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

Mealey's Insurance Fraud

August 30, 2024
Bank Faces Another Negligence, Fraud Suit In Connection With Vesttoo Collapse

NEW YORK — Asserting fraud and negligence claims against China Construction Bank Corp. (CCBC) and related entities, a company affected by the collapse of Vesttoo Ltd. filed suit in New York state court for damages that it says include at least $140 million in cedent premium payments that went into designated segregated accounts.
August 29, 2024
Judgment Denied In Travelers’ Suit Seeking To Rescind Insured Contractor’s Policy

WHITE PLAINS, N.Y. — A New York federal judge denied a motion for summary judgment by Travelers Casualty Insurance Co. in its suit seeking a declaratory judgment to rescind a general liability and property policy issued to a general contractor, finding though Travelers showed that the contractor made misrepresentations in the policy application regarding performing ineligible operations, Travelers failed to establish that those misrepresentations were material.
August 29, 2024
After $90M Settlement Reached, Judge Dismisses FCA Suit Alleging False CMS Bids

LOUISVILLE, Ky. — After being notified that Humana Inc. agreed to pay $90 million to settle a case against it, a Kentucky federal judge dismissed the case, which accused Humana of violating the False Claims Act (FCA) by receiving overpayments after it knowingly submitted false bids to the Centers for Medicare and Medicaid Services (CMS).
August 28, 2024
Dispute Over FCA Public Disclosure Bar Distributed For Conference In Supreme Court

WASHINGTON, D.C. — The U.S. Supreme Court on Aug. 28 distributed for conference a petition for certiorari filed by pharmaceutical companies seeking review of the Ninth Circuit U.S. Court of Appeals’ ruling that the public disclosure bar was not triggered in a case where it reversed a district court’s dismissal of a suit accusing the companies of violating the False Claims Act (FCA) by artificially inflating drug prices.
August 28, 2024
Life Insurer Seeks Rescission Of $1M Life Policy Over Health Misrepresentation

CAMDEN, N.J. — A life insurance and annuity company sued the beneficiary of a $1 million life insurance policy in a New Jersey federal court, seeking to rescind the policy for purported misrepresentations in the policy application regarding the insured’s health history, asserting that had the insurer known about the insured’s health history, it would not have issued the policy.
August 26, 2024
Insurer’s Reconsideration Bid Denied In $3.8M Murdaugh Housekeeper Settlement Row

CHARLESTON, S.C. — A South Carolina federal judge denied an insurer’s motion for reconsideration of a 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, finding that the insurer failed to show any changes in law or new evidence to justify reconsideration.
August 23, 2024
Disability Insurer Seeks Policy Rescission For Health History Misrepresentations

RALEIGH, N.C. — A life and disability income insurer sued its insured in a North Carolina federal court, seeking rescission of an individual disability policy issued to the insured based on her purported material misrepresentations regarding her failure to disclose her complete health history.
August 23, 2024
7th Circuit Affirms Judgment For Insurer In Dispute Over Rescinded Policies

CHICAGO — The Seventh Circuit U.S. Court of Appeals affirmed a district court’s ruling granting summary judgment to a reinsurer seeking to rescind policies issued to a waste collection company for the company’s purported misrepresentations in policy applications regarding failure to disclose a dispute over misuse of the company name, finding that the misrepresentations were material and therefore supported rescission of the policies.
August 19, 2024
Pharma Supplier: High Court Should Deny Cert In FCA, Anti-Kickback Violations Row

WASHINGTON, D.C. — A pharmaceutical wholesaler and related entities argue in their Aug. 16 U.S. Supreme Court brief that the court should not grant certiorari to review the Second Circuit U.S. Court of Appeals ruling affirming a district court’s dismissal of federal False Claims Act (FCA) suit alleging violations of the Anti-Kickback Statute (AKS), asserting the Second Circuit correctly held that the AKS is violated only when a defendant knows their conduct was unlawful.
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.