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May 13, 2022
Never Settle a Proactive Suit Against Fraudsters

Anti-SLAPP Suit Effective When Plaintiff Unable to Prove Lack of Probable Cause

Read the full article at https://lnkd.in/gwiZjyjm and at https://zalma.com/blog.

Posted on May 13, 2022 by Barry Zalma

When nine insurers sued a doctor for conducting a scheme to defraud them they folded after a partial summary judgment was granted by a US District Court leaving other charges of fraud available. The insurer plaintiffs then settled with Dr. Ajay Mahabeer only to be sued for maliciously prosecuting the suit against him. In Ajay Mohabeer v. Farmers Insurance Exchange, et al, A172057, 318 Or.App. 313, Court of Appeals of Oregon (March 16, 2022) the Oregon Court of Appeals ruled on the insurers’ Anti-SLAPP Motion.
BACKGROUND

Plaintiff brought this action against nine insurance company defendants (collectively Farmers) and Farmers’ attorneys, Cole, Wathen, Leid & Hall, P.C., and Ryan J. Hall, for wrongful use of civil proceedings, alleging that defendants filed insurance fraud claims against plaintiff in federal court, which were ultimately settled, but which were brought with malicious intent and without probable cause. The Defendants filed a special motion to strike the claims under ORS 31.150, Oregon’s Anti-Strategic Lawsuits Against Public Participation (anti-SLAPP) statute, contending that plaintiffs claims seek damages for conduct that is protected under ORS 31.150(2), and that plaintiff could not present substantial evidence that he would prevail on his claim.

Defendants appealed.
THE SLAPP MOTION

The special motion to strike, ORS 31.150(1) provides:

A defendant may make a special motion to strike against a claim in a civil action described in subsection (2) of this section. The court shall grant the motion unless the plaintiff establishes in the manner provided by subsection (3) of this section that there is a probability that the plaintiff will prevail on the claim. The special motion to strike shall be treated as a motion to dismiss under ORCP 21 A but shall not be subject to ORCP 21 F. Upon granting the special motion to strike, the court shall enter a judgment of dismissal without prejudice. If the court denies a special motion to strike, the court shall enter a limited judgment denying the motion.

A defendant making a special motion to strike has the initial burden to make a prima facie showing that the plaintiffs claim is of the type described in Oregon statutes. If the defendant meets that burden, the burden shifts to the plaintiff in the action to establish that there is a probability that the plaintiff will prevail on the claim by presenting substantial evidence to support a prima facie case.

Plaintiff is a licensed medical doctor who practiced medicine in association with First Choice Chiropractic clinics. In 2013, defendants filed several claims in federal court naming as defendants First Choice Chiropractic clinics, plaintiff, and several other individuals, based on allegations that the clinics and individual defendants had committed insurance fraud by making false reports of alleged symptoms and exaggerated findings designed to make it appear that the patient either had or continued to have injuries/ symptoms which did not actually exist.

Farmers and plaintiff subsequently settled Farmers’ remaining claims against plaintiff in the underlying action and stipulated that plaintiff would be considered the prevailing party.

On appeal, it is undisputed that plaintiffs claim falls within ORS 31.150(2Xb). The allegations of plaintiffs claim are based solely on written statements and documents provided to the federal court in the context of the underlying action. The only dispute on appeal concerns whether plaintiff has met his burden to present prima facie evidence as to each element of his claim of wrongful use of civil proceedings.
DISCUSSION

One element of the claim of wrongful use of civil proceedings is an absence of probable cause to prosecute the underlying action. “Probable cause” means that the person initiating the underlying action “reasonably believes” that there is a good chance of prevailing, viz., the person “has that subjective belief and that belief is objectively reasonable.” Defendants assert that plaintiff has not sustained his burden to present prima facie evidence that Farmers lacked probable cause to bring the underlying action.

Oregon’s anti-SLAPP statute provides “an expedited procedure for dismissal of certain nonmeritorious civil cases without prejudice at the pleading stage.” [Neumann v. Liles, 358 Or. 706, 723, 369 P.3d 1117 (2016).]

When facts are in dispute, proof of the absence of probable cause in establishing a claim for wrongful use of civil proceeding is a mixed question of law and fact. In the context of the special motion to strike, however, the existence of prima facie proof of the elements of the claim being challenged by the motion is something that the court determines as a matter of law, based on the pleadings and supporting and opposing affidavits stating the facts upon which the liability or defense is based. It is, therefore, not premature for the court to decide whether prima facie evidence of the elements of the claim has been presented before full discovery or for a party to raise the issue on appeal of the denial of a special motion to strike.

Defendants contended that the summary judgment ruling of the federal district court in the underlying action either conclusively establishes that Farmers had probable cause to bring the underlying action or gives rise to a rebuttable presumption of probable cause.

The federal district court concluded that Farmers had demonstrated genuine issues of material fact as to whether plaintiff (1) made material misrepresentations, either knowingly or recklessly, by signing off on falsified chart notes; (2) engaged in a pattern of racketeering by committing indictable acts through wire and mail fraud; (3) engaged in a conspiracy to commit racketeering; and (4) was unjustly enriched by fraudulent claims made to Farmers by falsified chart notes.

The Court of Appeal adopted a categorical rule that the denial of a motion for summary judgment in the underlying litigation conclusively established or created a rebuttable presumption of probable cause. Independent of the federal district court’s summary judgment ruling in the underlying action, there was ample evidence in the record that defendants had probable cause to name plaintiff as a defendant in the underlying action, including affidavits of former clinic employees, who described plaintiffs participation in a scheme to over-treat patients and overbill insurance.

Plaintiff disputed that evidence but has not rebutted it with evidence to support his position.

The Court of Appeal concluded, therefore, that plaintiff did not met his burden to present prima facie evidence of a lack of probable cause, and that the trial court erred as a matter of law in denying defendants’ special motion to strike.

ZALMA OPINION

Insurance companies that proactively file suit against people they believe have perpetrated fraud against them should be commended. However, the insurers bringing such actions – whether direct or under qui tam statutes – must have the courage of their convictions since insurance fraudsters have no morals. In this case, after entering into a settlement with the doctor they faced a suit from the doctor which could have been avoided if they insisted on taking the federal fraud case to trial. Since the USDC refused to grant the doctors summary judgment motion there was obviously probable cause to bring the action.
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(c) 2022 Barry Zalma & ClaimSchool, Inc.

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. He is available at http://www.zalma.com and [email protected].

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Write to Mr. Zalma at [email protected]; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com.

Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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What else you may like…
Videos
Posts
September 18, 2026
Expert May Only Testify to What Experience Supports

Insurance Expert May Not Testify to Speculative and Contains Unsupported Conclusions.

Posted on September 18, 2026 by Barry Zalma

See the full video at and at https://rumble.com/v7fmifw-expert-may-only-testify-to-what-experience-supports.html

In Michele A. Over, and The Estate Of Paul R. Over v. State Farm Mutual Automobile Insurance Company, and State Farm Fire And Casualty Company, Civil Action No. 23-cv-02243-PAB-STV, United States District Court, D. Colorado (September 14, 2026) Michele and Paul Over sued State Farm Fire and State Farm Auto over hail-damage and stolen-vehicle claims.

The operative dispute concerned State Farm Auto’s motion to exclude or limit opinions from plaintiffs’ insurance-industry expert, Aaron Castillo. Castillo.

Law

The proponent of expert testimony must establish by a preponderance of the evidence that an expert is qualified and that the opinions are helpful, sufficiently grounded, and reliably derived and applied. Experience-based opinions must explain how the...

00:03:10
September 17, 2026
Convicted on 29 Tax-Refund-Fraud Counts

150 Months in Prison for Tax Fraud
Post 4846

Posted on September 17, 2026 by Barry Zalma

See the full video at https://lnkd.in/g8rh3JBX and https://lnkd.in/gmkdy-9C, In United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.

FACTS

In United States Of America v. Thomas Addaquay, United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS

Thomas Addaquay controlled United Consolidated Accounting and Business Services (UC), nominally a check-cashing business.

The government proved a three-stage tax-refund scheme that converted the resulting refund checks into usable funds through ...

00:05:23
September 14, 2026
Court Enforces Fifth Amendment & Refuses to Compel Answers

Major Fraud Perpetrator Asserts Fifth Amendment Privilege to Avoid Prosecution

Post 5489

Posted on September 14, 2026 by Barry Zalma

Fraudster Refuses to Answer Questions About His Alleged Fraud

See the full video at https://lnkd.in/gvicAMDr and at https://lnkd.in/gvicAMDr

In Great American Insurance Co. v. Gemstone Property Management, LLC, et al., No. 23-cv-9100 (LJL), United States District Court, S.D. New York (September 8, 2026) Great American Insurance Company alleged that it was defrauded through a scheme in which Subin Associates, LLP recruited individuals to stage construction-site injuries, arranged unnecessary medical treatment and litigation funding, and pursued fraudulent personal-injury claims.

Luis Manuel Garcia Salcedo, resulted in a $6 million settlement. Non-party Jose Hernandez allegedly worked as an assistant manager at Subin, operated Hernandez Associates, and owned litigation-funding companies that shared office space with Subin and provided services to its clients.

After Great American ...

00:05:14
November 09, 2026
Excess Insurers May Face Declaratory Relief and Bad Faith Claims Before Coverage Attaches

Is Exhaustion Required to Seek Declaratory Relief From an Excess Insurer?

Post 4578

Posted on November 9, 2026 by Barry Zalma

In Fox Paine & Company, LLC, et al. v. Twin City Fire Insurance Company et al., S287404, 593 P.3d 832, 593 P.3d 838, 346 Cal.Rptr.3d 541, Supreme Court of California, (July 27, 2026) the Supreme Court noted that Insurance is sometimes procured in a series of layers, with an insured acquiring a primary insurance policy that provides an initial layer of coverage for loss or liability and an excess insurance policy or policies that provide additional coverage in the event the underlying coverage is exhausted. Usually, the first layer of coverage must be exhausted before the excess layers are available to the insured.
Exhaustion

Fox and Paine’s investment-firm dispute generated extensive litigation and competing insurance claims. Their insurance tower consisted of a $10 million primary policy and four $10 million excess layers.

The Fox Parties alleged that insurers paid their rivals, withheld information,...

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November 05, 2026
Convicted of Felony Fraud You Lose the Right to Vote

Payment of Fines & Completion of Probation Reinstates Right to Vote

Post 4576

Posted on November 5, 2026 by Barry Zalma

To Restore Voting Rights The Felon Must Pay Fines of $546.00

In Florida Supreme Court Mediator Ethics Advisory Committee, ETH F-26-377, No. F-26-377 (October 29, 2026) citizen unnamed and to Ron Desantis Governor, Cord Byrd the Secretary of State Florida Division of Elections provided an advisory opinion to a convicted felon about his right to vote:

To: [redacted] We received your request for an advisory opinion. You indicate that you have one or more felony convictions and request whether you are eligible to vote, including whether you have any outstanding legal financial obligations under section 98.0751, Florida Statutes, and, if so, a statement of the amount that must be paid to make you eligible to vote, and an explanation of how the amount was calculated.

The Division hereby responds to your request pursuant to its legal authority under section 106.23(2), Florida Statutes, and Florida ...

November 04, 2026
Castro Valdez Had an Available Administrative Appeal and Failed to Establish a Ground for Excusing

Administrative Review Permits the Agency to Apply its Expertise

Post 4574

In Erwin Jordan Castro Valdez v. Warden, Otay Mesa Detention Center, No. 26-cv-06147-BAS-JLB, United States District Court, S.D. California (October 30, 2026) Castro Valdez, a Cuban national paroled into the United States, was arrested on June 23, 2026, for alleged insurance fraud, grand theft, and making a false report to law enforcement. In his first habeas action, the district court ordered a bond hearing within fourteen days to determine whether the changed circumstances justified revoking his parole.

An Immigration Judge subsequently denied bond because of his pending state criminal case. Castro Valdez filed a second petition under 28 U.S.C. § 2241, challenging that determination and requesting immediate release without first appealing to the Board of Immigration Appeals (BIA).

LAW

According to the supplied text, § 2241 does not expressly require administrative exhaustion, but courts impose exhaustion as a prudential requirement. ...

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