zalma

When Defendant Wins the Statute of Limitations Starts to Run Post 4894 Dr. Gerald Dworkin sued Liberty Mutual and various subsidiaries for wrongful use of civil proceedings arising out of a previous lawsuit accusing Dworkin of insurance fraud. Defendants moved to dismiss on the grounds that Dworkin's suit was barred by the statute of limitations. In Gerald Dworkin, D.O. v. Liberty Mutual Holding Company, Inc., et al, Civil Action No. 24-1590, United States District Court, E.D. Pennsylvania (September 18, 2024) the USDC resolved the issue. FACTS Dworkin was sued in 2017 by Liberty Mutual for alleged insurance fraud. The Philadelphia County Court of Common Pleas granted summary judgment in Dworkin's favor, and Liberty Mutual appealed to the Pennsylvania Superior Court, which affirmed in a November 29, 2021 unpublished opinion. The Superior Court reissued its decision as a published opinion on February 1, 2022. On March 22, 2022, the Superior Court remanded the record to the Common Pleas Court. Dworkin filed his initial complaint in this case on March 20, 2024 two days less than two years after the remand order and more than two years after the published opinion. THE MOTION A court may only dismiss a claim under Rule 12(b)(6) based on the statute of limitations when the basis for the limitations defense is evident from the complaint itself or other materials the court may consider, which include exhibits attached to the complaint and matters of public record. THE STATUTE OF LIMITATIONS The statute of limitations for a claim of wrongful use of civil proceedings is two years. A claim's limitations period generally begins to run as soon as it accrues; that is, as soon as the right to institute and maintain a suit arises. A plaintiff's right to institute and maintain a suit for wrongful use of civil proceedings generally arises when underlying proceedings have terminated in his favor. The underlying proceedings terminate for the purposes of a wrongful-use claim when the defendant in the underlying proceedings successfully defeats the plaintiff's attempts to have him held legally liable. The defendant successfully defeats the plaintiff when judgment for the defendant becomes final, which generally happens when the judgment has been upheld by the highest appellate court having jurisdiction over the case or the judgment has not been appealed. Dworkin contended his claim accrued when the Superior Court remanded the record to the trial court on March 22, 2022. That was incorrect. The grant of summary judgment was by law subject to revision during the pendency of the claims against co-defendants and was therefore not a final judgment until, at the earliest, the date on which the plaintiff in the underlying proceedings agreed to settle and release all defendants. Dworkin's claim accrued at the expiration of Liberty Mutual's time to appeal the Superior Court's ruling because that is the point at which he successfully defeated Liberty Mutual's attempts to have him held legally liable, more than two years before the filing of Dworkin's suit. ZALMA OPINION The statute of limitations exists to protect defendants against stale claims which are difficult to defend because facts and witnesses become stale. Dworkin beat Liberty Mutual's suit claiming he committed fraud. If he wished to obtain damages from Liberty he should have sued as soon as he could rather than waiting more than two years and claiming that his account only accrued when at the ministerial act rather than than on the day the final judgment was entered at the time of the appeal affirming the judgment. (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/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to the Insurance Claims Library – https://lnkd.in/

GEICO GETS BIG JUDGMENT AGAINST NO FAULT FRAUDSTERS Post 4893\\On August 4, 2022, Plaintiffs Government Employees Insurance Company, GEICO Indemnity Company, and various GEICO companies (collectively, “Plaintiffs”) commenced this action for common law fraud, unjust enrichment, aiding and abetting fraud, negligent misrepresentation, Civil RICO violations, and a declaratory judgment, alleging that Defendants schemed to submit fraudulent no-fault insurance claims. Receiving no response to the suit Plaintiffs moved for default judgment on the common law fraud claim against Mr. St. Louis and 1 Brooklyn (collectively, the “Defaulting Defendants”). In Government Employees Insurance Company, et al v. Wilkins Williams Medical, P.C., Eric St. Louis, 1 et al, No. 22-CV-4608 (KAM)(JRC), United States District Court, E.D. New York (September 6, 2024) the USDC entered default judgment. FACTUAL BACKGROUND New York enacted the Comprehensive Motor Vehicle Insurance Reparations Act (the “Act”), New York Insurance Law §§ 5101-5109, for prompt compensation for losses incurred by accident victims without regard to fault or negligence, to reduce the burden on the courts, and to provide substantial premium savings to New York motorists. Plaintiffs underwrite automobile insurance in New York. Insured drivers can assign their rights to No-Fault Benefits, which include up to $50,000 for necessary expenses, to healthcare providers in exchange for healthcare services. Healthcare providers submit claims directly to insurance companies via “NF-3” or “HCFA-1500” forms, then receive payment for provided medical services. These forms contain warnings that filing claims with false information or concealing information is a crime. The No-Fault Laws state that a health care provider is ineligible to receive No-Fault Benefits if fraudulently licensed, if paying or receiving unlawful kickbacks for patient referrals, if permitting unlicensed laypersons to control or dictate treatments, or if allowing unlicensed laypersons to share fees for professional services. THE ALLEGED SCHEME Plaintiffs allege that Mr. St. Louis “holds himself out as a healthcare industry practice manager and operator of various healthcare offices but are, in actuality, organized to supply convenient, one-stop shops for no-fault insurance fraud”. Plaintiffs alleged that the Defaulting Defendants ran a scheme that systematically submitted fraudulent no-fault claims to Plaintiffs for unnecessary medical services by illegally using the medical license, signature, and other relevant information from a Dr. Wilkins B. Williams (“Dr. Williams”) and by illegally controlling Williams Medical. The Defaulting Defendants, in coordination with the John Doe Defendants, created the claim paperwork to bill for fraudulent services. The Defaulting Defendants created a stamp with the name of Williams Medical, Dr. Williams's National Provider Identifier number, and medical license number, then placed the stamp on Assignment of Benefit (“AOB”) and medical record forms, with Dr. Williams's forged signature, to misrepresent that Dr. Williams performed the services. The Defaulting Defendants worked with the Lawyer Defendants to provide billing and collection services for the fraudulent services. DISCUSSION Finding that Mr. St. Louis was properly served the Court concluded it has personal jurisdiction over him. As to 1 Brooklyn and Mr. St. Louis, Plaintiffs filed an affidavit demonstrating they were properly served the Summons and Amended Complaint. LIABILITY To state a claim for fraud under New York law, a plaintiff must allege (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 and also requires allegations of fraud be pleaded with specificity, which requires that the plaintiff (1) detail the statements (or omissions) that the plaintiff contends are fraudulent, (2) identify the speaker, (3) state where and when the statements (or omissions) were made, and (4) explain why the statements (or omissions) are fraudulent. Material Misrepresentations or Omissions of Fact Plaintiffs sufficiently alleged the Defaulting Defendants knew the submitted claims were false. The allegations sufficiently demonstrated the Defaulting Defendants knew the claims were false. Further, Plaintiffs sufficiently alleged that the Defaulting Defendants' conduct, on which Plaintiffs reasonably relied, caused Plaintiffs to pay $542,374.05 for fraudulent bills submitted through Williams Medical. REQUESTED RELIEF Unchallenged facts established the defendant's liability, the court determined the amount of damages due. Prejudgment Interest New York law provides for the award of prejudgment interest on damages, computed from the earliest ascertainable date the cause of action existed. In the insurance fraud context, prejudgment interest accrues from the date the insurance company makes payment. The Court found that granting pre-judgment interest beginning the first day of the first quarter following when Plaintiffs made payments is permissible. The Defaulting Defendants presently owe Plaintiffs $91,048.42 in prejudgment interest on a $542,374.05 total paid to Williams Medical. Joint and Several Liability In a scheme where there are repeated fraudulent acts by multiple defendants, plaintiffs are entitled to recover once for every fraudulent act, and each defendant who participated in the fraudulent act is jointly and severally liable for the amount of damage caused. The Defaulting Defendants are jointly and severally liable for damages. Conclusion Plaintiffs demonstrated that the Defaulting Defendants are liable for common law fraud. Therefore the Court entered judgment in favor of Plaintiffs and against the Defaulting Defendants: (1) $542,374.05 in compensatory damages; and (2) $91,048.42 in prejudgment interest, plus $33,301.26 ($133.74 per day between January 1, 2024, and today, September 6, 2024, the date of the Clerk of Court's entry of final judgment), for a total of $124,349.68. Should the date of judgment be beyond September 6, 2024, the Clerk of Court should be directed to add additional interest of $133.74 per additional day from September 6, 2024, through the date of judgment. Moreover, post-judgment interest shall accrue from the date of entry of judgment as provided in 28 U.S.C. § 1961. ZALMA OPINION The judgment may have an effect on the community of fraudsters taking advantage of insurers writing auto insurance in New York by taking the profit out of the crime. Since this is a default judgment GEICO will probably have a difficult time collecting the judgment it will chill the others trying to defraud insurers in New York. The finding might even make it possible for the US Attorney and the state and local prosecutors to prosecute the crime. Since there was no prosecution GEICO must be commended for its proactive effort to stop 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/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/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to the Insurance Claims Library – https://lnkd.in/gwEYk

Lack of Workers' Compensation Insurance Voids Contractor's License Post 4892 As a condition precedent to the issuance of a contractor's license, continued maintenance, or reinstatement of a contractor's license, California law requires applicants and licensees to have on file at all times a current and valid certificate of workers' compensation insurance. In American Building Innovation LP v. Balfour Beatty Construction, LLC, et al., G062471, G062965, California Court of Appeals (September 3, 2024) the contractor was unable to recover the contract payments because it did its work without a license. NO WORKERS' COMPENSATION, NO LICENSE, NO RIGHT TO BE PAID Failure to obtain or maintain the required coverage results in the automatic and immediate suspension of the contractor's license by operation of law. In California a party who was not duly licensed at all times during the performance of its contracting work generally cannot bring or maintain an action to collect compensation for that work. As a result of the policy cancellation, ABI's contractor's license was suspended mid-project. Fully aware it was unlicensed and uninsured; ABI nevertheless continued its work. ABI sued to recover amounts allegedly owed for its work on the project. The Board accepted ABI's representation and retroactively reinstated its contractor's license under section 7125.1. The Court needed to determine if ABI was duly licensed at all times during the performance of its work; if not, section 7031 bars ABI from bringing or maintaining the present action. In this case, the lapse in coverage was not beyond ABI's control. The record demonstrates the policy cancellation occurred because ABI chose not to pay billed insurance premiums. The insurer's retroactive reinstatement of the policy following that settlement was essentially meaningless because it occurred long after the statute of limitations ran on any workers' compensation claims, rendering the coverage illusory. STATEMENT OF FACTS ABI was on the project from August 2017 through May 2018. ABI concedes that its work on the project required it to be licensed and that it had to maintain workers' compensation insurance throughout the project in order to maintain its license. When ABI began its work on the project in August 2017, it had a workers' compensation insurance policy issued. ABI did not pay approximately $33,000 in outstanding premiums, which State Fund asserted were owed for ABI's 2015-2016 policy based on an audit State Fund had performed in 2017. ABI received State Fund's notice of cancellation; it nonetheless failed to make payment. Accordingly, State Fund canceled ABI's 2017-2018 policy on January 25, 2018. As a result of the policy cancellation, ABI's contractor's license was suspended by operation of law on January 25, 2018. The record establishes that Vo, ABI's principal, knew that ABI's policy had been canceled, that its license had been suspended, and that ABI was therefore not to engage in construction activities. As for the construction project, Balfour Beatty, the general contractor, refused to pay ABI for its work. The Board apparently accepted ABI's representations, as it reinstated ABI's license retroactively; the Board also revised ABI's license history to remove the January 2018 suspension under section 7125.2. The trial court issued a statement of decision finding in favor of Defendants on the 31st affirmative defense, concluding ABI was "not 'a duly licensed contractor at all times during the performance' of the contract" and therefore "may not 'bring or maintain' this action 'or recover' compensation for its work." The court then entered judgment in favor of Defendants and against ABI. ABI filed a notice of appeal from the judgment. DISCUSSION The trial court concluded that section 7031 bars ABI from maintaining this action because it was not '"a duly licensed contractor at all times during the performance"' of its contract from July 2017 through May 2018. The Court of Appeal concluded that ABI was not entitled to retroactive reinstatement of its license under section 7125.2. Because ABI applied for retroactive reinstatement of its license more than 90 days (in this case, nearly three years) after the effective date of the certificate of insurance, the Board could only reinstate the suspended license if "the failure to have a certificate on file was due to circumstances beyond the control of [ABI]." Neither the policy cancellation nor the continued failure to have insurance on file were outside ABI's control. ABI's representations were false. State Fund canceled the 2017-2018 policy effective January 25, 2018, because ABI made a considered decision not to pay the premiums due on the previous policy. When ABI elected not to pay the premium due or procure workers' compensation insurance elsewhere, ABI compromised the safety and security of its workers. It was not until over two years later, when faced with Defendants' motion for summary judgment, that ABI agreed to pay the 2015-2016 policy premium so that its 2017-2018 policy would be retroactively reinstated. The legitimacy of the public policies underlying California's licensing laws and the validity of section 7031 are well established. Section 7031 applies despite injustice to the unlicensed contractor. Section 7031 represents a legislative determination that the importance of deterring unlicensed persons from engaging in the contracting business outweighs any harshness between the parties. The result is a stiff all-or-nothing penalty for unlicensed work. The judgment and postjudgment order were affirmed. ZALMA OPINION The key to the public policy requiring contractors to be licensed is the protection of the public. The statute is Draconian but fair. If you do construction work without a license you cannot enforce the right to be paid for your work. ABI refused to pay the premium charged by the workers' compensation insurer, who appropriately cancelled the policy, notified the licensing board who immediately suspended the license. ABI's efforts to reinstate its license, by presenting false testimony, was ineffective because at the time ABI did the work it was unlicensed. (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/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to the Insurance Claims Library – https://lnkd.in/gwEYk

Loss Payable Clause Limits Recovery Only if Insured Can Recover Post 4892 Following a fire that damaged a malt beverage store owned by A Maxon Company, LLC (AMC), Acuity Insurance Company asked the Supreme Court of South Dakota to determine a question of coverage under the terms of an insurance policy, which listed Greg and Tammy Weatherspoon as additional loss payees. At trial, the circuit court granted Acuity's motion for judgment as a matter of law with respect to the Weatherspoons' counterclaim based upon the court's determination that the terms of the insurance policy prevented the Weatherspoons from recovering damages unless AMC successfully asserted a claim for coverage. In Acuity, A Mutual Insurance Company v. A Maxon Company, LLC, and Greg And Tammy Weatherspoon, 2024 S.D. 53, No. 30463-a-MES, Supreme Court of South Dakota (September 4, 2024) the Supreme Court interpreted the policy wording. THE JURY FINDING The jury ultimately determined that AMC principal, Russel Maxon, had intentionally started the fire, which, in turn, meant that coverage was excluded under AMC's policy. The Weatherspoons appealed, challenging the court's decision to grant the motion for judgment as a matter of law as well as two evidentiary rulings made during trial. FACTUAL BACKGROUND The Weatherspoons originally owned and operated T-Spoons, a malt beverage store in McLaughlin, South Dakota. In July 2017, they entered into a contract for deed to sell T-Spoons to Russel and Tracy Maxon. The Maxons purchased the property through their company, AMC, and began operating T-Spoons. Pursuant to the contract for deed, the Maxons were required to insure the property and list the Weatherspoons as "loss payees." AMC purchased property coverage under a commercial general liability insurance policy issued by Acuity in August 2017 and listed the Weatherspoons as loss payees. On April 15, 2018, the T-Spoons building was damaged by a fire that originated in the basement. Acuity hired Chris Rallis to investigate the fire who concluded that the fire was intentionally set and believed Russel had started it because Russel was the only person who had access to the building immediately prior to the fire. Rallis reasoned, though not noted in his investigation report, that Russel had a motive to start the fire because AMC was struggling financially. Beer distributors had stopped delivering to T-Spoons because the Maxons had written bad checks, and Russel had supplied T-Spoons with inventory by purchasing beer from a retail source. Special Agent Derek Hill of the Bureau of Alcohol, Tobacco, and Firearms (ATF) also conducted an investigation and determined the fire was intentionally started by Russel. Following the fire, the Weatherspoons filed a proof of loss with Acuity in an effort to claim damages relating to the T-Spoons fire. Acuity denied the claim, reasoning that the Weatherspoons' ability to collect, as loss payees, was dependent on whether AMC could make a compensable claim. After Acuity denied the Weatherspoons' claim, it sued for declaratory judgment naming the Weatherspoons and AMC as defendants. THE TRIAL The case was tried to a jury. Acuity presented the testimony of Special Agent Hill via a videotaped trial deposition. special Agent Hill testified that he is a certified fire investigator and related his training, education, and experience regarding fire investigations. He is also a federal law enforcement agent. Special Agent Hill was able to determine that the fire had started in the basement and had originated in multiple locations. He also found plastic water bottles in the basement that contained gasoline. Following his investigation, Special Agent Hill determined that the fire had been intentionally started. He also believed Russel had been responsible because "there was nobody else present" in the building before the fire started. Acuity’s fire investigator, Rallis, testified he spoke with Russel who said that he had been in the building doing laundry in the basement before the fire started, that there were multiple points of origin for the fire, starting "near the back door, down the stairway and into the basement area and throughout the basement area." Rallis also determined the fire started and was spread using "a trailer and booster technique[.]" Rallis concluded the fire was intentionally started. Rallis also believed that Russel had a "[f]inancial motive" to start the fire. Following its deliberation, the jury returned a verdict in which ten of the twelve jurors found it was more likely than not that Russel intentionally started the fire. ANALYSIS The Weatherspoons are not parties to the AMC-Acuity contract. They are loss payees whose ability to assert a claim is governed by a key provision of the contract, an endorsement entitled "Loss Payable Clauses." The "Loss Payable" clause listed in the schedule as the "applicable clause" provides as follows: “[We] Adjust losses with you; and b. Pay any claim for loss or damage jointly to you and the Loss Payee, as interests may appear. The circuit court determined that "jointly," as used in Paragraph 1(b), restricted the Weatherspoons' ability to collect to the extent that AMC could collect. The Loss Payable Clause only permits payment for loss jointly between the insured and the loss payee. As loss payees the Weatherspoons were only permitted to collect if and when AMC collected, and, consequently, the circuit court did not err when it granted Acuity's motion for judgment as a matter of law. The jury returned a verdict that found Russel had intentionally started the fire at T-Spoons on April 15, 2018. Pursuant to the dishonesty or criminal acts exclusion within the insurance contract, AMC was therefore precluded from collecting loss damages. The circuit court's decisions regarding judgment as a matter of law were not in error, and therefore, are affirmed. The Weatherspoons' ability to recover under the AMC-Acuity policy as loss payees depends upon AMC's ability to recover. Because the jury found that Russel intentionally started the fire, AMC was precluded from receiving loss benefits. Therefore, Acuity could, and did, properly deny the Weatherspoons' claim for loss damages. ZALMA OPINION The reason the Weatherspoons' recovered nothing is because their contract only required AMC to list them as loss payees rather than as lenders under a Union Mortgage Clause ISO form 438.BFU which allows the lender to collect even if the named insured may not because of fraud or other intentional act while the loss payable form (required by their contract) only allows them to collect jointly with the named insured. (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 Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to X @bzalma; Go to the Insurance Claims Library – https://lnkd.in/gwEYk

ZIFL Volume 28 Number 18 Post 4891

Court Orders DOJ to Indict Serial Fraudster for Criminal Contempt Post 4890 Court Orders DOJ to Indict Serial Fraudster for Criminal Contempt Post 4890 See the full video at and at https://youtu.be/J43Z2tNtsS8 The USDC described Defendant Alberto Marzan as a serial fraudster who has largely managed to dodge accountability for victimizing individuals in the entertainment industry. Plaintiff Michaleen Josephs sued Marzan and his company, Press Media Group (“PMG”), after Marzan fraudulently induced Josephs to issue a series of bogus investments and other payments. When Marzan failed to respond, the Court entered default judgment for Josephs and awarded damages and equitable relief, including a requirement that Marzan divest from his enterprises and provide any future potential investors, employees, or business associates with copies of the Court's default judgment order and his 2014 guilty plea for insurance fraud. In Michaleen Josephs v. Alberto Jose Marzan and Press Media Group, Inc., doing business as VumaTV, CIVIL No. 21-749 (JRT/DTS), United States District Court, D. Minnesota (August 22, 2024) found its patience exhausted because Marzan has continued to defraud others using the same businesses and has not complied with the Court's disclosure orders, all while expressing his knowledge of, and disdain for, the Court's order. The Court asked the United States Department of Justice to prosecute Marzan for criminal contempt. BACKGROUND Marzan fraudulently induced Josephs to lend him and his business, PMG, more than $250,000, which he never repaid. Josephs also rented and furnished an apartment for Marzan based on his promise to repay her, incurring nearly $50,000 in additional expenses. Marzan's fraud was nothing new: Josephs discovered Marzan's prior convictions for insurance and investment fraud and eight unpaid default judgments for which Marzan was responsible. Josephs sued Marzan for violations of the Racketeering Influenced and Corrupt Organizations Act (“RICO”) predicated on mail and wire fraud, fraud, breach of contract, promissory estoppel, and abuse of process. The Court ordered default judgment for Josephs and awarded her over $800,000 in damages, interest, and attorney's fees. The Court entered the injunction after considering the statutory and constitutional propriety of equitable relief. The USDC found that Marzan has created an enterprise designed to skirt damages awards and is using the enterprise to intentionally evade recovery by the same people and entities harmed by the enterprise. The undisputed facts show that he takes advantage of the court's leniency to find a new victim. Equitable relief is appropriate when defendants take advantage of the law to shield themselves from accountability at law. VIOLATIONS Marzan continues to defraud employees and contractors from a business that the Court ordered him to divest from and without issuing the required disclosures. And he has done so while making clear that he is aware of, but has no regard for, the Court's order. DISCUSSION Because the Court cannot let Marzan's blatant disregard for its order go unpunished and neither compensatory nor coercive civil contempt are appropriate, the Court refers this case to the United States Attorney for a criminal contempt prosecution. Fines would likely accomplish nothing, as Marzan habitually ignores monetary judgments. The Court found that Marzan knew of the Court's order and the proper mechanisms to ask the Court to reconsider, but decided he would instead disobey the order while denigrating these proceedings. He was not entitled to take matters into his own hands by unilaterally deciding to disregard the Court's order. The Court, therefore, requests that the United States Department of Justice prosecute Defendant Alberto Jose Marzan for criminal contempt. ZALMA OPINION Marzan's actions and disrespect and failure to obey court orders is a aggressive form of chutzpah. He blatantly disobeys the orders of the court, fails to appear after receiving an order to show cause, and ignores judgments rendered against him and disobeys orders of the court. It takes a great deal of abuse to cause a U.S. District Court Judge to request the DOJ to prosecute a party before the court for criminal contempt. Hopefully the DOJ will fulfill the court's request. Fraud should not be allowed to continue. (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 the Insurance Claims Library – https://lnkd.in/gwEYk

Allowing Admissions to be Deemed Admitted Defeats Suit Post 4889 Lynette Januzi appealed from the trial court's order granting summary judgment against her and in favor of American Modern Property and Casualty Insurance (AMCI) and Melissa Ann Workman. She asserts the trial court erred in considering deemed admissions and there is more than a scintilla of evidence to support her claims. In Lynnette Januzi v. American Modern Property And Casualty Insurance And Melissa Ann Workman, No. 12-24-00016-CV, Court of Appeals of Texas, Twelfth District, Tyler (August 29, 2024) the Court of Appeals applied Texas law. BACKGROUND In March 2019, Januzi obtained an insurance policy from her agent, Workman, through AMCI. The policy has a $75,000 sublimit for water damage. She had a water damage claim and over a period of AMCI issued additional payments to pay contractors and various damages making the total disbursement equal to the $75,000 limit. On January 22, AMCI notified Januzi that the last payment constituted the balance of the water damage limit. Januzi took issue with the $75,000 water damage limit, claiming she was unaware of the sublimit. She further claims that AMCI failed to adequately evaluate and pay her claim. Januzi also believed that her agent failed to provide a policy providing sufficient coverage and that there was a conspiracy between the agent and insurance company to underpay claims. As part of the discovery process, AMCI and Workman sent Januzi requests for admissions. Although Januzi responded to other discovery requests, she did not respond to the admissions request. In November, AMCI and Workman filed a motion for summary judgment, emphasizing that Januzi failed to respond to the admissions and that they are considered deemed admitted. Ultimately, the trial court granted the motion for summary judgment and dismissed Januzi's claims. DEEMED ADMISSIONS In Texas, once an action is filed, a party may serve written requests for admissions that can encompass "any matter within the scope of discovery, including statements of opinion or of fact or of the applications of law to fact . . ." If the opposing party does not serve responses to the admissions requests within thirty days, the matters in the requests are deemed admitted against the party without the necessity of a court order. Withdrawal of deemed admissions is permitted upon a showing of good cause but Januzi has yet to request the deemed admissions be withdrawn or amended. Because the requests for admissions were attached to the motion for summary judgment, the trial court could properly consider them. The deemed admissions were the controlling evidence before the trial court at the hearing on the motion for summary judgment, and the court could not properly have considered affidavits that attempted to controvert those admissions ANALYSIS In their motion, AMCI and Workman specifically relied on the following deemed admissions: Admit that you signed the application for the insurance policy attached as Exhibit A (Signed Homeowner Application). Admit that you authorized and approved the insurance coverage amounts stated in the application for insurance. Admit that you were aware of the water damage limit at the time you signed the application for the insurance policy found in Exhibit A (Signed Homeowner Application). Admit that the water damage limit under the policy is $75,000. Admit that Defendant paid the water damage limit of $75,000. Admit that you replaced items and made upgrades to the insured property that were not part of the water damage claim. Admit the majority of the damages to the insured property were caused by the contractors you hired. Admit water damage limits of $75,000 were paid under the Policy by 1-20-22. These admissions and many more established that Januzi was aware of the policy limits when she purchased her homeowner's policy from Workman and that those limits include a $75,000 sublimit for water damage. They also establish that AMCI made payments totaling that $75,000 limit. Januzi's causes of action against Workman for negligence, fraud, and negligent misrepresentation are rooted in her accusation that Workman, an insurance agent, represented that the policy "covered her needs fully" and that "she had the correct coverage." Therefore, the evidence establishes that Januzi was aware of and consented to the policy limits prior to her insurance claim, and Januzi cannot offer any conflicting evidence. The judgment of the court below was affirmed and that all costs of this appeal are hereby adjudged against the Appellant, Lynette Januzi. ZALMA OPINION When I was a young lawyer California allowed litigants to deem admitted requests for admission that were not responded to in 30 days. I filed, on behalf of my clients, dozens of motions for summary judgment based on requests that were deemed admitted. The plaintiff whose case was lost because of admissions deemed admitted is not without a remedy, her lawyers may be responsible for the error. (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/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to the Insurance Claims Library – https://lnkd.in/gwEYk

Litigants Must Meet & Confer to an Impasse Before Bringing Discovery Disputes to Court PLAINTIFF ACTED INAPPROPRIATELY IN DISCOVERY DISPUTE Post 4889 In an insurance coverage action where Plaintiff alleged that Defendant breached its flood insurance policy by paying less than what Plaintiff asserts was the appropriate coverage amount under the policy, there was a dispute as a result of Plaintiff's first set of interrogatories and first requests for production. On July 2, 2024, Plaintiff sought to initiate a Local Civil Rule 37 conference to discuss resolution of certain disputed items. The parties met on July 9, 2024. On July 26, 2024, Defendant sent Plaintiff a letter in response to the July 9, 2024, conference articulating Defendant's position on certain discovery requests and agreeing to supplement its production where possible. In Shane Collins v. American Bankers Insurance Company Of Florida, No. C23-1959-JCC, United States District Court, W.D. Washington, Seattle (August 29, 2024) the discovery dispute was resolved by the USDC finding the Plaintiff did not establish an impasse existed about the discovery discussions. BACKGROUND The record did not demonstrate an impasse, any subsequent conferral or attempt to confer, or any agreement in filing the Joint Submission. DISCUSSION - Legal Standard Parties may obtain discovery regarding any non privileged matter that is relevant to any party's claim or defense and proportional to the needs of the case. If requested discovery is withheld inappropriately or goes unanswered, the requesting party may move to compel such discovery. The Court also has broad discretion to decide whether to compel discovery. A party filing a motion to compel under Local Rule 37 may do so unilaterally or jointly. The joint option follows an expedited procedure and affords parties the benefit of same day noting. Importantly, the parties must affirmatively agree to utilize the expedited procedure. The motion must include a certification that the moving party has “in good faith conferred or attempted to confer with the person or party failing to make disclosure or discovery in an effort to resolve the dispute without court action.” Fed.R.Civ.P. 37(a)(1). A good faith effort to resolve discovery disputes requires an exchange of information until no additional progress is possible. Plaintiff's “Joint” Submission Here, there is no indication that the parties agreed to file the LCR 37 Joint Submission. In fact, based on the record, it appears Plaintiff has entirely neglected the expedited procedure detailed in Local Rule 37 and proceeded without affirmative agreement from Defendant. Rather than share an initial draft with Defendant and allow Defendant seven days to insert its rebuttal, Plaintiff instead sent a final draft on July 31, 2024 and then only gave Defendant two days to respond. Plaintiff ultimately filed the motion 12 days after it sent Defendant the “final” draft. However, the Court had no way of knowing if the parties agreed to or even complied with LCR 37's procedural requirements in the meantime because the only record of discussion between the parties specifically regarding the motion is insignificant. Moreover, after receiving the purported final draft from Plaintiff, Defendant continued to question the need for a joint motion. The fact that Defendant questioned the need for a joint motion even after Plaintiff shared the purported final draft demonstrates the lack of agreement. There is also no indication that the parties were at an impasse when Plaintiff filed the “joint” motion. Indeed, post-conference communications show that the parties agreed and expected that Defendant would continue to supplement its discovery responses. Ongoing discussions after an LCR 37 conference preclude a finding that no additional progress was possible. Defendant also provided Plaintiff with at least one supplemental production between the July 9, 2024, conference and the day Plaintiff filed the motion. The post-conference communications and supplemental production show the parties had not and have not reached an impasse justifying the Court's intervention. As such, the Court concluded that the parties have not met the meet and confer certification requirements of Rule 37. For the foregoing reasons, the Court denied the LCR 37 “Joint” Submission without prejudice. ZALMA OPINION Discovery in insurance disputes often bring about a lack of respect and cooperation between the parties. The courts, by rules like LCR 37, expect the litigants and their counsel to resolve their disputes - as much as possible - before seeking the assistance of the court. The parties submitted a discovery dispute to the court before they reached an impasse while meeting and conferring about the dispute. They failed to work together and the "Joint" submission was not joint and not submitted after the parties reached an impasse. (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/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to the Insurance Claims Library – https://lnkd.in/gwEYk

Domestic Abuse Exception to Intentional Act Exclusion

Fraud Attempted to Fund a Failing Business Post 4867

Lessors Should be Entitled to Waive Insurer's Right of Subrogation Post 4867 In a subrogation action, Plaintiff Philadelphia Indemnity Insurance Company (Philadelphia), as subrogee of Renaissance Realty Group, Inc. (Renaissance), appealed from the circuit court's partial grant of defendant Norinaica Gonzalez's motion to dismiss. In Philadelphia Indemnity Insurance Company, a/s/o Renaissance Realty Group, Inc. v. Norinaica Gonzalez, 2024 IL App (1st) 230833, No. 1-23-0833, Court of Appeals of Illinois, First District, Sixth Division (August 23, 2024) BACKGROUND On September 25, 2019, Renaissance and Gonzalez entered into a written lease agreement (hereinafter "Lease") for an apartment ("Unit 601") in a multi-unit building located on the 1500 block of West Belmont Avenue in Chicago. The Lease contains multiple provisions relevant to the resolution of Philadelphia's claims. On the first page of the Lease, Unit 601 is described as the "Leased Address (Premises)" and Tenant was required to maintain the Premises in a clean, presentable and safe condition at all times. On January 20, 2021, Philadelphia sued Gonzalez as subrogee to Renaissance. Therein, Philadelphia alleged that on August 7, 2020, a small fire started in Gonzalez's kitchen in Unit 601, which caused "a substantial amount of smoke" and activated the building's sprinkler system. The sprinkler system caused significant water damage to both Unit 601 and other units, totaling over $200,000. THE INSURANCE CLAIMS Renaissance submitted an insurance claim to Philadelphia, which paid "in excess of $50,000 to cover" repairs and lost rental income. Philadelphia alleged Gonzalez was liable to reimburse Philadelphia, as subrogee to Renaissance, for this coverage. Specifically, count I of the complaint alleged Gonzalez negligently caused the fire that resulted in the property damage. Count II alleged that Gonzalez breached the Lease because it required her to pay for any damages caused by her negligence, but she violated this term by refusing to reimburse Philadelphia. Gonzalez moved to dismiss the complaint arguing she was an implied coinsured of Renaissance's policy pursuant to the Illinois Supreme Court's holding in Dix Mutual Insurance Co. v. LaFramboise, 149 Ill.2d 314 (1992), and thus could not be sued by Philadelphia in subrogation. On June 30, 2021, Philadelphia responded, arguing in relevant part that the Lease terms demonstrated the parties' intent not to make Gonzalez an implied coinsured. The trial court found Philadelphia could not "seek compensation for damage beyond" Unit 601. Philadelphia moved for summary judgment regarding the damages arising from Unit 601 only, which it alleged totaled $18,831.04. The circuit court granted Philadelphia's motion for summary judgment as to liability only on Counts I and II for damages to Unit 601, with the total of those damages to be determined at trial. ANALYSIS This case presents a matter of contractual interpretation, as a lease is a contract and, as such, it is governed by the rules which govern contracts generally. Where a contract's terms are clear and unambiguous, the appellate court must enforce those terms without reference to extrinsic sources. The key factor in determining whether the parties intended to exculpate the tenant from liability for negligently caused fire damage to the leased premises is the allocation of insurance burdens as evidenced by the lease. When the provisions of the lease either explicitly or implicitly indicate that the lessor will obtain insurance against the risk of fire loss to its building, the tenant will normally not be liable for negligently causing fire damage to that building unless the parties' contrary intent is clear. Such a rule gives effect to the parties' probable and customary intent that the landlord is to look to the insurance he has agreed to procure for indemnification for fire loss. The Court of Appeals found that Philadelphia and Gonzalez did not intend for Gonzalez to be generally liable for negligently caused fire damage outside of Unit 601. If the parties had intended for Gonzalez to be liable for negligent conduct in other areas besides Unit 601, they would have done so with lease terms making her liable for negligently causing damage to the "property," "common area," or "elsewhere in the building." The Lease does not do so. Philadelphia's final claim is that equitable principles dictate that it should have a right to recover on a subrogation claim against Gonzalez. This argument fails because Philadelphia cannot overcome a core tenet of the equitable remedy of subrogation-a subrogee can have no greater right than the subrogor and can enforce only such rights as a subrogor could enforce per the Lease Renaissance has no right to recover against Gonzalez for damages outside of Unit 601, and, therefore, neither does Philadelphia as subrogee to Renaissance's rights. Because the Lease shows the parties' intended Gonzalez not to be liable for damages outside of Unit 601the circuit court's limitation on Philadelphia's recoverable damages was affirmed. ZALMA OPINION Suing, in subrogation, a tenant of an insured generally causes problems between insured's and the insurer. For that reason most commercial property policies include a provision that the insured may waive the insurer's right to subrogation against a tenant. Since the landlord did not waive the court made a Solomon-like decision and only held her responsible for damage to her unit in the building. The Court of Appeals did justice and the insured and its tenant resolved the dispute. Many courts, including Illinois, include an exclusion not written, that Philadelphia's insurance was issued for the mutual benefit of the insured and the tenant. (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/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to the Insurance Claims Library – https://lnkd.in/gwEYk

Ethics and the Reservation of Rights Post 4867 An insurer that reserves its rights under a policy of insurance will usually raise a request by the insured for independent counsel. However, unless the reservation actually raises the need for the application of the ethical duty of an attorney to avoid representing conflicting interests, there is no obligation to retain independent counsel. If that duty exists independent counsel is required. If there is no conflict the insurer may assert its right to control the defense of the insured with counsel of its choice. FACTUAL BACKGROUND In Federal Insurance Company v. MBL, Inc., 219 Cal.App.4th 29, after soil and groundwater contamination in the City of Modesto was traced back to a dry-cleaning facility known as Halford’s Cleaner’s (Halford’s), the federal government brought a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) action against the owners of the property on which Halford’s was located, as well as the lessees who owned and/or operated the facility, to recover the costs of monitoring and remediating the contamination. The defendants in the Lyon action subsequently filed third-party actions against, among others, appellant MBL, Inc. (MBL), a supplier of dry cleaning products including perchloroethylene (PCE), seeking indemnity, contribution and declaratory relief. MBL tendered the defense of these third-party actions to its insurers, Federal Insurance Company (Federal), Centennial Insurance Company (Centennial), Atlantic Mutual Insurance Company (Atlantic), Nationwide Indemnity Company (Nationwide), Utica Mutual Insurance Company (Utica) and Great American Insurance Company (Great American) (hereafter collectively referred to as Insurers). The Insurers accepted the tender of defense, subject to reservations of various rights, and retained counsel to provide MBL with a defense. MBL refused to accept retained counsel, arguing the Insurers’ reservations of rights created a conflict of interest and demanding the Insurers instead pay for counsel of MBL’s choosing. The Insurers denied there was any such conflict of interest and filed declaratory relief actions. The trial court granted summary judgment in favor of the Insurers, finding there was no actual conflict of interest. In a related appeal, Great American sought to preserve its right to equitable contribution from the other Insurers in the event MBL’s appeal is successful. Alone among the Insurers, Great American paid MBL’s independent counsel for the costs of defending the third-party actions, subject to a reservation of the right to reimbursement from MBL if it succeeded in its declaratory relief action. MBL supplies PCE, and other dry-cleaning products, to dry cleaning facilities, and has done so for a number of years. In 2007, MBL was named as a defendant in a number of third-party complaints and cross-complaints filed in the Lyon action. According to the allegations of the Lyon action, wastewater containing PCE was discharged into the sewer system as part of Halford’s dry cleaning operations until the mid-1980s. PCE was also leaking from an old dry-cleaning machine through the floor of the facility into the soil and groundwater. In 1989, the site was placed on the National Priorities List of hazardous waste sites. MBL retained defense counsel, who tendered the defense of the Lyon action to the Insurers, requesting they appoint Cumis counsel. The Insurers accepted the tender of defense subject to various reservations of rights, detailed below, and appointed counsel to defend MBL. MBL refused to allow the Insurers’ appointed counsel to associate as defense counsel, asserting it was entitled to independent counsel of its own choosing pursuant to Civil Code section 2860. The Insurers advised MBL it was only entitled to Cumis counsel if their reservations of rights created a conflict of interest and, with the exception of Great American, refused to pay the defense costs incurred by MBL’s counsel. INSURERS’ COMPLAINTS FOR DECLARATORY RELIEF The Insurers moved for summary adjudication of the causes of action for declaratory relief regarding their duty to provide independent counsel to represent MBL. The Insurers argued that the limited reservations of rights asserted by these insurers did not create a conflict of interest under California Civil Code section 2860 which modified the Cumis decision. In June 2009, after the matter was briefed and argued, the trial court granted the Insurers’ motions. In its order, the court noted that the specific reservations of rights by [the] insurers did not present a conflict which would require the appointment of independent counsel. The court further found the general reservation of rights to deny coverage does not present a conflict which would require the appointment of independent counsel. After amending its complaint to add a cause of action for reimbursement against MBL, Great American filed a motion for summary adjudication and summary judgment against MBL. The motion further sought summary judgment on MBL’s cross-complaint against Great American. The trial court granted Great American’s motion in its entirety and entered a declaratory and money judgment in favor of Great American and against MBL. Adapted from my book The Compact Book on Ethics for the Insurance Professional, the book is available from Amazon.com as a Kindle book, a Paperback or a Hardcover (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/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to the Insurance Claims Library – https://lnkd.in/gwEYk

INVITED ERROR MAKES SENTENCE REMAIN UNCHANGED Post 4865 Travis Darrell Gentry pled guilty to insurance fraud by presenting to insurer or person false or altered statement material to insurance, Idaho Code § 41-293(1)(c). Pursuant to a plea agreement, in exchange for his guilty plea, additional charges were dismissed. In State Of Idaho v. Travis Darrell Gentry, No. 51304, Court of Appeals of Idaho (August 21, 2024) the issue was resolved. As part of the plea agreement, both parties recommended a sentence of three years, with a minimum period of incarceration of one year, and three years of probation. The district court followed the recommendation and imposed a unified sentence of three years, with a minimum period of incarceration of one year, suspended the sentence, and placed Gentry on a term of probation for three years. Mindful that he received the sentence that he requested, Gentry appealed contending that his sentence is excessive. ANALYSIS Although Gentry received the sentence he asked for, he asserts that the district court abused its discretion by imposing an excessive sentence. The doctrine of invited error applies to estop a party from asserting an error when his or her own conduct induces the commission of the error. One may not complain of errors one has consented to or acquiesced in. This doctrine applies to sentencing decisions as well as rulings made during trial. Therefore, because Gentry received the sentence he requested, he may not complain that the district court abused its discretion in sentencing. Accordingly, the judgment of conviction and sentence are affirmed. ZALMA OPINION Insurance criminals are narcissists. They think they can convince anyone of anything. Mr. Gentry was wrong. He agreed to a sentence in exchange for the state dropping some of the charges, he had nothing to complain about but did so anyway. The court made him stand by his agreement even if it was more than was appropriate it was the deal he made and he was required to serve the time. It takes a great deal of gall to try to set aside an agreement made between Gentry, his lawyer, the prosecutor and the trial judge. He will serve the time. (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/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to the Insurance Claims Library – https://lnkd.in/gwEYk

Insured Can't Sit on a Lawsuit to Punish the Defendant Post 4866 Almost every litigating lawyer has tried to get an appellate court to grant a writ of mandate to overturn an error or abuse by a trial court. Successful writs of mandate are as rare as a snowstorm in the Sahara. Regardless, Allstate Texas Lloyd's (Allstate) tried by a petition for writ of mandamus, where relators Allstate and James Stabler contend that the trial court abused its discretion by refusing to dismiss the underlying insurance coverage dispute for want of prosecution. In In Re Allstate Texas Lloyd's And James Stabler, No. 13-24-00395-CV, Court of Appeals of Texas (August 26, 2024) surprised all and granted the writ of mandate. BACKGROUND On July 13, 2017, real parties in interest Julio and Rachel de la Garza filed suit against relators for denying or underpaying their claim for property damages sustained to their home as a result of a 2015 storm. The de la Garzas alleged that Stabler was the adjuster on the claim, and they asserted various causes of action including breach of contract, violations of the insurance code, deceptive trade practices, and bad faith. On August 10, 2017, relators filed their original answer to the de la Garzas' lawsuit. On May 3, 2019, relators filed a motion to dismiss the case for want of prosecution on grounds that the de la Garzas had not instituted any activity in the case since 2017. Relators alleged that the de la Garzas had not taken any action to lift the abatement by filing a controverting affidavit regarding their alleged failure to give notice, or by providing the required notice, and had otherwise taken no steps to prosecute the case. On June 17, 2019, the trial court held a hearing on relators' motion to dismiss for want of prosecution. Relators assert that, at this hearing, the trial court ordered the de la Garzas to provide relators with the requisite statutory notice by July 1, 2019, and the de la Garzas did so on July 3, 2019. On December 11, 2023, the trial court set the case for hearing on its dismissal docket; however, no notice of this hearing was provided to the parties. Nevertheless, that same day, the de la Garzas filed a verified motion to retain the case on the docket. On March 22, 2024, relators filed their second motion to dismiss the case for want of prosecution. On April 24, 2024, the parties mediated the case; however, mediation was unsuccessful. On April 25, 2024, the de la Garzas filed a second motion requesting the trial court to retain the case on its docket. THE RESPONSE Aside from filing their lawsuit in 2017 and propounding initial discovery, the only action the de la Garzas have taken to prosecute their case has been filing a motion to mediate on January 31, 2020, filing a Motion to Retain on December 11, 2023, and engaging in unsuccessful mediation on April 24, 2024. The de la Garzas provided no excuse – much less a reasonable excuse for delay for any of the time periods this case has been pending. On May 1, 2024, the trial court signed an order which granted the de la Garzas' second motion to retain the case and denied relators' second motion to dismiss the case for want of prosecution. This original proceeding ensued. MANDAMUS Mandamus is an extraordinary and discretionary remedy. The relator must show that (1) the trial court abused its discretion, and (2) the relator lacks an adequate remedy on appeal. The trial court abuses its discretion if it reaches a decision that is so arbitrary and unreasonable as to amount to a clear and prejudicial error of law Mandamus relief is appropriate when a trial court abuses its discretion. Dismissals for Want of Prosecution The plaintiff has a duty to prosecute its lawsuit to a conclusion with reasonable diligence, and if that duty is not fulfilled, the trial court may dismiss the case for want of prosecution. A delay of an unreasonable duration if not sufficiently explained, will raise a conclusive presumption of abandonment of the plaintiff's suit. This conclusive presumption justifies the dismissal of a suit under the trial court's inherent power. The Texas Rules of Judicial Administration require district and statutory county courts to ensure, so far as reasonably possible, that civil cases in which a jury has been demanded, other than those arising under the Family Code, are brought to trial or final disposition within eighteen months of the appearance date. ANALYSIS The de la Garzas filed their original petition against relators on July 13, 2017; thus, their lawsuit has been pending more than seven years. This period far exceeds the eighteen-month time frame for disposition of the case as set forth in the administrative rules. The de la Garzas assert that the case is set for trial in less than six months and, considering the circumstances, they have been reasonably active pursuing this case. In July 2017, the de la Garzas filed their original petition, including requests for disclosures, and in September 2017, they responded to relators' requests for disclosures. Although the record indicates that the de la Garzas occasionally engaged in brief periods of activity on the case, the record also indicates that there are several extensive periods of inaction. Actions taken after a motion to dismiss is filed, including the obtaining of a trial setting or filing of a jury demand, do not enter into the analysis of whether diligence has been exercised. The de la Garzas' proffered reasons for the delay do not offer a reasonable explanation or otherwise establish good cause for the delay. Accordingly, the Court of Appeals concluded that they failed to prosecute their lawsuit against relators to a conclusion with reasonable diligence, and the trial court abused its discretion by refusing to grant relators' second motion to dismiss for want of prosecution. Relators lack an adequate remedy by appeal and the Court of Appeals sustained the sole issue presented in this original proceeding and granted the petition for writ of mandamus and directED the trial court to vacate its May 10, 2024 order denying relators' second motion to dismiss and to enter an order granting that motion. ZALMA OPINION Many people think that if they sue an insurance company for bad faith the insurance company will open its checkbook and pay off the plaintiff as it demands. That is not true and it wasn't true with regard to the de la Garzas' suit against Allstate. Doing nothing much for seven years is not just sloth it is ridiculous and forced an appellate court to do something it does not like to do, grant a petition for mandamus and order the trial court to dismiss 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/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to the Insurance Claims Library – https://lnkd.in/gwEYk

ZIFL Volume 28 Number 17 Post 4864

Cashing Refund Check is Evidence of Receipt of Notice of Cancellation Post 4863 The Supreme Court of North Carolina considered whether Nationwide effectively canceled plaintiffs' fire insurance policy before their house burned down. Almost two months before that tragic fire, Nationwide mailed plaintiffs a letter explaining when and why it was terminating their coverage. The cancellation date came and went. Afterwards, Nationwide sent plaintiffs a check listing their policy number and refunding the excess premium. In Nung Ha and Nhiem Tran v. Nationwide General Insurance Company, No. 312A19-2, Supreme Court of North Carolina (August 23, 2024) Plaintiffs contend-and the trial court found-that they never saw the cancellation letter. But they received, signed, and cashed the refund check over a month before the fire. BACKGROUND Plaintiffs Nhiem Tran and Nung Ha have one daughter and three sons. In 2010, plaintiffs moved into a house in Wake Forest, North Carolina. On 1 April 2015, Mr. Tran filled out an online insurance application after an AAA Insurance policy was cancelled. Mr. Tran arranged for Nationwide to withdraw monthly premiums from his checking account. He later logged into Nationwide's web portal and signed the policy electronically. Nationwide issued that policy subject to an underwriter's review. NATIONWIDE CANCELS PLAINTIFFS' POLICY Nationwide dispatched an underwriter to inspect plaintiffs' property. That inspection unearthed many of the same hazards logged by the previous insurer, AAA- rotten siding, an unfenced swimming pool, and an unsecured trampoline. The latter two conditions were classified as "gross hazards." Citing those concerns, Nationwide-like AAA-chose to cancel plaintiffs' policy. The company then mailed plaintiffs a notice of cancellation on 22 May 2015 by first-class mail. The letter listed the three hazards prompting the cancellation. It also explained that plaintiffs' policy would end on 6 June 2015 unless they fixed the identified risks. Plaintiffs did not contact Nationwide, and so the company terminated their policy on 6 June 2015-fifteen days after mailing the cancellation letter. According to plaintiffs, they never received that letter. However, everyone agreed that after Nationwide ended plaintiffs' coverage, it stopped withdrawing monthly premium payments from their bank account. While funds were withdrawn at the beginning of April, May, and June, plaintiffs did not pay for insurance in July. Two days after the cancellation date, Nationwide mailed plaintiffs a check refunding the excess premium paid for June. The check prominently listed the policy number. Plaintiffs endorsed and cashed that check on 17 June 2015. On the evening of 24 July 2015, plaintiffs were at church when their home caught fire. The entire structure burned down, consuming the family's belongings. Plaintiffs later filed a claim with Nationwide-the company rejected it, contending that plaintiffs' insurance expired before the fire. ANALYSIS Insurance companies may cancel insurance policies by: “[G]iving to the insured a five days' written notice of cancellation with or without tender of the excess of paid premium above the pro rata premium for the expired time, which excess, if not tendered, shall be refunded on demand. Notice of cancellation shall state that said excess premium (if not tendered) will be refunded on demand.” As the Supreme Court explained almost a century ago, statutory notice requirements are manifestly for the protection of the insured. Mindful that the General Assembly designed notice provisions to give insureds a meaningful chance to avoid coverage lapses. The Supreme Court has explained that the manner in which notice is given is of secondary importance-it is the fact of notice that matters. In general terms, a person has actual notice when the information "given directly to” imparts clear knowledge of a fact or condition with legal significance. Because Nationwide gave plaintiffs the timely forewarning required by statute it properly canceled their policy. Though plaintiffs deny receiving Nationwide's cancellation letter, they were armed with clear knowledge and advanced warning of their policy's termination. Plaintiffs had actual notice of cancellation and Nationwide duly ended their insurance before the fire. The Supreme Court found actual knowledge of cancellation because two days after their policy was terminated, Nationwide sent plaintiffs a check refunding the excess premium. Plaintiffs not only received that check, but personally signed and cashed it. The check clearly listed plaintiffs' policy number. And the amount of the refund equaled the June premium, less the window of coverage until the cancellation date on 6 June 2015. Continuing to focus on substance over form, the Supreme Court held that plaintiffs had advanced warning of cancellation and were armed with the information necessary for their protection. Because the manner in which notice is given is of secondary importance when clear evidence shows an insured's actual notice the analysis began and ended with plaintiffs' direct and palpable knowledge of their policy's expiration. Because Nationwide canceled plaintiffs' coverage well before 24 July 2015, their policy was not in place at the time of the tragic fire. ZALMA OPINION The plaintiffs had been cancelled by AAA for the poor and dangerous condition of their property. They did nothing to change the condition and applied for insurance from Nationwide. Nationwide inspected the property and found the same defects that prompted AAA to cancel and did the same. Even if the insureds failed to see the cancellation notice, as they claimed, by cashing the refund check, they had actual notice of the cancellation. If they did not tell Nationwide about the reasons for AAA's cancellation they had 3 months of insurance until Nationwide inspected the property and cancelled. (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/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to the Insurance Claims Library – https://lnkd.in/gwEYk

Defendant Moved for Acquittal and New Trial Post 4863 Defendant Chiagoziem Kizito Okeke (“Okeke”) was charged with two counts: conspiracy to commit wire fraud and conspiracy to commit money laundering. He was convicted by a jury and moved the court for acquittal or a new trial in United States v. Chiagoziem Kizito Okeke, No. 4:21-CR-253(29), the United States District Court, E.D. Texas (August 21, 2024) ruled on the motion. FACTS The government charged Okeke participated in a multitude of fraudulent schemes to unlawfully obtain money from their victims, including online romance scams, business email compromise and investor fraud, healthcare and prescription fraud, and unemployment insurance fraud. Further it charged that Okeke, along with others, “did knowingly and willfully combine, conspire, confederate, and agree to commit wire fraud against the United States”. Additionally, the Second Superseding Indictment asserted that Okeke, along with others, not only coordinated how to receive money from victims, but also how to disguise, disburse, and launder that money once victims were defrauded. Okeke orally moved for a judgment of acquittal after the United States rested. The Court denied Okeke's oral motion. Following a thirteen-day jury trial, the jury returned its verdict and found Okeke guilty on both Count One and Count Two. Motion for Acquittal A Rule 29 motion for judgment of acquittal challenges the sufficiency of the evidence to convict. The issue is whether, viewing the evidence in the light most favorable to the verdict, a rational finder of fact could have found the essential elements of the offense charged beyond a reasonable doubt. The fact finder is free to choose among reasonable constructions of the evidence and it retains the sole authority to weigh any conflicting evidence and to evaluate the credibility of the witnesses. Motion for New Trial The court may vacate any judgment and grant a new trial if the interest of justice so requires. Generally, motions for new trial are disfavored and must be reviewed with great caution. A new trial is proper only where the defendant's “substantial rights” have been harmed-either based on a single error or the cumulative effect of multiple errors. ANALYSIS Although the United States introduced several bank accounts belonging to Okeke at trial, he claimed that “no evidence [was] presented to the jury that any money from any victim entered his bank accounts.” Further, Okeke asserts that no text messages or WhatsApp chats “prove[d] beyond a reasonable doubt that he had an agreement with his brother or anyone else to commit wire fraud.” Additionally, Okeke contended that two witnesses (and co-defendants) for the United States, testified that Okeke did not commit any illegal activity. Finally, Okeke stated that he testified in his own defense, as a credible witness, that he did not agree (with anyone) “to commit the offense of wire fraud”. The United States presented evidence regarding the discrepancy between Okeke's total net bank deposits and income reported to the Internal Revenue Service. The Court found that the evidence presented was sufficient to support the guilty verdict. Okeke's motion argued that the evidence presented does not establish beyond a reasonable doubt a scheme to defraud and a specific intent to defraud. Viewing the evidence in the light most favorable to the verdict, the Court determined that the jury could find Okeke guilty based on the evidence presented. The United States claimed that a new trial was not appropriate for several reasons. The United States claims that it consistently and diligently provided discovery pursuant to its obligations. The Court's denial of Okeke's motion for continuance does not warrant a new trial because Okeke has not shown that he experienced a specific and compelling or serious prejudice. A claim of prejudice to a party from the denial of a motion for continuance requires specific contentions of prejudice. Although Okeke claims that he experienced “irreparable harm” from his inability to formulate a defense he has not identified any specific defensive measures he would have taken. Okeke has not offered specific contentions of prejudice from the Court's denial of his motion for continuance. It was therefore ORDERED that Defendant's Motion for Acquittal and Motion for New Trial were denied. ZALMA OPINION Fraud perpetrators, by definition, have chutzpah (unmitigated gall) and cannot believe they were arrested, let alone taken to trial and verdict. The jury convicted him on all counts charged and, with the money obtained from his fraud, moved the court to set aside the verdict of the jury. Fraud hurting the elderly as well as insurers deserves a sentence that requires time in prison and restitution of the victims of his crimes. (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/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to the Insurance Claims Library – https://lnkd.in/gwEYk

Defendant Must Pay $46 Million Restitution in Installments Post 4863 On November 1,2023, Defendant Roman Israilov pled guilty to conspiracy to commit healthcare fraud and aggravated identity theft in connection with a long-running no-fault insurance fraud scheme. On May 23, 2024, the USDC sentenced Israilov to seven years' imprisonment and three years' supervised release but deferred its determination as to restitution. In United States Of America v. Roman Israilov, No. 22 Cr. 20 (PGG), United States District Court, S.D. New York (August 20, 2024) the USDC added restitution to the sentence to reimburse the insurers for their loss. FACTS The Government sought an order requiring Israilov to make restitution to thirteen insurance companies in the aggregate amount of $46,651,801.04. The purpose of the proposed restitution order was to reimburse the insurers for payments they made to medical clinics that were controlled by non-physicians, including Israilov. Israilov opposed the Government's application. BACKGROUND Israilov was charged in a large multi-defendant case premised on a $40 million no-fault insurance fraud scheme. The Indictment alleged that from approximately 2014 to 2021, Israilov and his co-defendants procured the identity of car accident victims through bribery, steered the accident victims to corrupt no-fault medical clinics willing to pay kickbacks for the referrals, and billed insurance companies for unnecessary medical procedures and medications. The corrupt medical clinics also falsely represented to the insurers that they were owned and controlled by physicians, when in fact they were not. ISRAILOV'S GUILTY PLEA AND SENTENCING On November 1, 2023, Israilov pled guilty to conspiracy to commit healthcare fraud and to aggravated identity theft. From at least in or about 2014 up to and including in or about 2021, the defendant agreed with others to unlawfully own and run clinics and pharmacies located in the New York area. The defendant knew that clinics are unable to bill insurance companies for No-Fault benefits if the medical facilities are controlled by nonphysicians. DISCUSSION The Mandatory Victims Restitution Act (the “MVRA”) provides that when sentencing a defendant for an offense “in which an identifiable victim or victims has suffered a ... pecuniary loss,” the court “shall order, in addition to ... any other penalty authorized by law, that the defendant make restitution to the victim of the offense.” 18 U.S.C. §§ 3663A(a)(1), 3663A(c)(1)(B). The primary and overarching goal of the MVRA is to make victims of crime whole. THE GOVERNMENT'S PROPOSED RESTITUTION The Government seeks a restitution order amounting to $46,651,801.04. The Government argues that under New York's no-fault insurance law, medical clinics under the control of non-physicians such as Israilov are not entitled to reimbursement from insurers for any medical claims, including for treatments and care that were medically necessary. Insurers have submitted affidavits or declarations stating that they made payments to medical clinics controlled by Israilov and his co-conspirators, in the listed amounts. Absent Israilov's fraudulent representations that his clinics were controlled and operated by physicians, the insurers would have provided no reimbursement for the medical care they rendered. There is thus no amount that the insurer would have paid had the defendant not committed the fraud. The loss to the insurance was enormous, $40 million, and the proceeds of the fraud that the defendant received, $5 million, were substantial. Israilov requests that any order of restitution require monthly payments of less than twenty percent of his gross monthly income. In determining a payment schedule, ths Court must consider “the financial resources and other assets of the defendant[,]” “defendant [earnings and other income of the defendant[,]” and “any financial obligations of the defendant[,] including obligations to dependents.” 18 U.S.C. § 3664(f)(2). Israilov states that he will “likely return to work as a barber after imprisonment,” and will “need to support his wife and three children.” Given these circumstances, Israilov contends that installment payments amounting to twenty percent of his monthly gross income would be excessive. In light of Israilov's likely future employment and his family obligations, this Court's restitution order will provide for monthly installment payments amounting to fifteen percent of his gross monthly income. For the reasons stated above, this Court will enter an order of restitution in the aggregate amount of $46,651,801.04. ZALMA OPINION The restitution order is a victory for Israilov since, at 15% of his earnings as a barber the restitution amount will be paid off in about 10,000 years after he is released from prison unless he goes back to his fraudulent ways and makes enough from the fraud to pay off the restitution. He will serve the full seven years where he will make no money. Israilov is a serious criminal who profited from the crime and has apparently spent the $5 million he took from the crime. THE ART OF ADJUSTING I will be appearing on the "Art of Adjusting" podcast The link below is a preview of the podcast that will be posted in full next week. https://dropbox.com/scl/fi/ldkfrvc (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/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to the Insurance Claims Library – https://lnkd.in/gwEYk

Although a Doctor is a Professional The Doctor is not a Lawyer Post 4862 Dr. Megan Rust appealed acting as her own attorney from the district court's summary judgment in favor of Defendant-Appellee Laboratory Corporation of America Holdings (Labcorp) in her action alleging five California state-law contract claims. In Megan Rust, M.D., an individual v. Laboratory Corporation Of America Holdings, No. 23-55186, United States Court of Appeals, Ninth Circuit (August 23, 2024) the Ninth Circuit resolved the issues raised by Dr. Rust. The Ninth Circuit declined to address Dr. Rust's argument that this action concerns whistleblower retaliation because she raised it for the first time on appeal. Labcorp's submission of excerpted deposition transcripts, rather than complete transcripts, in support of its summary-judgment motion was entirely appropriate. A party asserting that a fact cannot be or is genuinely disputed must support the assertion by citing to particular parts of materials in the record, including depositions. Dr. Rust failed to produce evidence to controvert Labcorp's evidence nor did she identify any specific material information in the omitted portions of the transcripts creating a genuine dispute. ANALYSIS OF SUMMARY JUDGMENT ISSUES If the party moving for summary judgment meets its initial burden of identifying for the court those portions of the materials on file that it believes demonstrates the absence of any genuine issues of material fact, then the nonmoving party must set forth, by affidavit or as otherwise provided in Rule 56, specific facts showing that there is a genuine issue for trial. The district judge is not required to comb the record to find some reason to deny a motion for summary judgment. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. The Ninth Circuit concluded that the district court did not err in granting summary judgment on Dr. Rust's first claim, breach of contract. The district court properly concluded that: extrinsic evidence-in the form of Dr. Rust's acquisition of full-time malpractice insurance coverage and LabCorp's supposed, but uncorroborated, oral statements contracting Dr. Rust for full-time work-was barred under the parol evidence rule because the parties executed a written, integrated agreement for "part-time professional pathology services, as requested." When parties enter an integrated written agreement, extrinsic evidence may not be relied upon to alter or add to the terms of the writing. Dr. Rust waived any argument of error regarding summary judgment on her claim of breach of the implied covenant of good faith and fair dealing, because her summary-judgment briefing affirmatively conceded that no genuine dispute of material fact existed with respect to this claim. Dr. Rust's "conclusory, self-serving" deposition testimony that Labcorp interfered with another business opportunity, standing alone, lacks detailed facts and any supporting evidence, so it is insufficient to create a genuine issue of material fact. Dr. Rust did not point to evidence in the record, other than her own declaration, showing a triable issue of a material fact. The fact that a judge rules against Dr. Rust is not evidence that the district judge exhibited bias or engaged in judicial misconduct. Judicial rulings alone almost never constitute a valid basis for a bias or partiality motion. ZALMA OPINION Insurance is a contract. Failure to prove the contract destroys the entire action brought by Dr. Rust in pro se. She was faced with a motion for summary judgment and failed to produce any evidence that established an issue of fact to defeat Labcorp's motion for summary judgment and proved the maxim that a person who acts as her own attorney has a fool for a client. THE ART OF ADJUSTING I will be appearing on the "Art of Adjusting" podcast The link below is a preview of the podcast that will be posted in full next week. https://dropbox.com/scl/fi/ldkfrvc (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/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to the Insurance Claims Library – https://lnkd.in/gwEYk

Wrongful Death of an Insured Excluded Post 4861 n B.H., Special Administrator of the Estate of C.W.H., a Minor, and B.H., Individually and for and on Behalf of All the Surviving Heirs-at-Law of C.W.H., a Minor v. P.B. and L.B., and Upland Mutual Insurance, No. 126,874, Court of Appeals of Kansas (August 16, 2024) the Court of Appeals needed to resolve a coverage issue when insurer was asked to pay a judgment rendered against its insured. GARNISHMENT PROCEEDINGS A garnishment proceeding in Kansas does not create contractual privity between a judgment creditor and the garnishee. A judgment creditor seeking to garnish a judgment debtor's insurance provider-when the judgment creditor is not in privity of contract with the insurer and is not an intended third-party beneficiary of the insurance policy-may only recover from the insurer to the extent the insured judgment debtor could recover. FACTUAL BACKGROUND Mother's toddler tragically died from drowning in a pond at the child's foster parents' home. Mother sought damages from the foster parents, alleging they negligently caused her child's death. The district court found one of the foster parents- P.B.-80% at fault for her child's death and awarded Mother damages of $320,000, comprised of $120,000 for the mother's survivor claim and $200,000 for her wrongful death claim. P.B. and L.B. were licensed foster parents who received Mother's child, C.W.H., as a foster placement in December 2015 when C.W.H. was about one month old. In August 2017, when C.W.H. was about 23 months old, he drowned in a tragic accident in a fishpond on the foster parents' property when only P.B. was home. At the time of C.W.H.'s death, Mother had been working on her reintegration plan and C.W.H. was spending five nights a week with Mother. The foster parents were insured under a homeowners insurance policy issued by Upland Mutual. The policy contained the following exclusion: "'bodily injury' to 'you', and if residents of 'your' household, 'your' relatives and persons under the age of 21 in 'your' care or in the care of 'your' resident relatives." Upland Mutual notified P.B. and L.B. of this refusal to provide coverage and defense, explaining that C.W.H. was under the age of 21 (he was approximately age 22 months old at the date of the incident), was residing in the household and was in P.B and L.B. care. C.W.H. was also an insured under the policy. After winning that judgment, Mother sued Upland Mutual, P.B.'s homeowners insurer, in the amount of the judgment against P.B. The district court ordered Upland Mutual to pay Mother $200,000, which represents P.B.'s proportional share of fault on her wrongful death claim. The district court agreed with Mother in part, finding no coverage for Mother's survivor claim but finding the homeowners insurance policy covered Mother's wrongful death claim because Mother was not an insured under the policy. DISCUSSION The only issue on appeal is whether the district court erred in entering a garnishment order against Upland Mutual for Mother's wrongful death judgment against P.B. When the facts are undisputed the court need not review the district court's factual findings and can proceed to the second step to review the district court's conclusions of law . The District Court Erred in Finding the Foster Parents' Homeowners Insurance Policy Provided Coverage for the Judgment on Mother's Wrongful Death Claim Upland Mutual's fairly broad coverage provision is limited by a separate provision that states personal liability coverage "does not apply to: a. 'bodily injury' to 'you', and if residents of 'your' household, 'your' relatives and persons under the age of 21 in 'your' care ...." The plain and unambiguous policy language excludes from coverage bodily injuries, including death, to persons under the age of 21 that occurred while the injured was in the care of the insured and a resident of their household. The parties did not dispute that C.W.H. resided with the insureds and thus met this definition under either interpretation. Since the exclusion language in the present case is not ambiguous it was applied as written. It is axiomatic that when the terms of an insurance policy are clear and unambiguous, the court must give effect to the parties' clear intentions and enforce the contract as made. Since the policy clearly excluded from coverage damages resulting from C.W.H.'s death because C.W.H. was residing in the insureds' home, under the insureds' care, and under the age of 21, the district court's garnishment order for Mother's wrongful death judgment was, therefore, reversed. ZALMA OPINION The loss of a child is horrible. Judges feel empathy, if not sympathy, to a mother whose child died as a result of a the negligence of others. Judges seldom have empathy for an insurer who refuses to indemnify an insured because of an exclusion. The Trial court ordered the insurer to pay in contravention of a clear and unambiguous exclusion. The Court of Appeals reversed because the exclusion was clear. THE ART OF ADJUSTING I will be appearing on the "Art of Adjusting" podcast The link below is a preview of the podcast that will be posted in full next week. https://www.dropbox.com/scl/fi/ldkfrvcr2c68kw8qx0iu2/TAoA-49-Barry-Zalma-Advert.mp4?rlkey=fvltdwov0j6nbhmu85xs6pzic&st=dwfb9u5g&dl=0 (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/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to the Insurance Claims Library – https://lnkd.in/gwEYk

Insured Must Reside at Premises at Time of Loss Unrealized Future Intent Does not Create a Residence Post 4860 Perla Olave owned a house in Thornton, Colorado, that was insured by American Family Mutual Insurance Company, S.I. In late 2017, Ms. Olave began spending a majority of her time in Missouri, and starting in March 2018, she allowed the family of her brother, Jamie Darci Olave-Hernandez, to live in the Thornton house. In September 2020, the house was damaged by fire. Ms. Olave had last stayed there in December 2019, and she had not spent a day in Colorado in 2020. In Perla Olave; Jamie Darci Olave-Hernandez v. American Family Mutual Insurance Company, S.I., No. 23-1337, United States Court of Appeals, Tenth Circuit (August 15, 2024) the Tenth Circuit resolved the dispute over the meaning of the term "reside." BACKGROUND American Family denied Ms. Olave's and Mr. Olave-Hernandez's claims under the insurance policy on the ground that Ms. Olave did not reside in the Thornton house at the time of the fire and had not complied with the policy's requirement to notify American Family of her change in residence. Ms. Olave and Mr. Olave-Hernandez (collectively, the Appellants) sued American Family and the district court granted summary judgment to American Family. The Policy. In December 2016, Ms. Olave represented in her application that she and her child would be the only residents of the Property, it would be her primary residence, and it would be owner-occupied. American Family renewed the policy in December 2019 (the Policy). The Policy's Declarations identified Ms. Olave as the named insured and the Property as a "Primary Residence". Change in Occupancy. In January 2018, she enrolled her child in school in Missouri and obtained a business license there. At that point, the Property was vacant. When the Policy was up for renewal in December 2019, Ms. Olave told her insurance agent that her mailing address had changed to Missouri, but that she was still living at the Property and was going back and forth to Missouri for work. The Claim and Investigation. The Property was damaged in an electrical fire on September 15, 2020. Ms. Olave was in Missouri. The last time she had stayed at the Property was some weeks in December 2019; the time before that was in August 2019. But due to the COVID-19 pandemic, she had not spent a single day in Colorado in 2020. She also stated she had a Missouri driver's license, and her Colorado driver's license had expired in 2018. American Family Denied Coverage. In January 2021, American Family denied coverage because: Ms. Olave's Colorado vehicle registration for a 2018 Jeep Grand Cherokee expired in 2018; Social media posts by Ms. Olave since 2018 were from Missouri; Ms. Olave was the owner of Frida Microblading Studio located in [the city of] Town and Country Missouri and Ms. Olave maintains her tattoo license with the State of Missouri; A blog focused on Ms. Olave's business states that Ms. Olave "move[d] to the St. Louis area . . . to ensure that her daughter grew up around extended family;" and Most notable, Ms. Olave registered to vote in Missouri beginning on 2/01/2018 and continuing through the date of loss. Ms. Olave's residency at the Property the District Court identified four relevant factors: the subjective or declared intent of the individual, the formality or informality of the relationship between the individual and members of the household, the existence of another place of lodging, and the relative permanence or transient nature of the individual's residence in the household. The District Court held that Ms. Olave breached her obligation under the Policy to notify American Family of her change of residence within 30 days. The District Court granted summary judgment to American Family on the bad faith and statutory delay/denial claims. DISCUSSION Under Colorado law, residence denotes a place where a person dwells. It simply requires bodily presence as an inhabitant in a given place. Ms. Olave's focus on her intent, without regard to her physical presence, is not a reasonable interpretation of "reside" under Colorado law. The Court Did Not Err In Holding The Misrepresentations Were Material. A misrepresentation will be considered material if a reasonable insurance company, in determining its course of action, would attach importance to the fact misrepresented. No reasonable juror could conclude that an insurance company would not attach importance to the alleged reason for Ms. Olave's travel where the Policy specifies a "work related travel" exception to the requirement to report the Property as "uninhabited" and no reasonable juror could conclude that an insurance company would not attach importance to a statement of ownership of items at the Property in determining whether Ms. Olave truly resided at the Property, as she claimed. ZALMA OPINION A homeowners policy is a contract of personal indemnity that requires the person who is the subject of the insurance actually live in the property that is the subject of the insurance. Ms. Olave did not live at the Colorado house and lied to the insurer when she renewed the policy that she lived there as her primary residence. It burned when someone else lived there and she resided in Missouri not Colorado. (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 or subscribe to my substack at https://lnkd.in/gmmzUVBy 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/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to the Insurance Claims Library – https://lnkd.in/gwEYk

A Dog That Lives at a House is not a Part of the Property Post 4859 Lana Sloan appealed from summary judgment entered in favor of Farm Bureau Town and Country Insurance Company of Missouri ("Farm Bureau") while she sought medical payments for injuries she received from a less than obedient and loving dog. In Lana Sloan v. Farm Bureau Town And Country Insurance Company Of Missouri, and Jesse Clark, Joseph Webb, and Bobbette Webb, No. SD37751, Court of Appeals of Missouri, Southern District, In Division (August 15, 2024) summary judgment established a dog was not a part of the premises. BACKGROUND Joseph Webb owns residential property insured by Farm Bureau. Webb leased the insured premises to Jesse Clark, who owns a dog. Webb neither owns nor cares for the dog. Clark's dog bit Sloan while she was walking on a public roadway adjacent to but not on the insured premises. Sloan made a claim under the medical payments provision of the Farm Bureau policy, on which Joseph Webb was the only named insured. The Farm Bureau policy provides coverage for medical payments to non-insureds when such person sustains bodily injury: On an insured premises with the permission of any insured, or elsewhere, if the bodily injury: Arises out of a condition on the insured premises; is caused by the activities of you, or your relatives if you are a person; is caused by a residence employee in the course of employment by you, or your relatives if you are a person; or is caused by an animal other than livestock owned by or in the care of you, or your relatives if you are a person. Farm Bureau denied Sloan's claim. She sued alleging that Farm Bureau was liable under § 375.420 for its vexatious refusal to pay her. The only dispute on summary judgment was the applicability of section 2.a, that is, whether Sloan's injuries, which occurred off the insured premises, arose out of a condition on the insured premises. The circuit court found the dog was not a condition on the insured premises, the loss was not covered under the policy, and Sloan could not prove the dog was a condition on the insured premises. APPLICABLE LAW The statutes allow penalties to be assessed against an insurer when it refuses to make payment, upon demand and in accordance with the policy, vexatiously, willfully, and without reasonable cause. Because "loss" is modified by the prepositional phrase "under a policy" in § 375.420, only those losses insured or covered by the policy satisfy the statute. Where an insurer had no duty to pay under the insurance policy, there cannot be a claim for vexatious refusal to pay. The interpretation of an insurance policy is a question of law. When a term within an insurance policy is undefined, the court will apply the plain meaning, i.e., the meaning that would be attached by an ordinary person of average understanding if purchasing insurance. DISCUSSION Sloan contended her loss was covered by the policy because a dog kept on the insured premises is a condition on the insured premises from which an off-premises attack and injury can arise. It is apparent that "premises" in common parlance and in the policy itself contemplates the land and more or less permanently affixed structures contained thereon. It does not contemplate easily movable property which may be located on the property at a given time or even on a regular or permanent basis. A dog, whether permanently kenneled or tethered on the property, is not a part of the premises. The noncoverage of the loss in this case is consistent with the principle that landlords generally are not liable for injuries to others caused by a tenant's dog. Ownership of real property does not make one an owner, possessor, or harborer of the domestic animals found on that property. There is a serious distinction between real property and domestic animals kept on that property. The Court of Appeals concluded that Sloan's injuries did not arise out of a condition on the insured premises. ZALMA OPINION A dog is a living breathing animal. It can live at a piece of real property, just like an owner or tenant may live at the premises but neither the owner, tenant, nor pets are part of the property. Since, to succeed, Sloan needed to prove that her injuries arose out of a condition of the insured premises and the judgment in favor of the insurer was affirmed. (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 or subscribe to my substack at https://lnkd.in/gmmzUVBy 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/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to the Insurance Claims Library – https://lnkd.in/gwEYk

Construction Defects, Standing Alone, Do Not Constitute Property Damage Post 4858 The Appeals Court of Massachusetts was asked to decide whether the costs of repairing or removing construction defects constitute "damages because of . . . 'property damage'" within the meaning of a commercial general liability policy. In Lawrence H. Lessard & another v. R.C. Havens & Sons, Inc., & others, No. 23-P-346, Appeals Court of Massachusetts, Essex (August 14, 2024) the Appeals Court was faced with an issue of first impression in Massachusetts: are construction defects "property damage" as defined in a CGL policy? THE UNDERLYING ACTION In the underlying action, Lawrence H. Lessard and Jennifer A. Meshna (together, the homeowners) sued their builder for the faulty construction of their home. At trial a jury found numerous construction defects and awarded the homeowners damages. Meanwhile, Main Street America Assurance Company (MSA) -- the insurer that issued to the defendants R.C. Havens with a commercial general liability policy covering the relevant period -- intervened in the action and sought a declaration that it did not have a duty to indemnify R.C. Havens under the policy. As the project neared completion, the homeowners began to discover substantial issues with the quality of the construction. A number of problems compromised the structural integrity of the home. A portion of a structural post that was supposed to run from the roof to the basement was missing, and partition walls, sill plates, and support beams were installed incorrectly. As a result, some partition walls were improperly weight bearing. The jury in the underlying action awarded the homeowners $114,159 for the structural defects, $14,207 for the roof deck, $37,000 for the siding, and $52,500 for the metal roof. The jury also awarded the homeowners $925 for problems with the home's insulation, $18,036 for mold damage, $8,430 for loss of use of their home during repair work, and $27,276 for costs of investigating the defects. A Superior Court judge ruled for MSA on all the issues. DISCUSSION As a general principle, the insured (or the individual seeking coverage) bears the initial burden of proving that the claimed loss falls within the coverage of the insurance policy. If the insured meets that burden, the burden then shifts to the insurer to show that a separate exclusion to coverage is applicable. To resolve the homeowners' appeal, the Appeals Court only needed to address whether the losses constituted property damage within the meaning of the policy. Policies define "property damage" as physical injury, which suggests the property was not defective at the outset, but rather was initially proper and injured thereafter. Because faulty construction is defective at the outset the cost to repair are not claims for property damage. For example an improperly installed window would not be "property damage," but resulting water damage to the surrounding wall would be. The Appeals court held that construction defects, without more, do not constitute property damage within the meaning of a commercial general liability policy. The summary judgment record established that the underlying jury verdict awarded damages for the costs of repairing or removing the construction defects themselves. Since there was no evidence that the construction defects caused injury to other property, MSA had no duty under its commercial general liability policy to indemnify R.C. Havens for the final judgment because construction defects, standing alone, do not constitute property damage within the meaning of a commercial general liability policy and the judgment was affirmed. ZALMA OPINION Liability insurance is designed to protect an insured against fortuitous events that cause direct physical damage and damage to the property of persons other than the insured. When there is no direct physical loss there can be no coverage because the only damage was the construction defects that were never undamaged and that did not cause damage to other property. The builder must pay from its own funds the judgment. (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 or subscribe to my substack at https://lnkd.in/gmmzUVBy 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/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to the Insurance Claims Library – https://lnkd.in/gwEYk

Prior Conviction for Insurance Fraud Material to Decision of Insurer Post 4857 Jose Palma appealed the trial court's summary judgment in favor of Allied Trust Insurance Co that found a lie about a prior insurance fraud conviction was a material misrepresentation causing the insurer to rescind the policy. In Jose Palma v. Allied Trust Insurance Co., No. 14-23-00063-CV, Court of Appeals of Texas, Fourteenth District (August 13, 2024) the Court of Appeals agreed with the insurer. BACKGROUND Palma purchased an insurance policy for his home with Allied. During the policy period, there was a fire at Palma's home. Palma submitted an insurance claim under the policy only to be faced with the discover of a prior conviction for insurance fraud that was not disclosed on his application for insurance. Allied rescinded the policy stating that Palma's misrepresentation rendered the policy void and that it would not have insured Palma had Palma disclosed his prior insurance fraud conviction. Palma sued Allied for breach of contract, and a litany of bad faith charges. Allied answered and asserted the defense that it rescinded the policy because of Palma's "material misrepresentation" among other affirmative defenses. THE MOTION FOR SUMMARY JUDGMENT Allied moved for summary judgment concluding that the policy issued to Palma is void due to Palma's material misrepresentation in the policy application that he was never convicted of insurance fraud. Allied argued that Palma misrepresented material facts and in support of these elements, Allied submitted five exhibits: the policy application; the policy; the "DocuSign certification of completion;" correspondence with insurance agent; and Palma's criminal conviction for insurance fraud. The trial court rendered a final summary judgment in favor of Allied. Misrepresentation in Insurance Application Palma argued that whether a misrepresentation is material is a question of fact both under the Insurance Code and common law and, therefore, summary judgment was improper. Allied countered that there was ample, undisputed evidence in the record to show that Palma's misrepresentation was material and no evidence to the contrary. ANALYSIS The policy application included a statement that Palma agreed the policy would be void "if such information is false or misleading in any way that would affect the premium charged or eligibility of the risk based on company underwriting guidelines." The purpose of a summary judgment is to provide a method of summarily terminating a case when it clearly appears that only a question of law is involved and that there is no genuine issue of fact. Various elements of claims may be a "question of fact" where there is an actual, genuine dispute between the parties about the facts. However, when no genuine issues of material facts exist, a court may properly grant summary judgment because there are no facts to find. Allied submitted its undisputed evidence establishing its affirmative defense. Palma did not respond with evidence to dispute the facts as stated by Allied. Put simply, the plain language of the statute indicates that a policy provision rendering the policy void or voidable for any false statement is a defense if the insurer demonstrates the misrepresentation was material to the risk or contributed to the contingency or event on which the policy became payable or due. None of these requirements obviates the insurer's ability to obtain summary judgment on its defense when the facts are undisputed. ZALMA OPINION A convicted insurance criminal lied on an application for insurance, obtained a policy based on the lie, only to have his home catch fire and burn resulting in a major claim. The insurer learned of the conviction by searching public records and, based on the lie, rescinded the policy from its inception because of the material misrepresentation about the plaintiff's criminal record and prior conviction for insurance fraud. The court affirmed the rescission. (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/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg Go to the Insurance Claims Library – https://lnkd.in/gwEYk

Convicted Felon Incompetently Seeks Shortened Sentence in Pro Se Pleading Post 4856