A Video Explaining When the Notice-Prejudice Rule Does Not Apply

The Notice-Prejudice Rule Doesn’t Always Apply

See the full video at https://youtu.be/ROzLqTpsa6Q

Claims made and claims made and reported policies contain a date certain notice requirement. In Colorado, the Colorado Supreme Court found:­­

“The notice-prejudice rule does not apply to a date-certain notice requirement in a claims-made insurance policy. In a claims-made policy, the date-certain notice requirement defines the scope of coverage. Thus, to excuse late notice in violation of such a requirement would rewrite a fundamental term of the insurance contract.” (Craft v. Philadelphia Indemnity Insurance Company, 2015 CO 11, 343 P.3d 951)

The conceptual differences between occurrence and claims-made liability policies lie at the core of this case. The Colorado Division of Insurance defines an occurrence policy as ‘an insurance policy that provides liability coverage only for injury or damage that occurs during the policy term, regardless of when the claim is actually made.’ (3 Colo. Code Regs. 702–5:5–1–8 (2014).)

Claims-made policies typically contain a second type of notice requirement not found in occurrence policies: the requirement that the insured provide notice of a claim within the policy period or a defined reporting period thereafter. Such a date-certain notice requirement fulfills a very different function than a prompt notice requirement.

Where a prompt notice requirement serves to allow the insurer to investigate the claim and negotiate with the third party asserting the claim, the date-certain notice requirement defines the temporal boundaries of the policy’s basic coverage terms.

 


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Barry Zalma on YouTube- https://studio.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/videos/upload?filter=%5B%5D&sort=%7B%22columnType%22%3A%22date%22%2C%22sortOrder%22%3A%22DESCENDING%22%7D

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

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New York Concludes an LLC is more akin to a Partnership than a Corporation

Member of LLC May Claim Underinsured Motorist Coverage

In the Matter of United Financial Casualty Company v. Alan Tekel, 2019-10964, 2020 NY Slip Op 03919, Supreme Court of The State Of New YORK Appellate Division, Second Judicial Department (July 15, 2020) the trial court order granted Alan Tekel’s motion to allow arbitration to go forward to seek supplemental Underinsured Motorist benefits (hereinafter SUM)

FACTS

Alan Tekel sustained injuries when, as a pedestrian, he was struck by a vehicle. After settling with the tortfeasor driver for the full limit of the driver’s insurance policy, Tekel submitted a claim for SUM benefits pursuant to a commercial automobile insurance policy issued by Progressive Casualty Insurance Company (hereinafter Progressive) to Air Repair, LLC (hereinafter the LLC), of which Tekel was the sole member.

Progressive denied coverage on the ground that Tekel did not meet the definition of an insured under the SUM endorsement, as he was not the named insured on the policy and, at the time of the accident, was not occupying a motor vehicle insured for SUM under the policy.

Following Terkel’s demand for arbitration, the underwriter of the policy sued seeking a permanent stay of arbitration. The Supreme Court (trial court) granted that branch of the petition which was to permanently stay arbitration only to change its position after reargument and denied that branch of the petition which was to permanently stay arbitration.

ANALYSIS

Where an automobile insurance policy contains a SUM provision and is issued to an individual, that individual and others in his or her family may be afforded SUM coverage under the policy when such person is injured in any vehicle, including a vehicle owned and insured by a third party. Where such a policy is issued to a corporation, however, the SUM provision does not follow any particular individual, but instead covers any person [injured] while occupying an automobile owned by the corporation or while being operated on behalf of the corporation. On the other hand, instances where the policy is issued to a partnership  the decision is easier since partnerships being a combination of individuals who can suffer injuries and do have spouses, households and relatives.

Here, the policy was issued to a limited liability company, which is more akin to a partnership than a corporation.

Considering the entire policy the determination to grant Tekel’s motion that the definition of the term “insured” must be resolved in Tekel’s favor, the SUM endorsement defines the term “insured” to mean “you, as the named insured and, while residents of the same household, your spouse and the relatives of either you or your spouse.”

Although the declarations page identifies the LLC as the named insured, it also states that supplemental spousal liability insurance coverage will be included within your bodily injury liability coverage at no additional premium charge.

Accordingly, a permanent stay of arbitration was not warranted.

ZALMA OPINION

The New York court ruled in favor of Tekel because the insurer did not write a policy that was clear, unambiguous or even logical. When insuring an LLC, a form of corporation, it also provided coverage for the insured’s spouse. Since a corporation cannot have a spouse it allowed the court to conclude that the insurer considered the LLC to be an individual (and its sole member) to be an insured and not the fictional entity doing business as an LLC. If they wanted to limit the coverage Progressive needed to rewrite the policy to deal with its insured as a corporation rather than as an individual. Cut and paste clearly did not work for the Progressive.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Barry Zalma on YouTube- https://studio.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/videos/upload?filter=%5B%5D&sort=%7B%22columnType%22%3A%22date%22%2C%22sortOrder%22%3A%22DESCENDING%22%7D

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

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Three New Books by Barry Zalma

“Zalma’s Mold & Fungi Handbook”

Understanding mold, fungi, and bacteria infestations and what to do about them.

Zalma's Mold & Fungi Handbook: Understanding mold, fungi, and bacteria infestations and what to do about them. by [Barry Zalma]This book is the latest addition to Barry Zalma’s series of books and articles that form the most thorough, up-to-date, expert-authored guides available today about damage to structures and injuries to people by mold, fungi, bacteria or viral infections.

Zalma’s Mold and Fungi Handbook deals specifically with the issues relating to mold, fungi, and bacterial infestations and provides a detailed examination of the substances, their potential for property damage and bodily injury.

Written by nationally-renowned insurance coverage and insurance claims expert, Barry Zalma, a semi-retired insurance coverage attorney, insurance claims consultant, insurance claims expert witness, author, videoblogger and blogger. Zalma’s Mold and Fungi Handbook provides in-depth explanations, analysis, examples, and detailed discussion of:

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

Thorough, yet practical, this book forms the ideal guide for any property owner, professional who works in or frequently interacts with the repair or remediation of mold, fungi or bacteria infested property. It is also of use to every insurance underwriting, sales or claims professional and any lawyer involved in the construction industry or who is involved in construction defect litigation dealing with mold, fungi or bacterial infestations. Business owners, whether they own or rent property, will benefit greatly from the The Mold and Fungi Handbook. It is the perfect resource for insurance educators, trainers, and students whose role requires an understanding of mold, fungi and bacterial infestations.
The author has provided checklists, and information and references to statutes involved with mold, fungi or bacteria.

This, Zalma’s Mold & Fungi Handbook was written to help anyone faced with property damage or bodily injury as a result of exposure to mold, fungi or bacterial infestations. It was also written to assist in the presentation of claims to tortfeasors and insurers for the damages to property or persons.

Kindle Edition

Random Thoughts on Insurance – Ten Volumes

Random Thoughts on Insurance Volume X: From Barry Zalma’s Blog Zalma on InsuranceAfter more than 52 years acting as a claims person and insurance coverage lawyer I enjoy reading court decisions concerning insurance. The idea of this blog is to find new cases that are interesting to me and then write a summary. Some of the cases reviewed will be important. Some may be of first impression. Others will be totally unimportant. All will be interesting.

The case digests and articles from 2010 to the present, now in ten volumes, where I digest 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.

“Getting the Whole Truth: Interviewing Techniques for the Lawyer”

by Barry Zalma, Esq., CFE

Learn techniques that can help you interact with others and effectively gather the facts you need.

The purpose of an interview is to uncover the truth; the method of uncovering the truth is the art of the interview. Obtaining sufficient relevant information is imperative in everything a lawyer does to protect the interests of the client, yet interviewing techniques are not emphasized in law school training.

Getting the Whole Truth teaches lawyers–from novices meeting their first clients to experienced trial lawyers–effective methods of obtaining information by human interaction. No matter from whom you are seeking information or what your reason for desiring it, these techniques can help you meet and interact with others and effectively gather the facts you need.

$59 NON-MEMBERS, $44 MEMBERS

© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Barry Zalma on YouTube- https://studio.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/videos/upload?filter=%5B%5D&sort=%7B%22columnType%22%3A%22date%22%2C%22sortOrder%22%3A%22DESCENDING%22%7D

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

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A Video Explaining the Duties of the Public Adjuster

Public Insurance Adjusters

See the full video at https://youtu.be/3xC2McFnSG8

Most policyholders do not have the in-house capability to investigate, evaluate, and negotiate significant property insurance losses. While some losses, such as a small fire loss requiring only minor repairs, may be dealt with easily, others, which involve more complex damages and different potential causes of loss, are much harder to assess. Resolving them may require expertise in understanding the scope of coverage provided by the applicable property insurance policy, scientific or other specialized background to determine the cause of a specific loss, the ability to determine the cost to repair or replace the damaged property, and the calculation of the amount of a time element (business interruption) loss.

In such cases, the policyholder may engage a public insurance adjuster (PA). PA’s are licensed by almost every state and their contract forms must be approved by the state. All PAs claim to be experts on property loss adjustment; most are. They represent only policyholders in fulfilling the duty to prepare, file, and adjust insurance claims. The PA should handle every detail of the claim, working closely with the policyholder and the insurer to obtain a prompt and reasonable settlement.

PAs usually charge a contingency fee, which they present to the insured as a fait accompli. But this fee is negotiable. The insured should try to lower it as much as possible. For a major loss, more than one PA will arrive at the site seeking a contract. A fee quoted by one can be reduced by seeking lower fees from the others. Rates can be negotiated from a low of 3% to a high of 40%, although the average charge is 10% to 15%. When considering a PA, the insured must take into account the fact that even if the insurer pays the full amount of the loss, the cost of the adjuster’s fee may not leave enough funds to fully repair the damaged structure.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Barry Zalma on YouTube- https://studio.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/videos/upload?filter=%5B%5D&sort=%7B%22columnType%22%3A%22date%22%2C%22sortOrder%22%3A%22DESCENDING%22%7D

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

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Louisiana Anti-Indemnity Statute Defeats Additional Insured Endorsement

Government Owned Sewerage Department’s Construction Contract Additional Insured Requirements Declared Void

Anti-Indemnity Statute Refuses Coverage of Sole Negligence of Additional Insured

The Consolidated Sewerage District No. 1 of the Parish of Jefferson (hereinafter “the Parish”) and American Alternative Insurance Company (hereinafter “AAIC”) appeal from the trial court’s decision granting summary judgment in favor of co-defendants Amerisure Insurance Company (hereinafter “Amerisure”) and Alterra American Insurance Company (hereinafter “Alterra”), finding that policies issued were void to the extent that they provided indemnity and insurance coverage for damages caused by the Parish’s own negligence.

In Shane Salathe v. The Parish Of Jefferson Through The Department Of Sewerage, NO. 19-CA-427, C/W 19-C-303, Fifth Circuit Court Of Appeal State Of Louisiana (July 15, 2020) the Court of Appeal was asked to interpret the policies and state anti-indemnity statutes.

UNDISPUTED FACTS

At the time of his injuries, Mr. Salathe was performing work at a lift station, part of the sewerage system of the Parish.

The Parish and Fleming Construction Company, LLC (hereinafter “Fleming”) entered a contract for replacement or restoration of existing sewer mains in Jefferson Parish. The “Standard General Conditions of the Construction Contract” (hereinafter “General Conditions Contract”) between the Parish and Fleming required Fleming to procure certain insurance policies naming the Parish as an additional insured, including, inter alia, a commercial general liability and umbrella policy and also indemnifying the Parish, except in the instance of the sole negligence of the Parish.

Fleming procured from Amerisure the Commercial General Liability policy (hereinafter “Amerisure policy”) with the limit of $1,000,000.00 per occurrence. Further, Fleming procured from Alterra America Insurance Company the Commercial Excess Liability policy (hereinafter “Alterra policy”) with the limit of $5,000,000.00 per occurrence.

A Fleming foreman, Shane Salathe, descended a ladder into the wet well to perform his work. As Mr. Salathe ascended the ladder to exit the wet well, he grasped the door to the well to steady himself. When he put pressure on the door, the locking arm on the hatch door failed, allowing the door to slam, which caused Mr. Salathe to fall off of the ladder. Mr. Salathe fell almost thirty feet to the bottom of the well and suffered a traumatic brain injury and paraplegia.

Mr. Salathe sued the Parish contending that the Parish is liable for his injuries through its negligence in, inter alia, failing to maintain the hinge on the door to the well, which failed and caused his injuries. Later Salathe added as defendants, the Parish’s insurer, American Alternative Insurance Company (hereinafter “AAIC”), and Fleming’s insurers, Amerisure and Alterra (hereinafter “Fleming’s insurers”) because of their contractual obligation to defend and indemnify the Parish as a named insured.

Fleming’s insurers filed their joint motion for partial summary judgment asking the trial judge to declare that the contractual indemnity and insuring agreements between the Parish and Fleming are “void, null, and unenforceable” under Louisiana law.

Notably, the Amerisure CGL policy contained a Contractor’s Blanket Additional Insured Endorsement (to which the Alterra excess policy was also subject). Fleming’s insurers argued that the language of indemnity and insuring provisions in the General Conditions Contract was null, void, and unenforceable under Louisiana law, and therefore, pursuant to the language of the endorsement to their insurance policies, Jefferson Parish is not an additional insured.

DISCUSSION

Louisiana statute: La. R.S. 38:2216(G) specifically allows for the additional insured provisions like those in the contract between Jefferson Parish and Fleming and provides: “It is hereby declared that any provision contained in a public contract, other than a contract of insurance, providing for a hold harmless or indemnity agreement, or both,
(1) From the contractor to the public body for damages arising out of injuries or property damage to third parties caused by the negligence of the public body, its employees, or agents, …”

If, for purposes of this appeal only, one accepts appellants’ argument that La. R.S. 38:2216(G) permits additional insured requirements covering a public entity’s negligence, then based on the facts at issue in the present matter, this provision is in conflict with the prohibitions contained in Louisiana’s anti-indemnity statute.

By including the phrase, “[n]otwithstanding any provision of law to the contrary and except as otherwise provided in this Section,” in the opening sentence of the statute the legislature expressed its intent for the statute to govern defined construction contracts performed in Louisiana, notwithstanding other existing laws to the contrary and subject only to the exceptions set forth in the statute further evidences the legislature’s intent to apply the statute to the broad range of construction contracts defined in the statute.

The court concluded, therefore, that La. R.S. 9:2780.1(C) governs the contract at issue unless subject to an exception set forth in the LAIA. The following subsections outline the exceptions to the application of the statute and found that La. R.S. 9:2780.1(C) applies to the contract at issue entered into between Jefferson Parish and Fleming.

The trial court’s judgment finding that the additional insured provisions contained in the contract entered into between Jefferson Parish and Fleming are null, void and unenforceable, to the extent they can be interpreted as requiring Fleming to indemnify and procure insurance coverage for Jefferson Parish’s own negligence, and dismissing, with prejudice, claims against certain commercial liability policies issued to Fleming by Amerisure and Alterra.

The judgment of the trial court dismissing, with prejudice, all claims asserted against Amerisure’s CGL policy and Alterra’s Excess Liability Policy to the extent that the policies could be interpreted as providing coverage for the Parish’s own, sole, joint or concurrent negligence was affirmed.

ZALMA OPINION

Louisiana’s statute is something different than the law in most states. It makes it impossible to transfer the risk of loss, by contract requiring another to indemnity the owner, builder or contractor working on a construction project to obtain indemnification from another by contract. Therefore, the standard AIA contracts that require additional insured endorsements cause an insurance contract obligation to defend and indemnify an additional insured void. Owners and general contractors must also obtain their own insurance to protect against the risk of loss to people working on a construction project in Louisiana.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Barry Zalma on YouTube- https://studio.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/videos/upload?filter=%5B%5D&sort=%7B%22columnType%22%3A%22date%22%2C%22sortOrder%22%3A%22DESCENDING%22%7D

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

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Trigger of Coverage

A Video Explaining the Term “Trigger of Coverage for Property Damage

The term “trigger of coverage” means “what event must occur for potential coverage to commence under the terms of the insurance policy” and “what must take place within the policy’s effective dates for the potential of coverage to be ‘triggered.'” [In Re Feature Realty Litig., 468 F. Supp.2d 1287, 1295, n.2 (E.D. Wash. 2006)]

After the California Supreme Court adopted a continuous trigger in Montrose Chemical Corp. v. Admiral Ins. Co. (1995) 10 Cal.4th 645, 685, 42 Cal.Rptr.2d 324, 913 P.2d 878 (Montrose) in the case of successive policies, property damage that is continuous or progressively deteriorating throughout several policy periods is potentially covered by all policies in effect during those periods, so that the insurer’s duty to defend arose under those policies. Insurers, trying to limit their coverage, revised the policy wording.

Therefore, the precise question is what result follows under the language of the policies of insurance to which the parties agreed. The “continuous injury” trigger has been applied mostly in cases involving gradual release of pollutants and other environmental harms. After Montrose, the insurer revised its policies to use the language for the very purpose of “obviat[ing] the application of the ‘progressive damage-continuous trigger’ articulated in Montrose.” As a result, the defendant’s policies state that property damage “which commenced prior to the effective date of this insurance will be deemed to have happened in its entirety prior to, and not during, the term of this insurance.” [Ins. Co. of Pa. v. Am. Safety Indem. Co., 32 Cal.App.5th 898, 244 Cal.Rptr.3d 310 (Cal. App., 2019)]

In King Cnty. v. Travelers Indem. Co. (W.D. Wash., 2019) the Louisiana Court of Appeals ruled that allegations by a property owner that an environmental consultant failed to detect the presence of pollutants on its property did not trigger coverage under the consultant’s liability policies. The Court found that the “occurrence” giving rise to the claims against the insured took place years prior to the issuance of the policies in question.

Whenever a claim is made for damage to property it is essential that both the insurer and the party making the claim determine the date and time when the property was actually physically damaged. Claims should then be made only to the insurer on the risk (the one whose policy is in force) at the time the physical damage occurred not the one whose policy is in force at the time suit is filed.

The word “trigger”, as a term of art, means the event that activates coverage under one or more insurance policies. The trigger of coverage problem arises in determining exactly what must take place within the policy’s effective dates to trigger coverage.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Barry Zalma on YouTube- https://studio.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/videos/upload?filter=%5B%5D&sort=%7B%22columnType%22%3A%22date%22%2C%22sortOrder%22%3A%22DESCENDING%22%7D

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

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Obamacare Results in Litigation About Lactation Services

Dismissal of Class Action for Lack of Private Right of Action in ACA

The Patient Protection and Affordable Care Act (“the ACA”) includes a mandate that group health plans and health insurers “provide coverage” and “not impose any cost sharing requirements for” certain types of preventive health services, including comprehensive lactation support and counseling services (“CLS”). The ACA defines cost sharing as “deductibles, coinsurance, copayments” and other expenditures required of an insured with respect to essential health benefits covered under a group health plan. Jillian York and Jody Bailey, members of group health plans subject to the mandate, submitted claims to be reimbursed for CLS provided by out-of-network providers. Wellmark Health Plan of Iowa, Inc., and Wellmark Blue Cross and Blue Shield of Iowa (collectively, “Wellmark”) refused to cover these costs.

In Jillian York; Jody Bailey, on behalf of themselves and all others similarly situated v. Wellmark, Inc., d/b/a Wellmark Blue Cross and Blue Shield of Iowa; et al., No. 19-1705, United States Court of Appeals For the Eighth Circuit (July 13, 2020) York and Bailey commenced a putative class action, asserting breach of contract claims under Iowa law and breach of fiduciary duty claims under the Employee Retirement Income Security Act (“ERISA”), based on allegations that Wellmark violated the mandate’s cost-sharing and “information and disclosure” requirements. The district court ruled in favor of the insurers.

FACTUAL BACKGROUND

Jillian York joined the UIChoice group health plan through her job at the University of Iowa. The plan’s coverage manual explains listed a network of providers specified in the manual.  All other medical providers are considered “Out-of-Network” providers.

In early 2016, York chose to deliver her baby at UIHC, which she knew was a UIChoice network facility. While pregnant, she received a prenatal lactation consultation with Deborah Hubbard, a registered nurse and International Board Certified Lactation Consultant (“IBCLC”) who operates UIHC’s breastfeeding clinic. When problems arose in early March, York consulted Mary Johnson, an IBCLC at UIHC, who created a personalized care plan. Johnson posited that York’s son was not transferring milk due to a tongue tie and told York to “seek help elsewhere” as Johnson “had very little experience” with this issue.  York was not charged for these services and consultations.

A pediatric dentist then performed a frenectomy to correct her son’s tongue tie, encouraged York to “follow up with a knowledgeable IBCLC,” and referred her to Jen Pitkin. A representative confirmed the plan covered lactation services but could not identify a CLS provider in Wellmark’s network. The representative noted that Pitkin was affiliated with a facility in the network and advised York to ask whether Pitkin could bill through that facility so York could obtain in-network benefits. York instead met with Pitkin, incurred a $65 charge, and sought reimbursement from the UIChoice plan for that charge. Wellmark denied the claim.

DISMISSAL ORDER ISSUES

Plaintiffs appeal the dismissal of claims that Wellmark violated cost-sharing and information and disclosure requirements of the ACA mandate.  As York was a member of a UIChoice group health plan not governed by ERISA, her breach of contract claim is governed by and construed in accordance with the laws of the State of Iowa, as the coverage manual expressly stated.

Because they could not get a referral to the needed experts the plaintiffs argued there was a facially plausible violation of the ACA’s preventive health services mandate.

In dismissing these claims, the district court accurately noted that neither the statutory mandate nor its implementing regulations requires the disclosure of information — including a list of providers — or prohibits “administrative barriers” or “inconsistent guidance.” The mandate’s implementing regulations do not include information and disclosure requirements.

Bailey seeks relief under a group health plan governed by ERISA, which preempts state law remedies. Although the ACA does not impose “information and disclosure requirements,” ERISA provides a private right of action for an alleged breach of a plan administrator’s duty to distribute written notices that are sufficiently accurate and comprehensive to reasonably apprise plan participants and beneficiaries of their rights and obligations under the plan. But Bailey did not assert a breach of that duty. Rather, her claim is that the ACA mandate and its implementing regulations impose a categorical fiduciary duty on the administrators of group health plans governed by ERISA to publish a “separate list” of lactation counseling providers. She was wrong, the health plan need only provide a list of network providers and describe when out-of-network services are covered.

Summary Judgment Issues.

The ACA mandate’s implementing regulations provide that a group health plan or issuer may deny coverage or impose cost sharing for items and services “performed by an out-of-network provider” if the plan or issuer “ha[s] in its network a provider who can provide an item or service.”

The ACA does not use the term “network of providers.” An implementing regulation provides that a plan or issuer may deny coverage or impose cost sharing for items and services “performed by an out-of-network provider” if the plan or issuer “ha[s] in its network a provider who can provide an item or service.”

To adopt Plaintiffs’ interpretation would require the court to change the contracts that state-regulated group health insurers negotiate with medical providers.

The undisputed facts show York and Bailey could receive (and in fact received) lactation support and counseling services at all relevant points during their pregnancies, during their inpatient stays, and after their discharge from the hospital. They received those services without charge from Certified Lactation Consultants at UIHC, an in-network facility seven miles from York’s home and ten to fifteen minutes from Bailey’s. . . . Wellmark’s decision not to credential lactation consultants, without more, does not prove Wellmark lacked in-network providers capable of providing comprehensive lactation services.

Difficulty in scheduling an appointment with a provider does not establish an insurer’s noncompliance with the requirements. Moreover, the summary judgment record established that Wellmark provided York and Bailey qualified, available in-network providers of CLS.

The Eighth Circuit concluded that the district court did not err in granting summary judgment dismissing Plaintiffs’ cost-sharing claims.

ZALMA OPINION

It seems the public, like the two ladies who tried to create a class action suit because of refusal to pay a $65 claim simply think the ACA guaranteed all medical services would be free. Clearly, that was not the case. The ladies received the services promised to them and even the ACA did not require that the health insurer provide free services for every possible situation. Insurance policies and statutes must be read in full and applied as written. Courts can’t change contracts nor can they even consider changing a clear and unambiguous statute.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Barry Zalma on YouTube-

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

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Construction Defects and Insurance

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:

Volume One : The Structure, The Construction Contract, and Construction Defect Insurance — Kindle book Paperback

Volume Two:The Defects andUnderstanding Insurance and Underwriting – Kindle book; Paperback

Volume Three: Construction Defect Policies – Kindle book;   Paperback

Volume Four: Liability Insurance. – Kindle Book; Paperback

Volume Five: The Tort of Bad Faith and Construction Defects – Paperback

Volume Six: Construction Defect Suits –  Kindle book; Paperback

Volume Seven: Tort Defences and the Trial of a Construction Defect Case – Kindle BookPaperback.

Volume Eight: Evaluation and Settlement & Alternative Dispute Resolution – Kindle Book; Paperback


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Barry Zalma on YouTube- https://studio.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/videos/upload?filter=%5B%5D&sort=%7B%22columnType%22%3A%22date%22%2C%22sortOrder%22%3A%22DESCENDING%22%7D

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Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

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Claims Personnel

The People Who Keep the Promises Made by the Insurance Policy

Watch the full video at https://youtu.be/zfob5rQwBWY

The Claims Adjuster

The claims adjuster is the contact between the insured and the insurer. He or she can be an employee of the insurer or an independent contractor retained by the insurer to investigate and adjust insurance claims on its behalf.  The adjuster is person charged with investigating a claim to fulfill the promises made by the policy of insurance and establish

whether the company is liable to the insured or a claimant and to what extent. The investigation can include interviews of the parties involved, property inspections, and reviewing hospital records or police reports.

The Claims Investigator

Although a small part of the work of the claim adjuster is to investigate, the adjuster does many more things. Insurance companies now retain the services—either by employing them directly or by use of independent contractors—of investigators whose expertise relates exclusively to insurance claims. The experienced claims investigator is usually a part of, or vendor to, a Special Investigative Unit (SIU) set up to protect the insurer and mandated by most states as a means to reduce the amount of fraud perpetrated against insurers.

The Claims Supervisor or Claims Manager

The insurance company claims department is set up with a hierarchy based upon the complexity and value of losses. The claims adjuster’s authority is limited, whether he or she is an employee of the insurer or a contractor. The claims supervisor has more authority to resolve claims than the adjuster and will be consulted by the claims adjuster if the loss exceeds the adjuster’s authority. The supervisor controls the work of several adjusters, drawing on his or her greater experience, education, and training.

Claims Counsel

The insured may meet with an attorney representing the insurer under two circumstances:

  • If the insured has been sued by a third person the insurer will retain counsel to defend the insured at the insurer’s expense. Counsel will meet with the insured and work to present the most effective defense to the suit.Insureds most often meet with claims counsel in a situation where the insured is in an automobile accident and a third party sues him or her for injuries incurred in the accident.
  • If there is a problem with coverage or with the extent of the claim, if the insured retains counsel to present his or her claim, or if fraud is suspected, the insurer will retain counsel to protect its interests. Attorneys who represent insurers in such situations are often referred to as “Coverage Counsel.” Coverage Counsel will usually deal with the insured’s personal attorney.

© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Barry Zalma on YouTube-

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

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Failure to Identify Relative as a Resident of Household Limits Available UM Coverage

Uninsured Motorist Coverage Limited to Minimum Statutory Limits

Tiffany Chow appealed the district court judgment in favor of IDS Property Casualty Insurance Company in this insurance coverage dispute. In IDS Property Casualty Insurance Company v. Tiffany Chow, No. 19-55837, United States Court Of Appeals For The Ninth Circuit (July 14, 2020) Chow claimed she was entitled to full policy limits even though policy excluded her. The trial court allowed her to receive the statutory limit of $30,000 but refused to allow her to receive the stated UM limit of $250,000.

FACTS

The automobile insurance policy provided $250,000 per person in underinsured motorist bodily injury coverage to a named insured or a “relative” of a named insured. The policy defined a “relative” as “a person related to you by blood, marriage, registered domestic partnership under California law or adoption who is a resident of your household and whom you have previously identified to us.” The district court concluded that Chow was ineligible for coverage because she had not been “previously identified” to IDS as a resident relative. In fact, the named insureds had informed IDS that Chow was not a resident of their household.

The district court further concluded that Chow was covered by the implied-by-law terms of the policy. In the absence of a written waiver, California law requires an automobile insurance policy to provide underinsured motorist bodily injury coverage of at least $30,000 per person to any relatives of a named insured “while residents of the same household.” The district court held that Chow, as a resident relative, was covered for $30,000 as provided by California law. Chow appeals, arguing that her coverage was $250,000 rather than $30,000.

Chow claimed the “previously identified” requirement is unenforceable, and when that requirement is read out of the policy, she meets the policy’s definition of “relative.”

ANALYSIS

Under California law, policy exclusions are not enforceable to the extent they conflict with California law. Thus, the policy’s “previously identified” requirement is unenforceable, but only to the extent it denies all coverage to unidentified resident relatives. It is, however, enforceable to the extent it denies coverage above the $30,000 statutory minimum.

Unless the insurer and the named insured execute a written waiver an insurance policy governed by its terms will be held to provide uninsured motorist coverage in the amounts mandated in the statute. Every insurance policy must be read so as to provide the minimum coverage required by law under a policy of that type, even where the policy on its face fails to do so.

The purpose of the uninsured motorist statute is not to make all drivers whole from accidents with uninsured drivers, but to make sure that drivers injured by such drivers are protected to the extent that they would have been protected had the driver at fault carried the statutory minimum of liability insurance.

The Ninth Circuit rejected Chow’s contention that the district court improperly concluded that the “previously identified” requirement was not plain, clear, and conspicuous. Further, although the policy did not clearly or conspicuously state that Chow was eligible by law for $30,000 in underinsured motorist coverage, Chow points to no authority requiring a policy to clearly and conspicuously set forth policy terms enhancing—rather than reducing—insurance coverage.

The policy unambiguously required the named insured to identify Chow as both a relative and a resident of the household. Chow was not so identified. As a result she was not entitled to the full amount of the stated coverage but by law she was entitled to the statutory minimum.

ZALMA OPINION

The Ninth Circuit read the entire policy and found its exclusion of coverage for a resident relative not previously identified to the insurer before a loss, to be clear, and unambiguous. Since the exclusion itself was conspicuous and known to the named insured who advised IDB that Chow was not a resident relative she was not entitled to the full limits but got the statutory minimum.  Facts can often be difficult things and those difficult things – and a statute – allowed Chow to receive up to $30,000 of UM coverage that IDB did not intend to pay but did not get the $250,000 she wanted.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

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Zalma’s Insurance Fraud Letter – July 15, 2020

Zalma’s Insurance Fraud Letter

Insurance Fraud Is Often A Violent Crime

See the video about  Zalma’s Insurance Fraud Letter, July 15, 2020 at https://youtu.be/xtExcV6fPuQ and read the full text of ZIFL at https://www.linkedin.com/pulse/zalmas-insurance-fraud-letter-barry-zalma-esq-cfe-10c and at https://zalma.com/zalmas-insurance-fraud-letter-2/

Articles, including:

  • Insurance Fraud Is Often A Violent Crime
  • A Lie Under Oath to an Insurer is a Felony
  • Listen to the Oral Argument and the First Ruling Denying Claim for Loss of Earnings
  • Claim Resulting from Covid-19 Lockdown
  • Convictions from the Coalition against Insurance Fraud
  • Health Insurance Fraud Convictions
  • Other Insurance Fraud Convictions
  • Videos on YouTube and Zalma on Insurance from Barry Zalma​Consider Books to Show
  • Your Appreciation to Your Insurer Clients or Claims Employees
  • Books from Full Court Press
  • Books from the American Bar Association

© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

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A Video Explaining How the Law of Unintended Consequences Destroyed the Need for the Tort of Bad Faith

The Law of Unintended Consequences and the Tort of Bad Faith

See the full video at https://youtu.be/s7cnXrrJqTs

The concept of unintended consequences is one of the building blocks of economics. Adam Smith’s “invisible hand,” the most famous metaphor in social science, is an example of a positive unintended consequence.

Most often, however, the law of unintended consequences illuminates the perverse unanticipated effects of legislation and regulation. In 1692 the English philosopher John Locke, a forerunner of modern economists, urged the defeat of a parliamentary bill desi

gned to cut the maximum permissible rate of interest from 6 percent to 4 percent. Insurance is controlled by the courts, through appellate decisions, and by governmental agencies, through statute and regulation. Compliance with the appellate decisions, statutes, and regulations—different in the various states—is exceedingly difficult and expensive.

The business of insurance is, unfortunately, subject to the law of unintended consequences as if it were on steroids.

Available as a paperback  

Available as a Kindle book


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

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Private Limitation of Action Provision Defeats Law Suit Against Insurer

Good Deeds by Insurer Still Punished by Late Filed Lawsuit

Insurance policies, to protect the insurer from stale claims and lawsuits where available evidence is difficult to obtain, contain private limitations of action provisions usually one or two years. In addition, those who are insured by a first party property insurance policy must protect the property from further loss and produce evidence to establish the amount of loss.

In Martha Ventilla v. Pacific Indemnity Co., 19-CV-1134 (JMF), United States District Court Southern District Of New York (July 9, 2020) Martha Ventilla submitted a supplemental insurance claim against Pacific Indemnity Company (“Pacific Indemnity”), seeking to recover, pursuant to a homeowner’s insurance policy (the “Policy”), nearly $400,000 in damages in addition to the $951,428.46 already paid that occurred when, on January 31, 2015, the bathtub in her Manhattan apartment overflowed and flooded her apartment with one to two inches of water.

Pacific Indemnity moved for summary judgment. Pacific Indemnity averred that all of Ventilla’s claims were time barred by the Policy’s two-year limitations clause.

FACTS

On January 31, 2015, Ventilla was in her apartment bedroom when she noticed water creeping in from under her door. She followed the rising stream to the bathroom, where she discovered that her bathtub was inexplicably overflowing. In a desperate attempt to stem the flood and protect her most-cherished items, Ventilla (in addition to contacting building staff, who arrived with a wet vacuum cleaner) mopped up the water with clothing and linens. But instead of laundering the clothing and linens for reuse or, at the very least, keeping the damaged possessions in storage in support of a later insurance claim, Ventilla bagged the soaked items and other ruined contents from her apartment and threw them away that same day.

Ventilla reported the incident to Pacific Indemnity on February 2, 2015, and on February 4 and 25, 2015, representatives from the insurance company conducted initial and follow-up surveys of her apartment. Ventilla did not, and indeed, could not, present the damaged items to the representatives for inspection during either visit.

More than a year passed, and other than presenting some receipts and credit card statements for certain items, Ventilla never provided more definitive details about her supplemental loss claim or provided the artwork for inspection or appraisal, despite Pacific Indemnity’s follow-up requests. An art appraisal from Ventilla’s expert was submitted June 2018, more than three years after the loss.

Eventually, the parties entered into a Settlement Agreement and Release (“Release”) signed by Ventilla on December 5, 2016, pursuant to which Pacific Indemnity paid Ventilla $951,428.46 on account of construction repairs, mold remediation, contents, fine arts and extra living expenses. In exchange, Ventilla released any “claims and potential claims for Additions & Alterations and Additional Living Expenses” arising under the Policy and pertaining to the January 31st incident.

Nearly twenty-eight months after the January 31st flood, on May 23, 2017, Ventilla submitted a Supplemental Contents Claim and, for the first time, advised Pacific Indemnity that she was seeking “$286,640.48 for damage to ‘seven closets’ worth of items.” Pacific Indemnity obtained a proof of loss and examination under oath. Yet it was only after this lawsuit commenced, on July 9, 2019 — over four and a half years after the date of loss — Ventilla in her First Set of Interrogatory Responses finally claimed $99,098.00 for damage to her fine arts collection (the “Fine Arts Claim”).

Pacific Indemnity advised Ventilla that the company disclaimed coverage for Ventilla’s Supplemental Contents Claim and any potential Fine Arts Claim as time barred by the policy’s two-year limitation clause.

ANALYSIS

Under New York law an agreement which modifies the Statute of Limitations by specifying a shorter, but reasonable, period in which to commence an action is enforceable. Courts have held that there is nothing inherently unreasonable about a two-year period of limitation; in fact, as Pacific Indemnity rightly notes, courts in New York have enforced limitation clauses that are even shorter. What matters here, however, is not so much the duration of the limitations period, but the accrual date and whether, in view of the circumstances of the particular case, the relevant conditions precedent can be satisfied within the prescribed time period.

Under the Policy Ventilla’s ability to bring any legal action against Pacific Indemnity was conditioned on two events: first, that she complied with all conditions of the policy, and second, that she bring the action within two years after a loss occurs. To satisfy all of the conditions for a property damage claim, Ventilla was required to notify Pacific Indemnity or her agent of the loss as soon as possible; take all reasonable means that are necessary to protect property from further loss or damage; prepare an inventory of damaged personal property, attaching bills, receipts, and other support of the like; and, upon Pacific Indemnity’s request, show Pacific Indemnity the damaged property, participate in an examination under oath, and submit, within sixty days of the request, a signed, sworn proof of loss.

All of these events could, with reasonable diligence, have been completed within two years of the January 31, 2015 incident. Ventilla’s failure to launder or keep the damaged items — and the snowball effect that that misguided decision may have had with respect to her ability to submit the Supplemental Contents and Fine Arts Claims before January 31, 2017 — does not excuse that fact. The court concluded that no reasonable jury would conclude otherwise.

Upon acceptance of an insurance policy and in the absence of fraud or misrepresentation, an insured is charged with knowledge of all of the terms and conditions of the policy.

ZALMA OPINION

No one is entitled to sit on rights, breach material conditions of a contract, and then claim their sloth was caused by an insurer taking advantage of their innocence or old age after being paid almost one million dollars. The two-year private limitation of action provision in many first party property policies is designed to avoid late or piecemeal  claims like those presented by Ventilla. This case teaches that the insured also has an obligation to deal fairly and in good faith with the insurer and act promptly and efficiently to prepare and prove a claim.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

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A Video Explaining the Claims Made CGL

The Claims Made Form

See the full video here: https://youtu.be/WoQzgOK375g

The insurance industry spent 10 years trying to restrict their liability for long tail losses. They tried wording that would prohibit stacking, as well as wording that would only allow coverage for losses first discovered during the policy period. “Claims Made” wording, which would only allow coverage to be triggered upon the making of a claim, and limited “occurrence” coverages were also attempted.

Ultimately, the decision was made by the ISO and its supporters to use a Claims Made approach, providing coverage only if the loss occurs and the claim is made to the insurer during the policy period. This eliminates long tail claims. Although effective, the Claims Made CGL turned out to be almost impossible to sell to the public. People in the construction industry would be exposed and probably uninsured for all but the most blatant defects, especially with long statutes of limitation or statutes of repose.

A key purpose of the claims made policy is to prevent limits or policies from being stacked, as well as to eliminate uncertainty regarding the policy that will apply to a given matter. This is accomplished by concentrating on the time that a claim is received instead of struggling with the problem of determining the date of “occurrence.” The date of “occurrence” is usually set at the date when the injured party was actually injured. Some courts have modified this simple rule to provide coverage where none was intended. The claims made form avoids such “social engineering.”

For example, if a builder had a Claims Made policy there would be no coverage available for a claim of defective construction:

  • filed nine years and eleven months after substantial completion of the structure; or
  • where the builder tried to fix the problem two years before only to have the roof leak again because the claim was made before the inception of the policy.

Pressures from several groups resulted in an alternative occurrence wording. In some Claims Made forms, both the injury-causing event and the claim must be made during the policy period. In others, the claim must be made during the policy period and the loss-causing event can occur any time.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

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Insurance Created by Government Needs Nine Years of Court Decisions to Make Sense

The Little Sisters of The Poor Establish Why Government Should Not Be Involved in Insurance

The Patient Protection and Affordable Care Act of 2010 (Obama Care or the ACA), an attempt to legislate health insurance brought about more than nine years of litigation over some of its requirements that demanded that religious people and religious organizations do something – providing for contraceptive insurance coverage – that violated the religious beliefs and raised litigation to gain an exemption from the mandate in violation of the First Amendment to the U.S. Constitution.

In Little Sisters Of The Poor Saints Peter And Paul Home Pennsylvania, et al. Donald J. Trump, President Of The United States, et al. v.  Pennsylvania, et al., No. 19-431, No. 19-454, Supreme Court Of The United States  (July 8, 2020) in a set of consolidated cases, Justice Thomas, writing for the Supreme Court, decided whether the Government created lawful exemptions from a regulatory requirement implementing the ACA, 124 Stat. 119.

The requirement at issue obligates certain employers to provide contraceptive coverage to their employees through their group health plans. Though contraceptive coverage is not required by (or even mentioned in) the ACA provision at issue, the Government mandated such coverage by promulgating interim final rules (IFRs) shortly after the ACA’s passage. This requirement is known as the contraceptive mandate.

THE SUPREME COURT HELD:

The Departments had the authority under the ACA to promulgate the religious and moral exemptions. The pivotal phrase, “as provided for,” granted sweeping authority to HRSA to define the preventive care that applicable health plans must cover. That same grant of authority empowers it to identify and create exemptions from its own Guidelines.

FACTUAL BACKGROUND

After six years of protracted litigation, the Departments of Health and Human Services, Labor, and the Treasury (Departments)—which jointly administer the relevant ACA provision—exempted certain employers who have religious and conscientious objections from this agency-created mandate. The Third Circuit concluded that the Departments lacked statutory authority to promulgate these exemptions and affirmed the District Court’s nationwide preliminary injunction. This decision was erroneous.

Shortly after the Departments promulgated the 2013 final rule, two religious nonprofits run by the Little Sisters of the Poor (Little Sisters) challenged the self-certification accommodation. The Little Sisters “are an international congregation of Roman Catholic women religious” who have operated homes for the elderly poor in the United States since 1868. They feel called by their faith to care for their elderly residents regardless of “faith, finances, or frailty.”

Consistent with their Catholic faith, the Little Sisters hold the religious conviction that deliberately avoiding reproduction through medical means is immoral. The Little Sisters were far from alone in raising RFRA challenges to the self-certification accommodation. Religious nonprofit organizations and educational institutions across the country filed a spate of similar lawsuits, most resulting in rulings that the accommodation did not violate RFRA. In Zubik v. Burwell, 578 U. S. ___, ___ (2016) (per curiam), the Supreme Court opted to remand the cases without deciding the question.

Within a week of the 2017 IFRs’ promulgation, the Commonwealth of Pennsylvania filed an action seeking declaratory and injunctive relief. Among other claims, it alleged that the IFRs were procedurally and substantively invalid under the APA. The District Court held that the Commonwealth was likely to succeed on both claims and granted a preliminary nationwide injunction against the IFRs. The Federal Government appealed. The Third Circuit affirmed.

Congress could have limited HRSA’s discretion in any number of ways, but it chose not to do so. Justice Thomas explained that it is a fundamental principle of statutory interpretation as it is a fundamental principle of insurance interpretation that “absent provision[s] cannot be supplied by the courts.” Rotkiske, 589 U. S., at ___ (slip op., at 5). This principle applies not only to adding terms not found in the statute, but also to imposing limits on an agency’s discretion that are not supported by the text.  It is not for the Supreme Court to rewrite the statute nor the policies written in accordance with the ACA requirements, so that it covers only what it thinks is necessary to achieve what it thinks Congress really intended.

The only question before the court was what the plain language of the statute authorizes. Justice Thomas, and six other justices including the Chief, concluded that the plain language of the statute clearly allows the Departments to create the preventive care standards as well as the religious and moral exemptions.

Because the court held that the Departments had authority to promulgate the exemptions, unless a statutory exception applies, here, the Departments issued an IFR that explained its position in fulsome detail and provided the public with an opportunity to comment on whether the regulations should be made permanent or subject to modification. The object of notice and comment, in short, is one of fair notice and respondents certainly had such notice.

For over 150 years, the Little Sisters have engaged in faithful service and sacrifice, motivated by a religious calling to surrender all for the sake of their brother. They commit to constantly living out a witness that proclaims the unique, inviolable dignity of every person, particularly those whom others regard as weak or worthless. But for the past seven years, they—like many other religious objectors who have participated in the litigation and rulemakings leading up to the decision—have had to fight for the ability to continue in their noble work without violating their sincerely held religious beliefs.

After two decisions from this Court and multiple failed regulatory attempts, the Federal Government has arrived at a solution that exempts the Little Sisters from the source of their complicity-based concerns—the administratively imposed contraceptive mandate.

The Departments had the statutory authority to craft that exemption, as well as the contemporaneously issued moral exemption. The rules promulgating these exemptions are free from procedural defects.

Therefore, the Supreme Court reversed the judgment of the Court of Appeals and remanded the cases for further proceedings consistent with the opinion.

The dissent by Justice Ginsberg concluded that the blanket exemption for religious and moral objectors to contraception formulated by the IRS, EBSA, and CMS is inconsistent with the text of, and Congress’ intent for, both the ACA and RFRA contending that neither law authorizes it. The original administrative regulation accommodating religious objections to contraception appropriately implemented the ACA and RFRA consistent with Congress’ staunch determination to afford women employees equal access to preventive services, thereby advancing public health and welfare and women’s well-being.

ZALMA OPINION

The ACA (Obamacare) is not insurance but a law mandating all heath insurance issued in the U.S. comply with the statute’s requirements. The ACA then gives regulators the ability to set rules and requirements for such policies. One such requirement was that every policy provide coverage for contraception for female insureds. Originally, there were no exceptions to the rule and the Little Sisters and many others sued to protect them from being ordered to violate their religious beliefs. After nine years of litigation and multiple appeals, the US, with regulations providing for exemptions, tried to protect the religious only to be sued by the state of Pennsylvania who had a court issue a nationwide injunction against the exemption. Justice Thomas and the other six justices in the majority found the exemption proper and enforced it by reversing the injunction. Insurers must learn from  this case, the same lesson learned by the government, that a court should not, and should always, refuse to rewrite a statute or policy when its language is clear.

 


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

 

 

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A Video Explaining the Fair Claims Settlement Practices Regulations

The Reasons Behind the California Fair Claims Settlement Practices Regulations

See the full video here https://youtu.be/7ELoCEAIldA

In 1993 the state of California determined that the insurance industry needed to be regulated to stop insurers from treating the people insured badly and without good faith. It created a set of Regulations called the “California Fair Claims Settlement Practices Regulations” (the “Regulations) to enforce the mandate created by the California Fair Claims Settlement Practices statute, California Insurance Code Section 790.03 (h) in response to the direction of the California Supreme Court. [Moradi-Shalal v. Fireman’s Fund Ins. Companies, 46 Cal. 3d 287 (1988)]

In so doing the California Department of Insurance (CDOI) attempted to micro manage the business of insurance claims and create a method to punish those insurers who failed to comply with the Regulations. Some of the Regulations asserted what had always been recognized by the insurance industry and good faith and proper claims handling. Others imposed draconian mandates on what and when to do everything in the claims process.

The Regulations also provided a guide to insureds, public insurance adjusters and policyholders’ lawyers to assert any violation of the Regulations to be evidence of an insurer’s breach of the implied covenant of good faith and fair dealing.

The Regulations impose on all insurance claims personnel the requirement that they read and understand the Regulations or attend an annual training program no later than September 1 of each year. Insurers are compelled to ascertain that every employee involved in any way in the claims process is trained about the Regulations or has submitted a sworn statement that he or she has read and understands the Regulations. The Regulations even require that the insurance claims managing executive attest, under oath, that each employee has been trained with regard to and/or understands the Regulations. This requirement must be complied with in order to avoid the possibility of administrative penalties upon the insurer or prosecution of the officer for perjury.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

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Long Time in Jail for Pill Mill Doc & Fraudster

90 to 180 Months for Pill Mill Doc’s Fraud & Death of Victim to Whom She Provided Narcotic Drugs

In Commonwealth Of Pennsylvania v. Stephanie Tarapchak, J-S17021-20, No. 281 MDA 2018, Superior Court Of Pennsylvania (JUNE 23, 2020) Stephanie Tarapchak appealed  from the  judgment of sentence entered in the Court of Common Pleas of Lackawanna County (“trial court”), following her jury convictions for insurance fraud, theft by deception, corrupt organizations, perjury, endangering the welfare of children (“EWOC”), drug delivery resulting in death, distributing prescription to drug dependent person, and refusal or failure to keep records.

FACTS

Appellant operated a small internal medicine practice in Ashland, Pennsylvania.  Appellant prescribed and dispensed excessive amounts of narcotics to her paramour, Delton Bolton, as well as her minor child, F.T., whereby Appellant became engaged in a hostile custody dispute with her ex-husband, Alex Tarapchak. Additionally, Appellant was investigated in connection with the fatal drug overdose of Thomas Kromer (the “victim”).

On September 21, 2015, Appellant proceeded to a two-week jury trial. During trial, the Commonwealth presented thirty-four witnesses and admitted a voluminous amount of exhibits. With respect to the victim’s death, the Commonwealth offered the testimony of six witnesses.

The Commonwealth also presented evidence demonstrating that Appellant owned the internal medicine practice in Ashland. Appellant exhibited control of the distribution of narcotics to individuals in Ashland through her internal medicine practice and fraudulently billed insurance companies.

Appellant’s paramour, Mr. Bolton, testified that Appellant dispensed or prescribed quantities of Vicodin and testosterone to him throughout their two year relationship utilizing the Moore catalog. He recognized the Moore catalog, and described in detail the manner in which Appellant ordered the Vicodin, and designated the location of the Vicodin, on the nightstand. Mr. Bolton testified that he became a daily Vicodin user. Mr. Bolton verified Appellant’s awareness of his addiction, and admitted that they discussed his addiction on several occasions.

The jury began deliberations, and on October 6, 2015, the jury found Appellant guilty of insurance fraud, theft by deception, corrupt organizations, perjury, EWOC, drug delivery resulting in death, distributing prescription to a drug dependent person, and refusal or failure to keep records.

At sentencing the trial court stated: “your understanding that came from your medical background was put aside as you attempted to provide people who you clearly knew were addicted with things that would only enhance their addiction, and, as in this case, result in the loss of life of one of those people.” Further, the court stated: “when I saw that you put drugs in the hands of a member of your own family who was a minor. That presents serious problems to the court, because I don’t know what was clouding your thinking, because in your mind you had to know you were doing wrong. To give a prescription without the appropriate diagnostic procedures and having to treat the person fully, clearly is doing wrong from the perspective of being a healer of people.” Therefore, the court sentenced Appellant to an aggregate term of ninety to one hundred and eighty months’ imprisonment.

THE APPEAL OF THE SENTENCE

In particular, Appellant argues that the evidence was insufficient to sustain her convictions for drug delivery resulting in death and corrupt organizations. A claim challenging the sufficiency of the evidence is a question of law.

An appellate court, reviewing the sufficiency of the evidence, views all the evidence admitted at trial in the light most favorable to the verdict winner, there is sufficient evidence to enable the fact-finder to find every element of the crime beyond a reasonable doubt. In addition, the facts and circumstances established by the Commonwealth need not preclude every possibility of innocence. Any doubts regarding a defendant’s guilt may be resolved by the fact-finder unless the evidence is so weak and inconclusive that as a matter of law no probability of fact may be drawn from the combined circumstances.

The Commonwealth may sustain its burden of proving every element of the crime beyond a reasonable doubt by means of wholly circumstantial evidence. Moreover, in applying the above test, the entire record must be evaluated and all evidence actually received must be considered. Appellant’s sufficiency challenge regarding drug delivery resulting in death lacks merit.

The trial court accurately and thoroughly addressed the merits of Appellant’s sufficiency challenge regarding her conviction for drug delivery resulting in death. The court found, among other things, that Appellant demonstrated extreme indifference to human life by continuing to prescribe the victim opioids at an accelerated pace without (a) adequately evaluating him, (b) maintaining medical records or (c) a prescribing rationale.

The trial court found that Appellant was aware that the victim “consumed his opioid prescriptions in a haphazard and reckless manner, presented with several psychiatric diagnoses as well as chronic obstructive pulmonary disease, and possessed a predisposition for arrhythmia.” Yet, “she deliberately increased the potency and dosage” of his prescriptions “so as to bypass the restraint of the insurance company.”  In so doing, Appellant consciously disregarded an unjustified and extremely high risk that her actions might cause death or seriously bodily injury. The evidence establishes that the Commonwealth proved beyond a reasonable doubt that Appellant committed drug delivery resulting in death.

In her second issue, Appellant challenged the sufficiency of the evidence supporting her conviction for corrupt organizations. The trial court also accurately and thoroughly addressed the merits of Appellant’s sufficiency challenge regarding her conviction for corrupt organizations. The trial court found, inter alia, that Appellant “either directly or indirectly participated in a pattern of racketeering activity through the two predicate acts of Insurance Fraud, and Distributing Prescriptions to Drug Dependent Person.”

The court reasoned that the two predicate acts formed a pattern related to the enterprise in that Appellant used the resources of her medical practice to acquire and maintain through the Moore catalog an inventory of narcotics. She utilized this inventory to supply Vicodin to her drug-addicted paramour without a prescription so as to avoid insurance regulations and criminal investigation.

She further used the resources of the enterprise, including the labor of her employees, and unwitting patients to receive income from insurance companies and funnel the income to herself under the guise of legitimate income. Appellant engaged in illegal commerce on an ongoing regular basis, supplying patients with excessive opioid prescriptions without conducting examinations, or documenting her medical decision making and continued to fraudulently bill insurance companies as if she did.

Moreover, evidence of Appellant’s drug addiction explains the history of the case, including events surrounding her criminal conduct for which she was charged.

In sum, the court concluded that Appellant waived several of the issues raised and the evidence was sufficient to sustain her convictions for drug delivery resulting in death and corrupt organizations.

ZALMA OPINION

Pill Mill Doctors, like Stephanie Tarapchak, commit a dangerous crime that results in the injury and death of those people put in her care. Her crimes are as evil as people who set arson fires in occupied properties or people who commit premeditated murder. Considering she provided narcotics to an addict and her own minor child, her sentence is a minimal for such a heinous crime.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

 

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Zalma on Insurance – the Podcast

The Insurance Podcast

Available at https://anchor.fm/barry-zalma and Listen to the Podcast: Zalma on Insurance and https://open.spotify.com/show/2VTJCeGmBUkf0IlFV8SWJk and wherever you get podcasts.

You can listen to

Ethics and the Insurance Product

https://anchor.fm/dashboard/episode/egfj8n

https://anchor.fm/dashboard/episode/ege1rq

and more than 50 episodes with one added five days a week on subjects related to insurance, insurance coverage, insurance law and insurance claims.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

 

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A Video Explaining Ethics and The Insurance Product

The Products Sold by Insurers are Promises

See the full video at https://youtu.be/wx-BtQMCWZk

The basic insurance product is a promise that the insurer may never be called upon to fulfill. The value of the promise is based on the trust of the policyholder in the insurer being able and willing to fulfill the promises made by the insurance policy.

Gallup polls since 1977 have consistently ranked insurance sales persons among the lowest in terms of perceived honesty and ethical standards. In the November 1999 poll, insurance sales persons ranked third from last, just above telemarketers and car salesmen.

Depending on circumstances faced by an insurance agent, insurance broker, insurance claims handler or other insurance professionals find that they look to different resources for guidance when faced with an ethical decision. Dealing with mistakes in an honest manner appears to be more related to personal values, which could be assessed by insurers during the selection and hiring process.

The results of various surveys do not support the effectiveness of a number of common prescriptive actions to improve ethical behavior in the insurance industry.

One of the most common prescriptions is ethics training. The results indicate that logically, far fewer hours are spent in ethics training than in sales training.

In addition, there was no significant relationship between ethical intent/behavior and having received training or the number of hours spent in training. In addition, it is important to note that larger doses of ineffective training cannot be expected to improve ethical conduct.

Training in a formal setting, although useful, will not accomplish anything if the person being trained does not already have a well-defined ethical compass that has been applied to all interpersonal and business interactions throughout his or her adult life. State mandated ethical training will not change an unethical person into a paragon of ethics. The most ethics training can hope to accomplish is to reinforce the ethics of those students who are already ethical and will have little or no effect on those who are not.

Ethics training is essential for an insurer’s ability to successfully communicate and carry out its main goal of dealing with all insured’s and claimants fairly and in good faith. Effective ethics training for employees ensures that the insurer is situated for success and that individuals within the company will stay committed to their tasks at hand fairly, ethically and in good faith.

Prompt and efficient customer service to policyholders and other stakeholders is essential to the ethical insurance professional. Insurance is a service business. Good service must be offered at all times for the business to succeed. Insurance professionals dealing with the public are on the front line of providing good service. They are directly accountable to policyholders for this aspect of the policyholder’s relationship with the insurer. The need for rapid and efficient servicing is most apparent when a legitimate claim is received. Only in genuine cases of fraud, deception or negligence on the part of the policyholder should this requirement go unfulfilled.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

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A Lie Under Oath to an Insurer is a Felony

Swinger Shot by Unhappy Swinger Lies to Get Insurance Benefits and is Convicted of Fraud and Perjury

John Alfonzo Smiley and Cynthia Biasi-Smiley were both charged with presenting a false and fraudulent insurance claim, insurance fraud, concealing an event affecting a person’s right to insurance benefits, two counts of attempted perjury, and presenting a false claim to a state board. A jury found both defendants guilty of the two attempted perjury counts and could not reach a verdict on the other charges. At a subsequent bench trial, defendants were each found guilty of the remaining counts. The trial court suspended imposition of sentence as to the defendants and placed them both on five years of formal probation.

In The People v. John Alfonzo Smiley, The People, v.  Cynthia Biasi-Smiley, C081566, C081737, Court Of Appeal Of The State Of California Third Appellate District (Sacramento) (June 26, 2020) the defendants appealed their convictions for attempted perjury but not the other counts.

BACKGROUND

The Shooting and Statement to the Police

In 2008, Smiley was a correctional officer for the Department of Corrections and Rehabilitation, driving and escorting inmates from one secured facility to another. He and Biasi-Smiley were married. On April 27, 2008, he was shot in the back and rendered paraplegic while walking with his wife in the North Beach section of San Francisco. Smiley and Biasi-Smiley were interviewed about the incident by San Francisco police and gave the following rendition of the events:

  • Defendants went to Twist, a swingers club in North Beach.  Arriving at around midnight, they paid the $80 entrance fee and went upstairs to the “play area,” where people were engaging in sex in plain view.
  • Biasi-Smiley took off her dress and performed oral sex on Smiley. An attractive young woman came up to them, and a young, well-dressed man with the woman motioned to Smiley. Smiley and the man nodded at each other, indicating an agreement to switch partners. Smiley and the other woman began engaging in intercourse, as did Smiley-Biasi and the other man.
  • After a couple of minutes, the man came over and accused Smiley of not wearing a condom.  The, believing Smiley did not use a condom, asked Smiley if he had a weapon; Smiley said he did not. The man then told Smiley, “I got a nine, and I’m going to kill you.”
  • As the Smileys walked to their car, a luxury sedan sped up from behind, pulled up sideways, and stopped. The man from the club got out of the car and said, “I told you I’m going to kill you.” Smiley and Biasi-Smiley started to run but the man shot Smiley in the back, rendering him paraplegic.

The Claims

In April 2009, Smiley filed a workers’ compensation claim, asserting he had been shot by a former inmate. Neither Smiley nor Biasi-Smiley mentioned, either on the form or to the adjuster, being at Twist, Smiley’s having sex with the other woman, or his being threatened by her companion due to his alleged failure to wear a condom.

The claim sought a permanent disability payment of more than $2 million, plus a like amount in home health expenses, for a total claim of around $4 million. The claim was estimated by the State Compensation Insurance Fund (SCIF) to be worth $2.44 million. Biasi-Smiley subsequently filed a lien for $271,680 against Smiley’s workers’ compensation claim for ongoing medical expenses.

Smiley claims were denied and he appealed the denial; he and Biasi-Smiley were deposed by an SCIF attorney on October 15, 2009. Smiley told the deposing attorney he constantly faced threats of violence from inmates. According to Smiley, one time an African-American inmate from Alameda County did not like the way Smiley was talking to him and threatened to “put some le[a]d” in Smiley.

In her first deposition she testified the man said to Smiley, “You know what I do for a living? I kill people. And I’m going to kill you.” Smiley said to Biasi-Smiley, “Let’s go. That’s a parolee.”

SCIF incurred costs of $22,176.36 for medical evaluation, investigative expenses, and legal fees associated with the claim. Smiley filed a disability retirement selection with California Public Employees’ Retirement System (CalPERS) on March 4, 2010, seeking “industrial disability” benefits. These benefits were available only if the disability was work-related, with much greater monthly payments than those for retirement due to disabilities not related to work. CalPERS generally defers to SCIF when determining whether an injury is work-related.

CalPERS denied the request for industrial disability, but approved him for regular disability retirement. Smiley’s monthly disability check was $574 at the time of trial. He would receive $3,002 a month with a retroactive payment of $18,717.63 had his work-related disability retirement been approved.

Defense Evidence

Testifying on his own behalf at the jury trial, Smiley maintained he told the truth at both depositions. He did not mention the swingers club incident during the deposition because he did not believe it had anything to do with the shooting, and the condom issue was a known risk of a partner swap. Smiley thought the shooter agreed to swap partners because he did not immediately recognize Smiley as a correctional officer, and later used the condom allegation as a ruse so he could try to kill Smiley. He recognized the man was an Alameda County parolee two days after the shooting.

DISCUSSION

The elements of perjury are a willful statement, made under oath, of any material matter which the declarant knows to be false. The appellate court’s sole function is to determine if any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. The making of a deposition is deemed to be complete from the time when it is delivered by the accused to any other person, with the intent that it be uttered or published as true. A “complete” deposition transcript is one that has been executed, i.e., signed by the deponent. If a defendant has not signed his or her deposition, it may not be used to convict him or her of perjury.

There is no evidence either affidavit was signed by Smiley or delivered. Rather than being prosecuted for perjury, Smiley was charged with and convicted of attempted perjury. An attempt to commit a crime consists of two elements: a specific intent to commit the crime, and a direct but ineffectual act done toward its commission. Perjury cannot be committed unintentionally so attempted perjury is a crime.

There is ample evidence Smiley knowingly made false, material statements in both depositions about the events leading up to his shooting. Also, Smiley had motive to make these false statements. If his misrepresentations about the cause of his shooting were believed, his injury could be deemed related to his work and he would stand to receive significantly more money than if the injury was found not work-related

Sufficient evidence supports an intent to commit the crime of perjury by making false material statements in the depositions in order to collect substantially larger payments from the state. Making those false statements with that intent but failing to sign and execute the depositions is a classic example of an attempted crime, a specific intent to commit perjury with a willful but ineffective act to do so.

Sufficient Evidence of Presenting a False Claim

A person aids and abets the commission of a crime when he or she, acting with (1) knowledge of the unlawful purpose of the perpetrator; and (2) the intent or purpose of committing, encouraging, or facilitating the commission of the offense, (3) by act or advice aids, promotes, encourages or instigates, the commission of the crime. Biasi-Smiley helped Smiley fill out the claim form he submitted to CalPERS that forms the basis of the section 72 charge. She filled out all or parts of six pages of the eight-page form. She filled out all of page two, which included the statement that Smiley was shot in the back by a parolee. She also signed the form, which could not be processed without the signature.

The trial court could reasonably find that filling out most of the form and signing it was an act to facilitate Smiley’s fraudulent industrial disability retirement claim to CalPERS, she did so with knowledge of the claim’s fraudulent purpose, and did so with the intent of facilitating the fraudulent claim. Substantial evidence supports her conviction on an aiding and abetting theory.

ZALMA OPINION

It is unfortunate and sad that a correctional officer of the state of California was willing to lie to obtain benefits he knew, or should have known, he was not entitled to receive. That he was shot in the back by a “swinger” who was offended that he had sex with a strange woman at a swingers club without a condom, clearly had nothing to do with his occupation. Creating a story that the shooter was a parolee and getting his wife to support the false claim resulted in both of them being convicted of insurance fraud and attempted perjury. They were fortunate that they were only sentenced to probation.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

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A Video Explaining Considerations for Early Settlement of Construction Defect Claims

Early Settlement of Construction Defect Claims are in the Best Interest of all Parties

See the full video at https://youtu.be/3VftWnmb1Fc

It is an axiom followed by almost every attorney that the sooner a suit is settled the less it will cost the defendants. Invariably as suits drag on, as discovery is received and analyzed, the positions of the parties become less amenable to compromise. If defendants and their counsel believe that liability against the defendant is reasonably clear, they should work to bring the parties together to attempt an early settlement. Some of the reasons for the early settlement are discussed below.

Adverse Publicity

The reputation of a builder, developer, engineer, or architect can be destroyed by adverse publicity. Wide dissemination of a single charge of negligent construction can cause the person charged to lose business. Early settlement, if appropriate, can eliminate the concern for the damages caused by adverse publicity. Preferably, settlement should be reached before suit is filed and appropriate language in the settlement agreement should make the settlement confidential. The confidentiality agreement should include an agreement to pay liquidated damages (a damage amount set in the settlement agreement) to the other party if breached.

Bad Facts and Serious Injuries

Some lawsuits are based on clear liability; bad facts and serious injuries make the case one to settle as quickly as possible. Such a case is likely to be expensive to defend. If the attorney’s reaction to the fact pattern is disbelief or horror, and the first impulse is to trade the suit to another attorney or law firm, it is a case that must be settled quickly. For example, the collapse of a terminal at the Charles de Gaulle airport in France only one year after it was built, crushing to death several passengers, is the type of case that, if it occurred in the United States, would be preferable to settle as soon as possible and before any suit was filed.

If the plaintiff makes a demand equal to or less than what the defendant knows to be the value of the case, the demand should be immediately accepted without negotiation. It will shock the plaintiff’s lawyer but once the settlement is made the case is done and a great deal of expense will be avoided.

Multiple Claims & Legal Issues

If the case is not settled, bad law may potentially be established. Bad case law has almost always resulted from cases that should have been settled but were not because someone was stubborn or unthinking.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

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Insurance Fraud is Often a Violent Crime

Murder as Side-Effect to an Insurance Fraud

There is a myth that abounds in the criminal and civil courts of the United States that insurance fraud is a non-violent crime. Abdullah Alkhalidi (“Alkhalidi”) was convicted of murder, robbery, and theft. The Indiana state court denied relief, holding Alkhalidi’s innocence claim strongly indicated he would not have accepted the plea deal. The state court also held that Indiana requires a defendant to admit a plea deal’s factual basis otherwise the trial court would be prevented from entering the plea. Alkhalidi filed for habeas corpus relief and the district court denied the petition.

In Abdullah T. Alkhalidi v. Ron Neal, No. 19-1378, United States Court of Appeals For the Seventh Circuit (June 29, 2020), at trial, Alkhalidi testified that his former roommate killed the victim in Alkhalidi’s vehicle while Alkhalidi followed in a car he planned to sell as part of an insurance fraud scheme. Alkhalidi admitted to helping hide the body and receiving stolen money but denied any other involvement. A jury found Alkhalidi guilty on all counts and the trial court imposed a sentence of 65 years. The Indiana Court of Appeals affirmed the conviction.

BACKGROUND

On May 3, 1999, Alkhalidi was seen leaving a casino with another man (“the victim”). The victim was found dead a few days later with a gunshot wound to the head. Police found the victim’s license plate and driver’s license, blood in Alkhalidi’s car, a gun, and other incriminating evidence in Alkhalidi’s possession.

In September of 2007, Alkhalidi, his attorney, and the prosecutor met to discuss a plea deal. Following the meeting, the prosecutor proposed a plea offer with a strict deadline. On September 13, the prosecutor sent a letter to Alkhalidi’s attorney that stated the best offer he could extend would be for Alkhalidi to plead guilty to robbery and auto theft. The letter stated the offer’s deadline would be September 21, 2007.

Alkhalidi expressed dissatisfaction with the plea and indicated he had a desire to counteroffer. The court denied Alkhalidi’s motion. In 2010, Alkhalidi filed a petition for post-conviction relief and, in 2014, Alkhalidi filed an amended petition. In 2015, the court held a post-conviction hearing. Alkhalidi testified that he would have accepted the offer or made a counteroffer. The trial court denied relief because Alkhalidi “maintained his innocence throughout the course of the proceedings” and failed to establish his acceptance of the plea offer. Indiana requires a defendant to admit the factual basis of the plea, otherwise the court is unable to accept the plea.

Alkhalidi filed a federal writ of habeas corpus relief with the district court which was rejected.

DISCUSSION

A federal court may grant habeas corpus relief for a state prisoner who is in custody in violation of the Constitution or laws or treaties of the United States. Federal habeas review thus exists as a guard against extreme malfunctions in the state criminal justice systems, not a substitute for ordinary error correction through appeal.

When a state prisoner asks a federal court to set aside a sentence due to ineffective assistance of counsel during plea bargaining, our cases require that the federal court use a doubly deferential standard of review that gives both the state court and the defense attorney the benefit of the doubt. The petitioner must show the state court’s decision was contrary to, or involved an unreasonable application of, clearly established Federal law or was based on an unreasonable determination of the facts in light of the evidence presented in the State court proceeding.

Alkhalidi was unable to show prejudice. Alkhalidi failed to show the state court’s decision was contrary to, or involved an unreasonable application of, clearly established Federal law and therefore the decision was based on an unreasonable determination of the facts in light of the evidence presented in the State court proceeding.

A reasonable probability of Alkhalidi accepting a plea deal is unpersuasive considering his insistence on counteroffers. Nothing in the record shows any reasonable probability Alkhalidi would have pleaded guilty.

The record shows that Alkhalidi remained committed to advocating his innocence and showed no probability of abating. Finally, Alkhalidi failed to meet the demanding doubly deferential standard that provides the benefit of the doubt to the state court and the defense attorney.

He failed to show that no possibility existed that fair-minded jurists could disagree with his claims and that the state court’s decision conflicts with prejudice. Since the state court was reasonable in finding Alkhalidi had not established he would have accepted the plea and the state court would have accepted the plea even if he had taken it.

The judgment of the district court was affirmed and the writ of habeas corpus was denied.

ZALMA OPINION

There is a myth that abounds in the criminal and civil courts of the United States that insurance fraud is a non-violent crime that needs to be destroyed. Mr. Alkhalidi was involved in creating an auto insurance fraud when his scheme was interrupted by a murder. The victim’s license plate and driver’s license, blood were found in Alkhalidi’s car, a gun, and other incriminating evidence in Alkhalidi’s possession. Since murder, whether as part of an insurance fraud or coincidental to an insurance fraud, is a violent crime. He was convicted because the evidence was overwhelming and his attempt at obtaining a habeas corpus release failed as did his defense of insurance fraud as his intent and someone else killed the victim.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

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RTFP – Failure to Read the Full Policy Costs the Insured

Insured’s Failure to Protect His Interest is His Own Worst Enemy for Not Reading Policy

In a case where it was undisputed that the insured admitted he did not read the policy or the numerous policy-renewal notices sent to him from 2006 to 2015 that explicitly set forth the policy limits and explicitly requested that he read them the insured sued for coverage he did not buy. Had he read the policy and notices the insured would have discovered that the policy limit for Coverage B was insufficient and could have, had he desired, requested additional coverage. Mr. Kevin Crook failed to do so and, thus, put himself in danger’s way and had no conscious appreciation of the danger of suffering a monetary loss until it happened.

In Kevin Crook v. Allstate Indemnity Company, The Barker Agency, and Allstate Insurance Company, 1180996, Supreme Court of Alabama (June 26, 2020) Kevin Crook appealed a summary judgment entered by the Tuscaloosa Circuit Court in favor of Allstate Indemnity Company (“Allstate Indemnity”), Allstate Insurance Company (“Allstate Insurance”), and The Barker Agency (hereinafter collectively referred to as “the defendants”) because the language of the policy was clear.

FACTS

Crook owns lake-front property in Tuscaloosa County. The property consists of a house, a bathhouse, a garage, a deck, and a boat dock. The deck is not directly connected to the house; an exterior stairway connects the house to the deck. The boat dock is, in turn, connected to the side of the deck opposite the stairway and house. A portion of the boat dock is covered with a roof supported by pilings, but the boat dock has no walls.

In 2006, Crook, through The Barker Agency, obtained property insurance on the house and other structures from Allstate Indemnity which was renewed through 2015. Crook admitted, although he was warned to review each renewal of the policy, was not aware of the actual policy limits provided by Allstate Indemnity and did not read the renewal notices. Crook simply trusted that the limits supplied by Allstate Indemnity were exactly what he needed.

On April 14, 2015, a storm damaged the deck and the boat dock; the amount of the damage caused “was at or greater than the coverage provided by” Coverage B. Kevin Smith, a “claims service analyst” inspected the damage reported by Crook. Smith concluded that the deck and the boat dock had been damaged by the storm and that the damage was covered under Coverage B, rather than Coverage A. Accordingly, on April 28, 2015, Allstate Indemnity paid Crook the Coverage B policy limit of $11,455.

Crook sued. Crook alleged that the damage to the deck and the boat dock should have been covered under Coverage A, which has a higher limit of insurance in the amount of $56,049. Concerning Crook’s negligent/wanton-procurement-of-insurance claim, Crook alleged that he relied upon the defendants to provide adequate coverage for the property and that the defendants “knew or should have known that [Coverage B] … would be insufficient to cover damages to [the] deck and [the] boat [dock].”

The circuit court entered a summary judgment in favor of Allstate Insurance as to all claims against it.

DISCUSSION

The Alabama Supreme Court, like other states, applies the following principles of construction in interpreting an insurance contract:

  1. The rules of contract interpretation are well settled. The issue whether a contract is ambiguous or unambiguous is a question of law for a court to decide.
  2. If a word or phrase is not defined in an insurance policy, then the court should construe the word or phrase according to the meaning a person of ordinary intelligence would reasonably give it. The court should not define words it is construing based on technical or legal terms.
  3. When analyzing an insurance policy, a court gives words used in the policy their common, everyday meaning and interprets them as a reasonable person in the insured’s position would have understood them.
  4. If, under this standard, they are reasonably certain in their meaning, they are not ambiguous as a matter of law and the rule of construction in favor of the insured does not apply.
  5. A policy is not made ambiguous by the fact that the parties interpret the policy differently or disagree as to the meaning of a written provision in a contract.
  6. A court must not rewrite a policy so as to include or exclude coverage that was not intended.
  7. However, if a provision in an insurance policy is found to be genuinely ambiguous, policies of insurance should be construed liberally in respect to persons insured and strictly with respect to the insurer.

The policy issued by Allstate states that Coverage A applies to Crook’s “dwelling including attached structures. Structures connected to your dwelling by only a fence, utility line, or similar connection are not considered attached structures.” It was undisputed that the house is a dwelling and that the deck and the boat dock are structures.

Crook argued that the exterior staircase attaches the deck to the house and that the deck, in turn, which is attached to the boat dock, attaches the boat dock to the house.

The various jurisdictions that have considered the issue determined that Coverage B applies to cover damage to an “other structure” when there is “clear space” between the dwelling and the other structure, even if the dwelling and the damaged other structure are connected by a structure such as a deck.

In the present case, the deck is connected to the house by an exterior staircase. There is a “clear space” between the house and the deck and the boat dock. Neither the deck nor the boat dock is attached to the house. There exists clear space between the structures. Accordingly, applying the plain language of the policy, the circuit court properly determined that the damage to Crook’s deck and boat dock is covered under Coverage B, rather than Coverage A.

The plain language of the policy indicates that Coverage B applies to the deck and the boat dock because those structures are not attached to the dwelling.

It was undisputed that Crook did not read the policy or the numerous policy-renewal notices sent to him from 2006 to 2015 that explicitly set forth the policy limits and explicitly requested that he read them. Had he done so, Crook would have discovered that the policy limit for Coverage B was only $11,455 and could have, had he desired, requested additional coverage. Crook failed to do so and, thus, put himself in danger’s way and should have had a conscious appreciation of the danger of suffering a monetary loss.

The Supreme Court affirmed the circuit court’s summary judgment in favor of Allstate Insurance.

ZALMA OPINION

Insurers, like Allstate, always ask their insureds to read the policy, consider the limits provided, and determine if the policy issued provides the coverages needed by the insured. Unfortunately, many, like Mr. Crook, fail to read their policy. Had he done the duty to review the policy when he received it, or the multiple times it was renewed, he would have learned that the coverage for his dock was limited and not sufficient to indemnify him completely if there was a major loss. He did not do so and, rather than accepting the fact that his inaction and inattention to the insurance needed, was the cause of his loss, elected to sue his agent and his insurer for not forcing him to buy more insurance coverage.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkV7pkuOtkiv6oakpgK33CNlNAYW-WBlLCOZFtgvpSdcL7R-tsWKfMVqG6fEuvmM7Hh7gUEJ7yKOdgHDbGl_cGAU%3D

Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

 

 

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A Video Explaining How to Negotiate the Settlement of a Liability Claim

How to Negotiate a Settlement

See the full video at https://youtu.be/WSYTbMC_uTE

After the adjuster determines that coverage exists, that the insured is probably liable for causing bodily injury or property damage to a third person, the adjuster must negotiate a settlement with the claimant or his or her attorney.

Just like the plaintiff’s attorney in a personal injury case, the insurance adjuster will investigate the claim – the facts of the accident and the plaintiff’s damages.

A very skillful and well-prepared insurance adjuster will often know more about the accident and about the plaintiff’s background than the plaintiff’s lawyer does.

There is no perfect method of valuing and negotiating a personal injury claim or suit. Each must be dealt with individually and the adjuster must be flexible enough to obtain a settlement that is agreeable to the insured, the plaintiff or claimant, and the lawyer representing the plaintiff or claimant.

The main facts determining how an accident settlement comes out are how well the adjuster has prepared all stages of the claim – investigation, supporting documents, demand letter, response, and counter offers and demands. How much the plaintiff or claimant is willing to settle for if it falls within the evaluation of the settlement value reached by the adjuster and the insurer will allow the parties to reach agreement.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkV7pkuOtkiv6oakpgK33CNlNAYW-WBlLCOZFtgvpSdcL7R-tsWKfMVqG6fEuvmM7Hh7gUEJ7yKOdgHDbGl_cGAU%3D

Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

 

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Ten Volumes Explaining How to Deal With Insurance Claims

Everything Needed by the Insurance Claims Professional from Barry Zalma

Over the last 52 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 for insurers and their claims staff to become insurance claims professionals.

Zalma on Insurance Claims – Second Edition

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.”

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.

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. A Comprehensive Review of insurance, insurance claims, the law of insurance policy interpretations, the practicalities of Property, Casualty and Liability Insurance Claims.

Zalma on Insurance Claims Volume 101 – Second Edition

A Comprehensive Review of insurance, insurance claims, the law of insurance and policy interpretation Paperback – July 17, 2019

This volume covers

  1. WHAT IS INSURANCE?
  2. THE HISTORY OF INSURANCE,
  3. ACQUISITION OF THE POLICY,
  4. CLAIMS PERSONNEL,
  5. KINDS OF INSURANCE POLICIES,
  6. THE LIABILITY POLICY.

The 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.

Available as a paperback

Available as a Kindle Book

Zalma on Insurance Claims Part 102 – Second Edition

This the second edition of the second volume in the latest addition to Barry Zalma’s insurance claims series of books and articles is part of the most thorough, up-to-date, expert-authored insurance claims guide available today. Zalma on Insurance Claims, part 102 provides in-depth explanations, analysis, examples, and detailed discussion of: •  Other Insurance Clauses; •   Trigger of Coverage; •    Underwriting; •    Conditions, Warranties and Exclusions

The 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.

Available as a Kindle book

Available as a paperback 

Zalma on Insurance Claims Part 103 Second Edition

A Comprehensive Review of the law and Practicalities of Property, Casualty and Liability Insurance Claims. Insured, Insurer, adjusting.

The Implied Covenant of Good Faith and Fair Dealing

The principle on which insurance has existed for the last three to four centuries is that insurance business is conducted with the utmost good faith (uberrima fides). The principle, called a covenant of good faith and fair dealing, must be followed religiously by both the insurer and the insured. This means, simply, that both parties to the insurance contract must treat each other in such a way that neither will deprive the other of the benefits of the contract.

This, the third part of Zalma on Insurance Claims and includes materials concerning:
This is part 103 of Zalma on Insurance Claims and will deal with:

•The Covenant of Good Faith and Fair Dealing
•Duties of the Insured and the Insurer
•Declaring a Policy Void
•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.

Available as a Kindle Book

Available as a paperback

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.

Available as a Kindle Book

Available as a paperback

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.

Available as a Kindle Book

Available as a paperback

Zalma on Insurance Claims Part 106 Second Edition

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

This latest addition to Barry Zalma’s insurance claims series of books and articles is part of the most thorough, up-to-date, expert-authored insurance claims guide available today. Written by nationally-renowned insurance coverage expert Barry Zalma, an insurance coverage attorney, consultant, expert witness and blogger.

Thorough, yet practical, this book is 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 this multiple volume guide. It is also the perfect resource for insurance educators, trainers, and students whose role requires an understanding of insurance law.

The 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.

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

  1. Property Insurance & the Tort of Bad FaithChapter
  2. Grounds for Finding Bad FaithChapter
  3. Avoiding Charges of Bad FaithChapter
  4. Punitive DamagesChapter
  5. Bad Faith & Liability Insurance.
  6. Defenses to the Tort of Bad Faith

The appendices also include full text of important insurance law cases and statutes

Available as a Kindle book

Available as a paperback 

Zalma on Insurance Claims Part 107 – Second Edition

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.

Available as a Kindle book

Available as a paperback 

Zalma on Insurance Claims Part 108 -Second Edition

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.

Available as a Kindle book

Available as a paperback

Zalma on Insurance Claims Part 109 Second Edition

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.

Available as a Kindle book

Available as a paperback

Zalma on Insurance Claims Part 110 Second Edition

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.

Available as a Kindle book

Available as a paperback


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! – https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkV7pkuOtkiv6oakpgK33CNlNAYW-WBlLCOZFtgvpSdcL7R-tsWKfMVqG6fEuvmM7Hh7gUEJ7yKOdgHDbGl_cGAU%3D

Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/


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A Video of True Crime Stories from Heads I Win, Tails You Lose

Heads I Win, Tails You Lose – True Crime Stories of Insurance Fraud

See the full video at https://youtu.be/AWRB2d_zYjE

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. If the fraud succeeds the insurer must charge more premium to cover the expense of defending the fraud and payment of funds to the fraud perpetrator. If the fraud fails the insurer must charge more premium to cover the expense of defending the fraud. Everyone, except the lawyers, lose.

The stories that follow were written to show how insurance fraud is taking money out of the pockets of innocent and honest people who buy insurance. For every dollar taken by a fraud an insurer must collect two dollars in premiums. Every person in the US who does not commit fraud is paying to support those who do. A minimum of $20.00 for every $100.00 every person insured pays in premiums goes into the pockets of insurance criminals. If these stories make the reader angry write to your local District Attorney, States Attorney, Attorney General or US Attorney and let them know of your anger. If enough people complain perhaps, the prosecution levels will increase. Although each of the stories that follow is based in fact, the names, locations and facts of the claims have been changed to protect the guilty. No resemblance to any person is intended and any resemblance is purely coincidental.

Insurers, in a search for profit, have decimated their professional claims staff. They laid off experienced personnel and replaced them with young, untrained and unprepared people. A virtual clerk replaced the old professional claims handler. Process and computers replaced skill and judgment. The promises made by an insurance policy are kept by the professional claims person. A professional claims staff is an effective cost-effective method to avoid litigation.

The professional claims person is an important part of the insurer’s defense to litigation against insurers for breach of contract. A staff of claims professionals dedicated to excellence in claims handling. Experience establishes that claims professionals resolve more claims for less money without the need for either party to involve counsel. A happy insured or claimant satisfied with the results of his or her claim will never sue the insurer.

This is mostly a work of fiction based on the real experiences of a practicing lawyer and Certified Fraud Examiner.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkV7pkuOtkiv6oakpgK33CNlNAYW-WBlLCOZFtgvpSdcL7R-tsWKfMVqG6fEuvmM7Hh7gUEJ7yKOdgHDbGl_cGAU%3D

Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

 

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Made Whole Doctrine Does Not Apply to a Self-Insured-Retention

The Made-Whole Doctrine Does Not Apply To First-Dollar Risk in New Jersey

A self-insured retention or deductible is an amount of risk that the insured has agreed to assume in exchange for a lower premium cost for the insurance policy. Where the award from a subrogation action against a third party is insufficient to reimburse both the insured’s self-insured retention and the carrier’s loss in excess of the self-insured retention, to place priority of recovery with the insured would, in effect, convert the policy into one without a self-insured retention. In City of Asbury Park v. Star Insurance Company, A-20 083371, Supreme Court Of New Jersey (June 29, 2020) the United States Court of Appeals for the Third Circuit asked the Supreme Court of New Jersey whether,  the made-whole doctrine applies to first-dollar risk that is allocated to an insured under an insurance policy, i.e., a self-insured retention or deductible.

FACTS

From February 2010 to February 2011, the City of Asbury Park (the City) had an insurance policy with Star Insurance Company (Star) that provided coverage for workers’ compensation claims against the City. The policy included a “self-insured limit retention for workers’ compensation” losses against the City in the amount of $400,000 per occurrence. In turn, Star agreed to indemnify the City for its workers’ compensation losses that exceeded the self-insured retention.

In January 2011, John Fazio, an employee of the Asbury Park Fire Department, suffered injuries while fighting a fire. He filed a workers’ compensation claim against the City, which in turn paid him $400,000, the full amount of its self-insured retention limit; Star paid $2,607,227.50, the amount exceeding the self-insured retention limit.

Fazio later filed suit against a third party for the injuries he suffered in the 2011 fire. Fazio and the third party reached a settlement agreement for $2,700,000. Subsequently, Fazio, the City, and Star agreed that $935,968.25 of the settlement proceeds would be set aside to partially reimburse the City and Star.

Star issued a demand to recover the entire $935,968.25, contending that it was entitled to be reimbursed in full before the City could recover amounts paid on the self-insured retention. The City asserted that under the made-whole doctrine, it was entitled to be reimbursed in full before Star could assert its subrogation right. Star responded that the made-whole doctrine does not apply to self-insured retentions to avoid unjustly enrich the City.

The City filed a declaratory judgment action against Star.

ANSWER TO THE THIRD CIRCUIT

The Court answered the certified question in the negative. Under equitable principles of New Jersey law, the made-whole doctrine does not apply to first-dollar risk, such as a self-insured retention or deductible, that is allocated to an insured under an insurance policy.

In the insurance context, subrogation is a doctrine allowing the insurer to seek recovery from the party at fault, exercised after the insurer has indemnified its insured under the terms of an insurance policy. Subrogation rights are created in one of three ways: (1) an agreement between the insurer and the insured, (2) a right created by statute, or (3) a judicial device of equity to compel the ultimate discharge of an obligation by the one who in good conscience ought to pay it.

The Made Whole Doctrine

Under the make-whole doctrine, an insurer cannot assert a subrogation right until the insured has been fully compensated for his or her injuries.

A self-insured retention or deductible is an amount of risk that the insured has agreed to assume in exchange for a lower premium cost for the insurance policy. Where the award from a subrogation action against a third party is insufficient to reimburse both the insured’s self-insured retention and the carrier’s loss in excess of the self-insured retention, to place priority of recovery with the insured would, in effect, convert the policy into one without a self-insured retention. Such interference with the contract would essentially write a better policy for the insured than the one purchased.

In the insurance context, subrogation is a doctrine allowing the insurer to seek recovery from the party at fault, exercised after the insurer has indemnified its insured under the terms of an insurance policy. The doctrine is based on the principle that a benefit has been conferred upon the insured at the expense of the insurer and vests in the latter any rights the former may have had against a third party who is liable for the damages. In subrogation cases, the insured’s right to recovery against a third party tortfeasor vests in the insurer, and the insurer steps into the shoes of the insured, and files suit against the tortfeasor subject to any defenses which would defeat recovery by the insured.

When an insurance carrier which has satisfied a loss it was paid to cover, seeks to recoup by asserting a claim its insured has against another with respect to that loss, the final question must be whether justice would be furthered by that course. While the made-whole doctrine generally applies in New Jersey, its courts have never addressed the question of whether the doctrine applies to first-dollar risk, such as deductibles and self-insured retentions, borne by insureds.

Considering the equitable principles that guide the doctrine of subrogation alongside insurance policies that allocate first-dollar risk to the insured, the Supreme Court found  that the made-whole doctrine does not apply to first-dollar risk allocated to the insured. A self-insured retention or deductible is an amount of risk that the insured has agreed to assume in exchange for a lower premium cost for the insurance policy. Where the award from a subrogation action against a third party is insufficient to reimburse both the insured’s self-insured retention and the carrier’s loss in excess of the self-insured retention, to place priority of recovery with the insured would, in effect, convert the policy into one without a self-insured retention. Such interference with the contract would essentially write a better policy for the insured than the one purchased.

Read together, if the Policy unambiguously provides Star with all of the City’s rights to recovery against third-party tortfeasors in the event that Star makes a payment under the Policy, that conclusion means that the made-whole doctrine would not apply.

Under equitable principles of New Jersey law, the made-whole doctrine does not apply to first-dollar risk, such as a self-insured retention or deductible, that is allocated to an insured under an insurance policy.

ZALMA OPINION

When a person or entity buys a policy with a self-insured retention he or it agrees to accept full responsibility – as if uninsured – for all losses up to the self-insured retention. A deal made with an insurer to only pay for losses over the amount of the self-insured retention coupled with an agreement to subrogate the insurer to the rights of the insured against third party tortfeasors allows the insurer to take what it can from the third party up to the amount paid before the insured is allowed to recover part or all of its self-insured retention. If the City had no insurance at all and paid the full amount of the firefighter’s workers’ compensation claim it could take the full amount from the tortfeasor, a right it gave to the insurer when it agreed to provide it with a right of subrogation.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkV7pkuOtkiv6oakpgK33CNlNAYW-WBlLCOZFtgvpSdcL7R-tsWKfMVqG6fEuvmM7Hh7gUEJ7yKOdgHDbGl_cGAU%3D

Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

 

 

 

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A Video About How the Covenant of Good Faith and Fair Dealing Requires Ethical Insurance Representatives

ETHICS FOR THE INSURANCE PROFESSIONAL

See the full video on YouTube at: https://youtu.be/tc62pBO_b0E

Insurance is, by definition, a business of the utmost good faith. This means that both parties to the contract of insurance must act fairly and in good faith to each other and do nothing that will deprive the other of the benefits the contract of insurance promised.

Without the covenant of good faith and fair dealing and ethical people who work in the insurance industry applying and fulfilling the covenant, insurance is impossible. One cannot act fairly and in good faith without being a person with a well-formed ethical compass.

In Carter v. Boehm S.C. 1 Bl. Burr 1906, 11th May 1766. 593, 3 Lord Mansfield in the British House of Lords stated: “Good faith forbids either party by concealing what he privately knows, to draw the other into a bargain, from his ignorance of that fact, and his believing the contrary.” Insurers, when making a decision to insure or not insure a risk, rely on the information provided to them by the insured. As Lord Mansfield instructed, the insured must provide the information requested honestly and in good faith.

The implied covenant explains that no party to a contract of insurance should do anything to deprive the other of the benefits of the contract.

The implied covenant of good faith and fair dealing imposes obligations not only as to claims by a third party but also as to those by the insured. When the insurer unreasonably and in bad faith withholds payment of the claim of its insured, it is subject to liability in tort. For the insurer to fulfill its obligation not to impair the right of the insured to receive the benefits of the agreement, it again must give at least as much consideration to the latter=s interests as it does to its own.

See multiple videos on my channel at https://studio.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/videos/upload?filter=%5B%5D&sort=%7B%22columnType%22%3A%22date%22%2C%22sortOrder%22%3A%22DESCENDING%22%7D

 

© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

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No Coverage for a Loss Known Before Inception of the Policy

$50.56 Million Judgment Useless When Defendant is Judgment Proof and Insurer Owes Nothing

After more than ten years of litigation between a group of neighbors in Elkhart, Indiana and a nearby wood recycling facility the disputes came to an end with the Seventh Circuit. The neighbors alleged that VIM Recycling’s waste disposal practices exposed them to dust and odors in violation of federal environmental law. They also brought state tort law claims for the resulting loss of use and enjoyment of their property and adverse health effects. At certain points the defendants—VIM Recycling, a related entity, and their owner, Kenneth Will—successfully fended off the neighbors’ claims. But sometimes they did nothing at all. These litigation choices eventually led to a $50.56 million default judgment against VIM.

In Carmine Greene, et al. v. Westfield Insurance Company, No. 19-2260, United States Court of Appeals For the Seventh Circuit (June 26, 2020) what began as a case about environmental pollution evolved into a joint garnishment action against VIM’s insurer, Westfield Insurance, to satisfy some of that $50.56 million judgment.

FACTS

VIM began operating its Elkhart wood recycling facility around 2000. Problems allegedly began in the nearby residential community soon thereafter. By 2009 a group of neighbors banded together to bring a class action lawsuit to recover for damage to their property. The plaintiffs alleged that the company processed old, dry wood outside without the proper emissions, all of which violated the Fugitive Dust Control Plan that the Indiana Department of Environmental Management, or IDEM, imposed on the site in July 2000.

The neighbors claimed that VIM’s disposal practices harmed the surrounding environment and their health.

While some of the pollution and injuries were taking place, VIM had acquired general commercial liability policies with Westfield Insurance. These policies collectively ran from January 1, 2004 through January 1, 2008, and obligated Westfield to pay up to $2 million of any judgments against VIM for “property damage” or “bodily injury.”

The litigation history was important to the court’s decision. It involves three separate lawsuits over the course of 10 years.

First Lawsuit

On October 27, 2009, the neighbors filed their original complaint in the Northern District of Indiana against three related VIM defendants. At the time of the court’s dismissal, Westfield Insurance had no knowledge of (or involvement in) the litigation. The reason was because VIM never notified Westfield that it had been sued in federal court for events that took place within the policy coverage periods.

Second Lawsuit.

VIM did seek coverage from Westfield in a different case. On May 24, 2010, the neighbors filed a second, nearly identical lawsuit against VIM in Indiana state court. Pending an investigation into its own coverage obligations, Westfield responded by hiring its own lawyer to serve as its assigned defense counsel for VIM in this state action.

Third Lawsuit.

Westfield meanwhile continued to evaluate its potential exposure in the case pending in state court. It concluded that it had no coverage obligations and sent a letter to VIM stating as much. It then sought a declaratory judgment in federal court against both VIM and the neighbors. VIM never answered the complaint, and the district court entered a default declaring that Westfield had no duty to defend or indemnify VIM in the state action.

Between 2010 and 2011 there were three cases in play—the original federal case (this case), the state case, and the federal declaratory judgment case relating to the state case. Westfield Insurance successfully disclaimed any obligation in Indiana state court through the federal declaratory judgment action but did not concern itself with this case, which it had only heard about indirectly from its own lawyer when it had been dismissed.

ANALYSIS

After securing the default judgment but realizing they were unable to recover much from VIM, the neighbors moved to institute proceedings against Westfield under Federal Rule of Civil Procedure 69, which allows the court to “garnish,” or recover, a money judgment that one party owes another. The neighbors invoked the rule and sought to garnish West field’s indemnity obligation to VIM pursuant to its insurance policies to satisfy part of the $50.56 million award.

There are two relevant exclusions in VIM’s general commercial liability policies with Westfield. The policies generally applied to any damages VIM was legally obligated to pay because of “bodily injury” or “property damage” that took place within the coverage period. If an exclusion applies, however, Westfield had no obligation to VIM, and the neighbors cannot seek to recover any of their judgment from Westfield.

Each of the four policies in place during the relevant period contained an exclusion for “known claims.” VIM’s policies with Westfield specifically stated that they did not cover losses if “a listed insured or authorized employee knew prior to the policy period, that the bodily injury or property damage occurred” and that “any continuation, change or resumption” of the property damage or bodily injuries “during or after the policy period will be deemed to have been known prior to the policy period.” The second exclusion provides that coverage does not extend to any bodily injury or property damage “expected or intended from the standpoint of [VIM].”

The Seventh Circuit interpreted the “known claim” and “expected or intended injury” exclusions based on their plain language. Though they are distinct the language of both focuses on when VIM first learned about the property damage and bodily injuries that gave rise to the neighbors’ lawsuit in 2009.

Recall that, as part of entering a default judgment against VIM, the district court properly deemed and accepted as true all allegations advanced by the neighbors in their second amended complaint. Considered collectively, the record supplies overwhelming evidence that VIM—and Kenneth Will in particular—knew about the fugitive dust and resulting injuries before the first Westfield policy went into effect. Any damages for those injuries, then, were both known claims and expected injuries.

The pertinent inquiry concentrates more on known facts. Expected injury or damage means that the insured acted although he was consciously aware that the harm caused by his actions was practically certain to occur.

Will was certainly aware of these underlying facts before the policies went into effect. He knew that the neighbors were complaining to IDEM between 2000 and 2003. Indeed, he admits in his affidavit that he paid to have their cars washed.  All of this occurred before 2004. By January 1, 2004 Will knew of and routinely acknowledged the dust problems. The overwhelming weight of evidence here—the facts the neighbors themselves relied on when they won their default judgment in 2015—supports the district court’s conclusion that VIM was consciously aware that the kind of environmental harms alleged in the Class’s complaint, and on which the default judgment is based, were practically certain to result from their operation of the Elkhart facility over the period of coverage.  Summary judgment was appropriate because there is no genuine dispute of material fact.

An insurer that has received notice of a lawsuit and believes it has no duty to defend should act as Westfield did in VIM’s state case—it should either file a declaratory judgment action or hire counsel to defend its insured under a reservation of rights.

The record does not support a conclusion that Westfield acted in bad faith by flatly refusing VIM coverage in this federal case. Westfield in no way avoided or breached its duty to defend by leaving its insured out in the cold. At best it had only indirect notice of the lawsuit and no indication that VIM or the neighbors—who were both in possession of the facts essential to provide direct notice—would ever seek coverage. Since Westfield shirked no responsibilities in the face of VIM’s and the neighbors’ belated, opportunistic pursuit of policy coverage, even if the indirect notice triggered any duty to defend, Westfield would not be estopped from claiming its applicable policy exclusions.

ZALMA OPINION

Judgment proof defendants who allow major judgments to be entered against them because they have no assets to pay the judgments cause creative plaintiffs’ lawyers to try to collect from the defendant’s insurer. The problem the plaintiffs’ lawyers face, as did the plaintiffs’ in this case, is to collect from the policy it must provide coverage to the insured to defend and the insurer must breach its duty to defend. In this case the insurer provided a defense to what it knew about, excluded the loss by clear and unambiguous policy language and was forced to deal with the case for many years because of arguments that attempted to change facts to fit coverage. Creative, perhaps, but still a failure and the $50 million judgment is no more than a piece of paper that can be framed and put on a wall and is worth the value of the frame.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

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FALSE SWEARING

False Swearing About Material Facts Voids an Insurance Policy and Defeats a Fraudulent Claim

See the full video at https://youtu.be/2fcN-QJHkBk

In common language the “false swearing” provision of an insurance policy merely means that if the insured lies under oath the policy is void whether the lie is in a proof of loss or at an examination under oath. In Texas and Oklahoma, false swearing is explained this way:

Where an insured knowingly and willfully overestimates the value of property destroyed or damaged, the policy is voided and the insured’s right to recover is defeated.

The reason for the false swearing defense can be explained because it would be unjust to allow a claimant to misrepresent facts under oath that might lead to a valid defense and then allow him to escape the consequences of the falsehood simply because he had succeeded so well that the company was unable to establish the defense.
In common language the “false swearing” provision of an insurance policy merely relates to a lie under oath.

As both the proof of loss and the testimony at examination under oath are sworn to by the insured, any material falsehood is sufficient to establish the defense of false swearing. The same is true of any difference between the facts testified to during the examination under oath or stated in the proof of loss, and the facts developed from an audit of the insureds books and records or an insurer’s investigation.

The U.S. Supreme Court stated the rule, as follows:

“A false answer as to any matter of fact material to the inquiry, knowingly and willfully made, with an intent to deceive the insurer, would be fraudulent. If it accomplished its result, it would be a fraud effected; if failed, it would be a fraud attempted. No one can be permitted to say, in respect to his own statements upon a material matter, that he did not expect to be believed; their materiality, in the eye of the law, consists in their tendency to influence the conduct of the party who has an interest in them and to whom they are addressed.” [Claflin v. Commonwealth Insurance Co., 110 U.S. 81, 3 S. Ct. 507, 28 L. Ed. 76 (1884).]

See multiple videos on my channel at https://studio.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/videos/upload?filter=%5B%5D&sort=%7B%22columnType%22%3A%22date%22%2C%22sortOrder%22%3A%22DESCENDING%22%7D

 

© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

 

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No Coverage for a Staged Accident

How to Collect Sufficient Evidence to Prove a Staged Accident Scheme

In a case involving multiple parties involved in an alleged side-swipe accident between a Honda and a limousine, Encompass Home & Auto Insurance Company and others collected a great deal of evidence, claimed they were the victims of a staged accident scheme and refused to pay the allegedly injured plaintiffs and the health care providers who provided services to the allegedly injured. The presented evidence to the Supreme Court of the State of New York and sought summary Judgment.

In Encompass Home & Auto Insurance Company v.  Elizinda Makendy, Maxime Makendy, Marclish Davidson, Alice Alarcon, et al, Index No. 160580/2015, 2020 NY Slip Op 31907(U), Supreme Court Of The State Of New York New York County Part IAS Motion 47EFM (June 12, 2020) the court considered a declaratory judgment suit brought by plaintiff, Encompass Home & Auto Insurance Company (Encompass).

The alleged staged automobile collision occurred on August 25, 2014. According to a certified police report, a 2000 Honda registered to Encompass’s insured, Elizinda Maxime, and operated by Marclish B. Davidson was involved in a sideswipe collision at approximately 1:50 am in Nassau County, New York with a 2007 Lincoln limousine operated by Bemba Keita. Alice Alarcon was a passenger in the Honda and the passengers in limousine were several. The Encompass policy was issued to Elizinda Maxime and Makendy Maxime. The limousine was owned by Paris Limousine Services and insured by American.

The Facts Establishing a Staged Accident

Subsequently, both Encompass and American opened investigations into the collision by among other things conducting examinations under oath of the individuals involved. Encompass’s and American’s investigations unearthed some of the following:

  • The driver of the Honda, Marclish B. Davidson resided at the time of the collision at 1290 Ocean Avenue, Brooklyn New York Apartment 3G and his full name is Marclish Baptiste Davidson.
  • On July 14, 2015 a Marclish Baptiste was involved in an automobile collision where he struck a livery vehicle in Brooklyn, New York.
  • According to the police report Marclish Davidson and Marclish Baptiste share the same date of birth, address and driver’s license number.
  • On July 14, 2015 Marclish was operating a Ford registered to Peterson Bellevue, residing at 15 Taylor Street, Johnson City, NY.
  • On May 26, 2015 the Bellevue vehicle was being operated by Gersey Louissant when it sideswiped a livery vehicle.
  • Alice Alarcon was a passenger in the Bellevue vehicle at the time, the same Alice Alarcon who was a passenger in the Encompass vehicle operated by Marclish on August 25, 2014
  • Gersey Louissant, the driver of the Bellevue vehicle on May 26, 2015, was friends with her May 26, 2015 passenger, Alice Alarcon.
  • Louissant was also friends with “Carly” and “Claud” residing at 499 Gates Avenue and had visited their apartment for parties (Ex 32, Examination Under Oath [EUO] of Louissant taken by Kemper Insurance, Peterson Bellevue’s insurer.
  • “Carly” and “Claud” are Carline Joseph and Joseph Blanc, passengers in the limousine that Marclish sideswiped with the Honda on August 25, 2014.
  • The 2000 Honda involved in the August 25, 2014 collision was purchased by Jefferson Juste but registered in his cousin’s name, Elizinda Maxime with whom he resides.
  • The Honda was insured by Elizinda and her husband, Makendy Maxime.
  • According to Elizinda Maxime, Juste gave her three different reasons why Marclish had the keys. First, he left them at Maxime’s house by mistake, second, he gave Marclish the car to help him move, and third, Marclish took the keys without permission.
  • Marclish testified that at the time of the collision he was driving a Nissan Pathfinder (not a Honda) owned by “Maxime” a female friend that he has known for two years but did not know her last name.
  • After the collision Marclish and Alarcon treated at the same medical facility located at Rutland Road and Utica Avenue in Brooklyn.
  • The passengers in the limousine also all treated at the same medical office.
  • Except for Jean Adolphe, all the limousine passengers testified that Joseph Blanc referred them to the medical facility
  • Jean Adolphe testified that Shana recommended the facility based upon the recommendation of an unknown friend.
  • The trip was arranged by Joseph Blanc or that they were going to a party for Blanc’s friend or family member.
  • The drivers of both vehicles and all their passengers are named defendants in this action.

DISCUSSION

An intentional and staged collision caused in the furtherance of an insurance fraud scheme is not a covered accident under a policy of insurance [Progressive Advanced Ins. Co. v McAdam, 139 AD3d 691, 692 [2nd Dept 2016]). The Court of Appeals described the modus operandi of staged accident rings in Medical Society of the State of NY v Serio as follows: “[R]ingleaders (often associated with organized crime) [ ] purchase minimum automobile insurance, perhaps under a fraudulent name, on wrecked or salvaged vehicles, and recruit others to fill up the vehicles and participate in staged accidents (typically sideswipes or fender benders). These purported victims [are] then steered to corrupt medical clinics, called ‘medical mills,’ where they feign[] aches, pains and soft tissue injuries. The medical mills [ ] then generate stacks of medical bills for each passenger, detailing treatments and tests that [are] unnecessary or never performed.”

Since direct proof of insurance fraud is rarely available, the requisite degree of proof can be satisfied by circumstantial evidence. Circumstantial evidence at a framed issue hearing established that the subject collision was intentional. Marclish’s changing narratives surrounding the events of the accident are consistent with someone engaged in an ongoing staged accident ring. Marclish was involved in at least one other staged accident with a livery vehicle while he was driving a vehicle registered in someone else’s name. Marclish’s July 14, 2015, collision occurred while he was driving the Bellevue vehicle which was involved in at least three other staged accidents on May 26, 2015, October 6, 2015 and January 3, 2016 (Ex M). Not only was Marclish connected to the Bellevue staged accidents, so was Alice Alarcon who was a passenger in the Bellevue when it collided with a livery vehicle.

The direct and indirect interconnections among the individuals involved in the August 25, 2014 collision, in the absence of any explanation for these remarkable coincidences is sufficient evidence to establish that Marclish, Alarcon and Joseph Blanc staged the August 25, 2014 collision and Joseph Blanc recruited the passengers for the limousine.

Circumstantial evidence sufficient to establish prima facie that defendant was involved in a financial fraud conspiracy existed. Since plaintiff has made out its prima facie showing of entitlement of summary judgment, the burden shifts to defendants to demonstrate the existence of a triable issue of material fact and none were presented.

The motor vehicle collision of August 25, 2014 was not the product of a covered event as defined by the applicable insurance policy issued by Encompass Home & Auto Insurance Company, the August 25, 2014 collision was the product of a staged and/or intentional event and Encompass Home & Auto Insurance Company, by reason of no coverage, is not required to provide a defense and/or indemnification to any of the defendants.

The motor vehicle collision of August 25, 2014 was not the product of a covered event as defined by the applicable insurance policy issued by Encompass nor American Alternative Insurance Corp. The August 25, 2014 collision was the product of a staged and/or intentional event. American Alternative Insurance Corp. has no duty to either defend nor indemnify the defendants and cross-claim defendants in any action, claim, suit, arbitration or other type of proceeding brought as a result of the August 25, 2014 collision. American Alternative Insurance Corp. has no duty to provide coverage for any claims for No-Fault benefits, personal injury, property damage, uninsured motorist benefits or underinsured motorist benefits made by or on behalf of any person or entity in connection with the August 25, 2014 collision. American is entitled, on its cross-claim, to damages in the amount of insurance benefits conferred to the defaulting parties.

ZALMA OPINION

When an insurer – even in a no fault state like New York – believes it is the victim of a staged accident scheme it has two options: ignore the fact and pay or investigate thoroughly and fight. In this case the insurers investigated thoroughly, presented unimpeachable evidence to the court, and caused the “victims” of the accident to refuse to participate and only fought with the medical vendors who provided services to the fake victims. Every insurer faced with a staged accident should do what Encompass and American Alternative did in this case, fight the fraud, investigate thoroughly and file a declaratory relief action to get court approval of its conclusion.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

 

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A Video on Getting the Whole Truth – Interviewing Techniques for the Lawyer

A New Book from the ABA on Interviewing for the Professional

“Getting the Whole Truth: Interviewing Techniques for the Lawyer”

by Barry Zalma, Esq., CFE

Get the book here.

See the Video here

Learn techniques that can help you interact with others and effectively gather the facts you need.

The purpose of an interview is to uncover the truth; the method of uncovering the truth is the art of the interview. Obtaining sufficient relevant information is imperative in everything a lawyer does to protect the interests of the client, yet interviewing techniques are not emphasized in law school training.

Getting the Whole Truth teaches lawyers–from novices meeting their first clients to experienced trial lawyers–effective methods of obtaining information by human interaction. No matter from whom you are seeking information or what your reason for desiring it, these techniques can help you meet and interact with others and effectively gather the facts you need.

Only $59 Non-Members, $44 Members

 


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkV7pkuOtkiv6oakpgK33CNlNAYW-WBlLCOZFtgvpSdcL7R-tsWKfMVqG6fEuvmM7Hh7gUEJ7yKOdgHDbGl_cGAU%3D

Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

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July 1, 2020 Issue of Zalma’s Insurance Fraud Letter

ZALMA’S INSURANCE FRAUD LETTER

Read the full text of the July 1, 2020 issue of Zalma’s Insurance Fraud Letter at https://www.linkedin.com/pulse/zalmas-insurance-fraud-letter-barry-zalma-esq-cfe-9c and Read last two issues of ZIFL here.

Guilty of Arson For-Profit-Fraud Deserves Long Sentence

More Trouble for the Strems Law firm in Florida

Evil Doctor Sentenced to One Hundred and Eighty Months

Health Insurance Fraud Convictions

Other Insurance Fraud Convictions

Consider Books to Show Your Appreciation to Your Insurer Clients or Claims Employees

“Getting the Whole Truth: Interviewing Techniques for the Lawyer” by Barry Zalma, Esq., CFE:

Getting the Whole Truth teaches lawyers–from novices meeting their first clients to experienced trial lawyers–effective methods of obtaining information by human interaction. No matter from whom you are seeking information or what your reason for desiring it, these techniques can help you meet and interact with others and effectively gather the facts you need.

Posted in Zalma on Insurance | Leave a comment

What Can Insurance People Do to Change the Poor Insurance Fraud Conviction Statistics?

The Obligation of an Insurance Professional to Defeat Insurance Fraud

The full video is available at https://youtu.be/NzuuxwjgnH0

It is the obligation of all who work to protect insurers against insurance fraud to do something to change the situation. Methods that are available and that should be exercised by every person who wants to reduce the effect of insurance fraud include:

  1. Lobby to change the system so that:
  • all the money goes to all kinds of insurance fraud at the discretion of the Commissioner of Insurance;
  • prosecutors must be assigned to the Fraud Bureau and their only job must be to prosecute insurance fraud; and
  • when the local District Attorney does not file a criminal complaint, the fraud investigator or lawyer for the insurer, must complain, loudly.
  1. Work within the system we have:
  • report every suspected fraudulent claim to the Fraud Division;
  • follow-up with the Fraud Division after you get the letter saying they won’t investigate;
  • supplement the Suspected Fraudulent Claim (SFC) report with investigation results and transcripts of examinations under oath;
  • develop a personal relationship with investigators at the Fraud Division; and
  • develop a personal relationship with supervising investigators at the Fraud Division.
  1. When the Fraud Division refers a case to a prosecutor determine the identity of the prosecutor.
  • make it clear to the prosecutor that you represent an interested and proactive victim;
  • make it clear to the prosecutor that your insurance company is upset that it is the victim of a crime;
  • make it clear to the prosecutor that you will make available to him or her anything required;
  • make it clear to the prosecutor that you, and other employees of the insurance company, will be available to testify;
  • if you are in California and sixty days go by after the case is referred to the District Attorney demand compliance with the requirements of the California Insurance Code. California Insurance Code § 1872.4 provides, in relevant part, as follows:

If prosecution by the district attorney concerned is not begun within 60 days of the receipt of the commissioner’s report, the district attorney shall inform the commissioner and the insurer as to the reasons for the lack of prosecution regarding the reported violations.” [Italics added]


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkV7pkuOtkiv6oakpgK33CNlNAYW-WBlLCOZFtgvpSdcL7R-tsWKfMVqG6fEuvmM7Hh7gUEJ7yKOdgHDbGl_cGAU%3D

Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

 

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It’s Not Nice to Lie to Your Insurance Company

Fraudulently Obtained No Fault Insurance is Subject to Rescission

This case involves a policy of no-fault insurance issued by IDS to Isha Simpson and Aquanetta Terry. Simpson and Terry are friends who co-own a 2014 Chrysler 300. Simpson and Terry are not related legally or biologically, and they did not share a residence. When Terry testified that she and her friend Simpson used Simpson’s address on the application because it was less expensive to purchase insurance with Simpson’s  address than with Terry’s Detroit address they admitted to a fraudulent application.

In Northland Radiology, Inc, Theramedic Rehab & Physical Therapy, and Integrative Neurology, PLLC, and ZMC Pharmacy, LLC and Northwest Labs, Inc, Intervening Plaintiffs, and American Anesthesia Associates, LLC v.  USAA Casualty Insurance Company and Ameriprise Insurance Company, and IDS Property Insurance Company, No. 346345, State Of Michigan Court Of Appeals (June 18, 2020) American Anesthesia Associates, LLC (AAA), appealed the order of the trial court granting defendant, IDS Property Insurance Company (IDS), summary disposition. IDS cross-appealed the same order, challenging the trial court’s determination that it was obligated to refund the full premium amount to its insureds to effectuate rescission of its no-fault insurance policy.

FACTS

In 2016, Simpson and Terry applied to purchase a policy of no-fault insurance from IDS. They listed themselves at the top of the first page of the application next to “applicant” and provided Simpson’s address in Redford, Michigan.  Simpson and Terry listed themselves as drivers. Above the signature line were warnings that the statements made in the application were made for the purpose of procuring an insurance policy and that the policy could be rescinded if the statements were untrue or incomplete. Simpson and Terry both signed the application. Both Simpson and Terry later testified that Terry has her own residence in Detroit and never lived at Simpson’s Redford address.

The policy warned that coverage would not be provided to a claimant who intentionally concealed or mispresented a material fact, engaged in fraud, or made a false statement. Specifically, the policy provided:

FRAUD

 We do not provide coverage for any insured or person making claim under this policy who, whether before or after a loss, has:

  1. Intentionally concealed or misrepresented any material fact or circumstance;
  2. Engaged in fraudulent conduct; or
  3. Made false statements;

relating to this insurance and/or in connection with any accident or loss for which coverage is sought under this policy.

In February 2017, Simpson was a passenger in the Chrysler 300 when another car hit the vehicle. Simpson sued IDS, as well as the driver and the owner of the other vehicle, seeking damages for injuries arising from the car accident and alleging that IDS refused to pay personal protection insurance benefits owed under the no-fault act. Simpson subsequently assigned her right to seek reimbursement for services to various healthcare providers, including AAA.

An IDS underwriter testified that based upon its underwriting guidelines, because the Chrysler 300 was co-titled to Simpson and Terry, Simpson and Terry were not related, Terry never lived at the Redford address, and the vehicle was not garaged at the address, IDS would not have issued the policy.

The trial court granted IDS’s motion, determining that there was no genuine issue of material fact that Simpson made a material misrepresentation on the application by listing Terry as a driver living in Simpson’s household when evidence showed that Simpson and Terry were not related and Terry never lived at Simpson’s address.

ANALYSIS

An insurance policy is a contract that is subject to the rules of contract interpretation and common-law contract defenses, including fraud, unless those defenses are prohibited by statute. The no-fault act does not prohibit an insurer from invoking the common-law defense of fraud, nor does it limit or narrow the remedy of rescission.

Fraudulent misrepresentation may support an equitable remedy, such as rescission of a contract. To establish fraudulent misrepresentation, the plaintiff must show that

  • the defendant made a material representation,
  • it was false,
  • when the defendant made the representation, the defendant knew it was false, or made it recklessly, without knowledge of its truth and as a positive assertion,
  • the defendant made the representation intending the plaintiff to act upon it,
  • the plaintiff acted in reliance upon it, and
  • the plaintiff suffered damage as a result.

A misrepresentation is material when an insurer would not have issued a policy in the manner or at the rate at which it was issued if the misrepresentation or nondisclosed fact had been known to the insurer. An insurer’s statement that it would not have issued a policy if it had known the previously-undisclosed information is sufficient to establish materiality. In this case, the evidence supports the trial court’s finding that Simpson and Terry made material misrepresentations in the application for insurance.

Rescission is justified without regard to the intentional nature of the misrepresentation, as long as it is relied upon by the insurer. Reliance may exist when the misrepresentation relates to the insurer’s guidelines for determining eligibility for coverage. Since its underwriting guidelines would require IDS to refuse to issue the policy to Simpson and Terry if it had known that they were not living together. Therefore, the trial court’s determination that Simpson and Terry made material misrepresentations in the application is supported by the record.

An insurer may rescind a policy on the basis of a material misrepresentation made in an application for no-fault insurance. When an insurer rescinds an insurance policy as the result of fraud by the insured, the rescission abrogates the policy and returns the parties to the relative positions that they would have occupied if the contract had never been made.

The trial court noted in its opinion that rescission is not a matter of right, but is instead discretionary with the trial court. The trial court found that Simpson made a material misrepresentation in the application for insurance regarding whether Terry was a member of Simpson’s household living at the address stated in the application. The trial court concluded that based upon the evidence IDS permissibly rescinded the policy. Although AAA is innocent of the fraud perpetrated by Simpson and Terry, it is the assignee of Simpson and therefore is essentially the same person as Simpson, standing in her shoes for purposes of recovery against IDS. IDS’s rescission of the policy therefore is effective against AAA because it is effective against Simpson.

The trial court correctly determined that IDS was required to refund the premiums in light of the rescission of the policy. However, requiring IDS to refund the premiums without considering IDS’s claim that it had already paid to or on behalf of the insureds more than the amount of the premiums, restores Simpson and Terry to their precontract position, but not IDS.

IDS should be given an opportunity to present its claim that the refund of the premiums should be weighed against amounts paid by IDS under the policy in the trial court’s balancing of the equities.

ZALMA OPINION

A lie on the application for insurance to get less expensive insurance with Simpson’s Redford address than with Terry’s Detroit address was sufficient to prove the application was fraudulent and neither the named insureds nor their assignees were entitled to any of the benefits of the policy. Rescission is an equitable remedy that is available to protect insurers against fraudulently obtained insurance. The insureds tried to save money by lying on the application for the insurance and, because of their fraud to save money, they lost the insurance coverage and their assignee was left with nothing.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkV7pkuOtkiv6oakpgK33CNlNAYW-WBlLCOZFtgvpSdcL7R-tsWKfMVqG6fEuvmM7Hh7gUEJ7yKOdgHDbGl_cGAU%3D

Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

 

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Zalma on Insurance Claims – A Tool for Every Insurance Professional

Zalma on Insurance Claims – Second Edition

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.”

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.

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. A Comprehensive Review of insurance, insurance claims, the law of insurance policy interpretations, the practicalities of Property, Casualty and Liability Insurance Claims.

Zalma on Insurance Claims Volume 101 – Second Edition

A Comprehensive Review of insurance, insurance claims, the law of insurance and policy interpretation Paperback – July 17, 2019

This volume covers

  1. WHAT IS INSURANCE?
  2. THE HISTORY OF INSURANCE,
  3. ACQUISITION OF THE POLICY,
  4. CLAIMS PERSONNEL,
  5. KINDS OF INSURANCE POLICIES,
  6. THE LIABILITY POLICY.

The 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.

Available as a paperback

Available as a Kindle Book

Zalma on Insurance Claims Part 102 – Second Edition

This the second edition of the second volume in the latest addition to Barry Zalma’s insurance claims series of books and articles is part of the most thorough, up-to-date, expert-authored insurance claims guide available today. Zalma on Insurance Claims, part 102 provides in-depth explanations, analysis, examples, and detailed discussion of: •  Other Insurance Clauses; •   Trigger of Coverage; •    Underwriting; •    Conditions, Warranties and Exclusions

The 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.

Available as a Kindle book

Available as a paperback 

Zalma on Insurance Claims Part 103 Second Edition

A Comprehensive Review of the law and Practicalities of Property, Casualty and Liability Insurance Claims. Insured, Insurer, adjusting.

The Implied Covenant of Good Faith and Fair Dealing

The principle on which insurance has existed for the last three to four centuries is that insurance business is conducted with the utmost good faith (uberrima fides). The principle, called a covenant of good faith and fair dealing, must be followed religiously by both the insurer and the insured. This means, simply, that both parties to the insurance contract must treat each other in such a way that neither will deprive the other of the benefits of the contract.

This, the third part of Zalma on Insurance Claims and includes materials concerning:
This is part 103 of Zalma on Insurance Claims and will deal with:

•The Covenant of Good Faith and Fair Dealing
•Duties of the Insured and the Insurer
•Declaring a Policy Void
•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.

Available as a Kindle Book

Available as a paperback

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.

Available as a Kindle Book

Available as a paperback

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.

Available as a Kindle Book

Available as a paperback

Zalma on Insurance Claims Part 106 Second Edition

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

This latest addition to Barry Zalma’s insurance claims series of books and articles is part of the most thorough, up-to-date, expert-authored insurance claims guide available today. Written by nationally-renowned insurance coverage expert Barry Zalma, an insurance coverage attorney, consultant, expert witness and blogger.

Thorough, yet practical, this book is 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 this multiple volume guide. It is also the perfect resource for insurance educators, trainers, and students whose role requires an understanding of insurance law.

The 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.

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

  1. Property Insurance & the Tort of Bad FaithChapter
  2. Grounds for Finding Bad FaithChapter
  3. Avoiding Charges of Bad FaithChapter
  4. Punitive DamagesChapter
  5. Bad Faith & Liability Insurance.
  6. Defenses to the Tort of Bad Faith

The appendices also include full text of important insurance law cases and statutes

Available as a Kindle book

Available as a paperback 

Zalma on Insurance Claims Part 107 – Second Edition

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.

Available as a Kindle book

Available as a paperback 

Zalma on Insurance Claims Part 108 -Second Edition

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.

Available as a Kindle book

Available as a paperback

Zalma on Insurance Claims Part 109 Second Edition

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.

Available as a Kindle book

Available as a paperback

Zalma on Insurance Claims Part 110 Second Edition

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.

Available as a Kindle book

Available as a paperback

Over the last 52 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 for insurers and their claims staff to become insurance claims professionals.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! – https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkV7pkuOtkiv6oakpgK33CNlNAYW-WBlLCOZFtgvpSdcL7R-tsWKfMVqG6fEuvmM7Hh7gUEJ7yKOdgHDbGl_cGAU%3D

Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/


Posted in Zalma on Insurance | Leave a comment

Insurer Read Your Policy

When The Full Policy is Read it Must Provide Coverage

Owners Insurance Company (Owners) appealed the entry of a final summary judgment in favor of Allstate Fire and Casualty Insurance Company (Allstate) in an action filed by Allstate against Owners and Allstate’s insured, James M. Horne, Jr. (Horne) in Owners Insurance Company v. Allstate Fire And Casualty Insurance Company and James M. Horne, Jr., Case No. 2D18-2309, District Court Of Appeal Of Florida Second District (June 19, 2020) to decide if Owners is required to provide UM benefits to Horne.

FACTS

Horne resided with his mother and stepfather, who had an automobile insurance policy with Owners. The Owners policy provided uninsured motorist (UM) coverage but only afforded it to relatives who did not own an automobile. Horne got into an accident while driving his own automobile. Allstate sought a declaration that Horne was covered under the Owners policy for injuries he suffered in the accident.

Because the Owners policy provided basic liability coverage to resident relatives, the trial court concluded that Owners was required to provide UM coverage to Horne.

ANALYSIS

Owners argued that “the basic liability coverage under the Owners policy extends only ‘to relatives who do not own an automobile.'” However, upon a closer examination of the policy these relatives are only excluded from the extended liability coverage of unlisted automobiles. Section II of the policy, entitled “Liability Coverage,” provides the following:

We will pay damages for bodily injury and property damage for which you become legally responsible because of or arising out of the ownership, maintenance or use of your automobile (that is not a trailer) as an automobile. We will pay such damages . . . on behalf of any relative using your automobile (that is not a trailer).

This provision affords Horne, who is a relative as that term is defined in the policy, basic liability coverage when driving one of the listed automobiles. Neither Owners nor Allstate cited to the Section II Liability Coverage provision in their briefs but the appellate court found the provision to be telling.

Allstate argued that Horne was entitled to UM coverage because “he is insured for basic liability coverage” under the overlooked Section II Liability Coverage provision.  However, if a trial court reaches the right result, as it did here, that decision will be upheld if there is any basis which would support the judgment in the record.

Under Florida law, if a motor vehicle liability insurance policy provides bodily injury liability coverage, then it must also provide UM coverage to those insured under the policy. Uninsured motorist protection does not inure to a particular motor vehicle, but protects the named insured or insured members of his family against bodily injury inflicted by the negligence of any uninsured motorist under whatever conditions, locations, or circumstances any of such insureds happen to be in at the time.

A policy may include specified provisions that exclude certain insureds from UM coverage if the named insured knowingly accepts such a limitation and the insurer offers a reduced premium.

To limit coverage validly, the insurer must satisfy the statutorily-mandated requirement of notice to the insured and obtain a knowing acceptance of the limited coverage and must file revised, decreased premium rates for such policies. Owners neither obtained the informed acceptance nor provided the reduced rates required of insurers that include the statutory exceptions to the UM-coverage mandate in their policies.

Since the Owners policy provides basic liability coverage to Horne, Florida law mandates the provision of UM coverage to him as well. As such, the trial court correctly granted summary judgment in favor of Allstate.

ZALMA OPINION

Had Owners Read The Full Policy (RTFP) it would have seen that it owed UM coverage to Horne and would have avoided the lawsuit and appeal. Under Florida law, since the Owners policy provided liability coverage to Horne as a member of its named insureds’ household, it was required to also provide UM benefits to Horne.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkV7pkuOtkiv6oakpgK33CNlNAYW-WBlLCOZFtgvpSdcL7R-tsWKfMVqG6fEuvmM7Hh7gUEJ7yKOdgHDbGl_cGAU%3D

Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

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A Video Explaining Why Arson is a Named Peril

Thank you to Everyone who Wished Me a Happy Birthday

More of you than I can respond to wished me a happy birthday. Thank you all. It was a nice day with my family, most on ZOOM, and a time to prove I’m still going strong. Thanks again.

Arson is a Covered Peril

Because arson is a fire, it is not an excluded peril in any first party property policy of insurance. An arson is never a defense to an insurance claim alone. Only when arson is caused by the named insured, or any insured is involved in causing the fire to occur for the purpose of defrauding an insurer. In Eddie P. Bates v. Hartford Insurance Company of the Midwest, No. 09-12840 (E.D.Mich. 03/03/2011) the insurer attempted to deny coverage by claiming that the fire was a “vandalism.” Since the house was vacant for more than 30 days there was no coverage available under the policy. The insurer’s effort to avoid payment was defeated because the insurer named vandalism and fire as separate perils, but did not, as it did for vandalism, exclude “fire” after the dwelling was vacant for more than 30 days.

As a result, the United States District Court Eastern District of Michigan Southern Division found that Plaintiff, Eddie Bates was correct when he alleged that the Defendant, the Hartford Insurance Company of the Midwest breached the parties’ insurance contract when it wrongfully denied his requests for payment under his fire insurance policy.

Bates  owns a residential rental property in Detroit, Michigan that was damaged by a fire on June 17, 2008. Bates asserts that he did not learn about the fire loss until his return to the United States from a vacation on June 23, 2008. He reported the fire loss to Hartford on the following day.  Upon its receipt of this claim, Hartford sought a copy of the police report from the Detroit Police Department. Hartford claimed that the Bates house was vacant in the days which immediately preceded the fire putting into issue an exclusion.

This case teaches that when asserting a policy defense, it is imperative that the insurer read the words of the policy and not read words into the policy that are not there.  Although a vandal may, as part of his vandalism, cause a fire, the efficient proximate cause of the loss was fire. If the insurer wished to avoid losses by fire started by a vandal, it would be easy to write that exclusion into its policy.

Video is also available at https://youtu.be/0e88OTplUWk

 

 


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkV7pkuOtkiv6oakpgK33CNlNAYW-WBlLCOZFtgvpSdcL7R-tsWKfMVqG6fEuvmM7Hh7gUEJ7yKOdgHDbGl_cGAU%3D

Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

Posted in Zalma on Insurance | Leave a comment

Needed by Every First-Party Property Adjuster, Lawyer or Insured

Everything Needed by the Insurance Claims Professional from Barry Zalma

Over the last 52 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 for insurers and their claims staff to become insurance claims professionals.

The Insurance Examination Under Oath Second Edition

A Tool Available to Insurers to Thoroughly Investigate Claims and Work to Defeat Fraud

A Tool Available to Insurers to Thoroughly Investigate Claims and Work to Defeat Fraud.

The insurance Examination Under Oath (“EUO”) is a formal type of interview authorized by an insurance contract. It is taken under the authority provided by the agreement of the insurer, when he, she or it acquires a policy of insurance, to submit to a condition of the insurance contract that compels the insured to appear and give sworn testimony at the demand of the insurer. Failure to appear and testify is considered a breach of a material condition.

The EUO is conducted before a notary and a certified shorthand reporter who is present to give the oath to the person interviewed. The reporter will record the entire conversation and prepare a transcript to be read, reviewed, corrected and signed by the witness under penalty of perjury or by an oath taken before a notary or judge.

The EUO is a tool only sparingly used by insurers in the United States. A professional insurer will only require an insured to submit to an EUO when a thorough claims investigation raises questions:.about the application of the coverage to the facts of the loss, the potentiality that a fraud is being attempted, or to assist the insured in the obligation to prove to the insurer the cause and amount of loss.

Although seldom used the EUO is an important tool needed by insurers when there is a question of coverage, destruction of evidence needed to prove a compensable loss or the amount of loss or evidence indicating the potential that a fraud is being attempted.The EUO and Legal Action provisions in an insurance policy are conditions precedent to an insured’s ability to file suit, and that since the insured failed to substantially comply with the terms of those provisions, the appropriate remedy is dismissal without prejudice. The insured’s failure to comply with these conditions does not bar his ability to bring suit to recover, but merely suspends his ability to bring suit until he has fully complied with those conditions.

Available as a paperback here   Available as a Kindle book here

THE HOMEOWNERS INSURANCE POLICY

HOW TO BUY AN APPROPRIATE HOMEOWNERS POLICY AND SUCCESSFULLY MAKE A CLAIM TO THE INSURER

Insurance is a contract between a person seeking insurance and an insurer. It is obtained by making contact with the insurer as a prospective insured seeking insurance. The homeowners policy is a specialized policy of insurance that protects the homeowner from certain risks of loss to the real and personal property at the home, the exposure the insured faces for injury to a household employee, and the exposure the insured faces to liability for bodily injury or property damage caused to third parties. The book explains how to buy a homeowners policy and how to collect on any claim made to the homeowners insurer.

Paperback Book     Kindle Book


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! – https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkV7pkuOtkiv6oakpgK33CNlNAYW-WBlLCOZFtgvpSdcL7R-tsWKfMVqG6fEuvmM7Hh7gUEJ7yKOdgHDbGl_cGAU%3D

Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

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Lack of Insurance Preserves Sovereign Immunity

Sovereign Immunity Bars Tort Lawsuit Against State

Plaintiff Carmela Powell (“Plaintiff”) sued Defendant State of Delaware, Department of Corrections (“Defendant”) alleging that she was injured while visiting an inmate at the James T. Vaughn Correctional Center. The Complaint alleges the Defendant negligently caused Plaintiff’s injuries.

For most of American history, sovereign immunity protected federal and state governments and their employees from being sued without their consent. Starting in the mid-1900s, however, a trend toward government accountability began to erode sovereign immunity. In 1946, the federal government passed the Federal Tort Claims Act (28 U.S.C.§2674), waiving immunity to suit and liability for some actions. Many, but not all, state legislatures followed by enacting statutes to define the limits of immunity for state governmental entities and employees.

Sovereign immunity takes two forms:

  1. immunity from suit (also known as immunity from jurisdiction or adjudication) and
  2. immunity from enforcement.

The former prevents the assertion of the claim; the latter prevents even a successful litigant from collecting on a judgment.

FACTS

In Carmela Powell v. State Of Delaware Department Of Corrections, C.A. No. N18C-12-233 ALR, Superior Court Of The State Of Delaware (June 16, 2020) the court was faced with a motion from the Defendant to dismiss the Complaint arguing that Plaintiff’s claims are barred by the doctrine of sovereign immunity.

Attached to Defendant’s motion was an affidavit of Debra Lawhead, the Insurance Coverage Administrator of the State of Delaware, which supports Defendant’s sovereign immunity argument by establishing the Defendant had no insurance and had not waived the immunity. The Court converted Defendant’s motion to dismiss into a motion for summary judgment and afforded the parties additional time to present all materials pertinent to such a motion.

ANALYSIS

The Court may grant summary judgment only where the moving party can show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. A genuine issue of material fact is one that may reasonably be resolved in favor of either party.

The doctrine of sovereign immunity provides that neither the State nor a State agency can be sued without its consent. The General Assembly, however, can waive sovereign immunity by an Act that clearly evidences an intention to do so. There are two means by which the State may waive sovereign immunity: by procuring insurance coverage for claims in the Complaint; or by statute which expressly waives immunity.

The affidavit of Ms. Lawhead established that the State has not waived immunity. Ms. Lawhead avers that she reviewed the Complaint that the State of Delaware, and its agency thereof, has not purchased any insurance that would be applicable to the circumstances and events alleged in the Complaint. Ms. Lawhead’s affidavit confirms that no other statute waives immunity in this instance—a proposition that Plaintiff has not contested.

Accordingly, the doctrine of sovereign immunity bars Plaintiff’s claims against Defendant and Defendant is therefore entitled to judgment as a matter of law.

ZALMA OPINION

States often buy insurance to protect, and indemnify, the public against negligent acts by state officers, agents or employees and, if insurance is not available, waive immunity by statute. The wise state, trying to protect the assets of the state, avoid litigation by refusing to buy liability insurance and/or refusing to waive sovereign immunity. Whether the Defendant was negligent in causing injury to Ms. Powell or not, the Defendant was immune from that suit by the ancient doctrine of sovereign immunity.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkV7pkuOtkiv6oakpgK33CNlNAYW-WBlLCOZFtgvpSdcL7R-tsWKfMVqG6fEuvmM7Hh7gUEJ7yKOdgHDbGl_cGAU%3D

Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

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