RTFP – Court Reads the Full Policy
Barry Zalma
Nov 17, 2023
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Mark Scafella appealed the order granting Erie Insurance Company (“Erie”) and Stanley Geho’s summary judgment in the underlying declaratory judgment action. In Mark Scafella v. Erie Insurance Company and Stanley Geho, No. 22-ICA-173, West Virginia Intermediate Court of Appeals (November 14, 2023) the West Virginia Court of Appeals resolved the dispute by reading the full policy.
FACTUAL BACKGROUND
The insurance claims Scafella made following that fire loss did not provide the result he desired and litigation followed.
THE POLICY
The property was insured under a homeowner’s policy of insurance issued by Erie (“policy”).
The the policy contained a standard business pursuits exclusion, which excluded loss to property “1. used in whole or in part for “business” purposes …; or 2. used to store “business” property.”
It was undisputed that Mr. Scafella chose the insurance quote that did not include the incidental farming endorsement, a less costly option. It is further undisputed that Mr. Scafella averred that he did not conduct “any business or occupational pursuits at the premises.”
Mr. Scafella began operating a business out of the milk house contrary to the statements on the application and that Olivia’s, LLC (“Olivia’s”), was a retail store selling meat, cheese, and sandwiches.
THE CLAIMS
The Court of Appeals concluded that the large barn area where the fire occurred and the milk house (where Mr. Scafella operated Olivia’s) are the same structure. In fact, when providing a recorded statement to Erie after the fire loss, Ms. Smith identified the barn and the milk house as being part of one building.
ZALMA OPINION
When a person is given a choice of available coverages and chooses the one less expensive he or she is gambling that future losses will fit within the lesser coverages. If, in addition the prospective insured misrepresents the facts at the site of loss to obtain the less expensive coverage the insured is committing fraud. After the loss Scafella attempted to change the policy he purchased into the policy he refused to pay for, with multiple legal machinations that the courts of West Virginia refused to honor. The moral: always tell the truth to your prospective insurer and never buy a policy that does not provide coverage for the risks the property faces.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
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Montana County Attorney Admits to Insurance Fraud & Is Only Suspended from Practice for 60 Days
Post 5251
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A Lawyer Who Commits Insurance Fraud and Pleas to a Lower Charge Only Suspended
In The Matter Of: Naomi R. Leisz, Attorney at Law, No. PR 25-0150, Supreme Court of Montana (December 23, 2025) the Montana Office of Disciplinary Counsel (ODC) filed a formal disciplinary complaint with the Commission on Practice (Commission) against Montana attorney Naomi R. Leisz.
On September 25, 2025, Leisz tendered a conditional admission and affidavit of consent. Leisz acknowledged the material facts of the complaint were true and she had violated the Montana Rules of Professional Conduct as alleged by ODC.
ADMISSIONS
Leisz admitted that in April 2022, her minor son was involved in a car accident in which he hit a power pole. Leisz’s son ...
Montana County Attorney Admits to Insurance Fraud & Is Only Suspended from Practice for 60 Days
Post 5251
Read the full article at https://lnkd.in/gnBaCjmv, see the video at https://lnkd.in/gfpVsyAd and at https://lnkd.in/gC73Nd8z, and at https://zalma.com/blog plus more than 5250 posts.
A Lawyer Who Commits Insurance Fraud and Pleas to a Lower Charge Only Suspended
In The Matter Of: Naomi R. Leisz, Attorney at Law, No. PR 25-0150, Supreme Court of Montana (December 23, 2025) the Montana Office of Disciplinary Counsel (ODC) filed a formal disciplinary complaint with the Commission on Practice (Commission) against Montana attorney Naomi R. Leisz.
On September 25, 2025, Leisz tendered a conditional admission and affidavit of consent. Leisz acknowledged the material facts of the complaint were true and she had violated the Montana Rules of Professional Conduct as alleged by ODC.
ADMISSIONS
Leisz admitted that in April 2022, her minor son was involved in a car accident in which he hit a power pole. Leisz’s son ...
Insurer’s Exclusion for Claims of Assault & Battery is Effective
Post 5250
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Bar Fight With Security is an Excluded Assault & Battery
In The Cincinnati Specialty Underwriters Insurance Company v. Mainline Private Security, LLC, et al., Civil Action No. 24-3871, United States District Court, E.D. Pennsylvania (December 16, 2025) two violent attacks occurred in Philadelphia involving young men, Eric Pope (who died) and Rishabh Abhyankar (who suffered catastrophic injuries). Both incidents involved security guards provided by Mainline Private Security, LLC (“Mainline”) at local bars. The estates of the victims sued the attackers, the bars, and Mainline for negligence and assault/battery. The insurer exhausted a special limit and then denied defense or indemnity to Mainline Private Security.
INSURANCE COVERAGE
Mainline had purchased a commercial ...
Court Must Follow Judicial Precedent
Post 5252
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Insurance Policy Interpretation Requires Application of the Judicial Construction Doctrine
In Montrose Chemical Corporation Of California v. The Superior Court Of Los Angeles County, Canadian Universal Insurance Company, Inc., et al., B335073, Court of Appeal, 337 Cal.Rptr.3d 222 (9/30/2025) the Court of Appeal refused to allow extrinsic evidence to interpret the word “sudden” in qualified pollution exclusions (QPEs) as including gradual but unexpected pollution. The court held that, under controlling California appellate precedent, the term “sudden” in these standard-form exclusions unambiguously includes a temporal element (abruptness) and cannot reasonably be construed to mean ...
Lack of Jurisdiction Defeats Suit for Defamation
Post 5250
Posted on December 29, 2025 by Barry Zalma
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He Who Represents Himself in a Lawsuit has a Fool for a Client
In Pankaj Merchia v. United Healthcare Services, Inc., Civil Action No. 24-2700 (RC), United States District Court, District of Columbia (December 22, 2025)
FACTUAL BACKGROUND
Parties & Claims:
The plaintiff, Pankaj Merchia, is a physician, scientist, engineer, and entrepreneur, proceeding pro se. Merchia sued United Healthcare Services, Inc., a Minnesota-based medical insurance company, for defamation and related claims. The core allegation is that United Healthcare falsely accused Merchia of healthcare fraud, which led to his indictment and arrest in Massachusetts, causing reputational and business harm in the District of Columbia and nationwide.
Underlying Events:
The alleged defamation occurred when United ...
Zalma’s Insurance Fraud Letter
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ZIFL Volume 29, Issue 24
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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/
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Merry Christmas & Happy Hannukah
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