Liars Never Prosper
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Failure to Tell the Truth on an Insurance Application Voids Entire Policy as if it Never Existed
Post 4814
Ms. Stephens demanded that Defendant Great American Assurance Company (“Great American”) provide legal representation for her under an insurance policy (the “Policy”).
In Accent Consulting Group, Incorporated, Brenda Marie Stephens v. Great American Assurance Company – Great American Assurance Company v. Accent Consulting Group, Incorporated, Brenda Marie Stephens, No. 1:22-cv-01767-JMS-CSW, United States District Court, S.D. Indiana, Indianapolis Division (May 20, 2024) resolved the dispute.
The Consumer Complaint
During the first Policy period, in October 2020, Ms. Stephens did a “desktop appraisal” of an Indiana single-family home (the “Property“). A “desktop appraisal” is one that is virtual.
The Insurance Renewal Application
Less than six months after the Complaint and Indiana OAG correspondence, on March 16, 2021, Ms. Stephens applied to renew Accent’s insurance Policy with Great American. The Renewal Application asked about claims. She responded in the negative.
The Complaint Before the Real Estate Appraiser Licensure and Certification Board
The Indiana OAG eventually demanded “disciplinary sanctions.”
The Request for Insurance Coverage
After the filing of the REAB Complaint, Ms. Stephens requested legal representation from Great American. Great American denied the application because Ms. Stephens received the Consumer Complaint in November 2020.
DISCUSSION
Ms. Stephens lied on her Renewal Application that she was not aware of any “[c]omplaint, disciplinary action, investigation or license suspension/revocation by any regulatory authority.”
The Consumer Complaint led directly to the Indiana OAG investigation. Ms. Stephens made a material misrepresentation. Her misrepresentation entitled Great American to rescind the policy.
ZALMA OPINION
When a person misrepresents a material fact on an application for insurance an insurer may rescind the policy from its inception, return the premium and deal with the policy as if it never existed. Ms. Stephens lied on the application and that fact was the basis for the defense of rescission. Rescission is an equitable remedy that concludes it is not fair to require an insurer to defend or indemnify an insured who obtained the insurance by false statements on an application.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Rescission Appropriate When Insured Lies on Application
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Post 4827
Progressive Michigan Insurance Company (Progressive) appealed the order denying its motion for summary disposition and ordering reformation of plaintiff's, Janice Sherman's, automobile insurance policy even when reformation was not requested by Sherman.
In Janice Sherman v. Progressive Michigan Insurance Company and JOHN DOE, No. 364393, Court of Appeals of Michigan (June 20, 2024) the Court of Appeals explained the importance of the equitable remedy of rescission.
BACKGROUND FACTS
On November 12, 2020, Sherman applied to Progressive for a no-fault insurance policy for two vehicles-a 2006 Cadillac DTS sedan and a 1993 Chrysler New Yorker sedan. In the application, she identified her address as 16845 Tremlett Drive, Clinton Township, MI 48035, and confirmed that the ...
More Prosecution is Needed to Deter Insurance Fraud
Post 4826
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Thomas Orville McLaughlin II was convicted of committing a fraudulent insurance act, making a false information, and interfering with law enforcement. He appealed claiming several of the State’s exhibits were improperly admitted and that a defense witness was improperly excluded.
In State of Kansas v. Thomas Orville McLaughlin II, No. 124,221, Court of Appeals of Kansas (June 21, 2024) McLaughlin sought relief from his conviction for insurance fraud.
MCLAUGHLIN REPORTS A HOME BURGLARY AND IS LATER CONVICTED
On August 2, 2016, Thomas McLaughlin reported a burglary. He contacted law enforcement and later spoke to Officer Travis Debarge about the burglary. McLaughlin advised the officer that his storage container had been robbed and three ATVs were missing. The...
How Insurance is Treated in Mass Tort Cases in Bankruptcy Court
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Post 4825
Between 1999 and 2019, approximately 247,000 people in the United States died from prescription-opioid overdoses. Respondent Purdue Pharma sits at the center of that crisis. Owned and controlled by the Sackler family, Purdue began marketing OxyContin, an opioid prescription pain reliever, in the mid-1990s. After Purdue earned billions of dollars in sales on the drug, in 2007 one of its affiliates pleaded guilty to a federal felony for misbranding OxyContin as a less-addictive, less-abusable alternative to other pain medications. Thousands of lawsuits followed. Purdue Pharma filed for bankruptcy and attempted to protect the Sackler family from individual tort actions.
Fearful that the litigation would eventually impact them directly, the Sacklers initiated a ...
The Duties of the Public Adjuster
An article on the Duties of Public Adjusters where you can read a part of the article and if you subscribe to Excellence in Claims Handling you can read the full article.
Chutzpah From Convicted Dentist
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Post 4817
THE LICENSE REVOCATION
The Board of Dental Examiners revoked Seth Lookhart’s dental license after he was convicted of dozens of crimes perpetrated in furtherance of a fraudulent scheme of staggering proportions that jeopardized the health and safety of his patients. Lookhart appealed the Board’s revocation of his license, arguing that his punishment was inconsistent with past Board decisions. On appeal, the superior court concluded that the Board properly exercised its discretion by revoking Lookhart’s dental license.
In a case of Chutzpah (unmitigated gall) called Seth Lookhart v. State Of Alaska, Division Of Corporations, Business, & Professional Licensing, Board Of Dental Examiners, No. S-18466, No. 7702, Supreme Court of Alaska (May 24, 2024) he asked for his license to practice dentistry from jail, the time of the Supreme Court was ...
After Health Provider Entity's Management is Arrested for Fraud Reporting Suspicion to Beneficiaries is not Defamation
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BrainBuilders, LLC appealed from an order granting summary judgment in favor of defendants Optum, Inc., et al (collectively, defendants) in Brainbuilders, LLC v. Optum, Inc., Optum Services, Inc., et al, No. A-0621-22, Superior Court of New Jersey, Appellate Division (April 19, 2024) resolved claims of defamation.
FACTS
Letters dated July 25, 2017 and August 2017 sent by the Optum entities to BrainBuilders' patients following an investigation into purported fraud by individuals associated with BrainBuilders.
BrainBuilders provides healthcare services to children on the autism spectrum. As an out-of-network or non-participating healthcare provider, BrainBuilders receives reimbursement for claims only if a patient's health ...
