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

Mealey's Insurance Fraud

February 29, 2024
Summary Judgment Granted For Insurer In No-Fault Suit Over ‘Staged’ Auto Accident

NEW YORK — A New York state court justice granted summary judgment to an insurer in its suit against insureds and various medical providers and pharmacies, seeking a declaration that the insurer does not have to pay no-fault benefits related to an allegedly “staged” auto accident, finding that the insurer established a breach of a condition precedent due to the failure of multiple parties to appear for examinations under oath, thereby “relieving” the insurer of its obligation to pay no-fault benefits.
February 28, 2024
Settlements Sought, Liquidation Proposal Updated In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — After putting forth several proposed settlements for approval in a Delaware federal bankruptcy court following mediation, the Official Committee of Unsecured Creditors on Feb. 28 filed the latest of its recent amendments to its proposed Chapter 11 plan of liquidation for Vesttoo Ltd. and dozens of Vesttoo affiliates.
February 28, 2024
Attorney Fee Award Affirmed In PIP Dispute Involving Estate Of Man Killed By Car

TRENTON, N.J. — A New Jersey appellate court affirmed a lower court’s award of attorney fees and costs to a medical center that intervened in a personal injury protection (PIP) suit filed by the estate of a man against multiple parties, including an insurer seeking to void a policy for material misrepresentations, finding that the lower court did not abuse its discretion in awarding attorney fees and costs “commensurate” with what the medical center paid under its retainer agreement.
February 27, 2024
$50M Bond Discharged After Plea Deal Reached In $38M Nursing Home Fraud Case

MIAMI — A Florida federal judge released a $50 million surety bond imposed on the former owner of skilled nursing facilities the day after the judge accepted the man’s guilty plea for conspiracy to commit health care fraud for the man’s role in a $38.7 million health care fraud scheme involving bribing physicians to have patients entered into the facilities he owned.
February 26, 2024
9th Circuit Affirms Judgment For Insurer In Fraud Suit, Deems Appeal ‘Frivolous’

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed a district court’s default judgment entered against a man and his daughter accused of defrauding a long-term care insurer by claiming that the man qualified as a “chronically ill individual,” finding that the appeal is “frivolous” and that the lower court did not abuse its discretion in entering a default judgment in response to the defendants violating court orders.
February 23, 2024
Panel Reverses Order Staying Arbitration In Accident Coverage Row With State Farm

CHICAGO — An Illinois appellate court on Feb. 22 reversed and remanded a lower court order staying an insured’s motion to compel arbitration of his claim against State Farm regarding an accident with an uninsured driver, finding that the lower court erred by not having a hearing as to the insured’s proof that State Farm should be estopped from contesting coverage for the insured’s alleged misrepresentations.
February 20, 2024
Panel: Insurer Can Rescind Professional Liability Policy Due To Misrepresentation

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on Feb. 16 affirmed 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, finding no genuine dispute of material fact that the clinic’s founder made a material misstatement in her applications for coverage.
February 20, 2024
Judgment Granted For Insurer In Yacht Fire Coverage Row Due To Misrepresentations

MIAMI — A Florida federal judge on Feb. 16 adopted a federal magistrate judge’s report and recommendation that because an insured yacht owner made material misrepresentations in a policy application, including falsely stating that the proposed captain of an 85-foot yacht had no recent driving under the influence (DUI) convictions, summary judgment should be granted to a marine insurer seeking a judgment that it is not obligated to cover the insured’s fire damage losses.
February 15, 2024
Motion To Certify Interlocutory Appeal Denied In FCA Suit Over Fraudulent Billing

PHILADELPHIA — A Pennsylvania federal judge denied a motion to certify for interlocutory appeal a ruling denying a service provider and its contracted skilled nursing facilities’ (SNFs) dismissal of a qui tam suit alleging that they violated the False Claims Act (FCA) by purportedly billing Medicare and Medicaid for unnecessary services, finding that “there is no controlling question of law” that would merit an interlocutory appeal.
February 15, 2024
Disputes Over Liquidation Proposal Sent To Mediation In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — A Delaware federal bankruptcy judge has referred matters pertaining to a proposed Chapter 11 plan of liquidation for Vesttoo Ltd. and dozens of its affiliates to mediation.
February 14, 2024
Consent Decree Entered Under 1 Dismissal In Case Over Alleged Counterfeit Policies

LOUISVILLE, Ky. — A variety of claims and parties have been dismissed under agreements in a sprawling suit over allegations of fraud, trademark counterfeiting and trademark infringement involving captive reinsurance programs, with a Kentucky federal court permanently enjoining two defendants “from future infringement of Plaintiffs’ trademarks.”
February 14, 2024
Judge Stays Case, Says Breach Of Contract Claim Must Be Arbitrated In FCA Suit

TAMPA, Fla. — A Florida federal judge stayed a physician’s qui tam suit alleging that a Medicare Advantage organization (MAO) and an independent physician association (IPA) violated the federal False Claims Act (FCA) by artificially increasing patients’ risk assessment scores, finding that an added claim for breach of contract must be arbitrated pursuant to the terms of an agreement between the physician’s practice and the IPA.
February 13, 2024
New Trial Denied But Judgment Cut By $270M In FCA Suit Against Ophthalmic Company

ST. PAUL, Minn. — A Minnesota federal judge reduced a $487,048,705.13 judgment against an ophthalmic company and its owner to $216,675,248.55 in a whistleblower’s qui tam suit alleging violations of the False Claims Act (FCA) and Anti-Kickback Statute (AKS) related to kickbacks paid to eye surgeons to use the company’s products for cataract surgeries paid for by Medicare.
February 12, 2024
11th Circuit Schedules Oral Arguments In Mold Coverage, Bad Faith Suit

ATLANTA — The 11th Circuit U.S. Court of Appeals scheduled oral arguments for April 16 in a mold coverage suit involving an insured’s appeal of a district court’s ruling on breach of contract and bad faith claims and an insurer’s cross-appeal of the district court’s ruling on fraud and conspiracy counterclaims asserted by the insurer.
February 07, 2024
Judge Dismisses FCA Claims Against Rehab Facilities Accused Of Medicare Fraud

PHILADELPHIA — A Pennsylvania federal judge on Feb. 6 dismissed claims against skilled nursing facilities (SNFs) alleged to have violated the federal False Claims Act (FCA) regarding Medicare and Medicaid fraud related to billing for rehabilitative therapy that was purportedly not provided, finding that claims in the amended complaint failed to “cure the deficiencies” of the previous complaint.
February 07, 2024
Judge Denies Reconsideration Of Fees Awarded To Nursing Home In ‘Frivolous’ Action

OXFORD, Miss. — A Mississippi federal judge denied reconsideration of the award of attorney fees to a nursing home in a relator’s qui tam suit alleging violations of the federal False Claims Act (FCA) regarding the nursing home submitting for payment claims to government insurers while employing a nurse whose license was purportedly revoked, finding that “the relator’s action was groundless, frivolous, and had no chance of success.”
February 06, 2024
Judge Denies Dismissal In Estate’s Suit Seeking Benefits Of 2 $5M STOLI Policies

NEW HAVEN, Conn. — A Connecticut federal judge denied dismissal motions filed by a bank acting as securities intermediary for two $5 million stranger-originated life-insurance (STOLI) policies and a limited partnership and beneficial owner of the policies in an estate’s suit seeking to recover death benefits, finding that the estate’s pleadings sufficed to show that the bank acted under the direction of the partnership to maintain the policies for the partnership’s benefit.
February 05, 2024
Judge Adopts Report Advising Attaching Property In $1.395M No-Fault Fraud Suit

BROOKLYN, N.Y. — A New York federal judge on Feb. 2 adopted a magistrate judge’s report and recommendation advising granting GEICO’s motion for prejudgment attachment for property belonging to non-appearing defendants alleged to have used their dissolved corporation to bill GEICO for more than $1,395,000 in “non-reimbursable psychology services” for persons claiming to be injured in auto accidents, finding “no clear error” on the record.
February 05, 2024
Insured Cannot Recover Attorney Fees, Texas High Court Says In Answering Question

AUSTIN, Texas —The Texas Supreme Court on Feb. 2 answered “yes” to a certified question from the Fifth Circuit U.S. Court of Appeals in an insured’s lawsuit alleging that its insurer violated the Texas Prompt Payment of Claims Act (TPPCA), concluding that the TPPCA prohibits the insured from recovering attorney fees because the insurer voluntarily paid the full appraisal award for the insured’s tornado damage plus any statutory interest.
February 05, 2024
Aon Entities Seek Dismissal Of Insurers’ Suit Over Vesttoo Dealings

NEW YORK — Contending in part that the August 2022 announcement of a $1 billion partnership between Vesttoo Ltd. and Clear Blue Insurance Group undercuts the framing of the complaint against them, Aon PLC (Aon) and Aon Insurance Managers (Bermuda) Ltd. have moved in New York state court for dismissal.
February 02, 2024
Judge Sets Date For Change Of Plea After Deal Reached In $38M Care Home Fraud Case

MIAMI — After being advised that a plea agreement had been reached, a Florida federal judge on Feb. 1 issued docket-only orders setting a date for a sentencing and change of plea hearing for a man convicted of fraud, bribery and money laundering in a $38.7 million health care fraud scheme involving bribing physicians to have patients entered into the assisted living and skilled nursing facilities he owned.
February 02, 2024
Judgment Granted For Insurer In Row Over Misrepresentation Of Harassment Suit

SANTA ANA, Calif. — A California federal judge granted summary judgment to an employment practices liability insurer in a declaratory judgment suit against its insured, finding that the insurer is entitled to rescind the policies because it would not have issued the policies had it known of the insured’s false affirmation in the policy application that no harassment suits were made against it in the last five years.
February 02, 2024
Bad Faith, Insurance Code Violation Claims To Proceed Against Homeowners Insurer

MARSHALL, Texas — An insured’s claims for bad faith and violation of the Texas Insurance Code will proceed to trial because questions of fact exist regarding the cause of a fire at the insured’s home and whether the homeowners insurer investigated the claim with the pretext of denying coverage on the basis that the fire was intentionally set by the insured, a Texas federal magistrate judge said in denying the insurer’s motion for summary judgment.
February 02, 2024
Questions Of Fact Exist On Breach Of Contract Claim In Fire Coverage Suit

TOLEDO, Ohio — An insured’s breach of contract claim against a homeowners insurer in a fire coverage dispute will proceed because questions of fact exist regarding the materiality of an insured’s alleged misrepresentations and regarding the insurer’s affirmative defense of arson; however, the insured’s bad faith claim cannot proceed because the insurer’s denial of coverage was not unreasonable, an Ohio federal judge said in partially granting the insurer’s motion for summary judgment.
February 01, 2024
Late Objection Bid Draws Opposition In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — Asserting that “Vesttoo’s defrauded creditors have overwhelmingly voted to accept” a Chapter 11 plan of liquidation for Vesttoo Ltd. and dozens of its affiliates, two creditors are among the entities urging a Delaware federal bankruptcy court to reject a motion to allow an untimely objection to claims against one of the affiliates.