When One Lies About an Insurance Claim He Will Never Prosper
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John Ruiz, proceeding pro se, sued Liberty Mutual Fire Insurance Company (“Liberty Mutual”), asserting that Liberty Mutual breached two homeowner’s insurance policies by failing to pay plaintiff’s water damage claims. Liberty Mutual asserts two counterclaims, seeking to recover money it paid to plaintiff pursuant to those policies and to investigate plaintiff’s claims. In John Ruiz v. Liberty Mutual Fire Insurance Company, No. 19 CV 4399 (VB), United States District Court, S.D. New York (February 14, 2022) the pro se plaintiff proved the old saw that he had an idiot for a client.
BACKGROUND
Plaintiff has been married to Yolanda Brooks-Ruiz (“Brooks-Ruiz”) since April 2016. Brooks-Ruiz uses the name Yolanda Brooks professionally. Plaintiff’s first marriage ended in divorce, and his ex-wife died approximately seven years after the divorce.
The parties agree that, after plaintiff and Brooks-Ruiz were married, they generally spent weekdays together at plaintiff’s apartment in East Harlem, Manhattan, along with two of plaintiff’s children. Plaintiff and his children spent weekends at plaintiff’s home at 111 Linden Place in Middletown, New York (the “Middletown Property”). Brooks-Ruiz spent weekends at a home she owned at 7609 Aquatic Drive in Arverne, New York (the “Arverne Property”), which is in the Rockaways, Queens.
Although Brooks-Ruiz regularly rented the one-bedroom residence, she had never rented the duplex out before she allegedly rented it to plaintiff.
Plaintiff’s Insurance Policies with Liberty Mutual
Liberty Mutual issued plaintiff two homeowner’s insurance policies covering the Middletown Property, from September 13, 2016, to September 13, 2018. The Policies contain the standard “Concealment or Fraud Provision.” The Policies also contain coverage for Additional Living Expenses.
Plaintiff’s Insurance Claims
Following flooding at the Middletown Property caused by a burst pipe in January 2017, plaintiff filed a claim with Liberty Mutual pursuant to the 2016 Policy. Plaintiff retained a public adjuster, Robert D’Amore, to assist him.
Among other things, plaintiff sought coverage for certain Additional Living Expenses, or “ALE.” Plaintiff made an ALE claim for rent payments he purportedly made to Brooks-Ruiz to reside with her at the Arverne Property. Pursuant to the lease agreement, Ruiz agreed to pay Brooks-Ruiz a security deposit of $1,000 and monthly rent of $4,000. The public adjuster claimed the insured paid $8,000 for February and March and now needs to pay April in a few days.
On March 31, 2017, the public adjuster emailed Liberty’s adjuster, Traas, explaining the efforts made by Ruiz to obtain a place to occupy in support of his ALE claim.
In support of his ALE claim Ruiz submitted copies of his rent checks, made out to “Yolanda Brooks, ” to Liberty Mutual for reimbursement. Following flooding at the Middletown Property caused by another burst pipe in January 2018, plaintiff made a claim with Liberty Mutual pursuant to the 2017 Policy. In connection with this second claim, plaintiff continued to reside with Brooks-Ruiz in her duplex at the Arverne Property and again sought reimbursement for rental payments made to her.
Liberty Mutual’s Investigation
As part of the investigation, Karen Kuitwaard, a senior investigator with Liberty Mutual, met with plaintiff on March 19, 2018, at the Middletown Property. Kuitwaard asked plaintiff if he was married, and plaintiff responded that he was a widower. Plaintiff never informed Liberty Mutual he was married, or married to Brooks-Ruiz, until his examination under oath (“EUO”) by Liberty Mutual on August 16, 2018. At his EUO, plaintiff admitted he was married to Brooks-Ruiz and that he previously told Kuitwaard he was a widower.
Liberty Mutual determined plaintiff violated the Concealment or Fraud Provision of the Policies and informed plaintiff it would not cover any of plaintiff’s claims relating to the Middletown Property. However, before denying plaintiff’s claims, Liberty Mutual had ultimately reimbursed plaintiff $43,943.76 in ALE related to the Arverne Property. Liberty Mutual would not have made those payments had Ruiz disclosed that Brooks-Ruiz was his wife.
DISCUSSION
A fact is material when it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is genuine if there is sufficient evidence upon which a reasonable jury could return a verdict for the non-moving party. See Id. It is the moving party’s burden to establish the absence of any genuine issue of material fact. Zalaski v. Bridgeport Police Dep’t, 613 F.3d 336, 340 (2d Cir. 2010).
Breach of the Concealment or Fraud Provision
The Policies provide they are void if plaintiff “[i]ntentionally concealed or misrepresented any material fact or circumstance” or “[e]ngaged in fraudulent conduct.”
To void an insurance policy, “[t]he insurer must prove fraud by clear and convincing evidence.” Varda, Inc. v. Ins. Co., 45 F.3d 634, 639 (2d Cir. 1995). To establish fraud under New York law, the moving party “must prove a misrepresentation or a material omission of fact which was false and known to be false by the other party, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury.” Lama Holding Co. v. Smith Barney Inc., 88 N.Y.2d 413, 421 (1996).
In the context of an insurance investigation, an insured’s misrepresentation or omission is material as a matter of law if it might have affected the attitude and action of the insurer or may be said to have been calculated either to discourage, mislead or deflect the insurer’s investigation in any area that might seem to the insurer, at that time, a relevant or productive area to investigate.
To sustain a fraud claim, the asserting party must show a causal connection between the “act of deception” and its injury.
Analysis
Liberty Mutual has demonstrated as a matter of law that plaintiff violated the Concealment or Fraud Provision. That is, it is undisputed plaintiff intentionally omitted his relationship with Brooks-Ruiz and misrepresented his connection to the Arverne Property.
If Liberty Mutual had known plaintiff was married to Brooks-Ruiz, it would not have reimbursed plaintiff for rental payments to reside with Brooks-Ruiz at the Arverne Property. In other words, it is undisputed plaintiff’s omission affected the attitude and action of Liberty Mutual in reimbursing him.
Concealment
Liberty Mutual offers conclusive evidence plaintiff never informed it that he was married to Brooks-Ruiz. Traas testified at his deposition that D’Amore never told him plaintiff was married or that the Arverne Property was owned by plaintiff’s wife. Moreover, plaintiff lied to Liberty Mutual’s investigator when she asked him about his marital status.
Misrepresentation
Liberty Mutual offered conclusive evidence plaintiff misrepresented his connection to the Arverne Property.
Reliance
Liberty Mutual has shown it reasonably relied on plaintiff’s omissions and misrepresentations as a matter of law. There is no evidence Liberty Mutual should have known from plaintiff’s ALE claim documentation that further investigation was warranted.
Liberty Mutual was not seeking to engage in a potentially risky transaction without performing due diligence, it was relying on the representations and documentation provided by plaintiff’s retained public adjuster.
Injury
Finally, it is undisputed Liberty Mutual was injured because of plaintiff’s conduct. As explained above, Liberty Mutual paid $43,943.76 in ALE it would not have covered had it known plaintiff and Brooks-Ruiz were married.
Liberty Mutual’s motion for partial summary judgment was granted and Plaintiff’s claims were dismissed.
With respect to Liberty Mutual’s counterclaims, the court ordered the parties to work toward a trial on the claim for return of the monies paid as a result of the fraud.
ZALMA OPINION
An obvious and blatant fraud was attempted by Ruiz who lied blatantly to the adjuster, investigator and at an Examination Under Oath and took money he knew, or should have known, he was not entitled to obtain under the policy. Lies in the presentation of a claim where the insurer relied on the lie to its detriment, is fraud. The trial that follows should provide a judgment to Liberty for the money it paid, interest, and the costs of its investigation and the litigation as a result of the fraud. Simultaneously the prosecutor should consider criminal charges since insurance fraud is a felony.
© 2022 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.
He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business.
Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome.
You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com, [email protected] and [email protected] . Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.
You may find interesting the podcast “Zalma On Insurance” at https://anchor.fm/barry-zalma; you can follow Mr. Zalma on Twitter at; you should see Barry Zalma’s videos on https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/featured; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims–library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/
Notice of Claim Later than 60 Days After Expiration is Too Late
Post 5089
Injury at Massage Causes Suit Against Therapist
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Hiscox Insurance Company (“Hiscox”) moved the USDC to Dismiss a suit for failure to state a claim because the insured reported its claim more than 60 days after expiration of the policy.
In Mluxe Williamsburg, LLC v. Hiscox Insurance Company, Inc., et al., No. 4:25-cv-00002, United States District Court, E.D. Missouri, Eastern Division (May 22, 2025) the trial court’s judgment was affirmed.
FACTUAL BACKGROUND
Plaintiff, the operator of a massage spa franchise, entered into a commercial insurance agreement with Hiscox that provided liability insurance coverage from July 25, 2019, to July 25, 2020. On or about June 03, 2019, a customer alleged that one of Plaintiff’s employees engaged in tortious ...
ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Posted on June 2, 2025 by Barry Zalma
Post 5087
See the full video at and at
Read the full article and the full issue of ZIFL June 1, 2025 at https://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-06-01-2025.pdf
Zalma’s Insurance Fraud Letter – June 1, 2025
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ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Read the full article and the full issue of ZIFL June 1, 2025 at https://lnkd.in/gTWZUnnF
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at ...
No Coverage if Home Vacant for More Than 60 Days
Failure to Respond To Counterclaim is an Admission of All Allegations
Post 5085
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In Nationwide Mutual Insurance Company v. Rebecca Massey, Civil Action No. 2:25-cv-00124, United States District Court, S.D. West Virginia, Charleston Division (May 22, 2025) Defendant Nationwide Mutual Insurance Company's (“Nationwide”) motion for Default Judgment against Plaintiff Rebecca Massey (“Plaintiff”) for failure to respond to a counterclaim and because the claim was excluded by the policy.
BACKGROUND
On February 26, 2022, Plaintiff's home was destroyed by a fire. At the time of this accident, Plaintiff had a home insurance policy with Nationwide. Plaintiff reported the fire loss to Nationwide, which refused to pay for the damages under the policy because the home had been vacant for more than 60 days.
Plaintiff filed suit ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
A Heads I Win, Tails You Lose Story
Post 5062
Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...