ACE Legend Award.  You may find interesting the podcast “Zalma On Insurance” at https://anchor.fm/barry-zalma;  you can follow Mr. Zalma on Twitter at; you should  see Barry Zalma’s videos on https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/featured; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims–library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

True Crime of Insurance Fraud Number 15   https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.  Monkey Business Costs Claimant  Some people are too smart for their own good. T hey want to commit a  fraud but don’t know how. In so doing they hurt themselves rather than  profit.  When I was a young insurance adjuster, in 1972, the company I worked for  as an adjuster waiting to hear from the California Bar about the  results of the Bar Exam, my employer insured a homeowner who owned a  Capuchin monkey as a pet. The monkey was a friendly sort. He did not  like confinement to the house. He wanted to be out and about meeting and  greeting the world.   One day, when the insured was not looking, the monkey escaped her home.   He was a pet and did not want to run away. He just wanted out of the  house. His escape, therefore, led him to the roof of the next-door  -neighbor’s house.  The claimant, who for an injury of her type, could have easily talked me  into paying her $1,000 to $3,000 back in 1972, thought she had cheated  me by changing a $10.00 doctor bill to $100.00 bill. In so doing she  gained $90.00 by cheating and lost the opportunity for more than ten to  twenty times the fraud by simply being honest.  Her fraud was a success. The insurer did nothing. It reported the fraud  to no one.  The insured owed the claimant much more than the $106.00 we  paid her. The claimant probably thought she committed a brilliant fraud.  This time the person actually damaged by the fraud was the claimant,  not the insurance company.  Adjusters must always keep in mind that when they receive an offer to  settle a claim for an amount that seems too good to be true there is a  very high probability that it is, in fact, too good to be true.   © 2022 – 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 practiced law in California for more than 44 years as an insurance  coverage and claims handling lawyer and more than 54 years in the  insurance business.  Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome.   You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com,  [email protected] and [email protected] . Mr. Zalma is the first  recipient of the first annual Claims Magazine/ACE Legend Award.  You may find interesting the podcast “Zalma On Insurance” at https://anchor.fm/barry-zalma;  you can follow Mr. Zalma on Twitter at; you should  see Barry Zalma’s videos on https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/featured; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims–library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Why Small Frauds Cost the Insurance Industry the Most   https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.  See the full video at  and at  The Birth of a Serial Insurance Fraudster   The claimant wore plastic framed eye-glasses with thick lenses. He  literally fell into a life of insurance crime and fraud.  One day the claimant was walking past a fine restaurant when he fell and  broke the frames of his glasses. The manager saw him fall. She rushed  out, helped him to his feet and checked his physical condition. He  thought he was uninjured but the frames of his glasses had broken at the  bridge.  The restaurant manager, fearful of a lawsuit, offered him lunch on the  house and asked the cost of the frames. When he told her $80.00, she  went to the register and brought him four crisp twenty-dollar bills. The  claimant could not believe his good fortune. It was so easy. From that  day on he made a good living from many small frauds.  Eighty dollars seems a small amount to avoid a lawsuit.  The claimant,  with multiple eighty-dollar claims, would average, in the two months he  would limit himself to in any community, $2500 a day. His collections  were either in person or by mail. He almost never bought a meal.  He was small stuff and no one wanted to bother with. Yet he stole, in  his own small way, more than $600,000 a year. He took long vacations  from his job. He stayed in the best resorts. He lived the good life  because an $80 fraud is just too small to bother businesses, insurers,  police and fraud investigators.   © 2022 – 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 practiced law in California for more than 44 years as an insurance  coverage and claims handling lawyer and more than 54 years in the  insurance business.  Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome.    You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com,  [email protected] and [email protected] . Mr. Zalma is the first  recipient of the first annual Claims Magazine/ACE Legend Award.  You may find interesting the podcast “Zalma On Insurance” at https://anchor.fm/barry-zalma;  you can follow Mr. Zalma on Twitter at; you should  see Barry Zalma’s videos on https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/featured; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims–library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurance Fraud Based on a Claimed Serbo-Croation War  https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.   Arson for Profit During the L.A. Olympics   In 1983, just before the Olympics came to Los Angeles, the doctor  decided he needed additional money to buy the lot next door to his  Westwood, California duplex. It was his dream to tear down the duplex  and build million dollar condominiums on the two lots. Before he could  do so, however, he had to remove his tenants from the duplex. He also  needed a substantial amount of cash as seed money for his intended  development. His plan was to have a fire destroy the duplex and to use  the money he expected to receive from his fire insurer to start  construction of the condominiums.  He called his insurance agent who came to the duplex where the doctor  lived with his girlfriend and her young son. He told his agent he had  learned about the increase in construction costs. He told the agent he  decided to double the limits of liability on his fire insurance policy.   The agent, whose only concern was collecting additional commissions, put  through the request for the increase with pleasure since doing so  doubled his commission.  The doctor, explained to his insurance agent that since he had escaped  communist Yugoslavia ten years before he did not understand American  insurance.  When the doctor treated his Croatian patients he told them he was  Croatian. When he treated Serbian patients he told them he was Serbian.  His practice flourished in the Yugoslavian community.  He continued to proclaim his total innocence even after admitting there  was evidence to support his plea of guilty to insurance fraud.  The judge  sentenced him to ninety days in the county jail and ordered him to make  restitution. The doctor paid the attorneys fees his insurer incurred in  defending the bad faith lawsuit he brought for failure to pay his claim  that was dismissed because of the insurance fraud conviction.   © 2022 – 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 practiced law in California for more than 44 years as an insurance  coverage and claims handling lawyer and more than 54 years in the  insurance business.   Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Hawaiian  https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.   How a Fake Jewlery Theft Was Defeated  The insured was a contractor in Honolulu. He made an excellent living  cheating his customers. The insured’s most lucrative scheme was an  electronic vermin killer. It consisted of a long wire and a transformer.  The contractor strung the wire around a house and plugged it in a wall.  The device, charged with low voltage from the transformer, allegedly  repelled vermin. The insured guaranteed that all roaches, flying insects  and rodents could not pass the charge in the wire.  When it didn’t work and a customer called to complain the insured would  ignore the complaints.  Since the tropical Hawaiian climate is a prime breeding ground for  insects, the insured had no lack of customers. He bought a Ferrari  sports car with the profits.  After gaining the confidence of the insured's secretary, he confronted  the secretary with the result of his investigation. He told her he knew  that the appraisals were not done by the jeweler. He showed her where he  had discovered that the typewriter used to type the description of the  items of jewelry was different from the typewriter used to type the name  of the appraiser. He told her that he liked her and would be very sorry  if she was involved in aiding her boss in committing a crime.  She began to cry. When he calmed her down, she confessed that she had  typed in all of the descriptions and the values of the jewelry. Her  boss, the insured, took the print ball out of the IBM Selectric  typewriter and smashed it under his shoe. If asked, she was to say that  his children broke the typewriter while playing with it. The adjuster  thanked her, paid for lunch and suggested she get a new job. He told her  he would do what he could to keep her out of criminal problems.  The claim was denied & the insured was eventually convicted of  fraud.  © 2022 – 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 practiced law in California for more than 44 years as an insurance  coverage and claims handling lawyer and more than 54 years in the  insurance business.  Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome.   You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com,  [email protected] and [email protected] . Mr. Zalma is the first  recipient of the first annual Claims Magazine/ACE Legend Award.  You may find interesting the podcast “Zalma On Insurance” at https://anchor.fm/barry-zalma;  you can follow Mr. Zalma on Twitter at; you should  see Barry Zalma’s videos on https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/featured; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims–library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Dishonest Chiropractor/Physician   https://zalma.com/blog  A dishonest physician or chiropractor will, for a fee, prepare  fictitious medical reports, including billings for multiple series of  physical therapy treatments. Sometimes the report of a legitimate  accident victim is modified only in the name, address, and physical  attributes of the victim. In all other respects, the reports are  legitimate. T hey are not a report of the victim’s actual injuries since  the victim either did not exist or was not injured. Medical bills  generated by such fiction total between $1200 and $3500. The numbers are  kept small to avoid suspicion and tempt insurers into making a quick  settlement.  When I was a young adjuster I dealt with these scofflaws and paid  fraudulent claims because I, like most young adjusters, was unaware of  the amount of fraud being perpetrated. Within a year I learned and  refused to pay the suspected frauds and advised them that the insurer I  worked for would pay nothing and they should file suit. I was convinced  it was a fraud when the suit was never filed.   Because of the ease of use a single clerk typist with a word processor  can prepare two hundred medical reports a day with the doctors’ laser  printer even generating his signature from a scanned image. The doctor,  not involved in the procedure, receives $100 to $500 per report. The  doctor is quite happy with his earnings since he need not see a patient  nor provide treatment.  This type of fraud operation can present hundreds of claims a month on  individuals who were not injured or never injured. The claims can  generate millions of dollars a year in net profits for the lawyers,  physicians and recruiters involved in the crime. By applying the maxims  set forth in the last chapter these insurance criminals discovered that  the person claimed injured, (that is the lawyer’s alleged client) will  almost never be seen by an adjuster, investigator or independent medical  examiner.  The criminals know that as long as they keep the claims small no lawyer  will be called upon to take testimony from the person identified as  injured. The criminals know that no one will go to the medical clinic to  learn whether they really provided the treatment claimed. Since the  insurance criminals keep their medical treatment down to minimal level  and the demands of the lawyer are always reasonable, the claims settle  quickly. The adjuster’s supervisors commend the adjuster for closing  files.  The adjuster is rewarded for keeping expense costs down. The  insurer saved the cost of a lawyer. The fraud was a success.  Occasionally, we read reports about the police or the fraud bureaus  making arrests of a massive fraud ring. The arrests just touch the cream  at the top of the glass of milk. The rest remains. It is greed that  causes the criminal’s demands to become sufficiently high to cause the  insurer to investigate the claim.  Insurers must realize that savings of expense dollars can, and almost  always will, cost them more in indemnity dollars.  New data base systems allow insurers to obtain records concerning all  claims supported by the crooked chiropractor, lawyer or physician. If  volume is too high the information provided to an insurer from the All  Claims Database, CLUE, or other databases will raise suspicions of fraud  sufficient to compel a thorough fraud investigation.   © 2022 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Olde Time Fire - Arson For Profit   True Crime Stories from an Insurance Fraud Expert  Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.  The brothers were operating a successful bar and grill in once bustling  steel mill town of Fontana, California. Drawing on the hard drinking,  fast living steel workers their Olde Tyme Bar and Grill was a success.  They would sell five to ten barrels of beer a day. The bar was noisy and  violent. Seldom would a night pass without a fight breaking out.  The brothers tired of the fights and boisterous customers decided to  move to an area with a better class of clientele.  They ignored that  their success was as a result of the type of people they served.  They rented a 7,000 square foot restaurant in the college town of  Claremont. The brothers’ called it the Olde Tyme Restaurant and  furnished it much like their bar and grill. Infatuated by their success  in the mill town they signed a twenty-year lease on the property. The  brothers even added one thousand square feet to the restaurant. They  spent most of the profits they had made from the Olde Tyme Bar and Grill  in remodeling the new restaurant in Claremont. They opened with fanfare  and initial success. An old time bar and grill in a college and bedroom  community was a novelty.  In two months, the novelty wore off. The brothers found that they were  serving lunch to two couples. Dinner and dancing clients usually did not  outnumber the waiters and waitresses. Fear struck the brothers with  images of imminent failure and bankruptcy.   © 2022 – 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 practiced law in California for more than 44 years as an insurance  coverage and claims handling lawyer and more than 54 years in the  insurance business.  Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome.   You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com,  [email protected] and [email protected] . Mr. Zalma is the first  recipient of the first annual Claims Magazine/ACE Legend Award.  You may find interesting the podcast “Zalma On Insurance” at https://anchor.fm/barry-zalma;  you can follow Mr. Zalma on Twitter at; you should  see Barry Zalma’s videos on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims–library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Tiffany Kid   https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.   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.  The insured tried drugs. The results disappointed him.  He was brilliant,  so college was no challenge. He felt he would die from the boredom.  Nothing challenged his intelligence.  He found the cure for his boredom one summer vacation from college. On a  dare, he surreptitiously entered the home of a neighbor. He removed a  single, solid brass and stained-glass dragonfly lamp made by Louis  Comfort Tiffany in the 1920’s. From this single event he found more  excitement, a greater “high,” than he had ever had with drugs.  The flow of adrenalin as he entered, his neighbor’s dwelling was  delicious. He had found the excitement he wanted. He had finally found a  way to relieve the boredom and lack of challenge in his life. He did  not steal for profit. He stole for excitement. He did not need the lamp.  He could have bought many similar lamps with the money in his trust  fund.   Like all addictions, burglary on a small scale continued. His burglaries  occurred in Marin County and in the small college town where he went to  school. He specialized in burglary limited to removing Tiffany lamps  and objects of art from their proper owners. He managed to amass a  collection of considerable value.  Burglary, however, was too easy.   © 2022 – 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 practiced law in California for more than 44 years as an insurance  coverage and claims handling lawyer and more than 54 years in the  insurance business.  Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome.   You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com,  [email protected] and [email protected] . Mr. Zalma is the first  recipient of the first annual Claims Magazine/ACE Legend Award.  You may find interesting the podcast “Zalma On Insurance” at https://anchor.fm/barry-zalma;  you can follow Mr. Zalma on Twitter at; you should  see Barry Zalma’s videos on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims–library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Baseball Card Scam   https://zalma.com/blog Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.   The insurance industry, unintentionally, instructs its insureds how to  successfully perpetrate insurance fraud. Insurers encourage fraud by:  decimating its professional claim staff by short-sighted cost cutting. by selling insurance to persons unknown to the company or the broker. by accepting the word of new applicants without a pre-risk survey. by allowing threats of bad faith lawsuits to intimidate the company into  a quick settlement.  Commercial property insurance has proven to be an excellent training  ground for novice frauds. Baseball cards are collectibles with widely  varying values depending on rarity and condition. The value of a  collectible car is totally subjective and, as a result, difficult to  insured.   © 2022 – 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 practiced law in California for more than 44 years as an insurance  coverage and claims handling lawyer and more than 54 years in the  insurance business.  Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome.    You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com,  [email protected] and [email protected] . Mr. Zalma is the first  recipient of the first annual Claims Magazine/ACE Legend Award.  You may find interesting the podcast “Zalma On Insurance” at https://anchor.fm/barry-zalma;  you can follow Mr. Zalma on Twitter at; you should  see Barry Zalma’s videos on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims–library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Case of the Art Flambé  https://zalma.com/blog Barry Zalma, Esq., CFE presents podcasts and videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.   Today's video explains why a person was driven to try an arson for  profit and how the insurer tried to defeat the crime.  When a person decides to perpetrate an insurance fraud, he pushes the  pause button on his morality. His plan to commit the fraud will then  become so flamboyant and creative that even the most innocent of claims  adjusters will detect the crime. Such was the case of a Belgian  immigrant. He came to the United States shortly after World War II. He  eked out a living with various jobs as a low paid engineering draftsman.   Before he decided to change his career and try arson for profit, he had  led a dull, but exemplary, life. He, at the age of sixty, married his  second wife. Later they had a child. When the child was three, he  contracted phlebitis and underwent several surgeries. He was unable to  keep up with his work and, in any event, the aerospace industry had just  lost several major contracts. He lost his job.   True Crime Stories  Barry Zalma presents fictionalized True Crime Stories of Insurance Fraud  from an Expert who explains why Insurance Fraud is a “Heads I Win,  Tails You Lose” situation for Insurers.  The stories help to Understand How Insurance Fraud in America is Costing  Everyone who Buys Insurance Thousands of Dollars Every year and Why  Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators  than any Other Crime.  If the fraud succeeds the insurer must charge more premium to cover the  expense of defending the fraud and payment of funds to the fraud  perpetrator. If the fraud fails the insurer must charge more premium to  cover the expense of defending the fraud. Everyone, except the lawyers,  lose.  As you watch the videos I hope they help you understand the effect that  insurance fraud has on the perpetrators, the insurers, the people who  need insurance, the people who buy insurance, and the people who keep  the promises made by insurance policies.Over the last 54 years Barry  Zalma has dedicated his life to insurance, insurance claims and the need  to defeat insurance fraud.  © 2022 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Burned Up Russian   Videos so you can learn how insurance fraud is perpetrated and what is  necessary to deter or defeat insurance fraud. This Video Blog of True  Crime Stories of Insurance Fraud with the names and places changed to  protect the guilty are all based upon investigations conducted by me and  fictionalized to create a learning environment for claims personnel,  SIU investigators, insurers, police, and lawyers better understand  insurance fraud and weapons that can be used to deter or defeat a  fraudulent insurance claim.  Since arriving in the United States, the Russian had done well  financially. He owned a million-dollar piece of real estate and three  gas stations. He was in the jewelry business, wholesaling jewelry he  would get on consignment from immigrants who arrived in the U.S. after  he was settled. He was, however, cash poor. What he needed was quick  cash.  He decided to burn his house down.  To profit from his action he increased his homeowners insurance coverage  three fold. He found unscrupulous “art appraisers” who would sign  appraisals in blank or which he prepared for them. He, without the  knowledge of his insurers, personally appraised all of his household  goods as if they were great works of art. He intended to, and did, claim  they all came from the then Soviet Union as “household goods.”  arry Zalma presents fictionalized True Crime Stories of Insurance Fraud  from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails  You Lose” situation for Insurers.  The stories help to Understand How Insurance Fraud in America is Costing  Everyone who Buys Insurance Thousands of Dollars Every year and Why  Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators  than any Other Crime.  If the fraud succeeds the insurer must charge more premium to cover the  expense of defending the fraud and payment of funds to the fraud  perpetrator. If the fraud fails the insurer must charge more premium to  cover the expense of defending the fraud. Everyone, except the lawyers,  lose.  As you watch the videos I hope they help you understand the effect that  insurance fraud has on the perpetrators, the insurers, the people who  need insurance, the people who buy insurance, and the people who keep  the promises made by insurance policies.Over the last 54 years Barry  Zalma has dedicated his life to insurance, insurance claims and the need  to defeat insurance fraud.  © 2022 – 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 practiced law in California for more than 44 years as an insurance  coverage and claims handling lawyer and more than 54 years in the  insurance business.  Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome.   You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com,  [email protected] and [email protected] . Mr. Zalma is the first  recipient of the first annual Claims Magazine/ACE Legend Award.  You may find interesting the podcast “Zalma On Insurance” at https://anchor.fm/barry-zalma;  you can follow Mr. Zalma on Twitter at; you should  see Barry Zalma’s videos on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims–library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Uninsured Motorist  https://zalma.com/blog  Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud.  This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.  ' Occasionally, without fanfare, someone stands up and refuses to honor an  obvious fraud. Such an event, by its rarity, deserves public  recognition.  In October 1989 Joe Chevrolet, a negligent, uninsured motorist struck  the rear end of a vehicle driven by Marcia Toyota. Ms. Toyota was  insured with Good Hands Insurance Company. Marcia claimed severe  physical and emotional injuries as a result of the accident. Through her  attorney, Mel Shyster, she presented the reports of Louise Quack, a  doctor of Chiropractic. Good Hands and Toyota did not agree on the  amount of loss she had incurred. Both sides presented evidence to  arbitrator Honest Abe Lawyer.  At the arbitration Dr. Quack testified explaining the severe injuries  she claimed she had detected in Toyota. Dr. Quack spoke at length about  the many modalities of treatment she provided to Toyota to make her  well. Good Hands produced George Wellness, M.D. who testified that  Toyota suffered “no injury.” Good Hands also brought to the Arbitration  Clever Expert, Ph.D. who stated an opinion that the collision was “de  minimis” and caused no actual damage to Toyota’s vehicle.  Good Hands presented its evidence to the arbitrator with trepidation. It  knew that arbitrators often attempt to reach Solomon-like decisions.  They often render awards that split the difference between the demand  and the offer.  Barry Zalma presents fictionalized True Crime Stories of Insurance Fraud  from an Expert who explains why Insurance Fraud is a “Heads I Win,  Tails You Lose” situation for Insurers.  The stories help to Understand How Insurance Fraud in America is Costing  Everyone who Buys Insurance Thousands of Dollars Every year and Why  Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators  than any Other Crime.  If the fraud succeeds the insurer must charge more premium to cover the  expense of defending the fraud and payment of funds to the fraud  perpetrator. If the fraud fails the insurer must charge more premium to  cover the expense of defending the fraud. Everyone, except the lawyers,  lose.   As you listen to the podcasts I hope they help you understand the effect that  insurance fraud has on the perpetrators, the insurers, the people who  need insurance, the people who buy insurance, and the people who keep  the promises made by insurance policies.Over the last 54 years Barry  Zalma has dedicated his life to insurance, insurance claims and the need  to defeat insurance fraud.  © 2022 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Largest Residential Burglary of All Time  https://zalma.com/blog  Within seven days of the delivery of his policy, a “burglary” was  reported. A total of $7,000,000.00 of specifically identified and  scheduled personal property was reported stolen. He claimed an  additional $2,000,000 in unscheduled diamonds were stolen from their  hiding place in one of his 50 suit coats hanging in the closet.  Faced with a $7 million fraudulent claim an insurer conducted a thorough  investigation only to fold when sued for bad faith.  Once an insurer gets a reputation for paying for fraudulent claims  rather than fighting with all of its assets those who perpetrate  fraudulent claims will gather like vultures over a rotting carcass ready  to pick the bones clean. The reverse is also true: when an insurer  makes it clear it will never pay a fraudulent claim, regardless of cost,  those who earn their living by fraud will stay away.  Barry Zalma presents fictionalized True Crime Stories of Insurance Fraud  from an Expert who explains why Insurance Fraud is a “Heads I Win,  Tails You Lose” situation for Insurers.  The stories help to Understand How Insurance Fraud in America is Costing  Everyone who Buys Insurance Thousands of Dollars Every year and Why  Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators  than any Other Crime.  If the fraud succeeds the insurer must charge more premium to cover the  expense of defending the fraud and payment of funds to the fraud  perpetrator. If the fraud fails the insurer must charge more premium to  cover the expense of defending the fraud. Everyone, except the lawyers,  lose.  As you watch the videos I hope they help you understand the effect that  insurance fraud has on the perpetrators, the insurers, the people who  need insurance, the people who buy insurance, and the people who keep  the promises made by insurance policies.Over the last 54 years Barry  Zalma has dedicated his life to insurance, insurance claims and the need  to defeat insurance fraud.  © 2022 – 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 practiced law in California for more than 44 years as an insurance  coverage and claims handling lawyer and more than 54 years in the  insurance business.  Subscribe to "Zalma on Insurance" at https://zalmaoninsurance.locals.com/subscribe and "Excellence in Claims Handling" at https://barryzalma.substack.com/welcome.   You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com,  [email protected] and [email protected] . Mr. Zalma is the first  recipient of the first annual Claims Magazine/ACE Legend Award.  You may find interesting the podcast "Zalma On Insurance" at https://anchor.fm/barry-zalma;  you can follow Mr. Zalma on Twitter at; you should  see Barry Zalma's videos on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A True Crime Video on How Not to Commit Arson   Barry Zalma presents fictionalized True Crime Stories of Insurance Fraud  from an Expert who explains why Insurance Fraud is a “Heads I Win,  Tails You Lose” situation for Insurers.   The stories help to Understand How Insurance Fraud in America is Costing  Everyone who Buys Insurance Thousands of Dollars Every year and Why  Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators  than any Other Crime.  If the fraud succeeds the insurer must charge more premium to cover the  expense of defending the fraud and payment of funds to the fraud  perpetrator. If the fraud fails the insurer must charge more premium to  cover the expense of defending the fraud. Everyone, except the lawyers,  lose.  As you watch the videos I hope they help you understand the effect that  insurance fraud has on the perpetrators, the insurers, the people who  need insurance, the people who buy insurance, and the people who keep  the promises made by insurance policies.Over the last 54 years Barry  Zalma has dedicated his life to insurance, insurance claims and the need  to defeat insurance fraud.   © 2022 – 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 media tor for insurance related disputes. He practiced law in California for  more than 44 years as an insurance coverage and claims handling lawyer  and more than 54 years in the insurance business.  Subscribe to "Zalma on Insurance" at https://zalmaoninsurance.locals.com/subscribe and "Excellence in Claims Handling" at https://barryzalma.substack.com/welcome. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Fictionalized True Crime Stories of Insurance Fraud from an Expert   https://zalma.com/blog Barry Zalma presents fictionalized True Crime Stories of Insurance Fraud  from an Expert who explains why Insurance Fraud is a “Heads I Win,  Tails You Lose” situation for Insurers.   The stories help to Understand How Insurance Fraud in America is Costing  Everyone who Buys Insurance Thousands of Dollars Every year and Why  Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators  than any Other Crime.  This book started as a collection of columns I wrote and published in  the magazines “Insurance Journal,” “Insurance Week,” and “The John Cooke  Insurance Fraud Report” insurance trade publications serving the  insurance community in the United States. Since the last edition I have  added more stories that were published in my twice monthly newsletter,  Zalma’s Insurance Fraud Letter which is available free to anyone who  clicks the links. The original title was “Heads I Win, Tails You Lose”  and was meant to describe insurance fraud as it works in the Unites  States. It means that whenever a person succeeds in perpetrating an  insurance fraud everyone who buys insurance is the loser. If the fraud  succeeds the insurer must charge more premium to cover the expense of  defending the fraud and payment of funds to the fraud perpetrator. If  the fraud fails the insurer must charge more premium to cover the  expense of defending the fraud. Everyone, except the lawyers, lose.As  you read the stories I hope they help you understand the effect that  insurance fraud has on the perpetrators, the insurers, the people who  need insurance, the people who buy insurance, and the people who keep  the promises made by insurance policies.Over the last 54 years Barry  Zalma has dedicated his life to insurance, insurance claims and the need  to defeat insurance fraud.   © 2022 – 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 media tor for insurance related disputes. He practiced law in California for  more than 44 years as an insurance coverage and claims handling lawyer  and more than 54 years in the insurance business.  Subscribe to "Zalma on Insurance" at https://zalmaoninsurance.locals.com/subscribe and "Excellence in Claims Handling" at https://barryzalma.substack.com/welcome.   You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com,  [email protected] and [email protected] . Mr. Zalma is the first  recipient of the first annual Claims Magazine/ACE Legend Award.  You may find interesting the podcast "Zalma On Insurance" at https://anchor.fm/barry-zalma;  you can follow Mr. Zalma on Twitter at; you should  see Barry Zalma's videos on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Liability Insurance & Construction Defects   https://zalma.com/blog Construction defects have grown into one of the most active areas of  litigation in the United States. This, the second edition of volume four of the eight volume series is  the newest addition to Barry Zalma’s insurance claims books that  thoroughly explain how to identify construction defects, how to insure,  investigate, prosecute, and defend cases that result from construction  defect claims. Written by nationally-renowned expert, Barry Zalma,  Construction Defects  & Insurance is designed to help property owners, developers,  builders, contractors, subcontractors, insurers, lenders, risk managers  and lawyers avoid construction litigation, confidently and rapidly  resolve claims associated with construction defect issues, or litigate  construction defect litigation.  Construction Defects & Insurance addresses a wide range of topics  associated with this escalating and expensive problem.  As you read  through the various volumes and pages, you will find comprehensive  insights into:  • The construction processes  • Risks to be managed  • What is required in an application for insurance protecting the  insured against the risks of loss anticipated from construction • How to acquire the correct and complete construction insurance • How insurers underwrite against construction defect claims • How insurers decide to insure/not insure • Confronting losses caused by construction defects • Litigation or alternative dispute resolution of construction defect  claims Barry Zalma, has more than 54 years’ practical experience in this area.  He is a highly sought after consultant and insurance claims handling  expert witness nationally and internationally.   In this eight volume treatise he has also provided checklists that walk  the reader through an analysis of construction defects, the process of  purchasing and later invoking construction defect insurance, and what is  necessary to prosecute or defend a construction defect lawsuit. The  books also include helpful sample forms to assist in the identification  of defects and numerous case studies to illustrate the state of  litigation.   Thorough, yet practical, this series of books form the ideal guide for  any professional who works in or frequently interacts with the  construction industry, construction defect insurance or the legal  practice.   Claims professionals, risk managers, producers, underwriters, attorneys  (both plaintiff and defense; both policyholder and insurer counsel), and  business owners will benefit greatly from the multiple volumes. It is  also the perfect resource for insurance educators, trainers, and  students whose role requires an understanding of construction defect law  and construction insurance law.   This, the fourth volume of Construction Defects & Insurance,  includes materials concerning Liability Insurance and covers the  following subjects: 1. Overview 2. What is Involved? 3. Liability Insurance 4. How To Shop for Insurance 5. A Resource for Victims of Fraudulent Insurance Applications 6. Duties of the Insured and Insurer 7. Other Insurance Clauses 8. Subrogation 9. Insurance Fraud 10. Checklist A – Liability Insurance 11. Appendix A Sample Request for Insurance Quotation Form 12. Appendix B Commercial General Liability Coverage Form 13. Appendix C Claims Made CGL --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL January 15, 2022 Volume 26, Issue 2   https://zalma.com/blog A ClaimSchool™ Publication © 2022, Barry Zalma & ClaimSchool, Inc.,  Go to my blog & Videos at: Zalma on Insurance, And at https://zalma.com/blog,  Go to the Insurance Claims Library, Listen to the Podcast: Zalma on  Insurance, Videos from Zalma on Insurance, Subscribe to Barry Zalma on  Substack.com, Subscribe to e-mail Version of ZIFL, it’s Free! Read last  two issues of ZIFL here. Go to the Barry Zalma, Inc. web site here,  Videos from “Barry Zalma on YouTube”  Go to Barry Zalma videos at  Rumble.com at https://rumble.com/zalma  Some Articles from the Current Issue Convicted Insurance Fraudster Loses Appeal  In The People of The State Of New York v. Kevin A. Ashby, No.  2021-07434, Supreme Court of New York, Fourth Department (December 23,  2021) after he was convicted, Kevin A. Ashby appealed the jury verdict  of insurance fraud in the third degree and attempted grand larceny in  the third degree.  Ashby contended that the indictment was jurisdictionally defective. The  failure of the first count of the indictment to recite all the elements  of the crime in full. However, the appellate court found that the  failure did not constitute a jurisdictional defect because that count  specifically referred to the applicable section of the Penal Law.  Although defendant further contended that each count of the indictment  was legally insufficient because the counts do not set forth sufficient  factual allegations, he failed to preserve his contention for the  court’s review.   Arrest Warrant Issued Fairly Defeats Malicious Prosecution Suit  Evidence Required to Support Malicious Prosecution Against Police Read the rest of the article at https://zalma.com/zalmas-insurance-fraud-letter-2/  A Proposal to Defeat Insurance Fraud  A Proposal that Every Insurer Should Establish a Corporate Position to Refuse to Pay a Fraud  See the full video of this proposal at https://rumble.com/vs8qes-how-to-defeat-insurance-fraud.html and at https://youtu.be/USCEdOuXs2A  Every first party property policy of insurance contains the following  language mandated by the statutory New York Standard Fire Policy. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Zalma's Insurance Fraud Letter Volume 26 Issue 1   https://zalma.com/blog The first issue of the twenty sixth year of publication is available as an Adobe .pdf document at  with this issue and the December 15, 2021  issues of ZIFL here. The issue includes the following articles but you  must go here  to read the full articles and the full 24 page issue of  Zalma's Insurance fraud Letter.   State Farm & Allstate Fight Fraudsters With Qui Tam Suits   It Is Essential That Insurers Are Proactive Against Insurance Fraud  Insurance companies are the victims of billions of dollars every year  from insurance fraudsters. They have found that states and police  agencies are either unable or unwilling to prosecute those who defraud  insurers. In The People ex rel. State Farm Mutual Automobile Insurance  Company v. Sonny Rubin et al., G059509, California Court of Appeals,  Fourth District, Third Division (December 14, 2021) State Farm has taken  proactive steps by filing qui tam suits based on the California  Insurance Fraud Protection Act (IFPA) that allows qui tam plaintiffs to  file lawsuits on the government's behalf and seek monetary penalties  against perpetrators of insurance fraud.  Insurance Fraud Perpetrators are Annoying People who commit insurance fraud believe that it is a crime without  punishment because no one is hurt except an insurance company. They are  wrong but refuse to accept the fact. As an example of how annoying an  insurance criminal can be is Steve Ellis Karacson v. David Shaver, No.  21-12100, United States District Court, E.D. Michigan, Southern Division  (November 23, 2021) who filed a pro se petition for writ of habeas  corpus. Steve Ellis Karacson, (“Petitioner”), pursuant to 28 U.S.C. §  2254, challenges his conviction for insurance fraud and arson of an  insured dwelling. Petitioner previously filed a petition for writ of  habeas corpus before Judge Matthew F. Leitman which challenged the same  conviction. The petition was held in abeyance while Petitioner exhausted  additional claims in the state courts [Karacson v. Shaver, No. 4:20-CV-13100  (E.D. Mich. May 27, 2021)]  Petitioner moved for Judge Leitman to reopen  that case, claiming that he has now exhausted his state court remedies.  Petitioner subsequently filed the instant petition, in which he again  seeks habeas relief from the conviction that he challenged in the active  petition before Judge Leitman.  ClaimSchool, Inc. – Insurance Education  Insurance Education from Barry Zalma    Barry Zalma Presents What Your Insurance Organization Needs. Mr. Zalma’s  presentations are practical, thought-provoking, entertaining and will  fit easily into any budget. Enthusiastically committed to  professionalism in insurance and insurance claims Mr. Zalma positively  influences other insurance professionals through the spoken and written  word.  Mr. Zalma specializes in clarifying the importance of insurance in a  modern society and in making insurance understandable. He also provides  everything needed by the insurance claims professional to complete the  thorough investigation of a property, casualty or liability claim  efficiently, equitably, empathetically and in good faith. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Economic Loss Doctrine, Peculiar Risk, Statutes of Limitation and  Repose, Contributory Negligence  Economic Loss Doctrine   https://zalma.com/blog “ The economic loss doctrine is a judicially created doctrine providing  that a commercial purchaser of a product cannot recover from a  manufacturer, under the tort theories of negligence or strict products  liability, damages that are solely ‘economic’ in nature.” It is a  defense to tort claims that arise in construction matters and, in all  claims, relating to property damage due to mold. Under the economic loss  doctrine, a plaintiff who suffers only financial injury (as opposed to  personal injury or emotional distress, or damage to real or personal  property) as a result of another’s actions cannot seek recovery in tort.  Instead, the plaintiff is limited only to recovery under a breach of  contract theory  The economic loss doctrine does not apply to claims for breach of  warranties under the Uniform Commercial Code by a buyer of an allegedly  defective product who has sustained only property damage.  In Kriegler v. Eichler Homes, Inc. 269 Cal.App.2d 224 (1969), the courts  fully examined the economic loss rule, and drew the line of demarcation  between an economic loss and physical injury to property, including to  the defective product itself. They allowed recovery of strict liability  damages in the latter instance. California’s cornerstone strict  liability construction case permitted recovery of strict liability  damages where defectively fabricated radiant heat tubes installed in the  substandard concrete slab of the plaintiff’s residence caused failure  of the heating system and entailed emergency and permanent repairs,  removal and storage of furniture, and the need for the plaintiff and his  family to find temporary replacement shelter.  Peculiar Risk  Under the peculiar risk doctrine, an innocent third party injured by an  independent contractor’s negligence could sue the contractor’s hirer  (the developer or the general contractor) so that the injured party did  not have to rely on the solvency of the contractor to be compensated for  injuries. In California, the workers’ compensation laws create an  exclusive remedy for an employee injured on the job and if such benefits  are available—even if the injured workers’ employer carried no workers’  compensation insurance—third party claims against the hirer of his  employer are barred. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining the Private Limitation of Action Provision of a First  Party Property Policy   HTTPS://ZALMA.COM/BLOG The phrase, “inception of the loss” in the standard fire insurance  policy has been interpreted to mean the occurrence of the casualty or  event insured against must, if a claim is denied, a suit must be filed  within one or two years of the date of the inception of the loss. The  law is clear that in most situations the limitation period will be  enforced.  The Sixth Circuit held that a one-year limitations period after the  inception of loss or damage in an insurance contract did not conflict  with Kentucky law and was reasonable. [Smith v. Allstate Ins. Co., 403  F.3d 401, 402-04 (6th Cir. 2005); Miller v. Seneca Specialty Ins. Co.  (W.D. Ky., 2019)]   The inception of loss means “the time when the loss was first incurred  or began to accrue.” [Tucker v. State Farm Mut. Auto Ins., 2002 UT 54,  ¶¶ 13-14, 53 P.3d 947].  In Oregon, the Supreme Court held that “[t]he loss occurs and has its  ‘inception’ whether or not the insured knows of it.” See also Zuckerman  v. Transamerica Ins. Co., supra, 133 Ariz. at 145 (“the phrase  ‘inception of the loss’ is not ambiguous and clearly denotes the time at  which the loss occurs”). Moore v. Mutual of Enumclaw Insurance Co., 317  Or. 235, 855 P. 2d 626 (Or. 07/29/1993).  An insured's suit on the policy will be deemed timely if it is filed  within one year after “inception of the loss,” defined as that point in  time when appreciable damage occurs and is or should be known to the  insured, such that a reasonable insured would be aware that his  notification duty under the policy has been triggered. “Once any damage  becomes reasonably apparent the time begins to run, even if the full  extent of the damage is unknown. The inception of the loss occurs when  the insured should have known that “Appreciable Damage” had occurred,  not when the homeowner learned the true extent of the damage.” (Doheny  Park Terrace Homeowners Assn., Inc. v. Truck Ins. Exchange 132  Cal.App.4th 1076, 34 Cal. Rptr. 3d 157 (2005) and Prudential-LMI Com.  Ins. v. Superior Court, 51 Cal. 3d 647, 798)  An insured's belated discovery of potential coverage is irrelevant to  the inception of loss date. [Abari v. State Farm Fire & Casualty Co.  205 Cal.App.3d 530, 535 Cal. Rptr. 565 (Ct. App. 1988)]  The limitations period is tolled in California from the time the insured  gives notice of the damage to the insurer until the insurer formally  denies coverage. “This has been construed to mean ‘unequivocal’ denial  in writing.” [Migliore v. Mid–Century Ins. Co. 97 Cal.App.4th 592, 118  Cal. Rptr. 2d 548 (2002)] “The reason for the tolling rule is to avoid  penalizing the insured for the time consumed by the insurer  investigating the claim, while preserving the ‘central idea of the  limitation provision that an insured will have only 12 months to  institute suit.’” [Marselis v. Allstate Ins. Co. 121 Cal.App.4th 122, 16  Cal. Rptr. 3d 668 (2004)] There is no requirement, however, that the  insurer take “firm, unmovable positions” [Liberty Transport, Inc. v.  Harry W. Gorst Co. 229 Cal.App.3d 417, 280 Cal. Rptr. 159 (Ct. App.  1991)] or use particular “magic” words, even the word “deny” to achieve  the requisite unconditional denial. © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Katrina Cases  https://zalma.com/blog The United States District Court for the Southern District of  Mississippi, Southern Division, entered an important decision with  regard to water damage and insurance policy coverages raised after  Hurricane Katrina.   In Leonard v. Nationwide Mutual Insurance Co., 499 F.3d 419 (5th Cir.  08/30/2007), the first of the Katrina cases to go to trial, the court  found that the Leonards’ residence was not covered by any policy of  flood insurance at the time of the storm. Flood insurance is available  to anyone, regardless of which flood zone their residence is situated  in, yet the plaintiffs did not purchase it; they purchased only a common  homeowner’s policy from Nationwide.  The evidence presented at trial conclusively established the following  points:  That on August 29, 2005, the entire area surrounding Pascagoula,  Mississippi, including the Leonard residence and its surrounding  neighborhood, was subjected to violent winds in excess of 100 miles per  hour. These winds increased gradually in the early morning hours and  reached a peak of intensity between 9:00 a.m. and noon. Water from the Mississippi Sound was driven ashore by the storm, and the  water level in the Leonard neighborhood rose to a peak level between  11:00 a.m. and noon. At its highest point, this water inundated the  Leonard residence to a depth of approximately five feet. The Leonard residence is approximately 12 feet above sea level.  This  property is 515 feet from the beachfront to the south. The inundation of the ground floor of the Leonards’ residence caused  extensive damage to their floors, carpets, walls, and personal property.  The second floor of the Leonards’ property was not damaged. The  physical damage to the roof of the Leonards’ property consisted of a  small number of broken shingles, and the watertight integrity of the  roof was not breached during the storm. The attached garage on the  Leonards’ property was also extensively damaged during the storm. The only wind damage on the ground floor of the Leonards’ residence was a  hole in one window that witnesses described as “golf-ball sized.” The  exterior of the Leonards’ home and the attached garage were soiled by a  combination of wind-driven materials and water-borne materials.  Based on the findings of fact established by evidence at trial, the  court concluded:   The provisions of the Nationwide policy that exclude coverage for  damages caused by water are valid and enforceable terms of the insurance  contract. Similar policy terms have been enforced with respect to  damage caused by high water associated with hurricanes in many reported  decisions. ZALMA OPINION  Whether a claims is for water damage, wind damage, or resulting mold  infestations as a result of water infestation it is important that the  insurer conduct a thorough investigation into the causes, determine  which are due to a covered peril and those which are clearly and  unambiguously excluded by the policy. The video discusses the types of  decisions that are rendered by the courts after a catastrophe like a  hurricane. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Structure, The Construction Contract, and Construction Defect  Insurance   HTTPS://zalma.com/blog Construction defects have grown into one of the most active areas of  litigation in the United States. This Second Edition of a multi-volume treatise is the newest addition to  Barry Zalma’s insurance claims books that thoroughly explain how to  identify construction defects, how to insure, investigate, prosecute,  and defend cases that result from construction defect claims. Written by nationally-renowned expert, Barry Zalma, Construction Defects  & Insurance Second Edition is designed to help property owners,  developers, builders, contractors, subcontractors, insurers, lenders,  risk managers and lawyers avoid construction litigation, confidently and  rapidly resolve claims associated with construction defect issues, or  litigate construction defect litigation. This publication is designed to provide accurate and authoritative  information in regard to the subject matter covered. It is sold with the  understanding that the publisher is not engaged in rendering legal,  accounting, or other professional service. If legal advice or other  expert assistance is required, the services of a competent professional  person should be sought.  This product may include information which is proprietary to Insurance  Services Office, Inc. ISO does not guarantee the accuracy or timeliness  of the ISO information provided. ISO shall not be liable for any loss or  damage of any kind and howsoever caused resulting from your use of the  ISO information.  This, the first volume of Construction Defects & Insurance Second  Edition, includes materials concerning: 1. Overview  2. The Structure,  3. The Construction Contract 4. Plans and Specifications 5. The Property Inspections 6. Construction Experts Used in Construction Defect Suits 7. Ethics in Construction 8. Commercial Leases 9. Appendix 1 – Sample State Contract 10. Appendix 2 – Sample Owners Association Contractor Rules and  Regulations 11. Checklist One – The Structure 12. Checklist Two – Plans and Specifications 13. Checklist Three – The Property Inspection 14. Checklist Four – The Construction Contract --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Misrepresentation or Concealment of a Material Fact   https://zalma.com/blog To constitute fraud, an insured must have concealed or misrepresented a  material fact with the intention of inducing an insurer to pay a claim  it would not, otherwise owe had it known the true facts. The facts that  are deemed to be “material” for purposes of denying a claim or voiding a  policy are not clearly defined and therefore each case must be  evaluated separately.  Generally, a fact is material to the application for insurance if it  might have influenced a reasonable insurer in deciding whether to accept  or reject the risk on the same terms and conditions.  Material facts  intentionally concealed or misrepresented with intent to mislead the  insurer that result in damage to the insurer are fraudulent. Fraud, at  the option of the insurer, allows the insurer to void the policy. A  misrepresentation after a loss as to a single material fact will forfeit  the entire insurance contract.  An insured cannot commit a “small” fraud any more than he can be just a  little dead. Once caught in a small fraud, the insured cannot demand  that he or she be paid the legitimate part of the claim and expect the  insurer to forgive the attempted fraud.  Determining the existence of a “misrepresentation” is not always  straightforward. In Suggs v. State Farm Fire and Casualty. Co., 833 F.2d  883 (10th Cir.1987), an initial investigation by an insurer and the  state fire marshal concluded that a residential fire was the result of  arson. The fire marshal further concluded that it was the insured who  set the fire. The insured was arrested and charged with arson.  With criminal charges pending, the insured hired experts who concluded  that the fire was probably caused by an electrical malfunction. Criminal  proceedings were then dismissed. Another expert retained by the insurer  later concluded that the fire was not of electrical origin, and the  insurer denied the insured’s fire damage claim on the ground that the  insured had intentionally set the fire. The insured responded by suing  for benefits under the policy, as well as for bad faith. A jury found in  favor of the insured on both causes of action. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining How Insurers Avoid Mold Litigation  https://zalma.com/blog  Insurance companies in most states have been permitted to exclude mold  coverage from new and existing policies. There are hundreds (perhaps  thousands) of pending cases against homeowner insurance carriers seeking  coverage for losses incurred as a result of mold contamination. In many  of these homeowner policies, damage “caused by” mold contamination is  expressly excluded from coverage. In the face of this exclusion,  homeowners often take the position that their claimed damages were not  “caused by” mold, but rather that the damage was caused by some form of  water intrusion which resulted in mold contamination, or some other  covered peril, and therefore the loss is covered. Insurers often contend  that the exclusion applies to any claimed damages concerning mold,  arguing either that the damage itself was caused by mold or some other  excluded cause or event.  State courts that have faced this issue cannot agree. Some have held  that the “caused by” exclusion applies to all mold damage, while other  courts have found an ambiguity in the exclusion.  Summary judgment for  either party is almost impossible because coverage decisions are  determined by the facts presented at trial.  The most recent ISO forms, which are used by many insurers in their  homeowner policies, contain the following exclusion regarding mold:  We will not pay for loss or damage caused directly or indirectly by  [mold]. Such loss or damage is excluded regardless of any other cause or  event that contributes concurrently or in any sequence to the loss. But  if [mold] results in a Covered Cause of Loss, we will pay for the loss  or damage caused by that Covered Cause of Loss.  Courts across the country have reached different conclusions regarding  its meaning and applicability. The video details some of the cases that  deal with mold exclusions and the ensuing loss clauses.    ZALMA OPINION   Insurers, by carefully writing their policies, have been able to avoid  most mold claims and the resulting litigation after the claim is denied.  Some decided to provide coverage for mold claims but set low limits of  liability while others drafted clear and unambiguous exclusions. Those  insurers have avoided some litigation while most have found the new  exclusions or limitations of liability to allow the insurer to  successfully defend the suits.   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Types of Warranties in Insurance Policies   HTTPS://ZALMA.COM/BLOG Express Warranty  Express warranties relate to the present or past existence of particular  facts relating to the risk upon the truth of which, the validity of the  contract depends. [California Insurance Code § 440.]   A statement of fact becomes an express warranty when the insurer and the  insured comply with California Insurance Code section 443. Section 443  provides:  Every express warranty made at or before the execution of a policy shall  be contained in the policy itself, or in another instrument signed by  the insured and referred to in the policy, as making a part of it. The violation of an express warranty will void a policy in its entirety.  [ See Aguirre v. Citizens Cas. Co. of N.Y., 441 F.2d 141 (5th Cir.  1971); Saskatchewan Gov’t Ins. Office v. Spot Pack, Inc., 242 F.2d 385,  388 (5th Cir.1957).] In the British case, A C Ward & Sons Ltd v.  Catlin (Five) Ltd & Ors [2009] Commercial Court, the insurers  attempted to avoid coverage on the failure of an alarm system, warranted  by the insured to work. The court concluded that the warranty was not  limited to the particular “protections” specified in the proposal form,  nor was the Alarm Warranty confined to such alarm systems as might have  been identified in the schedule.  As a matter of commercial common sense, the warranties referred to  whatever protections or alarms actually existed, whether identified in  the policy documentation or not. As to knowledge, the court adopted the  view that a breach of warranty could occur only in the event of a defect  of which the insured was, or should reasonably have been, aware, and  which it had then failed to remedy promptly. However, even though the  alarm warranty was not effective the insured also promised that theft  coverage for cigarettes & tobacco in a warehouse was not operative  outside of business hours unless the stock was kept within the special  secure store on the ground floor. Since they were not on the first floor  the insured was not allowed to recover. Affirmative Warranty  An affirmative warranty asserts an existing fact or condition which  appears on the face of the policy or “is attached thereto and made a  part thereof.” It is limited in time to the moment of the application. ZALMA OPINION   Fulfillment of insurance warranties by those insured or by the insurer  are important to every insurance claim investigation. It is important  that every claims person or insurance coverage lawyer understand the  effect of warranties and establish that every warranty made was  fulfilled at the time of inception or at the time of the loss. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL - Volume 25, Number 23   The full .pdf version is available here.    Admitted Crop Insurance Fraud Perpetrator Tries to ZIFL-12-01-2021 Limit  Restitution Crooked Farmer Goes to Jail and Must Pay $2.5 Million in Restitution  Defendant Ronnie Jolly pleaded guilty to crop insurance fraud, money  laundering, and conspiring to defraud the United States and to commit  mail or wire fraud. The Government sought restitution of monies paid by  the crop insurance program and Jolly moved to avoid or limit the orders  of restitution.   In United States of America v. Ronnie Jolly, CRIMINAL No. 5:18-32-KKC,  United States District Court, E.D. Kentucky, Central Division, Lexington  (November 1, 2021) the court dealt with the restitution order.   ZIFL OPINION  Insurance criminals have no shame. After admitting the extensive nature  of his fraud Jolly had the unmitigated gall to try to limit, or  eliminate, the restitution ordered. He succeeded in limiting what was to  be paid to the private insurer to only indemnity payments and failed on  his obligation to repay the crop insurance program he admittedly  defrauded. The government should take all of Jolly’s assets up to the  amount he stole and he should be required to spend all of the time  ordered in the grey-bar-hotel.   Pyrrhic Victory – Partial Win Makes Conviction for Insurance Fraud  Easier Since Insurance Fraud is a Felony Charging Misdemeanors Wasteful Following a preliminary hearing, Sanjoy Banerjee, a physician, was  charged with two counts of presenting a false or fraudulent health care  claim to an insurer, a form of insurance fraud and three counts of  perjury. The superior court denied Banerjee’s motion to dismiss the  information as unsupported by reasonable or probable cause and he sought  a writ of prohibition to eliminate the charges. In Sanjoy Banerjee v.  The Superior Court of Riverside County, The People, Real Party in  Interest, E076291, California Court of Appeals, Fourth District, Second  Division (October 5, 2021) the Court of Appeals prohibited the perjury  counts and allowed the insurance fraud charges to go forward.  INTRODUCTION  ZIFL OPINION  The crime of insurance fraud is a simple, direct, crime to prove. If a  fraudulent bill is sent to an insurance company the crime may be proved.  Since the evidence showed that by using the two additional entities  Banerjee was able to bill $9,000 more than if he billed it directly can  cause a jury to conclude he issued the bills with the intent to defraud  the insurer. The Court of Appeal, by eliminating the perjury charges  made the case simple, clean and direct instead of complicating the trial  with difficult to prove and less than clear statutes. Banerjee  succeeded partially, and in so doing, made it easier for the state to  convict him of insurance fraud. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Notice Prejudice Rule & Voluntary Payments   The Colorado Supreme Court refused to apply the notice-prejudice rule to  a policy provision prohibiting the insured from making voluntary  payments on, or settling, a claim without the insurer’s consent. The  court reasoned that “the no-voluntary-payments clause of the contract at  issue here actually goes to the scope of the policy’s coverage."   “The policies at issue also contain a voluntary payments clause, which  provides that the insured will not incur any expense without prior  approval except at his own cost. Indiana law provides that an insurer is  not liable when an insured breaches a voluntary payment clause by not  obtaining the insurer’s consent prior to incurring the expense."   On the other hand, the North Carolina Court of Appeals requires a  material prejudice requirement to insurance disputes concerning the  voluntary payments clause in a liability policy.  A school system made a  $49,200 claim against the insured roofing contractor for water damage  to school property in the building. The insured allegedly agreed with  the school system to be responsible for payment of the water damage  claim prior to the insurer’s decision on the claim. At some point the  insurer denied coverage for the claim. The insured filed a declaratory  judgment action to determine whether the claim was covered.  Where the insured has breached the voluntary payments clause of the  policy but the insurer has not demonstrated that the insured’s actions  prevented the insurer from investigating or litigating a claim, summary  judgment for the insurer must be denied. In reaching its decision the  court said:   [W]e conclude an insurer must show prejudice where the insured has  breached the voluntary payments clause of the parties’ insurance  contract. Defendant has not demonstrated that plaintiff’s actions  prevented defendant from investigating or litigating the claim.  Insurers must, even when they have evidence that establishes that an  insured has breached a material condition of the policy, also collect  evidence that establishes that the breach prejudiced the rights of the  insurer in those states requiring a showing of prejudice.   ZALMA OPINION   Conditions are an important part of every insurance contract. Conditions  like the Voluntary Payments Condition, the prompt reporting condition,  and the proof of loss condition will void coverage in most states. In  some states the courts will apply the notice prejudice rule so it is  important, before making a decision on a breach of a material condition,  it is prudent to seek the advice of a competent insurance coverage  lawyer in the state where the loss occurred, before making a decision on  the claim and if the loss is in a state that applies the notice  prejudice rule, whether there was actual prejudice as a result of the  breach.  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining Direct & Circumstantial Evidence and The Proof Required  To properly prepare a case for trial an adjuster or SIU investigator  must understand evidence and that evidence is broken into two major  categories: direct and circumstantial.  Direct Evidence  Direct evidence is proof that tends to show existence of a fact in  question without the intervention of the proof of any fact.  It includes  testimony that tends to prove or disprove a fact in issue directly,  such as eye-witness testimony or a confession.  Sometimes, direct evidence may not exist because records have been  destroyed in a fire, destroyed by water, stolen, discarded, or eaten by  vermin.  As important as direct evidence is to the proof of fraud or attempted  fraud, courts have noted that it can be difficult to obtain direct  evidence of something so internal as intent to commit fraud. [United  States v. Washington, 715 F.3d 975, 980 (6th Cir. 2013)]. Jurors are  therefore free to consider circumstantial evidence and draw reasonable  inferences from it.  In United States v. Hawkins (6th Cir., 2019)  circumstantial evidence was sufficient to allow a jury to convict.  Courts are often called upon to rule what direct evidence may be  admitted. In one case the Government was allowed to introduce tax  evidence, the asset transfer evidence and the 'salacious acts' evidence  as direct evidence to prove a crime. In addition, the Government was  allowed to introduce, under Rule 404(b), evidence concerning Mr. Brooks'  alleged insurance fraud and the stock purchases by Mr. Brooks' family  members. [United States v. Hatfield, 685 F.Supp.2d 320 (E.D. N.Y. 2010)] However, adjusters, like the  prosecutor in the Hicks case, should be leery of such “confessions” as  they may often be fabricated.  An insured should never be accused of  fraud based on an accused felon’s statement unless independent, innocent  witnesses corroborate the felon’s charges.  "Clear and Convincing” Standard of Evidence   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining How to Acquire a Policy of Insurance   The person buying insurance may only acquire insurance from an insurer  by one of three methods:   By Meeting With An Agent of The Insurer   The agent is a person appointed by the insurer to transact insurance  business with and on behalf of the insurer. The agent usually has the  right to bind insurance in the name of the insurer without first  obtaining permission from the insurer. The prospective insured presents  his or her needs to the agent who will either accept or reject the  proposed insurance. If accepted, the prospective insured is immediately  an insured of the insurer.  California Insurance Code Section 31 defines insurance agent as  “Insurance agent” means a person authorized, by and on behalf of an  insurer, to transact all classes of insurance other than life,  disability, or health insurance, on behalf of an admitted insurance  company.”  By Dealing With A Broker   An insurance broker is a person who transacts insurance with, but not on  behalf of, an insurer. The broker’s only duty is to the prospective  insured, so he or she shops for the broadest coverage available at the  lowest possible price. The broker cannot bind an insurer without first  obtaining a commitment in writing to insure the potential insured.  California Insurance Code Section 33 defines the term as follows:  “’Insurance broker’ means a person who, for compensation and on behalf  of another person, transacts insurance other than life, disability, or  health with, but not on behalf of, an insurer.”   Through A Direct Writer.  Some insurers, known as direct writers, refuse to deal with agents or  brokers. They will accept proposals for insurance directly from a  prospective insured who will speak—usually by telephone—with an employee  of the insurer who has the authority to accept a particular risk. ZALMA OPINION The key to analyzing every claim presented to an insurer requires an  analysis of the acquisition of the insurance policy, the representations  made by the insurer to obtain the policy and the insurance that was  agreed to by the insurer.  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

I am Thankful My family and I have much to be thankful for this year, not the least of  which are the care provided by our cardiologist who cares for me and my  wife, Thea. I am personally in good health, walking four to five miles a  day, and in retirement working only six to eight hours a day doing what  I love the most, writing about insurance, insurance claims, insurance  law and acting as an insurance claims consultant and expert witness.   To me, I am thankful for you, my friends, clients and readers of  “Zalma’s Insurance Fraud Letter,” my blog “Zalma on Insurance,” and my  books and other writing including the new Third Edition of the ten  volumes of my treatise, “Zalma on Insurance Claims.”  As a first generation American I am honored to join with all Americans  the ability to celebrate Thanksgiving that started when the United  States was a dream and just a colony of Great Britain to give thanks for  the good things in life at least once a year. It took Abraham Lincoln,  our greatest President to make it an official holiday. The Thanksgiving  holiday gives me and my family the opportunity to consider the blessings  my family and I have received and to thank all who have made it  possible.  Please allow me this opportunity to explain to you all the things I, and  my family, can give thanks for:  1. I have loved my wife of 54 years since we first met when she was nine  and I was twelve. 2. I am thankful that she still loves me and lets me make clear every  day that I love her more now than I did when she ignored me when I was  12. 3. My three adult children who are successes in their own right. 4. That my three children, my almost five-year-old granddaughter live  nearby, put up with my wife and I, and are healthy, successful, and  mostly happy in what they do. 5. That my grandson is now a successful college student at Puget Sound  University in Washington state. 6. My clients who, for the more than 54 years have allowed me to earn a  living doing what I love: practicing law until I let my license go  inactive, acting as a consultant, testifying as an expert witness and  writing materials to help others provide excellence in claims services  as members of the insurance profession. 7. My publishers the American Bar Association, Full Court Press,  Fastcase.com, Thomson Reuters and Amazon.com. 8. My dearly departed parents and grandparents for having the good sense  to leave the Ottoman Empire at the beginning of the 20th Century so we  could avoid the Holocaust and I could be born American. 9. My country for giving me a place to live and work in peace and  complain about it without fear. 10. The state of California, where I was born, and have lived for 79  years, for allowing me to have my home and grow my family, and the  ability to pay the high taxes for the privilege. 11. Those of you who read what I write and gain something from it. 12. Seventy nine years of mostly good health, but for a small heart  attack and clogged arteries, that gave me the ability to continue to  work – albeit at a reduced rate. 13. Allowing me the health and ambition to avoid my cardiologist by  walking every day and working on my garden and bonsai. 14. The hundreds of friends I have never met but with whom the Internet  has allowed me to communicate in parts of the world I have never  visited. 15. The wonder of the Internet that allows me to publish E-books, ZIFL  and my blog instantly on line. 16. That my family can get together to express our thanks for each other  and our happiness this year again without a need for anything but  enjoying each other’s company. 17. That most of you who I know only by my publications can also gather  with your families to express your thanks. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Lie to an Insurer and Lose Everything  https://zalma.com/blog False swearing is a special category of misrepresentation or concealment  because it is made under oath.  In criminal law, false swearing is  called perjury.  If there was any false swearing as to the property that was the subject  of the insurance, it vitiated that policy; if there was false swearing  as to the meat and corn, it vitiated the policy taken out upon those  articles.  The instruction, in effect, told the jury, that if they  believed there was false swearing with respect to the meat and corn, the  result would be to vitiate policy and that the plaintiff would not be  entitled to recover the policy benefits. [Williams v. Va. State Ins. Co,  55 S.E. 680, 106 Va. 259 (1906)]  In order for a "false swearing" to void an insurance policy, the false  swearing must have been willful, made with respect to a material matter,  and made with the intent to deceive the insurer. [Gould v. M.F.A.  Mutual Insurance Company, 331 S.W.2d 663, 669 (Mo.App.1960); Joiner v.  Auto-Owners Mut. Ins. Co., 891 S.W.2d 479 (Mo. App. 1994)]  Where an insurance policy provides that an insured's concealment,  misrepresentation, fraud, or false swearing voids the policy, the  insured must have actually intended to defraud the insurer. [West v.  Farm Bureau Mutual Insurance Co. of Michigan, 402 Mich. 67, 259 N.W.2d  556 (1977)]   Under Michigan law, fraud must be proved by clear and convincing  evidence, [Disner v. Westinghouse Electric Corp., 726 F.2d 1106, 1109-11  (6th Cir. 1984)], even when raised as an affirmative defense.  Therefore, under Michigan law, the insured's intent in making a  misrepresentation in a proof of loss is a material fact because it is a  falsely sworn statement. [Madkins v. State Farm Fire & Cas. (E.D.  Mich., 2019)]  Mississippi has a different understanding when there is more than one  part to an insurance policy. A policy insuring various items and fixing  the amount of insurance to be paid on each, is separable, although the  premium is fixed as an entirety; and that because the policy is void as  to one item, that fact does not render it unenforceable as to the  others. [Darden v. Liverpool & London & Globe Ins. Co., 109  Miss. 501, 68 So. 485; Scottish Union & National Ins. Co. v. Warren  Gee Lumber Co., 118 Miss. 740, 80 So. 9, 12, and National Union Fire  Ins. Co. v. Provine, 148 Miss. 659, 114 So. 730.]  On the other hand, in Michigan, even when viewed in a light most  favorable to plaintiff, the evidence presented the trial court  established that plaintiff's claims for no-fault benefits were based  upon fraud and false swearing. Reasonable minds could not differ that  plaintiff engaged in fraud for the purpose of recovering no-fault  benefits.  Because she did so, Farm Bureau had the contractual right to  void the policy and deny her no-fault benefits. [Parker v. Farm Bureau  Gen. Ins. Co. (Mich. App., 2019)] --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining An SIU Profit Center   The False Claims Act, also known as the “Lincoln Law,” dates back to the  Civil War. President Lincoln signed the act into law in 1863 because  war profiteers were selling the Union Army shoddy supplies at inflated  prices. The original law included qui tam provisions that allowed a  private person (plaintiff) to sue those who defrauded the federal  government. If the suit was successful the plaintiff would receive 50%  of any recovery from the defendant.  “Qui tam” is an abbreviation of the Latin phrase “qui tam pro domino  rege quam pro si ipso in hac parte sequitur” meaning “Who sues on behalf  of the King as well as for himself.”   There are a number of  pronunciations of the Latin abbreviation qui tam.  The simplest is key  tam (rhymes with “ham.”) Black’s Law Dictionary suggests kweye (rhymes  with “eye”) tam.  The False Claims Act makes it unlawful to knowingly (1) present or cause  to be presented to the United States a false or fraudulent claim for  payment or approval, 31 U.S.C. § 3729(a)(1) (2006); (2) make or use a  false record or statement material to a false or fraudulent claim, §  3729(a)(1)(B); or (3) use a false record or statement to conceal or  decrease an obligation to pay money to the United States, § 3729(a)(7)  (2006). Under the Act, private individuals ..., referred to as  “relators,” may file civil actions known as qui tam actions on behalf of  the United States to recover money that the government paid as a result  of conduct forbidden under the Act. Glaser v. Wound Care Consultants,  Inc., 570 F.3d 907, 912 (7th Cir. 2009). As an incentive to bring suit, a  prevailing relator may collect a substantial percentage of any funds  recovered for the benefit of the government.  To establish civil  liability under the False Claims Act, a relator generally must prove (1)  that the defendant made a statement in order to receive money from the  government; (2) that the statement was false; and (3) that the defendant  knew the statement was false. E.g., United States Ex Rel. Gross v. Aids  Research Alliance–Chicago, 415 F.3d 601, 604 (7th Cir. 2005); USA and  the State of Wisconsin v ACACIA Mental Health Clinic, USCA, 2016 WL  4555648 (2016).   © 2021 – Barry Zalma   Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Lawyer Lies on Application for Malpractice Insurance - Policy Rescinded   Travelers issued a Lawyers Professional Liability Insurance Policy to  Grimmer, Davis, Revelli & Ballif (“Grimmer Davis”). Grimmer Davis is  a law firm with its principal place of business in Lehi, Utah. Matthew  Grimmer was the sole shareholder of Grimmer Davis and had general  managing and governing responsibilities at the firm. Grimmer is a  licensed attorney with knowledge of the rules of professional conduct.  Jacob Davis was an employee of Grimmer Davis. Davis is also an attorney  with knowledge of the rules of professional conduct. Defendant Grimmer  and Associates, P.C. (“G&A”) is a law firm with its principal place  of business in Lehi, Utah. G&A is located in the same office as  Grimmer Davis. Grimmer is the sole shareholder of G&A, and Davis was  also employed at G&A.  Grimmer made false statements in the  application and in Travelers Casualty And Surety Company Of America v.  Grimmer Davis Revelli & Ballif, P.C., et al., No. 2:19-cv-597-DAK-JCB, United States District Court, D. Utah (November 10, 2021) Travelers sought to rescind the policy.   BACKGROUND Georgia Noel Inman and her twin brother Walker Patterson Inman III  (“Patterson”) were clients or former clients of G&A and its  attorneys. Patterson was also a client or former client of Grimmer Davis  and its attorneys. Georgia and Patterson's father died when they were  twelve years old. Their stepmother served as their deceased father's  personal representative and successor trustee. However, there were  allegations that she was pilfering or hiding assets from the estate. In  2013, Grimmer and G&A began representing Georgia and Patterson in  the probate dispute with their stepmother in an action in Wyoming.  On June 27, 2018, Georgia filed a motion to disqualify the firm Grimmer  Davis and the individual attorneys Grimmer and Davis from representing  Patterson in the consolidated trust cases pending in Wyoming, citing  various conflicts of interest and breaches of professional duties  against Grimmer, Davis, G&A and Grimmer Davis (“Grimmer Parties”).  In this disqualification motion, Georgia asserted that the Grimmer  Parties advocated for positions that favored Patterson and were adverse  to her interests. The motion states that “Georgia potentially has claims  against parties and lawyers in this litigation” and “Georgia now has  viable claims, which she will be bringing to undo both the Greenfield  Plantation sale and the assignment of claims”-two transactions involving  Georgia, Patterson, and Grimmer. ZALMA OPINION   A lawyer should know that insurance is a contract of utmost good faith  where neither party may do anything to deprive the other of the benefits  of the contract. In this case, a lawyer not only failed to act in good  faith when applying for malpractice insurance, he acted badly by  misrepresenting to the insurer that he knew of no potential action  against him or his firms when, in fact, he had been so advised by  Georgia and her counsel and by orders of two different courts.  Rescission was the only appropriate action available to the Travelers. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining How Mold Claims Became Popular  https://zalma.com/blog The fear of mold claims was engendered in the insurance industry by the  trial court decision in Ballard v. Fire Insurance Exchange, No. 99-05232  (Texas District Court, Travis County, June 1, 2001), cited in Jury  Awards: $32 Million to Texas Homeowner in Mold Coverage Action, 6, No.  12, Mealey’s Emerging Insurance Disputes 11 (June 20, 2001 and “What  Coverage Attorneys Need to Know About Mold,” Tort and Insurance Practice  Law Journal, Fall 2002 (38:1), at page 45). The fear was mostly  misplaced.  The verdict was the result of poor claims handling. Almost  the entire $32 million verdict was punitive damages that did not  withstand appellate review.  The Texas Court of Appeals, Third District, at Austin, reversed much of  the trial court’s opinion in Ronald Allison/Fire Insurance Exchange v.  Fire Insurance Exchange, A Member of the Farmers Insurance Group/Mary  Melinda Ballard and Ronald Allison, et. al, 98 S.W.3d 227 (2002), and  explained the factual background that resulted in an improper and  excessive judgment against the Fire Insurance Exchange (FIE). The Court  of Appeals describe the evidence presented at trial in detail necessary  to the understanding of the decision.     Although the Ballard Allison trial verdict was touted as a “mold” case,  it was, in fact, a claims-handling case. The jury was offended by the  admission that the adjuster, McConnell, lied to the insured and decided  to punish them with excessive punitive damages.   In order to avoid an insurance claim as complex as this one, the FIE  should have followed proper claims-handling protocol. The lawsuit, and  the results of the lawsuit, could have been avoided if it followed good  faith claims handling and if the claims adjuster did not testify that  she lied to the insured. [For a complete discussion of insurance claims  handing, see Zalma on Insurance Claims or the Compact Book of Adjusting  Property Claims or The Compact Book of Adjusting Liability Claims   available as paperbacks or Kindle books at http://zalma.com/blog/insurance-claims-library/]  If the Ballard claim was presented after the decision in Fiess v. State  Farm Lloyds, supra there would have been no coverage for any of her  claims except the direct damage caused by water and no basis for her  allegations of bad faith.   The US Centers For Disease Control (CDC) in response to an inquiry from  the public concerning the hazards of toxic mold said:  The term “toxic mold” is not accurate. While certain molds are  toxigenic, meaning they can produce toxins (specifically mycotoxins),  the molds themselves are not toxic, or poisonous. Hazards presented by  molds that may produce mycotoxins should be considered the same as other  common molds which can grow in your house. There is always a little  mold everywhere - in the air and on many surfaces. There are very few  reports that toxigenic molds found inside homes can cause unique or rare  health conditions such as pulmonary hemorrhage or memory loss. These  case reports are rare, and a causal link between the presence of the  toxigenic mold and these conditions has not been proven. [  www.cdc.gov/mold/stachy.htm#Q1 .]   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining the Union or Standard Mortgage Clause   https://zalma.com/blog Since properties are frequently encumbered by mortgages, most first  party property policies contain provisions that protect the mortgagee’s  interest in the event the insured property is damaged or destroyed.  Historically there have been two types of mortgage clauses:  a loss payable or open mortgage clause, which only provides that loss  shall be payable to the mortgagee as interest may appear. Most courts  have construed the phrase, “as interest may appear” as referring not to  the mortgagee’s interest in the insured property, but rather to the  amount of debt owed to it secured by the mortgage or deed of trust. the standard or union mortgage clause (Form 438 BFU NS), which states,  in addition to the loss payable provision, that the mortgagee’s interest  in the proceeds of the policy shall not be invalidated by any act or  neglect of the mortgagor.  Where an insurer issues a policy knowing that the property is subject to  a mortgage, and in fact the policy itself contains a standard mortgage  clause extending coverage to mortgage holders, there is no added risk.   At the time the policy was issued, it was foreseeable that a mortgagee  could take possession and control of the property in the event of  default.  The union mortgage clause in an insurance policy creates a separate  contract between the mortgagee and the insurer. [Vargas v. Nautilus Ins.  Co., 248 Kan. 881, 887, 811 P.2d 868 (1991); see also Neises v. Solomon  State Bank, 236 Kan. 767, 778, 696 P.2d 372 (1985); Iron Horse Auto v.  Lititz Mut. Ins. Co., 156 P.3d 1221, 283 Kan. 834 (Kan. 2007)  A standard mortgage clause creates an independent contract between the  insurer and the mortgagee that prevents the mortgagee's interest from  being invalidated by the conduct of the mortgagor. [Allen, 167 Minn. at  149–50, 208 N.W. at 817–18 (quoting Syndicate Ins. Co. v. Bohn, 65 F.  165, 178 (8th Cir.1894)); Magoun v. Fireman's Fund Ins. Co., 86 Minn.  486, 490, 91 N.W. 5, 7 (Minn. 1902).]  ZALMA OPINION  Every first party property adjuster must understand the effect a  standard mortgage clause has on claims handling and that, even if it is  proved that the insured intentionally committed the crime of  arson-for-profit and burned down his house the mortgagee may still  recover from the insurer up to its security interest.   © 2021 – Barry Zalma   Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders.  He also serves as an arbitrator or mediator for insurance related  disputes. He practiced law in California for more than 44 years as an  insurance coverage and claims handling lawyer and more than 54 years in  the insurance business.  Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.  He is available at http://www.zalma.com and [email protected]. Mr. Zalma  is the first recipient of the first annual Claims Magazine/ACE Legend  Award. Over the last 53 years Barry Zalma has dedicated his life to  insurance, insurance claims and the need to defeat insurance fraud. He  has created the following library of books and other materials to make  it possible for insurers and their claims staff to become insurance  claims professionals. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Every Professional Claims Person Must Understand Insurance  The excellence in claims handling program requires thorough training  providing each member of the claims staff with a minimum of the  following educational programs:   1 How to read and understand the contract of insurance that is the basis  of every adjustment, including but not limited to:  2 The formation of the insurance policy.  3 The rules of interpretation.  4 Apply the facts learned in a claims investigation to the wording of  the policy.  In addition State insurance departments across the country are  attempting to micromanage the business of insurance with various  statutes and regulations. Failure to comply with the continuing  education requirements can be used as evidence of an insurer’s failure  to require its employees to comply with the covenant of good faith and  fair dealing. Insurers should not only ensure that their training  programs conform to those required by the relevant states, but also that  the claims staff consistently apply excellence in claims handling  training in compliance with the requirements of the Regulations.   © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders.  He also serves as an arbitrator or mediator for insurance related  disputes. He practiced law in California for more than 44 years as an  insurance coverage and claims handling lawyer and more than 54 years in  the insurance business.  Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.   He is available at http://www.zalma.com and [email protected]. Mr. Zalma  is the first recipient of the first annual Claims Magazine/ACE Legend  Award. Over the last 53 years Barry Zalma has dedicated his life to  insurance, insurance claims and the need to defeat insurance fraud. He  has created the following library of books and other materials to make  it possible for insurers and their claims staff to become insurance  claims professionals.  Go to training available at https://claimschool.com; articles at https://zalma.substack.com,  the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at https://www.rumble.com/zalma ; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/  The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining the Need For Professional Claims Handlers    In search of profit, insurers have decimated their professional claims  staff. They laid off experienced personnel and replaced them with young,  untrained, unprepared people. A virtual clerk replaced the old  professional claims handler.  Process and computers replaced hands-on human skill and judgment. Money  was saved on the expense side of the business by paying lower salaries.  Within three months of firing the experienced claims people gross profit  increased. The accountants were happy. The quarterly profits increased.  None of the happy people were insurance professionals. None of them  understood how a professional claims adjuster saves the insurer by  establishing a fair amount of loss, avoiding payment for items not lost  or overvalued, and by avoiding losses for which no coverage was provided  by the policy.  The promises made by an insurance policy are kept by the professional  claims person. Keeping a professional claims staff dedicated to  excellence in claims handling is cost-effective over long periods of  time. A professional and experienced adjuster will save the insurer  millions by resolving disputes, paying claims owed promptly and fairly,  and by so doing avoiding litigation and claims of breach of contract and  breach of the covenant of good faith and fair dealing.  The professional claims person is an important part of the insurer’s  defense against litigation by insureds against insurers for breach of  contract and the tort of bad faith. Claims professionals resolve more  claims for less money without the need for either party to involve  counsel. A happy claimant satisfied with the results of his or her claim  will never sue the insurer.  Incompetent or inadequate claims personnel force insureds and claimants  to public insurance adjusters and lawyers. Every study performed on  claims establishes that claims with an insured or claimant represented  by counsel cost the insurer more than those where counsel is not  involved.  Prompt, effective, professional claims handling saves money for both the  insured and the insurer and fulfills the promises made when the insurer  sold the policy.  Insurers who believe they can handle first or third party claims with  young, inexpensive, inexperienced and untrained claims handlers should  be accosted by angry stockholders whose dividends have plummeted, or  will plummet, as a result. When an insurer compromises on claims staff,  profits, thin as they may have been previously, will move rapidly into  negative territory. Tort and punitive damages will deplete reserves.  Insurers will quickly question why they are writing insurance. Those who  stay in the business of insurance will either adopt a program requiring  excellence in claims handling from every member of their claims staff,  or they will fail.  ZALMA OPINION   The claims department of an insurance company is the key to a successful  insurance business. Every insurance policy makes promises to the  insured to indemnify and or defend the insured or to pay to repair or  replace real or personal property destroyed by a peril insured against.  It is the claims personnel who fulfill the promises made by the insurer  when the policy was sold. A claims department that provides excellence  in claims handling satisfy those insured and causes those insured to  tell their friends, neighbors and relatives about the quality of the  insurer and thereby increase the sales and profits of the insurer. An  Excellence in Claims Handling program written, produced and published by  me for ClaimSchool, Inc. is available for license.   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Description of Zalma’s Insurance Fraud Letter    https://zalma.com/blog Volume 25 Number 21 The Reason for the Examination Under Oath  Courts that construe submission to an EUO as a condition precedent to  recovery generally do not require the insurer to prove that it suffered  actual prejudice from an insured's unexcused refusal to submit to an  examination. Lorenzo–Martinez v. Safety Ins. Co., 58 Mass. App. Ct. 359,  790 N.E.2d 692, 695–96 (2003).  The EUO provides a mechanism for the  insurer to corroborate the claim by obtaining information that is  primarily or exclusively within the possession of the insured.  The adjuster, the independent adjuster, the Special Investigation Unit  (“SIU”) investigator, the independent insurance adjuster and, in complex  cases, the attorney retained to represent the insurer questions the  person interviewed in a manner similar to a deposition in a legal  proceeding. Because of the formality of the proceeding — it includes an  oath, and the presence of a certified shorthand reporter — the task of  establishing rapport with the person interviewed so that relevant  information may be obtained from the insured is more difficult than in  an informal interview. Unlike legal proceedings where questions are  limited to those seeking a “yes” or “no” or brief answer the EUO seeks  narrative responses from the person questioned.   The person taking the EUO, therefore, must be capable of transitioning  from lawyer like questions in litigation to the broad, inquisitive,  narrative seeking questioning. An EUO should never be conducted as if it  is an adversarial activity but merely a fact seeking activity that is  directed to the needs of an insurance policy and the need to prove a  loss is either compensable or not.  Because the EUO is a tool for gleaning the maximum amount of information  the EUO is an effective weapon against insurance fraud. This is because  the person taking the EUO is knowledgeable about insurance and  insurance law while the person being questioned is only aware of the  claim presented and the fraud he or she may be attempting.  Often, however, the purpose of the EUO is not to stop fraud but to allow  an insured the opportunity to prove his or her claim of loss in cases  where evidence has been destroyed by a casualty or is otherwise  unavailable.   New California Mandatory Fraud Warning  Insurers in California should note the requirement to update the  mandatory anti-fraud warnings on documents based on the recent signing  into law of AB1511.  This bill makes application fraud a specific crime in the state.   Georgia To Pay $870,000 To Whistleblowers Fired by Beck Who Pays for False Claims Act Actions? Health Insurance Fraud Convictions Other Insurance Fraud Convictions Free Insurance Videos  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders.  He also serves as an arbitrator or mediator for insurance related  disputes. He practiced law in California for more than 44 years as an  insurance coverage and claims handling lawyer and more than 54 years in  the insurance business.   Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

 Explaining Insurable Interest    https://zalma.com/blog It may be said, generally, that any one has an insurable interest in  property who derives a benefit from its existence or would suffer loss  from its destruction. An insurable interest in property is any right,  benefit or advantage arising out of or dependent thereon, or any  liability in respect thereof, or any relation to or concern therein of  such a nature that it might be so affected by the contemplated peril as  to directly damnify the insured.   The term “interest,” as used in the phrase “insurable interest,” is not  limited to property or ownership in the subject matter of the insurance.  An insurable interest in property may arise from some liability which  an insured incurs with relation thereto. Such liability may arise by  force of statute or by contract, or may be fixed by law from the  obligations which insured assumes.  Moreover, an insurable interest in property does not necessarily imply a  property interest in, or a lien upon, or possession of, the subject  matter of the insurance, and neither the title nor a beneficial interest  is requisite to the existence of such an interest. It is sufficient  that the insured is so situated with reference to the property that he  would be liable to loss should it be injured or destroyed by the peril  against which it is insured. For instance, although a person has no  title, legal or equitable, in the property, and neither possession nor  right to possession, yet he has an insurable interest therein if it is  primarily charged in either law or equity with a debt or obligation for  which he is secondarily liable. [Belton v. Cincinnati Ins. Co., 353 S.C.  363, 577 S.E.2d 487 (S.C. App. 2003)]   Insurable interest is a keystone of the concept of insurance,  safeguarding the insurer against the risk that arises if one who will  receive the monetary benefit from loss of the insured property (or life,  [in the case of life insurance,]) has no interest in the property not  being destroyed. [Woods v. Independent Fire Insurance Co., 749 F.2d  1493, 1496 (11th Cir. 1985)] It is well settled across the United States  that having title or an ownership interest is not the sole basis for  having an insurable interest in property. [Brown v. Ohio Cas. Insurance  Co., 239 Ga.App. 251, 253(2), 519 S.E.2d 726 (1999)] Rather, the test of  insurable interest in property is whether the insured has such a right,  title, or interest therein, or relation thereto, that he will be  benefitted by its preservation and continued existence, or suffer a  direct pecuniary loss from its destruction or injury by the peril  insured against. [Ga. Farm Bureau Mut. Ins. Co. v. Franks, 320 Ga.App.  131, 739 S.E.2d 427 (Ga. App. 2013)] --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining Insurable Interest    https://zalma.com/blog It may be said, generally, that any one has an insurable interest in  property who derives a benefit from its existence or would suffer loss  from its destruction. An insurable interest in property is any right,  benefit or advantage arising out of or dependent thereon, or any  liability in respect thereof, or any relation to or concern therein of  such a nature that it might be so affected by the contemplated peril as  to directly damnify the insured.  The term “interest,” as used in the phrase “insurable interest,” is not  limited to property or ownership in the subject matter of the insurance.  An insurable interest in property may arise from some liability which  an insured incurs with relation thereto. Such liability may arise by  force of statute or by contract, or may be fixed by law from the  obligations which insured assumes.   Moreover, an insurable interest in property does not necessarily imply a  property interest in, or a lien upon, or possession of, the subject  matter of the insurance, and neither the title nor a beneficial interest  is requisite to the existence of such an interest. It is sufficient  that the insured is so situated with reference to the property that he  would be liable to loss should it be injured or destroyed by the peril  against which it is insured. For instance, although a person has no  title, legal or equitable, in the property, and neither possession nor  right to possession, yet he has an insurable interest therein if it is  primarily charged in either law or equity with a debt or obligation for  which he is secondarily liable. [Belton v. Cincinnati Ins. Co., 353 S.C.  363, 577 S.E.2d 487 (S.C. App. 2003)]   Insurable interest is a keystone of the concept of insurance,  safeguarding the insurer against the risk that arises if one who will  receive the monetary benefit from loss of the insured property (or life,  [in the case of life insurance,]) has no interest in the property not  being destroyed. [Woods v. Independent Fire Insurance Co., 749 F.2d  1493, 1496 (11th Cir. 1985)] It is well settled across the United States  that having title or an ownership interest is not the sole basis for  having an insurable interest in property. [Brown v. Ohio Cas. Insurance  Co., 239 Ga.App. 251, 253(2), 519 S.E.2d 726 (1999)] Rather, the test of  insurable interest in property is whether the insured has such a right,  title, or interest therein, or relation thereto, that he will be  benefitted by its preservation and continued existence, or suffer a  direct pecuniary loss from its destruction or injury by the peril  insured against. [Ga. Farm Bureau Mut. Ins. Co. v. Franks, 320 Ga.App.  131, 739 S.E.2d 427 (Ga. App. 2013)] --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

About an Essential Element of the Rescission Remedy    https://zalma.com/blog  Every rescission requires proof that the facts misrepresented or  concealed were material.  Different courts have characterized the element of materiality  differently.  For example, in Connecticut:  A fact is material . . . when . . . it would so increase the degree or  character of the risk of the insurance so as to substantially influence  its issuance, or substantially affect the rate of premium.  Davis-Scofield v. Agricultural Insurance Co., 109 Conn. 673 at p. 678,  145 A. 38 at p. 40 (1920).   In Indiana:  The representations of the insured are material to the risk if a  truthful answer would lead the insurer to decline issuing insurance or  charge a higher premium.  Holtzclaw v. Bankers MutualInsurance Co., 448  N.E. 2d 55 at p. 58 (Ind. App. 3d Dist., 1983).  Imperial Casualty and Indemnity Co. v. Sogomonian, 198 Cal. App. 3d 169,  243 Cal. Rptr. 639 (Cal.App.Dist.2 02/04/1988).  Although not relevant to the issues here presented, Imperial in the same  complaint also sought damages from another defendant, Larklo  Dersarkisian, dba Derian Insurance Agency (Derian), for alleged  negligence and fraud committed by said defendant in the preparation and  submission of the defendants’ June 7, 1982, application to Imperial.  That claim was not affected by the award of summary judgment against the  defendants and is still awaiting trial in this action. In declarations  filed in his successful opposition to Imperial’s contemporaneous motion  for summary judgment against him, Derian stated that he had prepared the  application based upon information given him by the defendants.  Our conclusion here should not result in an assumption by insurers that  policy liability can, with impunity, be avoided or delayed by assertion  of a claim for rescission. That is a tactic which is fraught with peril.  Where no valid ground for rescission exists, the threat or attempt to  seek such relief may itself constitute (1) a breach of the covenant of  good faith and fair dealing which is implied in the policy (Fletcher v.  Western National Life Ins. Co. (1970) 10 Cal. App. 3d 376, 392, 401 [89  Cal. Rptr. 78, 47 A.L.R.3d 286]) and/or (2) the commission of one or  more of the unfair claims settlement practices proscribed by Insurance  Code section 790.03, subdivision (h). (Emphasis added)   Mr. Sogomonian was not a nice man. He became, among others, the subject  of hearings before the Congress of the United States, in S. Hrg.  104-604, May 15, 1996, Russian Organized Crime in the United States, [http://www.archive.org/stream/russianorganized00unit/russianorganized00unit_djvu.txt]  where some of the testimony provided included that from U.S. Customs.  Had the insurers known about the information reported to the U.S. Senate  they would have been more careful in their dealings with Mr.  Sogomonian. The fact that the suit was resolved by proof of rescission  eliminated the need for evidence of criminal activity and arson.  The author testified in the trial which, in 40 years as a litigator and  expert witness, is the first and only time he observed three armed  bailiffs in the courtroom who never took their hands off their weapons.  In addition, after testimony was completed, the bailiff offered to  escort the author safely to the elevator;.   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Settlements and the Ethical Burden on Attorneys    HTTPS://ZALMA.COM/BLOG Settlements of litigation, whether funded by insurance or not, raise  ethical issues that all parties and their attorneys must deal with  before the settlement is effected. The decision to settle belongs to the  plaintiff. This is especially important in cases with multiple parties  and multiple attorneys.  The Third US Circuit Court of Appeals revived a proposed class action  suit against a group of attorneys from southern states brought by more  than 2,600 former clients from northern states who say they were cheated  out of their fair share of $400 million in asbestos personal injury  settlements in the Mississippi state courts when the attorneys gave  larger payouts to southern plaintiffs. The northern plaintiffs claimed  that their share was reduced because the southern attorneys wanted to  allocate a greater percentage of aggregate settlements to southerners in  order to minimize the percentages paid to the northern plaintiffs’  local counsel.   The plaintiffs in Huber v. Taylor, 469 F.3d 67 (3d Cir. 10/31/2006) were  steelworkers from Pennsylvania, Ohio, and Indiana who joined a massive  Mississippi asbestos suit. The defendants were attorneys from  Mississippi, North Carolina, and Texas.  The suit alleged that the northern plaintiffs were never made aware of a  complex series of agreements between and among the attorneys that, they  say, ultimately led to their receiving smaller payouts than southern  plaintiffs. The northern plaintiffs had all retained attorneys in their  home states — referred to in the case as “local counsel” — who had in  turn struck deals with a Texas attorney who served as co-counsel.  According to the suit, by cheating the northern plaintiffs of their fair  share, the southern attorneys saved more than $10 million that would  have been paid to the northern clients’ local counsel.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders.  He also serves as an arbitrator or mediator for insurance related  disputes. He practiced law in California for more than 44 years as an  insurance coverage and claims handling lawyer and more than 54 years in  the insurance business.  Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.  He is available at http://www.zalma.com and [email protected]. Mr. Zalma  is the first recipient of the first annual Claims Magazine/ACE Legend  Award. Over the last 53 years Barry Zalma has dedicated his life to  insurance, insurance claims and the need to defeat insurance fraud. He  has created the following library of books and other materials to make  it possible for insurers and their claims staff to become insurance  claims professionals.  Go to training available at https://claimschool.com; articles at https://zalma.substack.com,  the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at https://www.rumble.com/zalma ; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/  The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining the Use of an IME  https://zalma.com/blog Medical examiners have established their own codes of ethics with regard  to an IME and are obligated by those codes to report their findings  fairly and accurately. The American Board of Independent Medical  Examiners has published the following Code of Ethics:  Physicians shall:  Be honest in all communications. Respect the rights of the examinees and other participants, and treat  these individuals with dignity and respect.  An independent medical examiner has a contractual relationship with the  entity that employs them but no preexisting relationship with the  subject of the examination. And this contractual relationship is often  independent of, if not adverse to, the subject's relationship with the  examiner's employer. To impose a categorical duty of care running from  the independent medical examiner to the subject would put the examiner  in an untenable position, if not create an outright conflict of  interest. [Kirk v. Anderson (Utah Supreme Court, 2021)]  The adjuster who follows the rules profiled by the American Board of  Independent Medical Examiners, which are similar to those posited by the  International Association of Special Investigation Units (IASIU),  should receive appropriate independent medical advice.   The adjuster (and the SIU fraud investigator) must be dedicated to:  Promoting a coordinated effort within the industry to combat insurance  fraud; providing education and training for insurance investigators;  developing greater awareness of the insurance fraud problem; encouraging  high professional standards of conduct among insurance investigators;  and supporting legislation that acts as a deterrent to the crime of  insurance fraud.  When an IME is retained the insurer should advise the IME of his  obligations in writing, in the following manner:  You have been retained by the ABC Insurance Company to conduct an  independent medical examination of the claimant and report to me,  concerning the injuries sustained, the present condition, your prognosis  and your evaluation of any continuing treatment needed by the claimant.   To assist you in that regard we enclose as complete as possible all of  the medical records of the claimant of which we are aware.  The purpose of your examination is to thoroughly review all relevant  facts within your field of expertise so we may determine whether the  injuries reported by the claimant captioned above was caused by the  accident and, if so, the extent of the injuries so that we may properly  evaluate his claim against our insured. We expect your examination to  provide the Company with sufficient facts to assist it in its obligation  to make a decision with regard to the claim.   © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders.  He also serves as an arbitrator or mediator for insurance related  disputes. He practiced law in California for more than 44 years as an  insurance coverage and claims handling lawyer and more than 54 years in  the insurance business.   Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Serious Injuries & Clear Liability Require Quick and Thorough Action    https://zalma.com/blog Some lawsuits are based on clear liability and terrible facts and  injuries that compel the parties involved to settle the case as quickly  as possible. In such cases defending and indemnifying the insured is  liable to be costly and could easily exceed the available policy limits.  If the adjuster’s reaction to the fact pattern is disbelief or horror,  and his or her first impulse is to trade the claim to another adjuster,  these are signs that the case must be settled quickly.  Bad facts and bad injuries get more expensive with time. These cases  should not be aggressively defended but should rather be handled with  empathy and generosity so that they can be resolved within the limits  available from the insured’s policy.  The worst of all cases could be an insured who admits he fell asleep at  the wheel, crossed over the double line and an island and struck a tiny  Ford Escape head on and rendered a paraplegic a 40 year old widower  father of four minor children all of who suffered from Down Syndrome and  needed constant care. The insured has a policy with only $500,000 in  limits. With the admission of liability and the extent of the injuries  every effort must be made to pay the limits as soon as possible. A  release on behalf of the insured would be useful but the adjuster should  not make the injured file suit before paying the limit, even if it must  be paid without condition.  Bad facts usually result in bad law. It is improper to take a chance on  the insured facing an uninsured loss just to give the insurer the  opportunity to create a legal precedent favorable to the insurer. The  fact that more trial court judgments are affirmed than are reversed  should temper the desire to file an appeal.  An insurer should never experiment if there is any potential that the  insured could incur an uninsured loss unless the insurer is willing to  guarantee payment of any judgment regardless of the policy’s liability  limits. Otherwise, the insurer will probably be found in breach of the  duty of good faith if an attempt is made to change a law that will  benefit the insurer over its entire book of business, and if it results  in an adverse judgment against the insured in excess of policy limits.  If the insurer wants to make a precedent it should enter into a written  agreement with the insured to take the case to trial and promise the  insured that it will indemnify him or her regardless of the verdict  (whether within policy limits or not) and will reimburse all of his or  her expenses.   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Criminal Acts by Public Adjusters  https://zalma.com/blog Although they are considered professional claims people they will are  not allowed to impinge on the work of the legal profession. Insurance  company adjusters and independent insurance adjusters working for  insurance companies can deal with insurance coverage issues but a PA may  not.  In one case, a public adjuster placed an insured in a position to pay  damages to the insurer. In Chubb & Son Inc. v. Consoli, 283 A.D. 2d  297, 726 N.Y.S. 2d 398 (N.Y. App. Div. 05/22/2001), a public adjuster  was involved in a scheme with one of Chubb’s adjusters to intentionally  inflate a claim and then pay Chubb’s adjuster to approve the claim.  The  insureds’ public adjuster was later convicted on charges of mail and tax  fraud and Chubb’s representative was found guilty of defrauding Chubb.  The court, recognizing that a PA acts as an agent for the insured and  that there exists the well settled rule that a principal, even if  innocent, is liable for acts of fraud that are within the scope of an  agent’s actual or apparent authority, the court concluded that the  insured was liable to Chubb and the claim was forfeited. Indiana has refused to accept PAs at all. In Professional Adjusters,  Inc. v. Tandon, 433 N.E. 2d 779 (1982), the Supreme Court of Indiana  found that the statute providing for licensing of certified PAs who  could then undertake negotiation of settlements between insureds and  insurers was an uncon-stitutional violation of the separation of powers  clause, in that it permitted practice of law by persons not required to  be admitted to the bar and not subject to discipline by the Supreme  Court.   The core element of practicing law is the giving of legal advice to a  client. Merely entering into such relationship constitutes the practice  of law in Indiana. [Professional Adjusters, Inc. v. Tandon (1982), Ind.,  433 N.E.2d 779; In re Perrello (1979), 270 Ind. 390, 386 N.E.2d 174].  The public adjuster was hired by a client to give legal advice. He  undertook the proffered employment, proceeded to examine the case, and  gave advice as to what legal steps should be pursued. The exercise of  such judgment on behalf of a client constitutes the practice of law and  is restricted to persons who have qualified and been admitted to the  Bar. By entering into the relationship and by giving legal advice, the  public adjuster, a non-attorney, has engaged in the unauthorized  practice of law. [State ex rel. Disciplinary Com'n of Supreme Court of  Indiana v. Owen, 486 N.E.2d 1012 (Ind., 1986)]      © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining the Obligations of the Public Adjuster    https://zalma.com/blog Most policyholders do not have the in-house capability to investigate,  evaluate, and negotiate significant property insurance losses. While  some losses, such as a small fire loss requiring only minor repairs, may  be dealt with easily, others, which involve more complex damages and  different potential causes of loss, are much harder to assess. Resolving  them may require expertise in understanding the scope of coverage  provided by the applicable property insurance policy, scientific or  other specialized background to determine the cause of a specific loss,  the ability to determine the cost to repair or replace the damaged  property, and the calculation of the amount of a time element (business  interruption) loss.In such cases, the policyholder may wish to engage a  public insurance adjuster (PA). PA’s are licensed by almost every state  and their contract forms must be approved by the state.  All PAs claim to be experts on property loss adjustment. Most are. They  represent only policyholders in fulfilling the duty to prepare, file,  and adjust insurance claims. The PA should handle every detail of the  claim, working closely with the policyholder and the insurer to obtain a  prompt and reasonable settlement.  'PAs invariably charge a contingency fee. When seeking an assignment,  the PA will present the contingency fee to the insured as a fait  accompli. Every person seeking the service of a PA must be aware that  the PA’s fee is negotiable.  The insured should negotiate with the various representatives of PA  firms who flock to fire and other loss sites, try to obtain the lowest  contingency as possible. Negotiating with a PA is much like negotiating  to buy a vase at an estate sale, one never pays the asking price. If  there are multiple representatives from PA firms seeking to provide  service it is appropriate to play them against each other to obtain a  fair contingency since whatever the PA takes will be funds not available  to repair the property.  For a major loss, more than one PA will arrive at the site seeking a  contract. Rates can be negotiated from a low of 3% to a high of 40%,  although the average charge for a run-of-the-mill loss is 10% to 15%.  When considering a PA, the insured must take into account the skill,  experience and reputation of the firm. The insured must also understand  the fact that even if the insurer pays the full amount of the loss, the  cost of the adjuster’s fee may not leave enough funds to fully repair  the damaged structure. If the insured is a busy professional his or her  time may be more valuable to the family than the fee paid to the PA who  will take on the arduous task of putting together a complete proof of  loss.  The public adjuster contract is technically an assignment of a portion  of policy proceeds due to the policyholder from the insurer. To protect  the ability to be paid the assignment gives the PA ownership of a  percentage of any claims payments.  Upon being retained, the professional PA will often do nothing until the  three-day cancellation provision most states require be in every PA  contract. Then, whether immediately or after the expiration of the  cancellation provision, the PA should:  Immediately inspect the loss site; meet at the scene with the insurer’s adjuster to set a scope of loss; analyze the damages; assemble the necessary support for the claim presentation; review the coverage to determine the portions of the loss which are  covered; assess the value of the loss; and negotiate with the insurance company to reach the end result   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining the Limitations Imposed by the U.S. Supreme Court on  the Award of Punitive Damages    The US Supreme Court has restricted the extent of available punitive  damages in State Farm Mutual Automobile Insurance Co. v. Campbell, 123  S.Ct. 1513, 155 L.Ed.2d 585 (U.S. 2003), where it overturned a $145  million verdict against an insurer. It said that a punitive damages  award of $145 million is excessive and violates the Due Process Clause  of the Fourteenth Amendment. By reducing the exposure to excessive and  debilitating punitive damages claims professionals can hope the Supreme  Court’s ruling gives insurers more courage to fight insurance fraud  since their exposure to punitive damages is limited. Regardless,  Campbell allows recovery of punitive damages for tortious breach of the  insurance contract and the tort of bad faith.   The Campbell case arose out of an automobile accident where one party  was killed and another severely injured. The Campbells, insured by State  Farm, attempted to pass six vehicles on a two-lane highway, failed, and  caused the driver of an oncoming car to drive off the road to escape  collision with the Campbells’ vehicle. The Campbells only had $25,000  coverage per person and $50,000 in the aggregate. The Campbells felt  they were not at fault because there was no contact between the two  vehicles. State Farm ignored the advice of its adjuster and counsel to  accept policy limits demands and took the case to trial. The verdict at  trial was over $180,000 and the State Farm-appointed counsel told the  Campbells to put their house on the market since they would need the  money to pay the verdict. State Farm refused to pay the judgment to fund  an appeal. The Campbells retained personal counsel to pursue an appeal  that was not successful, entered into a settlement with the plaintiffs  where the plaintiffs agreed to not execute on their judgment in exchange  for an assignment of 90% of all money received in a bad faith action by  the Campbells against State Farm. Before suit was filed, State Farm  paid the full judgment.  At trial the plaintiffs brought in evidence of actions of State Farm in  first party cases across the country, in third party cases not similar  to the Campbells’ auto accident, and other evidence not related to the  facts of their case.  The Supreme Court found that State Farm’s “handling of the claims  against the Campbells merits no praise,” but concluded “a more modest  punishment could have satisfied the State’s legitimate objectives.   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Zalma’s Insurance Fraud Letter Volume 25, Number 20  https://zalma.com/blog Criminal Caused Suit on Policy to Drag on for More than Six Years Court Finally Stopped an Unconscionable Level of Overlitigation  United States District Judge Gary R. Brown was faced with a legal  dispute that, perhaps because the defendant was a criminal, went on for  years without a final disposition. In Principal Life Insurance Company  v. Jason P. Brand, No. CV 15-CV-3804, United States District Court, E.D.  New York (September 29, 2021) the case was reduced to seven years on  disputes that appeared to be relatively straightforward:    defendant Brand obtained a disability policy in early 2012 from  plaintiff Principal Life, after being less than forthcoming about his  health history.     In June 2014 – prior to the submission of Defendant’s disability  claim on November 14, 2014 – the New York State Attorney General’s  office raided Defendant’s offices, seizing his computers and physical  files, leading to indictment on October 16, 2014 of Defendant and his  businesses, DASO Development Corp. and Narco Freedom, Inc., for  insurance fraud in the first degree and grand larceny in the second  degree, charges to which defendant would plead guilty.     Defendant filed a disability claim based upon anxiety;     Principal Life, for its part, acted quickly and rescinded the policy  and     Filed a declaratory relief action.  Proactive Insurer Has to Fight to Renew Judgment Against Convicted  Fraudster Insurer’s $7,870,557.89 Judgment Against Fraudster Stands  Insurer May Collect on Default Judgment Against Fraudster  In People of The State of California, ex rel. Interinsurance Exchange of  The Automobile Club of Southern California v. Alex Semyon Mirsky,  B297321, California Court of Appeals, Second District, Seventh Division  (September 21, 2021) Alex Semyon Mirsky appealed from the superior  court’s denial of a motion to vacate a 2013 renewal of a default  judgment and the underlying default judgment.  In 2003 the superior court entered a default judgment of over $7.8  million against Mirsky. Interinsurance Exchange of the Automobile Club  of Southern California (Interinsurance Exchange) renewed the judgment in  2013, and in 2018 it mailed notice of the renewal to Mirsky at an  address Interinsurance Exchange claimed was Mirsky’s last known address.  Mirsky filed a motion to vacate the renewal of judgment, or, in the  alterative, vacate the default judgment under Code of Civil Procedure  section 473, subdivision (d). The trial court denied the motion,  concluding Mirsky’s motion to vacate the renewal of judgment was  untimely and Mirsky failed to meet his burden to show the default  judgment was void. ClaimSchool, Inc. – Insurance Education Insurance Education from Barry Zalma  Barry Zalma Presents What Your Insurance Organization Needs. The Excellence in Claims Handling Program Good News From the Coalition Against Insurance Fraud Health Insurance Fraud Convictions Videos on YouTube and Rumble.com of Zalma on Insurance Other Insurance Fraud Convictions   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining the Doctrine of Reasonable Expectations    https://zalma.com/blog The act of infamy at the World Trade Center (WTC) in New York City on  September 11, 2001, is responsible for a great deal of insurance  litigation concerning, among other things, the meaning of the term  “occurrence” in first party property policies and the methodology  required of insurers when interpreting a policy of insurance. In the WTC  policies, “occurrence” was defined as follows:  “Occurrence” shall mean all losses or damages that are attributable  directly or indirectly to one cause or to one series of similar causes.   All such losses will be added together and the total amount of such  losses will be treated as one occurrence irrespective of the period of  time or area over which such losses occur.  Because WTC insurance issues are surrounded by the horrendous facts of  the attack, and due to the fact that some policies had yet to be printed  and delivered to the insured before September 11, 2001, the decisions  rendered in interpreting the policies had far-reaching impact. The  rulings in the WTC cases, combined with a decision of the California  Supreme Court, are changing how insurance policies are interpreted.  Since policy interpretation is essential to the presentation of any  insurance claim, the following detailed discussion is important to all  those concerned with insurance claims.   “Reasonable expectations” does not mean, however, that the expectations  of the insured can change or modify the clear and unambiguous language  of the policy of insurance. The Third Circuit found, in Canal Insurance  v. Underwriters, against the insured’s claim of reasonable expectations,  finding that in the context of the case before it “the refusal to look  beyond the plain meaning of the unambiguous exclusionary language to  Singh’s reasonable expectations is consistent with the interpretation of  Pennsylvania case law in our Circuit.”  For example, a case decided over 200 years ago made the point that the  reasonable expectations of the insured include the understanding that  “every [insurer] is presumed to be acquainted with the practice of the  trade he insures…. If he does not know it, he ought to inform himself.”  Similarly, more than 150 years ago the US Supreme Court in Hazard’s  Administrator v. New England Marine Insurance Co., 33 U.S. 557 (1834)  adopted the rule. It concluded that “no injustice is done if insurers  are presumed to know their insureds’ industry because it is part of  their ordinary business.”   © 2021 – Barry Zalma Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders.   He also serves as an arbitrator or mediator for insurance related  disputes. He practiced law in California for more than 44 years as an  insurance coverage and claims handling lawyer and more than 54 years in  the insurance business.  Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Rules of Contract Interpretation    https://zalma.com/blog The following rules govern the construction of contracts of insurance:  If the terms of a promise are in any respect ambiguous or uncertain, it  must be interpreted in the sense in which the promisor believed at the  time of making it, that the promisee understood it. [California Civil  Code § 1649] (which provides an excellent definition of the basic rule  of interpretation followed in most states).   “If a written contract is so worded that it can be given a definite or  certain legal meaning, then it is not ambiguous.”  However, if “the language of a policy or contract is subject to two or  more reasonable interpretations, it is ambiguous.” Simply stated, all  contracts are interpreted equally except insurance contracts, which are  interpreted to favor the insured in the event of an ambiguity.  An insurer may not rely on an ambiguous interpretation of a policy  provision that, if construed as the insurer contends, would deprive the  insured of coverage.  When the language of an insurance contract is reasonably susceptible to  two constructions, it should be construed in favor of the insured.  It is not necessary to show that the construction against the insurer is  more logical than that against the insured; it is sufficient to show  that the construction in favor of the insured is equally reasonable with  that which favors the insurer.   © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders.  He also serves as an arbitrator or mediator for insurance related  disputes. He practiced law in California for more than 44 years as an  insurance coverage and claims handling lawyer and more than 54 years in  the insurance business.   Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining What to Do When a Claim Includes Multiple Occurrences  https://zalma.com/blog CGL policies are written with endorsements that make the number of  occurrences highly important, especially in continuing loss cases.  deductibles or self-insured retentions are charged based on the number  of occurrences or the number of claims. policy limits can apply  individually per occurrence, individually per loss, individually per  claim, or in the aggregate over a one year period.  The test applied is  usually objective. [Uniroyal, Inc. v. Home Insurance Company, 707 F.  Supp. 1368 (1988); Champion International Corporation v. Continental  Casualty Company, 546 F. 2d 502 (1976), Cargill, Inc. v. Liberty Mutual  Insurance Company, 488 F. Supp. 49 (1979) Affirmed 621 F. 2d 275 (1980);  Mason v. Home Insurance Company, 177 Ill. App. 3d 454, 532 N.E. 2d 526  (1988); 64 A.L.R. 4th 688.]  A triggering injury in fact for an underlying claim may be found as  early as the time of first exposure to asbestos or silica, and may  continue progressively through the claimant's death or the date of  filing the claim, whichever occurs earlier. [Danaher Corp. v. Travelers  Indem. Co., 414 F.Supp.3d 436 (S.D. N.Y. 2019)]  In Lombard v. Sewerage and Water Board of New Orleans, 284 So.2d 905  (La.1973) and its progeny, the courts in exposure cases have applied the  “effect” test as opposed to the “cause” test in determining the number  of [Thebault V. American Home, 2015-0800 (La. App. 4Cir. 4/20/16), 195  So. 3d 113.]  A common method of allocation is referred to as the "time on the risk"  method, whereby each insurer is responsible for the pro rata percentage  of time the insurer's policy was in effect over the course of the full  time period over which loss was sustained by the insured. For example,  Edison Co. Of New York, Inc. v. Allstate Ins. Co., 774 N.E.2d 687, 695  (N.Y. 2002)] affirmed the trial court allocation of loss through  "time-on-the-risk" method, while "not foreclos[ing] pro rata allocation  among insurers by other methods."      © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining the Nature of Insurance Underwriting    https://zalma.com/blog Before the insurance claims adjuster begins a claims investigation he or  she must understand the nature of underwriting because it is how an  insurance policy comes into existence.  Underwriting is defined as the process of accepting or rejecting risks.  It requires a determination by the underwriter of the risks for which  insurance is sought and the terms under which the insurance will be  written if the risk is acceptable. Underwriting insurance is a function  unique to the insurance industry which transfers the risk of loss from  the person or entity insured to the insurer.   Three centuries ago, insurance originally was a very personal matter. A  property owner would discuss with an individual insurer the problems,  values and risks of loss involved in a commercial enterprise. They would  then agree upon the terms under which the insurer would insure the  risk. Together they would draft a contract and the insurer would sign  his name at the bottom — he literally underwrote the insurance.  When the Lloyd’s insurance marketplace started in Edward Lloyd’s coffee  shop policies were often written in chalk on a blackboard and those who  wished to join in the insurance would sign their name and the percentage  they wished to take of the risk under the terms of the policy written  on the board.  In its original usage, underwriting referred to the operation of the  insurance business.  Today, in application, there is a more restricted  meaning applied to the term.  Underwriting, in modern usage, is a systematic technique for evaluating  risks that are offered to an insurer by prospective insureds. The  function of underwriting involves evaluating, selecting, classifying,  and rating each risk. Underwriting establishes the standards of coverage  and amount of protection to be offered to each acceptable risk. It  formulates and administers the rules and procedures that are used to  ensure that predetermined standards are met by underwriters.  Underwriters are the risk takers. Adjusters only become involved when  the risk becomes a loss and the adjuster is called upon to keep the  promises made by the policy created by the underwriter.  In the US underwriting has become more corporate and less individual.  Underwriters are now invariably employees of insurance companies and no  longer put their personal fortunes at risk.   © 2021 – Barry Zalma   Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining the Construction Contract    https://zalma.com/blog When a construction contract, like every other contract, is unambiguous,  the parties’ intent may be determined from the contract alone, and it  is the duty of the court—not the jury—to state its meaning.  Construction contracts are governed by the same rules as all other  contracts. When a court is called upon to interpret a construction  contract its terms are given their ordinary and generally accepted  meaning with the court working to give effect to the intent of the  parties to the contract unless the contract itself gives special meaning  to the contract.  A construction contract should always be written. It should, like all  other contracts, set forth in detail the duties and obligations of the  parties to the contract. It should communicate the scope of work to be  rendered and the extent to which each party is involved in the differing  aspects of the project.  Contracts serve as means of documenting the services and assets to be  exchanged during the course of a project.  The contract is important not  only to finalize the deal in the minds of the parties to the  construction project, but also to help define the performance of the  work and may even determine who bears the tax burden.  A basic construction contract is negotiated by the parties and will be  interpreted following the normal rules of contract interpretation.   ZALMA OPINION   The construction contract is the most effective means of avoiding  disputes between the owner and the builders involved in the construction  project. Whether standardized forms are used or the agreement is  written to the specifications of the parties by an experienced  construction lawyer, the contract is essential to a successful  construction effort.  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining Insurance for Construction Defects Regarding  Structural Failures    https://zalma.com/blog Structural integrity failures can involve any of the following:  concrete; masonry; carpentry; or foundations.   Defects related to site preparation can be caused by any of the  following:  building on expansive soil or other defective soils incapable of  properly supporting structures; building on contaminated soils; lack of a slab-on-grade foundation when the soils are acidic and can  cause the deterioration of concrete; or building on improperly compacted soils, which can cause interior  distress to cabinets and countertops, make doors difficult to open and  cause structures to settle and cracking in stucco, drywall, plaster  interior walls, windows, tile floors, concrete flatwork, slabs, and  garage flooring.  In Texas, when a completed home developed problems with a shifting  foundation, a suit was filed alleging violations of the Texas Deceptive  Trade Practices Act (DTPA) and negligence. On the first day of trial,  the plaintiff settled with one defendant and proceeded against another.  The District Court granted a directed verdict on the claim that there  was a violation of the DTPA with a breach of an implied warranty of  good-and-workmanlike performance. Only the plaintiff’s negligence claim  was submitted to the jury, which found no negligence on defendant’s  part. The district court rendered a take-nothing judgment. [Codner v.  Arellano, 40 S.W.3d 666 (Tex.App. Dist.3 2001). See also Parmely v.  Hildebrand, S.D. 83, 630 N.W.2d 509 (2001), where the seller was found  to have made adequate disclosures about expansive soils at time of sale  and was not liable for soil expansion damages.]    The Ninth Circuit, dealing with the right to insurance for damages  caused by expansive soil, found that under California law, a latent  defect exclusion applies to third party negligence that is discoverable  only through subsequent intensive expert investigation. Because there is  no evidence that the contractor’s negligence in this case was  discoverable, short of an in-depth expert inspection after-the-fact, the  Ninth Circuit concluded that State Farm was entitled to summary  judgment on its exclusion for latent defects. [Winans v. State Farm Fire  and Casualty Co., 968 F.2d 884 (9th Cir. 1992).]   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

An Introduction to the Excellence in Claims Handling Program    https://zalma.com/blog  In search of profit, insurers have decimated their professional claims  staff. They laid off experienced personnel and replaced them with young,  untrained, unprepared people. A virtual clerk replaced the old  professional claims handler. Process and computers replaced hands-on  human skill and judgment. Money was saved by paying lower salaries.  Within three months of firing the experienced claims people gross profit  increased.A site for the insurance claims professional and anyone who  wants to know something about insurance, insurance claims, insurance  coverage, and insurance law. An insurer whose claims staff is made up of people who are less than  professional will find itself the subject of multiple instances of  expensive, counterproductive litigation. The excellence in claims handling program requires thorough training  providing each member of the claims staff with a minimum of the  following:  1. How to read and understand the contract that is the basis of every  adjustment, including but not limited to: a. The formation of the insurance policy. b. The rules of interpretation.  2. Tort law including negligence, strict liability in tort, and  intentional torts.  3. Contract law including the insurance contract, the commercial or  residential lease agreement, the bill of lading, nonwaiver agreements,  proofs of loss, releases and other claims related contracts. Claims handling without excellence is both dangerous and expensive.  Insurers should develop a professional claims staff and provide  excellence in claims handling because by so doing they will profit more  than if they keep an inadequate and unprofessional claims staff. The series of videos will be available soon for a monthly subscription.   --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining Why Property Insurance Insures People not Property  https://zalma.com/blog First party property insurance is a contract of personal indemnity. The  insurer promises to indemnify the first party, the insured, in the event  the insured incurs a loss as a result of one of the perils insured  against by the wording of the policy. Insurance does not follow title to  the land. The insurer makes a promise to the first party, the insured,  that if there is a loss to property in which the insured has an  interest, to pay indemnity for the loss.  The “elementary principle of  insurance law that fire insurance” is a contract of personal indemnity,  “not one from which a profit is to be realized.” [Cigna Property &  Cas. Ins. Co. v. Verzi, 684 A.2d 486, 112 Md.App. 137 (Md. App. 1995)]  The insurance claims adjuster (the adjuster) must always ascertain that  the owner, or a person with some other insurable interest in the  property, is the person insured and that the person insured has an  interest in the property. Failure to do so could result in the insurer  paying the wrong person or paying a person with no right to the benefits  promised by the policy. Proceeds of a policy upon the interest of an  insured are not subject to the claims of others who have an interest in  the property but are not named as insured or who do not qualify as  insureds by definition.   A first party property policy is considered by courts asked to interpret  the conditions of the policy, a contract of personal indemnity. It is a  contract made with the individual protected. The insurance does not go  with the property as an incident thereto to any person who may buy that  property. If it goes at all, it goes as a matter of contract for the  transfer of the policy. [Estate of Cartwright v. Standard Fire Ins. Co.,  No. M2007-02691-COA-R3-CV, 2008 WL 4367573, *2 (Tenn. Ct.App. Sept. 23,  2008) (noting that "[t]he contract of insurance is also purely a  personal contract between the insured and the insurance company, and  does not attach to or run with the title to the insured's property  absent an agreement for the transfer of the policy." Fulton Bellows, LLC  v. Federal Ins. Co., 662 F.Supp.2d 976 (E.D. Tenn., 2009).  It is an elementary principle of insurance law that fire insurance is a  contract of personal indemnity, not one from which a profit is to be  realized. The right to recover must be commensurate with the loss  actually sustained. [Glens Falls Ins. Co. v. Sterling, 219 Md. 217, 222,  148 A.2d 453, 456 (Ct.App.1959); Starkman v. Sigmond, 446 A.2d 1249,  184 N.J.Super. 600 (N.J. Super., 1982)]  To have an insurable interest, the insured must derive “a direct,  pecuniary loss” from the subject matter of the contract; the loss cannot  be indirect or sentimental.” [A.B. Petro Mart, Inc., 892 N.W.2d at 465;  see also 14 Mich. Civ. Jur. Insurance § 135] An insurable interest in  an insurance policy is determined not by the label attached to the  insured's property but by whether the insured will suffer a pecuniary  loss due to the destruction of the property. [Sam D Mkt. 1 v. Selective  Ins. Co. of S.C. (E.D. Mich. 2021)]  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurer --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining the Need for Professional Liability Claims Adjusters    https://zalma.com/blog Adjusting liability insurance claims requires skill, patience, knowledge  of insurance, basic knowledge of tort and contract law, and knowledge  and experience as an investigator.  To properly and effectively perform  the duties of a liability claims adjuster, he or she must be capable of  effectively dealing with the following basic obligations:  To understand the law of torts as applied in the state where the  adjuster works. To understand the law of contracts as applied in the state where the  adjuster works.  To understand sufficient medical terminology to be able to evaluate  claims of injury. To understand the costs to repair or replace damaged real or personal  property. To understand how to read and apply the terms and conditions of a  liability insurance policy to a particular fact situation developed by  his or her investigation. To understand how to thoroughly investigate all claims assigned. To conduct an investigation of every claim assigned fairly and in good  faith with an intent to find coverage for the loss presented by the  insured. To be able to effectively, fairly and in good faith negotiate with  claimants and lawyers to resolve bodily injury or property damage claims  asserted against an insured. To ascertain that the insurer pays promptly all claims the insurer owes  under the contract. To resist, and recommend against payment of all claims the insurer does  not owe under the contract of insurance.   This Compact Book of Adjusting Liability Claims- Third Edition is  designed to provide the new adjuster with a basic grounding in what is  needed to become a competent and effective liability claims insurance  adjuster. It is also designed to work as a refresher for the experienced  adjuster.  The adjuster must be prepared able to show empathy but not sympathy  while professionally investigating a liability claim. In addition, the  adjuster must be able to salve the emotions of the claimant and the  insured, explain why in the law and the policy it was appropriate to  pay, or not pay, the claimant and that a settlement is in the best  interest of both the insured and the insurer the adjuster represents.      © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

October 1, 1979 - 2021 – Another Anniversary – Thank You     https://zalma.com/blog Forty-one years ago today I left the world of the employed and became an  entrepreneur by opening my own law firm. The law practice was  incorporated shortly thereafter as Barry Zalma, Inc. When I opened for  business on October 1, 1979, I had no clients and no certainty that I  would have any in the future. I had borrowed money from the bank to  carry me through the first six months and was concerned about my ability  to pay the loan with my third child about to be born.  Much to my surprise and pleasure, on October 1, 1979, at 8:10 a.m., the  best claims handler in the London market, Alan Warboys, called from  London and provided me with my first case as an independent lawyer to  represent Certain Underwriters at Lloyd’s, London. He, and the Lloyd’s  Underwriters he represented, showed faith in me as a lawyer and  insurance expert. Alan is now, and will forever be, my law firm’s first  client and is still and always will be a good friend. He is retired from  the market now as I am retired from the practice of law.  Although I retired from the practice of law, I still work an eight hour  day, five days a week as a consultant, author, blogger, and  videoblogger.  I was admitted to the California Bar on January 2, 1972. I practiced law  in California full time until I retired from the practice of law in  2015. To those of you, in addition to Alan, who have honored me by  retaining me as your lawyer, thank you for a long, productive and  successful legal career.  In 2015 I asked that the California Bar render my license to practice  law inactive and it agreed. I will limit my work to acting as an  insurance claims handling, insurance fraud and insurance bad faith  consultant, expert witness, educator and author.  I Am Not Retired. I am Only Retired from the Practice of Law.   Articles in the October 1, 2021 Issue The EUO As a Tool ClaimSchool, Inc. – Insurance Education Man Bites Dog Story: State Farm Sues Chiropractors for Fraudulent Claims Good News From the Coalition Against Insurance Fraud Cancellation Rule Requires Contradictory Evidence to be Ignored Health Insurance Fraud Convictions Videos on YouTube and Zalma on Insurance from Barry Zalma Other Insurance Fraud Convictions New Books for the Insurance Claims Professionals   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Investigating the Extent of a Property Loss   https://zalma.com/blog To aid the insured in his or her obligation to prove the loss, the  adjuster must, on the first visit, establish with the insured a detailed  scope of loss. This means that the adjuster and the insured (or the  insured with his or her Public Insurance Adjuster (PA)) must walk  through the insured’s house or business and agree to exactly what was  damaged and destroyed as a result of the peril insured against.   The adjuster can get this agreement orally with a tape recorder or write  it down on paper. The scope of loss must be detailed. Descriptions,  including room dimensions; materials like moldings, flooring, wall  coverings, and fixtures; information about special features, openings,  casements, detailing, moldings, and other architectural features must be  part of the scope of loss. T he scope of loss must be as complete and  accurate as possible on a first inspection.  The adjuster must never, at the time of the first inspection of the  damaged property:  1. take a quick look around and ask the insured to fill out a property  loss form at his convenience; 2. leave the insured with blank forms, except for supplemental items  learned of after the initial scope was completed; 3. take a partial scope and attempt to do the rest later; rely on the expertise of the insured’s public adjuster; or 4. rely on a reconstruction contractor to establish the scope.   The adjuster should never make promises that cannot be kept. The  adjuster must advise the insured that the adjuster will – if necessary –  be retaining experts in the valuation and repair of the type of  property that is involved. These experts will bid on the repair and  replacement from the agreed scope. The adjuster should explain to the  insured that the scope of loss may change when some demolition is done  or when an expert examines the property, to change the extent of the  scope and that it is just a first evaluation based only on visible  damage.  Before any estimates for repair are prepared the adjuster must present  the insured with a copy of the agreed scope and inform the insured that  he may, if he wishes, obtain similar opinions based on the same agreed  scope.   The adjuster should provide two general contractors (different from the  construction consultant – if one was used to help the adjuster set the  scope – with a copy of the adjuster’s scope of loss. Each contractor  should prepare detailed estimates of the costs of repair based upon, and  written in the same order as, the adjuster’s scope of loss so that the  adjuster can identify the low bidder. The adjuster then should prepare  an estimate of the cost of repairs for comparison with the estimates  made by the contractors using the scope of loss and estimating programs  like Xactimate, Marshall and Swift or Boekhs.   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining how to Obtain a Subrogation Recovery    https://zalma.com/blog  Equity allows creative remedies for wrongs that do not fit within the  confines of traditional tort or contract remedies (i.e., with cash). The  ancient maxim “for every wrong there is a remedy” (California Civil  Code § 3523) applies to subrogation rights. The maxims were adopted from  the common law of England and are relied on in all jurisdictions.  In  California, the maxims were codified in its Civil Code.  The purpose of equitable subrogation is “to prevent forfeiture and  unjust enrichment.” [Eastern Savings Bank, FSB v. Pappas, 829 A.2d 953,  957 (D.C.2003)]  The roots of equitable subrogation lie in the concept of remedying a  mistake. In Hicks v. Londre, 125 P.3d 452, 458 (Colo.2005) the Colorado  Supreme Court observed that equitable subrogation is appropriate when  mistake is involved. [Joondeph v. Hicks, 235 P.3d 303 (Colo., 2010)]  Equitable subrogation is a doctrine that allows one who has discharged  the debt of another to succeed to the rights of the satisfied creditor.   For example, if Creditor # 3 pays off a debt owed to Creditor # 1 by the  same debtor, equitable subrogation would enable Creditor # 3 to jump  ahead of Creditor # 2 in priority for repayment. The doctrine, which  began in the English courts of equity as a way for a surety to seek  repayment from a defaulting debtor, has been applied by the Delaware  Court of Chancery for over a century. [Eastern Savings Bank, FSB v.  Cach, LLC, Supreme Court of Delaware, 124 A.3d 585 (2015)]  ZALMA OPINION  Subrogation is an equitable remedy and with the assistance of a  professional claims person becomes a profit center to an insurer since  it can reduce or fully reimburse the insurer for monies paid to an  insured. Every claims investigation must include an investigation of  subrogation potential.   © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

How an Individual Can Help the Government Defeat Fraud   https://zalma.com/blog  If an individual has knowledge that a false claim was submitted to the  government, that person can elect to become a whistleblower and retain  an attorney who will draft a complaint and a disclosure statement.  The  whistleblower will file these two documents under seal in US district  court and send copies to the Department of Justice.  After the complaint is filed, the Justice Department has 60 days to  investigate the allegations and determine whether it will join the  lawsuit. If the Justice Department does join the lawsuit, it has the  primary responsibility for prosecuting the case and can limit the  whistleblower’s participation in the action. If the qui tam action is  successful, the whistleblower’s share of the recovery will range from 15  to 30% depending on the extent of the individual’s investigation. The  judge normally determines the percentage.  If the department decides not to participate, the whistleblower has the  right to continue to pursue the claim on behalf of the US and will  receive a higher portion of any recovery received.  The False Claims Act states that any person can file a qui tam action as  long as they have direct and independent knowledge of the fraud and  this knowledge was not obtained from a “public disclosure.”  The  definition of “person” includes not only individuals, but also  businesses and state or local government entities. The most common  plaintiffs in qui tam actions are employees of government contractors,  healthcare organizations, and local, state, or federal government. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining the Need to Gather Evidence to Prove Fraud    https://zalma.com/blog Direct evidence is proof that tends to show existence of a fact in  question without the intervention of the proof of any fact.  It includes  testimony that tends to prove or disprove a fact in issue directly,  such as eye-witness testimony or a confession.  Sometimes, direct evidence may not exist because records have been  destroyed in a fire, destroyed by water, stolen, discarded, or eaten by  vermin.  If direct evidence does not exist for any reason, circumstantial  evidence must be produced to prove the fraud.   Circumstantial Evidence  Circumstantial evidence is all evidence of an indirect nature when the  existence of the principal fact is deduced from evidentiary facts by a  process of probability reasoning.  The investigator takes circumstantial  evidence and uses deductive reasoning to reach a conclusion.    Circumstantial evidence and the deductions of a professional  investigator are often more reliable than direct evidence like  eye-witness testimony.  Circumstantial evidence is sufficient to  establish proof of arson and other criminal activities.   Clear and Convincing Evidence  The “clear and convincing” standard is a very difficult and stringent  standard to establish.  In New Jersey, in the case of Italian Fisherman,  Inc. v. Commercial Union, 215 N.J. Super. 278, 521 A. 2d 912 (1987),  the court refused to accept the clear and convincing evidence standard  of proof proposed by the plaintiff in an insurance fraud defense,  pointing out that proof of fraud by a preponderance of the evidence (50  percent plus one, which is much easier to establish than the “clear and  convincing evidence” standard) renders the insurance policy void from  its inception.  Preponderance of Evidence  An insurer need only prove arson by a preponderance of the evidence. In  our view the defense of arson against a fire insurance claim is  established if it is proved by a preponderance of the evidence.   Scienter  In fraud cases, where intent, knowledge, and scienter (evil intent or  guilty knowledge) constitute essential elements of the offense, evidence  of similar frauds and misrepresentations is admissible at trial. The  insurer need only demonstrate the facts elicited during an investigation  that support the founded belief that a fraud was attempted.  Circumstantial evidence is sufficient to prove such facts if a party's  conduct may be reasonably inferred based upon logical inferences to be  drawn from the evidence.   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining the False Claims Act and How Insurers Can Take Advantage of  it to Deter Fraud    https://zalma.com/blog The False Claims Act, also known as the “Lincoln Law,” dates back to the  Civil War. President Lincoln signed the act into law in 1863 because  war profiteers were selling the Union Army shoddy supplies at inflated  prices. The original law included qui tam [“Qui tam” is an abbreviation  of the Latin phrase “qui tam pro domino rege quam pro si ipso in hac  parte sequitur” meaning “Who sues on behalf of the King as well as for  himself.”  There are a number of pronunciations of the Latin  abbreviation qui tam.  The simplest is key tam (rhymes with “ham.”)  Black’s Law Dictionary suggests kweye (rhymes with “eye”) tam.provisions  that allowed a private person (plaintiff) to sue those who defrauded  the federal government. If the suit was successful the plaintiff would  receive 50% of any recovery from the defendant.]   The qui tam provisions were weakened greatly as a result of  congressional amendments in 1943, and qui tam legislation became  virtually nonexistent. However, in 1986, Sen. Charles Grassley, R–Iowa,  and Rep. Howard Berman, D Calif., joined forces to amend the law and  strengthen the incentives for citizens to uncover and fight fraud as qui  tam relators. (Relators are the private plaintiffs under the False  Claims Act).  The 1986 False Claims Act amendments received widespread bi-partisan  support, and were signed into law by President Reagan. Since the  revitalization, the qui tam provisions have increasingly been used.  If the government does intervene, it assumes primary responsibility for  the prosecution of the case, and is not bound by any act of the relator.  31 U.S.C. § 3730(c)(1).  The relator remains as a party to the action,  however, subject to certain limitations set forth in the Act. Id.  Specifically, the government may dismiss the action notwithstanding the  objections of the relator, provided, however, that “the person has been  notified by the Government of the filing of the motion and the court has  provided the person with an opportunity for a hearing on the motion.”  [31 U.S.C. § 3730(c)(2)(A).; U.S. ex rel. Atkins v. EEOC, 1993 U.S.  Dist. LEXIS 21268.]  Since the qui tam provisions were added to the Act in 1986, the US  Department of Justice calculates that the government has recovered more  than $1.09 billion in qui tam cases, with whistleblowers receiving  nearly 18% (or $184 million) of the government’s recovery. When  considering a qui tam action be certain, however, that the authorizing  statute authorizes the action.  ZALMA OPINION  Insurance fraud is ever growing with estimates from $80 billion to $300  billion a year. The Qui Tam suit is a method to deter insurance fraud by  hitting the fraud perpetrator in the pocket book and deter the crime  when the state or federal government refuses to file criminal actions.      © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Retaining an Attorney by a Claims Person   https://zalma.com/blog  In instances where insurance claims may entail litigation, insurers must  move quickly to engage counsel. When an attorney is retained to defend a  person insured, the fact should be documented in writing by the  attorney, the adjuster, and the insured who is to be defended.  Before an insurer retains an attorney to represent an insured to defend  an insured who has been sued for a tort the claims person should be  certain the lawyer is competent to defend the insured. This can be  accomplished by attending a trial conducted by the lawyer where the  claims person can evaluate the lawyer’s competence at trial. If that  option is not available the claims person should seek recommendations  from other insurance claims professionals who have retained the lawyer  in the past or the insurance company’s list of approved defense lawyers  who have been evaluated by the insurer’s management.  If the attorney is being retained for the first time by the insurer, the  insurer should obtain an engagement letter from the attorney setting  forth the terms and conditions of the retention and signed by the  attorney, the claims person, and the insured. If the attorney or law  firm has an ongoing relationship with the insurer, only the person being  defended need sign an engagement letter.   The claims person must understand that an engagement letter is an  effective contract between the lawyer and the insurer. As a matter of  law, there could not have been an implied contract between Plaintiffs  and Gulley, personally. Because the Court has decided the implied  contract issue as a matter of law based on undisputed facts, the issue  of whether there is a factual dispute regarding the existence of an  implied contract is moot. Like an insurance policy a lawyer’s engagement  letter will be read as written if there is no ambiguity.   Whenever an insured is sued and requires a defense or the insurer is  sued, the insurance adjuster and the defense attorney must understand  their respective roles in preparing the case for trial. They must  develop a rapport with each other and with the insured person or entity  that is being defended, to make communication easier to maintain. Bad  faith lawsuits and poorly tried bodily injury cases seem to arise when  the adjuster and the defense attorney fail to communicate regularly with  each other and the policy holder.  At the first meeting, the attorney and the adjuster should agree on the  division of labor with regard to the preparation of the case, according  to their respective training and experience. Counsel and the claims  person should reach an agreement regarding the handling of the case.   © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders.  He also serves as an arbitrator or mediator for insurance related  disputes. He practiced law in California for more than 44 years as an  insurance coverage and claims handling lawyer and more than 54 years in  the insurance business.  He is available at http://www.zalma.com and [email protected]. Mr. Zalma  is the first recipient of the first annual Claims Magazine/ACE Legend  Award. Over the last 53 years Barry Zalma has dedicated his life to  insurance, insurance claims and the need to defeat insurance fraud. He  has created the following library of books and other materials to make  it possible for insurers and their claims staff to become insurance  claims professionals. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining Evaluation & Settlement    https://zalma.com/blog Case evaluation is necessary to the efficient operation of a third party  liability claims department.   The evaluation should be completed as soon as reasonably practical after  the completion of a thorough investigation. A quick resolution and  payment of the claim will result in a lower amount of settlement with  the claimant and lower expenses incurred by the insurer.  It should be the goal of every claims adjuster to pay the deserving  claimant every dollar owed as soon as possible.  This goal should be  tempered by the need to preserve the assets of the insurer and the  insured. It is axiomatic that a liability claim can be settled for less  before suit is filed than after.  Settlement is favored by the law, and by insurers, claimants, and  insureds. Every effort should be made to resolve the claim before  litigation begins.  The adjuster must learn to quantify these damages in order to reasonably  evaluate the exposure faced by the insured and, simultaneously, the  insurer. Sources to help quantify this type of subjective damages  include:  jury verdict research (publishers provide the adjuster with the  historical and current values juries put on the same type of injury in  the same jurisdiction); the records of the insurer on the amounts paid to settle similar claims  in the same jurisdiction; the experience of the individual adjuster: his or her knowledge of the  amounts needed to settle claims in his or her location; and the experience of the mediator or settlement conference judge.   © 2021 – Barry Zalma   Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders.  He also serves as an arbitrator or mediator for insurance related  disputes. He practiced law in California for more than 44 years as an  insurance coverage and claims handling lawyer and more than 54 years in  the insurance business.  He is available at http://www.zalma.com and [email protected]. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A podcast About the Birth & Growth of the Tort of Bad Faith    https://zalma.com/blog Fletcher v. Western Life  In Fletcher v. Western Life Ins. Co., 10 Cal. App. 3d 376, 89 Cal. Rptr.  78 (1970), the plaintiff, Fletcher was, at the time of trial, a  41-year-old father of 8 children, seven of whom were still in school.  Defendants’ conduct was premeditated, continuous and persistent  (citation) and defendant Amason, who was still employed as Western  National’s claims manager at the time of trial, indicated that he would  conduct himself similarly if a similar situation should again arise. The  primary function of punitive damages is to deter the defendant and  those similarly situated from engaging in similar tortuous conduct in  the future.   Gruenberg v. Aetna  It is manifest that a common legal principal underlies all of the  foregoing decisions; namely, that in every insurance contract there is  an implied covenant of good faith and fair dealing. The duty to so act  is imminent in the contract whether the company is attending to the  claims of third persons against the insured or the claims of the insured  itself. Accordingly, when the insurer unreasonably and in bad faith  withholds payment of the claim of its insured, it is subject to  liability in tort.  "We conclude, therefore, that the duty of good faith and fair dealing on  the part of defendant insurance companies is an absolute one. At the  same time, we do not say that the parties cannot define, by the terms of  the contract, their respective obligations and duties. We say merely  that no matter how those duties are stated, the nonperformance by one  party of its contractual duties cannot excuse a breach of the duty of  good faith and fair dealing by the other party while the contract  between them is in effect and not rescinded."   Silberg v. California Life  under these circumstances defendant’s failure to afford relief to its  insured against the very eventuality insured against by the policy  amounts to a violation as a matter of law of its duty of good faith and  fair dealing implied in every policy. 11 Cal. 3d at 462. (Emphasis  added.)  ZALMA OPINION  An insurer should never leave the insured without benefits while it is  involved in a dispute with another insurer or provider of benefits. It  should, rather, protect its right to dispute coverage and get its money  back by means of a reservation of rights letter or a non-waiver  agreement. The reservation of rights letter keeps the insurer, while it  is taking care of an insured whose coverage is in question, from being  bound to the insured forever. It allows the insurer, unilaterally, to  give itself the opportunity to complete a thorough investigation,  determine whether coverage applies, and then—if it does not  apply—withdraw its benefits and even seek return of what it has paid.  The non-waiver agreement is a contract where both the insured and the  insurer agree that while the insurer is investigating neither party  waives the rights available under the contract.    © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video from ZIFL - 9/15/2021 -  https://zalma.com/blog New Articles on Insurance Fraud Cease And Desist Orders Issued to Four Companies Allegedly  Selling Home Warranties Without a License The California Department of  Insurance announced September 7, 2021 that it has issued Cease and  Desist Orders, effective immediately, to four companies who allegedly engaged in selling home  warranty contracts in California without proper authorization. Under the Orders, the companies must immediately stop selling the  contracts. To protect consumers from fraud, any company marketing and  selling home warranty contracts to California consumers must be licensed  by the Department of Insurance.  “California consumers place their trust in home warranty companies to  provide coverage when something breaks,” said Insurance Commissioner  Ricardo Lara. “Our licensing process is intended to protect consumers  and ensure ethical standards and practices. Our team works diligently to help companies understand and meet these  standards, and when they do not, we take decisive action.” The Cease and  Desist Orders were issued to: • Complete Care Home Warranty, LLC • Global Home Protection, LLC • Fundamental America, LLC, doing business as Priority Home Warranty • First Premier Home Warranty  The Department launched an investigation after receiving a complaint  from a consumer alleging that these unlicensed home warranty companies  were marketing and selling their plans in California. During the  investigation, Department investigators, using aliases, visited each of  the companies’ websites and obtained multiple coverage quotes for  California addresses.  After initially receiving the quotes by emails,  the companies then sent multiple follow-up emails to the investigators  in attempts to sell the warranty contracts. Consumers are advised to  check the license status of a company before purchasing a policy and  contact the Department at 800-927- 4357 if they suspect they may be a victim of fraud. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

To understand the connection between ethics and quality service it is  important to understand the meaning of ethical values in the insurance  context.  https://zalma.com/blog The ethical insurer and its ethical claims and underwriting  staff must treat the insureds and claimants with whom they come in  contact honestly, fairly and with utmost good faith. The contact must  reflect the highest integrity, respect and empathy for the people who  need the service of the insurer.  Finally, the insurer must reflect a high level of trustworthiness,  fairness; honesty and personal accountability. Vince Lombardi reportedly  said  The quality of a person’s life is in direct proportion to their  commitment to excellence, regardless of their chosen field of endeavor.  The statement applies equally to football – about which Lombardi was  speaking – and insurance.  Excellence in the organization depends on the  high ethical values and excellence in keeping the promises made by an  insurance policy by the insurer’s employees and officers.  Without excellence in those involved in the business of insurance;  without excellence in claims handling; and without excellence in  underwriting coupled with ethical behavior and conduct, an insurer will  almost certainly fail. The insurer that demands excellence in claims  handling and underwriting within the confines of ethical conduct and  values will invariably succeed.  The professional insurance adjuster recognizes that the work of  adjusting insurance claims is a profession of public trust. Independent  insurance adjusters should maintain a standard of integrity that will  promote the goal of building public confidence and trust in the  insurance industry.   ZALMA OPINION   Every insurers needs, to be fair and profitable, a dedication to provide  excellence in claims handling. This is accomplished by creating a staff  of ethical insurance professionals who are ready and able to deal with  those it insures, or those making claims against its insured, fairly,  ethically and with the utmost good faith.  © 2021 – Barry Zalma Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders.  He also serves as an arbitrator or mediator for insurance related  disputes. He practiced law in California for more than 44 years as an  insurance coverage and claims handling lawyer and more than 54 years in  the insurance business.   He is available at http://www.zalma.com and [email protected]. Mr. Zalma  is the first recipient of the first annual Claims Magazine/ACE Legend  Award. Over the last 53 years Barry Zalma has dedicated his life to  insurance, insurance claims and the need to defeat insurance fraud. He  has created the following library of books and other materials to make  it possible for insurers and their claims staff to become insurance  claims professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at https://www.rumble.com/zalma ; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/  The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining Expected, Intended or Fortuity in Insurance  https://zalma.com/blog The Fortuity Doctrine arises from the basic concept upon which insurance  is founded: that insurance covers risks, not losses that were planned,  intended, or anticipated by the insured. It has always been the view of  insurers that losses that were expected by the insured could not be  insured. To do so would have a counterproductive effect. No one would  buy insurance until they were certain they would have a loss. The  concept of spreading the risk on which insurance is based would be  defeated.  An accident or occurrence is never present when the insured performs a  deliberate act unless some additional, unexpected, independent, and  unforeseen happening occurs that produces the damage. when the injury  was caused by the insured’s manufacture and sale of products the  manufacture and sale of products without right were deliberate and  intentional acts, and there were no additional, unexpected, independent,  and unforeseen happenings that caused the infringement alleged by the  plaintiff or the indemnity obligation. The court concluded that the  conduct giving rise to the underlying action was not an “accident” nor  an “occurrence” within the coverage provision. because there was no  potential basis for coverage, there is no duty to defend.6 The Loss-In-Progress Rule codifies a fundamental principle of insurance  law that an insurer cannot insure against a loss that is known or  apparent to the insured. (See Bartholomew v. Appalachian Ins. Co. (1st  Cir. 1981) 655 F.2d 27, 28-29.) The public policy rule is premised on  the view that to hold the insurer liable for a progressive and  continuing property loss that was discovered before the carrier insured  the risk would be to impose upon the insurer a guaranty of the good  quality of the property insured, which liability under the policy the  insurer had not assumed. (Greene v. Cheetham (2d Cir. 1961) 293 F.2d  933, 937.)  In Montrose Chemical Corp. v. Admiral Ins. Co. (1995) 10 Cal.4th 645,  691, 693 where the existence and extent of injuries were unknown from  the insured’s “standpoint,” coverage of continuous or progressively  deteriorating property damage under a CGL policy did not offend the  loss-in-progress rule.  The Fortuity Doctrine Or “Loss in Progress” Rule, where damage began to  occur prior to the inception of the policy, requires that, as a matter  of law, no part of the loss may be insured against. (See E.G., Summers  v. Harris, (5th Cir. 1978)573 F.2d 869, 872; Presley v. National Flood  Insurers Association (E.D. Mo. 1975) 399 F. Supp. 1242. The Fortuity  Doctrine only precludes a party from insuring against a loss that has  occurred or is certain to occur within the term of the policy. (See,  E.G., Sabella v. Wisler (1963)59 Cal. 2d 21, 34 [27 Cal. Rptr. 689, 377  P.2d 889]; Standard Structural Steel v. Bethlehem Steel Corp. (D.Conn.  1984) 597 F.Supp. 164, 193; Essex House v. St. Paul Fire & Marine  Insurance Co. (S.D. Ohio 1975) 404 F.Supp. 978, 988-990; Avis v.  Hartford Fire Insurance Company (1973) 283 N.C. 142 [195 S.E.2d 545,  548].)  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

False Swearing & Insurance Fraud    In common language the “false swearing” provision of an insurance policy  merely means that if the insured lies under oath the policy is void  whether the lie is in a proof of loss or at an examination under oath.  In Texas and Oklahoma, false swearing is explained this way:  Where an insured knowingly and willfully overestimates the value of  property destroyed or damaged, the policy is voided and the insured’s  right to recover is defeated.  The reason for the false swearing defense can be explained because it  would be unjust to allow a claimant to misrepresent facts under oath  that might lead to a valid defense and then allow him to escape the  consequences of the falsehood simply because he had succeeded so well  that the company was unable to establish the defense.  In common language the "false swearing" provision of an insurance policy  merely relates to a lie under oath.  In Texas and Oklahoma, false swearing is explained this way: "Where an  insured knowingly and willfully overestimates the value of property  destroyed or damaged, the policy is voided and the insured's right to  recover is defeated."[Summit Machine Tool Manufacturing Corp. v. Great  Northern Insurance Co., 997 S.W.2d 840 (Tex. App. Dist. 3, 1999)].   Almost every policy that insures against the risk of loss of property  requires the insured to submit a sworn proof of loss. The proof of loss  must provide complete details regarding the property insured, the origin  of the loss, and the value of the property claimed destroyed. A policy  usually also requires the insured to give the insurer access to books  and records to prove the claim. Where fraud is suspected, the insurer  may demand that the insured be examined under oath. Significant  deviations between the sworn proof of loss and the facts developed at an  examination under oath can be the basis of a defense of fraud or false  swearing. If false swearing is found to exist, it will normally  constitute a complete defense to any claim under a property insurance  policy.  The U.S. Supreme Court stated the rule, as follows:  A false answer as to any matter of fact material to the inquiry,  knowingly and willfully made, with an intent to deceive the insurer,  would be fraudulent. If it accomplished its result, it would be a fraud  effected; if failed, it would be a fraud attempted. No one can be  permitted to say, in respect to his own statements upon a material  matter, that he did not expect to be believed; their materiality, in the  eye of the law, consists in their tendency to influence the conduct of  the party who has an interest in them and to whom they are addressed.  Claflin v. Commonwealth Insurance Co., 110 U.S. 81, 3 S. Ct. 507, 28 L.  Ed. 76 (1884).   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Revealing The Birth of the Tort of Bad Faith in Comunale  https://zalma.com/blog The California supreme court in Comunale v. Traders & General Ins.  Co. (1958) 50 Cal.2d 654, 328 P.2d 198, held the insurer liable for  amounts over the policy limit because of its wrongful refusal to settle  the underlying action.  The opinion distinguishes the consequences of a  wrongful refusal to settle and a wrongful refusal to defend, pointing  out that as to the latter, the liability of the insurer is ordinarily  limited to the amount of the policy plus attorneys' fees and costs.  Mr. and Mrs. Comunale were struck in a marked pedestrian crosswalk by a  truck driven by Percy Sloan. Mr. Comunale was seriously injured, and his  wife suffered minor injuries. Sloan was insured by defendant Traders  & General Insurance Company under a policy that contained limits of  liability in the sum of $10,000 for each person injured and $20,000 for  each accident. He notified Traders of the accident and was told that the  policy did not provide coverage because he was driving a truck that did  not belong to him. When the Comunales filed suit against Sloan, Traders  refused to defend the action, and Sloan employed competent counsel to  represent him. On the second day of the trial Sloan informed Traders  that the Comunales would compromise the case for $4,000, that he did not  have enough money to effect the settlement, and that it was highly  probable the jury would return a verdict in excess of the policy limits.  Traders was obligated to defend any personal injury suit covered by the  policy, but it was given the right to make such settlement as it might  deem expedient. Sloan demanded that Traders assume the defense and  settlement of the case. Traders refused, and the trial proceeded to  judgment in favor of Mr. Comunale for $25,000 and Mrs. Comunale for  $1,250.   The decisive factor in fixing the extent of Traders' liability is not  the refusal to defend; it is the refusal to accept an offer of  settlement within the policy limits. Where there is no opportunity to  compromise the claim and the only wrongful act of the insurer is the  refusal to defend, the liability of the insurer is ordinarily limited to  the amount of the policy plus attorneys' fees and costs.  Comunale v. Traders & General Ins. Co., 328 P.2d 198, 50 Cal.2d 654,  68 A.L.R.2d 883 (Cal. 1958)  The Video covers the full text of the California Supreme Court decision.  ZALMA OPINION  This is the first case that created the tort of bad faith and allowed a  person to obtain both contract and tort damages as a result of a bad  faith refusal to defend and or settle a claim within policy limits. It  us imperative that everyone interested in insurance claims know the full  text of the case that started the creation of the tort of bad faith.   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Recitation of Crisci v. Security Ins. Co. of New Haven, Conn.   https://zalma.com/blog  A jury awarded Mrs. DiMare $100,000 and her husband $1,000. After an  appeal (DIMARE V. CRESCI, 58 CAL.2D 292, 23 CAL.RPTR. 772, 373 P.2D 860)  the insurance company paid [66 Cal.2d 429] $10,000 of this amount, the  amount of its policy. The DiMares then sought to collect the balance  from Mrs. Crisci. A settlement was arranged by which the DiMares  received $22,000, a 40 percent interest in Mrs. Crisci's claim to a  particular piece of property, and an assignment of Mrs. Crisci's cause  of action against Security. Mrs. Crisci, an immigrant widow of 70,  became indigent. She worked as a babysitter, and her grandchildren paid  her rent. The change in her financial condition was accompanied by a  decline in physical health, hysteria, and suicide attempts. Mrs. Crisci  then brought this action.  The trial court found that defendant 'knew that there was a considerable  risk of substantial recovery beyond said policy limits' and that 'the  defendant did not give as much consideration to the financial interests  of its said insured as it gave to its own interests.' That is all that  was required. The award of $91,000 must therefore be affirmed.  In determining whether an insurer has given consideration to the  interests of the insured, the test is whether a prudent insurer without  policy limits would have accepted the settlement offer.  Crisci v. Security Ins. Co. of New Haven, Conn., 66 Cal.2d 425, 58  Cal.Rptr. 13, 426 P.2d 173 (Cal. 1967)  ZALMA OPINION   It is important that claims professionals understand why there exists a  tort of bad faith. The treatment of Mrs. Crisci that drove her to  suicide when a minimally $100,000 case could have settled for less than  the policy limits of only $10,000 was egregious. By presenting the  entire decision claims personnel can better understand why they are  required to deal fairly and in good faith when defending an insured and  should determine whether - if there was no limit - the settlement offer  would or should have been accepted.   © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders.  He also serves as an arbitrator or mediator for insurance related  disputes. He practiced law in California for more than 44 years as an  insurance coverage and claims handling lawyer and more than 54 years in  the insurance business.  He is available at http://www.zalma.com and [email protected]. Mr. Zalma  is the first recipient of the first annual Claims Magazine/ACE Legend  Award. Over the last 53 years Barry Zalma has dedicated his life to  insurance, insurance claims and the need to defeat insurance fraud. He  has created the following library of books and other materials to make  it possible for insurers and their claims staff to become insurance  claims professionals. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurance Fraud Perpetrators are Creative We All Do it Fraud   https://zalma.com/blog The California Court of Appeal, in Cassim v. Allstate Insurance Co., 94  P.3d 513, 33 Cal.4th 780, 16 Cal. Rptr.3d 374 (Cal. 07/29/2004), was  faced with a trial verdict of bad faith against an insurer that it found  was based upon prejudicial final argument leading the jury to believe  that “some fraud” is permissible   The law in California, as it should be everywhere, is that an insured  cannot commit a little fraud. You either commit fraud or you do not. You  cannot commit a little fraud any more than you can be a little dead.  If you commit fraud, regardless of the bad faith of the insurer, you  recover nothing.   Hard Fraud   The following types of fraud are premeditated and intentionally  committed.  Those who differentiate between types of fraud would place  these in the category of “hard fraud,” which is considered more  egregious than “soft fraud” since it is performed with malice  aforethought.  Hard fraud takes planning, scheming, and even someone on the inside to  help you get money from an insurance company. An example of hard fraud  would be getting into an accident on purpose so that you can claim the  insurance money. This example is fairly prevalent lately; someone hits  the brakes so that the person behind them can’t stop quickly enough.  Another really severe form of hard fraud would be faking your own death  or murder for the life insurance death benefit.  T he Staged Loss   A theft where the owner contracts with an intermediary to dispose of a  vehicle. The owner ‘gives up’ the vehicle and then reports it to the  insurer as stolen.The person to whom the vehicle is given up will pass  it to a salvor who breaks it up into its component parts and sells the  parts (a “chop shop.”)  Staged theft also includes cases where the  insured ships an auto to Mexico, China, Vietnam, or other foreign  country where it is sold after which the insured makes claim reporting  the vehicle stolen. All staged thefts are planned and performed for the  sole purpose of defrauding an insurer.  Abandonment  The owner abandons a vehicle on a city street or in a parking lot,  creating a morale hazard. The insured will report the vehicle stolen and  attempt to collect before it is recovered.  Dumping  When the owner disposes of a vehicle by dumping it into a lake or other  body of water.  Cars have even been found buried underground and some  lakes have been found to have more than 50 cars underwater.   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining Duty to Defend and the Four Corners Rule  https://zalma.com/blog Some states apply a rule of interpretation of the duty to defend a  liability claim by limiting their review to the facts alleged in the  lawsuit and the wording of the insurance policy.  They refuse to consider any evidence extrinsic to the allegations of the  suit.  If any of the allegations are potentially covered by the policy, the  duty to defend is established. If none of the allegations in the  complaint is potentially covered by the policy, the insurer can  generally refuse to defend.   “Four corners” refers to the parameters of the policy; there is a  variant test known as the “eight corners rule.” There is little  difference between the two; they both take into consideration the four  corners of the suit and the four corners of the policy.  Courts operating under the four corners or eight corners rule will not  consider extrinsic facts or the potential for a suit drafted out of  spite. The prudent insurer will, before making a decision, determine  what rule or test is applied in the jurisdiction where the loss  occurred.  The rationale behind the two rules is to require insurers to defend  their insureds against all covered claims regardless of merit. Allowing  an insurer to admit extrinsic evidence that contradicts a plaintiff’s  allegations to establish the applicability of a policy exclusion would  circumvent the very reason for the rules.52  Many jurisdictions have ruled that any doubt regarding the obligation to  defend is to be resolved in favor of the insured [Miller v. Elite Ins.  Co., 100 Cal. App. 3d 739 (1980)].   Potentiality   The insurer is not required to indemnify the insured if the potentiality  of an accidental cause never materializes, if the jury finds that the  insured intentionally caused the plaintiff’s injury, or if the insured  is convicted of the crime of battery. However, even though a policy  excludes liability arising from violations of law, there is the  potentiality that the jury would find there was no violation of law and  that the policy provided coverage. However, if the claims of negligence  against the insured were potentially covered under the policy the  insurer will have a duty to defend.  Determining whether insurance coverage exists requires analysis of the  claims asserted in the state court action. [ Elec. & Power Co. v.  Northbrook Prop. & Cas. Ins. Co., 475 S.E.2d 264, 265-66 (Va. 1996);  Bohreer v. Erie Ins. Grp., 475 F. Supp. 2d 578, 584 (E.D. Va. 2007)]  noting that Virginia recognizes the "potentiality rule," wherein an  insurer's duty to defend is triggered if there is any possibility that a  judgment against the insured will be covered under the insurance  policy. The "eight corners rule," compares the four corners of the  insurance policy with the four corners of the underlying complaint to  determine whether coverage exists. [Erie Ins. Exch. v. State Farm Mut.  Auto. Ins. Co., 60 Va. Cir. 418 (Va. Cir. Ct. Dec. 16, 2002); AES Corp.  v. Steadfast Ins. Co., 725 S.E.2d 532, 535 (Va. 2012] --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Fraud Must be Defeated Even in the Face of Claims of Bad Faith  https://zalma.com/blog It has been said that where fear enters, reason flees. Doubt, with its  wavering in opinion and judgment, comes from a fear of the unknown. It  is an unrealistic viewpoint that develops from defects in knowledge or  evidence. But when a subject or situation is studied and understood, the  unknown becomes known and fear and doubt are overcome. Irrational  decisions are thereby avoided, or minimized, so that the problem at hand  is more likely to be successfully resolved. And so it is with the  irrational thinking and attitudes related to the handling of suspicious  claims and concerns about tort of bad faith.  What do fear and doubt have to do with the tort of bad faith? The fact  is that adjusters are faced almost daily with everything from an  insured's willful failure to cooperate to attempted bad faith setups,  intimidation, and threats of bad faith lawsuits. [See Borland v. Safeco  Ins. Co., 147 Ariz. 195, 709 P.2d 552 (Ct. App. 1985), for a detailed  discussion of how an insured and her attorney played games with claims  persons who the court described as "untrained or inexperienced, and  careless."  The court was also critical of the activities of the attorney  who was intimately involved with the claim from day one. The claim  involved a burglary loss of jewelry and a concurrent policy with the  Home Insurance Company. The insured's reasons for having two homeowner's  policies were not addressed.  Enormous pressures come to bear on adjusters, which inevitably lead to a  conflict between their duty to provide service to insureds and their  equally important and compelling duty to keep them honest. Dishonest  insureds and unethical attorneys use extortive tactics, which are  designed to thwart an insurer's legitimate investigation and to coerce  insurers into paying questionable and meritless claims. Unfortunately,  these tactics are frequently successful, as many adjusters do not have  the specialized education, training or knowledge needed to respond  properly.    Part of the problem is the unwillingness of some companies to educate,  train, and support experienced claims adjusters and SIU investigators to  be confident and confront the issues. Insurers must provide the moral  and financial support, including proper staffing and training, to  investigate, expose, and control fraudulent activity effectively. As a  consequence, some inexperienced, untrained and ineffective claims  adjusters are running scared and paying claims that should not be paid.  It is clear that the only way adjusters and insurers can minimize their  vulnerability to bad faith exposures, and at the same time control  fraud, is to become an expert in every facet of property claims  handling. Mere competence is insufficient.  Although contract law is replete with references to the good faith  duties of both parties, the rules generally have not been evenly and  fairly applied in the case of insurance contracts. More often than not  the burden of good faith and fair dealing has been one-sided, that is,  it has been placed almost exclusively on the shoulders of insurance  carriers. Little attention has been focused on the activities of the  insured, whether that activity has been a breach of conditions or other  conduct against public policy.   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

California Legislature Wants to Make Application Fraud a Crime   https://zalma.com/blog Application fraud in California is only recognized with regard to  workers’ compensation policies. The proposed new statute provides it  will be a crime for any fraud in any insurance application. Why it’s Difficult to Fire a Government Employee Insurance Fraud Conviction Requires Dismissal of Government Employee After Conviction for Fraud State Employee Demands Her Job  Fatu Rimbert appealed from a November 12, 2019 final administrative  decision of the Civil Service Commission (Commission) affirming her  removal as a family service worker for the County of Essex (County),  Department of Citizen Services, Division of Family Assistance and  Benefits (DFAB). In The Matter of Fatu Rimbert, Essex County Department  of Citizen Services, No. A-1684-19, Superior Court of New Jersey,  Appellate Division (August 18, 2021) was asked to reinstate the job from  which she was fired. Insurer’s Report to Insurance Fraud Authorities Is Privileged It Is Not Defamation to Report a Suspected Fraud to The State  Cholla Bay Hotel Group LLC; CBHG Management S.A. DE C.V.; Desert Springs  Equestrian Center LLC (“DSEC”); and Lorilei Peters (collectively  “CBHG”) appealed from the trial court’s grant of summary judgment in  favor of Farm Bureau Financial Services, its “affiliate,” Western  Agricultural Insurance Company, and Paul Cully (collectively “Farm  Bureau”), and the ultimate dismissal of its claims. In CBHG Management,  S.A. de C.V., a foreign corporation; Cholla Bay Hotel Group, an Arizona  corporation; Desert Springs Equestrian Center, LLC, an Arizona limited  liability company; and Lorilei Peters, in her individual capacity v.  Farm Bureau Financial Services, a foreign corporation, and Paul Cully,  No. 2 CA-CV 2020-0111, Court of Appeals of Arizona, Second Division  (August 6, 2021) the Court of Appeals was asked to reverse the trial  court’s judgment. The “Chutzpah” of Insurance Fraud Perpetrators After Sentencing Defendant Attempts to Change His Plea of Guilty  It takes a massive amount of unmitigated gall (chutzpah) to file an  appeal of a conviction and sentencing after pleading guilty with  knowledge and understanding but insurance fraud perpetrators seem to  have no trouble doing so rather than pay restitution or serve probation;  a classic case of the dog biting the hand that feeds him. Convictions from the Coalition Against Insurance Fraud Health Insurance Fraud Convictions Other Insurance Fraud Convictions --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining Why a Claims Made Policy's Notice Require is not  Subject to the Notice Prejudice Rule    https://zalma.com/blog Claims made and claims made and reported policies contain a date certain  notice requirement.   Applying the notice-prejudice rule to the date-certain notice  requirement in a claims-made policy would alter the parties' agreed  allocation of risk. In short, to excuse late notice in violation of such  a requirement would alter a basic term of the insurance contract.  Furthermore, it would prevent parties from defining coverage with  certainty, no matter how definitive or express the notice requirement.  Such a result would significantly diminish the advantages of claims-made  policies for both insurers and insureds: insurers could no longer  “close the books” on previous policy periods, and policy premiums  presumably would rise to account for the risk that an insured might  notify the insurer of a claim after the policy period has expired.  Where an insurance policy requires notice of a potential claim, the  insured must promptly notify the insurer when the insured reasonably  might expect to be the subject of a malpractice claim. This notice  requirement operates as a condition precedent to coverage, and to the  insurer’s obligation to defend and indemnify.  Therefore, absent a valid  excuse, the insured’s failure to satisfy the policy’s notice  requirements vitiates the policy, and the insurer need not show  prejudice in order to assert the defense of noncompliance.  Reading the contract as a whole, the notice provision in the Policy  provides a strict reporting requirement. Accordingly, the Court finds  that Plaintiffs were required to strictly comply with the notice  provision of the contract, and the notice-prejudice rule does not apply  to the Policy. Plaintiffs failure to comply with the Policy’s notice  provision bars recovery.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining the Contractual Right of an Insurer to Declare a  Policy Void   https://zalma.com/blog   A life insurance policy procured with the intent to benefit persons  without an insurable interest in the life of the insured does violate  the public policy of New Jersey, and such a policy is void at the  outset. [Sun Life Assurance Co. of Canada v. Wells Fargo Bank (N.J.,  2019)]  When a policy is declared “void” by the insurer, the most common ground  is that the insured has breached a condition of the policy, which  effectively forfeits the policy.  “Forfeiture” is defined in Webster’s  3rd International Unabridged Dictionary as “loss of some right,  privilege … in consequence of a … breach of condition or other act.”  Generally, if the insurer accepts unearned premiums from the insured at  the time of forfeiture or voidance with the knowledge of facts  indicating a forfeiture, the insurer waives its right to defend on that  ground.  Whenever an adjuster determines that a policy should be declared void  based upon policy language similar to the language in the standard fire  policy, he or she must coordinate with the underwriting department so  that the underwriters are aware of the action and do not inadvertently  waive a viable defense. The adjuster should be certain that a copy of  the letter declaring that a policy is void is placed in the underwriting  file as well as the claim file.   The insured did not make “[a] mere oversight or honest mistake” Rather,  he made a knowing misrepresentation of a material fact. Notwithstanding  that, even though the misrepresentation was not made at the inception of  the insurance agreement, the court held that the insurer was justified  in declaring the policy void.  The insurer must prove there was a knowing misrepresentation of fact  with the intent of the insureds to have the insurer rely upon it to its  detriment from the outset.  © 2021 – Barry Zalma Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders.  He also serves as an arbitrator or mediator for insurance related  disputes. He practiced law in California for more than 44 years as an  insurance coverage and claims handling lawyer and more than 54 years in  the insurance business.  He is available at http://www.zalma.com and [email protected]. Mr. Zalma  is the first recipient of the first annual Claims Magazine/ACE Legend  Award. Over the last 53 years Barry Zalma has dedicated his life to  insurance, insurance claims and the need to defeat insurance fraud. He  has created the following library of books and other materials to make  it possible for insurers and their claims staff to become insurance  claims professionals. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Coinsurance is often misunderstood in first party property insurance. https://zalma.com/blog  It  is a clause that causes frequent dissatisfaction with insureds over  claim settlements.  Historically most losses are partial losses. It is rare that the entire  building or amount of covered property is destroyed. Knowing this,  individuals deciding to insure their business property might insure for  only part of its value. The insured may reason that since it is more  likely to have a partial loss than a total loss, it is wasteful to spend  premiums on complete insurance.  This reasoning, of course, defeats the concept that insurance is the  sharing of risk.  If the insured does not obtain insurance for the total  values at risk, then the risk is not shared equally with other insureds.  If most insureds chose to insure only part of the value of their  property, the insurance industry would still have approximately the same  number of claims to pay; however, the premiums that it collected to pay  those claims would be vastly reduced. In order to have enough money to  pay the losses, insurers would charge more for the lower values that  insureds chose to insure. Those insureds who chose to insure the full  value of their property would pay even more than they now pay for the  same amount of coverage. Encouraging insureds to carry full insurance on  their property allows premium levels to be fairer and that is why the  coinsurance provisions were created.   The authors of the coverage forms were aware that expecting insured  individuals and businesses to carry coverage for 100 percent of the  value of their property was unrealistic. They allowed the choice (and  the corresponding premium level) of insuring against the risk of loss of  only a percentage of the value of the property.  The percentage that the insured chooses is called the “coinsurance  percentage.” The insured and the insurance company are coinsuring the  property because the percentage that the insured chooses not to insure  represents the amount of coverage that the insured will pay.  In order to encourage insureds to insure a reasonably high percentage of  their property’s value, the coverage form provides the incentive of  coverage extensions—broader coverage—to those insureds who choose at  least an 80 percent coinsurance.   © 2021 – Barry Zalma, Esq., CFE, --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining the Coinsurance Clause https://zalma.com/blog Coinsurance is often misunderstood in first party property insurance. It is a clause that causes frequent dissatisfaction with insureds over claim settlements. Historically most losses are partial losses. It is rare that the entire building or amount of covered property is destroyed. Knowing this, individuals deciding to insure their business property might insure for only part of its value. The insured may reason that since it is more likely to have a partial loss than a total loss, it is wasteful to spend premiums on complete insurance. This reasoning, of course, defeats the concept that insurance is the sharing of risk. If the insured does not obtain insurance for the total values at risk, then the risk is not shared equally with other insureds. If most insureds chose to insure only part of the value of their property, the insurance industry would still have approximately the same number of claims to pay; however, the premiums that it collected to pay those claims would be vastly reduced. In order to have enough money to pay the losses, insurers would charge more for the lower values that insureds chose to insure. Those insureds who chose to insure the full value of their property would pay even more than they now pay for the same amount of coverage. Encouraging insureds to carry full insurance on their property allows premium levels to be fairer and that is why the coinsurance provisions were created. The authors of the coverage forms were aware that expecting insured individuals and businesses to carry coverage for 100 percent of the value of their property was unrealistic. They allowed the choice (and the corresponding premium level) of insuring against the risk of loss of only a percentage of the value of the property. The percentage that the insured chooses is called the “coinsurance percentage.” The insured and the insurance company are coinsuring the property because the percentage that the insured chooses not to insure represents the amount of coverage that the insured will pay. In order to encourage insureds to insure a reasonably high percentage of their property’s value, the coverage form provides the incentive of coverage extensions—broader coverage—to those insureds who choose at least an 80 percent coinsurance. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Every Claims Person in California Must Be Trained on the Fair Claims  Settlement Practices Regulations by September 1    https://zalma.com/blog The Reasons Why the California Department of Insurance Imposed the  California Fair Claims Settlement Practices Regulations on All Insurers  Doing Business in California   In 1993, after waiting five years after receiving direction from the  California Supreme Court, the state of California determined that the  insurance industry needed to be regulated to stop insurers from treating  the people insured badly and without good faith. It created a set of  Regulations called the “California Fair Claims Settlement Practices  Regulations” (the “Regulations) that were designed to enforce the  mandate created by the California Fair Claims Settlement Practices  statute, California Insurance Code Section 790.03 (h).  In response to  the direction of the California Supreme Court in its decision,  Moradi-Shalal v. Fireman’s Fund Ins. Companies, 46 Cal. 3d 287 (1988).  In so doing the California Department of Insurance (CDOI) issued rules  that were designed to micro manage the business of insurance claims and  create a method to punish those insurers who failed to comply with the  Regulations. Some of the Regulations recited what had always been  recognized by the insurance industry as good faith and proper claims  handling. Others imposed draconian mandates on what and when to do  everything in the claims process.   The Regulations also provided a guide to insureds, public insurance  adjusters and policyholders’ lawyers to assert any violation of the  Regulations to be evidence of an insurer’s breach of the implied  covenant of good faith and fair dealing.  All insurers doing business in California must comply with the  requirements of the Regulations or face the ire of, and attempts at  financial punishment from, the CDOI.  Knowledge of the requirements of the Regulations is important to  everyone involved in the business of insurance whether as an insurance  adjuster, insurance claims management, public insurance adjuster,  policyholder, defense lawyer, insurance coverage lawyer, and  policyholder’s lawyer.   © 2021 – Barry Zalma Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/  The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Some of the Most Important Cases Creating the Tort of Bad Faith   https://zalma.com/blog In Comunale v. Traders & Gen. Ins. Co., 50 Cal. 2d 654 (1958), the  insurance company wrongfully refused to defend its insured who had been  sued in the underlying action for damages arising out of an automobile  accident. It also refused to conclude the suit after receiving an offer  of settlement for about 25 percent of the ultimate judgment obtained  against its insured. The refusal resulted in an excess judgment against  its insured. In the subsequent bad faith action the insurer was held  liable for the entire judgment including the excess limits and other  resulting damages. This was clearly an extra-contractual recovery since  under a straight breach of contract claim the insurer would have been  liable for only the amount of the policy.  In Critz v. Farmers Ins. Group, 230 Cal.App.2d 788, 799, 41 Cal.Rptr.  401 (1964), an injured person who had recovered a judgment against an  insured brought an action, as assignee of the insured, against the  insurer.  The Court of Appeal held that the assignment by the insured to  the injured person of any right of action that the insured might have  against his insurer for unreasonably rejecting the injured person’s  settlement offer to the insurer would subject the insurer to liability  for the amount of recovery by the injured person against the insured in  excess of the policy limit if the insurer acted in bad faith in  rejecting the offer of settlement. The court in this case held that a  wrongful refusal to settle sounded only in contract was expressly  disapproved.  The court stated that, in determining whether to accept a  settlement offer, the insurer must give the interest of the insured at  least as much consideration as its own. When there is a great risk of an  excess judgment, good faith requires acceptance of an offer within  policy limits.  In Critz v. Farmers Ins. Group, 230 Cal.App.2d 788, 799, 41 Cal.Rptr.  401 (1964), an injured person who had recovered a judgment against an  insured brought an action, as assignee of the insured, against the  insurer. The Court of Appeal held that the assignment by the insured to  the injured person of any right of action that the insured might have  against his insurer for unreasonably rejecting the injured person’s  settlement offer to the insurer would subject the insurer to liability  for the amount of recovery by the injured person against the insured in  excess of the policy limit if the insurer acted in bad faith in  rejecting the offer of settlement. When there is a great risk of an  excess judgment, good faith requires acceptance of an offer within  policy limits. The Court of Appeal concluded that if bad faith occurred  before the assignment the action could be maintained by the assignee. ZALMA OPINION   It is important that everyone involved in insurance claims understand  that the tort of bad faith exists and must be dealt with whenever a  claims is investigated and attempts to settle fail. The insurance claim  professional can learn to avoid the mistakes made by their predecessors  who cause the creation of the tort by not treating their insureds fairly  and in good faith, and sometime by attempting to defraud or hurt their  insureds to avoid payment of legitimate claims. Because of the creation  of the tort of bad faith such wrongful conduct is rare but still exists  and needs to be removed from the industry.  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining Uberrimae Fidei  https://zalma.com/blog Ethics is a process of systematically applying, using, defending and  recommending concepts of right and wrong behavior.   Ethical behavior is required of both parties to a contract of insurance  for the system to work. If any party to the insurance contract acts  unethically the ability of insurance to work effectively and profitably  will fail.  Ethics is the essence of insurance. Since insurance was first created it  has been a business of utmost good faith. As a result, the insured and  the insurer are expected to treat each other ethically.  Insurance was created to spread risk from individuals to multitudes.  Spreading the risk in a fair, ethical and honorable manner from one  person to many is the basis upon which a system of insurance was  founded. The insurance contract since modern insurance was first created  was founded on the concept of Uberrimae Fidei.  The Latin phrase Uberrimae Fidei is used to express the principle that a  contract of insurance must be made in perfect good faith, with neither  the insurer nor the insured concealing nothing from the other. In the  case of insurance both the insured and the insurer must observe the most  perfect good faith towards each other so that the insurer understands  the risk it is asked to take and the insured understands the risks  accepted by the insurer.  ZALMA OPINION   Everyone involved in the business insurer whether as an insured or  representative of an insurer must understand the obligation to treat  each other with the utmost good faith. The doctrine of Uberrimae Fidei -  Latin for "utmost good faith" creates a requirement that each party to  the contract of insurance treats the other ethically, fairly and in good  faith.    © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders.  He also serves as an arbitrator or mediator for insurance related  disputes. He practiced law in California for more than 44 years as an  insurance coverage and claims handling lawyer and more than 54 years in  the insurance business.  He is available at http://www.zalma.com and [email protected]. Mr. Zalma  is the first recipient of the first annual Claims Magazine/ACE Legend  Award. Over the last 53 years Barry Zalma has dedicated his life to  insurance, insurance claims and the need to defeat insurance fraud. He  has created the following library of books and other materials to make  it possible for insurers and their claims staff to become insurance  claims professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/  The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining how to Deal With a Demand for Insurance Appraisal    https://zalma.com/blog Almost all property insurance policies contain an “appraisal” clause  similar to that in the Standard Fire Insurance Policy.  This appraisal provision is, in many states, considered an arbitration  proceeding.  In California, an appraisal complies with the requirements  of California Code of Civil Procedure section 1280 et seq. It is easily  implemented and works promptly.  In some states, as becomes clear below, appraisal is not considered to  be an arbitration, but is still enforceable as a contractual provision.  However, the use of such appraisal will be rendered meaningless if the  appraisers are bound to the some of the definitions of actual cash value  issued by various courts and regulators.  They are not entitled to  resolve coverage issues but are compelled to reach their conclusions in  accordance with the law of the state where the appraisal will take  place.  The appraisers are limited, however, only to decide the amount of loss  and the value of the property in question. (Jefferson Insurance Company  of New York v. Superior Court, 3 Cal. 3d 398, 90 Cal. Rptr. 608 (1970).)  The appraisers cannot make decisions outside the limited scope of the  policy language. They cannot find that the insured did not own the  property, that the insured had no interest in it, that the insured was  not entitled to recovery under policy exclusions, that the insured  presented a fraudulent claim, or that the loss exceeds the policy  limits.  ZALMA OPINION   Appraisal is an important right available to insurers and their insureds  to resolve, without a great deal of expense, lawyer fees, and time to  resolve the usual dispute between insurers and insured about the amount  of loss.    © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining Why This Isn't Fraud I Just Need to Save Money  https://zalma.com/blog Insurance fraud is not limited to fake claims. Most people don’t present  claims. The basic principle upon which insurance is based require the  many to pay small amounts so that the few can collect. If the risk is  not spread fairly among the many, all suffer.  Most businessmen would be shocked at a suggestion that they inflate a  claim. They are honest in their business dealings. They honor their  contracts and pay their bills. They seldom have insurance claims. When  they have a claim, they deal fairly and honorably with their insurer.  Paying insurance premiums hurt. The marketplace is competitive. Prices  vary from insurer to insurer. Skills vary from insurance broker to  insurance broker.  Eventually, businessmen learn how insurers set their premiums. They know  that rates are applied to modifiers like the square footage of the  structure, the payroll, or the gross receipts of the business.  A businessman, sitting with his insurance broker, asks how he can get  the lowest premium. He will often put his morality on hold when the  broker suggests that he estimate a lower amount of gross earnings. The  businessman will see nothing wrong with loping 10,000 square feet of his  50,000-square foot warehouse when applying for insurance. When called  upon to list the payroll for his workers’ compensation policy, he will  be unconcerned when he tells his broker the payroll is $200,000 less  than it actually is. It is just good business sense to reduce your  workers’ compensation premium. When his policy shows factory workers  cost more to insure than clerical, he “accidentally” reports to his  workers’ compensation insurer that ten percent of his employees are  factory workers and ninety percent are clerical, although the opposite  is true.  The Golden Tooth  A broken tooth is a tragedy to most people. To the waitress a broken  tooth was the beginning of a career.  For fifteen years she waited tables in restaurants varying from small  coffee shops to exclusive French restaurants. She saw, almost weekly, at  least one customer trying to avoid paying for a meal. They would find  flies in their soup or chunks of metal in their hamburger. Sometimes it  was the fault of the restaurant and sometimes it was blatant fraud. Some  people actually suffered injury because of inadequacies in the kitchen.  The Fraud Division, noting that she was claiming only $650 concluded  that the claim was too small to warrant the expenditure of investigative  time. No one would investigate further, or prosecute, the waitress.  Rather than take further chances, she moved to another city where she  continued in her new profession. She is probably having a fine meal in  your town tonight.     © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining the Application of the Private Limitation of Action Provision The phrase, “inception of the loss” in the standard fire insurance  policy has been interpreted to mean “the occurrence of the casualty or  event insured against.” [ See e.g., Zuckerman v. Transamerica Ins. Co., 133 Ariz. 139, 650 P. 2d 441 (1982) (Arizona law); Closser v. Penn Mut. Fire Ins. Co., 457 A. 2d 1081 (Del Supr 1983) (Delaware law); Sager Glove Corp. v. Aetna Ins. Co., 317 F. 2d 439 (7th Cir) (Illinois law), cert den 375 U.S. 921 (1963); Gremillion v. Travelers Indemnity Co., 256 La. 974, 240 So. 2d 727 (1970) (Louisiana law); and General State Authority v. Planet Ins. Co., 464 Pa. 162, 346 A. 2d 265 (1975) (Pennsylvania law).] The Sixth Circuit held that a one-year limitations period after the  inception of loss or damage in an insurance contract did not conflict  with Kentucky law and was reasonable. [Smith v. Allstate Ins. Co., 403 F.3d 401, 402-04 (6th Cir. 2005); Miller v. Seneca Specialty Ins. Co. (W.D. Ky., 2019)] The inception of loss means “the time when the loss was first incurred or began to accrue.” [Tucker v. State Farm Mut. Auto Ins., 2002 UT 54, ¶¶ 13-14, 53 P.3d 947]. In 1885, the California Court of Appeal found the one year private  limitation to be enforceable unless the plaintiff established that  negotiations with the defendant insurer established a waiver or caused  the insurer to be estopped from asserting the provision as a defense. [Garido v. American Cent. Ins. Co. of St. Louis,  2 Cal Unrep. 560, 8 P. 512 (1885).] Finding no evidence of waiver or  evidence to support estoppel, the defense verdict was affirmed. In Sarmiento v. Grange Mutual Casualty Company, 106 Ohio  St.3d 403, 2005-Ohio-5410 (2005), the court found that a two-year  contractual limitation period for filing uninsured- and  underinsured-motorist claims is reasonable and enforceable, regardless  of whether the foreign state in which the accident occurred provides a  longer statute of limitations for the underlying tort claim. ZALMA OPINION Every person insured and every lawyer representing a policyholder  must undertstand the fact that insurance policies contain private  limitation of action provisions and, if there is a dispute, the suit  must be filed before the expiration of the private limitation not the  state’s statute of limitations. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL 8/15/2021 -- Volume 25, Issue 16   https://zalma.com/blog and https://zalma.com/zalmas-insurance-fraud-letter-2/ Claim For Damage to Property That Existed Before Issuance of Policy Is  Fraud It Is a Crime to Claim Preexisting Damage as New Damage After accepting a Plea Agreement and having a judgment entered the  Defendant had no right to expunge his criminal record Vsevolod Sergee  Garanin appealed from the order, entered in the Court of Common Pleas of  Lackawanna County, denying his expungement petition. Commonwealth Of  Pennsylvania v. Vsevolod Sergee Garanin, No. 337 MDA 2020, Superior  Court of Pennsylvania (July 30, 2021)  Man Bites Dog Story: Geico Gets Injunction Against Medical Provider’s  Allegedly Fraudulent Arbitrations  Co Violations by Health Care Providers Require Court to Enjoin  Arbitrations  Plaintiffs (collectively “GEICO”) sued Alexandr Zaitsev, M.D.,  Metropolitan Interventional Medical Services, P.C., and many others  health care providers. GEICO alleged that defendants committed civil  RICO violations, common law fraud, aiding and abetting fraud, unjust  enrichment, and New Jersey Insurance Fraud Prevention Act violations.  Additionally, GEICO sought a declaratory judgement that defendants may  not recover on any of the outstanding bills submitted to GEICO. In  Government Employees Insurance Company, et al. v. Alexandr Zaitsev,  M.D., et al., No. 1:20-cv-03495-FB-SJB, United States District Court,  E.D. New York (July 27, 2021) the USDC dealt with GEICO’s motion for a  preliminary injunction to (1) stay all of defendants’ pending no-fault  insurance collection arbitration against GEICO and (2) enjoin the  defendants from commencing any new no-fault insurance collection  arbitration or litigation against GEICO, pending the disposition of  GEICO’s claims in this action.  Fraud Created by Legal Professionals  Some attorneys, forgetting the oath they took when admitted to the Bar,  conspire with insureds and other attorneys to commit insurance fraud.  The schemes are innumerable, including staged accidents, workers’  compensation fraud, independent counsel, third party liability and  property insurance fraud.  A fraud claim against a lawyer is no different from a fraud claim  against anyone else. The fact a lawyer committed fraud in the capacity  of attorney for a client does not relieve him of liability. [Barber v.  Sedgwick Claims Management Services Inc., 3:14-27349, 2017 WL 1027593,  at *3 (S.D. W. Va. Mar. 16, 2017)] The absolute litigation privilege  does not extend to acts of fraud or malicious prosecution. [Miller v.  Ashton (N.D. W.Va., 2019)]  Health Insurance Fraud Convictions --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining the Application of Other Insurance Clauses   https://zalma.com/blog Every third-party liability policy contains an “other insurance” clause  that attempts to control disputes when there are two or more policies  insuring the same risk. The term “other insurance” is used in a special  sense in insurance contracts. It describes the situation where two or  more policies of insurance cover the same risk in the name of, or for  the benefit of, the same person. Difficulties arise when the two or more  policies have other insurance clauses that conflict with each other and  the insurers and the insureds must find a way to resolve the conflicts.  There are generally three types of “other insurance” clauses.. [Croskey  et al., Cal. Practice Guide: Insurance Litigation (The Rutter Group  2009) ¶¶ 8:15 to 8:20, pp. 8-5 to 8-8.]   Pro Rata:  Under a pro rata other insurance clause, the insurer seeks to limit its  liability to “the proportion that its policy limits bear to the total  coverage available to the insured.” [Id}   Excess Only:  Under an excess only other insurance clause, “[i]f there is other valid  and collectible insurance, the insurer is liable only to the extent the  loss exceeds such other insurance.” [Fireman’s Fund Ins. Co. v. Maryland  Casualty Co., Supra, 65 Cal.App.4th at p. 1305.]   Escape:  Under an escape other insurance clause, the “existence of other valid  and collectible insurance extinguishes the insurer’s liability to the  extent of such other insurance.” [Id.]   In many states, it is a type of the crime of insurance fraud to present  the same claim to two different insurers.  The need for other insurance clauses arose when it was found that people  would have more than one insurance policy covering the same risk by  error, accident, or incompetence rather than as a part of an attempt to  defraud the insurer. [ Federal Ins. Co. v. Commercial Union Ins. Co.,  126 A.D. 2d 892, 893, 510 N.Y.S. 2d 785, 786 (3d Dept 1987), appeal  denied, 69 N.Y. 2d 610, 511 N.E. 2d 84, 517 N.Y.S. 2d 1025 (1987); Wyman  v. Allstate Ins. Co., 29 A.D. 2d 319, 288 N.Y.S. 2d 250 (2d Dept 1986)   How the other insurance clause effects the insured is of primary  importance to the insurance claims adjuster and the lawyer representing  an insured or insurer. The resolution of these conflicts has been the  subject of a great deal of disputed claims and litigation between  insureds and insurers. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Trigger of Coverage/Property Damage    The term "trigger of coverage" means "what event must occur for  potential coverage to commence under the terms of the insurance policy"  and "what must take place within the policy's effective dates for the  potential of coverage to be 'triggered.'" [In Re Feature Realty Litig.,  468 F. Supp.2d 1287, 1295, n.2 (E.D. Wash. 2006)] https://zalma.com/blog In order for there to be coverage under these policies, the property  damage must have occurred during the policy period. The property damage  was the contamination (physical injury) to the property, which was  caused by previous owners and users of the site. GTL’s liability is  hinged upon its failure to detect the contamination. Even if the  property is not considered physically injured, property damage as  defined by the policy includes “[l]oss of use of tangible property that  is not physically injured.” However, that loss of use is deemed to occur  at the time of the occurrence that caused it. That occurrence predated  the policy by almost seven years. Accordingly, the property damage did  not occur during the policy period, and coverage is unambiguously  excluded. (Emphasis added.)  Whenever a claim is made for damage to property it is essential that  both the insurer and the party making the claim determine the date and  time when the property was actually physically damaged. Claims should  then be made only to the insurer on the risk (the one whose policy is in  force) at the time the physical damage occurred not the one whose  policy is in force at the time suit is filed.  “While the term ’trigger of coverage’ is not a term used in an insurance  policy, it is, as the California Supreme Court said, a convenience used  to describe that which, under the specific terms of an insurance  policy, must happen in the policy period in order for the potential of  coverage to arise. The issue is largely one of timing — what must take  place within the policy's effective dates for the potential of coverage  to be 'triggered'?” [State v. Continental, 55 Cal. 4th 186, 281 P.3d  1000 (2012) (quoting Montrose Chemical Corp. v. Admiral Ins. Co., 10  Cal. 4th 645, 655 n.2 (1995).]    The word “trigger”, as a term of art, means the event that activates  coverage under one or more insurance policies. The trigger of coverage  problem arises in determining exactly what must take place within the  policy’s effective dates to trigger coverage.   ZALMA OPINION  Every claims person must be aware of the the trigger of coverage so that  he or she can thoroughly investigate a property claim. Without  knowledge of the various triggers of coverage and how the trigger  applies to the fact of the loss being investigated the claims person  will fail in his or her obligation to thoroughly investigate a claim and  treat the insured fairly and in good faith. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining "Trigger" of Property Damage Coverage    https://zalma.com/blog  The term "trigger of coverage" means "what event must occur for  potential coverage to commence under the terms of the insurance policy"  and "what must take place within the policy's effective dates for the  potential of coverage to be 'triggered.'" [In Re Feature Realty Litig.,  468 F. Supp.2d 1287, 1295, n.2 (E.D. Wash. 2006)]  After the California Supreme Court adopted a continuous trigger in  Montrose Chemical Corp. v. Admiral Ins. Co. (1995) 10 Cal.4th 645, 685,  42 Cal.Rptr.2d 324, 913 P.2d 878 (Montrose) in the case of successive  policies, property damage that is continuous or progressively  deteriorating throughout several policy periods is potentially covered  by all policies in effect during those periods, so that the insurer’s  duty to defend arose under those policies. Insurers, trying to limit  their coverage, revised the policy wording.  Therefore, the precise question is what result follows under the  language of the policies of insurance to which the parties agreed. The  “continuous injury” trigger has been applied mostly in cases involving  gradual release of pollutants and other environmental harms. After  Montrose, the insurer revised its policies to use the language for the  very purpose of "obviat[ing] the application of the ‘progressive  damage-continuous trigger’ articulated in Montrose." As a result, the  defendant’s policies state that property damage "which commenced prior  to the effective date of this insurance will be deemed to have happened  in its entirety prior to, and not during, the term of this insurance."  [Ins. Co. of Pa. v. Am. Safety Indem. Co., 32 Cal.App.5th 898, 244  Cal.Rptr.3d 310 (Cal. App., 2019)] ZALMA OPINION  Every claims person must be aware of the the trigger of coverage so that  he or she can thoroughly investigate a property claim. Without  knowledge of the various triggers of coverage and how the trigger  applies to the fact of the loss being investigated the claims person  will fail in his or her obligation to thoroughly investigate a claim and  treat the insured fairly and in good faith. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining Wear and Tear and Inherent Vice   https://zalma.com/blog  Wear and Tear   It is inevitable that objects deteriorate over time and wear out. Even  the pyramids in Egypt show wear and tear after more than 4000 years  being abused by sand and wind storms.  Recent decisions of the courts of appeal have gone through such changes  that even an inherent vice of the insured property—a condition certain  to result in loss—rarely falls within the parameters of a non-fortuitous  loss.  The Restatement of Contracts 291, Comment a, holds that a loss is not  fortuitous “if it results from an inherent defect in the object damaged,  from ordinary wear and tear, or from the intentional misconduct of the  insured.”  In a case dealing with a boat that was left completely uncovered in the  Bahamas during the rainy season, ‘normal wear and tear’ resulted in the  sinking of the boat. Rainwater entered the boat, forcing the bilge pump  to operate continuously for several days. This drained the boat’s  battery, causing the pump to stop functioning. Batteries do not last  forever. While the battery may have had enough power to start the  engine, it obviously did not have enough power to operate the bilge pump  for two days. The deterioration of a battery constitutes normal wear  and tear, is not fortuitous, and is not compensable under a policy of  insurance.  We think it inappropriate to cause the insured to suffer a forfeiture by  concluding, with the aid of hindsight, that no fortuitous loss  occurred, when at the time the insurance took effect only a risk was  involved as far as the parties were aware. See Millers Mutual Fire  Insurance Co. v. Murrell, 362 S.W. 2d 868, 870 (Tex. Civ. App. 1962). De  Guinee v. Insurance Co., 724 F. 2d 369 (3rd Cir. 12/22/1983).  In Compagnie des Bauxites de Guinee v. Insurance Company of North  America, 724 F. 2d. 369 (3d Cir. 1983), an insured brought suit against  its all-risk insurer to recover business interruption losses arising  from the structural failure, collapse, and deformation of a tippler  building and crusherhouse used in the mining of bauxite ore. The trial  court found no coverage because the damage resulted from the defective  design of the building and was not fortuitous.   Latent Defect  Cases that provide coverage despite an exclusion for latent defects fall  generally within two categories. The court determines either that:  "the defect could have been discovered through appropriate testing and  it is therefore, not latent; or the loss resulted from a contributory covered  risk."  In Tzung v. State Farm Fire and Cas. Co., 873 F.2d 1338 (9th Cir.1989),  the court first held that damage due in part to inadequate protection  against soil expansion was excluded under a policy exclusion for “faulty  materials or workmanship.”  Because the design and construction defects at issue in Tzung—described  as “imbedded in the ground”—were discoverable only through expert  examination of the apartment building “and the soils beneath it,” they  were not “readily discoverable.” --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurers are large organizations with varying levels of authority for  the payment of claims.  HTTPS://zalma.com/blog  The adjuster is the representative at the loss  scene. He or she must report, in writing, to superiors with the  authority to pay the indemnity required unless the claim falls within  the authority provided to the adjuster who will only then write a short  closing report.  Writing a clear, concise, understandable and comprehensive report is an  essential part of the adjuster’s job.   The captioned report should be written immediately after the adjuster’s  first meeting with the insured on every file, no matter how small. The  length and detail of the report should only be limited by the extent of  the loss. The captioned report is written to explain to the adjuster’s  supervisor all the adjuster knows about the loss so that decisions  required of them by the insurer and the law can be made.   Adapted from my book, The Compact Book on Adjusting Property Claims,   © 2021 – Barry Zalma Barry Zalma, Esq., CFE, now limits his practice to  service as an insurance consultant specializing in insurance coverage,  insurance claims handling, insurance bad faith and insurance fraud  almost equally for insurers and policyholders. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Statute of Limitations as a Defense to Bad Faith   https://zalma.com/blog A one-year statute of limitations applies to a statutory bad faith  claim. Claims involving unfair settlement practices that arise under the  Unfair Trade Practices Act, West Virginia Code § 33-11-1 to -10 (1996  & Supp. 1997), are governed by the one-year statute of limitations  set forth in West Virginia Code § 55-2-12(c) (1994). [Wilt v. State  Auto. Mut. Ins. Co., 203 W. Va. 165, 506 S.E.2d 608 (1998)] .A common  law bad faith claim sounds in tort. The statute of limitations that  governs a tort action is contained in W. Va. Code § 55-2-12 (1959)  (Repl. Vol. 2008).  Has the Tort of Bad Faith Run its Course?  US law was first organized using English common law. When a contract was  breached, only contract damages could be recovered. Tort damages were  limited to tortious conduct and the two categories of damages were  mutually exclusive.  The primary purpose of damages for breach of a contract is to protect  the promisee’s expectation interest in the promisor’s performance.  Damages should put the plaintiff in as good a position as if the  defendant had fully performed as required by the contract. Insurance,  like all parts of modern society, is subject to the deprivations of the  law of un­intended consequences. The law can be defined as the  understanding that actions of people—and especially of government or the  courts—always have effects that are unanticipated or unintended.  Insurance is controlled by the courts, through appellate decisions, and  by governmental agencies through statute and regulation. Compliance with  the appellate decisions, statutes and regulations—different in the  various states—is exceedingly difficult and expensive.  Insurance contracts can be simple or exceedingly complex, depending upon  the risks taken by the insurer. Regardless, insurance is only a  contract whose terms are agreed to by the parties to the contract. Over  the last few centuries almost every word and phrase used in insurance  contracts has been interpreted and applied by one court or another.  Ambiguity in contract language became certain. However, the average  person saw the insurance contract as incomprehensible and impossible to  understand. Ostensibly to protect the public, regulators decided to  require that insurers write their policies in easy-to-read language.  Because they were required to do so by law, insurers changed the words  in their contracts into language that people with a fourth grade  education could understand. Precise language interpreted by hundreds of  years of court decisions was disposed of and replaced with imprecise,  easy-to-read language.         © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining the Contents Required of a Liability Claims File    https://zalma.com/blog The claim file is the basic foundation on which all claims are resolved.  It is used by defense counsel to properly defend a claim. It is the  source of all necessary information to make a reasoned decision with  regard to a claim. An incomplete claim file is a danger to the insurer  and its insured and is evidence of unprofessional claims handling. For  all liability claims it is important to memorialize and record the facts  as soon as possible after the incident.  Insurers have adopted computerized log notes so that claims personnel  can record, but not erase, notes of the conduct day by day. They do so  to allow supervision of the claims handlers, comply with the  requirements of state regulators who are called upon to deal with  complaints, and to be able to provide evidence that the claims  investigation was conducted in good faith.  The Need for Photos  Photographs should be good quality, reproducible, and with a negative  that can be enlarged or recorded digitally with at least sufficient  density that the photos can be printed, enlarged or projected in high  quality.  Publications  Newspapers published the day of, and the day after, the incident provide  information regarding the weather on the date of the incident, the  temperature, the time of sunrise and sunset, wind patterns, smog or  visibility problems, and other information relating to the environmental  context of the incident. Other local articles, magazines, or  publications that provide an unbiased, objective view of weather,  events, or other conditions that may have had a bearing on the incident  can yield valuable insights.  Police, Governmental or Internal Security Reports  Copies of all reports made by any agency regarding the incident should  be obtained.  Communications With Claimant & Witnesses  All contacts with each claimant should be specifically documented,  including the dates that each contact took place, the time and place of  the contact, who was present at the time of the contact, whether the  contact was recorded by the adjuster and/or the claimant, and the  physical condition of the claimant at the time of the contact. The  adjuster should record observations of casts, canes, or walkers and  their use by the claimant.  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining Defenses to Various Intentional Torts   https://zalma.com/blog  Self-Defense and Defense of a Third Party  The California Civil Code states:  Any necessary force may be used to protect from wrongful injury the  person or property of oneself, or of a wife, husband, child, parent, or  other relative, or member of one’s family, or of a ward, servant, master  or guest. (California Civil Code § 50)  The person must reasonably believe that danger exists, and must use only  such force as is reasonably necessary.  Use of Deadly Force  Deadly force or force likely to cause bodily harm is not justified  merely in defense of property. Spring guns or other deadly mechanical  devices are to be used only if deadly force is justifiable. Deadly force  may be used against a felonious trespasser.  Defenses to Defamation  Defenses to charges of defamation include, but are not limited to truth.  This is a complete defense. Reasonable, but erroneous belief in the  truth of the accusation is no defense. The erroneous belief merely  changes the tort from intentional to negligent defamation.  Defenses to False Imprisonment  Reasonable detention without arrest is a judicial privilege codified by  California Penal Code § 490.5(f)(1). For example, a storekeeper who  believes a theft has been committed may detain the suspected person for a  reasonable time.  Defenses to Malicious Prosecution  A termination of a case consistent with guilt or with civil liability is  not a basis for the tort of malicious prosecution. The plaintiff must  show that the original action was brought without a lack of probable  cause to make the criminal charge or to file the civil suit. If the  defendant honestly and reasonably believed in the truth of the charge,  the element requiring a favorable termination of the original case  fails. The defense must be independently proved. It cannot be inferred  from proof of malice. Advice of counsel is a defense establishing  probable cause.  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining "Fortuity" as an Unwritten Exclusion    https://zalma.com/blog Because the purpose of insurance is to protect insureds against unknown,  or fortuitous, risks, fortuity is an inherent requirement of all  insurance policies that take on the risk of loss accepted by the policy.  [Two Pesos, Inc. v. Gulf Ins. Co., 901 S.W. 2d 495, 502 (Tex. App.  Houston [14th Dist.] 1995, no writ)]. The fortuity doctrine precludes  coverage for both a “known loss” and a “loss in progress.” A “known  loss” is a loss the insured knew had occurred prior to making the  insurance contract. [Burch v. Commonwealth Mut. Ins. Co., 450 S.W. 2d  838, 840-41 (Tex. 1970)].  The doctrine has its roots in the prevention of fraud: because insurance  policies are designed to insure against fortuities, fraud occurs when a  policy is misused to insure a certainty. Inland Waters Pollution  Control, Inc. v. Nat’l Union Fire Ins. Co., 997 F. 2d 172, 175-77 (6th  Cir. 1993) and Scottsdale Insurance Company v. William Barret Travis,  Maintenance, Inc., No. 05-99-01831-CV (Tex. App. Dist. 5 05/29/2001).  The California Supreme Court considered the complex questions of  insurance policy coverage interpretation that arose in connection with a  federal court-ordered cleanup of the state’s Stringfellow Acid Pits  waste site. The Supreme Court initially addressed the “‘continuous  injury’ trigger of coverage,” as that principle was explained in  Montrose Chemical Corp. v. Admiral Ins. Co. (1995) 10 Cal.4th 645, (P.2d  878 (1995) and the “all sums” rule adopted in Aerojet-General Corp. v.  Transport Indemnity Co. (1997) 17 Cal.4th 38, 55-57 (Aerojet). The  California Supreme Court brought to an end the dispute that started in  the 1960’s when the Stringfellow Acid Pits began to leak. [State Of  California v. Underwriters at Lloyd’s London (2006) 146 Cal.App.4th 851  (54 Cal. Rptr. 3d 343)]  © 2021 – Barry Zalma Barry Zalma, Esq., CFE, now limits his practice to  service as an insurance consultant specializing in insurance coverage,  insurance claims handling, insurance bad faith and insurance fraud  almost equally for insurers and policyholders.  He also serves as an arbitrator or mediator for insurance related  disputes. He practiced law in California for more than 44 years as an  insurance coverage and claims handling lawyer and more than 54 years in  the insurance business.  He is available at http://www.zalma.com and [email protected]. Mr. Zalma  is the first recipient of the first annual Claims Magazine/ACE Legend  Award. Over the last 53 years Barry Zalma has dedicated his life to  insurance, insurance claims and the need to defeat insurance fraud. He  has created the following library of books and other materials to make  it possible for insurers and their claims staff to become insurance  claims professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Convicted Insurance Fraudster Appeals Finding She Breached Probation  https://zalma.com/blog Fraud Perpetrators Have Unmitigated Gall  Kristi Heffington appealed from the revocation of her probation. She  argued on appeal that the revocation court’s decision was error even  though it was proved that she had sent text messages to herself claiming  it came from her past employer dentist who fired her for stealing from  his practice and defrauding insurers. In Kristi Heffington v. State of  Maryland, No. 1899, Court of Special Appeals of Maryland (July 1, 2021)  the appellate court wasted much time dealing with her spurious  allegations in an attempt to avoid jail.  ZIFL OPINION  I am always amazed at the unmitigated gall, the “chutzpah” of those  convicted of insurance fraud, who use the courts to spend more time and  money than the fraudster stole. Ms. Heffington pleaded guilty to the  crime. She was lucky, she only had to serve 9 months of a ten year  sentence and leave the dentist she stole from alone. She couldn’t  resist. She harassed the dentist and tried to get the court, with false  evidence, to remove her obligation to make restitution. She got caught  and was sentenced to spend another 9 months and she appealed that. She  should have been sentenced to serve the full 10 years. Punishment needs  to be real if it is to deter future wrongful actions.  Refusal to Testify at Examination Under Oath is a Breach Condition  Precedent Court Of Appeal Requires Third Trial of Breach of Condition Precedent  Case Health Insurance Fraud Convictions Videos on YouTube and Zalma on Insurance from Barry Zalma  Other Insurance Fraud Convictions New and Now Available from the Zalma Insurance Claims Library   © 2021 – Barry Zalma Barry Zalma, Esq., CFE, now limits his practice to  service as an insurance consultant specializing in insurance coverage,  insurance claims handling, insurance bad faith and insurance fraud  almost equally for insurers and policyholders.  He also serves as an arbitrator or mediator for insurance related  disputes. He practiced law in California for more than 44 years as an  insurance coverage and claims handling lawyer and more than 54 years in  the insurance business.  He is available at http://www.zalma.com and [email protected]. Mr. Zalma  is the first recipient of the first annual Claims Magazine/ACE Legend  Award. Over the last 53 years Barry Zalma has dedicated his life to  insurance, insurance claims and the need to defeat insurance fraud. He  has created the following library of books and other materials to make  it possible for insurers and their claims staff to become insurance  claims professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Responsibility of the SIU Compliance Office   https://zalma.com/blog The primary responsibility of the Special Investigative Unit (SIU)  Compliance Review Office is to inspect insurance companies to ensure  regulatory compliance with regard to the establishment, staffing and  operation of the insurer's SIU.  The Office also is responsible for  updating, distributing, reviewing, monitoring and tracking the annual  SIU compliance reports filed by over 1,100 insurance companies each  year.  The SIU Regulations also requires each insurance company to submit an  annual compliance report to the Fraud Division, SIU Compliance Review  Office.  The SIU annual reports must provide adequate information and  documentation regarding the insurer's anti-fraud operations, policies  and procedures, and anti-fraud training. The SIU Compliance Review  Office provides the format and instruction for submission of the reports  and reviews, monitors and evaluates the completeness and timeliness of  the reports filed annually. After completion of a review and evaluation  of the insurers' reports filed annually, the SIU Compliance Review  Office considers various risk-based criteria for proper selection of  insurers for SIU review.  Once an SIU compliance review is completed, a preliminary report (or  Exit Review Report) is issued to the company identifying proposed  findings and recommendations. The Insurer is given 30 days to respond  and provide supporting documents and information, after which a Final  Report of Findings (final report) is issued to the Insurer. The final  report may show that all findings have been resolved and the company is  in compliance with the SIU regulations, or that all or some of the  findings still stand and the insurer is subject to legal action  including fines/penalties.  The CDOI provides on its web site a video training program explaining  the California Special Investigative Unit Requirements at http://www.insurance.ca.gov/0300-fraud/0100-fraud-division-overview/12-siu/SIU-video.cfm  which can assist insurers and the integral anti-fraud personnel in  understanding the SIU Regulations and its requirements.   © 2021 – Barry Zalma Barry Zalma, Esq., CFE, now limits his practice to  service as an insurance consultant specializing in insurance coverage,  insurance claims handling, insurance bad faith and insurance fraud  almost equally for insurers and policyholders. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining How to Allocate Defense Costs When two or More  Insurers Insure the Same Risk    https://zalma.com/blog Since other insurance clauses usually do not prescribe how defense costs  should be apportioned among insurers, courts have developed general  allocation rules. When only one of two insurers is held to provide  coverage, that insurer must bear the entire burden of defense. [Mandell  Corp. v. Insurance Co. of No. America, 125 Misc. 2d 390, 479 N.Y.S.2d  452 (Sup.Ct. New York County 1984)]  The majority view is that the insurers must share the costs of defense  pro rata in the same proportion that the face amount of each policy  bears to the total amount of valid and collectible insurance.  Generally, an excess insurer is not required to contribute to the  defense of the insured so long as the primary insurer is required to  defend. The discussion assumes that the relationship between the  insurers arises through the operation of other insurance clauses and not  by design of the insured. The considerations regarding allocation of  the duty to defend where the relationship between the insurers arises by  design may differ from that when the relationship arises by  coincidence.   When other insurance clauses operate to make one insurer the primary  insurer and the other an excess insurer, the primary insurer is  generally held to have the burden of defending.. Nevertheless, there are  cases that suggest that in certain circumstances, insurers may owe a  duty to participate in the insured’s defense.  Policyholders should not assume, whether they agree with the decisions  in Comerica and Qualcomm or not, that they can settle with underlying  insurers for less than the amount of any applicable underlying limits  without putting excess coverage at risk. Policyholders with pending  claims must carefully review their policies for exhaustion language like  that found clear and unambiguous in Comerica and Qualcomm should  consult coverage counsel before considering settlement of a suit or  claim. Policyholders seeking new or renewal policies should seriously  consider whether the price of the coverages is sufficient to provide the  coverage needed even with the limitations created by the language found  to be effective.  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Liability Insurance Is    https://zalma.com/blog Insurance, by definition, is a contract where the insurer, for  consideration (premium) agrees to indemnify another against a contingent  or unknown risk of loss. It is used as a method to spread losses among  many people who are insured with the same company. The insurer, by its  policy, promises, in exchange for a premium, to pay to defend and  indemnify the insured, in the event that a certain type of loss occurs  within a specified period of time called the “policy period.” By  spreading the risk of loss among many, each individual only pays a  minuscule portion of the risk of loss insured against.  Liability insurance is limited to insurance against the risk of losses  that can be incurred by a person for damages done to the person or  property of another by an accidental or fortuitous cause.  In exchange for the promise to pay the premium charged, the insurance  company agrees to provide the insured protection from various risks  faced by an owner, developer, or builder of real property. The risks of  loss taken by the insurer are listed on the policy.  For each promise  made by the insurer it charges a premium.  Purchasing CGL Insurance  When purchasing insurance as a named insured, it is imperative to  purchase only the insurance coverages needed. Seek the advice and  assistance of the insurance brokers and agents with whom insurance is  sought, at least three months before the inception date of the policy  needed. Regardless of whether the policy sought is a new policy or a  renewal, the agents and brokers will need sufficient time to shop the  available insurance market. The person seeking insurance should not rely  on the broker to simply renew the previous policy for the same price  with the same insurer. Coverages available and prices vary considerably  every year. Insurers will enter and leave the market for the  construction industry every year. The prudent insured will shop wisely  and diligently every year.  The prudent person seeking insurance will provide the broker with a list  of coverages needed, the status of the insurer with whom the broker is  to shop (e.g., a Best’s Rated A or better and admitted to do business in your  state or an approved surplus line insurer). The prudent person will have  the agent or broker avoid, if possible, unapproved and not admitted  insurers and recognize that the surplus lines market is the market of  last resort.     © 2021 – Barry Zalma Barry Zalma, Esq., CFE, now limits his practice to  service as an insurance consultant specializing in insurance coverage,  insurance claims handling, insurance bad faith and insurance fraud  almost equally for insurers and policyholders. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining the Need tor Training of the Fair Claims Settlement  Practices Regulations    https://zalma.com/blog In 1993, after waiting five years after receiving direction from the  California Supreme Court, the state of California determined that the  insurance industry needed to be regulated to stop insurers from treating  the people insured badly and without good faith. It created a set of  Regulations called the “California Fair Claims Settlement Practices  Regulations” (the “Regulations) that were designed to enforce the  mandate created by the California Fair Claims Settlement Practices  statute, California Insurance Code Section 790.03 (h).   in response to  the direction of the California Supreme Court in its decision,  Moradi-Shalal v. Fireman’s Fund Ins. Companies, 46 Cal. 3d 287 (1988).  In so doing the California Department of Insurance (CDOI) issued rules  that were designed to micro manage the business of insurance claims and  create a method to punish those insurers who failed to comply with the  Regulations. Some of the Regulations recited what had always been  recognized by the insurance industry as good faith and proper claims  handling.  Others imposed draconian mandates on what and when to do  everything in the claims process.  The Regulations also provided a guide to insureds, public insurance  adjusters and policyholders’ lawyers to assert any violation of the  Regulations to be evidence of an insurer’s breach of the implied  covenant of good faith and fair dealing. All insurers doing business in California must comply with the  requirements of the Regulations or face the ire of, and attempts at  financial punishment from, the CDOI. That punishment was found to be  questionable and limited because of one courageous insurer who fought  the CDOI and succeeded before an administrative law judge who limited  the right to punish. That success, as far as I have been able to  determine, has not been emulated. Regardless of difficulties in assessing punishment the state of  California requires all who are involved in the claims process — even if  only tangentially — to be trained with regard claims handling in  compliance with the Regulations and attest to completion of such  training under oath. To avoid the required annual training the claims  person can submit a sworn document to the insurer or insurers for whom  the claims person works that avers that he or she has read and  understood the Regulations. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining Foundation & Shear Wall Defects    https://zalma.com/blog Foundation Defects   A foundation is the base upon which a structure stands. If a foundation  is inadequately engineered it will not properly hold a structure up and  will pose a hazard to the structure, to adjoining structures, and to  occupants of the building.  A foundation is the base upon which a structure stands. If a foundation  is inadequately engineered it will not properly hold a structure up and  will pose a hazard to the structure, to adjoining structures, and to  occupants of the building.   Defective Shear Walls   Shear walls are the vertical walls in a building that are designed to  resist lateral forces. Lateral forces can come from extreme winds or  from movement in a floor system due to earth movement or earthquake.  Absorption of lateral forces is achieved by attaching shear walls to  floors using nails.  The Third Circuit found that although the failure to provide sufficient  shear strength in a building’s roof should have allowed the plaintiff to  recover, counsel did not properly plead the case as a breach of  warranty, so the plaintiff was deprived of the right to recover because  the failure of its counsel.  The proper measure of damages due to the defective design of a building  is the cost to remedy the defect, unless such amount is “grossly and  unfairly out of proportion to the good to be attained” by fixing the  building.  ZALMA OPINION  Construction defects lawsuits are almost ubiquitous. To deal with such  litigation it is necessary for the lawyer or insurance claims person to  understand construction and the parts needed to build a structure. This,  and the previous videos about construction defects work to provide the  information needed as adapted from my books on Construction Defects and  Insurance.   © 2021 – Barry Zalma Barry Zalma, Esq., CFE, now limits his practice to  service as an insurance consultant specializing in insurance coverage,  insurance claims handling, insurance bad faith and insurance fraud  almost equally for insurers and policyholders.  He also serves as an arbitrator or mediator for insurance related  disputes. He practiced law in California for more than 44 years as an  insurance coverage and claims handling lawyer and more than 54 years in  the insurance business.  He is available at http://www.zalma.com and [email protected]. Mr. Zalma  is the first recipient of the first annual Claims Magazine/ACE Legend  Award. Over the last 53 years Barry Zalma has dedicated his life to  insurance, insurance claims and the need to defeat insurance fraud. He  has created the following library of books and other materials to make  it possible for insurers and their claims staff to become insurance  claims professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Construction Defect Experts    https://zalma.com/blog In construction defect cases, the standard of care and its breach must  generally be shown through expert testimony. Lay testimony is sometimes  sufficient where the defects are of common knowledge.  In construction cases and other cases involving licensed professionals,  standard of care evidence in negligence matters generally must be  provided by expert testimony, because the standard of care involved in  construction is not an area that comes within the realm of common  knowledge. Expert testimony regarding a standard of care is generally  not required to establish a breach of contract rather than conduct  beneath the standard of care. There are many experts involved, not only  in the construction of a building, but also the investigation of any  defects that surface after a building is complete. A person faced with  liability for a defective structure or a potentially dangerous structure  should consider involving various experts. The Construction Consultant  There are few schools that teach construction except those that assist  individuals to become licensed general contractors. Consequently, a  construction consultant develops his or her expertise by a combination  of education, training, and experience as a general contractor in the  state where the property is located. He or she also usually has  experience in evaluating the work of people in the construction trades.  The construction consultant can also establish his or her credentials by  earning a license to construct buildings (and in fact doing so), and by  being well-read in the field of construction, publishing peer-reviewed  articles and books in his or her fields of expertise, and testifying in  court on the subject. A construction expert is a person with practical  experience, rather than one whose knowledge comes from schooling alone.  Such experts are considered to be the most effective in providing  advice, and in convincing a jury of the correctness of their advice and  stated conclusions. The Structural Engineer  Structural Engineering is the science and art of designing and making,  with economy and elegance, buildings, bridges, frameworks and other  similar structures so that they can safely resist the forces to which  they may be subjected   The Geotechnical Engineer  Along with the structural engineer, the geotechnical engineer is  responsible for the stability of the structure. The structural engineer  is responsible for the structure itself while the geotechnical engineer  is responsible for the ground upon which the structure is built. No  matter how strong the foundation or footings are, if the soil in which  the foundation is placed is not stable, the entire structure can fail. The Forensic Roofing Consultant  The forensic roofing consultant is a specialized construction consultant  whose expertise is limited to roofs, roof structures, and the damages  that occur when a roof fails to perform as designed.   Building Code Compliance Expert    The Architect    The Insurance Consultant  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining Some More of the Construction of a Dwelling. https://zalma.com/blog Interior Floor Finishes    Concrete is poured in place from 3½ to 6 inches thick at various areas.  It is usually poured into a form built with lumber or uses already  placed foundation walls as forms for basement and first floor slabs. The  concrete floors are usually reinforced with #3, #4, and/or #5 rods,  welded in a 6 by 6 inch mesh.   Hardwood floors are usually prefinished standard red or white oak with  dimensions of 3/8 inch by 7/8 inch, or 3/8 inch by 1½ inch, and other  variations depending on the needs of the builder. New materials that  imitate hardwood are becoming more popular. These materials are marketed  under the brand names “Pergo” and “Formica,” among others, and are  usually made of wood or composition wood materials laminated with  designs that simulate wood, marble or ceramic tile.   Interior Ceiling and Wall Finishes  Walls and ceilings are finished with almost any material that is  available and aesthetically pleasing to the owner.  Improper or defective installation of interior wall coverings can allow  the growth of fungi or mold, cause cracking in the finishes, allow the  entry of unwanted outside air and drafts, and otherwise make living in  the dwelling less than pleasant if not injurious to health.  Painting and Wallpaper  There is paint for almost every type of surface and surface condition.  The large variety makes it impractical to consider each type of paint.  Whatever type of paint is selected can be applied by brush, roller, or  spray gun.  Most wall coverings used in normal practice are not really wall  “papers.” Wallpaper is a paper material that may or may not be coated  with a washable plastic. The products used in most modern construction,  although still called “wallpapers,” are actually composed of a vinyl on a  fabric backing, not a paper backing. Some vinyl fabric coverings come  pre-pasted.  Miscellaneous Exterior Items  Failure or defective installation of any of the components can cause  damage to the dwelling, other structures, or the occupants.  ZALMA OPINION  Construction defects lawsuits are almost ubiquitous. To deal with such  litigation it is necessary for the lawyer or insurance claims person to  understand construction and the parts needed to build a structure. This,  and the previous videos work to provide the information needed as  adapted from my books on Construction Defects and Insurance.   © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining Some More of the Construction of a Dwelling  https://zalma.com/blog Roofing  Asphalt shingles account for close to 90 percent of all residential  roofs.  Sheet metal, cement tiles, wood shakes or shingles, and  traditional slate or ceramic tile are used across the country. For  low-slope roofs, polymer membranes compete with asphalt roll roofing,  coal tar, and asphalt-mop technologies.  A historic home or home style will normally be repaired using the  original material or a carefully manufactured imitation. The traditional  materials of earlier times—wood shingles, slate, tile, and sheet  metal—are still used.   Sheet Metal   Structures require use of sheet metal parts to complete the structure.  Sheet metal parts include galvanized flashing (a material used to stop  water intrusion), gravel stops, gutters and downspouts, roof edging, and  vents.  The sheet metal worker locates and marks reference points and, using  shop mathematics, calculates angles and curves needed to manufacture the  sheet metal parts. The sheet metal worker cuts the flat material and  shapes it into a three-dimensional form, using hand and power-driven  tools and fabricating machines.  When the parts are completed they are  assembled and riveted, welded, bolted, soldered, or otherwise bonded  together. Finally the parts are smoothed or polished and installed and  anchored in place.   Mechanical   The structure’s mechanical parts include, in addition to HVAC systems,  electrical and plumbing components.  Because of environmental concerns and difficulties experienced with the  power grid, many homeowners are considering solar or wind power for  their homes and businesses. Solar power is practical and can provide an  economic benefit over purchasing electricity from the power grid  although it takes many years to recover the cost even when subsidized by  local governments.  Insulation  Failure of insulation can increase the cost of heating and cooling the  property and, if improperly installed, allows release of insulation  fibers that might be dangerous to the occupants.   Windows and Glass   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining Some of the Construction of a Dwelling  htttps://zalma.com/blog To understand the construction defect claim and the litigation  surrounding construction defects, it is necessary to first have a basic  understanding of construction, what is proper and prudent and what can  go wrong. Building codes prescribe basic standards. When these standards  are not followed, or not followed carefully enough, a building can  fail. It may leak or lean or even fall down.  Typical single-family homes built during the last century were  constructed with a wood frame built on top of a concrete foundation. The  foundations are either raised on piers or poured flat on grade. The  lumber that makes up the wood frame is usually jacketed with lath (thin  wood strips) or a moisture barrier paper with a wire covering that is  covered with stucco (a durable porous concrete product), exterior  insulation and finish systems (artificial stucco) or wood or vinyl  siding. The interior walls are usually finished with drywall (gypsum  covered in paper that, when finished, gives the appearance of lath and  plaster) or, in older structures, wood lath and plaster. Basic  single-family dwellings are usually one to two stories in height and  range from 900 to 3,500 square feet. Of course, there are also  “mansions” where a single family may reside in a 20,000 square foot  structure. It is becoming common to remodel old dwellings of 900 – 1100  square feet into 5,000 to 7,000 square foot “McMansions” on small  residential lots. These extreme remodeling efforts often run afoul of  claims of construction defect.  Footings  Failure of footings can cause the dwelling to sink, slip, or lean,  causing plaster walls and stucco to crack; roofs, windows, and doors to  lose their watertight seals; and doors to creak.  Foundations  In addition to footings, foundations can be created using piles of wood,  concrete or sometimes metal columns that are driven into the ground and  used to support the structure and prevent it from sinking. Piles are  either driven down until they hit bedrock, or if bedrock is too  difficult to reach, the piles are driven to a depth where the soil  friction against the side of the pile is sufficient to prevent any  further downward movement.  Framing  Standard walls are 8 to 12 feet high. Boards approximately two inches by  six inches (2x6s) are commonplace in residential construction because  they provide a wider cavity that accommodates more insulation than the  standard; approximately two inch by four inch boards (2x4s). The 2x4 is  still most popular for most remodeling and add-ons.  Framing consists of top and bottom plates, wall studs, headers, and  trimmers/king studs as needed for window and door openings.  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining the Remedies Available for Defects  https://zalma.com/blog Construction defect suits are now flooding the courts of North America  in greater numbers every year. Construction Defects & Insurance is  designed to help the property owner, builder, construction professional,  insurer, insurance professional, construction defect plaintiffs’  lawyer, construction defect defense lawyer, and those who support them.  Anyone faced with construction defect issues can use the series of books  to effectively avoid or resolve claims of such defects. It covers  identification of construction defects, and explains how to insure,  investigate, prosecute, or defend litigation that results from claims of  construction defect.  Construction Defects and Insurance addresses a wide audience about this  escalating, expensive and excessive problem that makes it hazardous to  build any structure without sufficient and broad insurance protection.  The attorney representing a defendant or plaintiff in a construction  defect suit will find this series of books a useful resource to help  counsel understand the claims of multiple parties, insurers, and experts  involved.  Construction defect suits are now flooding the courts of North America  in greater numbers every year. Construction Defects & Insurance is  designed to help the property owner, builder, construction professional,  insurer, insurance professional, construction defect plaintiffs’  lawyer, construction defect defense lawyer, and those who support them.  Anyone faced with construction defect issues can use the series of books  to effectively avoid or resolve claims of such defects. It covers  identification of construction defects, and explains how to insure,  investigate, prosecute, or defend litigation that results from claims of  construction defect.  Construction Defects and Insurance addresses a wide audience about this  escalating, expensive and excessive problem that makes it hazardous to  build any structure without sufficient and broad insurance protection.  The attorney representing a defendant or plaintiff in a construction  defect suit will find this series of books a useful resource to help  counsel understand the claims of multiple parties, insurers, and experts  involved.  Negligence has the same definitions regardless of the state where it is  alleged. It has been defined as: “a legal duty owed to the Plaintiff by  the Defendant; a breach of that duty; an actual injury to the Plaintiff;  and a showing that the breach was a proximate cause of the injury." “A  breach of duty exists when it is foreseeable that one’s conduct may  likely injure the person to whom the duty is owed.”  The California Supreme Court upheld a judgment for property damage  caused by negligent residential construction in Sabella v. Wisler, 59  Cal.2d 21, 27-30 (1963). The defendant had built a house and offered it  for sale to the general public. As it turned out, the defendant’s  negligent preparation of the lot, in combination with a subcontractor’s  careless plumbing work, later caused leaks, subsidence, and damage to  the house. The purchasers sued for negligence.     © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining the Hazards of Failing to Reside in the Dwelling the Risk of  Loss of Which Was Insured    https://zalma.com/blog Insurance companies often see disputes relating to the terms “domicile”  and “residence” when dealing with a homeowners policy. It is important,  therefore, that everyone in the business of insurance must understand  the meaning, and application, of the terms to insurance claims and how  they relate to individuals and corporations that are insured or  insurers.  Although a person may have more than one residence, he or she may only  have one domicile at any one time. [Nat'l Artists Mgmt. Co. v. Weaving,  769 F. Supp. 1224, 1227 (S.D.N.Y. 1991)].  The controlling factor in determining residency, on the other hand, is  intent, as evidenced primarily by the acts, of the person whose  residence is questioned. [Farmers Auto Insurance Ass'n v. Williams, 213  Ill. App. 3d 310, 314 (2001), Direct Auto Ins. Co. v. Grigsby, 2020 IL  App (1st) 182642-U (Ill. App. 2020).]  In the context of automobile insurance exclusions, residence is  determined on a case-by-case basis using factors such as intent and  relative permanence. [Potter v. State Farm Mut. Auto. Ins. Co., 996 P.2d  781, 783 (Colo. App. 2000); Grippin v. State Farm Mut. Auto. Ins. Co.,  409 P.3d 529 (Colo. App. 2016)]  In Holland v Trinity Health Care Corp, 287 Mich App 524, 527-528; 791  NW2d 724 (2010) the Court defined the verb “reside” as to dwell  permanently or for a considerable time, to live. In doing so, the Court  expressly explained that the definition of "reside" is not synonymous  with the legal definition of "domicile," which may have a more technical  meaning than intended in the home insurance context under the policy  language at issue. The term “reside” requires that the insured actually  live at the property.  The homeowners policy language unambiguously requires that the property  at issue be the insured's "residence premises" for coverage to apply. It  does not require that the property be the Insured’s domicile.  The "insured location" was defined in relevant part to mean "the  residence premises," and the "residence premises" was defined to mean  the dwelling where the insureds "reside and which is shown as the  'residence premises' in the Declarations." Faced with such clear and  unambiguous language, a court is required to enforce the exact language  of the policy that unambiguously required the insured to reside at the  insured premises at the time of the loss. If the insured resided in a  different location there could be no coverage.  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining the Interpretation of Actual Cash Value    https://zalma.com/blog Determining the actual cash value of an item of personal property is  often difficult and is subject to different interpretations across  multiple jurisdictions. When an insurer and insured cannot agree on the  amount of actual cash value loss they have the right to seek appraisal —  a limited form of arbitration that may only determine the amount of  actual cash value and loss.  Depending on the wording of the policy or local state law Actual Cash  Value (ACV) can be determined by subtracting from full replacement cost  depreciation, based on the age and usefulness of the property involved.  In other jurisdictions or because of various policy wordings, ACV can be  the difference between the fair market value (FMV) of the item before  the loss and its FMV after the loss.  Some states apply the broad evidence rule and will take into  consideration the use of depreciation, consideration of FMV, or any  other evidence that will provide true ACV to the insured.  Limiting coverage to ACV does result in lower premiums, but it could end  up leaving the insured with a large gap between the amount of the  indemnity recovered after a loss. ACV may not be sufficient to rebuild  the dwelling or replace the contents.  For example, if the structure of the dwelling is in poor physical  condition, is old, or was constructed with a design that is no longer  popular its FMV might be very small with most of its value in the land.  In some cases, the structure even detracts from the full value of the  land and structure so its ACV may be zero while its replacement cost  could be $500,000 or more. It is imperative, therefore, before selecting  a policy limit that the insured understands the structure’s ACV and its  full RCV.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders.  He also serves as an arbitrator or mediator for insurance related  disputes. He practiced law in California for more than 44 years as an  insurance coverage and claims handling lawyer and more than 54 years in  the insurance business.  He is available at http://www.zalma.com and [email protected]. Mr. Zalma  is the first recipient of the first annual Claims Magazine/ACE Legend  Award. Over the last 53 years Barry Zalma has dedicated his life to  insurance, insurance claims and the need to defeat insurance fraud. He  has created the following library of books and other materials to make  it possible for insurers and their claims staff to become insurance  claims professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

HTTPS://zalma.com/blog This fraud technique involves a loss at a time when an individual has no  or inadequate insurance. Following the loss, the individual applies for  insurance or increases the limits of existing coverage. After a period  of time (usually several days or weeks), a fraudulent claim is submitted  for a loss reported to have happened after the new policy came into  effect. Failure of the insurer, or its agent, to see the property  (especially if the insurer has included the items on its schedules)  before issuance of a policy is an invitation to this type of fraud.  There is an unwritten exclusion in every insurance policy that requires  that every covered loss must be fortuitous, that is, be the result of a  contingent or unknown event. Attempting to post-date an auto loss is  often difficult and if there is a police report, impossible.Insurance  policies typically come into effect at 12:01 a.m., standard time on the  day the policy is purchased. If a person has an auto accident, fire or  theft at 10:00 a.m. he may go to an insurance agent, purchase a policy  that goes into effect at 12:01 a.m. that day, and make claim on the new  policy.Because the insurance fraud perpetrator will report that the loss  occurred the day after the policy date, this type of scheme usually  fails. When there is evidence that the insured knew about the incident  before the policy was acquired or that there exists evidence when it  actually happened, like a police or fire report, this type of fraud will  fail.   Paper Property   This sort of fraud involves property that never existed or was never  owned by the insured. It can be the most difficult type of staged loss  to defeat. Paper property can appear in a staged loss or in a legitimate  claim, where paper property is used to inflate the claim amount. In the  presentation of the claim, the insured produces a receipt (original or  duplicate) or an appraisal. The document is either fraudulent (examples  include the use of computers or even white-out paint and a photocopier  to change the name of the owner) or represent the value of an item owned  by another individual.For example, an insured who purchased jewelry at a  department store on a credit card, took the jewelry to an appraiser,  returned the jewelry for full credit and then reported it stolen. The  jewelry (no longer in her possession) was then insured by means of the  appraisal and a loss was reported shortly thereafter. The receipt  presented to the insurer was legitimate and if the receipt was not  verified with the vendor the fact that it was returned and is still in  inventory at the vendor will never be discovered.In one of my cases my  investigator went to the vendor to verify the sales receipt. It was  verified and then the vendor asked the investigator: “would you like to  see it?” He then pulled the item out of a showcase and provided the  investigator with the receipt showing he refunded the insured the  purchase price when it was returned.   Health Insurance Fraud    The nation’s bill for health care fraud is enormous ¾ as large as $300  billion or more every year. Fraud takes place at many points in the  health care system, in hospitals, nursing homes, and diagnostic  facilities, by doctors, attorneys, health care providers, durable  equipment providers, and patients.One large area prone to fraud is the  Medicare system. This system processes more than 800 million claims a  year with 70 different contractors handling the claims that come from  hundreds of thousands of doctors, laboratories, and other health  practitioners and facilities.    © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining The Equitable Remedy and Insurance  https://zalma.com/blog Rescission is an equitable remedy as ancient as the common law of  Britain.  When the United States was conceived in 1776 the founders were concerned  with protecting their rights under British common law. They adopted it  as the law of the new United States of America modified only by the  limitations placed on the central government by the U.S. Constitution  approved in 1789.  The viability and ability to enforce contracts was recognized as  essential to commerce. Courts of law were charged with enforcing  legitimate contracts. Courts of equity were charged with protecting  contracting parties from mistake, fraud, misrepresentation and  concealment since enforcing a contract based on mistake, fraud,  misrepresentation or concealment would not be fair.  The common law developed rules that courts could follow to refuse to  enforce the terms of a contract that was entered into because of mutual  mistake of material fact, a unilateral mistake of material fact, the  breach of warranty (a presumptively material promise to do or not do  something), a material concealment, or a material misrepresentation. The  remedy – called rescission – created a method to apply fairness to the  insurance contract and allow an insurer to void a contract and allowed  courts to refuse to enforce such a contract entered into by  misrepresentation or concealment of material facts.  Before making a decision to rescind, the claims investigator and the  insurer should seek the advice of competent insurance coverage counsel  for an opinion based upon the investigation and the law of the  jurisdiction where the policy was made or where it was made to be  performed, and, if counsel believes it necessary, the examination under  oath of the insured.   © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Independent insurance adjusters serve insurance companies who do not  have sufficient claims staff to handle insurance claims on behalf of  those various insurers without staff in every jurisdiction where there  is property the risk of loss of which was insured.   https://zalma.com/blog The professional insurance adjuster recognizes that the work of  adjusting insurance claims is a profession of public trust. Independent  insurance adjusters should maintain a standard of integrity that will  promote the goal of building public confidence and trust in the  insurance industry.  Independent insurance adjusters, and company employed insurance  adjusters, should follow standard rules of ethical conduct in the  business of insurance in order to act fairly and in good faith to the  policy holders, claimants and insurers.  On rare occasions, an insured will act unethically in his, her or its  relations with an insurer. When they do, if discovered by the insurer or  its claims person, the right to indemnity may be lost. As you read  about the decision from the United States Supreme Court below consider  how the insured acted unethically to the insurer and why the Supreme  Court decided to deprive the insured of his right to indemnity.  Although hoary with age this case still states the law of the United  States with regard to unethical and fraudulent conduct by an insured and  the insured’s obligation to appear for and testify honestly at an  examination under oath.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Every Profession has the Occasional Crook  https://zalma.com/blog  When a public insurance adjuster exceeds his or her authority and  attempts to defraud an insurer on behalf of the adjuster’s client, the  standard “Concealment or Fraud” provision precludes the insureds from  obtaining any recovery under their policies as the claims submitted by  Berson, their public insurance adjuster, in his capacity as their agent,  were fraudulent. [Astoria Quality Drugs, Inc. v. United Pacific Ins.  Co. Of NY, 163 A.D.2d 82, 557 N.Y.S.2d 339).] “Chubb, therefore, is  entitled to full recovery of the claims paid.” [Chubb & Son v.  Consoli, 283 A.D.2d 297, 726 N.Y.S.2d 398, 2001 N.Y. Slip Op. 04550  (2001).]  The Texas legislature has statutorily made a contract that is void for  illegality under the common law enforceable or voidable at the option of  the least culpable party—the insured—when a person contracts with the  insured to perform services as a public insurance adjuster but does not  have a public insurance adjuster's license. [Lon Smith & Assocs.,  Inc. v. Key, 527 S.W.3d 604 (Tex. App. 2017  In U.S. v. Saada, 212 F.3d 210 (3rd Cir., 1999) the government's  evidence at trial showed that:  [i]n 1990, appellants contacted Ezra Rishty, Isaac's cousin, for help in  an insurance fraud scheme. Rishty was a public insurance adjuster in  New York City who had conspired with various clients in over 200  fraudulent insurance schemes in the past.  Rishty agreed to assist Isaac in filing a fraudulent insurance claim,  and enlisted the help of Morris Beyda, a former employee who by then  owned his own business. Rishty also enlisted the help of Sal Marchello, a  general adjuster for the Chubb Insurance Group ("Chubb"), which was  Scrimshaw's insurer. Marchello assured Rishty that Chubb would assign  him to handle the future Scrimshaw claim.  In U.S. v. Lemm, 680 F.2d 1193 (8th Cir. 1982) a scheme to defraud  insurers was defeated with the testimony of a putative PA. He explained  to the trial court that the arson and insurance fraud activities  underlying the convictions of various defendants resulted from fire to  fire, but a general scenario was summarized by Eugene P. Gamst, the  government's chief witness, who was a public insurance adjuster licensed  in Minnesota. The government's case showed that at some point in the  early 1970's Gamst began mixing his legitimate adjustment activities  with arson, eventually becoming the center of an arson ring alleged to  have existed from April 1, 1975 to September 1, 1978.  The basic mode of operation was that Gamst, or occasionally another  coconspirator, would recruit an individual to start an arson fire for  insurance proceeds. Gamst would instruct the individual how to start the  fire, how to act, and what to tell the authorities. After the fire,  Gamst would pose as a legitimate public adjuster of an accidental fire.  Occasionally, Gamst would also act as a private contractor and repair  the fire damage in order to obtain a larger portion of the insurance  proceeds. The roles of the other conspirators included providing seed  money for the purchases of property, locating property for burning,  providing property to be burned, preparing and torching the property,  and recruiting others to the scheme resulted in convictions. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining the Investigation of Third Party Insurance Fraud   https://zalma.com/blog nsured Suspected  If the insured is suspected of involvement in a third party insurance  fraud, like a staged automobile accident, it will be necessary for the  insurer to retain two attorneys.  One attorney will be required to  defend the insured under the terms of the policy.  This attorney owes  his or her primary duty to the client, not the insurer, so will not be  advised of the potential fraud.  If he or she learns of facts that prove  the insured is involved in fraud, the attorney may not disclose that  information to the insurer.  He or she is also ethically obligated to  refuse to participate in the fraud and would, therefore, withdraw from  the defense. Insured not Suspected  When the insurer suspects that the insured is the victim of a fraudulent  claim, counsel is retained to represent the insured and given full  information about the fraud. Such an attorney should be a special breed  of counsel, ready to take every case presented to them to a trial before  a jury. These attorneys are selected not for their negotiation skills  but rather for their trial skills.  An insurer intent on defeating fraud will instruct counsel to try to a  verdict every case where fraud is suspected and capable of proof. No  authority should be provided for settlement other than to accept a  dismissal of the suit with prejudice. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Special Investigative Unit   https://zalma.com/blog California, Washington, New Jersey, and Florida are among many states  that require each insurer to have an SIU in place.  SIUs help identify  and investigate suspicious claims, although some insurance companies  outsource this work to other insurers and investigative agencies. An SIU  may be a small team whose primary role is to train claim  representatives to deal with the more routine kinds of fraud cases or  may consist of teams of trained investigators, including former law  enforcement officers, attorneys, accountants, and claim experts who work  together to investigate fraudulent activities thoroughly. More complex  cases, involving large-scale criminal operations or individuals who  repeatedly stage accidents, may be turned over to the NICB.  In some cases, the SIU has grown to be a multifaceted organization whose  duties are not limited to the investigation of fraudulent claims.  Depending on the way it is organized, the SIU’s work as an integral part  of an anti-fraud program that includes the following:  * investigation of potentially fraudulent claims; * education of claims and underwriting personnel about how to recognize  potential fraud; * education of the public about how insurance fraud affects the average   insurance buyer; and * liaison with fraud division, police, and prosecutorial agencies.    The CFE  The Certified Fraud Examiner (CFE) is a fraud-fighting professional.   The Association of Certified Fraud Examiners is an international,  25,000-member professional organization dedicated to fighting fraud and  white-collar crime.  It was established in 1988, and is based in Austin,  Texas.  With offices in North America and chapters around the globe,  the Association is networked to respond to the needs of anti-fraud  professionals everywhere.   The Expert Attorney  When an insurer suspects fraud, it will usually ask an attorney to get  involved.  Attorneys who are retained in such situations are specialists  who have either received specialized training or have sufficient  experience concerning fraud and the evidence necessary to prove fraud to  handle these cases.  Many are CFEs and all make it a practice to attend  continuing education classes that relate to fraud issues.  The role of the expert attorney varies depending on the type of claim  where fraud is suspected. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining Why a Plaintiff Has no Right to Assert Fifth  Amendment Protection    https://zalma.com/blog The Fifth Amendment to the U.S. Constitution protects an individual from  being forced to testify in a manner that might incriminate him or her  and subject the witness to prosecution. It is a defense, however, not a  weapon that can be used against a defendant in a civil suit. Since civil  litigation is entered into voluntarily, testimony in a civil suit  brought by a plaintiff is not a compulsion to self-incrimination because  the plaintiff can protect his or her privilege by dismissing the suit.  In Fremont Indemnity Co. v. Superior Court of Orange County, 137 Cal.  App. 3d 554, 187 Cal. Rptr. 137 (Cal.App.Dist.4 11/19/1982), plaintiff  owned a restaurant. Fremont, the defendant, issued a policy insuring  against its loss by fire. The policy included an exclusion under which  the insurer would be relieved of liability on the policy if it were  shown that the insured’s arson caused the loss.  After the fire, a criminal investigation into the origin of the fire was  undertaken, and plaintiff came under suspicion. As a consequence, the  defendant declined to pay plaintiff’s claim. Because of this, plaintiff  filed suit against his insurer.  Before his scheduled deposition counsel for plaintiff notified counsel  for defendant that plaintiff would not appear for his deposition because  he had been indicted for arson and therefore was asserting his  constitutional privilege against self-incrimination.  Since it was the plaintiff who claimed the privilege as to his own  behavior which was vitally relevant to a coverage exclusion contained in  the very fire insurance policy upon which he sought recovery, the Court  of Appeal issued a peremptory writ of mandate to the Orange County  Superior Court directing it to compel the testimony, and if plaintiff  continued to  refuse to appear for deposition as ordered or refused to  provide the documentary evidence as already ordered, the Court of Appeal  instructed the trial court to dismiss plaintiff’s action. He continued  to refuse and his case against his insurer was dismissed. © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected]. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining the Right of Insurers to Assist Prosecutors   https://zalma.com/blog  Insurance fraud is a major component of white-collar crime. It is slowly  becoming a more significant component of the law-enforcement agenda.  The insurance industry plays a leading role in assisting prosecutors in  the investigation and prosecution of insurance fraud. The industry has  been compelled to do so by statutes enacted by most states. Insurers  help prosecutors establish criminal cases involving health care  providers, lawyers, bogus claimants, arsonists, and a vast array of  participants in infinite number of schemes to defraud insurance  companies and their customers.  Throughout the country, insurers routinely cooperate with law  enforcement officials that are investigating insurance fraud by  providing information, specialized expertise, and technical and  administrative support for these complicated investigations. The recent  federal health insurance fraud statute, and state statutes in various  states, require cooperation between private insurers and law enforcement  officials on fraud investigations.  A conflict exists whenever there is a reasonable possibility that the  district attorney’s office may not exercise its discretionary function  in an evenhanded manner. The conflict is disabling only if it is so  grave as to render it unlikely that the defendant will receive fair  treatment.  In the criminal justice system, the prosecutor bears responsibility for  determining what crimes will be prosecuted. The legal system has  traditionally allowed wide discretion to criminal prosecutors in the  enforcement process. The Government retains broad discretion as to whom  to prosecute.   Prosecutorial discretion is not unlimited. “Selectivity in the  enforcement of criminal laws is … subject to constitutional  constraints.  The decision to prosecute may not be based upon an  unjustifiable standard like religion, race or sexual orientation. Beyond  these constitutional limitations, a trial judge “must accord a  presumption of constitutionality to prosecutorial decisions and approach  the inquiry with appropriate respect for the judgments exercised by  officers of a coordinate branch of government  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining Professional Conspiracies   https://zalma.com/blog   The Doctor Lawyer Conspiracy  The doctor–lawyer conspiracy will often begin in one of two ways. An  attorney uses individuals, called “chasers,” “runners,” or “cappers,” to  recruit a clientele of auto accident victims, usually for a flat fee.  They look for victims of actual automobile accidents and convince these  individuals to visit the attorney, who is, in fact, running a personal  injury mill. The recruit may either be solicited to become a knowing  participant in the scheme and receive payment for his or her  involvement, or can remain an unwitting participant, unaware that his or  her claim has been manipulated for fraudulent purposes. Some of the  “victims” are paid a flat fee of $100 to $500 and are never heard of  again, while the physicians create fake reports of injuries and  treatments and the unscrupulous lawyer presents the claim on behalf of  his “victim” client and shares any settlement equally with the  physician.  Organizers of such schemes may also recruit friends, acquaintances or  illegal aliens to play the role of victims in staged automobile  accidents. In this type of scheme, the claimant is a knowing,  cooperative participant in the fraudulent activity and may be involved  in many different claims involving the same corrupt professionals. The  attorney refers the accident victim to a cooperating medical  practitioner who fabricates medical diagnoses and reports and prepares  false bills.  Fraud in the Medical Profession  A doctor can initiate a medical fraud scheme by having a patient  schedule a number of visits even though the actual medical treatment is  minimal or non-existent. The doctor then bills as if the services were  rendered.  In another version of the scheme, a physician will “rent” Social  Security numbers from economically disadvantaged people who are not even  ill, and bill for services that they did not receive. There have been  cases where a medical provider purchases computer records of legitimate  patients from a hospital employee, submits invoices to Medicare or  Medicaid, which wires funds to the provider for the services  claimed—although not rendered—and then disappears only to obtain a  Medicaid and Medicare provider number under a different name.  Fraud in the Legal Profession  Attorneys conspire with insureds and other attorneys to bring suit and  counter suit against each other, with allegations that require a defense  under a reservation of rights. Then, demanding independent counsel  because of the conflict caused by the reservation of rights, the  so-called “independent” counsel run up excessive billing to be paid by  the insurer. The lawsuits seem to never be in a position to settle and  the attorneys’ billings often exceed the amounts claimed in the  lawsuits. The billings may be for legal work not done at all or be  simply excessive for the work done. One attorney regularly billed  various insurers more than 80 hours for work allegedly done in a single  day, although he never billed a single client more than eight hours in  any one day, he billed ten or more clients each day.  The most notorious example of this kind of fraud is often called “Cumis”  fraud because of a decision in the California Court of Appeal case, San  Diego Navy Fed. Credit Union v. Cumis Ins. Soc’y Inc., 208 Cal. Rptr.  494 (Cal. Ct. App. 1984) involving an attorney named Lynn Boyd Stites.  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL - Volume 25, Issue 13    https://zalma.com/blog Attorneys Should Never Be Involved in Fraud with Clients The Crime Fraud Exception to The Attorney Client Privilege  In United States of America v. Aron Chervin, Et Al, No. 10 CR 918  (S.D.N.Y. 09/21/2011) an indictment involving multiple health insurance  fraud perpetrators attempted to keep from their criminal trial wiretap  conversations that seem to establish the crime.  By motion dated June 1, 2011, Defendant Michael Lamond (“Lamond”) moved  to suppress nineteen telephone conversations between himself and  Defendant Aron Chervin intercepted by the Federal Bureau of  Investigation (“FBI”) pursuant to court-authorized wiretaps. Defendant  argued that the communications are protected by the attorney-client  privilege because Aron Chervin was a client.  The Defendants were charged with creating wholesale and retail shell  corporations to perpetuate the fraudulent sale of Durable Medical  Equipment (“DME”) to obtain inflated reimbursement from no-fault  insurance providers, and financing their scheme through the sale of  fraudulent receivables of the clinics to investors who benefitted from  the inflated reimbursement generated by the fraud even though New York  State prohibits medical professionals from sharing fees for medical  services with non-medical professionals.  The sophisticated schemes also utilized the services of lawyers to  represent patients, to facilitate payments, and to prevent the insurance  companies from detecting the possibility of fraud.  An Insured Cannot Commit A “Little” Fraud Anymore Than Be A “Little  Dead” Kentucky Claimed Millions in Unallowable School-Based Medicaid  Administrative Costs Good News from the Coalition Against Insurance Fraud Health Insurance Fraud Convictions   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining How Citizens Can Act to Defeat Insurance Fraud   https://zalma.com/blog The False Claims Act, also known as the “Lincoln Law,” dates back to the  Civil War. President Lincoln signed the act into law in 1863 because  war profiteers were selling the Union Army shoddy supplies at inflated  prices. The original law included qui tam [ “Qui tam” is an abbreviation  of the Latin phrase “qui tam pro domino rege quam pro si ipso in hac  parte sequitur” meaning “Who sues on behalf of the King as well as for  himself.”  There are a number of pronunciations of the Latin  abbreviation qui tam.  The simplest is key tam (rhymes with “ham.”)  Black’s Law Dictionary suggests kweye (rhymes with “eye”) tam.]  provisions that allowed a private person (plaintiff) to sue those who  defrauded the federal government. If the suit was successful the  plaintiff would receive 50% of any recovery from the defendant.  The qui tam provisions were weakened greatly as a result of  congressional amendments in 1943, and qui tam legislation became  virtually nonexistent. However, in 1986, Sen. Charles Grassley, R–Iowa,  and Rep. Howard Berman, D Calif., joined forces to amend the law and  strengthen the incentives for citizens to uncover and fight fraud as qui  tam relators. (Relators are the private plaintiffs under the False  Claims Act).  The 1986 False Claims Act amendments received widespread bi-partisan  support, and were signed into law by President Reagan. Since the  revitalization, the qui tam provisions have increasingly been used.  The False Claims Act makes it unlawful to knowingly (1) present or cause  to be presented to the United States a false or fraudulent claim for  payment or approval, 31 U.S.C. § 3729(a)(1) (2006); (2) make or use a  false record or statement material to a false or fraudulent claim, §  3729(a)(1)(B); or (3) use a false record or statement to conceal or  decrease an obligation to pay money to the United States, § 3729(a)(7)  (2006). Under the Act, private individuals ... , referred to as  “relators,” may file civil actions known as qui tam actions on behalf of  the United States to recover money that the government paid as a result  of conduct forbidden under the Act.  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining How Citizens Can Act to Defeat Insurance Fraud   https://zalma.com/blog The False Claims Act, also known as the “Lincoln Law,” dates back to the  Civil War. President Lincoln signed the act into law in 1863 because  war profiteers were selling the Union Army shoddy supplies at inflated  prices. The original law included qui tam [ “Qui tam” is an abbreviation  of the Latin phrase “qui tam pro domino rege quam pro si ipso in hac  parte sequitur” meaning “Who sues on behalf of the King as well as for  himself.”  There are a number of pronunciations of the Latin  abbreviation qui tam.  The simplest is key tam (rhymes with “ham.”)  Black’s Law Dictionary suggests kweye (rhymes with “eye”) tam.]  provisions that allowed a private person (plaintiff) to sue those who  defrauded the federal government. If the suit was successful the  plaintiff would receive 50% of any recovery from the defendant.  The qui tam provisions were weakened greatly as a result of  congressional amendments in 1943, and qui tam legislation became  virtually nonexistent. However, in 1986, Sen. Charles Grassley, R–Iowa,  and Rep. Howard Berman, D Calif., joined forces to amend the law and  strengthen the incentives for citizens to uncover and fight fraud as qui  tam relators. (Relators are the private plaintiffs under the False  Claims Act).  The 1986 False Claims Act amendments received widespread bi-partisan  support, and were signed into law by President Reagan. Since the  revitalization, the qui tam provisions have increasingly been used.  The False Claims Act makes it unlawful to knowingly (1) present or cause  to be presented to the United States a false or fraudulent claim for  payment or approval, 31 U.S.C. § 3729(a)(1) (2006); (2) make or use a  false record or statement material to a false or fraudulent claim, §  3729(a)(1)(B); or (3) use a false record or statement to conceal or  decrease an obligation to pay money to the United States, § 3729(a)(7)  (2006). Under the Act, private individuals ... , referred to as  “relators,” may file civil actions known as qui tam actions on behalf of  the United States to recover money that the government paid as a result  of conduct forbidden under the Act.  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining the Obligations of an Adjuster to the Underwriting of  Insurance   https://zalma.com/blog  Adjusters are the representatives of the insurers who fulfill the  promises made by the underwriter when the risk was taken and a policy  was issued. The adjuster (sometimes called a claims representative) must  determine that the decision to insure was based upon accurate facts and  that the underwriter fully understood the risk he or she was taking.  The work of the underwriter begins with the submission of an application  from a prospective insured, directly or by an agent or broker. The  underwriter reviews the application and either presents an offer to  insure or a refusal to insurer.  The underwriter is obligated by tradition and the history of the  insurance industry to believe that the applicant reports facts to the  underwriter honestly and in good faith. By considering that the  applicant is dealing with the underwriter fairly and in good faith the  underwriter is able to be confident in the evaluation of the risk  presented. The application presented to an underwriter, either directly  or via an agent or broker, is a request for an offer of insurance.  Acting on the understanding that the applicant is acting in good faith  the underwriter can weigh the hazards faced by a particular property,  individual or business before agreeing to take on the risk of loss and  make an offer of insurance. After completing a review of the application  and all facts available to the underwriter from other sources and his  or her experience will either issue an offer of insurance or a refusal  to insure.  Underwriters take information from adjusters, after a loss, to  reevaluate the risk decision, to be certain they were not deceived and  to better evaluate the risk taken so they can deal with future requests  for renewal or increases in coverages fairly and in good faith.  Sometimes an insurer will ask an adjuster to perform a pre-risk  inspection to determine if the risk is worthy before the underwriter  makes the decision to accept a risk for insurance. Underwriters also use  the services of inspection companies and engineers to inspect the  property or the risk before making a decision to offer or refuse to  offer insurance.  Usually, however, information from the adjuster is provided to help the  underwriter determine whether to cancel, non-renew, or continue on the  risk, or modify the policy and premium before agreeing to continue on  the risk on the same terms and conditions or modify terms, conditions  and premium amount.  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining Health Insurance Fraud    https://zalma.com/blog The nation’s bill for health care fraud is enormous  as large as $300  billion or more every year. Fraud takes place at many points in the  health care system, in hospitals, nursing homes, and diagnostic  facilities, by doctors, attorneys, health care providers, durable  equipment providers, and patients. One large area prone to fraud is the Medicare system. This system  processes more than 800 million claims a year with 70 different  contractors handling the claims that come from hundreds of thousands of  doctors, laboratories, and other health practitioners and facilities.    In 2012 Medicare paid out over $817 billion dollars. If only five  percent went to fraud, they took over $40 billion and if ten percent  went to fraud more than $81 billion was paid to fraud perpetrators. I  have heard estimates up to 30 percent of payouts are fraudulent. The  numbers, regardless of the percentage, are excessive.   Surveys show that it is usually the claimant who perpetrates the fraud,  as opposed to health care providers, employers, or attorneys. The most  common fraudulent activity is a false statement or omission of  information, i.e., lying about the severity of an injury or failing to  mention a pre-existing condition then profiting by obtaining a portion  of the amounts billed from the provider.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining How to Discover and Defeat Insurance Fraud    https://zalma.com/blog Next to tax fraud, insurance fraud is the most practiced crime in the  world. It is perpetrated by members of every race, religion, sexual  orientation, and nationality. Insurance fraud is perpetrated by members  of every profession. The temptation to commit insurance fraud is great  because prosecutions are rare, convictions are rarer and the convicted  serve little or no time in prison. The possibility of a tax-free profit,  coupled with the commonly held belief that it is not a crime or morally  wrong to steal from an insurer is often too difficult for normally  honest people to resist.  In September 2019 the Coalition Against Insurance Fraud, after reporting  on the conviction of an insurance fraud perpetrator who was sentenced  to probation only, asked: “What’s wrong with courts that won’t send  frauds to jail for a felony?” The answer is a failure to educate the  judiciary that insurance fraud is a serious crime against the public –  not just what they consider a rich and less than honorable industry.  The education effort must explain to the public and the judiciary that  each year, the effect of insurance fraud runs to billions of dollars. It  is estimated that insurance fraud takes between 3% and 30% of the  premiums collected by insurers doing business in the United States. It  drains from $80 billion to $300 billion from the assets of insurers and  similar amounts from government supported “insurance” programs like the  National Flood Insurance Program, crop insurance programs, Medicare,  Medicaid, Social Security Disability, and Obamacare.  Insurance fraud is not limited to the US. It happens in every country  where insurance exists. For example, in the United Kingdom, insurance  fraud is estimated to take £1.4 billion a year. [See  www.insurancefraudbureau.org/.]  In Canada, insurance fraud accounted  for between 10% and 15% of premiums in 2009—or an estimated $C1.3  billion, according to the Insurance Bureau of Canada (IBC).   © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

 Explaining How to Retain Defense Counsel   https://zalma.com/blog In instances where insurance claims may entail litigation, insurers must  move quickly to engage counsel. When an attorney is retained to defend a  person insured, the fact should be documented in writing by the  attorney, the adjuster, and the insured who is to be defended.  Before an insurer retains an attorney to represent an insured to defend  an insured who has been sued for a tort the claims person should be  certain the lawyer is competent to defend the insured. This can be  accomplished by attending a trial conducted by the lawyer where the  claims person can evaluate the lawyer’s competence at trial. If that  option is not available the claims person should seek recommendations  from other insurance claims professionals who have retained the lawyer  in the past or the insurance company’s list of approved defense lawyers  who have been evaluated by the insurer’s management.  If the attorney is being retained for the first time by the insurer, the  insurer should obtain an engagement letter from the attorney setting  forth the terms and conditions of the retention and signed by the  attorney, the claims person, and the insured. If the attorney or law  firm has an ongoing relationship with the insurer, only the person being  defended need sign an engagement letter. [ For example, the State Bar  of California rules require that attorneys provide a contract to each  client. A sample agreement that complies with Section 6148 of the  California Business and Professions Code may be found at  www.docstoc.com/docs/2936800/THE-STATE-BAR-OF-CALIFORNIA-Sample-Written-Fee-Agreement-Forms  (accessed August 23, 2013).]  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining How to Avoid Conflicts of Interest    https://zalma.com/blog It is imperative that the defense attorney and the adjuster both  recognize that where the interests of the insurer and the insured  conflict in a suit on a liability policy, the attorney’s duty is to the  insured. The attorney and the adjuster must be careful that the attorney  does not become the insurer’s agent on any issues that relate to  coverage. The insurer may, if it ignores this conflict, find itself  paying extracontractual damages and counsel may be surprised to be a  defendant in the same suit.  Conflicts may be avoided by sending a copy of the reservation of rights  letter or nonwaiver agreement to the attorney retained to defend the  insured so that he or she is aware of the problem areas. However, the  adjuster must not ask the attorney retained to defend the insured to  draft a reservation of rights letter for the company or to provide the  company any advice regarding coverage. Doing so would create an  unnecessary conflict between the attorney and the client/insured and  force the defense attorney to withdraw from the case.  The adjuster should not instruct the attorney to collect facts without  any relevance to the defense of the insured but that are particularly  directed to an issue that would tend to defeat coverage. Nor should the  adjuster pose hypothetical cases involving similar facts to the attorney  hired to represent the insured. Rather, the adjuster should consult  experienced coverage counsel regarding coverage issues, including  assistance drafting reservation of rights letters to the insured.  Coverage counsel should never be involved in the defense of the insured  or the insurer because coverage counsel will usually be a key witness in  any future litigation resulting from the advice provided. Coverage  counsel’s work should be limited to providing advice to the person or  entity who has retained him or her.  The American Bar Association (ABA) established Guiding Principles for  Insurance Representation in 1970, which were later incorporated into the  ABA’s Code of Professional Responsibility.  The ABA Guiding Principles  were rescinded at the annual meeting of the ABA House of Delegates in  August 1980. The delegates decided the Guiding Principles no longer  needed a separate statement, as the principles had been incorporated  into the ABA’s Code of Professional Responsibility. They include the  following suggestions:  If a conflict arises between the interests of the insured and the  insurer, the insurer and the attorney hired by it must inform the  insured of that conflict and invite him to retain his or her own  attorney at his or her own expense.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected]. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Trial Preparation   https://zalma.com/blog After completion of investigation, written discovery, oral depositions,  and retention of necessary expert witnesses, the trial preparation part  of the case begins.  The defense attorney’s response should include the settlement value, or  range of values, he or she places on the case.  After reviewing the report, the adjuster should confer with the attorney  to discuss strategy in depth. They should agree on the cost of a  potential settlement versus that of an actual trial. If they decide that  settlement should be attempted, the adjuster should give the attorney  settlement authority within the agreed-upon range.  Use of Experts  The qualification and reliability requirements of Evidence Rule 702 are  distinct. Because even a qualified expert is capable of rendering  scientifically unreliable testimony, it is imperative for a trial court,  as gatekeeper, to examine the principles and methodology that underlie  an expert’s opinion. Ohio and federal rules require that the trial judge  must assess whether any and all scientific testimony or evidence  admitted is not only relevant, but also reliable. It is that  determination that ensures that the testimony will be helpful to the  trier of fact.  Even when there is ample evidence in the record to support a trial  court’s decision that an expert is qualified and his or her testimony is  reliable, it is left to the discretion of the trial judge whether the  expert should be allowed to testify. Whenever an insurance coverage or  insurance claims handling expert is called it is essential that a record  be made at trial as to the expertise of the witness and that the expert  will provide testimony that is truly expert and neither elementary nor  simplistic and will help the jury or judge understand the custom and  practice of the insurance claims industry which information is not  within the knowledge or experience of a lay jury.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4A  site for the insurance claims professional and anyone who wants to know  something about insurance, insurance claims, insurance coverage, and  insurance law. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining The Ethical Obligations of the Claims Person when Retaining  an IME    HTTPS://zalma.com/blog Medical examiners have established their own codes of ethics with regard  to an IME and are obligated by those codes to report their findings  fairly and accurately. The American Board of Independent Medical  Examiners has published a code of Ethics.  The adjuster who follows the rules profiled by the American Board of  Independent Medical Examiners, which are similar to those posited by the  International Association of Special Investigation Units (IASIU),  should receive appropriate independent medical advice.  Insurance is a business of the utmost good faith. The IME is a tool that  the ethical adjuster must never abuse. Although insurers are frequent  victims of fraud, they must treat everyone they come in contact with as  honest until proven by a preponderance of the available evidence to be a  fraud. The purpose of the IME is to verify the extent of injury, not to  establish fraud. If the extent of injury found by the IME is different  from that presented in the claim, the SIU or independent counsel should  be contacted to evaluate the results of the IME and determine if a fraud  investigation is required.  When an independent medical examiner’s report is required the adjuster  should act so as to ensure that the report is scrupulously independent,  or risk becoming a defendant paying extreme punitive damages for a  conspiracy to defraud an insured.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining the Use of Experts to Resolve Claims  https://zalma.com/blog When the investigation is complete the adjuster must determine if  assistance is needed from liability experts, medical experts, or legal  counsel, or if it is better to rely on the layperson’s understanding of  physics, medicine, or other special areas involved in the particular  case.  Because a bad faith claim challenges the reasonableness of an insurer’s  conduct in investigating and adjusting a claim, the insurance company’s  conduct is judged objectively, using proof of industry standards.  [Travelers Ins. Co. v. Savio, 706 P.2d 1258, 1274 (Colo. 1985)].   In a case where nothing in the record convinced the court that jurors  are familiar with the Boeckh Cost Guide or Xactimate or the how and when  of its general use. The alleged negligence in this case involves  technical knowledge of the insurance industry and industry practices.  Expert testimony was required to establish the standard of care. Because  the plaintiffs failed to provide the requisite expert testimony, there  was insufficient proof concerning the standard of care. Thus, the jury’s  verdict cannot be sustained. [Konrady v. Bremer Insurance Agencies, 639  N.W.2d 224, 249 Wis. 2d 489 (Wis. App., 2001)]  It is appropriate and, indeed, often required to use an expert to  establish insurance industry standards at trial. The opinion of an  independent, unbiased expert who is paid a reasonable fee can be helpful  to the investigation.  The Independent Medical Examination (IME)  When a claimant claims an injury that does not agree with the facts of  the incident claimed to have caused the injury, the adjuster will often  seek the assistance of an Independent Medical Examiner (IME) to verify  the extent of the claimed injury. The IME is usually a forensic  physician or a chiropractor who has agreed to evaluate an injured person  for a fee and is not involved in the treatment of the injured person.  In Pennsylvania, an insurer providing medical benefits to its insureds  following an automobile accident did not have to establish good cause  before the insureds were required to take physical examination  administered by doctor of insurer’s choice, even though statute provided  generally that insurer seeking to compel independent medical exam was  required to show good cause; policy gave insurer right to order  examination without establishing good cause. [Fleming v. CNA Ins.  Companies, 409 Pa. Super. 285, 597 A.2d 1206 (1991)]. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

About the Waiver of the Privilege   https://zalma.com/blog INTENTIONAL WAIVER  Insurers frequently turn to outside counsel, or internal claims  adjusters who are licensed lawyers, for legal advice regarding their  coverage determinations on claims. In later litigation over denials of  coverage or a carrier’s claims-handling conduct, a question that  frequently arises is whether the advice provided by such counsel is  protected from disclosure to insureds. Insurers may be obligated to  disclose otherwise-privileged communications if the insurer relies on  “advice of counsel” as a defense to the claim for breach of contract or  bad faith.  It is not unusual for insurers to assert as a defense to charges of  bad-faith by claiming that their conduct was reasonable because they  relied on the advice of counsel. When an insurer asserts the defense, it  puts the substance of the advice it obtained at issue. By so doing most  courts conclude the insurer waived the attorney-client  privilege.[Chicago Title Insurance Co. v. Superior Court, 174 Cal.  App.3d 1142 (1985).]  UNINTENTIONAL WAIVER  In Sony Computer Entertainment America, Inc. v. Great American Ins. Co.,  et al., 229 F.R.D. 632 (N.D.Cal. 2005) Sony Computer Entertainment  Company, Inc. sued American Home Assurance Co. and other insurance  companies for wrongful denial of insurance coverage in connection with  two consumer lawsuits against Sony. The suits arose from claims of  property damage, false advertising, and other injuries in connection  with Sony’s PlayStation and PlayStation 2 products. American Home filed  motions to compel responses to discovery contesting that Sony’s  assertion of the attorney-client privilege at the depositions of  Jennifer Liu, an attorney and Sony’s director of legal and business  affairs.  Sony’s Ms. Liu was designated by Sony as its person most knowledgeable  for deposition under F.R.C.P. Rule 30(b)(6) regarding one of the  consumer lawsuits. At the depositions, Sony’s counsel asserted the  attorney-client privilege and the attorney-work product doctrine and  instructed Ms. Liu not to answer questions.  CRIME FRAUD EXCEPTION  A waiver of the privilege also may result when the carrier is sued for  bad faith and/or fraud. For example, California Evidence Code Section  956 provides: “there is no privilege under this article if the services  of the lawyer were sought or obtained to enable or aid anyone to commit  or plan to commit a crime or a fraud.” Even without a statute, the  license to practice law, is not a license to commit a crime.  One federal court ruled that a bad faith claim not involving fraud is  insufficient to trigger the exception. In Freedom Trust v. Chubb Group  of Insurance Cos., 38 F.Supp.2d 1170 (C.D. Cal. 1999) the insured argued  that the privilege had been waived because the insurer denied coverage  in bad faith. The court recognized that the attorney “does not have to  be aware of the fraud for the crime-fraud exception to apply” and that  the fraud exception includes civil fraud. The court noted a split in  authority nationally as to whether a bad faith claim triggers the  crime-fraud exception.  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining Why Insurance for Punitive Damages is Against Public Policy   https://zalma.com/blog in Most States   Insurers generally argue that they cannot indemnify or insure for  punitive damage awards. Insurance carriers typically rely, in  California, on “public policy” and point to California Insurance Code  Section 533. Section 533 states:  An insurer is not liable for a loss caused by the willful act of the  insured; but he is not exonerated by the negligence of the insured, or  of the insured’s agents or others.  Insurance carriers frequently cite Peterson v. Superior Court, 31 Cal.3d  147 (1982), in support of their argument. The Peterson court addressed  the question of whether “imposition of punitive damages negates an  insured’s coverage for compensatory damages as well as punitive  damages.” It stated that “indemnification of the punitive damages is  disallowed for public policy reasons.”  Many courts have recognized that the California Insurance Code Section  533’s bar against coverage does not apply when an insured’s liability is  based on the acts of its agents, employees or representatives, at least  absent evidence that the insured (or, in the case of a corporation, its  board of directors) authorized or ratified the intentionally wrongful  conduct.  For example, in Arenson v. National Automobile & Casualty Insurance  Co., 45 Cal.2d 81 (1955), the insured’s son, a minor, started a fire  that damaged school property, and the school district obtained a  judgment against the plaintiff for the amount of the damage. The carrier  refused to defend the suit or to pay the amount of the judgment,  claiming that the injury was caused intentionally by an insured and  therefore fell within an intentional acts exclusion or alternatively,  Section 533. The court held: “Section 533 ... has no application to a  situation where [the insured] is not personally at fault.” It apparently  ignored the fact that a minor child living with his parents is also an  insured.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL - 06-15-2021  https://zalma.com/blog Quote of the Issue - “Learn from yesterday, live for today, hope for  tomorrow.” - Albert Einstein What Is Insurance Fraud?  When an insurer is asked to pay a fraudulent insurance claim it is the  victim of a tort, a civil wrong and in most states, a crime.  Black’s Law Dictionary, 6th Edition, defines fraud as: "An intentional  perversion of the truth for the purpose of inducing another in reliance  upon it to part with some valuable thing belonging to him or to  surrender a legal right; a false representation of a matter of fact,  whether by words or by conduct, by false or misleading allegations or by  concealment of that which should have been disclosed, which deceives  and is intended to deceive another so that he shall act upon it to his  legal injury."  In simple language, fraud can be defined as a lie told for the purpose  of obtaining money from another who believes the lie to be true. Civil  insurance fraud exists if an insured:  Go Directly to Jail – Arson for Profit Fails  Setting a Fire and Presenting a Claim for Items Not Burned is Insurance  Fraud & Arson  Postal Inspector Guilty of Insurance Fraud After Pleading Guilty Defendant’s Petition Coram Nobis Fails to Reverse  His Conviction  Jason Weber pled guilty to a charge of theft of government funds. At the  time of the offense, Weber was serving as a postal inspector. The Court  sentenced him to a two-year term of probation and ordered him to pay  $65,634 in restitution. He has filed a petition for writ of coram nobis,  alleging that “new evidence” suggests that his indictment may have been  based on “malfeasance and mishandling of evidence” on the part of the  government.  In United States of America v. Jason Weber, Case No. 14 CR  241, USDC (June 2, 2021) the USDC considered Weber’s attempt to reverse  his conviction.  Health Insurance Fraud Convictions Marketing From Dennis Richard  My friend, Dennis Richard, is back offering his over 30 Years of  Strategic Business-to-Business Marketing Experience in the Insurance  Industry gained from, among other tools like the Insurance Broadcast  System and World Risk and Insurance News, that I was honored to appear  in as an expert on insurance claims.  Other Insurance Fraud Convictions Zalma on Insurance Blog Posting   © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Describing Grounds for the Tort of Bad Faith Unexplained Delays in Communication   https://zalma.com/blog When an insured asks a question of his or her insurer an answer is  expected. An insurer should respond to all inquiries promptly, and in no  event later than 15 days. If an insured submits a proof of loss to  which the insurer has agreed and asks “when can I expect to be paid?”  the insurer should respond with specificity, immediately. Most policies  and state regulations require payment within 30 calendar days of  agreement to the proof of loss. If the question is ignored and payment  is not made, after the insurer agreed to the proof of loss, the insurer  is breaching the contract and if without good cause, the covenant of  good faith and fair dealing. Often, bad faith is merely the difference  between courtesy and lack of courtesy.  An insurance company will not be allowed to deny coverage where all the  relevant facts were known to the insurer at the outset, but it  unreasonably delayed in asserting a basis for disclaimer. An unexplained  delay of two months can be found to be unreasonable in disclaiming  coverage. When the insurer waited an even longer amount of time, with an  unexplained delay of approximately one year, before mentioning two new  reasons for disclaimer the court found the insurer’s actions to be  unreasonable as a matter of law. [Allstate Ins. Co. v. Gross, 27 NY2d  263, 269-270) and Mendoza v. American Country Ins. Co., 19 A.D.3d 300,  797 N.Y.S.2d 492, 2005 NY Slip Op 5432 (N.Y. App. Div., 2005).]  Insurer's Delayed Requests for Information  The insurance adjuster knows better than an insured what is needed to  prove a claim. If, for example, the adjuster fails to ask for a proof of  loss, documentation to support a claim, or the sworn testimony of the  insured at examination under oath, until months after the loss the delay  in the request can upset the insured and lead to charges of breach of  contract and bad faith.  Lack of Settlement Authority Delays in Settlement  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining Various Defenses to Intentional Torts    https://zalma.com/blog  Self-Defense and Defense of a Third Party  The California Civil Code states:  Any necessary force may be used to protect from wrongful injury the  person or property of oneself, or of a wife, husband, child, parent, or  other relative, or member of one’s family, or of a ward, servant, master  or guest. (California Civil Code § 50)  The person must reasonably believe that danger exists, and must use only  such force as is reasonably necessary.  Defenses to Battery—Use of Deadly Force  Deadly force or force likely to cause bodily harm is not justified  merely in defense of property. Spring guns or other deadly mechanical  devices are to be used only if deadly force is justifiable. Deadly force  may be used against a felonious trespasser.  Use of Reasonable Force  This is always a defense. For example:  holding a violent person’s arms behind his back; striking a dog about to attack a child; holding a person who was intentionally striking a child; or escorting a trespasser off the premises. Defenses to Defamation, Including Libel and Slander Defenses to False Imprisonment  Reasonable detention without arrest is a judicial privilege codified by  California Penal Code § 490.5(f)(1). For example, a storekeeper who  believes a theft has been committed may detain the suspected person for a  reasonable time.  Defense of Champerty And Maintenance  Using venture capital to finance litigation has been tolerated in many  states because defendants often have more funds available than injured  plaintiffs. Recently, the Ohio Supreme Court, and a few others, have  called into question whether such arrangements violate the traditional  rule against champerty and maintenance.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining Intentional Torts   https://zalma.com/blog Negligence, strict liability, absolute liability, and products liability  all are “accidental” by definition: the persons being held liable for  injury to the plaintiff had no intent to harm the plaintiff. Intentional  torts are harmful or offensive contact, intentionally done. If I  attempt to hit you but hit someone else, have I committed a battery?  Yes. It was the intent to wrongfully touch someone that establishes the  tort. The intent is called “scienter,” which is an evil intent.  Intentional torts come in many forms, some of which are described below.  Battery is the intentional use of force or violence upon the person of  another; or the intentional administration of a poison or other noxious  liquid or substance to another.  Assault is an unlawful attempt, coupled with a present ability, to  commit a violent injury on the person of another. The investigation and  defenses to the tort are identical to that of battery.  A battery occurs when the attempt to commit a violent injury included  within the definition of assault is effected and a person is actually  injured.  Trespass: A person who comes on the land without privilege or consent  commits the tort of trespass. A person who trespasses is presumed to  have harmed the land. The extent of the harm is subject to proof.  Defamation is an invasion of the interest in reputation. It includes  libel, which is a written defamation, and slander, which is an oral  defamation. To prove defamation the plaintiff must show a publication  that is false and that has a natural tendency to injure or which causes  special damage. The publication must be intended, but no malice or ill  will is required.  False imprisonment is “the unlawful violation of the personal liberty of  another.” (California Penal Code § 236). The tort requires direct  restraint of the person for an appreciable length of time. The plaintiff  must have been compelled to stay or go somewhere against his or her  will. The physical force may be slight, like an officer putting his hand  on a person’s shoulder. Actual force is not essential. The restraint  can be by words, gestures, or acts. A false arrest is one way to commit  the tort of false imprisonment.  Malicious Prosecution was originally limited to unjustifiable criminal  litigation, causing damage to reputation, and the expense of defending  proceedings. Initiating or procuring the arrest and prosecution of  another under lawful process, but for malicious motives and without  probable cause, is tortious. A person who causes a third person to  institute a malicious prosecution is liable, as if he or she had  personally instituted it. It has often been held that actions for  malicious prosecution are, for reasons of public policy, “not favored.”  The tort now applies to maliciously prosecuted civil actions as well as  criminal.  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining Defenses to Tort Claims    https://zalma.com/blog Contributory and Comparative Negligence  At one time, a plaintiff who contributed in any amount to his or her own  injury recovered nothing. The California Supreme Court thought the  result was harsh. A person 99% responsible for another’s injury would  have an absolute defense. The California Supreme Court decided that  almost all accidents, all negligent torts, were the result of negligent  actions of both parties.  The California Supreme Court enunciated in Li v. Yellow Cab, a system  known as comparative negligence where the jury was instructed to  determine the percentage of responsibility attributable to both parties.  Assumption of the Risk  Primary assumption of risk generally absolves the defendant of a duty of  care toward the plaintiff with regard to injury incurred in the course  of a sporting or other activity covered by the doctrine. A person who  voluntarily and knowingly exposes him- or herself to obvious dangers is  deemed to have assumed the risk of injury. It is not contributory  negligence. It is more like consent to the act. The defendant’s conduct  involves certain dangers or risks, which the plaintiff voluntarily  accepts.  Last Clear Chance  The defense of “last clear chance” is an exception to the defense of  contributory negligence. Since 1975, it has been subsumed into  comparative negligence.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Catastrophes and Anti-Concurrent Cause Policy Language  https://zalma.com/blog The United States Court of Appeal, Fifth Circuit entered an important  decision with regard to water damage and insurance policy coverage for  claims resulting from water damage and catastrophe losses. In Leonard v.  Nationwide, 499 F.3d 419, 37 A.L.R. 6th 785 (2007) the first of the  Katrina cases to go to trial, found that  anti-concurrent-causation clause was not ambiguous; the clause was not invalid under Mississippi law; and water damages exclusion unambiguously excluded damage caused to  residence from storm surge.  The Leonards' home lies twelve feet above sea level on the southernmost  edge of Pascagoula, Mississippi, less than two hundred yards from the  Mississippi Sound. Hurricane Katrina battered Pascagoula with torrential  rain and sustained winds in excess of one hundred miles per hour. By  midday, the storm had driven ashore a formidable tidal wave—also called a  storm or tidal surge—that flooded the ground floor of the Leonards'  two-story home.  The Fifth Circuit found that the anti-concurrent causation “clause  unambiguously excludes coverage for water damage ‘even if another  peril”—e.g., wind— “contributed concurrently or in any sequence to cause  the loss.’ The plain language of the policy leaves the district court  no interpretive leeway to conclude that recovery can be obtained for  wind damage that ‘occurred concurrently or in sequence with the excluded  water damage.’”  For all these reasons, the Fifth Circuit “concluded that use of an  anti-concurrent-cause clause to supplant the default causation regime is  not forbidden by Mississippi caselaw (including the Camille cases which  antedate such clauses), statutory law, or public policy. Because the  anti-concurrent-causation clause is unambiguous and not otherwise  voidable under state law, it withstood the claim of the Leonards.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining The Need to Prove an Occurrence   https://zalma.com/blog An “occurrence” is usually defined as accidental loss or damage which  results, during the policy period, in bodily injury or property damage.  In Green v. State Farm Fire & Casualty Co. 127 P.3d 1279, 2005 UT  App 564 (Utah App. 12/30/2005) a homeowner sued the insured developer  after he sustained property damages as a result of a landslide. At the  time of the landslide, the developer held a contractor/builder’s risk  insurance policy issued by State Farm. The developer initiated a  declaratory judgment action against State Farm, seeking defense and  indemnification under the policy.  It should be axiomatic in all third party liability cases that before  there can be a duty to defend there must be an occurrence or accident so  that the events sued upon are fortuitous. In some states, the pleading  controls the decision on coverage, as in Utah, while in others, like  California, the insurer is obligated to look beyond the complaint to  extrinsic facts.  In Automobile Insurance Co. of Hartford v. Cook, 21 A.D.3d 1155, 801  N.Y.S.2d 837 (2005) the court was faced with the legal question of  whether an individual’s homeowner’s insurance policy affords coverage  when that individual is sued for wrongful death after killing a person  in self-defense. On February 20, 2002, defendant Alfred S. Cook shot and  killed Richard A. Barber, the decedent, after a disagreement over a  business arrangement spun out of control. The decedent had entered  Cook’s home without permission. During their discussions, Cook, armed  with a handgun, retreated to his bedroom to retrieve a 12-gauge shotgun  and then returned to the living room, where the fatal confrontation  occurred.  Please send me an e-mail at [email protected] if you liked or disliked the  videos I have produced on youtube.com and rumble.com.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Proposal to Create a Staff of Claims Professionals    https://zalma.com/blog To avoid claims of breach of contract, bad faith, punitive damages,  unresolved losses, and to make a profit, insurers must maintain a claims  staff dedicated to excellence in claims handling. That means they  recognize that they are obligated to assist the policyholder and the  insurer to fulfill all the promises made by the insurer in the wording  of the policy.  An insurer can create a claims staff dedicated to excellence in claims  handling by, at least:  Hiring insurance claims professionals. If claims professionals are not available to hire away from other  insurers, the insurer must be able to train all members of the existing  claims staff to be insurance claims professionals. Training each member of the claims staff annually on the local fair  claims settlement practices regulations. Supervising each claims handler closely to confirm all claims are  handled professionally and in good faith. Explaining to each member of the claims staff the meaning of the  covenant of good faith and fair dealing. Making clear to each member of the claims staff that it is the position  of the insurer that all insureds and claimants are to be treated fairly  and in good faith. Demanding excellence in claims handling from the claims staff. Being ready to dismiss any claims handler who fails to treat every  insured with good faith and fair dealing.  If any experienced claims professionals exist on the insurer’s staff the  insurer must cherish and nurture them and use their experience and  professionalism to train new claims people. If none are available, the  insurer has no option but to train its people from scratch using  available materials and professionals who have – for a reasonable fee –  the ability to properly and effectively train claims personnel.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Recognizing a Moral Hazard in the Underwriting of Insurance    https://zalma.com/blog The moral hazard is the increase in uncertainty caused by personal acts  of individuals. These acts may contribute to the probability or severity  of loss. The individual creating the problem may be the policyholder or  another person. In either case the chance of loss is increased. A moral  hazard may be present in every line of insurance. No underwriter can  ignore it without incurring an increased risk of substantial loss. The  moral hazard is very difficult to detect and therefore very dangerous to  the insurer.  "Moral hazard” is the term used to denote the incentive that insurance  can give an insured to increase the risky behavior covered by the  insurance. [May Dept. Stores, 305 F.3d 597, Erickson-Hall Constr. Co. v.  Scottsdale Ins. Co. (S.D. Cal., 2019)]  The competent underwriter, and adjuster, recognize that moral hazard  describes a policyholder who deliberately causes loss by, for example:  setting fire to his or her building or automobile; conspiring with thieves to steal his or her cargo-laden truck; making false entries in his or her accounts in order to justify a claim  for nonexistent property; or reporting a burglary that never took place at his or her home or  business.  Some underwriters think only of the intentional fraud when they use the  term “moral hazard.” If an applicant reveals such a fraudulent intent,  no sane underwriter would agree to insure him. It is for the adjuster to  discover it and warn the underwriter against maintaining the risk in  the future. However, most moral hazards are not of this deliberate type.  There are many cases when the attitude of the policyholder has  increased the hazard, without any thought of a deliberate act. The moral  hazards described below can be controlled by an effective and  knowledgeable underwriter.   © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Do Insurers Get Their Money’s Worth from Fighting Fraud?    https://zalma.com/blog The Law of Unintended Consequences Strikes Again to Help Set Up a Bad  Faith Case   How a Statute to Protect Against Bad Faith Offers Created an Opposite  Result  In White v. Cheek, A21A0212, Court of Appeals of Georgia (May 21, 2021) a  personal injury action arising from an automobile accident involving  Stephan Duwayne White and Walter Cheek. White appealed from the trial  court’s denial of his motion to enforce a settlement. White contended  that the trial court erred by holding that oral communications on  White’s behalf constituted a counter-offer, and thus there was no  enforceable settlement agreement formed between the parties.   ZIFL OPINION  The Georgia statute was enacted with an attempt to avoid bad faith  set-up offers of settlement. It, as Chief Judge McFadden noted, had the  exact opposite effect. The court was compelled to enforce the statute as  written. Chief Judge McFadden made it clear in a concurring opinion  that GEICO should aggressively defend the bad faith suit and made clear  that a motion for summary judgment should be granted because the offer  was clearly a bad faith set-up attempt. Lawyers must represent their  clients but need not act unethically by refusing an offer to accept the  settlement demand that did not accept every element of the 22 page offer  immediately. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining Insurance Fraud and How to Defeat It  https://zalma.com/blog To prove civil fraud it is the obligation of an insurer to present admissible evidence that establishes the requirements of the common law that generally identifies nine elements needed to establish fraud: 1. a representation of fact; 2. its falsity; 3. its materiality; 4. the representer’s knowledge of its falsity or ignorance of its truth; 5. the representer’s intent that it should be acted upon by the person  in the man- ner reasonably contemplated; 6. the injured party’s ignorance of its falsity; 7. the injured party’s reliance on its truth; 8. the injured party’s right to rely thereon; and 9. the injured party’s consequent and proximate injury.  The scams—Introduction Insureds who are intent on pursuing fraudulent claims employ many  devices, schemes, and artifices that operate to defraud insurance  carriers out of billions of dollars in loss settlements. In an attempt  to collect large loss payments, insureds may make untrue statements  regarding material facts, conceal the true facts, and submit phony  documentation. Values claimed are grossly inflated, deliberate  statements are made concerning nonexistent property, and deception and  inconsistencies abound in the fraudulent claim. Successful handling, investigation, and  defense against such fraudulent and often criminal activity requires a  complete understanding of the various elements of property insurance  fraud, as well as effective investigative approaches.  There are four general types of fraudulent claim activity which  dishonest individuals (insureds and third-party claimants) engage in to  recover policy proceeds fraudulently. Those activities involve the  following: (1) Obtaining insurance under false pretenses by  misrepresenting or concealing material facts in an application for  insurance, (2) Creating a loss, (3) staging a loss, (4) exaggerating the  amount of loss and (5) misrepresenting the cause of loss. Some claims  involve the creation and exaggeration of the loss and some involve all four types of fraudulent  claim activity.    Property Investigation Checklists Uncovering Insurance Fraud, 13th  Edition available from Thomson Reutershttps://store.legal.thomsonreuters.com/law-products/Forms/Property-Investigation-Checklists-Uncovering-Insurance-Fraud-13th/p/106702361 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining Personal Indemnity and Insurable Interest    https://zalma.com/blog First party property insurance is a contract of personal indemnity. The  insurer promises to indemnify the first party, the insured, in the event  the insured incurs a loss as a result of one of the perils insured  against by the wording of the policy. Insurance does not follow title to  the land. The insurer makes a promise to the first party, the insured,  that if there is a loss to property in which the insured has an  interest, to pay indemnity for the loss. The “elementary principle of  insurance law that fire insurance” is a contract of personal indemnity,  “not one from which a profit is to be realized.” [Cigna Property &  Cas. Ins. Co. v. Verzi, 684 A.2d 486, 112 Md.App. 137 (Md. App. 1995)]     The insurance claims adjuster (the adjuster) must always ascertain that  the owner, or a person with some other insurable interest in the  property, is the person insured and that the person insured has an  interest in the property. Failure to do so could result in the insurer  paying the wrong person or paying a person with no right to the benefits  promised by the policy. Proceeds of a policy upon the interest of an  insured are not subject to the claims of others who have an interest in  the property but are not named as insured or who do not qualify as  insureds by definition.  A first party property policy is considered by courts asked to interpret  the conditions of the policy, a contract of personal indemnity. It is a  contract made with the individual protected. The insurance does not go  with the property as an incident thereto to any person who may buy that  property. If it goes at all, it goes as a matter of contract for the  transfer of the policy. [Estate of Cartwright v. Standard Fire Ins. Co.,  No. M2007-02691-COA-R3-CV, 2008 WL 4367573, *2 (Tenn. Ct.App. Sept. 23,  2008) (noting that "[t]he contract of insurance is also purely a  personal contract between the insured and the insurance company, and  does not attach to or run with the title to the insured's property  absent an agreement for the transfer of the policy." Fulton Bellows, LLC  v. Federal Ins. Co., 662 F.Supp.2d 976 (E.D. Tenn., 2009).  It may be said, generally, that any one has an insurable interest in  property who derives a benefit from its existence or would suffer loss  from its destruction. An insurable interest in property is any right,  benefit or advantage arising out of or dependent thereon, or any  liability in respect thereof, or any relation to or concern therein of  such a nature that it might be so affected by the contemplated peril as  to directly damnify the insured.  The term “interest,” as used in the phrase “insurable interest,” is not  limited to property or ownership in the subject matter of the insurance.  An insurable interest in property may arise from some liability which  an insured incurs with relation thereto. Such liability may arise by  force of statute or by contract, or may be fixed by law from the  obligations which insured assumes.  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining Casualty Insurance   https://zalma.com/blog  "Casualty insurance” is defined as an “agreement to indemnify against  loss resulting from a broad group of causes such as legal liability,  theft, accident, property damage, and workers' compensation.” Black's  Law Dictionary 871 (9th ed. 2009).  Liability insurance is part of the casualty line of insurance. A  “casualty” is an accidental injury, a fortuitous event.  For every such harm there is a law or legal principle that places the  burden of the consequences back on the finances of the initiator of the  harm. Applying the ancient maxim of the law that “for every wrong there  is a remedy...” casualty and liability insurance exists to fund the  remedy.  Another feature of casualty insurance policies is that they are limited  to injuries to persons other than the insured. The ultimate concern of  these policies is the insured—the person who buys the insurance who  needs to be protected from claims made by third persons.  At one time, insurers were limited by statute and their charters were  limited as to the type of insurance they could write. Casualty insurance  could only be written by casualty insurance companies. That is no  longer the case and casualty insurance may be written by any insurer  willing to do so with sufficient assets to perform fairly and in good  faith. Some include:  Terrorism coverage Flood insurance Political Risk or Government Liability Employee Theft and Dishonesty Surety Bonds Cyber-Liability, Identity Theft, and Cyber-Fraud © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining Ethics and the Covenant of Good Faith & Fair  Dealing    https://zalma.com/blog On rare occasions, an insured will act unethically in his, her or its  relations with an insurer. When they do, if discovered by the insurer or  its claims person, the right to indemnity may be lost. As you read  about the decision from the United States Supreme Court below consider  how the insured acted unethically to the insurer and why the Supreme  Court decided to deprive the insured of his right to indemnity.  Although hoary with age this case still states the law of the United  States with regard to unethical and fraudulent conduct by an insured and  the insured’s obligation to appear for and testify honestly at an  examination under oath.  The full text of the U.S. Supreme Court decision in Claflin & Others  v. Commonwealth Insurance Company.; Same v. Western Assurance Company.;  Same v. Franklin Insurance Company, Supreme Court Of The United States  110 U.S. 81; 3 S. Ct. 507; 28 L. Ed. 76; 1884 U.S. LEXIS 1661 Argued and  submitted October 16, December 17, 1883. January 14, 1884, dealing with  an unethical insured is in Appendix 1.  The decision resulted after a man named Murphy, acting as the insured,  lied at an Examination Under Oath because he was concerned others might  learn of information that could hurt him with regard to his relationship  to his employer and a lender. The lie was a breach of Murphy’s ethical  obligation to the insurer and he was deprived of indemnity because what  he did was fraud.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video Explaining Appraisal in a Homeowners Claim   https://zalma.com/blog Almost all homeowners policies contain an “appraisal” clause similar to  that in the Standard Fire Insurance Policy.  Appraisal should be used as a last resort when all efforts to reach an  agreed amount of loss with the insured have failed. The appraisal  provision is optional, and neither the insured nor the insurer is  obligated to invoke that provision. [Overland Plumbing, Inc. v.  Transamerica Insurance Company, 119 Cal. App. 3d. 476, 174 Cal. Rptr. 1  (1981).]  Under civil practice rules, appraisal can be a formal proceeding at  which witnesses are subpoenaed to testify; evidence, both oral and  documentary, can be produced to the arbitrators; and, within the limited  scope of the appraisal, a trial, much like that in a lawsuit, can be  had.  The appraisers are limited, however, only to decide the amount of loss  and the value of the property in question. (Jefferson Insurance Company  of New York v. Superior Court, 3 Cal. 3d 398, 90 Cal. Rptr. 608 (1970).)  The appraisers cannot make decisions outside the limited scope of the  policy language. They cannot find that the insured did not own the  property, that the insured had no interest in it, that the insured was  not entitled to recovery under policy exclusions, that the insured  presented a fraudulent claim, or that the loss exceeds the policy  limits.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;   Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry  Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry  Zalma on YouTube-  https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the  Insurance Claims Library –  https://zalma.com/blog/insurance-claims-library/ Read posts from Barry  Zalma at https://parler.com/profile/Zalma/posts; and the last two issues  of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast  now available at  https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video About the Effect of the Tort of Bad Faith    https://zalma.com/blog It is indisputable that in the 1950’s, 1960's and 1970’s the insurance  industry abused some insureds to avoid paying legitimate claims. Without  a factual basis, insureds were accused of arson or other variations on  insurance fraud. Indemnity payments were refused on the flimsiest of  excuses. People were found to have diseases that only horses could  catch. Disability payments were refused because an insured was wheeled  in her wheelchair to church one day and, therefore, was not totally  house-confined. Insureds were driven into bankruptcy when reasonable  demands within policy limits were refused.  To stop this abuse, the courts of the state of California invented the  tort of bad faith. It took a universal contract remedy and decided that  the breach of an insurance contract without, what the court decided was  proper, genuine or even fairly debatable reasons, was transferred from a  contract breach into a new tort. Many other states have followed the  lead.  Until the invention of the tort of bad faith all that an insured could  collect from an insurer that wrongfully denied a claim were the benefits  due under the policy. After the creation of the tort of bad faith, the  courts allowed the insureds to collect, in addition, the entire panoply  of tort damages, including punitive damages.  The tort of bad faith, and the punitive damages that seem to go with it,  have, in my opinion, served their purpose. Insurers now have  professional claims departments. Insureds are almost universally treated  with courtesy and respect. More than 90% of all claims are resolved  without litigation or argument. Legitimate claims are paid with  alacrity.  Insurance fraud continues to grow. The amount of money taken from  insurers every year are in the tens or hundreds of billions of dollars.  The fear of punitive damages has made the fight against fraud difficult  and almost impossible. Even when an insured is arrested, tried and  convicted of the crime of insurance fraud, or attempted insurance fraud.  Attempts will still be made to sue the insurer for the tort of bad  faith.  Before I retired from the practice of law, I contended daily with  insurers who wanted to fight fraud but who found they must decide to pay  a claim rather than face the exposure of a punitive damage judgment.  Sometimes, the settlement of bad faith lawsuits, where there has been no  bad faith and an appropriate denial of a claim or refusal to pay a  policy limits demand, the insurer concludes it must pay more to avoid a  potential run-away jury.  I can, as my mentors taught me 53 years ago, state with confidence the  opinion that an insurer should spend millions of dollars for the defense  of a non-covered or fraudulent claim and not a dime for tribute to an  insured who brings a spurious bad faith law suit.  However, practical insurance professionals have a need to resolve  litigation as inexpensively as possible to protect the shareholders who  want the insurer to make a profit. As a result, the insurer will disobey  the millions for defense covenant and will make a business decision to  pay the non-covered loss or the fraud, rather than take a chance on an  adverse verdict. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Intentional Torts Should Never Be Insurable    https://zalma.com/blog Insurance against the liability that comes from an intentional tort is  said to be against “public policy.” Insurance companies are generally  forbidden to write liability insurance promising protection against the  consequences of an intentional tort since such activity would encourage  intentional torts.  Assault or battery is, by definition, intentional torts that should not  be insured. An assault is defined as:  An intentional, unlawful offer of corporal injury to another by force,  or force unlawfully directed toward person of another, under such  circumstances as create well-founded fear of imminent peril, coupled  with apparent present ability to execute attempt, if not prevented.  Battery differs from assault only in that the present ability is carried  out and there is an actual, unwarranted touching that causes a corporal  injury to another.  Insurance involves the transfer from the policyholder to the insurer of  the risk of possible losses. It should never be available for losses  that the policyholder knows of, plans, intends, or is aware are  substantially certain to occur. The standard “occurrence” definition  excludes coverage for injury expected or intended by the insured and  incorporates the fundamental concept that fortuitous loss as a  prerequisite for coverage.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Exclusions for Wear & Tear, Depletion, Deterioration, Rust,  Corrosion and Erosion, and Water Damage    https://zalma.com/blog  The wear and tear exclusion, perhaps because it is so obvious, has  seldom been the subject of appellate review. The exclusion for wear and  tear is not, however, as argued by the insured, limited to ‘abnormal  wear and tear,’ but rather encompasses all ‘wear and tear’. See Lovell  v. State Farm Mut. Auto. Ins. Co., 466 F.3d 893, 902 (10th Cir.2006)  Applying Colorado law and holding that when the language used in an  insurance contract is plain and its meaning is clear, the agreement must  be enforced as written. The policy at issue unambiguously excludes  losses caused, “directly or indirectly,” by ‘wear and tear, marring,  scratching, deterioration.  Deterioration, depletion, inherent vice or latent defect, rust or  corrosion, mold, wet or dry rot, erosion  The plain meaning of the exclusion is the insurer will not cover  slow-moving disintegration or corrosion of the concrete foundation  because of external forces. Whether deterioration be termed corrosion,  decay, or any one of several other synonyms, damage caused by contact  between the soil and foundation of the house is precisely the type of  loss the exclusion was meant to cover.  Water Damage  For water damage to be covered in most residential properties there must  first be damage to the roof by wind.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Mysterious Disappearance, Loss or Shortage Disclosed on Inventory,  Intentional Acts & Inherent Vice   https://zalma.com/blog  An exclusion is a provision of an insurance policy referring to hazards,  perils, circumstances, or property not covered by the policy.  Exclusions are usually contained in the coverage form or causes of loss  form used to construct the insurance policy.” [IRMI Online Glossary of  Insurance & Risk Management Terms https://www.irmi.com/online/insurance-glossary/terms/e/exclusion.aspx  (last visited Mar. 8, 2017)].  Intentional Act  “One common exclusion is a clause that prohibits coverage for an  intentional loss.”  Mysterious Disappearance  The term “mysterious disappearance” first appeared in insurance policies  in 1943. Johnson v. General Accident, Fire & Life Assur. Corp., 454  S.W. 2d 837, 838 (Texas California Civil Code. App. 1970). The term has  been defined several ways, but all share the sense of an unexplained  loss.  The term “mysterious disappearance” first appeared in insurance policies  in 1943. Johnson v. General Accident, Fire & Life Assur. Corp., 454  S.W. 2d 837, 838 (Texas California Civil Code. App. 1970). The term has  been defined several ways, but all share the sense of an unexplained  loss.  Shortage Disclosed on Inventory   The “mysterious disappearance” exclusion is often paired with, or  followed by, an exclusion for loss or shortage disclosed on taking an  inventory because of the similarity of moral hazard raised by losses  either unknown or not discovered until an inventory is taken. The  inventory shortage exclusion is often misunderstood and misapplied. The  exclusion, in simple, clear and unambiguous language states: “This  policy does not insure against … [l]oss or shortage disclosed upon  taking inventory.”  Inherent Vice   Inherent vice relates to internal decomposition or some quality which  brings about the object’s own injury or destruction, not an extraneous  cause. [Employers Casualty Company v. Holm, 393 S.W. 2d 363, 367 (Tex.  Civ. App. 1965).] The subjective test for fortuity raises questions  regarding whether the inherent vice exclusion is effective.  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Mysterious Disappearance, Loss or Shortage Disclosed on Inventory, Intentional Acts & Inherent Vice https://zalma.com/blog An exclusion is a provision of an insurance policy referring to hazards, perils, circumstances, or property not covered by the policy. Exclusions are usually contained in the coverage form or causes of loss form used to construct the insurance policy.” [IRMI Online Glossary of Insurance & Risk Management Terms https://www.irmi.com/online/insurance-glossary/terms/e/exclusion.aspx (last visited Mar. 8, 2017)]. Intentional Act “One common exclusion is a clause that prohibits coverage for an intentional loss.” Mysterious Disappearance The term “mysterious disappearance” first appeared in insurance policies in 1943. Johnson v. General Accident, Fire & Life Assur. Corp., 454 S.W. 2d 837, 838 (Texas California Civil Code. App. 1970). The term has been defined several ways, but all share the sense of an unexplained loss. The term “mysterious disappearance” first appeared in insurance policies in 1943. Johnson v. General Accident, Fire & Life Assur. Corp., 454 S.W. 2d 837, 838 (Texas California Civil Code. App. 1970). The term has been defined several ways, but all share the sense of an unexplained loss. Shortage Disclosed on Inventory The “mysterious disappearance” exclusion is often paired with, or followed by, an exclusion for loss or shortage disclosed on taking an inventory because of the similarity of moral hazard raised by losses either unknown or not discovered until an inventory is taken. The inventory shortage exclusion is often misunderstood and misapplied. The exclusion, in simple, clear and unambiguous language states: “This policy does not insure against … [l]oss or shortage disclosed upon taking inventory.” Inherent Vice Inherent vice relates to internal decomposition or some quality which brings about the object’s own injury or destruction, not an extraneous cause. [Employers Casualty Company v. Holm, 393 S.W. 2d 363, 367 (Tex. Civ. App. 1965).] The subjective test for fortuity raises questions regarding whether the inherent vice exclusion is effective. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL – May 15, 2021    https://zalma.com/blog The May 15, 2021 issue of Zalma’s Insurance Fraud Letter Includes  articles on the following subjects:   EUO Is A Condition Precedent  People who commit insurance fraud tend to run from serious insurers who  deny claims for fraud, misrepresentation, concealment or failure to  fulfill conditions precedent. State Farm filed an unopposed motion for  summary judgment against defendants All Med Merchandise and Trading,  Inc., Haar Orthopedics & Sports Medicine, P.C., Park Avenue  Orthopedics, P.C., and Anthony Vigorito, D.C., probably because the  defendants knew they had no case and placed their efforts to collect  from fraud by going against insurers who would rather pay than fight. Insurance Fraud Statutes  Insurance fraud laws have been enacted in 47 of the 50 states, the  District of Columbia and the United Kingdom. The statutes were not  written to give an unfair advantage to insurers, as some members of the  plaintiffs’ bar claim, but to protect the insurance buying public  against the enormous disadvantage insurers meet when faced with a  potentially fraudulent claim.   Unlike other victims of crimes, insurers are required by most of the  statutes, to staff Special Investigative Units (SIU) to investigate and  work to defeat insurance fraud attempts.   Ethics and the Public Insurance Adjuster   Some public insurers, acting alone or with the assistance of  unscrupulous lawyers, violated the standards set by NAPIA and the  covenant of good faith and fair dealing.   Health Insurance Fraud Convictions   Sentenced to Prison for Defrauding Medicaid Program Out of Hundreds of  Thousands of Dollars – Folashade Adufe Horne, 52, of Laurel, Maryland,  was sentenced May 12, 2021 to 13 months in prison for defrauding the  D.C. Medicaid program out of more than $370,000. Plus many more  convictions.   Other Insurance Fraud Convictions  Former Madera Insurance Agent Convicted for Felony Grand Theft Because  she Embezzled over $20,000 of consumers’ insurance payments  Wendy Judd, 47, of Madera, a former insurance agent pleaded guilty to  felony grand theft after embezzling over $20,000 of insurance premium  payments from consumers. Plus many more convictions. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Podcast About Commercial Property Claims Require Experienced and  Qualified Adjusters    The adjustment of a commercial loss is performed in the same manner as  any other property loss. The difference is one of tone, extent of loss  and professionalism of the insured, rather than substance.  Adjusters who usually deal with a business entity, and its officers or  employees, rather than an individual, find claims handling is often, but  not necessarily always, easier.  The experienced adjuster who deals with commercial claims usually has  knowledge of the business and the people who operate the business. Some  insurers even assign a single adjuster to a major commercial insured to  handle all claims presented by the commercial insured. Familiarity, and a  good working relationship over a period of months or years, benefits  both the insured and the insurer.  A fire can be devastating for a business if the business is not rapidly  put back to work after the fire is extinguished. The adjuster must  recognize this fact and act quickly to complete a fair and thorough  investigation.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Types of First Party Property Fraud    https://zalma.com/blog Every first-party property adjuster will face in his or her career  attempts to defraud the insurer for whom the adjuster works. It is  necessary that the adjuster is aware of each type of property insurance  fraud he or she may encounter. Some, but surely not all, fraud types  follow:  Arson for Profit  Arson is the intentional burning of property. It no longer is limited to  specific types of property. Although perhaps the most dangerous of all  methods of insurance fraud, people continue to attempt insurance fraud  by burning their homes, vehicles, and business structures.  The Staged Theft  The staged or fake residential theft where the insured reports the theft  of property from a residence or business when none actually occurred.  In U.S. v. Tam, 240 F.3d 797, 2001 Daily Journal D.A.R. 885, three  defendants were convicted of conspiracy to commit mail fraud and to  transport stolen cars in foreign commerce, mail fraud, and transporting  stolen cars in foreign commerce, and two of them were also convicted of  conspiracy to launder money, following a jury trial. The appellate court  concluded evidence was sufficient to support one defendant's  convictions.  Staged Water Damage or Mold Claim  Where the insured intentionally promotes damage by wetting down the  residence or business property with a hose or disconnecting a plumbing  fixture to generate water damage and encourage mold growth.  A staged loss, regardless of the type, is fraud. Even if no claim is  filed an insured can be accused of attempted fraud and face criminal  penalties. For example, in a New York case, a man gave his car keys to a  third party who was to sell or otherwise dispose of the car. The  insured was told by the third party to file a fraudulent claim against  his own policy and claim that the car was stolen. After reporting the  theft, the insured became frightened and did not move forward with the  claim.  Post-Dating a Loss  This fraud technique involves a loss at a time when an individual has no  insurance or inadequate insurance.  Following the loss, the individual applies for insurance, or increases  the limits of existing coverage, so he or she has sufficient insurance  to cover the loss. After a period of time (usually several weeks), a  fraudulent claim is submitted for a loss reported to have happened after  the new policy came into effect.  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Rescission is an Important Remedy to Avoid Fraud    Never Rescind a Policy Without a Thorough Investigation and Advice of  Counsel  https://zalma.com/blog Insurers must use the rescission remedy with care. Insurers should never  assume that the promise to pay indemnity to the insured under a policy  of insurance can, with impunity, be broken by advising the insured that  the insurer has rescinded the policy.  Rescission without sufficient evidence is wrongful. Rescission without  the advice of competent counsel is a tactic fraught with peril.   Rescission without a thorough investigation is dangerous. Where no valid  ground for rescission exists, the threat or attempt to seek such  relief, may constitute a breach of the covenant of good faith and fair  dealing which is implied in the policy and expose the insurer to tort  damages for that breach, including punitive damages.  One plaintiffs’  lawyer became wealthy when he learned that claims people were given a  rubber stamp that said “RESCISSION” and had no idea what it was. He  would take the claims person’s deposition and ask them to spell the  word. When the claims person failed his bad faith case was established.  When they spelled the word correctly, he would ask the adjuster to state  the elements necessary to effect a rescission. Almost none could  answer.  California, with a Draconian rescission law, still make it clear that if  an insurer elects rescission without sufficient evidence it will bring  the wrath of the courts down on it and will be the basis for  allegations, easily proven, of extra-contractual torts. [ Imperial  Casualty & Indemnity Co. v. Sogomonian (1988) 198 Cal.App.3d 169,  184, 243 Cal. Rptr. 639.]  If sufficient evidence exists, the rescission remedy will deprive the  insured or the insurer of all rights under the policy. The court will  conclude that the contract never existed and neither party has any right  under the contract.      © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Insurance Claims and Mold Reality  https://zalma.com/blog Get Rich Quick Thanks to Mold   Although there have been successful lawsuits, the days of multi-million  dollar verdicts in insurance mold claims are probably disappearing.  As for the get-rich-quick mold remediation companies, they are finding  that they must give real service or they will soon be visiting the  bankruptcy court.  "Killer Mold” Exists  Despite alarmist headlines that pronounce “Black mold can kill you!”  medical research has not been able to determine what amount of exposure  to “black mold,” if any, is toxic to a normally healthy individual.  [Article in the IEQ Review entitled “Indoor Exposure To Molds And  Allergic Sensitization”] Nonetheless, there are several toxic and  pathogenic species of mold that can have a severe acute or chronic  effect on people, especially those whose immune systems are compromised.  Mold Can Be Killed with Bleach Alone  Although a 10% bleach solution is, in some cases, an effective means of  cleaning up mold, it is not a solution. It is more important to  determine why the mold is there in the first place. If the moisture and  warm temperatures that facilitate the growth are not remedied, mold will  return no matter how much bleach is applied.  The Existence of Mold Means There Is a Problem  Mold exists everywhere. It is an important component of the natural  scheme of things. Once a baseline is established for “normal” quantities  of mold, the property owner can be certain that there is no problem  until the normal quantities are exceeded. Unfortunately, most  self-proclaimed experts in the field have yet to agree on what is  “normal.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

A Video True Crime Story of Insurance Fraud  https://zalma.com/blog They were All-American girls. Muffy and Buffy met each other as  cheerleaders in high school. They were best friends. They did everything  together. The two young women shared everything from clothes to  boyfriends. They decided to use insurance fraud to supplement their  income and allow them to continue to live with nothing but the best in  excess of their earnings.  Buffy and Muffy admitted to the adjuster that the watches were never  stolen in either claim. They withdrew the claim for the two watches.  They still tried to convince him that the rest of their claim resulted  from a legitimate auto burglary. He was not convinced. He denied the  claim on the spot. He followed up with a written denial.  He reported the claim to the Fraud Division who agreed it was a  fraudulent claim and presented it to the local district attorney. The  District Attorney refused to prosecute on the grounds that there was  insufficient evidence to guarantee a conviction.  Muffy and Buffy went back to work at the bank. They hired a lawyer who  threatened to sue if the claim was not paid in full. Since there was no  arrest the insurer felt vulnerable. It paid $60,000 to obtain a general  release.  Muffy and Buffy lived comfortably for a while on the money the lawyer  obtained for them.  They were determined to, and continued to, commit  insurance fraud once every few years, to supplement their income.  For Muffy and Buffy crime pays well.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Unintended Consequences of the tort Bad Faith    https://zalma.com/blog  In a typical contract, one party has a duty to perform (construct a  building, deliver goods, convey real estate, pay indemnity) and the  other party has a duty to pay money or perform a task.  Breach by the  performer may take the form of nonperformance, defective performance, or  delay in performance. The primary purpose of damages for breach of a  contract is to protect the promisee’s expectation interest in the  promisor’s performance.  Damages should put the plaintiff in as good a  position as if the defendant had fully performed as required by the  contract. Damages should never provide a profit to the non-breaching  party.  Insurance, like all parts of modern society, is subject to the  deprivations of the law of unintended consequences. In the USA alone  people pay to insurers more than $1.2 trillion dollars in premiums and  insurers pay out in claims as much or more than they take in. Profit  margins are small because competition is fierce and a year’s profits can  be lost to a single firestorm, earthquake, hurricane, flood or  unexpected bad faith law suit.  Neither the courts nor the governmental agencies seem to be aware that  in a modern, capitalistic society, a healthy and viable insurance is a  necessity.  No person would take the risk of starting a business, buying  a home or driving a car without insurance. The risk of losing  everything would be too great. By using insurance to spread the risk  among all the costs of taking the risk to start a business, buy a home  or drive a car becomes possible. The persons insured are dependent on  their insurer to take the risk the insureds are not willing to take  alone.  Insurance contracts can be simple or exceedingly complex, depending upon  the risks taken by the insurer. Regardless, insurance is only a  contract whose terms are agreed to by the parties to the contract.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Bad Faith Set-Ups Defeat the Purpose of the Tort of Bad Faith - https://zalma.com/blog One tactic for setting up a bad faith claim is to make a settlement  offer that likely cannot be complied with by the insurer. Knowing the  settlement demands may not be met, the insured/claimant waits for the  insurer’s misstep, then asserts a bad faith claim.  Sometimes the insured/claimant will make an offer for settlement  containing an arbitrary and unrealistic deadline for acceptance, before  the insurer has had the opportunity to fully investigate the claim. When  the insurer is unwilling to agree immediately to the  insured’s/claimant’s demands, a bad faith claim is filed.  For example, in DeLaune v. Liberty Mut. Ins. Co., 314 So. 2d 601 (Fla.  4th DCA. 1975), plaintiffs made an offer to settle their claim stemming  from an automobile accident for the $10,000 policy limit, attaching a  10-day deadline for the defense to accept the offer. Defense counsel,  believing that settlement for the policy limits was possible, but not  yet authorized to approve the settlement, contacted the plaintiffs’  counsel on the last day of the deadline and asked for an extension of  the offer until the following Monday after the Friday deadline. The  plaintiffs refused and initiated a common law bad faith action for the  excess judgment.  These developments have resulted in the bad faith landscape in some  jurisdictions appearing geared more closely to providing policyholder  counsel with a lucrative recovery than safeguarding the appropriate  balance of interests between insurer and insured.  Bad faith cases that are manufactured to avoid a settlement expand the  concept of “bad faith” beyond what the case law and statutes require for  “good faith.” An offer of settlement made only for the purpose of  setting up a bad faith lawsuit is the obverse of the requirement that  insurers act fairly and in good faith. Ultimately, bad faith claims have  become so common that the stringent standard actually needed to prove  the tort of bad faith appears to have been ignored and bad faith claims  allowed based on mere technical failures in reaching a settlement.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business.   Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Explaining the Need for Liability Claims Adjusters    https://zalma.com/blog The insurance adjuster is seldom, if ever, mentioned in a policy of  insurance. The strict wording of the third party liability policies set  the obligation to prove a claim that entitles the insured to defense or  indemnity of a claim against the insured by an injured third party. Over  a century ago insurers determined that to properly deal fairly and in  good faith with their insureds, an insurance claims professional was  needed to thoroughly investigate claims made against the insured, work  with the insured and a third party claimant to resolve claims without  litigation, and properly protect the interests of the insured.  Adjusting liability insurance claims requires skill, patience, knowledge  of insurance, basic knowledge of tort and contract law, and knowledge  and experience as an investigator. To properly and effectively perform  the duties of a liability claims adjuster, he or she must be capable of  effectively dealing with the following basic obligations:  To understand the law of torts as applied in the state where the  adjuster works. To understand the law of contracts as applied in the state where the  adjuster works. To understand sufficient medical terminology to be able to evaluate  claims of injury. To understand the costs to repair or replace damaged real or personal  property. To understand how to read and apply the terms and conditions of a  liability insurance policy to a particular fact situation developed by  his or her investigation. To understand how to thoroughly investigate all claims assigned. To conduct an investigation of every claim assigned fairly and in good  faith with an intent to find coverage for the loss presented by the  insured. To be able to effectively, fairly and in good faith negotiate with  claimants and lawyers to resolve bodily injury or property damage claims  asserted against an insured. To ascertain that the insurer pays promptly all claims the insurer owes  under the contract. To resist, and recommend against payment of all claims the insurer does  not owe under the contract of insurance.  In the United States, the average adjuster is a 22-year-old graduate of a  liberal arts college who has little or no training sufficient to allow  him or her to fulfill the obligations imposed on them as a  representative of an insurer. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Intentional Acts Exclusions and Fortuity    https://zalma.com/blog Implicit in the concept of insurance is that the loss occur as a result  of a fortuitous event not one planned, intended, or anticipated. Oddly,  the fortuity principle never appears in insurance contracts. The  principle is rooted in common law and in the statutes of at least six  states. The fortuity principle has the effect of an exclusion. That is,  an all-risk policy might provide coverage for all risks minus named  exclusions, but never provides coverage for non-fortuitous events, even  though non-fortuitous events are not named exclusions in the policy. For  this reason, the fortuity principle is sometimes called the unnamed  exclusion.  A fortuitous event is an event which so far as the parties to the  contract are aware, is dependent on chance. It may be beyond the power  of any human being to bring the event to pass; it may be within the  control of third persons; it may even be a past event, such as the loss  of a vessel, provided that the fact is unknown to the parties. Compagnie  des Bauxites de Guinee v. Ins. Co. of N. Am., 724 F.2d 369,372 (3d Cir.  1983) (quoting Restatement of Contracts § 291 cmt. A (1932))  “The purpose behind the fortuity doctrine applies with full force where a  party attempts to purchase insurance against the consequences of his  own ongoing wrongful conduct.” (Scottsdale Ins. Co. v. Travis, Court of  Appeal of Texas, 68 S.W.3d 72 (2001))  Judge Cardozo, in 1923, stated a simple and obvious rule of law that “no  one shall be permitted to take advantage of his own wrong. [Messersmith  v. American Fidelity Co., 232 N.Y. 161, 133 N.E. 432 (1921).]  California, by statute, covers has codified Cardozo’s statement. Almost  every insurance policy issued in the US excludes the intentional acts of  the insured. Those that do not are covered by the public policy adopted  by most states. To insure against wrongful acts would be to allow  people to act wrongfully with no adverse effect since their victims  would be compensated by insurance.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL - Volume 25, No. 9  https://zalma.com/blog & https://rumble.com/vgbcof-zalmas-insurance-fraud-letter-may-1-2021.html The May 1, 2021 issue of Zalma's Insurance Fraud Letter includes the  following articles and a video reporting on the key article about the  Examination Under Oath at  The Examination Under Oath is an Important Tool for Every Fraud  Investigation The EUO Is a Serious and Important Part of the Insurer’s Investigation  The attorney, insurance claims professional or investigator who conducts  the EUO can take a role similar to the role of a prosecutor without the  usual constitutional restraints controlling testimony at a deposition  or trial. [Hickman v. London Assurance Corporation, 184 Cal. 524, 195 P.  45 (1920)] A false statement as to any material fact during the EUO can  cause the policy to be declared void, even if the fact has no  relationship to the loss.  In Claflin the false testimony concerned a witness that would not affect  the amount payable under the policy but to protect his reputation for  veracity. The U. S. Supreme Court found that the witness of the injury  was material to the investigation and declared the policy void for fraud  because he made false statements under oath.  Contrary to the Belief of Lawyers for the Insured, the EUO Is Not an  Adversary Proceeding like a Deposition in a Lawsuit.  Insurance Benefits Not Available to Remodel Fixer Upper Good News From the Coalition Against Insurance Fraud Probation for Insurance Fraud Proves Futile Health Insurance Fraud Convictions When You Do the Crime & Only Get Probation it is not Wise to Commit a  New Crime Other Insurance Fraud Convictions OIG’s Most Wanted Fugitives When Granted Non-Custodial Probation it is Insulting to Appeal the  Conviction New Books for the Insurance Claims Professionals   © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Construction Defects that Cause Illness or Disease  https://zalma.com/blog  Sick building syndrome (SBS) covers a whole range of health problems  that are related to toxin exposure in a building. There are serious  questions raised by physicians and mold experts about the existence of a  true relationship between the mold and bacterial infections that have  been reported to be the cause of SBS. SBS is used to describe situations  in which building occupants experience acute health and discomfort  effects that appear to be linked to time spent in a building, but no  specific illness or cause can be identified. The complaints may be  localized in a particular room or zone, or may be widespread throughout  the building. In contrast, the term “Building Related Illness” (BRI) is  used when symptoms of diagnosable illness are identified and can be  attributed directly to airborne building contaminants.  A study concluded that Stachybotrys chartarum produces the mycotoxin  Satratoxin H, which is implicated in very high cytotoxicity and several  environmental allergic reactions. The various papers concerning the  toxicity of contact with mold spores has met with serious concerns that  people can really be sickened by exposure to mold spores.  Legionnaires’ Disease acquired its name in 1976 when an outbreak of what  was believed to be pneumonia occurred among persons attending a  convention of the American Legion in Philadelphia. Later, the bacterium  causing the illness was named Legionella. Patients with Legionnaires’  Disease usually have fever, chills, and a cough, which may be dry or may  produce sputum. Some patients also have muscle aches, headaches,  tiredness, loss of appetite, and, occasionally, diarrhea. Laboratory  tests may show that these patients’ kidneys are not functioning  properly. Chest X-rays often lead to a diagnosis of pneumonia. It is  difficult to distinguish Legionnaires’ Disease from other types of  pneumonia by symptoms alone; other tests are required for diagnosis.  Legionellosis is an infection caused by the bacterium Legionella  pneumophila. The disease has two distinct forms: Legionnaires’ Disease,  the more severe form of infection that includes, as a result of the  infection, the development of pneumonia, and Pontiac fever, a milder  illness. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

"Additional Insured" Requirements of Construction Contracts and Policies     https://zalma.com/blog Although the “additional insured” requirement provides additional  security to the owner and architect, it can add to the cost of  insurance. Regardless, the requirement is often included in contract  documents and, if not carefully drafted, can result in multiple disputes  as to which insurer is required to defend which insured. Construction  contract language should be designed to avoid such disputes. An owner and a contractor should make every effort to obtain language in  their contract forms that will avoid ambiguous “additional insured”  endorsements. The form language in the example above includes a  requirement that the contractor provide the owner with a certificate, a  copy of the actual endorsement making the owner an additional insured,  and a copy of the entire policy. An owner who receives an endorsement  should read it carefully and if it is not clear, then the owner should  demand that it be clarified.  The requirements are usually verified by the contractor providing to the  owner, architect, and others a “certificate of insurance” that is a  statement by an insurance agent or broker that insurance exists at the  time the certificate is signed in the amounts stated in the certificate  by the insurers represented. A certificate is not insurance but only  evidence of insurance at a specific time. Certificates often promise to  advise the certificate holder if the policy is cancelled or otherwise  goes out of force.  Parties to such contracts must carefully review their insurance  contracts and be certain that their agents and brokers obtain policies  that provide for such waivers of subrogation. Failure to do so can void  the insurance contract as was held by the California Court of Appeals in  Liberty Mutual Insurance Co. v. Altfillisch Construction Co., 70  Cal.App.3d 789, 139 Cal.Rptr. 91 (Cal.App.Dist.4 1977) where the court  held that the waiver was “clearly a breach of the insured’s implied  covenant of good faith and fair dealing.”  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Construction Contract https://zalma.com/blog When a construction contract, like every other contract, is unambiguous,  the parties’ intent may be determined from the contract alone, and it  is the duty of the court—not the jury—to state its meaning.  Construction contracts are governed by the same rules as all other  contracts. When a court is called upon to interpret a construction  contract its terms are given their ordinary and generally accepted  meaning with the court working to give effect to the intent of the  parties to the contract unless the contract itself gives special meaning  to the contract.  A construction contract should always be written. It should, like all  other contracts, set forth in detail the duties and obligations of the  parties to the contract. It should communicate the scope of work to be  rendered and the extent to which each party is involved in the differing  aspects of the project.  Contracts serve as means of documenting the services and assets to be  exchanged during the course of a project. The contract is important not  only to finalize the deal in the minds of the parties to the  construction project, but also to help define the performance of the  work and may even determine who bears the tax burden.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4 --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Why it is Time to Abolish the Tort of Bad Faith    https://zalma.com/blog It is indisputable that in the 1950’s, 1960's and 1970’s the insurance  industry abused some insureds to avoid paying legitimate claims. Without  a factual basis, insureds were accused of arson or other variations on  insurance fraud. Indemnity payments were refused on the flimsiest of  excuses. People were found to have diseases that only horses could  catch. Disability payments were refused because an insured was wheeled  in her wheelchair to church one day and, therefore, was not totally  house-confined. Insureds were driven into bankruptcy when reasonable  demands within policy limits were refused.  To stop this abuse, the courts of the state of California invented the  tort of bad faith. It took a universal contract remedy and decided that  the breach of an insurance contract without, what the court decided was  proper, genuine or even fairly debatable reasons, was transferred from a  contract breach into a new tort. Many other states have followed the  lead.  Until the invention of the tort of bad faith all that an insured could  collect from an insurer that wrongfully denied a claim were the benefits  due under the policy. After the creation of the tort of bad faith, the  courts allowed the insureds to collect, in addition, the entire panoply  of tort damages, including punitive damages.  It worked. Insurers treated the insureds better. The threat of punitive  damages made insurers wary of rejecting any claim. The creation of the  tort of bad faith was in many ways a good thing for insurers and  insureds. What the courts that created the tort of bad faith did not  recognize was that it was also the key to Pandora’s box of abusive  lawyers who found it to be a new profit center for their practices.  Bad faith litigation is not a game, where insureds are free to  manufacture claims for recovery. It is time that it is abolished from  litigation in the United States  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;   Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry  Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry  Zalma on YouTube-  https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the  Insurance Claims Library –  https://zalma.com/blog/insurance-claims-library/ Read posts from Barry  Zalma at https://parler.com/profile/Zalma/posts; and the last two issues  of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Marine Rule   https://zalma.com/blog In some states, even if the false statements made in the application  were not warranties but were merely misrepresentations or concealments  (whether innocent or intentional), grounds exist for rescission.  Fraud  need not be proved; this is called the Marine Rule.  In Gates v. Madison County Mut. Ins. Co. (5 N.Y. 469, 55 Am.Dec. 360, a  "marine rule imposes on the insured, although no inquiry be made, to  disclose every fact material to the risk, within his knowledge.” In  other words, an applicant for marine insurance must state all material  facts which are known to him and unknown to the insurer (Alexander,  Ramsey Kerr v. National Union Fire Ins. Co., 104 F.2d 1006, 1008).  The Supreme Court of Rhode Island, applying the Marine Rule in Guardian  Life Insurance Company of America v. Alfred E. Tillinghast, 1986 RI 2219  (1986), found there was no need to prove fraud, even if pleaded, where a  material misrepresentation is sufficient to rescind the policy.   © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].   Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Denial Must Be in Writing Setting Out All Reasons for the Denial    https://zalma.com/blog Once a claim is denied, the insured no longer need comply with the  conditions of the policy.  He or she need not submit a sworn proof of  loss nor respond to requests for records or an examination under oath.   Therefore, an insurer should not make the decision to deny a claim until  it is convinced that it has completed a thorough investigation.  If the investigation reasonably justifies a denial of the claim, the  insured should always be notified in writing.  After the investigator is convinced that the investigation is complete  and the file is properly documented, all the information must be  gathered and evaluated in an objective and impartial manner. A fair and  thorough analysis will negate charges of bad faith or malice to the  insured. All information that can be corroborated must be corroborated  by the fraud investigator.  Advice of counsel is not an absolute defense to a bad faith action. It  is often no defense at all. Sometimes, if the insurer refuses to give  the lawyer all of the information, it is evidence of bad faith.  Most  courts agree that the advice of counsel is only evidence to be  considered in determining whether the insurer denied a claim in bad  faith.  On the other hand, denial can be enforced if the insured – even on the  advice of counsel – refuses to fulfill a required condition of the  policy. Therefore, the insured’s purported reliance on the alleged  advice of counsel in refusing to answer an insurer’s questions and  failing to supply requested documentation did not excuse her failure to  comply with the policy conditions requiring her to supply the requested  documents and answer material questions at her EUO. The insurer properly  denied coverage on the basis that the insured’s failure to comply  constituted material breaches of her contractual duties.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;   Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry  Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry  Zalma on YouTube-  https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the  Insurance Claims Library –  https://zalma.com/blog/insurance-claims-library/ Read posts from Barry  Zalma at https://parler.com/profile/Zalma/posts; and the last two issues  of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Even Honest People are Tempted To Commit Insurance Fraud    https://zalma.com/blog Career criminals are not the only people who perpetrate insurance fraud.  The temptation has become so great that almost anyone who is given the  opportunity, will try. Those who do not premeditate insurance fraud are  called perpetrators of soft frauds. Most are small. Some are not. The  story that follows is a not a soft fraud but one that was premeditated  for a great deal of money by a person who should have known better.  Some years ago, residents of a hillside community received a letter from  the county engineer informing them that their houses sat on an active  landslide. The engineers concluded that an unusual amount of irrigation  water, water from septic systems, and rainfall lubricated an ancient  landslide under their homes and that the slide was moving. The engineers  were concerned because it was moving at the rate of three inches a  year. The houses sitting on the landslide were also moving a few inches a  month. Within ten years the houses would be torn apart by the movement  if nothing was done to stabilize the hillside.  Homeowners, living on the hill, noticed cracks in the plaster walls.  Concrete block walls split at the mortar seams. Cracks formed in the  foundation systems. Since the homes on the hill were all valued from  $500,000 and $5,500,000, the monetary value of the potential loss of 300  homes on the landslide was enormous. Many of the homeowners gathered  and hired counsel to pursue persons responsible for their damage.  As a lawyer the intentional concealment of a material fact with the  intent to deceive an insurer to its detriment is fraud, a criminal act,  and if convicted, grounds for disbarment. For that reason, the insured  accepted the denial and did nothing further about the claim.  Had the insurer not done the minimum investigation and retained the  services of a competent engineer it would have paid the $2,500,000.00  claim. Had the insured’s fraud been presented to a prosecutor he could  have been arrested, tried and convicted of attempted insurance fraud and  would have been disbarred.  He was lucky that the insurer agreed to a mutual rescission of the  policy, a return of the premium, and to forget what was attempted.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected]. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Hard Fraud is a Crime    https://zalma.com/blog The following types of fraud are premeditated and intentionally  committed.  Those who differentiate between types of fraud would place  these in the category of “hard fraud,” which is considered more  egregious than “soft fraud” since it is performed with malice  aforethought.  Hard fraud takes planning, scheming, and even someone on the inside to  help you get money from an insurance company. An example of hard fraud  would be getting into an accident on purpose so that you can claim the  insurance money. This example is fairly prevalent lately; someone hits  the brakes so that the person behind them can’t stop quickly enough.  Another really severe form of hard fraud would be faking your own death  or murder for the life insurance death benefit.  The following types of fraud are premeditated and intentionally  committed.[1] Those who differentiate between types of fraud would place  these in the category of “hard fraud,” which is considered more  egregious than “soft fraud” since it is performed with malice  aforethought.  Hard fraud takes planning, scheming, and even someone on the inside to  help you get money from an insurance company. An example of hard fraud  would be getting into an accident on purpose so that you can claim the  insurance money. This example is fairly prevalent lately; someone hits  the brakes so that the person behind them can’t stop quickly enough.  Abandonment:  The owner abandons a vehicle on a city street or in a parking lot,  creating a morale hazard. The insured will report the vehicle stolen and  attempt to collect before it is recovered.  Dumping:  When the owner disposes of a vehicle by dumping it into a lake or other  body of water.  Cars have even been found buried underground and some  lakes have been found to have more than 50 cars underwater.  False registration; Exaggerated Repair Costs After A Car Accident; Fires  to Avoid Lease Payments; Arson for Profit  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Lawyers & Adjusters Must Work Together    https://zalma.com/blog Defense Counsel   Whenever an insured is sued and requires a defense or the insurer is  sued, the insurance adjuster and the defense attorney must understand  their respective roles in preparing the case for trial. They must  develop a rapport with each other and with the insured person or entity  that is being defended, to make communication easier to maintain. Bad  faith lawsuits and poorly tried bodily injury cases seem to arise when  the adjuster and the defense attorney fail to communicate regularly with  each other and the policy holder.  At the first meeting, the attorney and the adjuster should agree on the  division of labor with regard to the preparation of the case, according  to their respective training and experience. Counsel and the claims  person should reach an agreement regarding the handling of the case.  Challenges to Use of in House Counsel  Defense counsel are sometimes employees of the insurance company. Some  attorneys have challenged the use of in-house counsel on the ground that  the insurer, as an employer of attorneys, is not licensed to practice  law. They claimed that the insurer was engaged in the unauthorized  practice of law—a crime. Attorneys in Texas convinced a trial court on  the issue but the decision was reversed on appeal.  Attorneys have also raised challenges against house counsel because the  employee attorney is alleged to be serving two different masters. As an  employee of the insurer (it is alleged) the attorney cannot do justice  to both his client, the insured, and his employer, the insurer.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;   Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry  Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry  Zalma on YouTube-  https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the  Insurance Claims Library –  https://zalma.com/blog/insurance-claims-library/ Read posts from Barry  Zalma at https://parler.com/profile/Zalma/posts; and the last two issues  of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

ZIFL 4/15/2021 https://zalma.com/blog Zalma’s Insurance Fraud Letter,  in its 25th year is free to anyone who  subscribes or goes to the Mr. Zalma’s Website where you can Subscribe to  e-mail Version of ZIFL, it’s Free!  Read last two issues of ZIFL  here.  Go to the Barry Zalma, Inc. web site here Videos from “Barry Zalma on  YouTube”   Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921  See the full video at https://rumble.com/vfnvcj-a-video-from-zalmas-insurance-fraud-letter-april-15-2021.html and at https://youtu.be/zHkVc_ozTqs  Read the full issue of ZIFL at https://lnkd.in/dfGQHC3 and at https://lnkd.in/gfZwXxi There can Never be a Fraud Too Small to Void a Policy Material Misrepresentation Concerning the Extent of Loss Voids Policy  After the district court ruled for the defendant insurance company on  cross-motions for summary judgment, ending the action, the plaintiff  appealed that summary-judgment ruling. In Meat Town Inc. v. Sentinel  Insurance Company, Case No. 19-2351, United States Court of Appeals for  The Sixth Circuit (March 30, 2021) was asked to find the fraud wasn’t  big enough to stop the insured from collecting the remainder of its  loss. Two Types of Soft Fraud that are Ignored “GOOD CAUSE” FRAUD  Morally and criminally, insurance fraud is always wrongful. Many people,  within the insurance industry and outside it, believe that because  insurers are so well funded that there are good causes for committing  insurance fraud. A frightening trend is emerging where judges, jurors  and administrative law courts are refusing to convict or hold  responsible perpetrators of fraud if the court is convinced that the  fraud is for a good cause. Good News From the Coalition Against Insurance Fraud Health Insurance Fraud Convictions Criminal Must Pay Restitution Order  Mr. Speights was a very bad man who pled guilty to multiple criminal  acts causing damage to the victims. Ohio has logically stated that a  crime victim who is reimbursed by an insurer for its losses should not  receive restitution. What they fail to understand is that, if the losses  are insured, then the insurer is the victim and entitled to any payment  of restitution since, allowing an insured to receive indemnity from its  insurer and restitution would unjustly enrich the victim who should  turn over anything received to its insurer. Other Insurance Fraud Convictions  © 2021 – Barry Zalma --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

How to Determine the Priority of Rights to Salvage    https://zalma.com/blog One case involved a dispute among three groups of divers for the right  to salvage silver from the cargo of a ship sunk and for the title to  whatever silver is recovered. In resolving the problem, the court  considered the common law of finds that treats property that is  abandoned as returned to the state of nature and thus equivalent to  property, such as fish or ocean plants, with no prior owner.  The first person to reduce such property to “possession,” either actual  or constructive, becomes its owner. [R. Brown, The Law of Personal  Property 15 (2d ed. 1955) as cited in Hener v. United States, 525 F.  Supp. 350 (S.D.N.Y. 10/15/1981).] A mere “searcher” has no rights in  abandoned property even if he succeeds in locating it; in particular, he  has no right to exclude others from the attempt to recover it. Any  competing searcher is entitled to enter the area where the abandoned  property is and to seek to reduce it to his possession, as long as he or  she acts without infringing on the concurrent rights of other  searchers.  The opinion in Eads v. Brazelton, 22 Ark. 499 (1861) comprehensively  sets out the law of finds. It refers to, and relies on, a broad range of  authorities for its conclusions, and its premise that a finding  requires both intent and some form of possession remains accurate. In  Eads, for example, had Brazelton placed his boat over the wreck with the  means to raise its valuables, and had he persisted in “efforts directed  to raising the lead,” his conduct would have constituted “the only  effectual guard over it” and thus a judicially recognizable warning that  other “longing occupants” would have been obliged to regard.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

It is the Obligation of the Adjuster to Negotiate Settlement with  Insured   https://zalma.com/blog  After the adjuster has completed the bid comparison and established the  objective amount of the loss, he or she should meet with the insured and  present each of the estimates and the bid comparison. The adjuster will  then advise the insured that the settlement of the building or  structure loss will be based on the objective value of the loss  determined by the bid comparison.  The decision on which contractor to use is always made by the insured  not the insurer. The insured may believe he knows someone who can do the  work better or who, from experience, the insured knows will satisfy  him, and will accept the dollar amount offered by the insurer.  The adjuster should never demand that a particular contractor be used  since the insurer is only obligated to pay indemnity, not to reconstruct  a building.  Building, Contents and Guaranteed Replacement Cost  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Flying Carpet, a  Fictionalized True Crime Story of Insurance Fraud  https://zalma.com/blog From an Expert who  explains why Insurance Fraud is a “Heads I Win, Tails You Lose”  situation for Insurers. The stories help to Understand How, and why, my  book Insurance Fraud in America is Costing Everyone was written to  explain to those who buy insurance thousands of dollars every year and  why insurance fraud is safer and more profitable for the ­­­perpetrators  than any other crime. The names of the perpetrators and the locations  were changed to protect the guilty.   The original title was “Heads I Win, Tails You Lose” and was meant to  describe insurance fraud as it works in the Unites States. It means that  whenever a person succeeds in perpetrating an insurance fraud everyone  who buys insurance is the loser.  If the fraud succeeds the insurer must charge more premium to cover the  expense of defending the fraud and payment of funds to the fraud  perpetrator. If the fraud fails the insurer must charge more premium to  cover the expense of defending the fraud. Everyone, except the lawyers,  lose.  Before the ISO changed the homeowners program to include a special limit  of liability for theft of antique rugs, homeowners insurers found  themselves faced with reports of the thefts of thousands of antique  Persian rugs valued between $10,000 and $20,000 each. Although most of  the claims appeared suspicious, the insurers were unable to prove the  nonexistence of the rugs and were compelled to pay claims.  When the special limit of liability was adopted, the rash of Persian rug  thefts stopped. It was as if a ring of burglars suddenly left the  country.  The fraudulent Persian rug claim industry ceased doing business.   Immigrant communities in Los Angeles, New York, Chicago and other major  cities found other ways to earn money.   © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Law of Unintended Consequences and the Tort of Bad Faith   https://zalma.com/blog  US law was first organized using English common law. When a contract was  breached, only contract damages could be recovered. Tort damages were  limited to tortious conduct and the two categories of damages were  mutually exclusive.  The primary purpose of damages for breach of a contract is to protect  the promisee’s expectation interest in the promisor’s performance.  Damages should put the plaintiff in as good a position as if the  defendant had fully performed as required by the contract. Insurance,  like all parts of modern society, is subject to the deprivations of the  law of un­intended consequences. The law can be defined as the  understanding that actions of people—and especially of government or the  courts—always have effects that are unanticipated or unintended.  Insurance is controlled by the courts, through appellate decisions, and  by governmental agencies through statute and regulation. Compliance with  the appellate decisions, statutes and regulations—different in the  various states—is exceedingly difficult and expensive.  Insurance contracts can be simple or exceedingly complex, depending upon  the risks taken by the insurer. Regardless, insurance is only a  contract whose terms are agreed to by the parties to the contract. Over  the last few centuries almost every word and phrase used in insurance  contracts has been interpreted and applied by one court or another.  Ambiguity in contract language became certain. However, the average  person saw the insurance contract as incomprehensible and impossible to  understand. Ostensibly to protect the public, regulators decided to  require that insurers write their policies in easy-to-read language.  Because they were required to do so by law, insurers changed the words  in their contracts into language that people with a fourth grade  education could understand. Precise language interpreted by hundreds of  years of court decisions was disposed of and replaced with imprecise,  easy-to-read language. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Some of the First Cases   https://zalma.com/blog Comunale v. Traders & Gen. Ins. Co  In Comunale v. Traders & Gen. Ins. Co., 50 Cal. 2d 654 (1958), the  insurance company wrongfully refused to defend its insured who had been  sued in the underlying action for damages arising out of an automobile  accident. It also refused to conclude the suit after receiving an offer  of settlement for about 25 percent of the ultimate judgment obtained  against its insured. The refusal resulted in an excess judgment against  its insured. In the subsequent bad faith action the insurer was held  liable for the entire judgment including the excess limits and other  resulting damages. This was clearly an extra-contractual recovery since  under a straight breach of contract claim the insurer would have been  liable for only the amount of the policy.  Critz v. Farmers Ins. Group  The court in this case held that a wrongful refusal to settle sounded  only in contract was expressly disapproved. The court stated that, in  determining whether to accept a settlement offer, the insurer must give  the interest of the insured at least as much consideration as its own.  When there is a great risk of an excess judgment, good faith requires  acceptance of an offer within policy limits.    Crisci v. Security Ins. Co.  In Crisci v. Security Ins. Co., 66 Cal. 2d 425, 58 Cal. Rptr. 13 (1967),  Crisci, an underinsured landlady, was sued by a tenant who fell on a  staircase. Her liability policy had a limit of $10,000, which was 25% of  the $40,000 claimed damages. However, prior to trial the tenant’s  demand was substantially reduced and he expressed a willingness to  settle the case for $10,000. In spite of strong evidence of both  liability and substantial damages, the defendant insurance company  refused to settle for more than $3,000. A final settlement offer of  $9,000, of which Crisci agreed to pay $2,500, was likewise rejected.  Following a jury trial in the underlying action, the tenant received a  judgment for $100,000, of which the insurance company paid the $10,000  policy limit. Crisci was unable to pay the remaining $90,000 and was  rendered indigent.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Silberg and Egan and Why There is a Tort of Bad Faith   https://zalma.com/blog In Silberg v. California Life Ins. Co., 11 Cal. 3d 452 (1974), the  insurer advertised an accident policy with the phrase “Protect Yourself  Against the Medical Bills That Can Ruin You.” It issued an accident  policy to Mr. Silberg. The policy excluded injuries covered by workers’  compensation. Silberg was injured while performing incidental services  at his place of employment. His employer’s compensation carrier denied  coverage. Mr. Silberg found himself with substantial medical bills which  California Life also refused to pay.  Many courts recommend that the two insurers attempt to agree to share  the costs equally and work out their differences later. If such an  agreement cannot be reached then the company you represent should front  the money under a reservation of rights, take an assignment from the  insured, and sue, in the insured’s name, the other insurer for all the  money paid plus damages incurred by the insured.  In Egan v. Mutual of Omaha Insurance Company Egan was allowed to retain  both compensatory and punitive damages as a result of the bad faith  conduct of the insurer since he was able to prove the four elements  required by the Supreme Court because the insurer wrongfully accused him  of fraud and cut off his disability payments.  For the insurer to fulfill its obligation not to impair the right of the  insured to receive the benefits of the agreement, it again must give at  least as much consideration to the latter’s interests as it does to its  own. The insured in a contract like the one before us does not seek to  obtain a commercial advantage by purchasing the policy, rather he seeks  protection against calamity.  An insurer is sometimes considered to be like a fiduciary, although it  is never a fiduciary, to its insured. In Frommoethelydo v. Fire  Insurance Exchange, 42 Cal. 3d. 208, 228 Cal. Rptr. 160 (1986), Mr.  Frommoethelydo was arrested and tried on charges of insurance fraud, he  was tried and acquitted. The Supreme Court found the failure of the  insurer to investigate the basis of the acquittal was evidence of bad  faith.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/ --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Setting Reserves & Discovery of the Insurance Claims File  https://zalma.com/blog The insurer is required to evaluate a claim based upon its merits, and  without regard to policy limits. Eastham v. Oregon Auto Ins. Co., 542 P.  2d 895 (Or. 1975).  The adjuster must determine the value of the claim  without a thought to limits of liability in the policy and then compare  the evaluation with the limits available.  Reserves should be set realistically and are recorded in the claim file.  Reserves are the adjuster’s estimate of the potential recovery the  claimant would receive from a jury. Reserves should be reviewed  regularly, and revised if necessary. Failure to do so can be a factor in  holding the insurer responsible for an excess verdict. Kunkle v. United  Security, 168 N.W. 2d 723 (S.D. 1969). (For further assistance in  setting reserves see Chapter 13, “Evaluation and Settlement.”) New York  uses a definition of insurance reserves that can be used everywhere.  It defines insurance reserves as:  The referenced provision states that: every insurer shall . . . maintain  reserves in an amount estimated in the aggregate to provide for the  payment of all losses or claims incurred on or prior to the date of  statement, whether reported or unreported, which are unpaid as of such  date and for which such insurer may be liable, and also reserves in an  amount estimated to provide for the expenses of adjustment or settlement  of such losses or claims (Insurance Law Section 1303 [emphasis  supplied]). Majewski v. Broadalbin-Perth Central School District, 91  N.Y. 2d 577, 696 N.E. 2d 978, 673 N.Y.S. 2d 966 (N.Y. 05/12/1998).  When presented with a challenge to discovery of insurance reserves  information, the trial court is required to make a preliminary  determination of whether the requested information is relevant in that  it is admissible or is reasonably calculated to lead to the discovery of  admissible evidence. In making a determination in the context of  discovery about the relevancy of insurance reserves information, the  trial court should take into account the nature of the case, the methods  used by the insurer to set the reserves and the purpose for which the  information is sought, and only grant requests for disclosure when its  findings of fact and conclusions of law support a determination that the  specific facts of the claim in the case before it directly and  primarily influenced the setting of the reserves in question. [State ex  rel. Erie Ins. Co. v. Mazzone, 625 S.E.2d 355, 218 W.Va. 593 (W. Va.,  2005)] © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Burden of Proof & Exclusions   https://zalma.com/blog It is the obligation of the insured to prove that property has been  physically damaged. The loss of marketability is not a peril insured  under a property policy; only physical damage to tangible property is  insured.  In Lundstrom v. United Servs. Auto. Ass’n-CIC, 192 S.W.3d 78 (Tex. App.  2006), a case involving a leaking water pipe, the US Court of Appeal  affirmed the District Court for the Eastern District of Pennsylvania and  found that a leaking water pipe can bring about a loss of personal  property. [Gatti v. The Hanover Insurance Company, 774 F. 2d 1151  (1985).] One of the insured’s employees noticed that the ground was  saturated with water and that the water meter was spinning rapidly. This  led to the conclusion that the water from the underground pipe was  escaping after passing through the water meter. Confirmation of this  conclusion came in the form of a water bill for $39,523.45. The insureds  contended that the all risk policy should cover this expense, but the  insurer disagreed and argued that this was a pecuniary loss as  distinguished from a physical loss of property.  The court disagreed and found coverage, stating that the insurer’s  position “ignored the common sense meaning of the phrase ‘physical  loss.’” The water became the property of the insured once it passed  through the water meter, and therefore the subsequent escape of water  was a physical loss of the insured’s personal property—the water.  Coverage was denied an insured in Chadwick v. Aetna Insurance Company, 9  N.C. App. 446, 176 S.E. 2d 352 (1970), when evidence tended to show  that jewelry was stolen from a jeweler by an unidentified man and woman  who pretended to be customers at the plaintiff’s jewelry store. The loss  was discovered during a “spot check” of the inventory approximately  nine days after the alleged theft. The Chadwick court found that the  facts of the case did not warrant recovery and ordered a new trial,  noting that the language of the policy plainly “bar[s] recovery for  unexplained losses or for mysterious disappearances, however they come  to light.”  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and Read last two issues of ZIFL here. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Not a Joke - Zalma's Insurance Fraud Letter Volume 25, Number 7    zalma.com/blog Arson for Profit Conviction Affirmed in Pennsylvania  John M. Sekerak appealed from the January 16, 2020 judgment of sentence  entered in the Court of Common Pleas of Berks County ("trial court"),  following his jury convictions for two counts of arson, recklessly  endangering another person ("REAP"), and insurance fraud. In  Commonwealth of Pennsylvania v. John M. Sekerak, J-S47005-20, No. 387  MDA 2020, Superior Court of Pennsylvania (March 15, 2021) the  Pennsylvania court considered the convicted arsonist’s claims of error  only to find that he was guilty beyond a reasonable doubt.  Seven and a Half to Fifteen Years for Fraud  After a judgment was entered by the Supreme Court, New York County  (Justice, Neil E. Ross, J.), rendered December 4, 2018, convicting  defendant Sharif King, upon his plea of guilty, of criminal possession  of stolen property in the second degree, forgery in the second degree,  identity theft in the first degree and insurance fraud in the third  degree, and sentencing him, as a second felony offender, to an aggregate  term of 7½ to 15 years.  False Estimate By “Consultant” Adopted by Insured Is Fraud  Jennifer Mezadieu (“the Homeowner”) appeals the trial court’s entry of  final summary judgment in favor of SafePoint Insurance Company  (“SafePoint”) in her breach of contract action. The trial court entered  final summary judgment pursuant to the policy’s “concealment or fraud”  provision after determining that the repair estimate prepared by the  Homeowner’s loss consultant included material false statements. In  Jennifer Mezadieu v. SafePoint Insurance Company, No. 4D20-2, District  Court of Appeal of The State of Florida Fourth District (March 26, 2021)  the court sought to be excused from her reliance on the consultant and  adoption of the false estimate.  Good News From the Coalition Against Insurance Fraud Health Insurance Fraud Convictions Insurance Fraud – The Bane of the Insurance Industry  Next to tax fraud, insurance fraud is the most practiced crime in the  world. It is perpetrated by members of every race, religion, and  nationality. It is found in every profession. The possibility of a  tax-free profit when coupled with the commonly held belief that criminal  prosecution will probably not occur, is sometimes too difficult for  normally honest people to resist.  Other Insurance Fraud Convictions  Hard Fraud & Soft Fraud   Those who try to put fraud in more than one category move from soft  fraud to what they call “hard fraud.” Hard fraud is considered a fraud  or attempted fraud that is premeditated and intentionally committed. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Third Party Claimant has no Right to Tort Damages for Bad Faith by Other  Party's Insurer    https://zalma.com/blog The Supreme Court of California was faced with the question of “whether  an insurance company’s breach of the covenant sounds in tort when it  retroactively overcharges a premium it knows is not owed.”  In Jonathan Neil & Associates v. Jones, a dispute between Jones  Trucking and Jonathan Neil & Associates arose after an audit of the  Joneses’ operations found the trucking company was subcontracting  business to other trucking companies. A rule governing the state’s  assigned risk plan called for Jones Trucking to pay for the  subcontractors’ insurance. Cal-Eagle, the insurer, sought to  retroactively collect increased premiums from the Joneses, and brought  in Jonathan Neil & Associates, a collection agency.  A breach of this duty of reasonable settlement gives rise to tort  damages. However, the Supreme Court of California has, in the past,  refused to extend the tort remedy to breaches of contracts other than  insurance contracts. The question raised was whether bad faith conduct  not involving a claim entitled an insured to tort damages. The court  rejected the expansion of tort damages.  “Imposing a duty of good faith and fair dealing running from the Insurer  to the [plaintiffs] would ‘create a serious conflict of interest for  the [I]nsurer’ by obligating it to safeguard both the [plaintiffs’] and  Gonzalez’s interests.” Plaintiffs, as third party claimants, have no  contractual relationship with the insurer and cannot sue the insurer for  breach of the implied covenant of good faith and fair dealing. In so  arguing, the court applied the law as stated by the California Supreme  Court in Moradi-Shalal v. Fireman’s Fund Ins. Companies (1988) 46 Cal.3d  287 (Moradi-Shalal).  The Supreme Court held that a third party claimant—an individual who is  injured by the alleged negligence of an insured party—does not have a  private right of action against the insurer for unfair settlement  practices.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and Read last two issues of ZIFL here. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Duty to Defend and Potentiality   https://zalma.com/blog In the leading case of Gray v. Zurich Ins. Co. 65 Cal.2d 263, 54 Cal.  Rptr. 104 (1966) the Supreme Court of California set the basic rule  followed in most jurisdictions for deciding whether an insurer owes a  duty to defend or not. It found that insurers issuing dual-promise  policies (a promise to both defend and indemnify) are required to defend  any suit in which there is a potentiality that the insurer will have to  indemnify.  The insured in Gray was alleged to have assaulted and battered the  plaintiff. The policy, and the statutes of California, prohibited  indemnity for an intentional act of an insured. Assault and battery are,  by definition, intentional acts, so the insurer argued that it owed no  defense.  The complaint against the insured only alleged the intentional tort of  battery. The court concluded the insurer should be compelled to defend  since there was a potential that the complaint could be amended, or the  jury could find, the insured’s actions were merely negligent. The  court’s decision was founded in the wording of the policy, concluding  that the duty to defend was broader than the duty to indemnify. The  insurer’s agreement to defend suits even if they were “false or  fraudulent” caused the court to conclude that the insurer agreed to  extend the duty to defend far beyond those acts for which coverage for  indemnity might exist.  The potentiality concept has expanded the exposure of insurers insuring  personal and commercial risks. Even though a policy excludes liability  arising from violations of law, there is the potentiality that the jury  would find there was no violation of law and that the policy provided  coverage.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].   Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and Read last two issues of ZIFL here. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

The Property Damage Trigger of Coverage   https://zalma.com/blog The term "trigger of coverage" means "what event must occur for  potential coverage to commence under the terms of the insurance policy"  and "what must take place within the policy's effective dates for the  potential of coverage to be 'triggered.'" [In Re Feature Realty Litig.,  468 F. Supp.2d 1287, 1295, n.2 (E.D. Wash. 2006)]  After the California Supreme Court adopted a continuous trigger in  Montrose Chemical Corp. v. Admiral Ins. Co. (1995) 10 Cal.4th 645, 685,  42 Cal.Rptr.2d 324, 913 P.2d 878 (Montrose) in the case of successive  policies, property damage that is continuous or progressively  deteriorating throughout several policy periods is potentially covered  by all policies in effect during those periods, so that the insurer’s  duty to defend arose under those policies. Insurers, trying to limit  their coverage, revised the policy wording.  Therefore, the precise question is what result follows under the  language of the policies of insurance to which the parties agreed. The  “continuous injury” trigger has been applied mostly in cases involving  gradual release of pollutants and other environmental harms. After  Montrose, the insurer revised its policies to use the language for the  very purpose of "obviat[ing] the application of the ‘progressive  damage-continuous trigger’ articulated in Montrose." As a result, the  defendant’s policies state that property damage "which commenced prior  to the effective date of this insurance will be deemed to have happened  in its entirety prior to, and not during, the term of this insurance."  [Ins. Co. of Pa. v. Am. Safety Indem. Co., 32 Cal.App.5th 898, 244  Cal.Rptr.3d 310 (Cal. App., 2019)]  In King Cnty. v. Travelers Indem. Co. (W.D. Wash., 2019) the Louisiana  Court of Appeals ruled that allegations by a property owner that an  environmental consultant failed to detect the presence of pollutants on  its property did not trigger coverage under the consultant’s liability  policies. The Court found that the “occurrence” giving rise to the  claims against the insured took place years prior to the issuance of the  policies in question. [Herzog Contracting Corp. v. Oliver, No. 40, 918  So.2d 516 (La. App. Cir.2 12/16/2005).]  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.    Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-   library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and Read last two issues of ZIFL here. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support

Lawyers May Never Share Fees With a Non-Lawyer   https://zalma.com/blog The decision, In re Oheb, No. 99-C-11161 (Cal. Bar Rev. 07/16/2004) a  hearing judge’s recommended that respondent Tamir Oheb be placed on four  years’ stayed suspension and on four years’ probation with conditions,  including two years’ actual suspension. Oheb admitted that “[t]he  detailed findings of the Hearing Department are amply supported by the  record” and that “[t]he degree of discipline recommended by the Hearing  Department is well-supported and should be adopted” by the review  department.  Oheb, after pleading nolo contendere, he was convicted in the Los  Angeles Superior Court on two felony counts of violating Penal Code  section 549 for accepting referrals of personal injury clients with  reckless disregard for whether the referring party or the referred  clients intended to make false or fraudulent insurance claims.  Given that either reckless disregard or knowledge of intent of another  to commit insurance fraud is an element of the offense – since Oheb pled  to the “reckless disregard” element the Bar concluded it was unable to  conclude that Penal Code section 549 inherently involves moral  turpitude.  Oheb was told, and believed, that Gottlieb had been a very successful  “attorney for 25 years plus, that [Gottlieb] was a litigator, [that  Gottlieb] had worked for a number of famous attorneys,” that Gottlieb  had a “huge book of business” that he was willing to refer to  respondent, and that he was willing to teach respondent how to litigate.  As silly and patently illegal was the offer, Oheb in financial  difficulty, agreed with Gottlieb to split the attorney’s fees on each  case Gottlieb referred to Oheb: 25 percent to Oheb and 75 percent to  Gottlieb whenever Gottlieb had to buy the case or otherwise had to pay  money to someone in connection with the case, and 50 percent each  whenever Gottlieb did not have to buy the case or otherwise have to pay  for some expense related to the case or whenever Gottlieb bought the  case from a specific individual who did not charge much for cases.  © 2021 – Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and [email protected].  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and Read last two issues of ZIFL here. --- Support this podcast: https://podcasters.spotify.com/pod/show/barry-zalma/support