Statute Limited to Acts of Insured Cannot be Used Against Insurer
Barry Zalma
Mar 21, 2024
Read the full article at https://lnkd.in/gdxBjKHh and see the full video at https://lnkd.in/gfssd7FU and at https://lnkd.in/gwFRXJGS and at https://zalma.com/blog plus more than 4750 posts.
Insured Seeks to Impose Damages on Insurer under the Fraud Act
Post 4759
Losses claimed under a policy of insurance issued to Plaintiff Volunteer Management & Development Company (“Volunteer”) by Defendant State Auto Property & Casualty Insurance Co. (“State Auto”) resulted in a suit where Volunteer claims breach of contract and insurance fraud against State Auto and filed a petition to compel appraisal and appoint umpire. State Auto moved to dismiss the claims under the Insurance Fraud Act, “agency,” and punitive damages.
In Volunteer Management & Development Company, Inc. v. State Auto Property & Casualty Insurance Co., No. 1:23-cv-00041, United States District Court, M.D. Tennessee, Columbia Division (March 7, 2024) resolved the claims.
BACKGROUND
To survive a motion to dismiss, a complaint must contain sufficient factual allegations, accepted as true, to state a claim for relief that is plausible on its face. A claim has facial plausibility when the plaintiff pleads facts that allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.
When a court reviews a motion to dismiss, the court construes the complaint in the light most favorable to the plaintiff, accepts its allegations as true, and draws all reasonable inferences in favor of the plaintiff. Thus, dismissal is appropriate only if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.
ANALYSIS
Plaintiff asserted a claim for insurance fraud under Tenn. Code Ann. § 56-53-103(a)(1). Defendant seeks dismissal of that claim because the cited statute applies only to actions of “an insured.” Defendant, as the insurer, contends it cannot violate that statutory provision.
PLAINTIFF MAY NOT MISLEAD COURT BY IGNORING LIMITATION IN STATUTE
In response, Plaintiff quoted the same statute, but omits the operative phrase, “by or on behalf of an insured,” effectively changing the scope of that statute so that its claim is cognizable.
The Court began, as it must, with the plain language of the statute. In this narrow respect, Plaintiff’s Response is correct. Clear and unambiguous statutes will be enforced according to their clear terms. As Plaintiff also acknowledges, but fails to actually do in its response, that every word of the statute will be given effect. The statute only applies to insureds and cannot apply to an insurer.
With regard to an award of punitive damages, Defendant is correct that punitive damages are generally not available in a breach of contract case.
Defendant’s Motion to Dismiss was granted as to the claim for insurance fraud under Tenn. Code Ann. § 56-53-103(a)(1).
ZALMA OPINION
A plaintiff should never lie to a court. When the insured acknowledged that the statute only applies to fraud by insureds on appeal it tried to sneak into a fraud case against State Auto by not fully quoting the statute. It didn’t work. The fraud statute is limited to fraud by insureds and there is no way it could be applied against an insurer. This was not even a good try, it was an attempt to defraud the court.
(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.
Subscribe to my substack at https://lnkd.in/gcZKhG6g
Go to X @bzalma; Go to Newsbreak.com https://lnkd.in/g8azKc34; Go to Barry Zalma videos at Rumble.com at https://lnkd.in/gV9QJYH; Go to Barry Zalma on YouTube- https://lnkd.in/g2hGv88.
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Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
The Largest Residential Burglary of All Time
Post 5407
Fraud & the Fear of Bad Faith Suits
Posted on July 22, 2026 by Barry Zalma
See the full video at https://lnkd.in/gWQQEySW and at https://lnkd.in/gyhdK6wv
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help 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.
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help 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.
After ...
Communications with Arson Investigation is Privileged
Post 5488
Posted on September 11, 2026 by Barry Zalma
ACE Was Not Required To Produce Any Disputed Document Because Each Was Protected By The Attorney-Client Privilege, or The Work-Product Doctrine.
See the full video at and at https://rumble.com/v7fbzvo-arson-for-profit-is-ground-to-deny-claim.html
In Rubesne Resources LLC, a Colorado Limited Liability Company v. ACE Property And Casualty Insurance Company, a Foreign Corporation, Civil Action No. 1:24-cv-02300-DDD-SBP, United States District Court, D. Colorado (August 30, 2026) Rubesne Resources LLC sought insurance coverage from ACE Property and Casualty Company after a January 5, 2024 fire destroyed its business.
South Metro Fire Rescue classified the ignition as intentional, and ACE’s retained expert concluded that gasoline had been poured in multiple areas and ignited. ACE retained coverage and subrogation counsel, National Subrogation Services, and a cause-and-origin expert ...
Arson for Profit is Ground to Deny Claim
Posted on September 11, 2026 by Barry Zalma
Communications with Arson Investigation is Privileged
Post 5488
ACE Was Not Required To Produce Any Disputed Document Because Each Was Protected By The Attorney-Client Privilege, or The Work-Product Doctrine.
See the full video at and at https://rumble.com/v7fbzvo-arson-for-profit-is-ground-to-deny-claim.html
In Rubesne Resources LLC, a Colorado Limited Liability Company v. ACE Property And Casualty Insurance Company, a Foreign Corporation, Civil Action No. 1:24-cv-02300-DDD-SBP, United States District Court, D. Colorado (August 30, 2026) Rubesne Resources LLC sought insurance coverage from ACE Property and Casualty Company after a January 5, 2024 fire destroyed its business.
South Metro Fire Rescue classified the ignition as intentional.
After reviewing the disputed documents in camera, the court found that each was protected.
LAW
Colorado Revised Statutes § 10-4-1003 requires ...
Referral of Claims to its SIU Is Not Bad Faith
Post 5487
Posted on September 10, 2026 by Barry Zalma
In WIZ Collision, LLC, on behalf of itself and as assignee of Jawara Small, Chester Street LLC, and Aziz Brooks v. GEICO Corporation, No. 25-cv-4201 (KAM)(JAM), United States District Court, E.D. New York (August 28, 2026) Wiz Collision, a New York City auto-body shop, regularly repaired vehicles and submitted insurance claims for customers. It alleged that GEICO repeatedly approved claims and repairs, then referred certain claims to its Special Investigations Unit, stopped issuing payments, and delayed resolution despite ultimately finding no fraud.
Wiz Collision sued on its own behalf and as purported assignee of three customers, asserting contract, good-faith, consumer-protection, and injunctive claims. GEICO removed the case and moved to dismiss under Rule 12(b)(6).
LAW
Under Rule 12(b)(6), a complaint must plead facts supporting a facially plausible claim. Article III standing requires a concrete injury, ...
