Legal Conclusions are Not Allegations of Fact
Barry Zalma
Feb 12, 2024
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Post 4734
Read the full article at https://lnkd.in/g5rYCgH4 and see the full video at https://lnkd.in/gA4uUAj3 and at https://lnkd.in/g9BysvGz and at https://zalma.com/blog plus more than 4700 posts.
Zox LLC (“Zox”) appealed the district court’s grant of summary judgment in favor of West American Insurance Company. Zox contended the district court erred because the Zox Brothers sought damages for three potentially covered claims: (1) malicious prosecution; (2) disparagement; and (3) use of an “advertising idea.”
In ZOX LLC, a California Limited Liability Company, v. West American Insurance Company; et al., No. 23-55125, USCA, 9th (February 9, 2024) the dispute was resolved.
ANALYSIS
Under California law, a liability insurer owes a broad duty to defend its insured against claims that potentially seek damages within the coverage of the policy. Coverage turns not on the technical legal cause of action pleaded by the third party but on the facts alleged.
While the duty to defend is broad, an insurer will not be compelled to defend its insured when the potential for liability is tenuous and farfetched.
The Zox Brothers did not plead facts, nor provide extrinsic evidence, to satisfy any of the requisite elements of a malicious prosecution claim. The Pleadings did not trigger coverage for malicious prosecution.
Disparagement
The Zox Brothers must plead facts to show a false or misleading statement that clearly derogates that product or business.
Appropriation of Advertising Ideas
Zox Brothers triggered coverage by claiming that Zox appropriated their “advertising ideas” by using the “Zox” name and “passing off” their products as Zox Brothers’ goods. The district court did not err in finding that the Pleadings did not trigger coverage for a “use of another’s advertisement” claim.
CONCLUSION
For the reasons stated by the Ninth Circuit, outlined above, it found that West American did not have a duty to defend or indemnify Zox in the Zox Litigation because, there was no duty to defend.
Where there is a duty to defend, there may be a duty to indemnify; but where there is no duty to defend, there cannot be a duty to indemnify.
ZALMA OPINION
The Ninth Circuit applied the clear and unambiguous language of the policy to the “facts” alleged; found that the allegations were mostly speculative or based on legal conclusions, failure to allege facts to support the three claims failed and, therefore, the Ninth Circuit had no choice but to affirm the summary judgment find no duty to defend nor a duty to indemnify.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
follow me @bzalma on X;Subscribe to my substack at https://lnkd.in/gcZKhG6g; videos at Rumble.com at https://lnkd.in/gV9QJYH; Insurance Claims Library – https://lnkd.in/gwEYkxD.
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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.
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Post 5489
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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.
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Plaintiff’s Reading of the Policy is Plaintiff’s Reasonable Allegations
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Post 4868
CLASS ACTION THAT STATES A SIMPLE CLEAR AND PLAUSIBLE CAUSE OF ACTION SURVIVES
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BLOCKCHAIN FRAUD
Mr. Madden was more than football. He was working to establish a program called “Fraud Protection Systems, Methods, and Computer Programs for Blockchain Financial Transactions.”
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The Examiner rejected claims several numbered claims under 35 U.S.C. § 101 as directed to an abstract idea without significantly more.
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Sovereign Immunity Defeats Suit Against Police Officers
Post 4866
Posted on October 21, 2026 by Barry Zalma
In Chad Lightfoot, et al. v. Progressive Direct Insurance Company, et al., Civil Action No. 26-434, United States District Court, E.D. Louisiana (October 9, 2026) Chad Lightfoot was involved in an Orleans Parish automobile accident in 2011 and filed claims with several insurers, including Progressive.
After a related civil dispute, Progressive counsel allegedly submitted a false affidavit stating that Lightfoot had fraudulently received a $50,000 payment. A New Orleans police detective relied on the affidavit to obtain an arrest warrant, and Louisiana State Police Lieutenant Alan Arcana allegedly reported that Lightfoot had received the payment. Lightfoot was arrested in 2015 and charged with theft, insurance fraud, and perjury.
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