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August 05, 2022
SMALL FRAUD DEFEATS CLAIM

WITHDRAWAL OF FRAUDULENT PORTION OF CLAIM DOES NOT ELIMINATE FRAUD

Posted on August 5, 2022 by Barry Zalma

See the full video at https://rumble.com/v1euzub-small-fraud-defeats-claim.html and at

Star Casualty Insurance Company appealed a summary final judgment and attorney fee award entered in favor of Gables Insurance Recovery, Inc., as assignee of Star Casualty’s insured, Ana Maria Correa. Star Casualty alleges that the trial court erred by granting summary judgment due to genuine issues of material fact concerning whether Correa’s medical bills for diagnostic imaging procedures were medically necessary and related to the underlying accident for purposes of section 627.736, Florida Statutes. Additionally, Star Casualty alleged that the trial court reversibly erred by striking four affirmative defenses from its amended answer that could have exempted it from liability for the claim.

In Star Casualty Insurance Company v. Gables Insurance Recovery, Inc., a/a/o Ana Maria Correa, Nos. 3D21-0033, 3D21-0377, Florida Court of Appeals, Third District (July 20, 2022) the Court of Appeal was faced with an attempt to avoid the consequences of being caught on a partial fraud only to have the plaintiff withdraw the claim and contend the rest of the claim was honest.
FACTS

Correa was involved in a vehicle accident on January 19, 2009 and sustained injuries. Subsequently, Correa received diagnostic imaging procedures costing a total of $3,375.00, and Gables, as her assignee, submitted a claim to the insurer for reimbursement of eighty percent of the reasonable medical expenses pursuant to section 627.736(1)(a). After the insurer paid only $400.71 and denied the remainder of the claim, Gables sued to recover the remaining costs.

Star Casualty proffered an affidavit by Edward A. Dauer, M.D., opining that the charges were not medically necessary or related to the accident. This affidavit also noted that three of the imaging procedures performed on Correa appeared to have been improperly upcoded or unbundled with other procedures.

Based on Dr. Dauer’s affidavit, Star Casualty amended its answer to add affirmative defenses asserting that it was exempt from paying the entire because the three charges were fraudulent, upcoded, or unbundled. Prior to the summary judgment hearing, Gables voluntarily withdrew its claims for reimbursement of the three charges on which Star Casualty based its affirmative defenses. Gables then moved to strike the defenses from Star Casualty’s answer, alleging that the withdrawal of the claims for those three charges made the corresponding defenses irrelevant and moot.

The trial court granted partial summary judgment on the relatedness and necessity issues and granted Gables’ motion to strike the affirmative defenses based on plaintiff’s withdrawal of the part of the claim found to be fraudulent.
ANALYSIS

The Court of Appeal noted that the trial court erred by finding that Dr. Dauer’s affidavit did not create a genuine issue of material fact. An issue of fact is “genuine” for summary judgment purposes when a reasonable jury could potentially return a verdict in favor of the non-moving party. A factual dispute is “material” when it may affect the outcome of the case under the applicable substantive law.

The sole basis for Star Casualty’s assertions of a factual dispute as to relatedness and necessity comes from Dr. Dauer’s affidavit. In the affidavit, Dr. Dauer opined that the images conducted were “not medically necessary and not related to the accident of 1/19/2009” because “there were no objective findings and documentation to warrant the ordering of the x-rays in this case.” Because these findings created a genuine issue of material fact as to relatedness and necessity, the Court of Appeal concluded that the summary judgment must be reversed and remanded.

On remand, the trial court’s order striking Star Casualty’s affirmative defenses was reversed, as the defenses were not wholly irrelevant to the claims in the operative complaint. An affirmative defense may not be stricken merely because it appears to a judge that the defendant may be unable to produce evidence at trial to sustain such a defense.

The trial court’s reasoning for striking the defenses was based solely on the fact that the claims for reimbursement of the charges relating to those defenses had been voluntarily withdrawn. Conversely, Star Casualty claims that because the defenses asserted fraud, upcoding, and unbundling, such defenses pertained to the remaining charges.

Any insurance fraud voids all coverage. arising from the claim related to such fraud under the personal injury protection coverage of the insured person who committed the fraud, irrespective of whether a portion of the insured person’s claim may be legitimate.

An insurer is not required to pay a claim or charges that are upcoded, or that is unbundled when such treatment or services should be bundled and Florida statutes relieve both the insurer and the insured from paying the claims of any person who knowingly submits a false or misleading statement relating to the claim or charges.

Evidence of insurance fraud necessitated summary judgment in favor of an insurer to the entire PIP claim comprising two separate and distinct claims for medical expenses and lost wages, since allowing for payment of one portion of a claim would nonsensically allow an insured to engage in a cost-benefit analysis with respect to the contemplation of such fraud.
ZALMA OPINION

A party seeking insurance benefits may not commit a little fraud any more than he or she can be a little dead. When caught in fraud, as evidenced by an expert, the fraud attempt cannot be ignored by simply deleting it from the claim since the insurer, by proving some fraud, will convince the trier of fact that the entire claim was fraudulent or that the attempted fraud voided the right to the benefits of the policy. Attempted fraud whether large of small; whether related to one part of a claim or another.
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Random Thoughts on Insurance Volume XIV: A Collection of Blog Posts from Zalma on Insurance —
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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].

Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe.

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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/

00:09:22
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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.

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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 ...

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June 02, 2025
Zalma’s Insurance Fraud Letter – June 1, 2025

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

See the full video at https://lnkd.in/gw-Hgww9 and at https://lnkd.in/gF8QAq4d, and at https://zalma.com/blog plus more than 5050 posts.

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 ...

00:08:42
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May 30, 2025
Plain Language of Policy Enforced

No Coverage if Home Vacant for More Than 60 Days

Failure to Respond To Counterclaim is an Admission of All Allegations

Post 5085

See the full video at https://lnkd.in/gbWPjHub and at https://lnkd.in/gZ9ztA-P, and at https://zalma.com/blog plus more than 5050 posts.

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 ...

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May 15, 2025
Zalma's Insurance Fraud Letter - May 15, 2025

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 ...

May 15, 2025
CGL Is Not a Medical Malpractice Policy

Professional Health Care Services Exclusion Effective

Post 5073

See the full video at https://lnkd.in/g-f6Tjm5 and at https://lnkd.in/gx3agRzi, and at https://zalma.com/blog plus more than 5050 posts.

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 ...

April 30, 2025
The Devil’s in The Details

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...

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