Mealey's Insurance Fraud : Mealey's : Legal News & Analysis

Mealey's Insurance Fraud

December 07, 2022
11th Circuit Rules On Remaining Issues On Appeal In Hurricane Irma Fraud Suit

ATLANTA — Ruling on three remaining issues on appeal in a coverage dispute stemming from a hotel operator insured’s alleged filing of a fraudulent Hurricane Irma commercial property damage claim, the 11th Circuit U.S. Court of Appeals held Dec. 6 that even assuming that the lower federal court erred in admitting the transcripts of the insured’s sole member’s examinations under oath, any error was harmless.
December 07, 2022
U.S. High Court Hears Arguments In Appeal Over U.S. Dismissal Of Qui Tam Suit

WASHINGTON, D.C. — The United States lacks authority to dismiss a False Claims Act (FCA) case after declining to intervene, the attorney representing a relator in a case over Medicare billing argued Dec. 6 during oral arguments before the U.S. Supreme Court.
December 06, 2022
West Virginia High Court Reverses Judgment For Insurer In Policy Rescission Row

CHARLESTON, W.Va. — The West Virginia Supreme Court of Appeals reversed a lower court’s decision granting summary judgment to Allstate in a breach of contract and unfair practices suit filed against it by an insured homeowner after Allstate rescinded his homeowners policy for alleged misrepresentations on the policy application, finding that issues of fact remain regarding whether a policy question related to occupying the house within 30 days “was material to Allstate’s issuance of the policy.”
December 06, 2022
Insurers’ Claims Of Fraudulent Billing For COVID Tests Survive Dismissal Motion

NEWARK, N.J. — Health insurers adequately allege their claims of insurance fraud, common-law fraud and negligent misrepresentation to survive a motion to dismiss under Federal Rule of Civil Procedure 9(b) by asserting that two radiology laboratories and other entities connected with several doctors participated in “a series of fraudulent schemes” to fraudulently bill for COVID-19 testing, a federal judge in New Jersey found.
December 06, 2022
Life Insurer To 7th Circuit: Rescission For Misrepresentation Should Be Affirmed

CHICAGO — A trial court did not err in finding that an insured was obligated to notify his insurer of his cancer diagnosis between the time he applied for the policy and its inception and that the diagnosis was material to the insurer’s risk, entitling it to rescind the policy, the insurer told the Seventh Circuit U.S. Court of Appeals in urging it to affirm the lower court’s summary judgment ruling (Lorrie R. Meier v. Pacific Life Insurance Company, No. 22-1607, 7th Cir.).
December 05, 2022
Judge Denies Insurer’s Motion For New Trial In Equipment Loss Coverage Suit

LOS ANGELES — A California federal denied a commercial property insurer’s renewed motion for judgment as a matter of law and/or motion for a new trial in an equipment breakdown coverage dispute after determining that expert testimony submitted by the insured was admissible and that the time limits imposed by the court during trial were proper.
December 01, 2022
Michigan Panel Vacates Judgment, Remands For Reconsideration Under Meemic

LANSING, Mich. — The Michigan Court of Appeals vacated orders granting summary disposition to an auto insurer and insurance agency in a no-fault insurance coverage case and remanded for the court to reconsider in light of Meemic Insurance Co. v. Fortson, in which the Michigan Supreme Court found that anti-fraud provisions in an insurance policy are invalid if they apply to fraud or misrepresentations that occurred after the policy was issued.
December 01, 2022
Judge: Ambiguous Questions Preclude Summary Judgment In Suit Over Rescission

LANSING, Mich. — Rejecting three theories under which an insurer argued that a homeowner committed common-law fraud under Michigan law, a Michigan federal judge ruled that questions at the heart of the recovery of benefits suit were ambiguous enough to preclude summary judgment.
November 30, 2022
Magistrate Recommends $310,000 Default Judgment Against Clinic For Defrauding GEICO

MIAMI — A Florida federal magistrate judge recommended granting four insurers’ motion for default judgment against three defendants who have failed to appear to date in a lawsuit alleging that they schemed to defraud the insurers of $2.1 million by filing illusory or medically unnecessary claims for insureds who had recently been involved in automobile accidents (Government Employees Insurance Co., et al. v. Compass Medical Centers Inc., et al., No. 21-23623, S.D. Fla., 2022 U.S. Dist. LEXIS 205546).
November 29, 2022
6th Circuit Affirms: Failure To Disclose Overdue Taxes Is Material Misrepresentation

CINCINNATI — A trial court did not err in granting summary judgment to a homeowners insurer that rescinded a policy after learning that the prior homeowner had failed to pay property taxes, the Sixth Circuit U.S. Court of Appeals found, affirming the lower court’s finding that the insured made a material misrepresentation and rejecting the insured’s argument that even if the insurer was aware of the overdue taxes, it would have been required to issue the policy under Michigan’s Essential Insurance Act.
November 23, 2022
Michigan Majority Affirms Plaintiff Committed Fraudulent Insurance Act In PIP Suit

DETROIT — A majority of the Michigan Court of Appeals held that a lower court properly concluded that a plaintiff knowingly signed and submitted false claims for personal protection insurance (PIP) benefits under Michigan’s No Fault Act, affirming the lower court’s grant of summary disposition in favor of the insurer.
November 23, 2022
Texas High Court To Review Whether Insurers Must Prove Intent To Deceive

AUSTIN, Texas — The Texas Supreme Court will review a state appellate court’s ruling that a life insurance company must prove the insured’s intent to deceive in order to establish a material misrepresentation defense and rescind a policy.
November 23, 2022
1st Circuit Reverses Drug Wire Fraud, ID Theft Convictions; Jury Given Exhibits

BOSTON — The First Circuit U.S. Court of Appeals reversed the wire fraud and identity theft conviction of an Aegerion Pharmaceuticals Inc. sales representative because the trial court erred by including prosecution exhibits for each count in its jury instructions, an error a court panel said was not harmless.
November 23, 2022
3rd Circuit Affirms Ruling For Insurer In Material Misrepresentation, Fraud Case

PHILADELPHIA — The Third Circuit U.S. Court of Appeals affirmed a district court’s grant of summary judgment to a commercial insurer on its declaratory judgment and statutory fraud claims against its auto repair shop insured, finding that the insured waived its argument that it did not knowingly provide misleading or false information during the claims adjustment process when it submitted altered invoices and that the invoices were not misleading.
November 21, 2022
Judge Dismisses ACA Risk Adjustment Fraud Claims, Clarifies Impact

SAN FRANCISCO — A federal judge in California granted a motion to clarify that his ruling dismissing some of a False Claims Act case against insurers that allegedly submitted fraudulent claims in the Patient Protection and Affordable Care Act risk adjustment program applied only to the original plaintiffs and not the United States as intervenor.
November 18, 2022
Judge: Life Insurer Entitled To Rescind Policy Due To Material Misrepresentations

ATLANTA — A federal judge in Georgia held that an insured made misrepresentations on a life insurance application and that at least some of those misrepresentations were material to the insurer’s decision to issue the policy, granting the insurer’s motion for summary judgment in its lawsuit seeking to rescind the policy.
November 15, 2022
8th Circuit: Insurance Form Ambiguous; Rescission For Misrepresentation Reversed

ST. LOUIS — Finding that a question asking an insurance applicant whether she “‘had a foreclosure’” is ambiguous, the Eighth Circuit U.S. Court of Appeals on Nov. 15 found that her response was not a misrepresentation entitling her insurer to rescind the policy, reversing the judgment of a lower court.
November 14, 2022
Judge: Insureds Knowingly Made False Statements On Homeowners Insurance Application

NEW ORLEANS —A federal judge in Louisiana found by a preponderance of the evidence that insureds made a material misrepresentation in their homeowners insurance application with intent to deceive the insurer, voiding the policy from its inception and entering judgment in favor of the insurer in the insureds’ breach of contract lawsuit seeking coverage for Hurricane Zeta damage.
November 14, 2022
Judge: Plaintiff Has No Standing To Sue Insurer After Coverage Denied Due To Arson

ST. PAUL —A federal judge in Minnesota held that as a stranger to a businessowners insurance policy, a plaintiff has no standing to sue to the insurer for breach of the contract or declaratory judgment in a lawsuit arising from the insurer’s denial of fire damage to a bar due to arson.
November 11, 2022
Supreme Court To Consider Scope Of Federal Identity Theft Statute

WASHINGTON, D.C. — In a Nov. 10 miscellaneous order, the U.S. Supreme Court granted certiorari to a psychologist who was convicted under the federal aggravated identity theft statute, agreeing to take up his question of what constitutes “use” of another person’s name or identifying information.
November 08, 2022
Colorado Appellate Panel: 4 Insurance Fraud Convictions Must Be Merged

DENVER — Where a person is convicted under Colorado law of presenting a fraudulent insurance claim and for making false statements in support of the claim, “generally” the conviction for false statements is to be merged under the one for a fraudulent claim due to “the prohibition against double jeopardy and multiplicity,” a Colorado Court of Appeals panel ruled, saying the issue was one of first impression in the state.
November 07, 2022
High Court Grants Divided Argument In Appeal Over U.S. Dismissal Of Qui Tam Suit

WASHINGTON, D.C. — The U.S. Supreme Court on Nov. 7 granted the U.S. solicitor general’s motion for divided argument in an appeal to determine whether the government retains the right to dismiss a False Claims Act (FCA) complaint after it has declined to intervene in a case.
November 07, 2022
Judge Refuses To Dismiss Allstate’s Suit Alleging It Paid Over $2M In False Claims

DETROIT —A federal judge in Michigan denied medical service providers’ motion to dismiss a fraud lawsuit brought by Allstate entities, determining the defendants have failed to identify deficiencies that are fatal to Allstate’s complaint alleging the defendants submitted fraudulent no-fault insurance claims for services that were not actually performed or were not medically necessary.
November 07, 2022
Tennessee Panel: Insured Misrepresented Health, Rendering Life Policy Void

NASHVILLE, Tenn. — A Tennessee man’s failure to fully disclose the details of a recent hospital visit on his certificate of good health (COGH) when seeking an additional life insurance policy two days before his death increased the insurer’s risk of loss and rendered the policy void, a Tennessee appellate panel ruled, affirming a trial court’s ruling.
November 02, 2022
Jury: Farmer Not Guilty On CARES Act Charges, Guilty On 2 Crop Insurance Charges

PIERRE, S.D. — Following a six-day trial, a federal jury in South Dakota found one farmer guilty on two of five counts of false statements regarding crop insurance; the jury also found that farmer not guilty on two counts of major fraud against the United States in regard to the Coronavirus Relief Fund.