Mealey's Insurance Fraud
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April 04, 2024
Coverage Owed For Mold Damages, Insureds Reiterate In Corrected Reply Brief
ATLANTA — In a corrected reply brief, filed with the permission of the 11th Circuit U.S. Court of Appeals, insureds reiterate their argument that a district court erred in finding that no coverage is owed for mold damage discovered in an insured hotel because the policy at issue provides coverage for losses caused by a construction defect even if the cost to fix the defect is not covered.
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April 03, 2024
Magistrate Recommends Denying Insurer’s Dismissal Bid, Says It Has ‘Chutzpah’
DENVER — A Colorado federal magistrate judge on April 2 issued a report and recommendation advising the court to deny a general liability insurer’s dismissal motion in an excess insurer’s suit against the liability insurer and the insured seeking a declaration that the excess policy is void ab initio due to fraud, finding that the liability insurer should have known that it would become a defendant in the suit and that to claim otherwise “borders on the definition of chutzpah.”
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April 02, 2024
Michigan Panel Vacates Summary Disposition In PIP Auto Accident Coverage Dispute
DETROIT — A Michigan appellate court vacated and remanded a lower court decision granting summary disposition to an insurer that rescinded a no-fault policy for fraud and denied personal injury protection (PIP) benefits for a woman injured in an auto accident, finding that “because the claim for no-fault benefits involved an innocent third party,” the lower court erred in failing to “balance the equities” between the insurer and the injured innocent third party.
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March 29, 2024
Judge Nixes Fraud, Specific Performance Claims In Reinsurer’s Breach Lawsuit
FORT WORTH, Texas — Granting motions for dismissal of all but two claims in a reinsurer’s case over allegedly inflated provisional commissions and breach of various agreements, a Texas federal judge called the case “a lesson in Murphy’s Law for unwitting contractees” and ruled that “bad looks cannot support a fraud claim where the resulting harm was merely contractual.”
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March 29, 2024
FCA Suit Against Allergan Tossed, But Judge Allows ‘Last Opportunity’ To Amend
CHICAGO — An Illinois federal judge dismissed without prejudice relators’ third amended qui tam complaint against Allergan asserting violations of the federal False Claims Act (FCA) and numerous state false claims laws regarding allegations that Allergan paid unlawful kickbacks to physicians to prescribe opioid drugs for off-label uses, finding it “appropriate” to allow the relators “one chance to fix the deficiencies the Court has identified.”
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March 28, 2024
GEICO Sues Radiology Clinics, Owner, Seeking More Than $290,000 For No-Fault Fraud
BROOKLYN, N.Y. — GEICO filed a complaint in New York federal court against multiple radiology clinics and their owner, seeking to recover $290,000 it paid on alleged fraudulent billing for services that were medically unnecessary and “otherwise non-reimbursable” and were purportedly provided to auto accident victims insured by GEICO.
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March 26, 2024
Expert Testimony Precluded, Judgment Granted To Defendants In Auto Glass Fraud Row
PHOENIX — An Arizona federal judge on March 25 granted in part insureds’ summary judgment motion in an insurance fraud dispute alleging that they submitted fraudulent bills for automobile glass repair and replacement services, granting the motion as to insurance claims made after the insurer sent cease-and-desist letters to its insureds but denying the motion for claims before the letters were sent due to a dispute of material facts.
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March 25, 2024
Judgment Granted For Insurer In Dispute Over Insured’s Hurricane Coverage Fraud
LAKE CHARLES, La. — A Louisiana federal judge granted summary judgment to a homeowners insurer on its counterclaim to recoup reimbursement paid to a homeowner who sued the insurer for bad faith over its purported failure to adequately compensate her for damage caused by Hurricane Laura, finding that there is no dispute regarding the homeowner's misrepresentations when she applied for insurance.
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March 21, 2024
9th Circuit Affirms Judgments For Insurers In Fire Loss Coverage Dispute
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on March 20 affirmed a district court’s grants of summary judgment for insurers in two coverage disputes consolidated on appeal, finding that the district court correctly granted summary judgment for the insurers because no issues of fact remain regarding whether the homeowner misrepresented in the insurance application that she used her property for commercial purposes or that she had prior losses.
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March 19, 2024
2nd Circuit Upholds Order Denying Injunction In D&O Case Related To FCA Suit
NEW YORK — The Second Circuit U.S. Court of Appeals on March 18 affirmed a district court order denying a motion filed by a former manager of affiliated health care companies for preliminary injunction requiring an insurer to defend him pursuant to a directors and officers (D&O) policy in an underlying breach of fiduciary duties suit, finding that “the district court did not abuse its discretion” in denying the manager’s motion.
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March 19, 2024
Judgment Granted To Insurer Seeking Policy Voidance For Material Misrepresentation
BIRMINGHAM, Ala. — An Alabama federal judge granted summary judgment to an insurer seeking to void policies and a declaration that it owes no coverage to the insureds, a construction company and its owner, in underlying suits filed against them alleging construction defects, finding that the insurer is entitled to summary judgment in part because “but for the misrepresentation,” the insurer would not have issued the policies with the applicable provisions.
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March 18, 2024
4th Circuit Stands By Ruling That Insurer Can Rescind Professional Liability Policy
RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on March 15 refused to reconsider its affirmation of a lower federal court’s summary judgment ruling in favor of a professional liability insurer in its lawsuit seeking a declaratory judgment that it can rescind an insurance policy issued to a clinic, standing by its finding that there is no genuine dispute of material fact that the clinic’s founder made a material misstatement in her applications for coverage.
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March 15, 2024
Judge Won’t Strike ‘Allegedly Scandalous Material’ In FCA Suit Against Medtronic
KANSAS CITY, Kan. — A Kansas federal judge denied Medtronic’s request to strike purportedly false allegations in a qui tam suit alleging that Medtronic and its related company and a hospital violated the False Claims Act (FCA) by participating in a scheme to provide medically unnecessary treatment resulting in the submission of false claims for payment to federal health care programs, finding that “the court has no grounds to strike” “the allegedly scandalous material.”
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March 13, 2024
Summary Judgment Denied To State Farm In Dispute Over Concealed SSDI Application
DENVER — A Colorado federal judge denied State Farm’s motion for summary judgment in a bad faith and breach of contract suit filed against it over coverage for an insured’s uninsured/underinsured motorist (UM/UIM) claims related to an auto accident, finding that the insured did “not technically” make false statements regarding her application for Social Security Disability Income (SSDI) that would void her insurance policy for fraud.
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March 13, 2024
Judge Adopts Report, Says Defendants Are Liable For $481K In Insurance Fraud Suit
BROOKLYN, N.Y. — A New York federal judge issued a docket-only order adopting a magistrate judge’s report and recommendation to grant GEICO’s motion for default judgment against specified defendants and to enter a judgment of $481,233.13 against them in GEICO’s suit alleging that multiple providers participated in a scheme to submit fraudulent charges for medically unnecessary services under New York’s no-fault insurance law.
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March 12, 2024
Discovery Orders Granted, Appeal Filed In Vesttoo Chapter 11 Bankruptcy Cases
WILMINGTON, Del. — A notice of appeal has been filed concerning the confirmation of a Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates, and a Delaware federal bankruptcy judge on March 11 granted four unopposed motions for leave to conduct discovery against banking entities.
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March 11, 2024
Judge Amends Consent Decree Order In Case Over Alleged Counterfeit Policies
LOUISVILLE, Ky. — In a March 8 amended ruling entering a consent decree in a sprawling suit over allegations of fraud, trademark counterfeiting and trademark infringement involving captive reinsurance programs, a Kentucky federal judge said he “inadvertently omitted the names of two parties.”
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March 08, 2024
5th Circuit Vacates $553,000 Fee Award In FCA Suit Over False ‘Cost-Reporting’
NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on March 7 vacated and remanded a district court’s award of $553,007.83 in attorney fees, costs and expenses in a qui tam suit alleging that a hospital and its owners and officers violated the False Claims Act (FCA) by falsifying “cost reporting practices,” finding that the ruling must be vacated and remanded because the court based its decision on a judgment later modified by the Fifth Circuit.
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March 07, 2024
Drug Manufacturer Pleads Guilty To Selling Adulterated Drugs, Agrees To Fines
PHILADELPHIA — KVK Research Inc., a generic drug manufacturer, on March 6 pleaded guilty in a Pennsylvania federal court to two misdemeanor counts of introducing adulterated drugs into interstate commerce and agreed to fines totaling $3.5 million for violations of the federal Food, Drug and Cosmetic Act (FDCA) and the False Claims Act (FCA).
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March 07, 2024
Life Insurer Sues Beneficiary, Seeks To Void $500K Policy Issued To ‘Imposter’
SHERMAN, Texas — A life insurer filed a declaratory judgment suit in a Texas federal court against a claimant who sought death benefits under a $500,000 term life insurance policy, asserting that the policy is void ab initio because an “imposter,” rather than the decedent, completed the policy application.
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March 06, 2024
6th Circuit Affirms Orders Enforcing Settlement In State Farm Billing Fraud Row
CINCINNATI — The Sixth Circuit U.S. Court of Appeals on March 5 affirmed a district court’s orders enforcing a settlement agreement between State Farm and the owner of medical clinics it sued for allegedly orchestrating a fraudulent no-fault billing scheme, finding that the district court did not err in requiring the owner to seek consent from the U.S. government to dismiss his claims against State Farm in a separate action under the False Claims Act (FCA).
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March 06, 2024
Judge Refuses To Toss FCA Fraud ‘Scheme’ With Kickbacks Involving Labs, Owner
PHOENIX — An Arizona federal judge denied dismissal of a consolidated qui tam suit filed against a chiropractor and his office-based lab (OBL) franchises, alleging that they violated the federal False Claims Act (FCA) by participating in a “scheme” to offer financial rewards to physicians who referred vascular surgeons to the OBL franchises, finding that the defendants’ knowing reimbursement to their physician investors sufficed to make a claim for FCA violations.
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March 05, 2024
Dismissal Denied In Life Insurer’s Suit Seeking To Rescind Missing Man’s Policy
FORT MYERS, Fla. — A Florida federal judge on March 4 denied dismissal of a life insurer’s suit seeking a declaration that a man committed suicide and rescission of his $1.4 million life insurance policy due to his purported material misrepresentations in his policy application, finding that the insurer has plausibly alleged the man’s death by suicide, in part, because his boat was recovered off the Florida coast but he remains missing.
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March 04, 2024
Fraud Claims Against Lilly, Bayer Properly Dismissed Under Public Disclosure Bar
TRENTON, N.J. — A New Jersey appellate court on March 1 affirmed lower court decisions consolidated on appeal that dismissed similar qui tam suits filed against Bayer and Eli Lilly alleging that they violated the New Jersey False Claims Act (NJFCA) by participating in unlawful marketing schemes resulting in false claims being paid by government health care programs, finding that the complaints were appropriately dismissed under the NJFCA’s public disclosure bar.
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February 29, 2024
U.S. Bankruptcy Judge Approves Liquidation Plan In Vesttoo Chapter 11 Cases
WILMINGTON, Del. — After the latest in a string of recent hearings, a Delaware federal bankruptcy judge on Feb. 29 confirmed a Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates, also approving four settlements — one with a caveat and one with conditions precedent.