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

Mealey's Insurance Fraud

December 20, 2022
Parties Stipulate To Dismissal Of Suit Over Rescission Of Homeowners Policy

LANSING, Mich. — After a homeowner was granted permission to file a motion for summary judgment after deadline in his suit seeking insurance benefits for a fire at his Michigan home, he and his homeowners insurer notified the federal court that they had agreed to settle the matter; on Dec. 19, they filed a stipulation of dismissal with prejudice.
December 20, 2022
3rd Circuit Affirms Dismissal Of Insurers’ RICO Suit Against Suboxone Makers

PHILADELPHIA — The Third Circuit U.S. Court of Appeals affirmed dismissal of two consolidated cases in health insurers’ Racketeer Influenced and Corrupt Organizations Act (RICO) violations suits against companies selling and manufacturing Suboxone asserting that the companies fraudulently conspired for Suboxone’s inclusion in the insurers’ formularies, finding that the insurers failed to comply with the “particularity” requirements of Federal Rule of Civil Procedure 9(b).
December 19, 2022
Settlement Agreement Sealed By Federal Judge In Insurance Coverage, Fraud Dispute

TOLEDO, Ohio — An Ohio federal judge granted a mortgagee’s motion to seal a confidential settlement agreement in a breach of contract suit it filed against insurers and a company that previously owned resort property purportedly damaged by water and wind.
December 16, 2022
Counterclaim Dismissal Denied In Row Over ‘Fraudulent’ Excess Insurance Claims

MOCKSVILLE, N.C. — A North Carolina state court judge denied a chicken processing plant owner’s motion to dismiss excess insurers’ recoupment and unjust enrichment counterclaims in a breach of contract, bad faith and deceptive trade practices suit against excess coverage insurers after a fire at the plant, finding that the counterclaims regarding the plant owner’s “fraudulently asserted entitlement to insurance proceeds” to fund improvements outside of fire damage “satisfy the element of falsity.”
December 16, 2022
Magistrate Recommends Awarding Insurer Judgment, Finding Policy Void From Inception

BROOKLYN, N.Y. — Finding that a commercial insurer has established that a company made misrepresentations in its application for a businessowners policy and that, pursuant to its underwriting guidelines, the insurer would not have issued the policy if the company had provided truthful responses, a federal magistrate judge in New York recommended that the court enter a declaratory judgment that the policy is void from its inception and that the insurer is not obligated to pay any claims the company submits.
December 15, 2022
Fla. Magistrate Rules On Motion In Limine In $3.8M No-Fault Insurance Fraud Suit

MIAMI — A Miami federal magistrate judge granted in part a motion in limine filed by a physician, a health care facility and a purported health care facility owner seeking to exclude evidence related to the physician and owner’s arrests and certain testimony in a fraud and Racketeer Influenced and Corrupt Organizations (RICO) Act violation suit filed against them by GEICO, finding that GEICO is not allowed to introduce evidence about the arrests because its “relevance argument . . . is wholly unconvincing” (Government Employees Insurance Co., et al. v. Gilberto Seco, M.D., et al., No. 21-24155, S.D. Fla., 2022 U.S. Dist. LEXIS 223576).
December 12, 2022
Federal Judge Dismisses Claims In Row Over Alleged ‘No Value’ Insurance Policies

TRENTON, N.J. — A New Jersey federal judge on Dec. 9 granted a successor insurer’s motion to dismiss counterclaims in its declaratory judgment suit seeking a declaration that life insurance policies it issued that are now owned by an insolvent insurer are void ab initio, finding that the insolvent insurer’s counterclaims for fraud, negligent misrepresentation, violations of the Texas Deceptive Trade Practice Act (DTPA) and promissory estoppel were insufficiently alleged.
December 12, 2022
Parties In Crop Insurance Case Dispute Bid For Acquittal Or New Trial

PIERRE, S.D. — Two farmers that a South Dakota federal jury found guilty of making false statements regarding crop insurance are seeking a judgment of acquittal or a new trial, while the government contends that neither is warranted.
December 12, 2022
Magistrate Allows Testimony From Expert In Support Of Insurance Fraud Charges

MIAMI — An expert retained by an insurer that sued a group of medical facilities and their employees for submitting fraudulent claims may testify, a federal magistrate judge in Florida said, finding the arguments for exclusion best addressed through cross-examination.
December 07, 2022
Judge Finds Insured Misrepresented Cause Of Car Damage; Insurer Awarded Summary Judgment

SEATTLE — Finding that the “evidence is overwhelming that Plaintiff deliberately misrepresented the circumstances surrounding the damage to his car,” a federal judge in Washington granted summary judgment to an insurer and dismissed the insured’s breach of contract and bad faith suit.
December 07, 2022
Relator’s Federal, Virginia Fraudulent COVID Testing, Care Claims Survive Dismissal

NEWARK, N.J. — A relator has successfully pleaded claims that the owner and operator of numerous urgent care clinics coded patients’ visits for COVID-19 testing to be reimbursed at higher rates and billed for medically unnecessary office visits to survive a motion to dismiss under the False Claims Act (FCA) and Virginia Fraud Against Taxpayers Act (VFATA), a federal judge in New Jersey found.
December 07, 2022
Judge: Insured’s Material Misrepresentation On Auto Policy Bars Accident Coverage

ORANGE COUNTY, Calif. — A California judge granted an automobile liability insurer’s motion for summary judgment in its declaratory judgment lawsuit disputing coverage for an accident, concluding that the insured made a material misrepresentation as to the use of his vehicles on the insurance application.
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.