When Defendant Wins the Statute of Limitations Starts to Run
Post 4894
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Dr. Gerald Dworkin sued Liberty Mutual and various subsidiaries for wrongful use of civil proceedings arising out of a previous lawsuit accusing Dworkin of insurance fraud. Defendants moved to dismiss on the grounds that Dworkin's suit was barred by the statute of limitations.
In Gerald Dworkin, D.O. v. Liberty Mutual Holding Company, Inc., et al, Civil Action No. 24-1590, United States District Court, E.D. Pennsylvania (September 18, 2024) the USDC resolved the issue.
FACTS
Dworkin was sued in 2017 by Liberty Mutual for alleged insurance fraud. The Philadelphia County Court of Common Pleas granted summary judgment in Dworkin's favor, and Liberty Mutual appealed to the Pennsylvania Superior Court, which affirmed in a November 29, 2021 unpublished opinion. The Superior Court reissued its decision as a published opinion on February 1, 2022. On March 22, 2022, the Superior Court remanded the record to the Common Pleas Court. Dworkin filed his initial complaint in this case on March 20, 2024 two days less than two years after the remand order and more than two years after the published opinion.
THE MOTION
A court may only dismiss a claim under Rule 12(b)(6) based on the statute of limitations when the basis for the limitations defense is evident from the complaint itself or other materials the court may consider, which include exhibits attached to the complaint and matters of public record.
THE STATUTE OF LIMITATIONS
The statute of limitations for a claim of wrongful use of civil proceedings is two years. A claim's limitations period generally begins to run as soon as it accrues; that is, as soon as the right to institute and maintain a suit arises. A plaintiff's right to institute and maintain a suit for wrongful use of civil proceedings generally arises when underlying proceedings have terminated in his favor.
The underlying proceedings terminate for the purposes of a wrongful-use claim when the defendant in the underlying proceedings successfully defeats the plaintiff's attempts to have him held legally liable. The defendant successfully defeats the plaintiff when judgment for the defendant becomes final, which generally happens when the judgment has been upheld by the highest appellate court having jurisdiction over the case or the judgment has not been appealed.
Dworkin contended his claim accrued when the Superior Court remanded the record to the trial court on March 22, 2022. That was incorrect. The grant of summary judgment was by law subject to revision during the pendency of the claims against co-defendants and was therefore not a final judgment until, at the earliest, the date on which the plaintiff in the underlying proceedings agreed to settle and release all defendants.
Dworkin's claim accrued at the expiration of Liberty Mutual's time to appeal the Superior Court's ruling because that is the point at which he successfully defeated Liberty Mutual's attempts to have him held legally liable, more than two years before the filing of Dworkin's suit.
ZALMA OPINION
The statute of limitations exists to protect defendants against stale claims which are difficult to defend because facts and witnesses become stale. Dworkin beat Liberty Mutual's suit claiming he committed fraud. If he wished to obtain damages from Liberty he should have sued as soon as he could rather than waiting more than two years and claiming that his account only accrued when at the ministerial act rather than than on the day the final judgment was entered at the time of the appeal affirming the judgment.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Jury’s Findings Interpreting Insurance Contract Affirmed
Post 5105
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Madelaine Chocolate Novelties, Inc. (“Madelaine Chocolate”) appealed the district court’s judgment following a jury verdict in favor of Great Northern Insurance Company (“Great Northern”) concerning storm-surge damage caused by “Superstorm Sandy” to Madelaine Chocolate’s production facilities.
In Madelaine Chocolate Novelties, Inc., d.b.a. The Madelaine Chocolate Company v. Great Northern Insurance Company, No. 23-212, United States Court of Appeals, Second Circuit (June 20, 2025) affirmed the trial court ruling in favor of the insurer.
BACKGROUND
Great Northern refused to pay the full claim amount and paid Madelaine Chocolate only about $4 million. In disclaiming coverage, Great Northern invoked the Policy’s flood-exclusion provision, which excludes, in relevant part, “loss or damage caused by ....
Failure to Name a Party as an Additional Insured Defeats Claim
Post 5104
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Contract Interpretation is Based on the Clear and Unambiguous Language of the Policy
In Associated Industries Insurance Company, Inc. v. Sentinel Insurance Company, Ltd., No. 23-CV-10400 (MMG), United States District Court, S.D. New York (June 16, 2025) an insurance coverage dispute arising from a personal injury action in New York State Supreme Court.
The underlying action, Eduardo Molina v. Venchi 2, LLC, et al., concerned injuries allegedly resulting from a construction accident at premises owned by Central Area Equities Associates LLC (CAEA) and leased by Venchi 2 LLC with the USDC required to determine who was entitled to a defense from which insurer.
KEY POINTS
Parties Involved:
CAEA is insured by Associated Industries Insurance Company, Inc. ...
Exclusion Establishes that There is No Duty to Defend Off Site Injuries
Post 5103
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Attack by Vicious Dog Excluded
In Foremost Insurance Company, Grand Rapids, Michigan v. Michael B. Steele and Sarah Brown and Kevin Lee Price, Civil Action No. 3:24-CV-00684, United States District Court, M.D. Pennsylvania (June 16, 2025)
Foremost Insurance Company (“Foremost”) sued Michael B. Steele (“Steele”), Sarah Brown (“Brown”), and Kevin Lee Price (“Price”) (collectively, “Defendants”). Foremost sought declaratory relief in the form of a declaration that
1. it owes no insurance coverage to Steele and has no duty to defend or indemnify Steele in an underlying tort action and
2. defense counsel that Foremost has assigned to Steele in the underlying action may withdraw his appearance.
Presently before the Court are two ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
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/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
A Heads I Win, Tails You Lose Story
Post 5062
Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone 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."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...
