GEICO Continues it Proactive Actions Against Insurance Fraud
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Post 4821
Insurers have found that states, like New York, will do little or nothing to deter insurance fraud. Determined to protect its assets and its insureds, many GEICO brand insurance companies have acted proactively against people and health care providers who are attempting to defraud them and their insureds. In Government Employees Insurance Company, et. al. v. Colin Clarke, M.D., Colin Clarke Md P.C., Svetlana Kovaleva a/k/a Melana Kay, Medical Evaluation Services & Billing, Inc., Medical Consultation Services & Billing, Inc., and John Doe Defendants, No. 1:23-CV-04605 (FB) (SJB), United States District Court, E.D. New York (June 20, 2024) the fraud perpetrators attempted to defeat GEICO’s RICO action by counterclaiming that GEICO committed fraud.
GEICO moved to dismiss the Clarke Defendants’ counterclaims and to strike twelve of their affirmative defenses.
BACKGROUND
GEICO sued Defendants for submitting allegedly fraudulent no-fault insurance claims to GEICO for services performed at Dr. Clarke’s healthcare practice, among other things. It brought claims for civil RICO violations, common law fraud, and unjust enrichment. GEICO also seeks a declaratory judgment that the Clarke Defendants have no right to receive payment for any pending bills submitted to GEICO.
In response, the Clarke Defendants counterclaimed against GEICO on allegations that GEICO has – through its insurance-claim verification process, committed fraud by reporting Dr. Clarke to the New York State Department of Health, and by bringing two RICO cases against Dr. Clarke, including this lawsuit.
The Clarke Defendants counterclaimed for: (i) common law fraud; (ii) aiding and abetting fraud; (iii) breach of the covenant of good faith and fair dealing; (iv) violation of N.Y. Gen. Bus. Law § 349; (v) abuse of process; (vi) and attorneys’ fees. GEICO moved to dismiss all counterclaims and to strike twelve of the Clarke Defendants’ affirmative defenses.
DISCUSSION
Under New York law, the elements of a common law fraud claim are: (i) material misrepresentation of a fact, (ii) knowledge of its falsity, (iii) intent to induce reliance, (iv) justifiable reliance by the claimant, and (v) damages.
The fraudulent conduct the Clarke Defendants allege is simply the non-performance of GEICO’s contractual duties to process no-fault and regarding the alleged thefts committed by the Kay Defendants, and GEICO’s alleged non-disclosure of those thefts. Since the Clarke Defendants’ conclusory allegations are insufficient to plead a claim for fraud and because vague and conclusory allegations that a defendant committed theft are insufficient to plead a cognizable fraud claim.
THE COVENANT OF GOOD FAITH AND FAIR DEALING
GEICO argued that the Clarke Defendants’ breach of contract claim must be dismissed because they have not alleged sufficient details about the underlying contracts or how their implicit duties were violated.
The Clarke Defendants conclusory allegations that they were assigned the contractual rights that GEICO owed to its insureds without any specific facts about those policies, when they were assigned, who they belonged to, what terms they contained, or on what basis GEICO denied claims submitted pursuant to their terms. Absent even minimal detail about the underlying contracts, the Clarke Defendants cannot sustain a claim that GEICO violated the implicit duties of good faith and fair dealing contained therein. Accordingly, this claim is dismissed.
ABUSE OF PROCESS
To the extent that their abuse of process claim is predicated on this case or any other civil RICO action, the mere commencement of a lawsuit cannot serve as a basis for a cause of action alleging abuse of process.
MOTION TO STRIKE AFFIRMATIVE DEFENSES
GEICO’s motion to dismiss the Clarke Defendants’ counterclaims was granted; accordingly, those claims were dismissed. Its motion to strike the Clarke Defendants’ affirmative defenses was granted with respect to the Clarke Defendants’ Third, Twenty-Second, and Twenty-Third affirmative defenses; it is denied in all other respects. GEICO’s request to stay discovery pending adjudication of this motion is denied as moot.
ZALMA OPINION
States like New York have made insurance fraud – like that brought in the suit against the Clarke Defendants – only to do little or nothing to prosecute the crime. GEICO, frustrated as a victim of fraud, has become proactive and works to take the profit out of the crime of insurance fraud. They, and other proactive insurers, are becoming successful in New York and other states and should be emulated by other victims of insurance fraud.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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No Right to Subrogation Against Tenant
Post 5231
Not Fair to Require Tenant to Pay for Damage Insured by LandlordSee the video at https://lnkd.in/gFkrp_6M and at https://lnkd.in/gQdFQBWj and at https://zalma.com/blog plus more than 5200 posts.
See the video at and at
For Insurer to Subrogate Lease Must Require Tenant to Obtain Insurance for the Benefit of the Landlord
In AmGUARD Insurance Co. v. Tyrone Ellis and Shakyra Ellis, U.S. District Court, District of Connecticut Civil No. 3:25-cv-946 (JCH) (November 19, 2025), Judge, Janet C. Hall the defendant’s Motion to Dismiss the Amended Complaint on the basis of Connecticut’s anti-subrogation doctrine required dismissal.
KEY FACTS
Landlord Michael Caldwell, a Connecticut citizen, owned a multi-family building in Windsor, Connecticut. Defendants Tyrone and Shakyra Ellis were residential tenants in the building. On or about March 1, 2025, a fire ...
Debt Resulting from Fraud is Not Dischargeable in Bankruptcy
Post 5230
Read the full article at https://lnkd.in/gpF3y7Vd, see the video at https://lnkd.in/gR5cVcbY and at https://lnkd.in/gch6Q4_V, and at https://zalma.com/blog plus more than 5200 posts.
Knowing Misappropriation and Conversion of Funds is Fraud
In re Matthew Jene Tubbs (Bankr. N.D. Tex., Fort Worth Div., No. 22-42728-MXM-7; Adv. No. 23-04019-mxm), October 15, 2025 .
Key Facts
Plaintiffs (Robles) and Defendant (Tubbs) met through their church; both held leadership roles. In Feb 2021 Robles home suffered major water damage from Winter Storm Uri and insurance paid $173,000.
In the Fall of 2021: Tubbs represented to Mr. Robles that he personally built a newer house and large barn on his parents’ property “with his own hands” (except foundation/insulation). That he had 10 years’ experience overseeing window/door installations at a major home-improvement chain, was a licensed contractor (false) and carried general contractor liability insurance.
Relying on ...
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ZIFL-Volume 29 Number 22
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
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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/
Read the full 20 page issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2025/11/ZIFL-11-15-2025-1.pdf
Man Bites Dog Story – Hertz Sues Alleged Fraudsters
Hertz Successfully Refuses to Pay Alleged Fraudulent Health Care Providers
Proactive Victim of Fraud Defeats Health Care Providers
More McClenny Moseley & Associates Issues
This is ZIFL’s thirty eighth installment of the saga of McClenny, Moseley & Associates and its problems with the federal courts in the State of Louisiana and what appears to be ...
The Professional Claims Handler
Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
How to Create Claims Professionals
To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
