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

Mealey's Insurance Fraud

October 07, 2022
Lender: Claims In FCA Suit Properly Dismissed On Materiality, Causation Grounds

CHICAGO — A federal district court did not err in granting summary judgment against a relator in a False Claims Act (FCA) lawsuit in which the relator alleged that a mortgage lender fraudulently approved insurance for Federal Housing Authority Administration (FHA) loans that did not meet U.S. Department of Housing and Urban Development requirements because the relator failed to produce, on a loan-by-loan basis, “evidence sufficient to create a triable issue of fact on the FCA’s materiality and causation elements,” the mortgage lender argues in an appellee brief filed in the Seventh Circuit U.S. Court of Appeals.
October 07, 2022
Medical Companies Withdraw Appeal Of Order Denying Dismissal Of Insurers’ RICO Suit

NEW YORK — The Second Circuit U.S. Court of Appeals ordered the withdrawal of an appeal of a lower court order denying medical companies’ motion to dismiss no-fault insurers’ fraudulent billing suit against them after the parties submitted a stipulation for withdrawal without prejudice to reinstatement, indicating that they were engaged in settlement negotiations that “may obviate the need for the Court to hear and determine the appeal.”
October 05, 2022
Default Judgment Entered In Insurer’s Suit Alleging Fabricated Dialysis Claims

NEW HAVEN, Conn. — Three days after a federal judge in Connecticut held that an insurer is entitled to a declaratory judgment that it has no duty to pay any claims submitted by a defendant for dialysis services, to actual damages for the payments it has already made and to treble damages for civil theft, the judge entered a $14,371,384.95 default judgment against the defendants.
October 03, 2022
Supreme Court Denies Cert In Dispute Over Medicare Fraud Standard In Hospice Care

WASHINGTON, D.C. — A Fifth Circuit U.S. Court of Appeals ruling upholding a man’s federal conviction for pervasive fraud regarding hospice certifications in a Medicare health care fraud scheme stands after the U.S. Supreme Court on Oct. 3 declined the man’s petition for writ of certiorari.
September 26, 2022
Judge Refuses To Dismiss Horizon’s Fraud Claims Over Coronavirus Rapid Testing

NEWARK, N.J. — A federal judge in New Jersey refused to dismiss Horizon Blue Cross Blue Shield’s second amended consolidated counterclaim and third-party complaint alleging common-law fraud and violations of the New Jersey Insurance Fraud Prevention Act, rejecting the third-party defendants’ argument that Horizon's claims are conclusory statements that fail to demonstrate how their medical services for coronavirus rapid testing were fraudulent, illegal or miscoded.
September 26, 2022
Appellants Dispute The Materiality Of Insured’s Misrepresentation On Policy

ALEXANDRIA, Va. — Appellants filed a notice of appeal in a Virginia federal court indicating that they are appealing to the Fourth Circuit U.S. Court of Appeals a final judgment in favor of a medical professional liability insurer in its lawsuit seeking a declaration that it has no duty to defend or indemnify its psychiatrist insured against an underlying lawsuit because she made materially false statements on the insurance policy application.
September 26, 2022
Evidence Is Insufficient To Support Rescission Of Policy, Panel Says In Reversal

TRENTON, N.J. — A New Jersey appeals panel said it is convinced that the factual dispute regarding whether an insured supplied the misstatements in a homeowners insurance application precludes summary judgment to the insurer on its affirmative defense of fraud in the procurement of the policy, reversing and remanding.
September 23, 2022
Michigan Panel Reverses Ruling Entitling Insurer To Rescission For Alleged Fraud

TROY, Mich. — A Michigan appeals panel held that a lower court was not allowed to weigh evidence, access credibility or resolve factual dispute and subsequently award summary disposition under Michigan Court Rules 2.116(C)(10) on the basis of a credibility determination, reversing the lower court’s ruling that entitled an insurer to rescind a no-fault automobile insurance policy based on alleged fraud in the procurement of coverage.
September 23, 2022
Insurer Had Reasonable Basis To Suspect Fraud, Georgia Federal Judge Says

ATLANTA — An insured’s breach of contract and bad faith claims arising out of a dispute for stolen jewelry cannot proceed because the insured failed to comply with the terms of the policy by not producing all requested documents regarding the stolen jewelry to the insurer and because the insurer’s suspicion of fraud was reasonable, a Georgia federal judge said.
September 23, 2022
Judge: Attorney’s Material Misrepresentation Is Sufficient For Rescission Of Policy

LOS ANGELES — A federal judge in California held that the undisputed evidence shows that an attorney insured made a material misrepresentation in connection with his application for professional liability insurance that is sufficient for the insurer to rescind the policy, granting the insurer’s motion for summary judgment and dismissing the lawsuit with prejudice.
September 20, 2022
United States Says High Court Review Of Dismissal Of FCA Suit Is Not Warranted

WASHINGTON, D.C. — The United States on Sept. 9 filed its amicus curiae brief in the U.S. Supreme Court arguing that high court review is not warranted of the Sixth Circuit U.S. Court of Appeals’ ruling that affirmed the dismissal of False Claims Act (FCA) and related state law claims brought in a qui tam action against a home health agency and others, addressing the question of whether the petitioner pleaded her false claims allegations with sufficient particularity to satisfy Federal Rule of Civil Procedure 9(b).
September 19, 2022
Insurer Appeals Finding That Misrepresentation Did Not Increase Its Risk Of Loss

JACKSON, Tenn. — A homeowners insurer on Sept. 12 filed a notice of appeal indicating that it is asking the Sixth Circuit U.S. Court of Appeals to review a Tennessee federal judge’s denial of its motion for judgment as a matter of a law in an insured’s breach of contract and bad faith lawsuit seeking coverage for fire damage, challenging the lower court’s rejection of its argument that a jury verdict should be set aside because the insured’s material misrepresentation about sprinklers in her home increased its risk of loss.
September 19, 2022
GEICO Awarded $6.6M After Dismissing Final Claims In Fraudulent Billing Suit

BROOKLYN, N.Y. — In an amended final judgment filed Sept. 14, GEICO was awarded a total of $6,616,142.68 in damages by a federal court in New York in its fraud and Racketeer Influenced and Corrupt Organizations (RICO) Act suit alleging that acupuncturists and others engaged in a scheme and billed the no-fault automobile insurer for reimbursements they were ineligible to receive.
September 16, 2022
Drugmaker Akorn Pays $7.9M For Charging Medicare Prescription Prices For 3 Drugs

BOSTON — Drug maker Akorn Operating Co. LLC on Sept. 9 agreed to pay $7.9 million to settle a false claims complaint alleging that the company continued to charge prescription prices for three drugs after the drugs were reclassified to cheaper, over-the-counter status, resulting in false claims being filed with Medicare.
September 12, 2022
President Of Test Maker Found Guilty Of Health, Securities Fraud, Paying Kickbacks

SAN JOSE, Calif. — A California federal jury on Sept. 1 found the president of a medical technology company guilty of nine counts health care fraud, securities fraud and paying kickbacks in connection with purported rapid tests for allergies and COVID-19.
September 12, 2022
Federal Judge Refuses To Dismiss Insurer’s Suit Seeking Rescission Of D&O Policy

SAN JOSE, Calif. — A federal judge in California on Sept. 7 denied an insured’s motion to dismiss an insurer’s lawsuit seeking a declaration that a directors and officers insurance policy is rescinded or otherwise void ab initio because of the insured’s material misrepresentations, finding that the insurer stated a plausible declaratory relief claim insofar as it has pleaded factual content that permits the court to draw a reasonable inference that the insured is liable for the alleged fraudulent misconduct.
September 12, 2022
Insurer Has No Right To Rescind Policy For Alleged Misrepresentation, Panel Affirms

INDIANAPOLIS — An Indiana appeals panel held Sept. 7 that a lower court’s judgment denying declaratory relief to an automobile insurer “is not clearly erroneous,” rejecting the insurer’s contention that it had a right to rescind the policy for the insured’s alleged material misrepresentation as to business use of its vehicle.
September 12, 2022
Forfeiture Of Coverage Not Warranted Under Fraud Provision, Majority Says, Reverses

DAYTONA BEACH, Fla. — Reversing a lower court’s grant of summary judgment in favor of a homeowners insurer in a coverage dispute over storm damage, a majority of a Florida appeals court held Sept. 9 that the lower court erred in finding that the insured’s affirmative misrepresentations as to the preloss condition of her property warranted forfeiture of coverage under the policy’s concealment or fraud provision.
September 12, 2022
Consent Order Modification Sought In Suit Over Alleged Counterfeit Policies

LOUISVILLE, Ky. — After plaintiffs and intervening plaintiffs in a suit over allegations of fraud, trademark counterfeiting and trademark infringement involving captive reinsurance programs filed an Aug. 29 motion in Kentucky federal court seeking to lift portions of a consent order to allow novation settlements regarding one defendant to proceed, the court issued a Sept. 8 text order directing that defendant to state its position by Sept. 22.
September 07, 2022
Pro Se Clinician Appeals Remand To State Court In $6.5M Insurance Fraud

CAMDEN, N.J. — A pro se speech pathologist on Aug. 30 moved in New Jersey federal court for a stay pending appeal of a judge’s Aug. 22 ruling remanding to state court her challenge to the enforcement of a settlement in favor of an insurer who says the pathologist and her speech therapy center fraudulently billed more than $6.5 million in insurance payments.
September 06, 2022
Trust Says Prejudgment Interest Owed On Premium Refunds In STOLI Dispute

NEW CASTLE, Del. — In an Aug. 11 reply brief filed in the Delaware Supreme Court, Wilmington Trust, National Association maintains that the high court should reverse a lower court’s dismissal of its promissory estoppel counterclaim in a stranger oriented life insurance (STOLI) policy dispute and further find that the insurer must pay prejudgment interest on premiums that the insurer was ordered to return.
September 02, 2022
Michigan Panel Reverses Ruling As To Fraud Exclusion In PIP Coverage Dispute

GRAND RAPIDS, Mich. — A Michigan appeals panel held Aug. 18 that a lower court erred in granting an insurer’s motion for summary disposition on reconsideration in a lawsuit seeking recovery of personal injury protection (PIP) benefits under the state’s no-fault act, finding that reversal is warranted in light of Haydaw v. Farm Bureau Ins. Co., which held that “statements made during the course of litigation do not implicate an insurance policy's fraud or misrepresentation clause and that such a clause may not be relied on by the insurer to justify a denial of benefits.”
September 02, 2022
Auto Insurer Not Permitted To Rescind Policy As It Applied To Resident Relative

DETROIT — An auto insurer was not permitted to rescind an auto policy as it pertained to an insured’s resident relative who was involved in an auto accident because the resident relative had no knowledge that the insured failed to inform the auto insurer that another resident of driving age lived in the home with the insured, the Michigan Court of Appeals said Aug. 18.
September 02, 2022
Fraudulent Statements Are Relevant To Uninsured, Underinsured Motorist Claim

LANSING, Mich. — A trial court did not err in granting summary judgment in favor of three insurers on an insured’s claim for uninsured or underinsured motorist benefits because the insured made fraudulent statements regarding the extent of his injuries sustained in an auto accident; however, the trial court erred in dismissing the insured’s claim for personal injury protection (PIP) benefits because the insured’s entitlement to PIP benefits is governed by Michigan law and not by the insurance policies at issue, the Michigan Court of Appeals said Aug. 18 in noting that the policies’ anti-fraud provisions cannot be asserted as a bar to PIP benefits.
September 02, 2022
Rescission Of Policy Not Permitted Based On Ambiguity In Application Question

BROOKLYN, N.Y. — A breach of contract claim alleged against a commercial property insurer can proceed because the insurer failed to show that its rescission of the insurance policy was based on a material misrepresentation, a New York federal judge said Aug. 16 in explaining that there could be no misrepresentation by the insureds as a question in the insurance policy application regarding the number of apartment units was ambiguous.