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

Mealey's Insurance Fraud

August 19, 2024
Homeowners Insurer Did Not Breach Contract, Act In Bad Faith In Denying Claim

DENVER — A district court properly entered judgment in favor of a homeowners insurer on breach of contract and common-law and statutory bad faith claims because the insured did not reside at her home, as required by the policy, when the home was damaged as the result of a fire, the 10th Circuit U.S. Court of Appeals said.
August 14, 2024
Patent Attorney Urges High Court To Decline Review Of 9th Circuit FCA Reversal

WASHINGTON, D.C. — A patent attorney who was a district court’s qui tam plaintiff in a suit accusing pharmaceutical companies of violating the False Claims Act (FCA) by artificially inflating drug prices urges the U.S. Supreme Court to decline review of the Ninth Circuit U.S. Court of Appeals’ ruling reversing the district court’s dismissal, arguing that the Ninth Circuit correctly “held that the public disclosures did not collectively disclose the fraud.”
August 08, 2024
Conference Scheduled After Missed Deadline In Allstate’s RICO Suit Against Doctors

BROOKLYN, N.Y. — After parties said settlement was reached but failed to file stipulations of dismissal as ordered, a New York federal magistrate judge scheduled a status conference in Allstate’s Racketeer Influenced and Corrupt Organizations Act (RICO) violations suit against physicians and their practices related to alleged billing for excessive services for no-fault insureds injured in auto accidents.
August 07, 2024
Insurer Seeks Extension In $3.8M Murdaugh Housekeeper Heirs Settlement Dispute

CHARLESTON, S.C. — An insurer moved for an extension to respond to parties opposing the insurer’s bid for reconsideration of a South Carolina federal court’s ruling denying summary judgment to the insurer in its suit seeking a declaration that it is entitled to recover the $3.8 million it paid to settle a claim brought by the estate of Alex Murdaugh’s former housekeeper, which the estate never received due to the purported fraud of Murdaugh and his alleged conspirators.
August 07, 2024
Judgment Granted To Insurer Seeking To Rescind Policy For Value Misrepresentation

LOS ANGELES — A California federal judge on Aug. 6 granted summary judgment to an insurer that filed a cross-claim for rescission against its insured in a breach of contract suit over the insurer’s failure to pay a claim for fire damages, finding that the insurer was entitled to rescind the policy due to the insured’s material misrepresentations in the policy application, including undervaluing the property by more than $300,000.
August 07, 2024
Progressive Seeks To Void Insured’s Auto Policy, Deny ‘Staged’ Accident Coverage

FLORENCE, S.C. — Progressive Direct Insurance Co. filed suit in a South Carolina federal court against its insured and passengers in her vehicle that was in an accident, seeking a declaration that the insured’s auto policy is void due to material misrepresentations she purportedly made in the policy application and seeking a declaration that no coverage is owed for the auto accident that Progressive Direct claims was “staged.”
August 06, 2024
Judge Issues Status Report Deadline In Allstate’s RICO Suit Against DME Suppliers

CHICAGO — An Illinois federal judge issued a minute entry requiring Allstate and defendant durable medical equipment (DME) suppliers to file a joint status report before Oct. 15 in Allstate’s suit against the suppliers alleging Racketeer Influenced and Corrupt Organizations Act (RICO) violations related to the suppliers’ alleged “scheme” to defraud Allstate by billing it for DME supplies and services that were not authorized or not provided to Allstate claimants injured in auto accidents.
August 05, 2024
Judgment Granted For Insurer In Dispute Over Dentist’s ‘Misrepresented’ Loss

SPOKANE, Wash. — A Washington federal judge granted a business insurer’s motion for summary judgment and denied a dentist’s motion for summary judgment in the dentist’s suit alleging breach of contract against the insurer for failure to cover the alleged damage to his dental equipment and resulting business losses, finding that the dentist’s misrepresentations about his purported loss prevent him from obtaining coverage under the policy.
August 05, 2024
Judge Dismisses Two Parties In State Farm’s Auto Accident No-Fault Fraud Suit

BROOKLYN, N.Y. — After State Farm filed a stipulation of dismissal as to two parties, a New York federal judge issued docket-only orders dismissing a physical therapy practice and a physical therapist as defendants in State Farm’s suit alleging that medical providers submitted for reimbursement to State Farm fraudulent bills for ineligible or medically unnecessary services provided to auto accident victims eligible for State Farm no-fault benefits.
August 02, 2024
Partial Dismissal Granted In FCA Suit Against Hospital Over Unread Test Billing

SYRACUSE, N.Y. — A New York federal judge granted in part dismissal motions filed by a physician, his practice and a hospital in a relator’s qui tam suit alleging violations of the federal False Claims Act (FCA) and New York false claims law for the defendants’ purported billing of federal insurers, including Medicaid, for testing that was not evaluated by a physician, finding the allegations insufficient for labor law violations against the hospital and for reverse false claims and conspiracy against all defendants.
August 01, 2024
Insurer Files Counterclaim Against Homeowners, Appraiser In Hurricane Coverage Row

NEW ORLEANS — After homeowners sued their insurer for breach of contract and bad faith related to the insurer’s alleged failure to cover their loss related to Hurricane Ida, the insurer filed a counterclaim against them and a third-party complaint against their appraiser, seeking damages for the homeowners’ and appraiser’s alleged scheme to defraud the insurer by inflating the damages estimate and improperly attributing costs to upgrade the property to hurricane damages.
July 31, 2024
Reconsideration Denied In Dispute Over Misrepresentation As To $2M Life Policies

MACON, Ga. — A Georgia federal judge on July 30 denied a life insurance beneficiary’s motion for reconsideration of a summary judgment ruling for the insurer regarding the beneficiary’s bad faith claim related to the insurer’s attempted rescission of two $1 million life insurance policies, finding that the insurer “had reasonable grounds to contest” the beneficiary’s claim given that the insured made misrepresentations in his insurance applications regarding his alcohol use.
July 31, 2024
9th Circuit Reverses Judgment In Insurance Row Over Application Misrepresentation

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals reversed and remanded a district court’s grant of summary judgment to insurers in their insureds’ suit seeking coverage for expenses in defending another suit regarding fraud-based claims, finding that the district court erred in applying Nevada law, rather than Texas law, and that pursuant to Texas law, reversal is required because material facts remain in dispute regarding alleged material misrepresentations in the insureds’ application for policy renewal.
July 29, 2024
Michigan Panel Affirms Ruling Requiring GEICO To Reimburse Allstate In PIP Dispute

DETROIT— In an auto accident coverage dispute, a Michigan appellate court affirmed lower court orders granting an auto insurer’s motion for summary disposition and entering judgment requiring GEICO to reimburse Allstate for personal injury protection (PIP) benefits already paid and assuming liability for future PIP benefits, finding that the lower court correctly granted summary disposition to the insurer because its insured made material misrepresentations in the insurance application.
July 29, 2024
Judge Denies Underwriter’s Dismissal Bid In Yacht Damage Coverage Row With Insurer

KANSAS CITY, Kan. — A Kansas federal judge denied an insurance underwriter’s motion to dismiss a coverage dispute in which an insurer seeks a determination that a yacht that was damaged is excluded from coverage, finding that because the court previously decided that it had jurisdiction over the underwriter, the underwriter’s renewed request for dismissal is denied as an “attempt to take a second bite from the proverbial apple.”
July 26, 2024
Ex-Underwriter’s Dismissal Bid Skirts Main Claim In Breach Of Contract Row

MIAMI — Noting that he does not seek dismissal of a claim that he says the bulk of the allegations relate to, a former underwriter on July 25 moved in Florida federal court for dismissal of the other two claims in a suit over conduct that an insurer alleges included greatly exceeding his authority by executing a facultative retrocession agreement to cover a risk of more than $44 million.
July 25, 2024
Insurer Fails To Show Insured’s Concealment Of Commercial Fireworks Was Intentional

BISMARCK, N.D. — A federal judge in North Dakota on July 24 ruled in favor of an insured in a homeowners insurer’s declaratory judgment lawsuit disputing coverage for underlying property damage and personal injuries caused by a fireworks explosion, finding that the policy’s misrepresentation provision does not bar coverage because the insured did not willfully conceal or misrepresent any material facts regarding his use and storage of commercial fireworks at his Bismark property.
July 24, 2024
U.S. Supreme Court Distributes Cert Petition Over FCA Suit, Settlement Agreement

WASHINGTON, D.C. — The U.S. Supreme Court on July 24 distributed for conference a petition for writ of certiorari filed in the U.S. Supreme Court by the owner of medical clinics seeking review of the Sixth Circuit U.S. Court of Appeals’ ruling upholding a district court’s orders enforcing a settlement agreement and compelling the owner to seek U.S. government consent to dismiss claims for federal False Claims Act (FCA) violations in a separate qui tam suit.
July 23, 2024
Judge Issues Standing Order In Negligence Suit Against Purported Insurer’s Counsel

ATLANTA — A Georgia federal judge issued a standing order outlining case management in a negligence suit against legal counsel for a purported health insurer now in liquidation regarding the law firm’s role in aiding and abetting in an alleged scheme to entice people to purchase health plans that ultimately left “members without coverage and with devastating medical bills.”
July 19, 2024
Judgment Granted For Broker In Coverage, Fraud Dispute With Insurance Agent

TRENTON, N.J. — A New Jersey federal judge on July 18 granted in part judgment for an insurance broker in a dispute among a commercial general liability insurer, a broker and wholesale insurance agent, finding that material facts are not in dispute regarding negligent misrepresentation and common-law indemnity claims but that fact disputes remain as to a fraud in the inducement claim.
July 18, 2024
State Farm Waives Response To Cert Petition Over FCA Suit And Settlement Agreement

WASHINGTON, D.C — State Farm Mutual Automobile Insurance Co. waived its right to respond to a petition for writ of certiorari filed in the U.S. Supreme Court by the owner of medical clinics seeking review of the Sixth Circuit U.S. Court of Appeals’ ruling upholding a district court’s orders enforcing a settlement agreement and compelling the owner to seek U.S. government consent to dismiss claims for federal False Claims Act (FCA) violations in a separate qui tam suit.
July 17, 2024
8th Circuit Reverses Judgment For Nationwide In Row Over Public Auction Definition

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on July 16 reversed a district court ruling granting summary judgment to Nationwide Mutual Insurance Co. in its suit seeking to void its insured’s homeowners policy and a declaration that it is not liable for a fire loss at the insured’s property, finding that Nationwide failed to meet its burden to show that the homeowner’s alleged misrepresentation in the policy application “was false in fact.”
July 16, 2024
Judge Grants Dismissal In FCA Violations Suit Against Calif. Specialty Laboratory

LOS ANGELES — Without providing explanation, a California federal judge on July 15 granted parties’ joint stipulation of dismissal in a relator’s qui tam suit against a California special laboratory, alleging violations of the federal False Claims Act and similar California statutory provisions for the lab’s role in inducing physicians and offering remuneration to them to refer government-insured patients to the lab.
July 11, 2024
Insurer Seeks To Void Policy, Deny Fire Damage Coverage For Code Violation Fraud

LOS ANGELES — A commercial insurer sued its insured limited liability company in a California federal court, seeking rescission of the insured’s policy and a declaration that the insurer is not obligated to pay for fire damage to the property due to the insured’s material misrepresentations in the policy application regarding the absence of safety code violations and liens on the property when an investigation revealed otherwise.
July 10, 2024
Insurer Granted Default Judgment In Row Over Absent Motorist’s Misrepresentations

TRENTON, N.J. — A New Jersey federal judge on July 9 granted default judgment in an insurer’s suit seeking a declaration that the auto insurance policies issued to its insured are rescinded and that it has no duty to defend and indemnify regarding an auto accident involving the insured where another man died, finding that the complaint sufficiently alleges fraud and that the insurer will be prejudiced without default judgment against the insured, who failed to appear.