When Reasonable Expectations are not Reasonable

When a Court Reads and Understands a Policy Justice is Done

Almost no one  reads an insurance policy. Regardless, the words of the policy still control any question about coverage for a claim if they are clear and unambiguous.

Insureds are never happy when a claim is denied even if the decision to refuse defense and indemnity are clear, unambiguous and obvious. They sue and try to convince a court that the coverage should apply to the insured seeking coverage, usually by claiming the reasonable expectations doctrine applies since they can easily testify that they reasonably expected to have the coverage they needed. However, if a court allowed an insured to override the plain language of a policy limitation anytime he or she was dissatisfied with the limitation by simply invoking the reasonable expectations doctrine, the language of insurance policies would cease to have meaning and, as a consequence, insurers would be unable to project risk.

In Frederick Mutual Insurance Co. v. Donald Hall, Individually And Trading As Hallstone, Inc.; Maria A. Hall,Individually And Trading As Hallstone, Inc.; Hallstone, Inc.; R. Lee Hulko; Bradley B. Fair, No. 17-3477, United States Court Of Appeals For The Third Circuit (November 8, 2018) Plaintiff-Appellant Frederick Mutual Insurance Company (“Frederick”) appealed the adverse decision of a trial court in a declaratory judgment action in which it sought to have the District Court declare that it did not have the duty to defend and indemnify Hailstone, Inc. (“Hailstone”) under an insurance policy that Frederick issued to Hailstone in a state court action against Hailstone.

FACTUAL BACKGROUND

Donald and Marie Hall formed Hailstone to provide stone masonry work for residential premises. On the advice of a builder, Donald Hall (“Hall”), a principal in Hailstone, approached the Fraser Insurance Agency (“Fraser”) to obtain an insurance policy to provide in Hall’s words “maximum,” “soup to nuts” coverage for Hailstone. Fraser obtained a liability policy from Frederick for Hailstone. Hall and Frederick did not have direct contact and Hall never asked for or received a copy of the policy Frederick issued.

Beginning in or around March 2006, R. Lee Hulko and Bradley B. Fair (“the Customers”) contracted with Hailstone to provide custom stone masonry work for their home. The project was a substantial undertaking as it took several years to complete and the Customers paid nearly $300,000 for the project. The Customers discovered that some of the stone masonry work that Hailstone had undertaken had been damaged and required substantial repairs ultimately costing $352,294. The Customers attributed the damage to what they regarded was Hailstone’s substandard and defective work and consequently they filed a state court action in Pennsylvania against Hailstone alleging breach of warranty, negligence, and related statutory claims.

While defending Hailstone in the state court action, Frederick filed this declaratory judgment action in the District Court, seeking a determination that it did not have a duty under its policy to defend and indemnify Hailstone for its defective workmanship. At the  bench trial the Court found that the insurance policy unambiguously excluded faulty workmanship coverage.

Regardless the Court also found that Hall believed the policy provided coverage ‘”if something was done inadvertently’, or if his business did something and someone made a claim against his business that he might be liable for,” Frederick Mut. Ins. Co. v. Hall, No. 15-3354, 2017 WL 4883157, at *2 (E.D. Pa. Oct. 30, 2017). The Court’s ultimate finding was that Hailstone had a reasonable expectation of workmanship coverage, and, accordingly, it entered judgment for Hailstone.

DISCUSSION

In reaching its decision, the District Court found that the insurance policy unambiguously excluded coverage for the faulty workmanship claims the Customers made in the underlying state court action, a conclusion with which the Third Circuit concurred.

It is well-settled that when policy language is unambiguous, a court must give effect to that language. It is also well-settled that the focus of any inquiry regarding issues of coverage under an insurance policy is the reasonable expectations of the insured. An insured, however, may not complain that its reasonable expectations have been frustrated when the applicable policy limitations are clear and unambiguous.

Having found the policy unambiguous, the Third Circuit concluded that the trial Court should have entered judgment for Frederick instead of applying the reasonable expectations doctrine.

Hall, however, did not apply for the specific type of insurance coverage he now claims that he expected. Rather, he asked in general terms for “soup to nuts” coverage. Although the request was broad it was not specific. Thus, Frederick could regard Hall’s application for insurance as seeking a general liability insurance policy.

However, a general liability policy does not provide a guarantee of the policyholder’s workmanship. A businessman purchases a liability insurance policy to transfer the risk and cost of unexpected and unintended happenings (occurrences) to his insurance company. The insurer only agrees to assume that risk for a calculated premium. The insurer does not, however, provide a guarantee of the businessman’s workmanship or his products for that premium. Typically, the insurer protects itself against such claims by excluding coverage for property in the care, custody or control of the insured or property as to which the insured for any purpose is exercising control. There is usually some form of insurance available to cover injury to or destruction of the excluded property at a higher premium which is commensurate with the risk.

At no point did Hallstone specify that it desired the more costly workmanship insurance. An insured’s failure to request or bargain for a particular coverage precludes a court from finding that the insured expected such coverage, whether or not the insured received a copy of the policy.

Pennsylvania case law makes clear that the District Court’s application of the reasonable expectations doctrine was flawed. Only objectively reasonable expectations are protected. Hall’s claim that he expected Hallstone’s “maximum,” “soup to nuts” liability policy to include workmanship coverage is no more reasonable than if a purchaser of auto insurance expected his policy to cover repairs if his car breaks down, even if he asked for “soup to nuts” coverage. It is simply not the kind of coverage insurance agents and insurance companies expect to provide unless the insured explicitly requests such coverage.

The Third Circuit refused to allow an insured to override the plain language of a policy limitation just because he or she was dissatisfied with the limitation by invoking the reasonable expectations doctrine. The language of insurance policies would cease to have meaning.

The Third Circuit refused, therefore, to set such a deleterious sequence of events into motion. Accordingly, it reversed the District Court’s judgment and remanded the matter to that Court to enter judgment for Frederick.

ZALMA OPINION

In essence, the Third Circuit found that the hindsight expectations of the insured, Hallstone, which only arose after it was sued, were not reasonable in light of the clear and unambiguous language of the policy. Insurers are entitled to rely on the clear and unambiguous language of the policy agreed to by the insured before a loss. A court, in a declaratory judgment action is charged with interpreting the policy not rewriting it to meet what the insured learned it needed only after it was sued.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Go to Zalma Books Paperbacks and Kindle books by Barry Zalma at the Insurance Claims Library at http://zalma.com/blog/insurance-claims-library/

 

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“Zalma on Insurance Claims”

Ten Volumes on Insurance Claims

A Comprehensive Group of Materials on Property & Casualty Insurance Claims

Insurance claims professional and expert witness Kevin Quinley said about the following ten volumes: “Zalma’s series of books is a terrific blend of both the legal underpinnings and the practical implications for the claim practitioner.

Insurance Maven Bill Willson said: “Zalma On Insurance Claims” is a tour de force, an indispensable tool that should be a part of every claims training program in America and in the library of every claims professional for quick and frequent reference. This comprehensive guide belongs in the library of every insurance defense AND policyholder law firm. It should be a part of every claims training program of carriers, independent adjusting firms, and public adjusters. Many of these parts should be part of the training or reference programs for non-claims personnel, from agents to underwriters to risk managers.”

Zalma on Insurance Claims Volume 101

A Comprehensive Review of the law and Practicalities of Property, Casualty and Liability Insurance Claims

This series of ten books is the latest addition to Barry Zalma’s insurance claims series of books and articles that will form the most thorough, up-to-date, expert-authored insurance claims guide available today.

Written by nationally-renowned insurance coverage expert Barry Zalma, a semi-retired insurance coverage attorney, consultant, expert witness and blogger, Zalma on Insurance Claims provides in-depth explanations, analysis, examples, and detailed discussion of:

  • Property insurance claims;
  • Third-party liability claims;
  • Casualty claims; and
  • Insurance Fraud

Thorough, yet practical, this series of books form the ideal guide for any professional who works in or frequently interacts with the insurance industry. Claims professionals, risk managers, producers, underwriters, attorneys (both plaintiff and defense), and business owners will benefit greatly from the ten volume guide. It is also the perfect resource for insurance educators, trainers, and students whose role requires an understanding of insurance law. As you read through the various volumes of Zalma on Insurance Claims, you will find comprehensive—yet comprehensible—coverage of key topics, including:

  • What is Insurance?
  • The History of Insurance
  • The covenant of good faith and fair dealing.
  • The tort of Bad faith
  • Conditions,
  • Warranties,
  • Exclusions
  • Declaring a policy void
  • Duties of insured and insurer
  • Evaluation and settlement
  • Identifying insurance fraud
  • Investigation
  • Kinds of insurance policies
  • Other insurance clauses
  • Preparing a case for trial
  • Processing a claim
  • Responses to fraud
  • Subrogation and salvage
  • Underwriting and
  • Many more property and casualty insurance matters.

Zalma on Insurance Claims Part 102

This, the second part of Zalma on Insurance Claims and includes materials concerning:

  • Other Insurance Clauses
  • Underwriting
  • Conditions, Warranties and Exclusions

Zalma on Insurance Claims Part 103

This is part 103 of Zalma on Insurance Claims and will deal with:

1.Duties of the Insured and the Insurer
2.Declaring a Policy Void
3.Processing a Claim

When read with Part 101 and Part 102, this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 104

This, the fourth volume of Zalma on Insurance Claims and includes materials concerning:

  1. Investigation of First Party Property Claims
  2. Rescission
  3. The Mortgage Clause
  4. Fortuity & Other Issues
  5. Determine the Amount of the Loss
  6. The Claim File

When read with Part 101, Part 102, and Part 103, this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 105

This, the fifth volume of Zalma on Insurance Claims and includes materials concerning:

  1. Investigation – Liability
  2. Claims Made and Reported Policies
  3. The Notice Prejudice Rule.
  4. Types of Torts
  5. The Liability Claims File
  6. Discovery of the Insurance Claims File
  7. Tests for Determining Duty to Defend
  8. Appendices – forms for the claims person

When read with Insurance 101, Insurance 102, Insurance 103 and 104, this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 106

This is the sixth part of “Zalma on Insurance Claims” and will deal with:

Chapter 1 Property Insurance & the Tort of Bad Faith
Chapter 2 Grounds for Finding Bad Faith
Chapter 3 Avoiding Charges of Bad Faith
Chapter 4. Punitive Damages
Chapter 5.Bad Faith & Liability Insurance
Chapter 6.Defenses to the Tort of Bad Faith
Appendix 1 – California Civil Code Section 3294

When read with Part 101, Part 102, and Part 103, Part 104 and Part 105 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 107:

This is the seventh part of “Zalma on Insurance Claims” and will deal with:

1.Evaluation and Settlement – Property
2.Evaluation and Settlement – Liability
3.Subrogation
4.Salvage

When read with Part 101, Part 102, Part 103, Part 104, Part 105 and Part 106 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 108

This, the eighth part of Zalma on Insurance Claims, includes materials concerning:

1.Preparing a case for trial
2.Interviewing Techniques
3.The art of the Interview
4.Interview General Principles
5.The Interviewer
6.Preparing for the Interview
7.Beginning the Interview
8.Control Of The Interview
9.Dealing with Witness Types
10.Approaches the Work
11.Dealing with the Nervous Person
12.Bluffs
13.The Mutability Of Memory
14.The Examination Under Oath

When read with Part 101, Part 102, Part 103, Part 104, Part 105, Part 106 and Part 107 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 109 

This, the ninth part of Zalma on Insurance Claims, includes materials concerning:

•Identifying Insurance Fraud
•Professional Conspiracies
•Multiple Types of Insurance Fraud
•How to Join the Fraud Fight
•Case Studies of Successful Fraud Investigations
•Checklist 1 – Types of Insurance Fraud
•Checklist 2 – Training Adjusters
•Checklist 3 – Red Flags of Fraud – Property Insurance
•Checklist 4 – Red Flags of Fraud – Liability Insurance
•Appendix A – Commonly Used Medical Acronyms and Abbreviations
•Appendix B – Glossary of Medical Terms

When read with Part 101, Part 102, Part 103, Part 104, Part 105, Part 106, Part 107 and Part 108 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 110

This, the tenth part of Zalma on Insurance Claims, includes materials concerning:

•Responses to Fraud
•Grounds for Rescission.
•The Fight Against Fraud
•Checklist 1—Responses to Fraud
•Checklist 2 – The Fight Against Fraud

When read with Part 101, Part 102, Part 103, Part 104, Part 105, Part 106, Part 107, Part 108 and Part 109 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Read about these and other insurance books by Barry Zalma at zalma.com/blog/insurance-claims-library/

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Zalma’s Insurance Fraud Letter – November 15, 2018

The Essential Resource for The Insurance Fraud Professional

Zalma’s Insurance Fraud Letter, Volume 22, No. 22   

Asbestos Victim Fund Under Investigation

When a company is unable to pay liabilities related to asbestos exposure, it may file for Chapter 11 bankruptcy protection. Companies that successfully file are protected from lawsuits.

Asbestos companies are reviewed for bankruptcy reorganization under section 524(g) of the U.S. Bankruptcy Code. They attempt to fund trusts with enough money to pay current and future asbestos claims.

Companies establish the trusts, but trustees manage them and decide the amount of compensation paid to claimants.

In total, all asbestos bankruptcy trusts hold more than $30 billion. This figure comes from a 2016 report from RAND Corporation’s Institute for Civil Justice.

These trusts have paid claimants approximately $18 billion since the late 1980s. This figure includes an estimated $15 billion from 2006 to 2012.

The U.S. Justice Department in the last two months of 2018 demanded trust documents as part of a civil investigation, opposed the creation of another trust it said lacked sufficient safeguards, and argued against the appointment of a lawyer it said was too conflicted to represent victims.

The actions take aim at a system that over decades has paid out billions of dollars to the sick and cancer-stricken, but that critics say is opaque and prone to fraud and manipulation by well-connected lawyers. The government’s intervention aligns it with business groups who have long complained about the process.

But plaintiffs’ lawyers and asbestos victims’ advocates say there’s scant proof of widespread fraud, particularly for a system that has accommodated millions of claims. And University at Buffalo law professor S. Todd Brown said the additional government oversight, while not a bad idea, “could lead to money going to complying with this oversight rather than going to the victims.”

The trusts started emerging in the 1980s, formed by makers of asbestos-containing products who sought bankruptcy protection in the face of lawsuits from people who feared they had been exposed. The maneuvering enabled the companies to shield themselves from lawsuits while setting aside money to pay pending and future claims for asbestos, an environmental hazard once found in everyday products that can lead to the deadly mesothelioma cancer and other illnesses.

A 2011 Government Accountability Office report identified 60 trusts formed between 1988 and 2010 that it said had paid about 3.3 million claims valued at more than $17 billion.
Lawyers for asbestos victims say the process enables people to obtain compensation for catastrophic illness without drawn-out lawsuits.

Some claim that weak oversight allows people to collect payments with minimal evidence they were harmed by a particular company’s product, and for illnesses far less serious than mesothelioma and lung cancer. They argue trust overseers are often tied to well-connected plaintiffs’ firms, raising concerns of favoritism and cronyism.

In 2014, a judge in the bankruptcy case of an asbestos gasket maker described a “startling pattern of misrepresentation” by alleged victims and their lawyers. The judge found that plaintiffs repeatedly told Garlock Sealing Technologies that it was responsible for their exposure and struck large settlement agreements with the company, only to later file claims with multiple other trusts over injuries and exposures they hadn’t previously disclosed.

The Justice Department stepped up its oversight in the last few months.


 The Current Issue Contains the Following  

  • Asbestos Victim Fund Under Investigation
  • Barry Zalma Speaks at Your Request
  • Claiming Injury when not in Vehicle is Fraud
  • Wisdom
  • We All Do It” Fraud
  • Rescission of Life or Disability Insurance Policies.
  • Good News From the Coalition Against Insurance Fraud
  • Zalma’s Flat Rate Opinions
  • Health Insurance Fraud Convictions
  • Justice Requires Fraud to be Punished
  • Other Insurance Fraud Convictions
  • Books from Barry Zalma – All Available at the Insurance Claims Library

Books

Go to Zalma Books – Paperbacks and Kindle Books  by Barry Zalma at the Insurance Claims Library


THE “ZALMA ON INSURANCE” BLOG 

The most recent posts to the daily blog, Zalma on Insurance, one of Feedspots top 50 insurance law blogs are available at http://zalma.com/blog.

Check in every day for a case summary at http://zalma.com/blog:

 

Zalma’s Insurance 101

I have completed a video blog called Zalma’s Insurance 101 that consist of 1022 three to four minute videos starting with “What is Insurance” and moving forward to insurance fraud investigations explaining the basics of insurance and insurance claims handling in a painless fashion that can be viewed every morning with the first cup of coffee at  Zalma’s Insurance 101.

If you start at Volume 1 at the bottom of the blog’s first page and view one or two videos a day you will have approximately 12 to 24 hours of training a year until you get to the last video.

The videoblog is adapted from my book, Insurance Claims: A Comprehensive Guide available at the Zalma Insurance Claims Library.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Go to Zalma Books Paperbacks and Kindle books by Barry Zalma at the Insurance Claims Library at http://zalma.com/blog/insurance-claims-library/

 

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New Books from Barry Zalma

Important books dealing with insurance coverage and insurance law by insurance coverage law, insurance claims consultant, insurance claims expert witness that will fulfill every need for access to insurance law and insurance claims law.

New Books from Full Court Press

Full Court Press continues to publish expert secondary content. This time it’s a new collection of insurance law treatises from consultant, expert witness, arbitrator, and mediator Barry Zalma.

Barry Zalma practiced law in California for more than 44 years as an insurance coverage Cal Lawand claims-handling lawyer, and has spent more than 50 years in the insurance business. We welcome his deskbooks as the first published under our Full Court Press imprint. Three titles are available in ePub and MOBI format, as well as on the Fastcase legal research platform.

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the UniZalmated States, and few know more about California insurance law than Barry Zalma.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers.

An annual subscription to secondary content on the Fastcase BadFaithplatform includes new editions and updates published by the author as they are rolled out, so you can rest assured that your research is up to date. Go to fastcase.com for more detail and how to use the material on-line as part of your legal or insurance research or as stand-alone e-books.

All available at fastcase.com.


Books from ClaimSchool, Inc.

“Insurance Law”

Insurance Law is the most comprehensive, and yet practical, Product Detailsinsurance law authority available today. Written by nationally-renowned insurance coverage expert Barry Zalma, an insurance coverage attorney, consultant, expert witness and blogger, Insurance Law introduces the new insurance professional to the fundamental principles of insurance and provides the experienced litigator analyses of today’s leading insurance law decisions nationwide.

Insurance Law is the most comprehensive, and yet practical, insurance law authority available today.

This book is ideal for any professional who works in or frequently interacts with the insurance industry. Claims professionals, risk managers, producers, underwriters, attorneys (both plaintiff and defense), business owners, and students will benefit greatly from this all-inclusive reference. It is also the perfect resource for educators and trainers whose role requires an understanding of insurance law.

In addition to case law, the author has provided countless citations to relevant statutory, regulatory, and judicial sources which are guaranteed to kickstart your research.

Price Reduced from $196- Send Check for $75.00 to ClaimSchool, Inc., 4441 Sepulveda Blvd., Culver City, Ca 90230 and the book will be mailed to you.

Mold Claims Coverage Guide

Today, mold claims are common, but they continue to grow in complexity, involving not only property damage but bodily injury as well. Mold-related lawsuits have dramatically increased over the past few years, and tProduct Detailshe numbers continue to rise. Coverage requirements—and related issues—can be complicated and confusing.  This resource will remove the complexity and allow the insurer, insured, property owner or developer and their counsel to deal with mold quickly and effectively and, if possible, avoid unnecessary litigation.

Price Reduced – Send Check for $50.00 to ClaimSchool, Inc., 4441 Sepulveda Blvd., Culver City, Ca 90230 and the book will be mailed to you.

Construction Defects Coverage Guide

This insightful and practical two volume resource was envisioned anProduct Detailsd written by nationally renowned expert Barry Zalma, and it thoroughly explains how to identify construction defects and how to insure, investigate, prosecute, and defend cases that result from construction defect claims.

Construction Defects Coverage Guide was designed to help property owners, developers, builders, contractors, subcontractors, insurers, and lenders, as well as their risk managers and lawyers rapidly resolve construction defect claims when they arise and avoid construction litigation.  If litigation becomes necessary it will help the prosecution or defense of construction defect suits effectively.

Price Reduced from $196 – Send Check for $75.00 to ClaimSchool, Inc., 4441 Sepulveda Blvd., Culver City, Ca 90230 and the book will be mailed to you.

Insurance Claims: A Comprehensive Guide

Insurance contracts and clauses are specific in nature—but the manner in which insurance claims are pursued and resolved can be remarkably different.  Mistakes in handling a claim can undermine the outcome—and ultimate value—of the claim itself.

Insurance Claims: A Product DetailsComprehensive Guide is the one resource that enables insurance professionals, producers, underwriters, attorneys, risk managers, and business owners to successfully handle insurance claims from start to finish—employing proven, practical techniques and best practices every step of the way.

Price Reduced from $196 – Send Check for $75.00 to ClaimSchool, Inc., 4441 Sepulveda Blvd., Culver City, Ca 90230 and the book will be mailed to you.


Books from the American Bar Association

The Insurance Fraud Deskbook

Author: Barry Zalma

Sponsor(s):  Tort Trial and Insurance Practice Section, Publisher(s):   ABA Book Publishing

ISBN: 978-1-62722-676-9
Product Code: 5190506
2014, 638 pages, 7 x 10

Product DetailsThis book is written for individuals who are focused on the effort to reduce expensive and pervasive occurrences of insurance fraud. Lawyers who represent insurers, claims personnel, prosecutors and their investigators can all benefit from this exhaustive resource.

The Insurance Fraud Deskbook is a valuable resource for those who are engaged in the effort to reduce expensive and pervasive occurrences of insurance fraud. It explains the elements of the crime and the tort to claims personnel, and it provides information for lawyers who represent insurers, so they can adequately advise their clients. Prosecutors and their investigators can use this book to determine what is required to prove the crime and win their case.

The full text of decisions from courts of appeal and supreme courts across the country are provided so the reader can understand what happens after the investigation is completed and can apply that information to undertake their own thorough investigations. It allows claims personnel and their lawyers to understand what errors would cause a defeat or a not-guilty verdict.

The effort to reduce insurance fraud requires the assistance of both civil and criminal courts. The Insurance Fraud Deskbook can help the prudent fraud investigator, insurance adjuster, insurance attorney, insurance Special Investigation Unit, and insurance company management to attain the information needed to deal with state investigators and prosecutors.

Available from the American Bar Association at: http://shop.americanbar.org/eBus/Default.aspx?TabID=251&productId=214624; or  orders@americanbar.org, or 800-285-2221.

Diminution in Value Damages: How to Determine the Proper Measure of Damage to Real and Personal Property

ISBN: 978-1-63425-295-8
Product Code: 5190524
2015, 235 pages, 7 x 10, Paperback

This book was written to provide sufficient information to those who became interested in the issue since the Georgia Supreme Court decided State Farm Mutual Automobile Insurance Co. v. Mabry, 274 Ga. 498, 556 S.E.2d 114 (Ga. 11/28/2001) and includes cases dealing with the use of diminution in value as a method of determining the amount of loss incurred by a plaintiff seeking indemnity for damage to real or personal property.

Because confusion has reigned across the United States concerning the proper measure of damages for property damage to property that has been repaired, Diminution In Value Damages assists the reader in answering the questions concerning the proper measure of damage in each of the fifty United States and federal United States jurisdictions

This edition has been totally rewritten and expanded, providing the most extensive and detailed coverage of the issue and a thorough explanation of how to apply diminution in value damages to losses to property.


Co-Author(s):Property Investigation Checklists: Uncovering Insurance Fraud, 12th Michael H Boyer  &  Barry Zalma

Property Investigation Checklists: Uncovering Insurance Fraud provides detailed guidance and practical information on the four primary areas of any investigation of suspicious claims:
• Recognizing suspicious claims
• Proper investigation procedures
• Analysis of laws concerning fraudulent personal and real property claims
• Evaluating and settling claims.
The book also examines recent developments in areas such as arson investigation procedures, bad faith, and extracontractual damages. The appendix includes the NAIC Insurance Information and Privacy Protection Model Act.
Read about these and more books by Barry Zalma at http://zalma.com/blog/insurance-claims-library/
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Crooked Cop Stays in Jail

Police Officer’s Insurance Fraud Conviction

A police officer is charged with enforcing the law. There is nothing more wrongful than a police officer who breaks the law. In State Of Tennessee v. Edwin Millan, No. E2017-01053-CCA-R3-CD, Court Of Criminal Appeals Of Tennessee At Knoxville (November 1, 2018) Edwin Millan appealed his Bradley County Criminal Court jury convictions of filing a false or fraudulent insurance claim, initiating a false police report, and tampering with evidence.

He, unwilling to serve the time for the crime he committed, contends that the trial court erred.

FACTS

At trial, a co-defendant, Mr. Crisp testified that he met the defendant in 2011 when he and the defendant both purchased the same model 2011 Yamaha Stryker motorcycle at a Yamaha motorcycle dealer. He said that he and the defendant “pretty much became friends after that” and that they played golf, worked out, and rode motorcycles together.

After his divorce, Mr. Crisp, was short of funds and discussed his inability to sell the motorcycle with the defendant. The defendant “said, well don’t sell it, and we can take care of it and make it disappear and you won’t owe anything.”

Mr. Crisp testified that the defendant, who was at that time a Cleveland Police Department (“CPD”) Officer, told Mr. Crisp to bring the motorcycle to Marco’s Auto Concepts (“the shop”) in Cleveland, which Mr. Crisp believed was owned by the defendant’s “friend,” on a day when the defendant was on duty. The defendant directed Mr. Crisp to “bring it to his shop and drop it off. And then go get something to eat. And then report it stolen. And he would get the call. And he would make it disappear.”

Mr. Crisp ate and then called 911. After the call was made, the defendant, who was on duty with the CPD that day, arrived to take a report of the offense. Mr. Crisp testified that the defendant told Mr. Crisp “that he’d put the report in somebody else’s name since me and him were friends.”

After making the theft report and at the defendant’s suggestion Crisp filed a claim for the loss of the motorcycle with GEICO insurance company. He said that GEICO made a payment to Superior Financial …”

Christina Hernandez testified that the defendant asked her “to get rid of” a motorcycle frame that had been “at the body shop at the top” “since . . . before [she] started working there.” She testified that the defendant said that “[h]e didn’t care where it went or what happened, just get rid of it.”

Tennessee Highway Patrol (“THP”) Sergeant Thomas Clower located a motorcycle frame “off a really steep embankment.” Sergeant Clower said that the frame “had nothing left on it, except for the full 17 digit” vehicle identification number, or VIN.

The defendant acknowledged that he was the first officer to respond to Mr. Crisp’s 9-1-1 call reporting the theft of the motorcycle but said that “midway through the call, Officer Criddle showed up on scene” in his patrol car. At that point, he said, he “turned over all information that [he] had gathered over to Officer Criddle.”

Based upon the evidence presented the jury convicted the defendant of filing a false or fraudulent insurance claim; initiating a false police report; and evidence tampering. Following a sentencing hearing, the trial court imposed concurrent sentences of three years for each of the convictions.

ANALYSIS

Ms. Hernandez’s Testimony

After the defendant questioned Ms. Hernandez about her fear of Mr. Molina and the threats she had received from Mr. Molina and “his people,” the State questioned Ms. Hernandez about threatening behavior by the defendant. The defendant objected, and the trial court partially sustained the objection, ruling that Ms. Hernandez would only be permitted to testify about two occasions on which the defendant confronted her personally about the case.

Evidence Tampering

As charged in this case, “[i]t is unlawful for any person, knowing that an investigation or official proceeding is pending or in progress, to . . . [a]lter, destroy, or conceal any record, document or thing with intent to impair its verity, legibility, or availability as evidence in the investigation or official proceeding.” As indicated, the indictment alleged that the defendant engaged in conduct that qualified as evidence tampering in August 2015. The only proof of any act that would satisfy the elements of the statute was the defendant’s attempting to alter the VIN number and then engaging Ms. Hernandez to dispose of Mr. Crisp’s motorcycle engine and frame during August 2015.

There must be some fact testified to, entirely independent of the accomplice’s testimony, which, taken by itself, leads to the inference, not only that a crime has been committed, but also that the defendant is implicated in it; and this independent corroborative testimony must also include some fact establishing the defendant’s identity. This corroborative evidence may be direct or entirely circumstantial, and it need not be adequate, in and of itself, to support a conviction.

The defendant was the only common factor between the reported theft of the motorcycle and the wanton disposal of the frame by Ms. Hernandez. Under these circumstances, we conclude that the evidence was sufficient to corroborate Ms. Hernandez’s testimony and to support the defendant’s conviction of evidence tampering.

Initiating a False Police Report and Filing a Fraudulent Insurance Claim

Any person who intentionally presents or causes to be presented a false or fraudulent claim, or any proof in support of such claim, for the payment of a loss, or other benefits, upon any contract of insurance coverage, or automobile comprehensive or collision insurance, or certificate of such insurance or prepares, makes or subscribes to a false or fraudulent account, certificate, affidavit or proof of loss, or other documents or writing, with intent that the same may be presented or used in support of such claim, is punished as in the case of theft.

Officer Criddle testified, and CPD employee records verified, that Officer Criddle was off duty on August 2, 2013. GEICO insurance paid in excess of $8,000 to the lienholder. This evidence was sufficient to support both of the defendant’s remaining convictions.

Judicial Diversion

The trial court need not provide a recitation of all the applicable “factors when justifying its decision on the record in order to obtain the presumption of reasonableness. Here, the trial court determined that the defendant’s “social, physical history, his willingness and ability to be a law abiding citizen in the past” should “make him amenable to correction” and would support a grant of judicial diversion. The court nevertheless rejected the defendant’s request for judicial diversion, focusing on the defendant’s amenability to correction and noting that, although the defendant had no criminal record and had “served with distinction” for “the overwhelming majority” of his adult life, his actions indicated a sustained intent to violate the law.

The record contains substantial evidence to support the trial court’s decision and, as a result, it affirmed the denial. The record supports the trial court’s conclusion that the defendant’s lack of candor and refusal to accept responsibility reflected poorly on his amenability to correction and that a need for general and specific deterrence existed in the community.

The circumstances of the offenses in this case cannot be classified as violent, horrifying, offense, excessive, or exaggerated, but, as the trial court observed, they can be described as shocking, offensive, or reprehensible. However, the defendant, a police officer sworn to uphold the law, not only broke the law but also used his position as a police officer to do so. He manipulated the system in a way that broke the public trust. Additionally, the record supports the trial court’s finding of a need for deterrence to similarly-situated individuals..

ZALMA OPINION

When a police officer, sworn to uphold the law, not only breaks the law but also used his position as a police officer to encourage, and conspire with, Mr. Crisp to do so. He manipulated the system in a way that broke the public trust and needs to serve time to deter other police officers from the temptation to pursue insurance fraud for profit.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Go to Zalma Books Paperbacks and Kindle books by Barry Zalma at the Insurance Claims Library at http://zalma.com/blog/insurance-claims-library/

 

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Fictionalized True Insurance Crime Books

Fictionalized True Insurance Crime Books

“HEADS I WIN, TAILS YOU LOSE”

Product DetailsA collection of columns originally published in the magazines “Insurance Journal,” “Insurance Week,” and “The John Cooke Insurance Fraud Report” insurance trade publications serving the insurance community in the United States that have been updated and revised.

The title, “Heads I Win, Tails You Lose” is meant to describe insurance fraud as it works in the Unites States. It means that whenever a person succeeds in perpetrating an insurance fraud everyone who buys insurance is the loser.

Available as a Kindle Book.

Available as a paperback.

“Candy and Abel: Murder for Insurance Money

How a young lawyer and wise old investigator defeated an attempt at life insurance fraud.

Product DetailsAvailable as a Kindle Book.

Available as a paperback.

 

 

“Murder And Insurance Fraud Don’t Mix”

My name is Marion Orpheus Montague. My friends, and some enemies, call me “MOM.” It is not a designation of my ability to nurture my clients. I have never been, nor will I Product Detailsever be, maternal. I accept the play on my initials because it causes adversaries to underestimate me.

I am 66-years-old. My grayish blond hair is thin and my full beard is a bit scraggly. My face is round and often tinged with red. My nose is full, my eyes green and my cheeks bulge out to the sides trying to emulate the belly that precedes every other part of my body as I walk. People see me and do not believe that I am a private investigator. Seeing me they often think that I am on leave from my winter work as a Macy’s Santa Claus.

I like being underestimated. It makes my job as an investigator easier.

See how a fake robbery at a jewelry store led to murder and prison.

Available as a Kindle book.

Available as a paperback

“Murder & Old Lace: Solving Murders Performed for Insurance Money”

 

Product Details

When the women first met – 20 years ago at a Santa Monica health spa – Magogassasanian appeared taken with Gogolivesky. The women moved Alvarado into an apartment, then started applying for life insurance policies on him. They jointly took out four policies, each as 50% beneficiaries in addition to the individual policies they bought from my client. Gogolivesky also took out three more policies on her own while Magogassasanian only took out a single individual policy on Earnest. The two women pocketed nearly $6,000,000 in insurance benefits on Alvarado alone and $4,000,000 in insurance benefits on Earnest. They also recovered a total of $5,000,000 on the other six old men they killed.

Available as a Kindle book.

Available as a paperback.

“Arson for Profit: How an Attempt to use Arson & Fraud to Fund Terrorism Failed”

This story is based on a real case involving a member of Russian/Armenian organized crime, real insurers, investigators, lawyers, fire fighters, and insurance brokers. The names, descriptions, and identities of the people involved have been changed to protect both the guilty and the innocent. The report to the US Senate, after this case was decided by the California Courts, reveal that the threats made on MOM and lawyer Hazan were real and they are lucky that the threats were never fulfilled. The person identified in this story as Levonyan was described to the US Senate as the leader of a Russian/Armenian organized crime ring. It is important to take seriously threats from criminals. Insurance fraud and arson-for-profit are not victimless crimes. They are crimes of violence that cost everyone who lives in the U.S.]

Available as paperback.

Available as a Kindle Book.

M.O.M. & The Taipei Fraud: How an Experienced Adjuster Defeated a $7 Million Fake Burglary Claim

 

The problem is that each option the insurers have available have a down side and Feng is represented by a lawyer who has proved highly successful in suing insurers and collecting large compensatory and punitive damage awards. Since the claims exceed $6 million dollars, he can expect, applying the law set out by the U.S. Supreme Court in State Farm Mut. Automobile Ins. Co. v. Campbell and BMW of North America, Inc. v. Gore as much as $60 million in punitive damages. So I need to explain to the insurers that they face an exposure anywhere from their policy limits to ten times the policy limit. They need the courage of their convictions to reject this major claim.

Available as a paperback.

Available as a Kindle book.

Read about these and other insurance books by Barry Zalma at http://zalma.com/blog/insurance-claims-library/

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Insurance Fraud Conviction Helps Establish Lack of Credibility

Prescriptive Easement Established by Fraudulent Testimony of Defendant

An New York trial court, after finding that defendant’s credibility was called into question by inconstancies in his testimony and a felony conviction for insurance fraud, discounted the defendant’s testimony and found that the defendant failed to meet his burden to rebut the presumption of hostility needed by the plaintiff to prove a prescriptive easement.

In Martin A. Rosenzweig et al. v. Francis A. Howlan III, 526316, 2018 NY Slip Op 07394, Appellate Division of the Supreme Court of the State of New York (November 1, 2018) the  plaintiffs’ sought right to an easement of a driveway between their properties that technically belonged to the defendant.

Plaintiff Martin A. Rosenzweig became the owner of a parcel of that property on which he had been residing with his mother. His sister, plaintiff Lois J. Rosenzweig obtained ownership of a parcel of property from her mother in 1996. Between the parcel owned by Martin Rosenzweig and the parcel owned by Lois Rosenzweig is an approximately 30-foot-wide strip of land (hereinafter the right-of-way) owned by defendant. The right-of-way contains a crushed stone driveway extending 100 feet from, and perpendicular to, Lampman Road, then another 200 to 250 feet of grassy area, before connecting to a 33-acre wooded parcel owned by defendant. Plaintiffs used the driveway to access their homes and a garage, and parked adjacent to it.

In 2013, after defendant attempted to prevent plaintiffs from using the right-of-way, Martin Rosenzweig sued seeking, among other things, a declaration that he possessed title to the right-of-way by adverse possession. He later filed an amended complaint that added his sister as a plaintiff and sought a declaration that they are fee owners of the right-of-way or, alternatively, a declaration that they have a prescriptive easement over the right-of-way.

After defendant presented his evidence and the parties submitted closing arguments, the court, among other things, granted plaintiffs a prescriptive easement over the crushed stone driveway and the entire right-of-way.

Because the first amended complaint raised prescriptive easement as an alternative demand to plaintiffs’ fee ownership claim, the trial court did not abuse its discretion in allowing plaintiffs to amend their complaint, considering that the court confirmed with defendant that prescriptive easement had been raised and discussed at every pretrial conference, indicating a lack of surprise, and offered to grant an adjournment for defendant to recall any witnesses called by plaintiffs or to gather additional proof.

The trial court did not err in granting plaintiffs a prescriptive easement over the right-of-way.

Testimony from plaintiffs, a neighbor, defendant and defendant’s predecessor-in-interest established that plaintiffs used the crushed stone driveway to gain access to their property daily for more than 20 years. All witnesses were aware that Martin Rosenzweig plowed the driveway in the winter. Plaintiffs testified that one or both of them maintained the right-of-way by adding rubble and crushed stone to the driveway when needed (approximately 10 times over the years), planting flowers along the driveway, rolling the area beside the driveway to level it, weed-whacking and mowing the entire right-of-way. Martin Rosenzweig testified that he installed a mailbox just inside the right-of-way 15 years earlier and erected a basketball hoop and light pole within the right-of-way many years earlier.

Both plaintiffs testified that they never asked anyone for permission to use or improve the right-of-way, and they used it without incident until 2013.

Defendant testified that, when he first bought his property in 1995, he gave plaintiffs permission to use the right-of-way. He acknowledged that, in 2013, he sent Martin Rosenzweig a letter in which he recited that, in 1997, his attorney had sent Martin Rosenzweig a certified letter telling him to keep off defendant’s property, and that Martin Rosenzweig had signed for that letter. Defeating the believability of the assertion no such 1997 letter was admitted into evidence and defendant questioned whether his attorney had actually written or sent one.

Defendant stated that he wanted plaintiffs to keep off his property in 1997, but he then gave them permission to use it again until 2013. When questioned about how he expressed his renewed permission, defendant responded that it was given by him not doing anything to keep plaintiffs off his property. Defendant also testified that he had almost no interaction with plaintiffs. After an incident in 2013 in which Martin Rosenzweig was allegedly on defendant’s property beyond the right-of-way without permission, defendant called the police on him several times per week for months.

The evidence established that plaintiffs used and maintained the right-of-way openly and notoriously for a period well in excess of 10 years. That use extended beyond the driveway to the entire right-of-way.

Since the evidence demonstrated a lack of neighborly accommodation between the parties, the element of hostility can be presumed.

In addition, the trial court, after finding that defendant’s credibility was called into question by inconsistancies in his testimony and a felony conviction for insurance fraud, reasonably concluded that defendant did not give permission for plaintiffs to use the right-of-way, at least between 1997 and 2013.

Thus, defendant failed to meet his burden to rebut the presumption of hostility that allowed the court to order a prescriptive easement.

Accordingly, plaintiffs proved by clear and convincing evidence that they were entitled to a prescriptive easement to use the entire right-of-way.

ZALMA OPINION

One of the certainties is the law is the difficulty of resolving disputes between neighbors who do not like each other. These neighbors disliked each other to the point that the defendant issued complaints to the police about the plaintiffs regularly, gave testimony that the trial court did not believe, and help establish his lack of credibility by admitting a conviction for insurance fraud, a crime of moral turpitude.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Go to Zalma Books Paperbacks and Kindle books by Barry Zalma at the Insurance Claims Library at http://zalma.com/blog/insurance-claims-library/

 

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Three Important Insurance Books

The Essence of Insurance

Insurance, since the first policy was scratched on a claim tablet eons ago, has always been a business of the utmost good faith. Insurance personnel must act fairly, in good faith and ethically in every interaction with the public. “Ethics for the Insurance Professional” provides the knowledge about ethical behavior and how an insurer can perform ethically.

“Rescission of Insurance” explains the equitable remedy available to an insurer who is deceived by an unethical insured who did not understand that the covenant of good faith and fair dealing applies to both the insured and the insurer.

Finally, “The Insurance Examination Under Oath,” explains to the insurance professional how to gather the facts needed to resolve an insurance claim, discover unethical conduct by an insured, or defeat an attempt at insurance fraud.

Ethics for the Insurance Professional

Methods for Insurers and their Personnel to Act with the Utmost Good FaithProduct Details

Ethics is a process of systematically applying, using, defending and recommending concepts of right and wrong behavior. Ethical behavior is required of both parties to a contract of insurance for the system to work. Ethics is the essence of insurance. Ethical behavior is required of both parties to a contract of insurance for the system to work. If any party to the insurance contract acts unethically the ability of insurance to work effectively and profitably will fail. Ethics is the essence of insurance. Since insurance was first created it has been a business of utmost good faith. As a result, the insured and the insurer are expected to treat each other ethically.

Available as a paperback.

Rescission of Insurance

Product DetailsRescission is an equitable remedy as ancient as the common law of Britain. When the United States was conceived in 1776 the founders were concerned with protecting their rights under British common law. They adopted it as the law of the new United States of America modified only by the limitations placed on the central government by the U.S. Constitution approved in 1789. The viability and ability to enforce contracts was recognized as essential to commerce. Courts of law were charged with enforcing legitimate contracts. Courts of equity were charged with protecting contracting parties from mistake, fraud, misrepresentation and concealment since enforcing a contract based on mistake, fraud, misrepresentation or concealment would not be fair. The common law developed rules that courts could follow to refuse to enforce the terms of a contract that was entered into because of mutual mistake of material fact, a unilateral mistake of material fact, the breach of warranty (a presumptively material promise to do or not do something), a material concealment, or a material misrepresentation. The remedy – called rescission – created a method to apply fairness to the insurance contract and allow an insurer to void a contract and allowed courts to refuse to enforce such a contract entered into by misrepresentation or concealment of material facts.

Available as a paperback.

Available as a Kindle book.

“The Insurance Examination Under Oath”

Product DetailsThe insurance Examination Under Oath (“EUO”) is a formal type of interview authorized by an insurance contract. It is taken under the authority provided by a condition of the insurance contract that compels the insured to appear and give sworn testimony on the demand of the insurer or find his, her or it claim rejected for breach of a condition. A notary and a certified shorthand reporter are always present to give the oath to the person interviewed and record the entire conversation.

Available as a Kindle book.

Available as a paperback.

Read about these and more important insurance books by Barry Zalma at http://zalma.com/blog/insurance-claims-library/

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Corporate Veil Pierced for Lie to Insurer

Lie About Gross Earnings Compel Payment of Additional Premium

No one likes to pay insurance premiums. Some, to avoid legitimate premium, will lie on an application about the insured’s gross earnings to reduce the premium paid. The insurer, after a premium audit the insurer sought payment of additional premium that was related to the risk taken. The insured refused to pay and litigation followed.

THE SUIT

In Minico Insurance Agency, LLC, etc., v. AJP Contracting Corp., et al., 2017-09113, 2018 NY Slip Op 07423, Supreme Court Of The State Of New York Appellate Division, Second Judicial Department (November 7, 2018 ) Minico sued to recover damages for breach of contract and fraud. The defendants appealed from an order of the trial court that denied the defendants’ motion to dismiss the complaint insofar as asserted against the defendant Antonios Pappas.

FACTUAL BACKGROUND

The defendant AJP Contracting Corp. (hereinafter AJP), through an agent, submitted an application to the plaintiff to obtain commercial general liability insurance, and was issued a policy. The plaintiff alleged that the premium charged and collected for the policy was based upon an estimate, provided by AJP’s president, the defendant Antonios Pappas, of AJP’s anticipated gross sales for the policy period. After the expiration of that period, the plaintiff conducted a premium audit and determined that AJP’s actual gross sales for the policy period had been substantially underestimated. Based upon the audit and the policy, the plaintiff demanded an additional premium, which was never paid.

The plaintiff thereafter sued alleging causes of action sounding in breach of contract and account stated against both defendants, as well as a third cause of action solely against Pappas personally, sounding in fraud. With regard to the causes of action alleging breach of contract and account stated, the plaintiff sought to recover against Pappas for AJP’s alleged wrongs by piercing the corporate veil. The defendants moved to dismiss the complaint insofar as asserted against Pappas.

ANALYSIS

On a motion to dismiss the pleading must be afforded a liberal construction, the facts alleged are presumed to be true, the plaintiff is afforded the benefit of every favorable inference, and the court is to determine only whether the facts as alleged fit within any cognizable legal theory, without regard to whether the allegations ultimately can be established.

A party seeking to pierce the corporate veil must establish that

  • the owners exercised complete domination of the corporation in respect to the transaction attacked; and
  • that such domination was used to commit a fraud or wrong against the plaintiff which resulted in the plaintiff’s injury.

The party seeking to pierce the corporate veil must further establish that the controlling corporation abused the privilege of doing business in the corporate form to perpetrate a wrong or injustice against that party such that a court in equity will intervene.

Here, affording the complaint a liberal construction, accepting as true all facts alleged therein, and according the plaintiff the benefit of every favorable inference the plaintiff sufficiently pleaded a cause of action to recover against Pappas for the alleged wrongs committed by AJP based on a theory of piercing the corporate veil. Contrary to the defendants’ contention, the plaintiff sufficiently alleged that Pappas exercised complete domination and control over AJP in order to commit a wrong against the plaintiff that resulted in injury to the plaintiff.

The appellate court agreed with the trial court’s denial of that branch of the defendant’s motion which was to dismiss the third cause of action, alleging fraud, asserted against Pappas only.

The elements of a cause of action to recover damages for fraud are

  • a misrepresentation or a material omission of fact which was false,
  • knowledge of its falsity,
  • an intent to induce reliance,
  • justifiable reliance by the plaintiff, and
  • damage.

In actions for fraud, corporate officers and directors may be held individually liable if they participated in or had knowledge of the fraud, even if they did not stand to gain personally. In addition to alleging all of the elements of a fraud cause of action, the statute provides that the circumstances constituting the wrong shall be stated in detail. However, the purpose of this heightened pleading requirement “is to inform a defendant with respect to the incidents complained of” and “should not be confused with unassailable proof of fraud” (Pludeman v Northern Leasing Sys., Inc., 10 NY3d at 491-492.

PIERCING THE CORPORATE VEIL

The plaintiff, seeking the personal assets of Mr. Pappas rather than the limited assets of the corporation, alleged a specific misrepresentation, intentionally made by Pappas himself in the context of applying for a policy of insurance from the plaintiff, and that the plaintiff relied upon that misrepresentation to its detriment. Minico consequently charged and collected a lower premium than it otherwise would have for the insurance policy as a direct and proximate cause of the alleged fraud of Mr. Pappas.

Assuming the facts alleged to be true and according the plaintiff the benefit of every favorable inference, these allegations set forth a cognizable cause of action to recover damages for fraud against Pappas, and stated in sufficient detail the facts constituting the wrong.

ZALMA OPINION

The ruling found that the plaintiff sufficiently alleged enough facts to allow it to present evidence to a trier of fact that Pappas could not hide behind the corporate form and is personally responsible for the fraudulent understatement of gross earning and thereby deprive the insurer of its appropriate premium.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Go to Zalma Books Paperbacks and Kindle books by Barry Zalma at the Insurance Claims Library at http://zalma.com/blog/insurance-claims-library/

 

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Did You Train Your People by September 1 on the Regulations?

Failure to Train Subjects Insurers to Fines

The California Court of Appeal recently affirmed the right of the California Department of Insurance to assess serious fines against insurers that fail to fulfill the requirements of the California Fair Claims Settlement Practices Regulations and the SIU Regulations. One of the Regulations usually violated is the requirement to train before September 1 of each year claims personnel on both Regulations. The two books by Barry Zalma can help you fulfill those requirements.

California Fair Claims Settlement Practices Regulations

A Guide to Insureds, Public Insurance Adjusters, and Lawyers to Properly Investigate and Adjust Insurance Claims

This book was designed to assist insurance personnel who do business in the state of California. It will assist all insurance claims personnel, claims professionals, independent insurance adjusters, special fraud investigators, private investigators who work for the insurance industry, the management in the industry, the attorneys who serve the industry, public insurance adjusters, policyholders and counsel for policyholders working with insurers doing business in California. All insurers doing business in California must comply with the requirements of the Regulations or face the ire of, and attempts at financial punishment from, the CDOI. That punishment is now questionable and limited because some courageous insurers fought the CDOI and succeeded before an administrative law judge who limited the right to punish. Regardless of difficulties in assessing punishment the state of California requires all who are involved in the claims process — even if only tangentially — to be trained with regard claims handling in compliance with the Regulations and attest to completion of such training under oath. To avoid the annual training the claims person can submit a sworn document that avers that he or she has read and understood the Regulations. Reviewing this book and the Regulations set forth below should be sufficient to comply with the training requirements of the Regulations. It is necessary that insurance personnel who are engaged in any way in the presentation, processing, or negotiation of insurance claims in California be familiar with the Regulations. Counsel for insurers and policyholders should also be familiar with the Regulations since they set a minimum standard for claims handling in the state.

Available as a Kindle book.

Available as a paperback.

California SIU Regulations

The State of California Imposes Control on the Investigation of Insurance Fraud

California SIU Regulations: The State of California Imposes Control on the Investigation of Insurance FraudCalifornia SIU Regulations is designed to assist California insurance claims personnel, claims professionals, independent insurance adjusters, special fraud investigators, private investigators who work for the insurance industry, the management in the industry, the attorneys who serve the industry, and all integral anti-fraud personnel working with California admitted insurers to comply with the requirements of California SIU Claims Regulations.

The state of California, by statute, requires all admitted insurers to maintain a Special Investigative Unit (an “SIU”) that complies with the requirements set forth in the Special Investigative Unit Regulations (the “SIU Regulations”) and train all integral anti-fraud personnel to recognize indicators of insurance fraud.

Available as a Kindle Book.

Available as a paperback.

Read these and more insurance books by Barry Zalma at http://zalma.com/blog/insurance-claims-library/

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After Loss it is too Late to Change Policy

Save Premium and Lose Your Business

Much to the surprise of individuals and some judges an insurance policy is nothing more than a contract that makes detailed promises to indemnify a person as a result of certain identified perils or risks of loss. When an insurer offers coverage for risks that the insured refuses to purchase to save premium the insured may not then seek coverage if that risk causes damage. The failure to accept the insurer’s offer of coverage leaves the insured without insurance protection.

In Lexington Insurance Company, a Foreign Corporation v. Nicole Gersbeck, an Individual, Islamorada Asset Management, Inc., a Florida corporation, David Chamgpagne, an Individual, and M&M Ventures, Inc., a foreign corporation, Case No. 4:18-CV-10118-JLK, United States District Court Southern District Of Florida Key West Division In Admiralty (November 2, 2018) the USDC was asked to declare that Lexington Insurance Company (“Lexington”) neither owed defense nor indemnity to the defendants.

Lexington Moved the court to Re-Open Case and for Entry of Final Judgment Against Respondents, Islamorada Asset Management, Inc. (“IAMI”) and David Champagne (“Champagne”) (collectively, the “Respondents”). A Clerk’s default was entered against IAMI and Champagne and to date, IAMI and Champagne have failed to appear in this action and failed to file an answer or defensive motion to Lexington’s Petition for Declaratory Relief.

INTRODUCTION

Lexington is seeking a judicial determination as to its rights and obligations under a certain Dive Boat Liability Policy which was issued to IAMI for the dive vessel Giant Stride and bearing effective dates of July 22, 2013 through July 22, 2014 (the “Policy”). In this action, Lexington named several Respondents – IAMI, Mr. Champagne, M&M Ventures and Nicole Gersbeck. Lexington now seeks the entry of Final Judgment against Respondents, IAMI and Champagne.

LEGAL STANDARD

The effect of a default judgment is that the defendant admits the plaintiff’s well-pleaded allegations of fact, is concluded on those facts by the judgment, and is barred from contesting on appeal the facts thus established.

While a complaint does not need detailed factual allegations a plaintiff’s obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.

If the admitted facts are sufficient to establish liability, then the Court must ordinarily ascertain the appropriate amount of damages and enter final judgment in that amount. However, in this action for declaratory relief, damages are not at issue, and so no further consideration of damages is required.  

Florida Law Regarding an Insurer’s Duty to Defend or Indemnify the Insured

In Florida, an insurer’s duty to defend the insured depends solely on the allegations filed in the complaint. The complaint must allege facts which fairly bring the case within coverage. If, however, the complaint alleges facts partially within and partially outside the scope of coverage, the insurer is obligated to defend the entire suit. If after examining the allegations of the complaint there remains any doubt regarding the insurer’s duty to defend, then the presumption is in favor of the insured. There is no duty to defend the insured when the allegations of the initial complaint do not allege facts which would bring the case within the coverage of the insurance policy. An insurer has no duty to indemnify when it has no duty to defend the insured.

DISCUSSION

The court found Lexington established that IAMI and Champagne were properly served, and a Clerk’s Default was entered against them when they failed to answer or otherwise respond to the Petition for Declaratory Relief.

Furthermore, the Petition for Declaratory Relief adequately states a claim upon which relief may be granted. The Petition for Declaratory Relief provides sufficient factual allegations and evidence showing that IAMI and Champagne did not apply for and purchase crew coverage for an additional premium and therefore no such coverage exists under the Policy. Moreover, it has pled sufficient factual allegations demonstrating that there is no coverage for the claims asserted by Nicole Gerbeck in an action filed against IAMI, Champagne and M&M in the Southern District of Florida, Key West Division, styled Nicole Gersbeck v. Islamorada Asset Management, Inc., d/b/a Key Dives, et al., Case No.: 4:16-CV-10026-JLK (the “underlying action.”) .

In particular, the following well-pleaded allegations in the Petition for Declaratory Relief are admitted by the insureds and notes that the policy excluded “any damages resulting from Bodily Injury or Death to Captain and/or Crewmember(s) unless, You request to included Captain and/or Crewmember(s) on Your policy, and same is agreed by Us and the number of Captain and/or Crewmember(s) are noted on the Declaration Page, Section B, Crew Liability, or by separate endorsement.”

IAMI Did Not Apply for or Pay Additional Premium for Crew Coverage

On July 1, 2014, Gersbeck was employed and working for IAMI and Champagne as a dive instructor and crewmember when she completed two dives in the water that resulted in decompression sickness. As a result, Gersbeck was left with permanent and debilitating injuries.

Gersbeck filed suit against IAMI, Champagne and M&M seeking to recover damages from IAMI, Champagne and M&M for the injuries she suffered while in service of the subject vessel Giant Stride.

Because of IAMI’s and Champagne’s refusal to apply for and purchase crew coverage for an additional premium, Lexington alleges that there is no coverage for bodily injury to crewmember(s) either in or out of the water because no coverage for bodily injury to crewmember(s) was ever purchased by IAMI/Champagne or issued by Lexington.

Based upon the terms of the Policy, the executed declination forms (which were made part of the Policy), and the well-pleaded allegations of the Petition for Declaratory Relief which have been admitted by IAMI and Champagne, there is no coverage under the Policy for claims relating to injuries suffered by any crewmember while performing crew duties either in or out of the water. The undisputed record evidence demonstrates that IAMI never applied for and purchased such coverage; therefore crew coverage was not issued by Lexington and does not exist under the Policy.

In the underlying action, to the extent that Gersbeck alleges that she was employed and working for IAMI and Champagne as a dive instructor and crew member when she completed two dives in the water that resulted in decompression sickness and caused her injuries.

There is no coverage under the Policy for Gersbeck’s claims. Accordingly, based upon Florida law and the well-pleaded allegations of the Petition for Declaratory Relief, this Court has determined that Lexington has no obligation to defend or indemnify IAMI and Champagne or to pay for any of the bodily injury damages asserted by Gersbeck in the underlying action.

ZALMA OPINION

Sometimes an appellate decision, like that made by the USDC, is easy. The insureds did not pay for crew member coverage and rejected the coverage in writing. Therefore, since Gersbeck’s suit revolved around injuries she received while working as a crew member, there was no possibility of coverage.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Go to Zalma Books Paperbacks and Kindle books by Barry Zalma at the Insurance Claims Library at http://zalma.com/blog/insurance-claims-library/

 

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Two Primers to Create Professional Insurance Adjusters

How to Create a Staff of Competent and Professional Claims Adjusters

The training, education, and maintenance of professional insurance adjusters is a rare thing in the modern U.S. insurance market. The lack of education, training and experience of insurance adjusters has become one of the most expensive exposures faced by the insurance industry because of errors that result in suits for breach of contract and the tort of bad faith. An inexpensive and easy to resolve the problem are the two compact books on adjusting written by insurance expert, consultant, author and attorney Barry Zalma.

The Compact Book of Adjusting Property Insurance Claims”

A Manual for the First Party Property Insurance Adjuster

The insurance adjuster is not mentioned in a policy of insurance. The The Compact Book of Adjusting Property Insurance Claims: A Manual for the First Party Property Insurance Adjusterobligation to investigate and prove a claim falls on the insured. Standard first party property insurance policies, based upon the New York Standard Fire Insurance policy, contain conditions that require the insured to, within sixty days of the loss, submit a sworn proof of loss to prove to the insurer the facts and amount of loss.

The policy allows the insurer to then, and only then, respond to the insured’s proof of loss. The insurer can then either accept or reject the proof submitted by the insured.

Technically, if the wording of the policy was followed literally the insurer could sit back, do nothing, and wait for the proof. If the insured was late in submitting the proof the insurer could reject the claim. If the insured submits a timely proof of loss the insurer could either accept or reject the proof of loss. If the insurer rejected the proof of loss the insured could either send a new one or give up and gain nothing from the claim. Suit on the policy would be difficult because the policy contract limited the right to sue to times when the proof of loss condition had been met.

Insureds and insurers were not happy with that system. It made it too difficult for a lay person to successfully present a claim. The system, as written into the standard fire policy seemed to run counter to the covenant of good faith and fair dealing that had been the basis of the insurance contract for centuries. Most insurers understood that their insureds were mostly incapable of complying with the strict enforcement of the policy conditions. To fulfill the covenant of good faith and fair dealing insurers created the insurance adjuster to fulfill its obligation to deal fairly and in good faith with the insured.

Available as a Kindle book.

Available as a paperback.

“The Compact Book on Adjusting Liability Claims”

A Handbook for the Liability Claims Adjuster

This Compact Book of Adjusting Liability Claims is designed to Product Detailsprovide the new adjuster with a basic grounding in what is needed to become a competent and effective insurance adjuster. It is also available as a refresher for the experienced adjuster.

The liability claims adjuster quickly learns that there is little difficulty with a claimant (the person alleging bodily injury or property damage against a person insured) if the claim is paid as demanded. The insured may be unhappy if the claimant’s claim is paid as presented since most do not believe they did anything wrong or fear an increase in premiums charged for subsequent policies.

The adjuster must be prepared to salve the insured’s emotions, explain why in the law and the policy it was appropriate to pay the claimant and that the settlement is in the best interest of both the insured and the insurer the adjuster represents.
The adjuster knows, and must be prepared to explain to an insured, that if a claim is resisted or denied the claimant will be unhappy, will probably file suit. If not promptly settled the claimant’s lawyers will rake the insured over the coals to prove that the insured is liable for the claimant’s injuries. The litigation will take time, effort, and money to establish the extent of the injuries and who is responsible for the injuries. Failure to settle promptly can cost the insured his or her reputation and will certainly cost the insurer much more than the claim could have been resolved for had it been resolved before the claimant retained a lawyer.

Available as a Kindle book

Available as a paperback.

Read about these and other insurance books by Barry Zalma at http://zalma.com/blog/insurance-claims-library/

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The Stupidity of Covering Others for More than Yourself

You Can’t Make an Insurer Pay for Coverage You Didn’t Buy

People injured in auto accidents usually have buyer’s remorse about the insurance they purchased to protect themselves – like Uninsured Motorist/Underinsured Motorist (UM/UIM) coverage. Because the person is injured and needs money he or she has no qualms about suing the insurance company to get the insurance coverage needed rather than the insurance coverage purchased.

New Jersey’s appellate courts were faced with the coverage issues in Christopher Cox v. Krystal Tomasso, NJM Insurance Group, and/or New Jersey Reinsurance Group, and New Jersey Manufacturers Insurance Company, Docket No. A-0106-17T2, Superior Court Of New Jersey Appellate Division (November 1, 2018) where Cox appealed an order granting summary judgment in favor of New Jersey Manufacturers Insurance Company (NJM).

FACTS

Plaintiff was injured when a car driven by Krystal Tomasso struck the motorcycle he was riding. Plaintiff had insured his motorcycle through Rider Insurance Company (Rider) under a policy with a $15,000 liability limit, which was $10,000 less than the $25,000 limit Tomasso had on her car. Thus, Tomasso’s vehicle was not underinsured compared to the coverage on plaintiff’s motorcycle.

Plaintiff sought underinsured motorist (UIM) benefits under a $500,000-limit policy he had obtained from NJM to cover his pick-up truck.

THE POLICY

The liability section of the NJM policy specifically stated that NJM did not provide liability coverage for “the ownership, maintenance or use” of any vehicle with fewer than four wheels.  NJM did not provide liability coverage for plaintiff’s motorcycle or for plaintiff while he was riding a motorcycle. Therefore, he obtained a separate policy from Rider to cover his motorcycle.

The UIM section of the NJM policy explicitly excluded coverage for plaintiff “[w]hile occupying any vehicle insured by another motor vehicle policy in which you or a family member are a named insured.” That provision further stated: “However, this exclusion . . . does not affect UM/UIM coverage for minimum limits required by New Jersey law for liability coverage.

NJM denied plaintiff’s UIM claim on the basis of this exclusion because he was the named insured on the Rider motorcycle policy and Tomasso’s vehicle had limits higher than the $15,000 minimum required by law.

The trial judge granted NJM summary judgment, reasoning that the policy exclusion was unambiguous and was clearly applicable to plaintiff’s situation. The trial judge rejected plaintiff’s argument that the NJM Buyer’s Guide created an ambiguity in the policy.

ANALYSIS

When a court construes an insurance policy it must recognize that insurance policies are contracts of adhesion drafted by experts but read by consumers who are lay persons. Accordingly the court will attempt to give effect to the insured’s reasonable expectations and construe genuinely ambiguous clauses favorably to the insured. Nonetheless, an insurance policy that is clear and unambiguous should be enforced as written. If the policy’s plain language is unambiguous, the court may not engage in a strained construction to support the imposition of liability or write a better policy for the insured than the one purchased.

The appellate court agreed with the trial judge that the NJM policy was not genuinely ambiguous, and the trial judge’s interpretation of the policy is consistent with the insured’s reasonable expectations.

Unlike the policy provision in a case cited by the plaintiff the NJM exclusion began with a complete sentence clearly stating a general exclusion. A reasonable reader would understand the exclusion as meaning that if, as here, he had insured a vehicle with another insurance company and was a named insured on that policy, NJM would not provide UIM coverage for the use of that vehicle. In that context, the second sentence, stating an exception to the exclusion, for “minimum” limits required by law, would not lead a reasonable reader to believe that NJM would provide $500,000 in UIM coverage for the use of such a vehicle.

Moreover, it should have come as no surprise to plaintiff that NJM would not provide UIM coverage when he was riding a motorcycle for which he had purchased separate coverage from another insurer, particularly when the NJM policy explicitly stated that it did not cover vehicles with fewer than four wheels (e.g., motorcycles).

While the result here is required by public policy, as opposed to the clear wording of the clause, it is consistent with the purpose of the UIM statute. That statute limits the purchase of UIM coverage to the amount of liability insurance the insured has purchased. Thus, an insured can obtain more UIM coverage by buying more liability insurance. This provides greater protection for both the insured and anyone the insured injures with his or her vehicle.

By buying only a minimum-liability policy for his motorcycle, which was his only liability coverage for that vehicle, plaintiff provided only $15,000 in liability protection for himself and in potential financial recovery for anyone he injured with his motorcycle. The court found no violation of public policy by limiting plaintiff to UIM coverage equal to the liability insurance he purchased for the motorcycle.

The insured got into an accident while riding his motorcycle, and Universal claimed that NJM should contribute to his UIM coverage. As here, the liability section of the NJM policy excluded liability coverage for motorcycles, i.e., for motorized vehicles with fewer than four wheels.

The NJM policy in this case has an unambiguous exclusion for situations where the insured is using a vehicle he owns, on which he is the named insured on another insurance policy. For that reason, plaintiff’s argument that UIM coverage is linked to the injured person, not the covered vehicle, is unavailing. In this case, the policy language specifically excludes UIM coverage to the injured person, albeit based on his use of a vehicle which he insured under a separate policy.

ZALMA OPINION

States, for reasons known only to their legislators, set minimum liability limits to a paltry $15,000. Insurers, for reasonable premium, are willing to issue policies for higher policy limits up to multiple millions for both liability and UM/UIM coverages. Mr. Cox insured his pickup truck with $500,000 limits but decided to only take the minimum statutory limits for his motorcycle. As a result he limited his recovery by choice and for saving a few dollars in premium he lost the ability to receive $500,000 in UIM coverage.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Go to Zalma Books Paperbacks and Kindle books by Barry Zalma at the Insurance Claims Library at http://zalma.com/blog/insurance-claims-library/

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Bad Faith and Fraud – Happy Bedfellows

Time to Rescind the Tort of Bad Faith

The tort of bad faith was created to solve a perceived abuse of persons insured by their insurers. The cure, allowing a breach of an insurance contract allow an insured to collect tort damages – including punitive damages – has become worse than the abuse it was designed to cure. In the new book “Time to Rescind the Tort of Bad Faith” Barry Zalma explains why the abuses of the insurance industry brought about by the tort has run its course and made insurance fraud easier and more effective. The new books,“Insurance Fraud & Weapons to Defeat Insurance Fraud” provides the insurance professional with tools to defeat insurance fraud and still avoid the claims of bad faith.

Insurance and the Law of Unintended Consequences Paperback 

Insurance is, and always will be, a business of the utmost good faith. Time to Rescind the Tort of Bad Faith: Insurance and the Law of Unintended ConsequencesAll parties to the insurance contract agree, in good faith and fair dealing, to do nothing to deprive the other the benefits of the contract. Insurance is, and always be, nothing more than a contract.

The insurer makes a promise to the insured that if a contingent or unknown loss occurs caused by a peril or risk insured against and not excluded, to pay the insured indemnity as promised by the contract up to the limits provided.

The insured promises to truthfully disclose the risks of loss faced by the insured, property owned by the insured, the business of the insured and/or the insured’s liability exposures. The insured also promises to honestly present a claim, prove the claim, and cooperate with the insurer in its investigation. If the parties to the insurance contract deal with each other fairly and in good faith the policy remains viable, claims are paid promptly and to the satisfaction of the insurer and the insured.

Only if a true tort occurs can the insured waive the contract action and sue in tort. Breach of contract, by centuries old tradition, is not a tort and cannot and should not be considered a tort. The Tort of Bad Faith has served its purpose and is now causing more problems than it solves. It is time the courts and state legislatures rescind the tort and return to common law contract damages.


“Insurance Fraud & Weapons to Defeat Insurance Fraud”

In Two Volumes

Product DetailsInsurance fraud continually takes more money each year than it did the last from the insurance buying public. No one knows the actual amount with any certainty because most attempts at insurance fraud succeed. Estimates of the extent of insurance fraud in the United States range from $87 billion to more than $300 billion every year.

Insurers and government backed pseudo-insurers can only estimate the extent they lose to fraudulent claims. Lack of sufficient investigation and prosecution of insurance criminals is endemic. Most insurance fraud criminals are not detected. Those that are detected do

so because they became greedy, sloppy and unprofessional so that the attempted fraud becomes so obvious it cannot be ignored.

No one will ever be able to place an exact number on the amount lost to insurance fraud. Everyone who has looked at the issue knows – whether based on their heart, their gut or empirical fact determined from convictions for the crime of insurance fraud – that the number is enormous.

When insurers and governments put on a serious effort to reduce the amount of insurance fraud the number of claims presented to insurers and the pseudo-government-based or funded insurers drops logarithmically. Since the appointment of Attorney General Sessions, the effort to stop insurance fraud against Medicare and Medicaid has increased.

Insurance Fraud & Weapons to Defeat Fraud - Volume Two: A Manual for Those Working to Defeat Insurance Fraud by [Zalma, Barry]This book contains appellate decisions regarding insurance fraud from federal and state appellate courts across the country and full text of many insurance fraud statutes.

It is available as both a legal research tool and a product to assist insurers, insurance company personnel, independent insurance adjusters, special investigation unit investigators, state fraud investigators and insurance lawyers to become effective persons involved in the attempt to defeat or reduce the effect of insurance fraud.

Volume One available as a Kindle book and a paperback.

Volume Two Available as a Kindle book and a paperback

Read about these and other insurance books by Barry Zalma at http://zalma.com/blog/insurance-claims-library/

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Child Molestation can be Fortuitous

Negligent Hiring and Supervision of a Pederast is an Occurrence

An evil, intentional act of sexually molesting a minor is never an insured “occurrence” insured by a Commercial General Liability Insurance Policy (CGL). However, when the plaintiff sues the employer of the pederast for negligently hiring and supervising the villain, the insurer can be obligated to defend the employer.

In Liberty Surplus Insurance Corporation, a New Hampshire Corporation; Liberty Insurance Underwriters, Inc. v. Ledesma And Meyer Construction Company, Inc., a California corporation; Joseph Ledesma, an individual; Kris Meyer, an individual, No. 14-56120, United States Court Of Appeals For The Ninth Circuit (October 19, 2018) Liberty Surplus Insurance Corporation and Liberty Surplus Underwriters, Inc. (collectively, “Liberty”) sought declaratory relief. Liberty contended that it had no obligation to defend or indemnify the various defendants (collectively, “L&M”) and the San Bernardino Unified School District (the “School District”). All of the defendants faced a tort claim arising out of the alleged sexual abuse of a minor by an L&M employee on school grounds. L&M appealed from the district court’s order granting summary judgment in favor of Liberty.

FACTS

L&M contracted with the School District to manage a construction project at a middle school. In relevant part, the construction contract provided that L&M would defend and indemnify “the Owner, its officers, employees, and agents” from all claims resulting from L&M’s negligence.

L&M hired Darold Hecht as an assistant superintendent and assigned him to the School District project. Subsequently, Jane Doe, a 13-year-old student, filed a governmental tort claim against the School District alleging that Hecht had sexually abused her. Pursuant to the construction contract, the School District tendered the defense and indemnification of the governmental tort claim to L&M. The operative complaint alleged that the School District and L&M had negligently hired, retained, and supervised Hecht. Ultimately, the state court entered judgment finding the School District and L&M liable.

Liberty had issued L&M a commercial general liability policy (the “General Policy”) for the relevant time period. In pertinent part, the policy defined “occurrence” as “an accident.” Both L&M and the School District tendered their defense in the Underlying Action to Liberty. Liberty defended L&M under a reservation of rights, but refused to defend the School District on the ground that the School District was not insured under the Policy. Pursuant to the construction contract, L&M paid expenses incurred by the School District to defend against the claim.

In the federal court insurance coverage declaratory judgment action, the district court found that L&M’s negligent hiring, retention, and supervision of Hecht was too attenuated from the injury-causing conduct committed by Hecht to constitute an “occurrence” under the General Policy. Finding no “occurrence,” and by extension, no possibility of coverage, the district court declined to consider whether the School District was covered under the relevant policies.

CALIFORNIA SUPREME COURT

On June 4, 2018, the California Supreme Court issued its opinion responding to the Ninth Circuit’s inquiry, in  Liberty Surplus Ins. Co. v. Ledesma & Meyer Constr. Co., 418 P.3d 400 (Cal. 2018) (hereinafter “Liberty III“). In doing so, it rephrased the question: “When a third party sues an employer for the negligent hiring, retention, and supervision of an employee who intentionally injured that third party, does the suit allege an ‘occurrence’ under the employer’s commercial general liability policy?”  The California Supreme Court answered that question in the affirmative.

The California Supreme Court reasoned as follows: The meaning of the term “accident” is well-established under California insurance law. “An accident is an unexpected, unforeseen, or undesigned happening or consequence from either a known or an unknown cause.”

ANALYSIS

So long as a defendant’s conduct is a “substantial factor” in bringing about a plaintiff’s injury, causation is established. California law recognizes that an employer’s negligent hiring, retention, or supervision of an employee can be a substantial factor in the injuries arising out of a sexual assault perpetrated by that employee.

The California Supreme Court’s decision required reversal of the district court’s summary judgment ruling in favor of Liberty. Doe accused L&M of negligence. As explained by the California Supreme Court, “[a]t the time Doe was molested, from L&M’s point of view the event could have been ‘an unexpected, unforeseen, or undesigned happening or consequence’ of its hiring, retention, or supervision of Hecht.” This was true despite the fact that Hecht’s conduct in perpetrating the assault was willful.

L&M’s negligence set in motion and created the potential for injury. L&M’s negligent hiring, retention, and supervision of Hecht was an “occurrence” under the Policy, and L&M is entitled to judgment in its favor on the coverage question.

Neither the district court nor the California Supreme Court addressed whether the School District was an additional insured or otherwise covered under L&M’s insurance policies. Rather than deciding this question now, we leave to the district court the opportunity to consider it in the first instance.

ZALMA OPINION

As astonishing as this decision may seem – child molestation is an “occurrence” – the decision is severely limited to the employer, not the molester. If the employer had no reason to believe that Hecht would act with evil intent the resultant molestation, as to the employer, was clearly fortuitous.

 


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Mr. Zalma’s books available as Kindle books or paperbacks at Amazon.com can be reached at http://zalma.com/zalma-books/

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Construction Defects and Mold Claims

Tools for the First Party Property Claims Person

Eventually every first party property insurance claims person will be faced with a claim alleging damages caused by construction defects or infestation by mold or bacteria. The claims require investigative skill and expertise. The insurer and its claims people can more easily deal with such claims by referral to the eight volumes of “Construction Defects and Insurance” and “Mold Claims” available from amazon.com.

Construction Defects and Insurance

Construction Defects and Insurance Volume One: The Structure, The Construction Contract, and Construction Defect InsuranceBarry Zalma has updated and re-edited his seminal work Construction Defects Coverage Guide into is the latest addition to Barry Zalma’s insurance claims series of books and articles that will form the most thorough, up-to-date, expert-authored insurance claims guide available today eight Kindle or Paperback Volumes at reasonable prices.

Thorough, yet practical, this series of books form the ideal guide for any professional who works in or frequently interacts with the insurance industry.

Claims professionals, risk managers, producers, underwriters, attorneys (both plaintiff and defense), and business owners will benefit greatly from the ten volume guide. It is also the perfect resource for insurance educators, trainers, and students whose role requires an understanding of insurance law.

The Eight volumes include:


Mold Claims

This series of books is the latest addition to Barry Zalma’s insurance claims series of books and articles that will form the most thorough, up-to-date, expert-authored insurance claims guide available today.

Mold Claims Volume One: Understanding insurance claims and litigation concerning mold, fungi, and bacteria infestations.

Written by nationally-renowned insurance coverage expert Barry Zalma, a semi-retired insurance coverage attorney, consultant, expert witness and blogger, Mold Claims provides in-depth explanations, analysis, examples, and detailed discussion of:

•Mold;
•FungMold Claims Volume Two: Understanding insurance claims and litigation concerning mold, fungi, and bacteria infestations.i;
•Bacteria;

•Mold, fungi and bacteria claims; and
•Mold, Fungi, Bacteria litigation.

Thorough, yet practical, this series of books form the ideal gMold Claims Volume Three: Understanding insurance claims and litigation concerning mold, fungi, and bacteria infestations.uide for any professional who works in or frequently interacts with the insurance industry or is involved in litigation. Claims professionals, risk managers, producers, underwriters, attorneys (both plaintiff and defense), and business owners will benefit greatly from the mold volumes. It is also the perfect resource for insurance educators, trainers, and students whose role requires an understanding of insurance law as it relates to mold, fungi and bacterial infestations.

TMold Claims Volume Four: Understanding insurance claims and litigation concerning mold, fungi, and bacteria infestations.he author has provided checklists, sample procedures, form letters, tables and information and references to model statutes, state statutes, administrative regulations, and requirements of insurance departments nationwide.

 

Read abouot these and more insurance books by Barry Zalma at http://zalma.com/blog/insurance-claims-library/


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Failure to I-Phone Home Costs Insured More than $1.6 Million

Insured Wrongfully Demands More Insurance Coverage than Acquired

A first party property insurance policy promises to indemnify the insured for a loss due to a peril insured against at specified locations. Most include endorsements that provide coverage for newly acquired property. Extending an Endorsement to cover new property at any location removes the fundamental promise sought and received that both parties make when they enter into the insurance contract because it eliminates the requirement to decide on the front end which locations will be covered.

FACTS

In Berrylane Trading, Inc. v. Transportation Insurance Company, No. 18-3144, United States Court Of Appeals For The Sixth Circuit (November 2, 2018) a thief broke into Berrylane Trading Inc.’s (“Berrylane”) warehouse and stole $1,654,860 worth of iPhones, Berrylane submitted an insurance claim to Transportation Insurance Company (“TIC”). TIC denied the claim, contending that its insurance policy (the “Policy”) did not cover loss at the warehouse. Berrylane sued, alleging breach of contract and bad faith. The district court dismissed Berrylane’s complaint. It found that the Policy did not provide coverage for the theft because the warehouse was not a covered location under the Policy’s Schedule of Locations.

It also found that the theft was not covered under the Policy’s Newly Acquired or Constructed Property endorsement (the “Endorsement”) because the warehouse was not acquired during the requisite time period.

Berrylane buys and sells cell phones, including iPhones, to companies and individuals across the United States. The Policy was implicated when, on December 7, 2015, a thief broke into Berrylane’s warehouse in Doral, Florida and stole approximately $1,654,860 worth of iPhones.

The Policy could have covered the loss in two ways:

  • if the theft occurred at a location specifically listed in the Schedule of Locations or
  • if the newly acquired iPhones were stolen at a location to which the Endorsement applied.

TIC found that neither provision applied. First the General Adjuster wrote Berrylane that the warehouse was not listed as a covered location under the Policy. He wrote: “The policy provides coverage for personal property at 24300 Solon Road, Bedford, Ohio. There is no coverage for personal property at 2602 NW 72nd Ave., Doral.” Second the adjuster informed Berrylane that its loss was also not covered under the Endorsement because the Doral, Florida, location was not newly acquired or constructed, according to the terms of the endorsement, because it was acquired before the Policy ever was incepted and not acquired during the course of the Policy.

ANALYSIS

A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard asks for more than a sheer possibility that a defendant has acted unlawfully but is not akin to a probability requirement.

Berrylane contends that the Endorsement did not require it to acquire the warehouse during the Policy period; rather, Berrylane only had to acquire the iPhones during the policy period. It also contended that even if the warehouse had to be acquired during the period, this requirement was met because the warehouse was physically acquired after the Policy began even though the lease became effective prior to the Policy period.

As to Berrylane’s first two arguments, the Sixth Circuit concluded that the Endorsement required the warehouse to be acquired during the Policy period and that acquisition occurred when the lease became effective. It, therefore, concluded that the Policy did not cover loss at the warehouse.

STATE LAW

Berrylane’s complaint raises state law claims under Ohio law, and the defendants removed to federal court on the basis of diversity of citizenship. Thus, the Sixth Circuit must  apply the substantive law of Ohio and federal procedural law.

To establish a breach of contract in Ohio, a plaintiff must prove, by a preponderance of the evidence, the existence of a contract, performance by the plaintiff, breach by the defendant, and damage or loss to the plaintiff.

Under Ohio law, when confronted with an issue of contractual interpretation, the role of the court is to give effect to the intent of the parties to the agreement. The court examines the insurance contract as a whole and presumes that the intent of the parties is reflected in the language used in the policy. Common words appearing in a written instrument are to be given their plain and ordinary meaning unless manifest absurdity results or unless some other meaning is clearly intended from the face or overall contents of the instrument. When the language in a written contract is clear, the court may only look at the writing itself to determine the intent of the parties. In Ohio, as a matter of law, a contract is unambiguous if it can be given a definite legal meaning. To the contrary, where language in the contract cannot be given a definite legal meaning, courts may consider extrinsic evidence to ascertain the parties’ intent. A court may not, however, impute an intent contrary to that expressed by the parties.

Where an insured provides an unreasonable interpretation of the policy, the court will not construe ambiguity in favor of the insured. Although, as a rule, a policy of insurance that is reasonably open to different interpretations will be construed most favorably for the insured, that rule will not be applied so as to provide an unreasonable interpretation of the words of the policy.

Corporations, like Berrylane, both expand to new locations and add new personal property as they grow. With either type of growth, their insurance companies’ exposure to risk also grows, and parties usually amend their insurance coverage accordingly.

It is unsurprising that Berrylane wants acquisition to relate to the time it began physically using—rather than leasing—the warehouse. If the Sixth Circuit was to adopt Berrylane’s proffered meaning, its acquisition of the warehouse would fall within the Policy period, and Berrylane’s loss would be covered by the Endorsement. To determine the issue the Sixth Circuit started with the plain and ordinary meaning of the word “acquire.”

Although physical possession of property is one factor that courts consider when determining whether a party has acquired real property, it is legal possession that allows the adverse possessor to remain on the property without worry of ejectment. Hence, it is legal, not physical, possession that ultimately matters.

Similarly, common sense directs us to interpret “acquire” as legal, rather than physical, possession of real property. Berrylane’s acquisition of the warehouse occurred either when it signed the lease or when it took effect. Either date, however, was before the Policy period began and either date precludes recovery under the Policy.

Moreover, the Endorsement language suggests that Berrylane acquired the warehouse when the lease took effect, rather than when Berrylane began using it. The Endorsement applied to newly acquired property that Berrylane “acquire[s] by purchase or lease,” which by its very terms indicates that the Policy contemplated that acquisition occurs “by purchase or lease,” not through physical possession.

The purpose of a Newly Acquired provision is to provide a temporary safeguard to cover new property acquired during the policy period that would otherwise be uninsured.

If the provision covered new property at any location—even properties the insurance holder has already owned for years—there would be little incentive to include multiple locations on a schedule of locations. Rather, the insurance holder could pay a premium on only one location but continually reap benefits for other locations should loss occur elsewhere.

This conflicts with the notion of insurance as a gamble that both parties enter into ahead of time: the insurance holder gambles that paying an insurance premium is worth it because loss may occur, and the insurance company gambles that the risk will never come to fruition.

Extending an Endorsement to cover new property at any location removes the fundamental gamble that both parties make when they enter into the contract because it eliminates the requirement to decide on the front end which locations will be covered.

ZALMA OPINION

An insurance company is only required to keep the promises it made rather than the promises, as in this case, the insured after a loss decided it wanted it to make. That the insured failed to ask the insurer to insure against the risk of loss at the Florida facility was fatal to the claim. Since the insurer never promised to cover property at the Florida location the risk of loss of the property at that location remained with the insured and was never a risk taken by the insurer. A simple call to an insurance broker saying that more than a million dollars worth of I-Phones were stored in Florida would have resulted in added coverage and added premium. Avoiding paying the added premium cost the insured more than $1.6 million.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Mr. Zalma’s books available as Kindle books or paperbacks at Amazon.com can be reached at http://zalma.com/zalma-books/

Mr. Zalma’s reports can be found on Tumbler at https://www.tumblr.com/search/bzalma  on Facebook at https://www.facebook.com/barry.zal

 

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Zalma on Insurance Claims

Ten Volumes Comprising A Comprehensive Group of Materials on Property & Casualty Insurance Claims

Insurance claims professional and expert witness Kevin Quinley said about the following ten volumes: “Zalma’s series of books is a terrific blend of both the legal underpinnings and the practical implications for the claim practitioner.

Insurance Maven Bill Willson said: “Zalma On Insurance Claims” is a tour de force, an indispensable tool that should be a part of every claims training program in America and in the library of every claims professional for quick and frequent reference. This comprehensive guide belongs in the library of every insurance defense AND policyholder law firm. It should be a part of every claims training program of carriers, independent adjusting firms, and public adjusters. Many of these parts should be part of the training or reference programs for non-claims personnel, from agents to underwriters to risk managers.”

Zalma on Insurance Claims Volume 101

A Comprehensive Review of the law and Practicalities of Property, Casualty and Liability Insurance Claims

This series of ten books is the latest addition to Barry Zalma’s insurance claims series of books and articles that will form the most thorough, up-to-date, expert-authored insurance claims guide available today.

Written by nationally-renowned insurance coverage expert Barry Zalma, a semi-retired insurance coverage attorney, consultant, expert witness and blogger, Zalma on Insurance Claims provides in-depth explanations, analysis, examples, and detailed discussion of:

  • Property insurance claims;
  • Third-party liability claims;
  • Casualty claims; and
  • Insurance Fraud

Thorough, yet practical, this series of books form the ideal guide for any professional who works in or frequently interacts with the insurance industry. Claims professionals, risk managers, producers, underwriters, attorneys (both plaintiff and defense), and business owners will benefit greatly from the ten volume guide. It is also the perfect resource for insurance educators, trainers, and students whose role requires an understanding of insurance law. As you read through the various volumes of Zalma on Insurance Claims, you will find comprehensive—yet comprehensible—coverage of key topics, including:

  • What is Insurance?
  • The History of Insurance
  • The covenant of good faith and fair dealing.
  • The tort of Bad faith
  • Conditions,
  • Warranties,
  • Exclusions
  • Declaring a policy void
  • Duties of insured and insurer
  • Evaluation and settlement
  • Identifying insurance fraud
  • Investigation
  • Kinds of insurance policies
  • Other insurance clauses
  • Preparing a case for trial
  • Processing a claim
  • Responses to fraud
  • Subrogation and salvage
  • Underwriting and
  • Many more property and casualty insurance matters.

Zalma on Insurance Claims Part 102

This, the second part of Zalma on Insurance Claims and includes materials concerning:

  • Other Insurance Clauses
  • Underwriting
  • Conditions, Warranties and Exclusions

Zalma on Insurance Claims Part 103

This is part 103 of Zalma on Insurance Claims and will deal with:

1.Duties of the Insured and the Insurer
2.Declaring a Policy Void
3.Processing a Claim

When read with Part 101 and Part 102, this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 104

This, the fourth volume of Zalma on Insurance Claims and includes materials concerning:

  1. Investigation of First Party Property Claims
  2. Rescission
  3. The Mortgage Clause
  4. Fortuity & Other Issues
  5. Determine the Amount of the Loss
  6. The Claim File

When read with Part 101, Part 102, and Part 103, this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 105

This, the fifth volume of Zalma on Insurance Claims and includes materials concerning:

  1. Investigation – Liability
  2. Claims Made and Reported Policies
  3. The Notice Prejudice Rule.
  4. Types of Torts
  5. The Liability Claims File
  6. Discovery of the Insurance Claims File
  7. Tests for Determining Duty to Defend
  8. Appendices – forms for the claims person

When read with Insurance 101, Insurance 102, Insurance 103 and 104, this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 106

This is the sixth part of “Zalma on Insurance Claims” and will deal with:

Chapter 1 Property Insurance & the Tort of Bad Faith
Chapter 2 Grounds for Finding Bad Faith
Chapter 3 Avoiding Charges of Bad Faith
Chapter 4. Punitive Damages
Chapter 5.Bad Faith & Liability Insurance
Chapter 6.Defenses to the Tort of Bad Faith
Appendix 1 – California Civil Code Section 3294

When read with Part 101, Part 102, and Part 103, Part 104 and Part 105 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 107:

This is the seventh part of “Zalma on Insurance Claims” and will deal with:

1.Evaluation and Settlement – Property
2.Evaluation and Settlement – Liability
3.Subrogation
4.Salvage

When read with Part 101, Part 102, Part 103, Part 104, Part 105 and Part 106 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 108

This, the eighth part of Zalma on Insurance Claims, includes materials concerning:

1.Preparing a case for trial
2.Interviewing Techniques
3.The art of the Interview
4.Interview General Principles
5.The Interviewer
6.Preparing for the Interview
7.Beginning the Interview
8.Control Of The Interview
9.Dealing with Witness Types
10.Approaches the Work
11.Dealing with the Nervous Person
12.Bluffs
13.The Mutability Of Memory
14.The Examination Under Oath

When read with Part 101, Part 102, Part 103, Part 104, Part 105, Part 106 and Part 107 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 109 

This, the ninth part of Zalma on Insurance Claims, includes materials concerning:

•Identifying Insurance Fraud
•Professional Conspiracies
•Multiple Types of Insurance Fraud
•How to Join the Fraud Fight
•Case Studies of Successful Fraud Investigations
•Checklist 1 – Types of Insurance Fraud
•Checklist 2 – Training Adjusters
•Checklist 3 – Red Flags of Fraud – Property Insurance
•Checklist 4 – Red Flags of Fraud – Liability Insurance
•Appendix A – Commonly Used Medical Acronyms and Abbreviations
•Appendix B – Glossary of Medical Terms

When read with Part 101, Part 102, Part 103, Part 104, Part 105, Part 106, Part 107 and Part 108 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 110

This, the tenth part of Zalma on Insurance Claims, includes materials concerning:

•Responses to Fraud
•Grounds for Rescission.
•The Fight Against Fraud
•Checklist 1—Responses to Fraud
•Checklist 2 – The Fight Against Fraud

When read with Part 101, Part 102, Part 103, Part 104, Part 105, Part 106, Part 107, Part 108 and Part 109 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Read about these and other insurance books by Barry Zalma at http://zalma.com/blog/insurance-claims-library/

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Appraisers Can’t Determine Amount Without First Determining Cause of Loss

First Party Insurance Appraisers & Causation

Insurance appraisals are limited to a determination of the amount of loss. Some courts find that the cause of a loss is prohibited by the language of the appraisal provision of the policy since it limits the appraisers to a determination of the amount of loss and causation must be left to the courts. Others conclude that an appraisal must determine the cause before it can calculate the amount of loss.

In Walnut Creek Townhome Association vs. Depositors Insurance Company, In The Supreme Court Of Iowa, No. 16–0121 (August 10, 2018) the Supreme Court of Iowa was asked to determine if the trial court erred by rejecting an insurance appraisal award for hail damage to roofing shingles. The case presented a question of first impression in Iowa that has divided the courts of other jurisdictions: whether the appraisers may determine the cause of the loss.

FACTS

The insured townhome association was already investigating a warranty claim against the manufacturer seeking replacement of allegedly defective shingles when the hailstorm occurred. The property insurer paid for damage to metal gutters and fascia but disputed whether the hail caused damage to the asphalt shingles and denied coverage based on the preexisting manufacturing defect. The Association sued the insurer for breach of contract and invoked the appraisal provision of the property insurance policy to ascertain the amount of the loss from the hailstorm. The appraisal panel considered conflicting expert opinions and, in a two-to-one decision, valued the hail-damage loss at approximately $1.4 million. The district court held a bench trial, rejected the appraisal award, found no shingle damage from hail, applied an exclusion for defective materials, and entered judgment in favor of the insurer.

The court of appeals held the district court erred by rejecting the appraisal award for shingle damage and remanded for entry of judgment on the appraisal award, excluding amounts for air conditioners not owned by the insured. A dissenting judge would have affirmed the district court judgment against the insured, concluding the district court was not bound by the appraiser’s determination of the cause of the loss.

Walnut Creek Townhome Association (Walnut Creek or the Association) is a residential common interest community in Urbandale. The thirty-six multifamily buildings at Walnut Creek were built between 2004 and 2006. the board learned that the type of shingle used on its roofs — New Horizon manufactured by CertainTeed — was regarded by roofing professionals to be defective.

On August 8, 2012, a severe wind and hailstorm hit Walnut Creek. One resident described the hail as “pea size” and “dime size” and noted that it covered his entire deck.

In September, Walnut Creek asked Nicholas Waterman, a roofing renovator with GreenGuard Construction, to inspect the roofs for hail damage. Waterman found between eight to twelve hits per ten-by-ten-foot square and concluded that “[t]he roofing definitely had hail damage.”

Walnut Creek is insured by Depositors Insurance Company (Depositors). Walnut Creek submitted an insurance claim to Depositors, alleging that the August 8 storm caused damage to the roofs, gutters, siding, soffits, and air conditioning units and that the policy covered such damage.

Walnut Creek and Depositors each named an appraiser, and their appraisers selected an umpire. Before the appraisal occurred, Walnut Creek filed a civil action against Depositors in district court for breach of contract and sought a declaratory judgment “that the appraisal award form specify the amount of the covered loss.”

The appraisal took place on May 5, 2015. The appraisers inspected five buildings. The appraisal award stated:

The Appraisers and Umpire above-referenced hereby agree and stipulate that the appraisal herein is limited in scope to the amount of loss and damage as a result of a hail and windstorm that occurred on or about August 8, 2012. The award does not include an evaluation or determination of coverage, policy exclusions or the relative causation of the same. (Emphasis added)

The appraisal award set the amount of loss at $1,467,830.2. This included the replacement cost of the air conditioners, which the court later determined did not belong to Walnut Creek and, therefore, were not covered by the policy.

TRIAL COURT DECISION

The trial court concluded that Depositors did not breach the contract because the policy did not cover the damage to Walnut Creek’s roofs. The court determined that the policy excludes coverage of the roof damage because

  1. Walnut Creek did not prove the storm was the only cause of the physical damage to the roofs,
  2. Walnut Creek did not disprove Depositors’ contention that the shingles contained a product defect that triggered deterioration, and
  3. The defective shingles were used in the construction of the townhomes even though the defect was well-known in the roofing industry.

The district court found that the damage to the shingles resulted from multiple concurrent causes, including the preexisting defect in the shingles; Walnut Creek was aware of the policy exclusions; and the appraisal, which was not signed by all parties, only addressed one of the causes of roof damage. The court concluded that Walnut Creek did not meet its burden of showing the appraisal award was binding and conclusive on the parties. The court denied Walnut Creek’s breach of contract claim and claim for declaratory judgment.

ANALYSIS

The court is to decide coverage questions, but the appraisers’ determination of the factual cause and monetary amount of the insured loss is binding on the parties absent fraud or other grounds to overcome a presumption of validity.

Since the state standard policy must be followed to the extent the final sentence of Depositors’ appraisal provision purports to change the meaning of the provision, it is unenforceable.

Appraisal awards do not provide a formal judgment and may be set aside by a court. The appraisal award will not be set aside unless the complaining party shows fraud, mistake or misfeasance on the part of an appraiser or umpire.

Whether Causation Determinations Made by the Appraisal Panel Are Binding.

Depositors contends the district court was free to disregard the appraisal award in determining the cause of the shingle damage and in applying coverage exclusions for defective shingles. Coverage questions are for the court. But factual causation issues may be decided through the appraisal process. The appraisal award is presumptively binding on the parties and court.

The fighting issue here is whether the appraisers may determine the cause-in-fact of damage to insured property (here, roofing shingles) when appraising the amount of the loss from the hailstorm. Courts across the country are divided as to whether, in determining the ‘amount of loss’ pursuant to appraisal provisions like the one here, appraisers may consider questions of causation. Some courts view causation questions as off-limits for appraisers.

HOW LOSS IS DETERMINED

It would be extraordinarily difficult, if not impossible, for an appraiser to determine the amount of storm damage without addressing the demarcation between ‘storm damage’ and ‘non-storm damage.’ To hold otherwise would be to say that an appraisal is never in order unless there is only one conceivable cause of damage — for example, to insist that ‘appraisals can never assess hail damage unless a roof is brand new. Under the circumstances of this case a determination of amount of loss under the appraisal clause includes a determination of causation. In Iowa, therefore, appraisers may decide the factual cause of damage to property in determining the amount of the loss from a storm.

Here, the appraisers themselves made clear they were determining only the amount of loss attributable to the hailstorm without deciding coverage exclusions or other causes of shingle damage.

Depositors’ policy excludes coverage for preexisting deterioration caused by defective shingles. But the appraisers necessarily distinguished the hailstorm damage from deterioration of defective shingles installed between 2004 and 2006.

The Supreme Court concluded Depositors failed to overcome the appraisal award’s presumption of validity.

On remand, the trial court was ordered to accept the appraisal award as to the hail damage loss, and then determine the amount, if any, Depositors owes under the policy after adjudicating the coverage defenses.

ZALMA OPINION

I have served as an appraiser in the past. It is impossible – especially when multiple causes of damage may exist – to set an amount of loss and damage without first determining causation. The appraisers in this case were wise enough to make clear in their award that it only determined the amount of hail damage and nothing more. The issue of coverage for damage to things like air conditioning was left to the trial court. Logic, in this case, won over legalistic sophistry.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Mr. Zalma’s books available as Kindle books or paperbacks at Amazon.com can be reached at http://zalma.com/zalma-books/

Mr. Zalma’s reports can be found on Tumbler at https://www.tumblr.com/search/bzalma  on Facebook at https://www.facebook.com/barry.zal

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COIL -Commentary on Insurance Law

Everything Needed by the Insurance Claims Professional

Over the last 51 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

COIL Commentary on Insurance Law Volume 1, Number One & Number Two

A Journal providing information about insurance, insurance claims handling and insurance law as it changes with new decisions.

A Journal providing information about insurance, insurance claims handling and insurance law as it changes with new decisions from the state and federal appellate courts. Articles included:

  • What is Insurance?
  • Claims in a Catastrophe
  • Misrepresentation or Concealment of a Material Fact
  • Only in California “Once” is with “Such Frequency as to Indicate a General Business Practice”

COIL Commentary on Insurance Law Volume 1, Number Two

Commentary On Insurance Law: November 1, 2018 Volume One, Number Two by [Zalma, Barry]

  • Accident – the name of Insurance – Needed to Obtain Benefits
  • Late Report of Loss Fatal to Claim to Excess Insurer
  • The Danger of Retaining an Unlicensed and Dishonest Public Adjuster
  • Insurance and the Law of Unintended Consequences
  • A CPA’s Obligations with Regard to Errors & Omissions Insurance

Read about these and other insurance materials by Barry Zalma at http://zalma.com/blog/insurance-claims-library/

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Claiming Injury when not in Vehicle is Fraud

When You do the Crime You Must Pay the Fine

Charyse McMillan made a no-fault claim for injuries due to an auto accident even though she was not in the vehicle at the time of the accident. New Jersey found her guilty of violating the state’s Insurance Fraud Protection Act (IFPA) and assessed fines and penalties against her.

In Richard J. Badolato, Commissioner Of The New Jersey Department Of Banking And Insurance v. Charyse McMillan, Docket No. A-5474-16T1, Superior Court Of New Jersey Appellate Division (October 19, 2018) Charyse McMillan appealed from a May 26, 2017 Special Civil Part order granting the Commissioner of the Department of Banking and Insurance’s motion for summary judgment, finding that McMillan violated the New Jersey Insurance Fraud Prevention Act (IFPA), N.J.S.A. 17:33A-1 to -34, by falsely claiming that she was injured in a car accident while driving her former boyfriend’s car. In addition to imposing the statutory surcharge of $1000, the court imposed the maximum civil penalty of $5000 and the entire requested Attorney General counsel fees of $7946.50.

FACTS

In January 2010, McMillan reported to New Jersey Manufacturers Insurance Company (NJM) that she suffered personal injuries in an October 2009 car accident in Newark. In March 2010, McMillan submitted a no-fault personal injury protection (PIP) insurance claim to NJM under her former boyfriend’s policy, which was denied by NJM.

McMillan filed a lawsuit against NJM that proceeded to arbitration. The arbitrators awarded her $25,000 in damages, but the case proceeded to trial after NJM rejected the award and requested a trial de novo. The jury found that McMillan was driving her former boyfriend’s car, but that no accident had occurred. Because the jury reached a verdict of no cause of action, McMillan’s lawsuit was dismissed with prejudice in April 2014.

In December 2016, the Commissioner filed a complaint against McMillan, alleging she knowingly provided false and misleading statements concerning material information in her PIP claim, in violation of the IFPA. The court granted the Commissioner’s motion for summary judgment and determined that McMillan violated that IFPA. The court also suspended McMillan’s driving privileges for one year.

At the bottom of its order granting summary judgment, the court wrote: “Collateral Estoppel Applies. Defendant not involved in the accident.”

SETTLEMENT

McMillan, adding to her fraudulent activities, claimed she had a settlement agreement with the Commissioner. The enforceability of settlements is governed by contract law. A settlement agreement, like a contract, requires an offer and acceptance by the parties, and it must be sufficiently definite that the performance to be rendered by each party can be ascertained with reasonable certainty.

A legally enforceable contract requires mutual assent, a meeting of the minds based on a common understanding of the contract terms. Once parties to a contract agree on essential terms and manifest an intention to be bound by those terms, they have created an enforceable contract. Alternatively, if the parties do not agree to one or more essential terms, their contract is ordinarily unenforceable.

The written exchanges between counsel demonstrate that the parties never reached a final settlement agreement. Although the IFPA created a statutory mandate to confront aggressively the problem of insurance fraud in New Jersey, it does allow a no-admission settlement. The emails between the Deputy Attorney General and McMillan’s counsel confirm that there was no meeting of the minds as to the essential issue of admission of culpability. Without a meeting of minds – there is no agreement – and there was no settlement because the Department’s acceptance of the settlement agreement was expressly conditioned upon McMillan’s admission that she knowingly violated the IFPA.

Acceptance to a contract is not valid if it is expressly made conditional on assent to additional or different terms. Moreover, as indicated by the written exchanges between counsel, until McMillan agreed to include an admission of culpability, the Deputy Attorney General refused to draft settlement documents. Thus no meeting of the minds as to all essential elements of the agreement occurred, and the motion court properly did not enforce McMillan’s version of the settlement.

SUMMARY JUDGMENT

To defeat a motion for summary judgment the non-moving party must present evidence that creates a genuine issue of a material fact. To determine if an issue of fact is genuine, a trial court must decide whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.

A party will prevail under the IFPA if it establishes that (1) the defendant ‘presented’ a ‘written or oral statement’; (2) the defendant knew that the statement contained ‘false or misleading information’; and (3) the information was ‘material’ to ‘a claim for payment or other benefit pursuant to an insurance policy.

McMillan submitted a claim to NJM for PIP benefits, stating that she was in a car accident. Because, as the jury found, McMillan was not involved in a car accident, McMillan must have known her claim was fraudulent. McMillan’s claim to NJM that she was in a car accident was, of course, material to NJM’s decision regarding payment of benefits.

A court may deny a request for oral argument, as long as it sets forth the reason for doing so orally on the record or separately in writing.

ZALMA OPINION

Insurance criminals are persistent. Although she was found by a jury to have committed insurance fraud, McMillan insisted on a settlement where she did not admit to the fraud. The Department refused and she was fined the maximum. Doing justice the court sent the case back to make sure there was good reason for the maximum fine. Otherwise the judgment was appropriately upheld.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Mr. Zalma’s books available as Kindle books or paperbacks at Amazon.com can be reached at http://zalma.com/zalma-books/

Mr. Zalma’s reports can be found on Tumbler at https://www.tumblr.com/search/bzalma  on Facebook at https://www.facebook.com/barry.zal

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Insurance Books Available for Every Insurance Professional

Insurance Books Available for Every Insurance Professional

The new publisher, Full Court Press, has published three of my books on insurance coverage available as e-books and for research purposes on the legal research site, Fastcase.com.

My books recently taken back from National Underwriter are discounted and available including “Insurance Claims: A Comprehensive Guide,” “Construction Defects,” “Mold,” and “Insurance Law.”

Two books from the American Bar Association called “Insurance Fraud Deskbook” and “Diminution in Value.”

From Thompson Reuters the fully rewritten “Property Investigation Checklists Uncovering Insurance Fraud, 12th Edition”.

New Books from Full Court Press

Full Court Press continues to publish expert secondary content. This time it’s a new collection of insurance law treatises from consultant, expert witness, arbitrator, and mediator Barry Zalma.

Barry Zalma practiced law in California for more than 44 years as an insurance coverage and claims-handling lawyer, and has spent more than 50 years in the insurance business. We welcome his deskbooks as the first published under our Full Court Press imprint. Three titles are available in ePub and MOBI format, as well as on the Fastcase legal research platform.

 

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the UniZalmated States, and few know more about California insurance law than Barry Zalma.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers.

An annual subscription to secondary content on the Fastcase BadFaithplatform includes new editions and updates published by the author as they are rolled out, so you can rest assured that your research is up to date. Go to fastcase.com for more detail and how to use the material on-line as part of your legal or insurance research or as stand-alone e-books.

All available at fastcase.com.


Books from ClaimSchool, Inc.

“Insurance Law”

Insurance Law is the most comprehensive, and yet practical, Product Detailsinsurance law authority available today. Written by nationally-renowned insurance coverage expert Barry Zalma, an insurance coverage attorney, consultant, expert witness and blogger, Insurance Law introduces the new insurance professional to the fundamental principles of insurance and provides the experienced litigator analyses of today’s leading insurance law decisions nationwide.

Insurance Law is the most comprehensive, and yet practical, insurance law authority available today.

This book is ideal for any professional who works in or frequently interacts with the insurance industry. Claims professionals, risk managers, producers, underwriters, attorneys (both plaintiff and defense), business owners, and students will benefit greatly from this all-inclusive reference. It is also the perfect resource for educators and trainers whose role requires an understanding of insurance law.

In addition to case law, the author has provided countless citations to relevant statutory, regulatory, and judicial sources which are guaranteed to kickstart your research.

Price Reduced from $196- Send Check for $75.00 to ClaimSchool, Inc., 4441 Sepulveda Blvd., Culver City, Ca 90230 and the book will be mailed to you.

Mold Claims Coverage Guide

Today, mold claims are common, but they continue to grow in complexity, involving not only property damage but bodily injury as well. Mold-related lawsuits have dramatically increased over the past few years, and tProduct Detailshe numbers continue to rise. Coverage requirements—and related issues—can be complicated and confusing.  This resource will remove the complexity and allow the insurer, insured, property owner or developer and their counsel to deal with mold quickly and effectively and, if possible, avoid unnecessary litigation.

Price Reduced – Send Check for $50.00 to ClaimSchool, Inc., 4441 Sepulveda Blvd., Culver City, Ca 90230 and the book will be mailed to you.

Construction Defects Coverage Guide

This insightful and practical two volume resource was envisioned anProduct Detailsd written by nationally renowned expert Barry Zalma, and it thoroughly explains how to identify construction defects and how to insure, investigate, prosecute, and defend cases that result from construction defect claims.

Construction Defects Coverage Guide was designed to help property owners, developers, builders, contractors, subcontractors, insurers, and lenders, as well as their risk managers and lawyers rapidly resolve construction defect claims when they arise and avoid construction litigation.  If litigation becomes necessary it will help the prosecution or defense of construction defect suits effectively.

Price Reduced from $196 – Send Check for $75.00 to ClaimSchool, Inc., 4441 Sepulveda Blvd., Culver City, Ca 90230 and the book will be mailed to you.

Insurance Claims: A Comprehensive Guide

Insurance contracts and clauses are specific in nature—but the manner in which insurance claims are pursued and resolved can be remarkably different.  Mistakes in handling a claim can undermine the outcome—and ultimate value—of the claim itself.

Insurance Claims: A Product DetailsComprehensive Guide is the one resource that enables insurance professionals, producers, underwriters, attorneys, risk managers, and business owners to successfully handle insurance claims from start to finish—employing proven, practical techniques and best practices every step of the way.

Price Reduced from $196 – Send Check for $75.00 to ClaimSchool, Inc., 4441 Sepulveda Blvd., Culver City, Ca 90230 and the book will be mailed to you.

Books from the American Bar Association

The Insurance Fraud Deskbook

Author: Barry Zalma

Sponsor(s):  Tort Trial and Insurance Practice Section, Publisher(s):   ABA Book Publishing

ISBN: 978-1-62722-676-9
Product Code: 5190506
2014, 638 pages, 7 x 10

Product DetailsThis book is written for individuals who are focused on the effort to reduce expensive and pervasive occurrences of insurance fraud. Lawyers who represent insurers, claims personnel, prosecutors and their investigators can all benefit from this exhaustive resource.

The Insurance Fraud Deskbook is a valuable resource for those who are engaged in the effort to reduce expensive and pervasive occurrences of insurance fraud. It explains the elements of the crime and the tort to claims personnel, and it provides information for lawyers who represent insurers, so they can adequately advise their clients. Prosecutors and their investigators can use this book to determine what is required to prove the crime and win their case.

The full text of decisions from courts of appeal and supreme courts across the country are provided so the reader can understand what happens after the investigation is completed and can apply that information to undertake their own thorough investigations. It allows claims personnel and their lawyers to understand what errors would cause a defeat or a not-guilty verdict.

The effort to reduce insurance fraud requires the assistance of both civil and criminal courts. The Insurance Fraud Deskbook can help the prudent fraud investigator, insurance adjuster, insurance attorney, insurance Special Investigation Unit, and insurance company management to attain the information needed to deal with state investigators and prosecutors.

Available from the American Bar Association at: http://shop.americanbar.org/eBus/Default.aspx?TabID=251&productId=214624; or  orders@americanbar.org, or 800-285-2221.

Diminution in Value Damages: How to Determine the Proper Measure of Damage to Real and Personal Property

ISBN: 978-1-63425-295-8
Product Code: 5190524
2015, 235 pages, 7 x 10, Paperback

This book was written to provide sufficient information to those who became interested in the issue since the Georgia Supreme Court decided State Farm Mutual Automobile Insurance Co. v. Mabry, 274 Ga. 498, 556 S.E.2d 114 (Ga. 11/28/2001) and includes cases dealing with the use of diminution in value as a method of determining the amount of loss incurred by a plaintiff seeking indemnity for damage to real or personal property.

Because confusion has reigned across the United States concerning the proper measure of damages for property damage to property that has been repaired, Diminution In Value Damages assists the reader in answering the questions concerning the proper measure of damage in each of the fifty United States and federal United States jurisdictions

This edition has been totally rewritten and expanded, providing the most extensive and detailed coverage of the issue and a thorough explanation of how to apply diminution in value damages to losses to property.


Co-Author(s):Property Investigation Checklists: Uncovering Insurance Fraud, 12th Michael H Boyer  &  Barry Zalma

Property Investigation Checklists: Uncovering Insurance Fraud provides detailed guidance and practical information on the four primary areas of any investigation of suspicious claims:
• Recognizing suspicious claims
• Proper investigation procedures
• Analysis of laws concerning fraudulent personal and real property claims
• Evaluating and settling claims.
The book also examines recent developments in areas such as arson investigation procedures, bad faith, and extracontractual damages. The appendix includes the NAIC Insurance Information and Privacy Protection Model Act.
Read about these and other insurance books by Barry Zalma at http://zalma.com/blog/insurance-claims-library/
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Zalma’s Insurance Fraud Letter – 11-1-18

Agent Who Kept Premium Owed to Zurich Loses at Ninth Circuit

 Zalma’s Insurance Fraud Letter, Volume 22, No. 21   

In this, the 21st issue of the 22nd year of the publication of Zalma’s Insurance Fraud Letter (ZIFL) you will find two summaries of appellate decisions dealing with insurance fraud, articles to help the insurance fraud investigator, and recitations of convictions for both property and casualty and health insurance fraud.

In the first case summary ZIFL discusses how insurance agents, by contract with insurers they represent, must place all premium collected on behalf of the insurer and place the funds in a separate trust account.  Depending on the terms of the contract the agent then deducts the agreed commission and remits the remainder to the insurer. Failure to remit the premium, less the commission, is a theft or conversion of funds to which the agent had no entitlement.

In Zurich American Insurance Company v. Sealink Insurance Service Corp. And Yan Sara Zhang, and Phann Gelinda Keo, et al., No. 17-55776, United States Court of Appeals for the Ninth Circuit (October 15, 2018) Defendants Yan Sara Zhang and Sealink Insurance Service Corporation appealed from the district court’s denial of their motion to set aside the entry of default and default judgment against them.

The Ninth Circuit did not reach the issue of defendants’ culpable conduct because defendants’ lack of a meritorious defense was sufficient to justify the district court’s refusal to set aside the default and default judgment. Defendants have no meritorious defense to Zurich American Insurance Company’s breach of contract claim.

This case establishes that insurance fraud is not limited to people who are insured defrauding an insurer. In this case the insurer trusted the agents and allowed them to bind insurance with Zurich in exchange for a promise to remit premiums. Zurich was the victim of fraud by the agent and, rather than attempt a criminal prosecution for conversion, sued the agent and obtained a judgment which was upheld by the Ninth Circuit Court of Appeal. Zurich should execute on the judgment and obtain the full amount of the judgment. If not, it should seek prosecution of those who unlawfully converted Zurich’s funds to their own use.


 The Current Issue Contains the Following  

  • Agent Who Kept Premium Owed to Zurich Loses at Ninth Circuit
  • Barry Zalma Speaks at Your Request
  • If you do the Crime You Must Do the Time
  • Wisdom
  • Attempt to Save Premium is Costly to Insured
  • Good News From the Coalition Against Insurance Fraud
  • Zalma’s Flat Rate Opinions
  • Health Insurance Fraud Convictions
  • Justice Requires Fraud to be Punished
  • Other Insurance Fraud Convictions
  • Books from Barry Zalma – All Available at the Insurance Claims Library

THE “ZALMA ON INSURANCE” BLOG 

The most recent posts to the daily blog, Zalma on Insurance, one of Feedspots top 50 insurance law blogs are available at http://zalma.com/blog.

Check in every day for a case summary at http://zalma.com/blog:

Zalma’s Insurance 101

 I have completed a video blog called Zalma’s Insurance 101 that consist of 1022 three to four minute videos starting with “What is Insurance” and moving forward to insurance fraud investigations explaining the basics of insurance and insurance claims handling in a painless fashion that can be viewed every morning with the first cup of coffee at  Zalma’s Insurance 101.

If you start at Volume 1 at the bottom of the blog’s first page and view one or two videos a day you will have approximately 12 to 24 hours of training a year until you get to the last video.

The videoblog is adapted from my book, Insurance Claims: A Comprehensive Guide available at the Zalma Insurance Claims Library.

Go to Zalma Books Paperbacks and Kindle books by Barry Zalma at the Insurance Claims Library at http://zalma.com/blog/insurance-claims-library/ 
Go to Zalma’s Insurance 101 at http://www.zalma.com/videoblog 

Subscribe to e-mail Version, it’s Free! – http://www.zalma.com/ZIFL-CURRENT.htm.  

Go to my blog Zalma On Insurance at http://zalma.com/blog.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Mr. Zalma’s books available as Kindle books or paperbacks at Amazon.com can be reached at http://zalma.com/zalma-books/

Mr. Zalma’s reports can be found on Tumbler at https://www.tumblr.com/search/bzalma  on Facebook at https://www.facebook.com/barry.zal

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Fictionalized True Insurance Crime Books

Fictionalized True Insurance Crime Books

“HEADS I WIN, TAILS YOU LOSE”

Product DetailsA collection of columns originally published in the magazines “Insurance Journal,” “Insurance Week,” and “The John Cooke Insurance Fraud Report” insurance trade publications serving the insurance community in the United States that have been updated and revised.

The title, “Heads I Win, Tails You Lose” is meant to describe insurance fraud as it works in the Unites States. It means that whenever a person succeeds in perpetrating an insurance fraud everyone who buys insurance is the loser.

Available as a Kindle Book.

Available as a paperback.

“Candy and Abel: Murder for Insurance Money

How a young lawyer and wise old investigator defeated an attempt at life insurance fraud.

Product DetailsAvailable as a Kindle Book.

Available as a paperback.

 

 

“Murder And Insurance Fraud Don’t Mix”

My name is Marion Orpheus Montague. My friends, and some enemies, call me “MOM.” It is not a designation of my ability to nurture my clients. I have never been, nor will I Product Detailsever be, maternal. I accept the play on my initials because it causes adversaries to underestimate me.

I am 66-years-old. My grayish blond hair is thin and my full beard is a bit scraggly. My face is round and often tinged with red. My nose is full, my eyes green and my cheeks bulge out to the sides trying to emulate the belly that precedes every other part of my body as I walk. People see me and do not believe that I am a private investigator. Seeing me they often think that I am on leave from my winter work as a Macy’s Santa Claus.

I like being underestimated. It makes my job as an investigator easier.

See how a fake robbery at a jewelry store led to murder and prison.

Available as a Kindle book.

Available as a paperback

“Murder & Old Lace: Solving Murders Performed for Insurance Money”

 

Product Details

When the women first met – 20 years ago at a Santa Monica health spa – Magogassasanian appeared taken with Gogolivesky. The women moved Alvarado into an apartment, then started applying for life insurance policies on him. They jointly took out four policies, each as 50% beneficiaries in addition to the individual policies they bought from my client. Gogolivesky also took out three more policies on her own while Magogassasanian only took out a single individual policy on Earnest. The two women pocketed nearly $6,000,000 in insurance benefits on Alvarado alone and $4,000,000 in insurance benefits on Earnest. They also recovered a total of $5,000,000 on the other six old men they killed.

Available as a Kindle book.

Available as a paperback.

“Arson for Profit: How an Attempt to use Arson & Fraud to Fund Terrorism Failed”

This story is based on a real case involving a member of Russian/Armenian organized crime, real insurers, investigators, lawyers, fire fighters, and insurance brokers. The names, descriptions, and identities of the people involved have been changed to protect both the guilty and the innocent. The report to the US Senate, after this case was decided by the California Courts, reveal that the threats made on MOM and lawyer Hazan were real and they are lucky that the threats were never fulfilled. The person identified in this story as Levonyan was described to the US Senate as the leader of a Russian/Armenian organized crime ring. It is important to take seriously threats from criminals. Insurance fraud and arson-for-profit are not victimless crimes. They are crimes of violence that cost everyone who lives in the U.S.]

Available as paperback.

Available as a Kindle Book.

M.O.M. & The Taipei Fraud: How an Experienced Adjuster Defeated a $7 Million Fake Burglary Claim

 

The problem is that each option the insurers have available have a down side and Feng is represented by a lawyer who has proved highly successful in suing insurers and collecting large compensatory and punitive damage awards. Since the claims exceed $6 million dollars, he can expect, applying the law set out by the U.S. Supreme Court in State Farm Mut. Automobile Ins. Co. v. Campbell and BMW of North America, Inc. v. Gore as much as $60 million in punitive damages. So I need to explain to the insurers that they face an exposure anywhere from their policy limits to ten times the policy limit. They need the courage of their convictions to reject this major claim.

Available as a paperback.

Available as a Kindle book.

Read about these and other insurance books by Barry Zalma at http://zalma.com/blog/insurance-claims-library/

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Fall from Cherry on Top But No Cake

Business Exclusion Clear and Enforceable

When a farmer allows individuals access to the farm so they can pick cherries off trees in the orchard and buy the cherries at a lesser price than pre-picked cherries it is doing the business of farming. That is a reason why most farmers will buy a business liability policy to protect against the exposure of injury to the public picking cherries off the farmer’s trees. A homeowners policy is not designed to cover business losses.

In Western National Assurance Company v. John and Linda Robel, individually and as husband and wife; and Robel’s Orchard, a Washington Corporation and/or sole proprietorship owned by John and Linda Robel; Vicki Posa, a single person, No. 35394-0-III, Court Of Appeals Of The State Of Washington Division Three (October 23, 2018) resolved an appeal by Vicki Posa from the trial court’s order granting summary judgment to respondent Western National Assurance Company concerning the existence of insurance coverage under a homeowners policy for an injury occurring in an orchard.

FACTS

Ms. Posa was injured in a fall from a three-legged ladder while picking cherries at a Green Bluff area orchard operated by John and Linda Robel. The Robels offered both pre-picked and u-pick options for customers.

Ms. Posa and a companion arrived at the Robel orchard to pick cherries for themselves. Ms. Posa and her companion spoke to a man named John and each were outfitted with a basket that strapped to the body of the picker. They were directed to the appropriate section of the orchard and told where ladders could be located.

The ladders are ten feet tall and three-legged. While using a ladder, Ms. Posa became unbalanced as the basket filled. She fell, breaking her hand and left foot. She also sustained injuries to her neck, hip, and shoulder. She underwent two surgical procedures and was expected to have additional surgery.

Ms. Posa filed suit against the Robels seeking compensation for her injuries. She alleged that the Robels, doing business as Robel’s Orchard, had failed to maintain the orchard in a safe manner and also had failed to properly instruct her on use of the ladder. Western National appointed an attorney to defend the suit and counsel appeared for the Robels.

Western National sued the Robels and Ms. Posa seeking declaratory relief. Western National asserted that the Robel’s homeowner’s policy did not provide liability coverage for the couple’s business operations. The Robels did not appear in the declaratory action and, at some point, filed for bankruptcy protection. Ms. Posa appeared and defended the declaratory action.

In response to the summary judgment motion, Ms. Posa contended that the business was farming and that the occasional self-pick customer was not within the scope of the farm’s primary operation. The trial court determined that the business exclusion provision was not ambiguous and operated to deny coverage for Ms. Posa’s injuries.

ANALYSIS

The appellate court was asked to determine whether a customer’s self-picking of cherries is a part of the business of farming.

Interpretation of an insurance policy is a question of law. Insurance policies are construed as contracts, so policy terms are interpreted according to basic contract principles. The policy is considered as a whole, and is given a fair, reasonable, and sensible construction as would be given to the contract by the average person purchasing insurance. If the language is clear, the court must enforce the policy as written and may not create ambiguity where none exists. A clause is only considered ambiguous if it is susceptible to two or more reasonable interpretations. If an ambiguity exists, the clause is construed in favor of the insured.

The policy issued by Western National includes the following definition: “4. ‘Business’ means a trade, a profession, or an occupation including farming, all whether full or part time. This includes the rental of property to others. It does not include the occasional rental for residential purposes of the part of the ‘insured premises’ normally occupied solely by ‘your’ household.”

The policy excluded from liability coverage any “bodily injury . . . resulting from activities related to the ‘business’ of an ‘insured’, except as provided by Incidental Business Coverage.”  Against the exclusions, Ms. Posa argues that there are at least factual questions about whether or not the Robels were engaged in the “business” of farming, whether self-service picking falls within the farming business, and whether instructing on proper ladder use falls within the couple’s “business.”

The appellate court found that the only conclusion to draw from the evidence is that the Robels were engaged in the business of farming. They had a cherry orchard and sold the produce to the public. That is how farming works—a crop is planted and eventually harvested for the benefit of those who consume the crop.

Whether or not the Robels made much money from u-pick operations does not change the nature of their business. The fact that there were different options for harvesting the produce likewise does not alter those facts; the identity of the harvester does not change the nature of a farming operation. It was the orchard produce that drew Ms. Posa to the Robel farm on that fateful day. The fact that the Robels may not have been working that particular day does not change the nature of their operation. They farmed by producing a crop, not by harvesting seven days a week.

Similarly, it cannot seriously be contested that using a ladder to pick cherries from a cherry tree is not part of the farming task of harvesting the crop. Any negligence in failing to properly instruct on the use of the three-legged ladder was related to the family’s farming operations. In short, the business exclusion applied to the Robels’ cherry orchard.

The appellate court concluded that the self-pick operations are part of the business operations of the orchard. The business exclusion to the homeowners policy precluded liability coverage and, therefore, the trial court correctly concluded that there was no coverage under the policy for Ms. Posa’s business-related injury and that Western National did not owe a duty to defend or indemnify the Robels.

ZALMA OPINION

A cherry orchard is a business. Ms Posa was injured as a customer of that business. She was injured while picking cherries from the Robels’ orchard. Had the Robels’ puchased a business or farm policy that covered their liability to third parties as a result of the operation of the farm Ms. Posa and the Robels would have a case against Western National or the farm insurer. They took their chances and lost resulting in bankruptcy.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Mr. Zalma’s books available as Kindle books or paperbacks at Amazon.com can be reached at http://zalma.com/zalma-books/

Mr. Zalma’s reports can be found on Tumbler at https://www.tumblr.com/search/bzalma  on Facebook at https://www.facebook.com/barry.zal

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Important New Insurance Books – Ethics, EUO, Rescission

Ethics for the Insurance Professional

Methods for Insurers and their Personnel to Act with the Utmost Good FaithProduct Details

Ethics is a process of systematically applying, using, defending and recommending concepts of right and wrong behavior. Ethical behavior is required of both parties to a contract of insurance for the system to work. Ethics is the essence of insurance. Ethical behavior is required of both parties to a contract of insurance for the system to work. If any party to the insurance contract acts unethically the ability of insurance to work effectively and profitably will fail. Ethics is the essence of insurance. Since insurance was first created it has been a business of utmost good faith. As a result, the insured and the insurer are expected to treat each other ethically.

Available as a paperback.

Rescission of Insurance

Product DetailsRescission is an equitable remedy as ancient as the common law of Britain. When the United States was conceived in 1776 the founders were concerned with protecting their rights under British common law. They adopted it as the law of the new United States of America modified only by the limitations placed on the central government by the U.S. Constitution approved in 1789. The viability and ability to enforce contracts was recognized as essential to commerce. Courts of law were charged with enforcing legitimate contracts. Courts of equity were charged with protecting contracting parties from mistake, fraud, misrepresentation and concealment since enforcing a contract based on mistake, fraud, misrepresentation or concealment would not be fair. The common law developed rules that courts could follow to refuse to enforce the terms of a contract that was entered into because of mutual mistake of material fact, a unilateral mistake of material fact, the breach of warranty (a presumptively material promise to do or not do something), a material concealment, or a material misrepresentation. The remedy – called rescission – created a method to apply fairness to the insurance contract and allow an insurer to void a contract and allowed courts to refuse to enforce such a contract entered into by misrepresentation or concealment of material facts.

Available as a paperback.

Available as a Kindle book.

“The Insurance Examination Under Oath”

Product DetailsThe insurance Examination Under Oath (“EUO”) is a formal type of interview authorized by an insurance contract. It is taken under the authority provided by a condition of the insurance contract that compels the insured to appear and give sworn testimony on the demand of the insurer or find his, her or it claim rejected for breach of a condition. A notary and a certified shorthand reporter are always present to give the oath to the person interviewed and record the entire conversation.

Available as a Kindle book.

Available as a paperback.

Read these and more insurance books by Barry Zalma at http://zalma.com/blog/insurance-claims-library/

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Attempt to Save Premium is Costly to Insured

Living in New Jersey but Insured in Florida is Fraud

No one like to pay insurance premiums. However, in a state like New Jersey, insuring a vehicle with No Fault insurance is mandatory. Since insurance in Florida is less expensive than in New Jersey a resident of New Jersey was tempted to and, in fact, insured his vehicle in Florida to save money on premium charges.

In Jeffrey E. Scholes v. Stephen M. Hausmann, and Kimberly A. Logan, Docket NO. A-0980-17T3, Superior Court Of New Jersey Appellate Division (October 16, 2018) the plaintiff appealed from an order granting summary judgment to defendant Stephen M. Hausmann (“defendant”) and dismissing the complaint based on the court’s finding that plaintiff was uninsured within the meaning of N.J.S.A. 39:A-4.5(a), and thereby barred from recovering damages for economic and non-economic losses.

FACTS

On October 23, 2014, plaintiff and defendant were involved in an automobile accident in South Orange and plaintiff suffered injuries. The vehicle he was driving was titled and registered in his name using a friend’s address in Florida, despite plaintiff living and working in New Jersey for approximately five years. He failed to obtain a New Jersey driver’s license or to register his vehicle in New Jersey.

Plaintiff acknowledged that his vehicle was principally garaged in New Jersey. The judge found that plaintiff “provided false information to the State of Florida as to his residency.” At his deposition, plaintiff testified he continued to maintain his “Florida automobile insurance because . . . Florida insurance was less expensive than New Jersey insurance.” (emphasis added)

As a result of his injuries, plaintiff applied for personal injury protection (“PIP”) benefits through his Florida Geico automobile insurance policy. The Florida policy was not approved by the New Jersey Commissioner of Banking and Insurance, and it only provided $10,000 per person in medical benefits coverage.

Defendant moved for summary judgment, arguing N.J.S.A. 39:6A-4.5(a) barred plaintiff’s claims because the Commissioner did not approve his insurance policy and therefore, he was uninsured under the statute. Based upon plaintiff’s misrepresentations, defendant also argued that insurance fraud was committed pursuant to N.J.S.A. 2C:21-54.6, which was enacted to prevent reverse rate evasion.

DISCUSSION

Every owner of an automobile principally garaged in New Jersey must maintain automobile liability insurance coverage under provisions approved by the Commissioner, including mandatory medical expense benefits coverage of $15,000 per person. New Jersey statutes state that all owners of motor vehicles registered or principally garaged in New Jersey are required to maintain minimum amounts of standard, basic, or special liability insurance coverage for bodily injury, death, and property damage caused by their vehicles; that because an out-of-state insured vehicle was principally garaged in New Jersey, the owner must maintain PIP coverage; any person who, at the time of an automobile accident resulting in injuries to that person, is required but fails to maintain medical expense benefits coverage mandated by the statute shall have no cause of action for recovery of economic or noneconomic loss sustained as a result of an accident while operating an uninsured automobile.

The Legislature adopted the statute to limit the ability of persons injured in motor vehicle accidents to sue persons responsible for their injuries. The statute advances a policy of cost containment by ensuring that an injured, uninsured driver does not draw on the pool of accident-victim insurance funds to which he did not contribute. The statutes limit a plaintiff’s ability to sue when he or she has not complied with the compulsory insurance law and gives the uninsured driver a very powerful incentive to comply with the compulsory insurance laws: obtain automobile liability insurance coverage or lose the right to maintain a suit for both economic and [non-economic] injuries.

In order to find that plaintiff was required to maintain New Jersey medical expense benefits coverage, it must be established that his vehicle was principally garaged in New Jersey. To determine where an automobile is principally garaged, the pivotal factor is where the vehicle is primarily or chiefly kept or kept most of the time not where the owner intends to reside.

Since plaintiff primarily garaged his vehicle in New Jersey, he was required to maintain automobile liability insurance coverage under provisions approved by the Commissioner, including mandatory medical expense benefits coverage of $15,000 per person. As noted by the judge, the Deemer Statute cannot save the plaintiff’s failure to obtain an insurance policy approved by the State of New Jersey.

The court found no ambiguity in the statute that would offend plaintiff’s procedural due process rights. As recognized by the motion judge, implicit in the goal of the statute is that New Jersey residents, and those who principally garage their automobile in this state, are required to maintain automobile insurance coverage approved by the Commissioner of Banking and Insurance.

ZALMA OPINION

By not insuring the vehicle with New Jersey insurance because it was cheaper to be insured as a Florida resident the Plaintiff committed insurance fraud and was unable to receive any benefits as a result of the accident. He was lucky he was not charged with a crime and sentenced to jail.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Mr. Zalma’s books available as Kindle books or paperbacks at Amazon.com can be reached at http://zalma.com/zalma-books/

Mr. Zalma’s reports can be found on Tumbler at https://www.tumblr.com/search/bzalma  on Facebook at https://www.facebook.com/barry.zalma and you can follow him on Twitter at https://twitter.com/bzalma

Legal Disclaimer:

The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

 

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Did You Comply With California Claims Regulations Training?

The state of California requires every person dealing with claims in the state to be trained no later than September 1 each year and submit a sworn statement to insurance company management that they were trained or had read and understood the Regulations. Failure to do so exposes the claims person and the insurer to serious fines for each violation.

The two books that follow will allow claims personnel to comply with the Regulations.

California Fair Claims Settlement Practices Regulations

A Guide to Insureds, Public Insurance Adjusters, and Lawyers to Properly Investigate and Adjust Insurance Claims

This book was designed to assist insurance personnel who do business in the state of California. It will assist all insurance claims personnel, claims professionals, independent insurance adjusters, special fraud investigators, private investigators who work for the insurance industry, the management in the industry, the attorneys who serve the industry, public insurance adjusters, policyholders and counsel for policyholders working with insurers doing business in California. All insurers doing business in California must comply with the requirements of the Regulations or face the ire of, and attempts at financial punishment from, the CDOI. That punishment is now questionable and limited because some courageous insurers fought the CDOI and succeeded before an administrative law judge who limited the right to punish. Regardless of difficulties in assessing punishment the state of California requires all who are involved in the claims process — even if only tangentially — to be trained with regard claims handling in compliance with the Regulations and attest to completion of such training under oath. To avoid the annual training the claims person can submit a sworn document that avers that he or she has read and understood the Regulations. Reviewing this book and the Regulations set forth below should be sufficient to comply with the training requirements of the Regulations. It is necessary that insurance personnel who are engaged in any way in the presentation, processing, or negotiation of insurance claims in California be familiar with the Regulations. Counsel for insurers and policyholders should also be familiar with the Regulations since they set a minimum standard for claims handling in the state.

Available as a Kindle book.

Available as a paperback.

California SIU Regulations

The State of California Imposes Control on the Investigation of Insurance Fraud

California SIU Regulations: The State of California Imposes Control on the Investigation of Insurance FraudCalifornia SIU Regulations is designed to assist California insurance claims personnel, claims professionals, independent insurance adjusters, special fraud investigators, private investigators who work for the insurance industry, the management in the industry, the attorneys who serve the industry, and all integral anti-fraud personnel working with California admitted insurers to comply with the requirements of California SIU Claims Regulations.

The state of California, by statute, requires all admitted insurers to maintain a Special Investigative Unit (an “SIU”) that complies with the requirements set forth in the Special Investigative Unit Regulations (the “SIU Regulations”) and train all integral anti-fraud personnel to recognize indicators of insurance fraud.

Available as a Kindle Book.

Available as a paperback.

Read about these and other insurance books by Barry Zalma at http://zalma.com/blog/insurance-claims-library/

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If you do the Crime You Must Do the Time

Guilty of Disability Fraud

Insurance criminals today define the Yiddish word “Chutzpah!” Their unmitigated gall to challenge a conviction for fraud is without bound. They appeal and waste the time of courts of appeal. More often than not the attempt fails, even in the very liberal Ninth Circuit Court of Appeal.

In United States Of America v. Jasvir Kaur, United States Of America, v. Harjit Johal, No. 17-10306, No. 17-10307, United States Court Of Appeals For The Ninth Circuit (October 17, 2018) Harjit Kaur Johal and Jasvir Kaur challenge their convictions under 18 U.S.C. § 1623 for making false declarations to a grand jury during its investigation of a large-scale unemployment and disability insurance fraud scheme orchestrated by Mohammad Riaz “Ray” Khan and Mohammad Shabaz Khan.

DISCUSSION

The defendants argued that the joinder where they were both tried together was improper. The Ninth Circuit concluded that joinder was proper under Fed. R. Crim. P. 8(b) because, although Kaur and Johal were charged with separate counts of offering false testimony to the grand jury, the indictment stemmed from the same larger investigation and the false testimony related to the same aspects of the alleged fraudulent scheme.

The charges against each defendant arose out of the same series of acts or transactions and a substantial number of the facts the Government needed to prove at trial were overlapping. Moreover, even if they were improperly joined, reversal is not required because improper joinder is subject to harmless error review. Kaur and Johal have failed to show any possible prejudice.

Kaur and Johal argued that the district court improperly admitted evidence under Federal Rule of Evidence 404(b) that Johal participated in earlier fraud schemes organized by the Khan brothers. Even assuming the Government is incorrect that these prior acts fall outside the parameters of Rule 404(b) because they are inextricably intertwined with the charged offense, the evidence was properly admitted under Rule 404(b)(2) for the purpose of showing lack of mistake and a common plan or scheme. The court did not plainly err in failing to exclude the evidence under Federal Rule of Evidence 403. Moreover, even without the challenged evidence, the evidence against Kaur and Johal was overwhelming, so any error in the admission was harmless.

Whether Kaur and Johal actually picked peaches and whether they purchased pay stubs from Ray Khan were questions capable of influencing the grand jury investigation and therefore were material. And the questions posed to Kaur and Johal were not so ambiguous that their answers could be considered “literally true.”

Finally, the Government presented sufficient evidence to support a jury finding that Kaur purchased pay stubs, even if the testimony of certain trial witnesses identifying her could be called into question. Because there was overwhelming independent evidence against the defendants any error in admitting the in-court identification testimony was harmless beyond a reasonable doubt.

The Sentencing Guidelines permit a three-level increase for substantial interference with the administration of justice if the defendant’s perjury caused the unnecessary expenditure of substantial governmental or court resources. Although the underlying expenses associated with prosecuting Kaur for perjury cannot be included in this calculation the district court found that the Government expended other resources as a result of Kaur’s perjury.

In light of the Government’s representation that it called additional witnesses before the grand jury as a result of Kaur’s perjury, and in light of evidence that it called Kaur to testify again after she was offered immunity, this determination was not clearly erroneous.

ZALMA OPINION

When people lie to a grand jury and are caught in the lie the government has no choice but to charge and convict them of perjury. The opinion made it clear that the crime was obvious and proved beyond a reasonable doubt. If there was any justice the two would have accepted the sentence and served their time. Rather, exercising unmitigated gall, they appealed.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Mr. Zalma’s books available as Kindle books or paperbacks at Amazon.com can be reached at http://zalma.com/zalma-books/

Mr. Zalma’s reports can be found on Tumbler at https://www.tumblr.com/search/bzalma  on Facebook at https://www.facebook.com/barry.zalma and you can follow him on Twitter at https://twitter.com/bzalma

Legal Disclaimer:

The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

 

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Basic Adjusting Manuals for New and Experienced Adjusters

Primers for the Insurance Claims Person

Claims professionals, whether new to the profession or seriously experienced can profit from the two primers on insurance adjusting where they can either learn for the first time or refresh their knowledge on the basic requirements of insurance adjusting. Available in compact form as a paperback or a Kindle book every insurance adjuster will find something to make them more professional in the two compact books.

The Compact Book of Adjusting Property Insurance Claims”

A Manual for the First Party Property Insurance Adjuster

The insurance adjuster is not mentioned in a policy of insurance. The The Compact Book of Adjusting Property Insurance Claims: A Manual for the First Party Property Insurance Adjusterobligation to investigate and prove a claim falls on the insured. Standard first party property insurance policies, based upon the New York Standard Fire Insurance policy, contain conditions that require the insured to, within sixty days of the loss, submit a sworn proof of loss to prove to the insurer the facts and amount of loss.

The policy allows the insurer to then, and only then, respond to the insured’s proof of loss. The insurer can then either accept or reject the proof submitted by the insured.

Technically, if the wording of the policy was followed literally the insurer could sit back, do nothing, and wait for the proof. If the insured was late in submitting the proof the insurer could reject the claim. If the insured submits a timely proof of loss the insurer could either accept or reject the proof of loss. If the insurer rejected the proof of loss the insured could either send a new one or give up and gain nothing from the claim. Suit on the policy would be difficult because the policy contract limited the right to sue to times when the proof of loss condition had been met.

Insureds and insurers were not happy with that system. It made it too difficult for a lay person to successfully present a claim. The system, as written into the standard fire policy seemed to run counter to the covenant of good faith and fair dealing that had been the basis of the insurance contract for centuries. Most insurers understood that their insureds were mostly incapable of complying with the strict enforcement of the policy conditions. To fulfill the covenant of good faith and fair dealing insurers created the insurance adjuster to fulfill its obligation to deal fairly and in good faith with the insured.

Available as a Kindle book.

Available as a paperback.

“The Compact Book on Adjusting Liability Claims”

A Handbook for the Liability Claims Adjuster

This Compact Book of Adjusting Liability Claims is designed to Product Detailsprovide the new adjuster with a basic grounding in what is needed to become a competent and effective insurance adjuster. It is also available as a refresher for the experienced adjuster.

The liability claims adjuster quickly learns that there is little difficulty with a claimant (the person alleging bodily injury or property damage against a person insured) if the claim is paid as demanded. The insured may be unhappy if the claimant’s claim is paid as presented since most do not believe they did anything wrong or fear an increase in premiums charged for subsequent policies.

The adjuster must be prepared to salve the insured’s emotions, explain why in the law and the policy it was appropriate to pay the claimant and that the settlement is in the best interest of both the insured and the insurer the adjuster represents.
The adjuster knows, and must be prepared to explain to an insured, that if a claim is resisted or denied the claimant will be unhappy, will probably file suit. If not promptly settled the claimant’s lawyers will rake the insured over the coals to prove that the insured is liable for the claimant’s injuries. The litigation will take time, effort, and money to establish the extent of the injuries and who is responsible for the injuries. Failure to settle promptly can cost the insured his or her reputation and will certainly cost the insurer much more than the claim could have been resolved for had it been resolved before the claimant retained a lawyer.

Available as a Kindle book

Available as a paperback.

Read about these and other insurance books by Barry Zalma at http://zalma.com/blog/insurance-claims-library/

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A Clear and Unambiguous Exclusion Can’t Beat a Great Lawyer

Bar Negligent for not Seeking Arrest of Drunk & Disorderly Customer

It is axiomatic among plaintiffs’ personal injury lawyers that the more serious the injury the less the need for legal niceties. In a case of the wrongful death of a young woman at the hands of a violent, intoxicated and unlicensed driver a clear and unambiguous exclusion is insufficient to avoid liability when a trial court finds liability for the bar distinct from the service, use, or removal of an intoxicated patron.

In Mesa Underwriters Specialty Insurance Co. v. Secret’s Gentleman’s Club; Glmr, Inc., dba Secret’s; Sharon Snyder, Individually and as Administratrix of the Estate of Deceased Desiree Snyder; Terry Snyder, No. 17-3779, United States Court Of Appeals For The Sixth Circuit (October 16, 2018) refused to protect the insurer who refused to defend or indemnify the bar.

Mesa Underwriters Specialty Insurance Co. (Mesa) appealed the district court’s grant of partial summary judgment in favor of Defendants Secret’s Gentleman’s Club and GLMR, Inc. (together Secret’s), and Sharon and Terry Snyder (the Snyders), and the district court’s denial of Mesa’s motion for judgment on the pleadings.

FACTS

On April 5, 2014, twenty-two year old Desiree Snyder was killed when the vehicle she was a passenger in was struck head-on by a vehicle driven by Julio Vargas who, heavily intoxicated, was driving the wrong way on I-480. Minutes before the head-on collision, Defendant Secret’s, an adult entertainment bar in Cleveland, had ordered Vargas to leave its establishment.

At the time, Mesa insured Secret’s under a Commercial General Liability Coverage policy that afforded liability coverage for “bodily injury” (defined to include death) caused by an “occurrence” (defined as an “accident”). As pertinent here, the policy contained a liquor liability exclusion, which excluded coverage for:

“Bodily Injury” or “property damage” for which any insured may be held liable by reason of:

  • Causing or contributing to the intoxication of any person;
  • The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or
  • Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages.

 State-Court Action

Desiree’s parents sued. alleging claims of common-law negligence, wrongful death, conscious disregard/willful and wanton misconduct, survivorship, loss of consortium, and violations of Ohio’s Dram Shop Act by Gigi’s Lounge and Secret’s.

After receiving notice of the state-court action, Mesa notified Secret’s by letter dated February 25, 2015, that it would not defend or indemnify Secret’s against what it termed a “liquor liability” claim.

The Snyders and Secret’s executed a Confidential Agreement and Stipulation for Consent Judgment.  The case went forward against Secret’s and GLMR. Secret’s and the Snyders entered into an Amended Stipulation for Consent Judgment allowing Secret’s to continue to deny liability and allowing the state court to determine Secret’s liability and damages, if any, for the Snyders’ common-law negligence, wrongful death, and survivorship claims.

The state trial court found, among other things:

  • The toxicological evidence shows that Julio Vargas’ blood alcohol content (BAC) at the time of the crash was likely .263 to .265-well over three times the legal limit.
  • The Court’s determination of Secrets’ liability is not premised on its selling or furnishing of alcoholic beverages to Mr. Vargas or on a statutory violation of Ohio’s Dram Shop statute, R.C. § 4399.18. Instead, and pursuant to the parties’ Stipulation, this Court’s sole focus is on Secrets’ alleged common law negligence based on the unique and case-specific facts and attendant circumstances.
  • As of April 5, 2014, Julio Vargas did not have a valid driver’s license.
  • Vargas was drinking almost continuously on the night of the accident.

 CONCLUSIONS OF LAW

The trial court concluded that the Plaintiffs’ common law negligence claims were sufficiently distinct, separate and independent from a statutory cause of action premised on the sale or service of alcohol. Secrets was negligent in failing to inform the Cleveland Police Officer working on its premises of Julio Vargas’ noticeably and extremely intoxicated condition, of his assault of a club dancer in violation of Ohio law, and of his unauthorized use of a woman’s credit card that was clearly not his own. It also includes Secrets’ negligence in failing to take any action whatsoever to prevent Vargas from driving, despite the foreseeable consequences of its inaction in these regards, along with its negligence in instead choosing to personally escort Vargas out of the club to ensure that he would drive away in the extremely intoxicated condition he was in.

Secrets had a common law duty to use reasonable care to prevent foreseeable harm to others, including to Desiree Snyder. This includes Secrets’ duty to call or involve the police (recognizing that an off duty police officer worked at Secrets) to prevent patrons who are known to be noticeably intoxicated from driving, or to, at a minimum, provide them with a ride or call them a taxi. Secrets breached its common law duty of reasonable or due care.  The trial Court further held that Secrets’ negligent acts and omissions are a proximate cause of Desiree Snyder’s conscious pain and suffering and wrongful death.

Vargas was more than merely intoxicated. He was over three times the legal limit, had just criminally assaulted a dancer and was, contrary to Secrets’ own rules, trying to use a credit card that was clearly not his own.

Had Secrets notified Officer Butler (who was on scene) of Vargas’ extremely intoxicated condition, Vargas wouldn’t have driven anywhere.

When, as here, the case-specific facts and attendant circumstances show independent acts or omissions of negligence that are separate, distinct and independent from the sale or service of alcohol, Ohio Courts have permitted common law negligence actions to be maintained against the establishment.

Secrets’ negligence claims in this case are separate, distinct and independent from any statutory claim involving or arising from its sale or service of alcohol. While Mesa may disagree with the State Court’s determination that Secrets is liable for common law negligence-separate, distinct and independent from anything having to do with the sale or service of alcohol-the doctrine of collateral estoppel precludes Mesa from attempting to relitigate Secrets’ liability in the Sixth Circuit Court of Appeal.

The district court determined that under the insurance-policy language Mesa had a duty to indemnify Secret’s. Regarding Mesa’s duty to defend, the district court concluded that because the Snyders’ common-law negligence claims were not “indisputably outside the contracted policy coverage” and could arguably have been covered under the Policy, Mesa’s duty to defend was triggered.

When, as here, the case-specific facts and attendant circumstances show independent acts or omissions of negligence that are separate, distinct and independent from the sale or service of alcohol, Ohio Courts have permitted common law negligence actions to be maintained against the establishment.

Under Ohio law, an insurer’s duty to defend arises when a complaint alleges claims that arguably could be covered under the insurance policy. An insurer has an absolute duty to defend an action when the complaint contains an allegation in any one of its claims that could arguably be covered by the insurance policy, even in part and even if the allegations are groundless, false, or fraudulent. Mesa does not contend that there is no coverage under the policy’s statement of coverage; rather, it argues that coverage is excluded by the liquor liability exclusion.

The district court correctly noted that the Snyders’ allegations “contemplate action or inaction on the part of Secrets’ employees which would arguably amount to negligence whether or not Mr. Vargas was sold or consumed any alcohol at Secrets.” And, as the district court observed, “even if [Mesa’s] initial review of the Complaint did not convince Mesa of its duty to defend Secrets, Mesa was contacted repeatedly by Secrets’ Counsel regarding the fact that allegations of common-law negligence-separate and distinct from causing or contributing to Mr. Vargas’s intoxication or the sale or service of alcohol-were being asserted.”

Although Mesa insists that Secret’s liability is premised on “contributing to the intoxication of Vargas,” this is contrary to the state court’s decision and analysis. Because Mesa presents no argument undermining the district court’s analysis of the policy language,  the district court’s determination that Mesa has a duty to indemnify Secrets was affirmed.

ZALMA OPINION

The plaintiffs’ lawyers were brilliant when faced with judgment proof defendants to withdraw the dram shop cause of action and limit their allegations to common law negligence to dip into the assets of the insurer, Mesa. To me, had Vargas been stone cold sober, a boor, and a licensed driver the accident would not have happened. What caused him to drive on the wrong side of the road and hit the decedent head on was due to his intoxication. The court should have considered reality rather than the limitations on the analysis caused by the plaintiffs’ lawyers.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Mr. Zalma’s books available as Kindle books or paperbacks at Amazon.com can be reached at http://zalma.com/zalma-books/

Mr. Zalma’s reports can be found on Tumbler at https://www.tumblr.com/search/bzalma  on Facebook at https://www.facebook.com/barry.zalma and you can follow him on Twitter at https://twitter.com/bzalma

Legal Disclaimer:

The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

 

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An Exclusion Can Never Create Coverage

A Battery Is Always Intentional and Cannot Be an “Occurrence”

Insurance, by definition, only applies to a contingent or unknown event. For a person to obtain defense or indemnity to a claim of bodily injury the injury must be due to an accident, a fortuitous event.

In Unitrin Direct Insurance Company v. Michael Esposito, No. 17-3810, United States Court Of Appeals For The Third Circuit (October 17, 2018) Unitrin Direct Insurance Company appealed an order of the District Court declaring that it has a duty to defend Michael Esposito in a state-court personal injury action and a second order denying reconsideration.

FACTS

In August 2014, Esposito and Mark Anderson were involved in a bar fight. Anderson later sued Esposito in state court, alleging negligence and assault and battery. The complaint avers that Esposito, “without provocation, punched, kicked and injured the plaintiff[,] causing permanent, significant and disfiguring facial injuries.” At the time of Anderson’s suit, Esposito was covered by a homeowners insurance policy (the Policy) issued by Unitrin.

After initially defending Esposito subject to a reservation of rights, Unitrin sought a declaration from the District Court that it had no duty to defend and indemnify Esposito in the state court action. Esposito filed an answer, denying he assaulted another patron but asserting that there had been an altercation at the bar in which he “was required to defend himself and his wife against an attack.”

Unitrin moved for judgment on the pleadings, arguing it had no duty to defend Esposito because the events described in the state court complaint did not constitute an “occurrence,” which the Policy defines as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in . . . ‘Bodily injury’; or . . . ‘Property damage.'”

In the alternative, Unitrin argued that coverage was barred by two separate exclusions—the “expected or intended injury” exclusion, and the “physical or mental abuse” exclusion.

In response to Unitrin’s motion, Esposito argued he was entitled to a defense because he was defending his wife, who also is insured under the Policy. Esposito did not address whether the altercation was a covered “occurrence” but instead claimed that his conduct fell within the self-defense exception to the “expected or intended injury” exclusion.

The District Court denied Unitrin’s motion for judgment on the pleadings and entered a declaratory judgment that Unitrin had a duty to defend Esposito in the underlying suit. The Court found that the conduct alleged in the state court complaint was not an “occurrence” under the Policy. It nevertheless held that Esposito was entitled to coverage because the conduct fell within the self-defense exception to the “expected or intended injury” exclusion. In the District Court’s view: “Although the injury-producing conduct alleged in the underlying action does not fall within the policy definition of an occurrence triggering coverage, the policy exclusion for intentional conduct expressly provides coverage when the insured acts in self-defense or in the defense of others.”

Unitrin contended that once the District Court determined there was no “occurrence,” its work was done and it should not have addressed the self-defense exception. The Court denied the motion for reconsideration, and this appeal followed.

The Policy states that Unitrin will indemnify and defend a claim made or suit “brought against an ‘insured’ for damages because of ‘bodily injury’ or ‘property damage’ caused by an ‘occurrence’ to which this coverage applies.” And it defines an “occurrence” as an “accident” resulting in bodily injury or property damage. “Accident” is not defined in the Policy, but the District Court defined it as “an unexpected happening causing loss or injury which is not due to any fault or misconduct on the part of the person injured but for which legal relief may be sought.” (quoting Webster’s Third New International Dictionary, Unabridged (2017)).

The District Court concluded that because the conduct alleged in the state court complaint was not accidental, it did not fall within the Policy definition of an “occurrence.” As the Court explained, “because [the plaintiff] alleges in his complaint that Esposito acted intentionally and not accidentally, there is no occurrence triggering personal liability coverage. (emphasis added).

ANALYSIS

After finding no coverage under the Policy, the District Court should not have considered whether any of the Policy’s exclusions (or exceptions thereto) applied. Simply put, exceptions to policy exclusions cannot create or expand insurance coverage. It is elemental that exclusions and exceptions in an insurance policy cannot expand the scope of agreed coverage. If coverage does not exist under the insuring agreement, the inquiry is at an end.

There is no need to look to the exclusions because they cannot expand the basic coverage granted in the insuring agreement. So once the District Court found no coverage under the Policy, it had no need to consider whether any exclusions to coverage applied.

Likewise, we have no need to consider whether the self-defense exception applies here.  Nevertheless, given the District Court’s analysis and the parties’ extensive arguments on the question, we note that the allegations in the state court complaint against Esposito do not support a claim of self-defense.

Under Pennsylvania law, it is well established that an insurer’s duties under an insurance policy are triggered by the language of the complaint against the insured. The obligation of an insurer to defend an action against the insured is fixed solely by the allegations in the underlying complaint. We find no reason to expand upon the well-reasoned and long-standing rule that an insurer’s duty to defend is triggered, if at all, by the factual averments contained in the complaint itself.  The District Court therefore erred by looking beyond the allegations of the underlying complaint to consider Esposito’s claim that he acted in self-defense.

Here, the state court complaint alleges that Esposito “without provocation, punched, kicked and injured the plaintiff.” The complaint also alleges that “Esposito was charged with assault and pleaded guilty.”  These allegations of an unprovoked and “unjustified assault,” do not support a claim of self-defense.

Based on the allegations in the complaint, the District Court correctly found that there was no “occurrence,” and thus no coverage, under the Policy. Accordingly, Unitrin does not have a duty to defend Esposito in the underlying state court case.

ZALMA OPINION

The District Court attempted to be fair to the defendant by creatively finding coverage by concluding that an exclusion did not apply to the facts of the case and ignored its own finding that there was no occurrence. Since there can only be coverage if there is an occurrence the analysis of the exclusion was useless. If there is no occurrence there is no coverage regardless of other arguments.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Mr. Zalma’s books available as Kindle books or paperbacks at Amazon.com can be reached at http://zalma.com/zalma-books/

Mr. Zalma’s reports can be found on Tumbler at https://www.tumblr.com/search/bzalma  on Facebook at https://www.facebook.com/barry.zalma and you can follow him on Twitter at https://twitter.com/bzalma

Legal Disclaimer:

The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

 

 

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The Problem With Bad Faith & Insurance Fraud

Does the Tort of Bad Faith Help Fraud Perpetrators

The tort of bad faith was created by the courts in the 1950’s and allows people mistreated by their insurers to sue for both breach of contract and tort damages including punitive damages. In two important books Barry Zalma explains why insurance fraud is a serious problem that needs to be dealt with by professional claims handlers and SIU investigators. In “Time to Rescind the Tort of Bad Faith” Mr. Zalma explains why the tort has outlived its purpose and is a cure that is worse than the disease it was designed to cure. In “Insurance Fraud & Weapons to Defeat Insurance Fraud” explains how to deal professionally with attempts at insurance fraud.

Time to Rescind the Tort of Bad Faith

Insurance and the Law of Unintended Consequences Paperback 

Insurance is, and always will be, a business of the utmost good faith. Time to Rescind the Tort of Bad Faith: Insurance and the Law of Unintended ConsequencesAll parties to the insurance contract agree, in good faith and fair dealing, to do nothing to deprive the other the benefits of the contract. Insurance is, and always be, nothing more than a contract.

The insurer makes a promise to the insured that if a contingent or unknown loss occurs caused by a peril or risk insured against and not excluded, to pay the insured indemnity as promised by the contract up to the limits provided.

The insured promises to truthfully disclose the risks of loss faced by the insured, property owned by the insured, the business of the insured and/or the insured’s liability exposures. The insured also promises to honestly present a claim, prove the claim, and cooperate with the insurer in its investigation. If the parties to the insurance contract deal with each other fairly and in good faith the policy remains viable, claims are paid promptly and to the satisfaction of the insurer and the insured.

Only if a true tort occurs can the insured waive the contract action and sue in tort. Breach of contract, by centuries old tradition, is not a tort and cannot and should not be considered a tort. The Tort of Bad Faith has served its purpose and is now causing more problems than it solves. It is time the courts and state legislatures rescind the tort and return to common law contract damages.


“Insurance Fraud & Weapons to Defeat Insurance Fraud”

In Two Volumes

Product DetailsInsurance fraud continually takes more money each year than it did the last from the insurance buying public. No one knows the actual amount with any certainty because most attempts at insurance fraud succeed. Estimates of the extent of insurance fraud in the United States range from $87 billion to more than $300 billion every year.

Insurers and government backed pseudo-insurers can only estimate the extent they lose to fraudulent claims. Lack of sufficient investigation and prosecution of insurance criminals is endemic. Most insurance fraud criminals are not detected. Those that are detected do

so because they became greedy, sloppy and unprofessional so that the attempted fraud becomes so obvious it cannot be ignored.

No one will ever be able to place an exact number on the amount lost to insurance fraud. Everyone who has looked at the issue knows – whether based on their heart, their gut or empirical fact determined from convictions for the crime of insurance fraud – that the number is enormous.

When insurers and governments put on a serious effort to reduce the amount of insurance fraud the number of claims presented to insurers and the pseudo-government-based or funded insurers drops logarithmically. Since the appointment of Attorney General Sessions, the effort to stop insurance fraud against Medicare and Medicaid has increased.

Insurance Fraud & Weapons to Defeat Fraud - Volume Two: A Manual for Those Working to Defeat Insurance Fraud by [Zalma, Barry]This book contains appellate decisions regarding insurance fraud from federal and state appellate courts across the country and full text of many insurance fraud statutes.

It is available as both a legal research tool and a product to assist insurers, insurance company personnel, independent insurance adjusters, special investigation unit investigators, state fraud investigators and insurance lawyers to become effective persons involved in the attempt to defeat or reduce the effect of insurance fraud.

Volume One available as a Kindle book and a paperback.

Volume Two Available as a Kindle book and a paperback

Read these and other insurance books by Barry Zalma at http://zalma.com/blog/insurance-claims-library/

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Construction Defects, Mold, Bacteria and Insurance

Construction Defects, Mold, Bacteria and Insurance

Modern insurance claims professionals now must understand and deal with insurance disputes relating to construction, claims of construction defects, mold and bacterial infestations into structures. Claims for damage to property and bodily injury as a result have grown logarithmically. The books below will help the insurance professional obtain sufficient knowledge to properly deal with such claims and will help the insured present a claim to an insurer that will be covered for defense and indemnity.

Construction Defects and Insurance

Construction Defects and Insurance Volume One: The Structure, The Construction Contract, and Construction Defect InsuranceBarry Zalma has updated and re-edited his seminal work Construction Defects Coverage Guide into is the latest addition to Barry Zalma’s insurance claims series of books and articles that will form the most thorough, up-to-date, expert-authored insurance claims guide available today eight Kindle or Paperback Volumes at reasonable prices.

Thorough, yet practical, this series of books form the ideal guide for any professional who works in or frequently interacts with the insurance industry.

Claims professionals, risk managers, producers, underwriters, attorneys (both plaintiff and defense), and business owners will benefit greatly from the ten volume guide. It is also the perfect resource for insurance educators, trainers, and students whose role requires an understanding of insurance law.

The Eight volumes include:


Mold Claims

This series of books is the latest addition to Barry Zalma’s insurance claims series of books and articles that will form the most thorough, up-to-date, expert-authored insurance claims guide available today.

Mold Claims Volume One: Understanding insurance claims and litigation concerning mold, fungi, and bacteria infestations.

Written by nationally-renowned insurance coverage expert Barry Zalma, a semi-retired insurance coverage attorney, consultant, expert witness and blogger, Mold Claims provides in-depth explanations, analysis, examples, and detailed discussion of:

•Mold;
•FungMold Claims Volume Two: Understanding insurance claims and litigation concerning mold, fungi, and bacteria infestations.i;
•Bacteria;

•Mold, fungi and bacteria claims; and
•Mold, Fungi, Bacteria litigation.

Thorough, yet practical, this series of books form the ideal gMold Claims Volume Three: Understanding insurance claims and litigation concerning mold, fungi, and bacteria infestations.uide for any professional who works in or frequently interacts with the insurance industry or is involved in litigation. Claims professionals, risk managers, producers, underwriters, attorneys (both plaintiff and defense), and business owners will benefit greatly from the mold volumes. It is also the perfect resource for insurance educators, trainers, and students whose role requires an understanding of insurance law as it relates to mold, fungi and bacterial infestations.

TMold Claims Volume Four: Understanding insurance claims and litigation concerning mold, fungi, and bacteria infestations.he author has provided checklists, sample procedures, form letters, tables and information and references to model statutes, state statutes, administrative regulations, and requirements of insurance departments nationwide.

 

Read about these and other insurance books by Barry Zalma at http://zalma.com/blog/insurance-claims-library/


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Contra Preferentum Does Not Apply to a Clear and Unambiguous Policy

No Coverage Before Policy In Effect

People who sue insurance companies seem to forget that an insurance policy is a contract – not an entitlement provided by a government. Insurance contracts must be read as a whole document and all clear and unambiguous terms must be applied as written.

In Atlantic Specialty Insurance Company v. Sergey Pastukov, No. 18-11129, United States Court Of Appeals For The Eleventh Circuit, (October 10, 2018) the Eleventh Circuit was asked to provide insurance coverage for Sergey Pastukov who was involved in a truck accident on May 14, 2015 before a policy with  Atlantic Specialty Insurance Company was in effect.

Atlantic Specialty denied his claim and later sought a declaratory judgment to establish that it was not obligated to cover his accident. The district court agreed and granted judgment in Atlantic Specialty’s favor.

Before the district court, Atlantic Specialty provided three reasons for which it was not obligated to provide coverage for Mr. Pastukov’s accident. First, it argued that his claim was not covered because his loss occurred before coverage began. Second, it argued that he was not eligible for coverage under the policy because he did not meet the requirements of a “Contract Driver” or an “Owner-Operator.” Finally, it asserted that his claim was barred by the known loss doctrine.

The district court adopted the second basis, finding that Mr. Pastukov was never eligible for coverage. It rejected Mr. Pastukov’s contention that the contract’s terms were ambiguous and held that there is “no interpretation of the language of the [Certificate of Insurance] under which [he] qualifies for coverage, either as a Contract Driver or an Owner-Operator.”

THE POLICY

According to the insurance contract, under the provision entitled “Your Coverage Effective Date,” Mr. Pastukov’s “coverage under the Policy beg[an] on the latest of:”

(1) the Policy Effective Date

(2) the date You become a member of an eligible Class as described above; or

(3) the date upon which the Program Administrator or its Designee approves Your fully completed and signed enrollment form.

Mr. Pastukov’s Policy stated an effective date of May 14, 2015. His coverage began, however, when the Program Administrator approved his application on May 29, 2015.

ANALYSIS

Under Florida law, insurance contracts are construed according to their plain meaning. The policy terms should be given their plain and unambiguous meaning as understood by the man-on-the-street. If the relevant policy language is susceptible to more than one reasonable interpretation, one providing coverage and another limiting coverage, the insurance policy is considered ambiguous. If, however, the policy provision is clear and unambiguous, it should be enforced according to its terms whether it is a basic policy provision or an exclusionary provision.

This provision is consistent with Florida law. Florida recognizes that generally, the parties to a contract are competent to fix the effective date. The ability of the parties to agree upon which date, or event, coverage begins is also recognized by the leading treatises. The effective date is a key concept because it defines when the insured has contractual rights that can be enforced. As a general rule, the risk attaches as of the time actually agreed upon or understood by the parties.

A court may not, as Pastukov argued, focus on portions of the contract in isolation. Rather, the court must read the policy as a whole, endeavoring to give every provision its full meaning and operative effect.

The clear terms of the insurance policy contemplate that “coverage under the Policy beg[an] on the latest of” three events. The latest event was the approval of his application on May 29.

Mr. Pastukov argued that the maxim that the court should construe insurance policy language in favor of the insured. The Eleventh Circuit concluded that this principle (sometimes called contra preferendum) does not apply because the contract language is clear.

Only if a provision is ambiguous after considering the policy as a whole will a court construe the ambiguous provision against the insurer in favor of coverage.

ZALMA OPINION

The Eleventh Circuit read the contract as a whole. It did not use the same reason as did the District Court since it found there was no policy in effect at the time of the loss and had no need to look to the other two grounds on which Atlantic based its conclusion there was no coverage. There can never be coverage under a policy before it comes into effect.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Mr. Zalma’s books available as Kindle books or paperbacks at Amazon.com can be reached at http://zalma.com/zalma-books/

Mr. Zalma’s reports can be found on Tumbler at https://www.tumblr.com/search/bzalma  on Facebook at https://www.facebook.com/barry.zalma and you can follow him on Twitter at https://twitter.com/bzalma

Legal Disclaimer:

The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

 

 

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Zalma on Insurance Claims

Materials Needed by Every Insurance Claims Professional

Insurance claims professional and expert witness Kevin Quinley said about the following ten volumes: “Zalma’s series of books is a terrific blend of both the legal underpinnings and the practical implications for the claim practitioner.

Insurance Maven Bill Willson said: “Zalma On Insurance Claims” is a tour de force, an indispensable tool that should be a part of every claims training program in America and in the library of every claims professional for quick and frequent reference. This comprehensive guide belongs in the library of every insurance defense AND policyholder law firm. It should be a part of every claims training program of carriers, independent adjusting firms, and public adjusters. Many of these parts should be part of the training or reference programs for non-claims personnel, from agents to underwriters to risk managers.”

Ten Volumes Comprising A Comprehensive Group of Materials on Property & Casualty Insurance Claims

Zalma on Insurance Claims Volume 101

A Comprehensive Review of the law and Practicalities of Property, Casualty and Liability Insurance Claims

This series of ten books is the latest addition to Barry Zalma’s insurance claims series of books and articles that will form the most thorough, up-to-date, expert-authored insurance claims guide available today.

Written by nationally-renowned insurance coverage expert Barry Zalma, a semi-retired insurance coverage attorney, consultant, expert witness and blogger, Zalma on Insurance Claims provides in-depth explanations, analysis, examples, and detailed discussion of:

  • Property insurance claims;
  • Third-party liability claims;
  • Casualty claims; and
  • Insurance Fraud

Thorough, yet practical, this series of books form the ideal guide for any professional who works in or frequently interacts with the insurance industry. Claims professionals, risk managers, producers, underwriters, attorneys (both plaintiff and defense), and business owners will benefit greatly from the ten volume guide. It is also the perfect resource for insurance educators, trainers, and students whose role requires an understanding of insurance law. As you read through the various volumes of Zalma on Insurance Claims, you will find comprehensive—yet comprehensible—coverage of key topics, including:

  • What is Insurance?
  • The History of Insurance
  • The covenant of good faith and fair dealing.
  • The tort of Bad faith
  • Conditions,
  • Warranties,
  • Exclusions
  • Declaring a policy void
  • Duties of insured and insurer
  • Evaluation and settlement
  • Identifying insurance fraud
  • Investigation
  • Kinds of insurance policies
  • Other insurance clauses
  • Preparing a case for trial
  • Processing a claim
  • Responses to fraud
  • Subrogation and salvage
  • Underwriting and
  • Many more property and casualty insurance matters.

Zalma on Insurance Claims Part 102

This, the second part of Zalma on Insurance Claims and includes materials concerning:

  • Other Insurance Clauses
  • Underwriting
  • Conditions, Warranties and Exclusions

Zalma on Insurance Claims Part 103

This is part 103 of Zalma on Insurance Claims and will deal with:

1.Duties of the Insured and the Insurer
2.Declaring a Policy Void
3.Processing a Claim

When read with Part 101 and Part 102, this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 104

This, the fourth volume of Zalma on Insurance Claims and includes materials concerning:

  1. Investigation of First Party Property Claims
  2. Rescission
  3. The Mortgage Clause
  4. Fortuity & Other Issues
  5. Determine the Amount of the Loss
  6. The Claim File

When read with Part 101, Part 102, and Part 103, this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 105

This, the fifth volume of Zalma on Insurance Claims and includes materials concerning:

  1. Investigation – Liability
  2. Claims Made and Reported Policies
  3. The Notice Prejudice Rule.
  4. Types of Torts
  5. The Liability Claims File
  6. Discovery of the Insurance Claims File
  7. Tests for Determining Duty to Defend
  8. Appendices – forms for the claims person

When read with Insurance 101, Insurance 102, Insurance 103 and 104, this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 106

This is the sixth part of “Zalma on Insurance Claims” and will deal with:

Chapter 1 Property Insurance & the Tort of Bad Faith
Chapter 2 Grounds for Finding Bad Faith
Chapter 3 Avoiding Charges of Bad Faith
Chapter 4. Punitive Damages
Chapter 5.Bad Faith & Liability Insurance
Chapter 6.Defenses to the Tort of Bad Faith
Appendix 1 – California Civil Code Section 3294

When read with Part 101, Part 102, and Part 103, Part 104 and Part 105 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 107:

This is the seventh part of “Zalma on Insurance Claims” and will deal with:

1.Evaluation and Settlement – Property
2.Evaluation and Settlement – Liability
3.Subrogation
4.Salvage

When read with Part 101, Part 102, Part 103, Part 104, Part 105 and Part 106 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 108

This, the eighth part of Zalma on Insurance Claims, includes materials concerning:

1.Preparing a case for trial
2.Interviewing Techniques
3.The art of the Interview
4.Interview General Principles
5.The Interviewer
6.Preparing for the Interview
7.Beginning the Interview
8.Control Of The Interview
9.Dealing with Witness Types
10.Approaches the Work
11.Dealing with the Nervous Person
12.Bluffs
13.The Mutability Of Memory
14.The Examination Under Oath

When read with Part 101, Part 102, Part 103, Part 104, Part 105, Part 106 and Part 107 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 109 

This, the ninth part of Zalma on Insurance Claims, includes materials concerning:

•Identifying Insurance Fraud
•Professional Conspiracies
•Multiple Types of Insurance Fraud
•How to Join the Fraud Fight
•Case Studies of Successful Fraud Investigations
•Checklist 1 – Types of Insurance Fraud
•Checklist 2 – Training Adjusters
•Checklist 3 – Red Flags of Fraud – Property Insurance
•Checklist 4 – Red Flags of Fraud – Liability Insurance
•Appendix A – Commonly Used Medical Acronyms and Abbreviations
•Appendix B – Glossary of Medical Terms

When read with Part 101, Part 102, Part 103, Part 104, Part 105, Part 106, Part 107 and Part 108 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 110

This, the tenth part of Zalma on Insurance Claims, includes materials concerning:

•Responses to Fraud
•Grounds for Rescission.
•The Fight Against Fraud
•Checklist 1—Responses to Fraud
•Checklist 2 – The Fight Against Fraud

When read with Part 101, Part 102, Part 103, Part 104, Part 105, Part 106, Part 107, Part 108 and Part 109 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Read about these and other insurance books by Barry Zalma at http://zalma.com/blog/insurance-claims-library/

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Private Limitations of Action Provision Enforced

Ninth Circuit Affirms Summary Judgment Because Suit Was Filed Too Late

Every first party property insurance policy contain a special provision that limits the time available for an insured to sue the insurer in the event a claim is rejected. The private limitations provision is usually less than the state’s statute of limitations and protects the insurer from stale claims.

In Maxwell B. Williams and Claire N. Williams v. Travelers Home and Marine Insurance Company and Travelers Indemnity Company, No. 17-17368, United States Court Of Appeals For The Ninth Circuit (October 17, 2018) the Ninth Circuit was asked to ignore a private limitation of action provision.

FACTS

Maxwell and Claire Williams brought a diversity insurance coverage action seeking coverage under their homeowners’ policy after suffering a water loss at their residence in Las Vegas, Nevada. The Williamses appeal the district court’s grant of summary judgment in favor of Travelers Home and Marine Insurance Company (“Travelers”).

In Nevada, a claim for bad faith must be filed within four years of the triggering event. A claim based on violation of statute must be filed within three years of the triggering event. Under Nevada law, an insured’s limitations period does not begin to run until the insurer “formally denies” liability or additional benefits. No magic words are necessary to constitute a denial of further benefits; rather the limitations period is triggered by notification that the carrier has failed to fulfill its promise to pay a claim.

Here, the limitations period was triggered by Travelers’ October 5, 2011 letter, which stated that Travelers was closing the claim file because the Williamses had failed to cooperate with Travelers’ previous two requests for inspection of the property and additional information in support of the claim. The letter notified the Williamses that Travelers was “closing [its] file,” and referred the Williamses to their insurance policy’s “Suit Against Us” provision, which set forth a two-year limitation period for breach of the policy. The letter put the Williamses on notice that Travelers would not make further payments on the claim.

The only evidence the Williamses offered of any post-closure activity is Travelers’ July 7, 2012 letter, which advised the Williamses that Travelers did not have a record of the check it issued to them on May 26, 2011 being cashed. The letter did not indicate that any further consideration had been or would be given to the Williamses’ claim or that Travelers contemplated further payment.

The Williamses filed suit on June 17, 2016—well over four years after the limitations period was triggered by the October 5, 2011 letter.

DECISION

The Williamses’ claims for bad faith and violations of statute were barred by the applicable statutes of limitation.

Nevada has a six-year limitation period for general breach of contract actions. However, the Policy contains a two-year suit limitation provision. Suit limitation provisions are enforceable in Nevada so long as the period provided in the contract is a reasonable balance between the insurer’s interest in prompt commencement of action and the insured’s need for adequate time to bring suit.

As noted above, the Williamses filed suit on June 17, 2016—over four and a half years after the limitations period was triggered by the October 5, 2011 letter. The Williamses’ breach of contract claim was barred by the two-year suit limitation provision.

ZALMA OPINION

The Ninth Circuit found the decision, as it should, a simple decision based on arithmetic. The suit was filed  more than four years after the denial. The language of the policy was clear and easy to understand. The failure to file suit within four years of the denial was slothful and gave the court no basis to give the insureds’ the opportunity to sue their insurer.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Mr. Zalma’s books available as Kindle books or paperbacks at Amazon.com can be reached at http://zalma.com/zalma-books/

Mr. Zalma’s reports can be found on Tumbler at https://www.tumblr.com/search/bzalma  on Facebook at https://www.facebook.com/barry.zalma and you can follow him on Twitter at https://twitter.com/bzalma

Legal Disclaimer:

The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

 

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Insurance Claims Law

Insurance Claims Law

Available now from Barry Zalma, ClaimSchool, and Amazon.com are books and materials essential to the claims professional. COIL provides regular commentary on insurance law to allow the claims professional to remain current on what the courts are doing with regard to insurance law. The ten volume “Zalma on Insurance Claims” provides the claims professional with everything needed to professionally investigate and adjust property and casualty claims.

COIL Commentary on Insurance Law

Volume 1, Number One

A Journal providing information about insurance, insurance claims handling and insurance law as it changes with new decisions.

A Journal providing information about insurance, insurance claims handling and insurance law as it changes with new decisions from the state and federal appellate courts.Future issues will be issued regularly providing information on new and interesting insurance appellate decisions.  Articles included:

  • What is Insurance?
  • Claims in a Catastrophe
  • Misrepresentation or Concealment of a Material Fact
  • Only in California “Once” is with “Such Frequency as to Indicate a General Business Practice”

Ten Volumes Comprising A Comprehensive Group of Materials on Property & Casualty Insurance Claims

Insurance claims professional and expert witness Kevin Quinley said about the following ten volumes: “Zalma’s series of books is a terrific blend of both the legal underpinnings and the practical implications for the claim practitioner.

Insurance Maven Bill Willson said: “Zalma On Insurance Claims” is a tour de force, an indispensable tool that should be a part of every claims training program in America and in the library of every claims professional for quick and frequent reference. This comprehensive guide belongs in the library of every insurance defense AND policyholder law firm. It should be a part of every claims training program of carriers, independent adjusting firms, and public adjusters. Many of these parts should be part of the training or reference programs for non-claims personnel, from agents to underwriters to risk managers.”

Zalma on Insurance Claims Volume 101

A Comprehensive Review of the law and Practicalities of Property, Casualty and Liability Insurance Claims

This series of ten books is the latest addition to Barry Zalma’s insurance claims series of books and articles that will form the most thorough, up-to-date, expert-authored insurance claims guide available today.

Written by nationally-renowned insurance coverage expert Barry Zalma, a semi-retired insurance coverage attorney, consultant, expert witness and blogger, Zalma on Insurance Claims provides in-depth explanations, analysis, examples, and detailed discussion of:

  • Property insurance claims;
  • Third-party liability claims;
  • Casualty claims; and
  • Insurance Fraud

Thorough, yet practical, this series of books form the ideal guide for any professional who works in or frequently interacts with the insurance industry. Claims professionals, risk managers, producers, underwriters, attorneys (both plaintiff and defense), and business owners will benefit greatly from the ten volume guide. It is also the perfect resource for insurance educators, trainers, and students whose role requires an understanding of insurance law. As you read through the various volumes of Zalma on Insurance Claims, you will find comprehensive—yet comprehensible—coverage of key topics, including:

  • What is Insurance?
  • The History of Insurance
  • The covenant of good faith and fair dealing.
  • The tort of Bad faith
  • Conditions,
  • Warranties,
  • Exclusions
  • Declaring a policy void
  • Duties of insured and insurer
  • Evaluation and settlement
  • Identifying insurance fraud
  • Investigation
  • Kinds of insurance policies
  • Other insurance clauses
  • Preparing a case for trial
  • Processing a claim
  • Responses to fraud
  • Subrogation and salvage
  • Underwriting and
  • Many more property and casualty insurance matters.

Zalma on Insurance Claims Part 102

This, the second part of Zalma on Insurance Claims and includes materials concerning:

  • Other Insurance Clauses
  • Underwriting
  • Conditions, Warranties and Exclusions

Zalma on Insurance Claims Part 103

This is part 103 of Zalma on Insurance Claims and will deal with:

1.Duties of the Insured and the Insurer
2.Declaring a Policy Void
3.Processing a Claim

When read with Part 101 and Part 102, this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 104

This, the fourth volume of Zalma on Insurance Claims and includes materials concerning:

  1. Investigation of First Party Property Claims
  2. Rescission
  3. The Mortgage Clause
  4. Fortuity & Other Issues
  5. Determine the Amount of the Loss
  6. The Claim File

When read with Part 101, Part 102, and Part 103, this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 105

This, the fifth volume of Zalma on Insurance Claims and includes materials concerning:

  1. Investigation – Liability
  2. Claims Made and Reported Policies
  3. The Notice Prejudice Rule.
  4. Types of Torts
  5. The Liability Claims File
  6. Discovery of the Insurance Claims File
  7. Tests for Determining Duty to Defend
  8. Appendices – forms for the claims person

When read with Insurance 101, Insurance 102, Insurance 103 and 104, this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 106

This is the sixth part of “Zalma on Insurance Claims” and will deal with:

Chapter 1 Property Insurance & the Tort of Bad Faith
Chapter 2 Grounds for Finding Bad Faith
Chapter 3 Avoiding Charges of Bad Faith
Chapter 4. Punitive Damages
Chapter 5.Bad Faith & Liability Insurance
Chapter 6.Defenses to the Tort of Bad Faith
Appendix 1 – California Civil Code Section 3294

When read with Part 101, Part 102, and Part 103, Part 104 and Part 105 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 107:

This is the seventh part of “Zalma on Insurance Claims” and will deal with:

1.Evaluation and Settlement – Property
2.Evaluation and Settlement – Liability
3.Subrogation
4.Salvage

When read with Part 101, Part 102, Part 103, Part 104, Part 105 and Part 106 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 108

This, the eighth part of Zalma on Insurance Claims, includes materials concerning:

1.Preparing a case for trial
2.Interviewing Techniques
3.The art of the Interview
4.Interview General Principles
5.The Interviewer
6.Preparing for the Interview
7.Beginning the Interview
8.Control Of The Interview
9.Dealing with Witness Types
10.Approaches the Work
11.Dealing with the Nervous Person
12.Bluffs
13.The Mutability Of Memory
14.The Examination Under Oath

When read with Part 101, Part 102, Part 103, Part 104, Part 105, Part 106 and Part 107 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 109 

This, the ninth part of Zalma on Insurance Claims, includes materials concerning:

•Identifying Insurance Fraud
•Professional Conspiracies
•Multiple Types of Insurance Fraud
•How to Join the Fraud Fight
•Case Studies of Successful Fraud Investigations
•Checklist 1 – Types of Insurance Fraud
•Checklist 2 – Training Adjusters
•Checklist 3 – Red Flags of Fraud – Property Insurance
•Checklist 4 – Red Flags of Fraud – Liability Insurance
•Appendix A – Commonly Used Medical Acronyms and Abbreviations
•Appendix B – Glossary of Medical Terms

When read with Part 101, Part 102, Part 103, Part 104, Part 105, Part 106, Part 107 and Part 108 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Zalma on Insurance Claims Part 110

This, the tenth part of Zalma on Insurance Claims, includes materials concerning:

•Responses to Fraud
•Grounds for Rescission.
•The Fight Against Fraud
•Checklist 1—Responses to Fraud
•Checklist 2 – The Fight Against Fraud

When read with Part 101, Part 102, Part 103, Part 104, Part 105, Part 106, Part 107, Part 108 and Part 109 this volume works to take the reader to a complete understanding of insurance and insurance claims.

Read about these and other insurance books and materials by Barry Zalma at http://zalma.com/blog/insurance-claims-library/

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Agent Who Kept Premium owed to Zurich Loses at Ninth Circuit

Agent Defrauds Insurer by Not Remitting Premium Collected

Insurance agents, by contract with insurers they represent, must place all premium collected on behalf of the insurer and place the funds in a separate trust account. Depending on the terms of the contract the agent then deducts the agreed commission and remits the remainder to the insurer. Failure to remit the premium, less the commission, is a theft or conversion of funds to which the agent had no entitlement.

In Zurich American Insurance Company v. Sealink Insurance Service Corp. And Yan Sara Zhang, and Phann Gelinda Keo, et al., No. 17-55776, United States Court of Appeals for the Ninth Circuit (October 15, 2018) Defendants Yan Sara Zhang and Sealink Insurance Service Corporation appealed from the district court’s denial of their motion to set aside the entry of default and default judgment against them.

In evaluating such a motion, an appellate court must consider three factors:

1. whether the party seeking to set aside the default engaged in culpable conduct that led to the default;
2. whether it had no meritorious defense; or
3. whether reopening the default judgment would prejudice the other party.

A finding that any one of these factors is true is sufficient reason for the district court to refuse to set aside the default.

The Ninth Circuit did not reach the issue of defendants’ culpable conduct because defendants’ lack of a meritorious defense was sufficient to justify the district court’s refusal to set aside the default and default judgment. Defendants have no meritorious defense to Zurich American Insurance Company’s breach of contract claim.

The defendants point to the lack of a written agreement and argue that the contract at issue does not exist. However, they do not dispute that Sealink sold insurance policies issued by Zurich in exchange for Sealink’s remittance of premiums, and there is ample evidence of an agreement governing that arrangement. Defendants offer no facts to dispute the existence of an agreement, and general objections to the existence of a contract are insufficient to satisfy the meritorious defense requirement.

Defendants also lack a meritorious defense to Zurich’s breach of fiduciary duty claim.

Defendants do not dispute that Sealink failed to maintain the premiums it owed Zurich in a segregated trust account as required by California Insurance Code sections 1733 and 1734. Defendants’ argument that those provisions do not provide Zurich with a cause of action is mistaken. The Ninth Circuit concluded that a civil action will lie for damages proximately resulting from a licensee’s breach of the fiduciary obligations imposed by sections 1733 and 1734.

Finally, defendants fail to assert a meritorious defense to the size of the default judgment award. The district court determined that the declaration of Zurich’s legal collection specialist and the billing statement generated by Zurich constituted proof sufficient to support Zurich’s requested damages. Defendants’ challenge to the sufficiency and reliability of that evidence does not amount to a meritorious defense.A mere general denial regarding the extent of the deficiency owed is not enough to justify vacating a default or default judgment.

Defendants fail to offer specific facts disputing the damages amount despite being in the best position to have the accurate records required to refute Zurich’s evidence. Defendants’ assertion that they lack records substantiating the claimed amount does not amount to an allegation of “sufficient facts that, if true, would constitute a defense.

The district court did not err in failing to set aside the default judgment pursuant to Federal Rules of Civil Procedure that provides for relief when a judgment is void. In contrast to the other grounds for relief a default judgment may be vacated on this ground even if the defendant lacks a meritorious defense.

The defendants argued that the judgment is void due to inadequate service of process. But Zurich’s service of process satisfied the statutory requirements. Zurich’s substituted service of the summons and complaint on Zhang was proper. Zurich’s service of the summons and complaint on Sealink complied with Federal Rules of Civil Procedure.

Finally, Zurich served both Zhang and Sealink with its motion to enter default judgment in accordance with the Central District of California’s Local Rules.

ZALMA OPINION

This case establishes that insurance fraud is not limited to people who are insured defrauding an insurer. In this case the insurer trusted the agents and allowed them to bind insurance with Zurich in exchange for a promise to remit premiums. Zurich was the victim of fraud by the agent and, rather than attempt a criminal prosecution for conversion, sued the agent and obtained a judgment which was upheld by the Ninth Circuit Court of Appeal. Zurich should execute on the judgment and obtain the full amount of the judgment. If not, it should seek prosecution of those who unlawfully converted Zurich’s funds to their own use. Hopefully this case will teach Zurich and other insurers to trust but verify the honesty of their agents.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Books from Full Court Press

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner. The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma. The California Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. Similar to Barry Zalma’s general Insurance Law Deskbook, this title focuses on the state where the author has long resided and practiced as an expert in California law. The book, published for the first time under Full Court Press, includes the full texts or digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, and California appellate courts, as well as vital explanatory chapters and historical context.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers. Previously, a person suing an insurance company in the United States could only recover contract damages, but when the tort of bad faith was created by the courts contract law was enormously affected, allowing insureds to sue insurers for both contract and tort damages, including punitive damages. Read a thoughtful analysis of how punitive damages apply in the United States to insurance bad faith suits, and why some states allow judges and juries to award punitive damages against insurers in civil litigation.

Mr. Zalma’s books available as Kindle books or paperbacks at Amazon.com can be reached at http://zalma.com/zalma-books/

Mr. Zalma’s reports can be found on Tumbler at https://www.tumblr.com/search/bzalma  on Facebook at https://www.facebook.com/barry.zalma and you can follow him on Twitter at https://twitter.com/bzalma

Legal Disclaimer:

The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

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Important Insurance Books from Barry Zalma

New Books from Full Court Press

Full Court Press continues to publish expert secondary content. This time it’s a new collection of insurance law treatises from consultant, expert witness, arbitrator, and mediator Barry Zalma.

Barry Zalma practiced law in California for more than 44 years as an insurCal Lawance coverage and claims-handling lawyer, and has spent more than 50 years in the insurance business. We welcome his deskbooks as the first published under our Full Court Press imprint. Three titles are available in ePub and MOBI format, as well as on the Fastcase legal research platform.

 

Insurance Law Deskbook: Learn the insurance basics that are essential to every civil practitioner.

California Insurance Law Deskbook: California has long led the way when it comes to insurance jurisprudence in the UniZalmated States, and few know more about California insurance law than Barry Zalma.

Insurance Bad Faith and Punitive Damages Deskbook: Understand the relationship between insurance, the tort of bad faith, and why punitive damages are awarded to punish insurers.

An annual subscription to secondary content on the Fastcase BadFaithplatform includes new editions and updates published by the author as they are rolled out, so you can rest assured that your research is up to date. Go to fastcase.com for more detail and how to use the material on-line as part of your legal or insurance research or as stand-alone e-books.

All available at fastcase.com.


Books from ClaimSchool, Inc.

“Insurance Law”

Insurance Law is the most comprehensive, and yet practical, Product Detailsinsurance law authority available today. Written by nationally-renowned insurance coverage expert Barry Zalma, an insurance coverage attorney, consultant, expert witness and blogger, Insurance Law introduces the new insurance professional to the fundamental principles of insurance and provides the experienced litigator analyses of today’s leading insurance law decisions nationwide.

Insurance Law is the most comprehensive, and yet practical, insurance law authority available today.

This book is ideal for any professional who works in or frequently interacts with the insurance industry. Claims professionals, risk managers, producers, underwriters, attorneys (both plaintiff and defense), business owners, and students will benefit greatly from this all-inclusive reference. It is also the perfect resource for educators and trainers whose role requires an understanding of insurance law.

In addition to case law, the author has provided countless citations to relevant statutory, regulatory, and judicial sources which are guaranteed to kickstart your research.

Price Reduced from $196- Send Check for $75.00 to ClaimSchool, Inc., 4441 Sepulveda Blvd., Culver City, Ca 90230 and the book will be mailed to you.

Mold Claims Coverage Guide

Today, mold claims are common, but they continue to grow in complexity, involving not only property damage but bodily injury as well. Mold-related lawsuits have dramatically increased over the past few years, and tProduct Detailshe numbers continue to rise. Coverage requirements—and related issues—can be complicated and confusing.  This resource will remove the complexity and allow the insurer, insured, property owner or developer and their counsel to deal with mold quickly and effectively and, if possible, avoid unnecessary litigation.

Price Reduced – Send Check for $50.00 to ClaimSchool, Inc., 4441 Sepulveda Blvd., Culver City, Ca 90230 and the book will be mailed to you.

Construction Defects Coverage Guide

This insightful and practical two volume resource was envisioned anProduct Detailsd written by nationally renowned expert Barry Zalma, and it thoroughly explains how to identify construction defects and how to insure, investigate, prosecute, and defend cases that result from construction defect claims.

Construction Defects Coverage Guide was designed to help property owners, developers, builders, contractors, subcontractors, insurers, and lenders, as well as their risk managers and lawyers rapidly resolve construction defect claims when they arise and avoid construction litigation.  If litigation becomes necessary it will help the prosecution or defense of construction defect suits effectively.

Price Reduced from $196 – Send Check for $75.00 to ClaimSchool, Inc., 4441 Sepulveda Blvd., Culver City, Ca 90230 and the book will be mailed to you.

Insurance Claims: A Comprehensive Guide

Insurance contracts and clauses are specific in nature—but the manner in which insurance claims are pursued and resolved can be remarkably different.  Mistakes in handling a claim can undermine the outcome—and ultimate value—of the claim itself.

Insurance Claims: A Product DetailsComprehensive Guide is the one resource that enables insurance professionals, producers, underwriters, attorneys, risk managers, and business owners to successfully handle insurance claims from start to finish—employing proven, practical techniques and best practices every step of the way.

Price Reduced from $196 – Send Check for $75.00 to ClaimSchool, Inc., 4441 Sepulveda Blvd., Culver City, Ca 90230 and the book will be mailed to you.


Books from the American Bar Association

The Insurance Fraud Deskbook

Author: Barry Zalma

Sponsor(s):  Tort Trial and Insurance Practice Section, Publisher(s):   ABA Book Publishing

ISBN: 978-1-62722-676-9
Product Code: 5190506
2014, 638 pages, 7 x 10

Product DetailsThis book is written for individuals who are focused on the effort to reduce expensive and pervasive occurrences of insurance fraud. Lawyers who represent insurers, claims personnel, prosecutors and their investigators can all benefit from this exhaustive resource.

The Insurance Fraud Deskbook is a valuable resource for those who are engaged in the effort to reduce expensive and pervasive occurrences of insurance fraud. It explains the elements of the crime and the tort to claims personnel, and it provides information for lawyers who represent insurers, so they can adequately advise their clients. Prosecutors and their investigators can use this book to determine what is required to prove the crime and win their case.

The full text of decisions from courts of appeal and supreme courts across the country are provided so the reader can understand what happens after the investigation is completed and can apply that information to undertake their own thorough investigations. It allows claims personnel and their lawyers to understand what errors would cause a defeat or a not-guilty verdict.

The effort to reduce insurance fraud requires the assistance of both civil and criminal courts. The Insurance Fraud Deskbook can help the prudent fraud investigator, insurance adjuster, insurance attorney, insurance Special Investigation Unit, and insurance company management to attain the information needed to deal with state investigators and prosecutors.

Available from the American Bar Association at: http://shop.americanbar.org/eBus/Default.aspx?TabID=251&productId=214624; or  orders@americanbar.org, or 800-285-2221.

Diminution in Value Damages: How to Determine the Proper Measure of Damage to Real and Personal Property

ISBN: 978-1-63425-295-8
Product Code: 5190524
2015, 235 pages, 7 x 10, Paperback

This book was written to provide sufficient information to those who became interested in the issue since the Georgia Supreme Court decided State Farm Mutual Automobile Insurance Co. v. Mabry, 274 Ga. 498, 556 S.E.2d 114 (Ga. 11/28/2001) and includes cases dealing with the use of diminution in value as a method of determining the amount of loss incurred by a plaintiff seeking indemnity for damage to real or personal property.

Because confusion has reigned across the United States concerning the proper measure of damages for property damage to property that has been repaired, Diminution In Value Damages assists the reader in answering the questions concerning the proper measure of damage in each of the fifty United States and federal United States jurisdictions

This edition has been totally rewritten and expanded, providing the most extensive and detailed coverage of the issue and a thorough explanation of how to apply diminution in value damages to losses to property.


Co-Author(s):Property Investigation Checklists: Uncovering Insurance Fraud, 12th Michael H Boyer  &  Barry Zalma

Property Investigation Checklists: Uncovering Insurance Fraud provides detailed guidance and practical information on the four primary areas of any investigation of suspicious claims:
• Recognizing suspicious claims
• Proper investigation procedures
• Analysis of laws concerning fraudulent personal and real property claims
• Evaluating and settling claims.
The book also examines recent developments in areas such as arson investigation procedures, bad faith, and extracontractual damages. The appendix includes the NAIC Insurance Information and Privacy Protection Model Act.
Read about these and other insurance related books from Barry Zalma at http://zalma.com/blog/insurance-claims-library/
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