Lie on an Application About Primary Residence is Ground for Rescission
Post 4896
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Plaintiff Homesite Insurance Company's (Homesite) moved for Summary Judgment seeking a judicial declaration that it is entitled to rescission of Defendant Zhen Jiang's homeowners' insurance policy and enter summary judgment in its favor on Mr. Jiang's bad faith counterclaims.
In Homesite Insurance Company v. Zhen Jiang, No. CV-21-00554-TUC-JGZ, United States District Court, D. Arizona (September 16, 2024) the USDC explained an insurer's right to rescission.
INTRODUCTION
The USDC described this case as "an insurance fraud case."
Homesite asserts that Mr. Jiang misrepresented that the house located at 7617 East Snyder Road, Tucson, AZ 85750 (the Property) was his primary residence. Homesite relied on Mr. Jiang's representation in issuing the homeowners' insurance policy (the Policy); and Mr. Jiang's misrepresentation was material because Homesite does not, and would not, insure a vacant home.
Mr. Jiang owns properties in Arizona and Texas. In early 2018, Mr. Jiang bought the Property, a five-bedroom single-family residence located on four acres at 7617 East Snyder Road. The Property had been vacant since the previous owners lost the Property to foreclosure in 2014.
Mr. Jiang's Insurance Application And Policy
In November 2019, Mr. Jiang applied for homeowners' insurance for the Property. In his application, Mr. Jiang represented that the Property was his primary residence and that the information provided in the application was truthful and accurate.
Homesite warned Mr. Jiang, after accepting him as an insured, to review the Declarations page and check the description of the dwelling, and occupancy and if any of this information needs to be corrected, Jiang must advise Homesite within 30 days of receipt.
The Pima County Sheriff's March 21, 2020 Report
On March 21, 2020, the Pima County Sheriff's Department responded to a call of vandalism at the Property. Vandals had set off fireworks inside the Property, graffitied and put holes in the walls, started fires, and broke numerous windows.
Mr. Jiang's Neighbor's Statements
The March 21, 2020 call to police was made by neighbor Morgan Hay stated that the damage to the Property possibly occurred over New Years. Mr. Hay informed officers that Mr. Jiang “would show up from time to time and ask Mr. Hay to check on the house periodically; however, nobody had occupied that residence since it was foreclosed upon in 2014.” Similar responses were testified to by multiple neighbors.
Mr. Jiang's Statements Regarding Occupancy
Mr. Jiang provided numerous inconsistent statements as to when, if ever, he lived at the Property. In his Opposition, he states that he lived in the home from late 2019 until early 2020, and that the home was not vacant for more than 60 days prior to the March 21, 2020 fire.
DISCUSSION
Fraudulent misstatements, omissions, or concealment of facts can be established by proving either legal fraud or actual fraud. Legal fraud exists if the question asked in an insurance application: (1) is one where the facts are within the personal knowledge of the insured; (2) are such that the insurer would naturally have contemplated that the answers represented the actual facts; and (3) the answers are false. Legal fraud does not require an intent to deceive.
Homesite established that the Property was not Mr. Jiang's primary residence. No reasonable juror could conclude otherwise based upon the evidence that he lived elsewhere, the condition of the Property, the reports of his neighbors, and the fact that he was apparently unaware of the vandalism occurring on the Property until late October 2020.
Mr. Jiang is not credible for the additional reason that he concealed his lease at the 7th Street Apartment during discovery.
Homesite Did Not Act In Bad Faith In Investigating And Processing Mr. Jiang's Claim.
The Court will enter summary judgement in favor of Homesite on Mr. Jiang's bad faith counterclaims. The USDC concluded that Homesite is entitled to rescission of the Policy and entry of judgment on Mr. Jiang's counterclaims.
ZALMA OPINION
Insurance is a business of utmost good faith where neither party to the contract will do anything to deprive the other of the benefits of the contract. Mr. Jiang lied on his application and continued to lie as he pursed his claim. The lies were material since the insurer would never issue a homeowners policy to a vacant property, especially one that had been vacant and vandalized before he bought the property. This liar will not prosper from his fraud and the court should refer Mr. Jiang to the office of the US Attorney to prosecute him for fraud.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Montana County Attorney Admits to Insurance Fraud & Is Only Suspended from Practice for 60 Days
Post 5251
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A Lawyer Who Commits Insurance Fraud and Pleas to a Lower Charge Only Suspended
In The Matter Of: Naomi R. Leisz, Attorney at Law, No. PR 25-0150, Supreme Court of Montana (December 23, 2025) the Montana Office of Disciplinary Counsel (ODC) filed a formal disciplinary complaint with the Commission on Practice (Commission) against Montana attorney Naomi R. Leisz.
On September 25, 2025, Leisz tendered a conditional admission and affidavit of consent. Leisz acknowledged the material facts of the complaint were true and she had violated the Montana Rules of Professional Conduct as alleged by ODC.
ADMISSIONS
Leisz admitted that in April 2022, her minor son was involved in a car accident in which he hit a power pole. Leisz’s son ...
Montana County Attorney Admits to Insurance Fraud & Is Only Suspended from Practice for 60 Days
Post 5251
Read the full article at https://lnkd.in/gnBaCjmv, see the video at https://lnkd.in/gfpVsyAd and at https://lnkd.in/gC73Nd8z, and at https://zalma.com/blog plus more than 5250 posts.
A Lawyer Who Commits Insurance Fraud and Pleas to a Lower Charge Only Suspended
In The Matter Of: Naomi R. Leisz, Attorney at Law, No. PR 25-0150, Supreme Court of Montana (December 23, 2025) the Montana Office of Disciplinary Counsel (ODC) filed a formal disciplinary complaint with the Commission on Practice (Commission) against Montana attorney Naomi R. Leisz.
On September 25, 2025, Leisz tendered a conditional admission and affidavit of consent. Leisz acknowledged the material facts of the complaint were true and she had violated the Montana Rules of Professional Conduct as alleged by ODC.
ADMISSIONS
Leisz admitted that in April 2022, her minor son was involved in a car accident in which he hit a power pole. Leisz’s son ...
Insurer’s Exclusion for Claims of Assault & Battery is Effective
Post 5250
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Bar Fight With Security is an Excluded Assault & Battery
In The Cincinnati Specialty Underwriters Insurance Company v. Mainline Private Security, LLC, et al., Civil Action No. 24-3871, United States District Court, E.D. Pennsylvania (December 16, 2025) two violent attacks occurred in Philadelphia involving young men, Eric Pope (who died) and Rishabh Abhyankar (who suffered catastrophic injuries). Both incidents involved security guards provided by Mainline Private Security, LLC (“Mainline”) at local bars. The estates of the victims sued the attackers, the bars, and Mainline for negligence and assault/battery. The insurer exhausted a special limit and then denied defense or indemnity to Mainline Private Security.
INSURANCE COVERAGE
Mainline had purchased a commercial ...
Court Must Follow Judicial Precedent
Post 5252
Read the full article at https://www.linkedin.com/pulse/sudden-opposite-gradual-barry-zalma-esq-cfe-h7qmc, see the video at and at and at https://zalma.com/blog plus more than 5250 posts.
Insurance Policy Interpretation Requires Application of the Judicial Construction Doctrine
In Montrose Chemical Corporation Of California v. The Superior Court Of Los Angeles County, Canadian Universal Insurance Company, Inc., et al., B335073, Court of Appeal, 337 Cal.Rptr.3d 222 (9/30/2025) the Court of Appeal refused to allow extrinsic evidence to interpret the word “sudden” in qualified pollution exclusions (QPEs) as including gradual but unexpected pollution. The court held that, under controlling California appellate precedent, the term “sudden” in these standard-form exclusions unambiguously includes a temporal element (abruptness) and cannot reasonably be construed to mean ...
Lack of Jurisdiction Defeats Suit for Defamation
Post 5250
Posted on December 29, 2025 by Barry Zalma
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He Who Represents Himself in a Lawsuit has a Fool for a Client
In Pankaj Merchia v. United Healthcare Services, Inc., Civil Action No. 24-2700 (RC), United States District Court, District of Columbia (December 22, 2025)
FACTUAL BACKGROUND
Parties & Claims:
The plaintiff, Pankaj Merchia, is a physician, scientist, engineer, and entrepreneur, proceeding pro se. Merchia sued United Healthcare Services, Inc., a Minnesota-based medical insurance company, for defamation and related claims. The core allegation is that United Healthcare falsely accused Merchia of healthcare fraud, which led to his indictment and arrest in Massachusetts, causing reputational and business harm in the District of Columbia and nationwide.
Underlying Events:
The alleged defamation occurred when United ...
Zalma’s Insurance Fraud Letter
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ZIFL Volume 29, Issue 24
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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/
Zalma’s Insurance Fraud Letter
Merry Christmas & Happy Hannukah
Read the following Articles from the December 15, 2025 issue:
Read the full 19 page issue of ZIFL at ...
