Frivolous Litigation and Frivolous Appeal Causes Default to Be Entered

Barry Zalma
Feb 28, 2024

Read the full article at https://lnkd.in/gPeferTP, sd at https://lnkd.in/gf-priVr and at https://zalma.com/blog plus more than 4700 posts.

Post 4744

Read the full article at https://lnkd.in/gPeferTP, sd at https://lnkd.in/gf-priVr and at https://zalma.com/blog plus more than 4700 posts.

PROOF OF FRAUDULENT CLAIM REQUIRED SUIT

Transamerica Life Insurance Company (“Transamerica”) sued Akop Arutyunyan and his daughter Anahit Arutyunyan for allegedly engaging in a conspiracy to defraud Transamerica into paying benefits under a long-term care insurance policy.

In Transamerica Life Insurance Company v. Akop Arutyunyan; Anahit Arutyunyan, No. 22-55199, United States Court of Appeals, Ninth Circuit (February 22, 2024) Transamerica sued to avoid paying benefits to a fraudulent disability claim.

FACTS

In March 2016, Transamerica issued a life insurance policy to Anahit, which covered her father, Akop, as the “Insured.” The policy included a “Comprehensive Long Term Care Insurance Rider,” that generally agreed to “pay a Monthly Long Term Care Benefit when the Insured has incurred expenses for Qualified Long Term Care Services.”

Akop filed a claim for benefits under the rider. Transamerica, unsure about the claim, conducted surveillance of Akop and an inconclusive IME and paid while conducting further surveillance showed that Akop was continuing to engage in activities that were inconsistent with his claimed level of impairment.

ABUSE OF TRIAL COURT ORDERS

Concluding that Defendants had repeatedly failed to obey court orders, the Ninth Circuit found it was abundantly clear appellants arguments were wholly without merit.

The multiple misstatements by counsel requred an order to show cause that may ultimately call for the application of “Hanlon’s Razor”: “Never attribute to malice that which is adequately explained by stupidity.”

The Ninth Circuit found a default judgment as a sanction was appropriate and that the appeal was frivolous.

ZALMA OPINION

Transamerica was the victim of a blatant fraud. Surveillance established that the disability claimed by the defendant did not exist and so Transamerica sued to end the payment of benefits to the defendants only to be met with recalcitrant defendants and defense lawyer who refused to obey any court order, lied to the trial court and to the Ninth Circuit and may find criminal charges pending and a law license in jeopardy. The actions of Transamerica actions should be emulated by every insurer faced with a fraudulent claim and the California Bar should take action against the lawyer if he cannot show good cause for his actions and the US Attorney should consider the criminal conduct.
Transcript
This is Barry Zalma speaking for Claims School Incorporated's blog, Zalma on Insurance.
Today we're going to speak about why ignoring a court order is done at the peril of the client and the lawyer and why a frivolous litigation and frivolous appeal causes a default judgment to be entered against the parties.
Proof of fraudulent claim is
Received by Transamerica Life Insurance Company required it to litigate with its insurers.
Transamerica Life Insurance Company sued a cop, Artunian, and his daughter, Anahit Artunian, for allegedly engaging in a conspiracy to defraud Transamerica into paying benefits under a long-term care insurance policy.
In Transamerica Life vs. the Artunians, the United States Court of Appeal for the Ninth Circuit on February 22, 2024 sued to avoid paying benefits to a fraudulent disability claim.
In March of 2016, Transamerica issued a life insurance policy to Anahit
which covered her father ACOP as the insured.
The policy included a comprehensive long-term care insurance writer under which Transamerica generally agreed to pay a monthly long-term care benefit when the insured is incurred expenses for qualified long-term care services.
One of the requirements for triggering this long-term care coverage was that the insured qualified as a chronically ill individual.
In December of 2018, ACOP filed a claim for benefits under the Rider alleging that he had torn his left rotator cuff and suffered from spinal arthritis.
The following month, a nurse conducted an on-site assessment of ACOP at his home in order to determine whether ACOP was eligible to receive benefits under the Rider.
Anahit also provided written confirmation to Transamerica that
He had hired Mr. Brinskian as his caregiver.
In light of the information provided by the defendants, Transamerica approved the claim and began paying ACOP benefits.
Over the next several months, because of suspicions, Transamerica conducted surveillance of ACOP in order to determine whether the representations made in support of the claim for benefits were accurate.
The surveillance revealed that Priskin never visited ACOP's home, in spite of the fact that on each date of surveillance ACOP represented to Transamerica and signed and certified proof-of-law statements that he received between three and eight hours of care services from Mr. Priskin in his home.
Based on the initial surveillance, Transamerica invoked its rights under the rider to require ACOP to submit to an independent medical exam.
The doctor who performed the evaluation, Dr. Molinar, examined ACOP in April of 2019, and because the IME determination was sufficient to support ACOP's continuing claimed eligibility for long-term care benefits, Transamerica continued paying benefits to him.
Further surveillance allegedly confirmed that Pritzkin did not provide care to ACOP on the dates represented by ACOP to Transamerica.
Transamerica's further surveillance also purportedly showed that ACOP was continuing to engage in activities that were inconsistent with this claimed level of impairment.
Transamerica sued seeking an order that it did not owe ACOP.
The court concluding that the defendants had repeatedly failed to obey court orders related to the discovery process, the district court ultimately entered default judgment against the Artoonians.
Defendants have timely appealed the judgment, but the Ninth Circuit concluded that their arguments in the court
We're Frivolous.
Moreover, when called upon to defend his disregard of the district court's orders, defendants counseled an oral argument in the court, made multiple blatantly false statements about his and his clients' responses to the court's orders.
In May of 2020, Transamerica sued the defendants, alleging that they had obtained insurance benefits through fraud.
Specifically, Transamerica asserted monetary claims based on fraud, civil theft, civil conspiracy, and restitution.
The defendants filed their response to the order to show cause on September 13.
Three days late, defendants challenged the district court's ultimate decision
To Enter a Default Judgment as a Sanction for a Defendant's Violation of Court Orders.
The District Court applied a measured and gradational approach in responding to the defendant's noncompliance with the court's order and the local rules.
The Ninth Circuit found it is abundantly clear that the result is obvious and the appellant's arguments were wholly without merit.
Moreover, at oral argument for the appeal, Defendant's counsel repeatedly minimized, if not misrepresented, his lack of compliance with the district court's orders in this case.
For example, at one point during argument, counsel asserted that, quote, in terms of our compliance with the court's order, at no point did we ignore or flout our responsibility to respond to discovery, close quote.
It may well be that when it comes to evaluating these multiple misstatements, this case may ultimately call for the application of what has been called, quote, Hanlon's razor, close quote, which provides, quote, never attribute to malice that which is adequately explained by stupidity, close quote.
In view of the frivolous nature of the appeal,
and the multiple misstatements made by counsel at oral argument.
The Ninth Circuit ordered the defendants and their counsel by separate order filed contemporaneously to show cause why the court should not impose sanctions against them.
Defendants' counsel was likewise ordered to show cause why this court should not refer the matter to the State Bar of California.
The Ninth Circuit upheld the District Court's order deeming defendants' objections to certain items of discovery to be forfeited in requiring production of those items.
By failing to present any sufficient argument in their opening brief as to why the District Court's stated grounds for that decision were erroneous, defendants forfeited any challenge to that order on appeal, and in addition, it held that the District Court did not abuse its discretion in entering a default judgment as sanctions for defendants' violation of the Court's order.
Finally, the Ninth Circuit held that the appeal was and is frivolous.
In my opinion, Transamerica was the victim of a blatant fraud.
Surveillance established that the disability claimed by the defendant did not exist and so Transamerica, after giving him every benefit of the doubt, sued to end the payment of benefits to the defendants and for reimbursement and damages only to be met with a recalcitrant defendants and defense lawyer
who refused to obey any court order, lied to the trial court and to the Ninth Circuit, and may find criminal charges pending and a law license in jeopardy.
The actions of Transamerica should be emulated by every insurer faced with a fraudulent claim, and the California Bar should take action against the lawyer if he cannot show good cause for his actions, and the U.S.
Attorney should consider the criminal conduct.
Of the Defendants.
This video was adapted from my blog, Zalma on Insurance, which is available free to anyone who clicks on the URL zalma.com slash blog and subscribes.
If you subscribe, you will be provided with notice of every blog post, usually five, sometimes six a week, and access to the more than 4,700 blog postings.
You can also subscribe to these videos
at rumble.com and on youtube.com and if you do I'd appreciate it if you click on the thumbs up button at rumble or the like button on youtube and please tell your friends and colleagues about the blog and the videos and let them also subscribe to help them in their profession
And if you're interested in more detail about insurance, insurance claims, insurance fraud and insurance law, please consider for a very small fee subscribing to my Substack publication.
Thank you for your attention.

(c) 2024 Barry Zalma & ClaimSchool, Inc.

Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.

Subscribe to my substack at https://lnkd.in/gcZKhG6g

Go to: X @bzalma; Rumble.com at https://lnkd.in/gV9QJYH; the Insurance Claims Library – https://lnkd.in/gwEYk

Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.

Subscribe to my substack at https://lnkd.in/gcZKhG6g

Go to: X @bzalma; Rumble.com at https://lnkd.in/gV9QJYH

The Insurance Claims Library – https://lnkd.in/gwEYk