Allstate Proactively Moves to Take the Profit Out of Insurance Fraud
Post 4974
Read the full article at https://lnkd.in/gZtC28zc, see the full video at https://lnkd.in/gfgi7NnQ and at https://lnkd.in/gU7eWAmz, and at https://zalma.com/blog plus more than 4950 posts.
THE ISSUES
The New Jersey Superior Court, Appellate Division was faced with a need to resolve whether claims of insurance fraud under the Insurance Fraud Prevention Act (the Fraud Act), N.J.S.A. 17:33A-1 to -30, and the New Jersey Anti-Racketeering Act (RICO), N.J.S.A. 2C:41-1 to -6.2, are subject to arbitration under the Automobile Insurance Cost Reduction Act (AICRA), N.J.S.A. 39:6A-1.1 to -35.
In Allstate New Jersey Insurance Company, et al v. Carteret Comprehensive Medical Care, PC, et al, No. A-0778-23, Superior Court of New Jersey, Appellate Division (January 9, 2025) resolved the issues presented requiring statutory interpretation., The Superior Court Appellate Division held that insurance fraud claims under the Fraud Act and RICO are not subject to PIP arbitration under AICRA and that the Plaintiffs are permitted to pursue their claims in the Law Division, with the right to a jury triaL
THE PARTIES
Plaintiffs are six related insurance companies (plaintiffs or collectively Allstate). Allstate provides no-fault automobile insurance policies in New Jersey, under which insureds can recover PIP benefits if they are injured in an automobile accident. When insureds receive medical treatment, they may, and typically do, assign their PIP benefits to their medical providers. The medical providers can then seek payment from insurers, like Allstate.
FACTUAL BACKGROUND
In March 2023, Allstate filed a nine-count complaint against over thirty defendants, including several medical practices, the owners of those practices, and current and former physicians and administrators working at or with those medical practices. Allstate alleged that from 2008 through 2022, defendants conspired to obtain over $1.7 million in PIP benefits from Allstate through more than 800 fraudulent and misleading medical claims. In its complaint, Allstate asserts that defendants' actions violated the Fraud Act and RICO. Allstate also contends that certain defendants violated the Corporate Practice of Medicine Doctrine, N.J.A.C. 13:35-6.16, and New Jersey's Anti Self-Referral Law, N.J.S.A. 45:9-22.4 to -22.9.
Allstate alleged that numerous defendants engaged in kickback schemes, illegal self-referrals, and patterns of fraud and racketeering in providing the services for which defendants obtained payments from Allstate. Allstate seeks damages, including the disgorgement of over $1 .7 million that Allstate paid to defendants, treble damages, injunctive relief, and attorneys' fees.
The trial court entered three orders granting the moving defendants' request to compel all claims asserted by Allstate to arbitration under a statute known as AICRA.
THE FRAUD ACT
The Fraud Act was enacted in 1983 "to confront aggressively the problem of insurance fraud in New Jersey." N.J.S.A. 17:33A-2. The New Jersey Supreme Court has held that private parties in an action brought under the Fraud Act have a right to a jury trial because the Fraud Act provides legal relief in the form of compensatory and punitive damages and because a Fraud Act claim is comparable to common-law fraud.
RICO
The Legislature enacted RICO to safeguard the public interest to prevent, disrupt, and eliminate the infiltration of organized crime type activities which are substantial in nature into the legitimate trade or commerce of this State. Modeled on the federal statute, RICO provides a private cause of action.
NO-FAULT INSURANCE AND AICRA
New Jersey operates under a no-fault automobile insurance system, which includes AICRA enacted in 1998, established a resolution system to expeditiously resolve disputes regarding the amount or legitimacy of PIP claims. The Commissioner implemented regulations that provide that a request for arbitration of a "PIP dispute" can be made by the injured party, the insured, the provider who is an assignee of PIP benefits, or the insurer.
INTERPRETING AND HARMONIZING THE FRAUD ACT, RICO, AND AICRA
PIP regulations and PIP arbitration process are designed to expeditiously address disputes concerning the payment of medical expenses. Unlike arbitration and the statute implementing it, the goal of the Fraud Act is to confront aggressively the problem of insurance fraud in New Jersey and RICO has the goal of eliminating activities that present a serious threat to the political, social and economic institutions of this State.
THE POTENTIAL CONSTITUTIONAL ISSUE
The New Jersey Constitution guarantees the right to a jury trial to causes of action-even statutory causes of action-that sound in law rather than equity. The New Jersey Constitution provides a right to jury trial for claims under the Fraud Act and RICO. Neither are subject to PIP Arbitration. Therefore, the orders compelling plaintiffs' claims to PIP arbitration were reversed and vacated.
ZALMA OPINION
Forcing insurers who believe they were defrauded to arbitration clearly was designed to deprive the victim of insurance fraud (in this case Allstate) of the constitutional right to a jury trial to take the profit out of the crime of insurance fraud by forcing each dispute into individual arbitration where the results will be different while a jury trial will allow Allstate to prove the schemes of fraud that has fraudulently taken Allstate's money. Allstate has the right to get its money back plus treble damages under RICO. Allstate should be honored for taking down those who commit fraud.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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://barryzalma.substack.com/subscribe
Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg
Go to the Insurance Claims Library – https://lnkd.in/gwEYk
Convicted Criminal Seeks to Compel Receiver to Protect his Assets
Post number 5291
See the video at and at and at https://www.zalma.com/blog plus more than 5250 posts.
The Work of a Court Appointed Receiver is Constitutionally Protected
In Simon Semaan et al. v. Robert P. Mosier et al., G064385, California Court of Appeals, Fourth District, Third Division (February 6, 2026) the Court of Appeals applied the California anti-SLAPP statute which protects defendants from meritless lawsuits arising from constitutionally protected activities, including those performed in official capacities. The court also considered the doctrine of quasi-judicial immunity, which shields court-appointed receivers from liability for discretionary acts performed within their official duties.
Facts
In September 2021, the State of California filed felony charges against Simon Semaan, alleging violations of Insurance Code section 11760(a) for making...
When There are Two Different Other Insurance Clauses They Eliminate Each Other and Both Insurers Owe Indemnity Equally
Post number 5289
In Great West Casualty Co. v. Nationwide Agribusiness Insurance Co., and Conserv FS, Inc., and Timothy A. Brennan, as Administrator of the Estate of Pat- rick J. Brennan, deceased, Nos. 24-1258, 24-1259, United States Court of Appeals, Seventh Circuit (February 11, 2026) the USCA was required to resolve a dispute that arose when a tractor-trailer operated by Robert D. Fisher (agent of Deerpass Farms Trucking, LLC-II) was involved in a side-impact collision with an SUV driven by Patrick J. Brennan, resulting in Brennan’s death.
Facts
Deerpass Trucking, an interstate motor carrier, leased the tractor from Deerpass Farms Services, LLC, and hauled cargo for Conserv FS, Inc. under a trailer interchange agreement. The tractor was insured by Great West Casualty Company with a $1 million policy limit, while the trailer was insured by Nationwide Agribusiness Insurance Company with a $2 million ...
Opiod Producer Seeks Indemnity from CGL Insurers
Post number 5288
Read the full article at https://lnkd.in/guNhStN2, see the full video at https://lnkd.in/gYqkk-n3 and at https://lnkd.in/g8U3ehuc, and at https://zalma.com/blog plus more than 5250 posts.
Insurers Exclude Damages Due to Insured’s Products
In Matthew Dundon, As The Trustee Of The Endo General Unsecured Creditors’ Trust v. ACE Property And Casualty Insurance Company, et al., Civil Action No. 24-4221, United States District Court, E.D. Pennsylvania (February 10, 2026) Matthew Dundon, trustee of the Endo General Unsecured Creditors’ Trust, sued multiple commercial general liability (CGL) insurers for coverage of opioid-related litigation involving Endo International PLC a pharmaceutical manufacturer.
KEY FACTS
Beginning as early as 2014, thousands of opioid suits were filed by governments, third parties, and individuals alleging harms tied to opioid manufacturing and marketing.
Bankruptcy & Settlements
Endo filed Chapter 11 in August 2022; before bankruptcy it ...
Passover for Americans
Posted on February 19, 2026 by Barry Zalma
“The Passover Seder For Americans”
For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lost the ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah. Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and wonder how did all these wonderful things come into being. Jews believe the force we call G_d created the entire universe and everything in it. Jews feel G_d is all seeing and knowing and although we can’t see Him, He is everywhere and in everyone.We understand...
Passover for Americans
Posted on February 19, 2026 by Barry Zalma
Read the full article at https://www.linkedin.com/pulse/passover-americans-barry-zalma-esq-cfe-5vgkc.
“The Passover Seder For Americans”
For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lostthe ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah.
Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and ...
You Get What You Pay For – Less Coverage Means Lower Premium
Post number 5275
Posted on January 30, 2026 by Barry Zalma
See the video at and at
When Experts for Both Sides Agree That Two Causes Concur to Cause a Wall to Collapse Exclusion Applies
In Lido Hospitality, Inc. v. AIX Specialty Insurance Company, No. 1-24-1465, 2026 IL App (1st) 241465-U, Court of Appeals of Illinois (January 27, 2026) resolved the effect of an anti-concurrent cause exclusion to a loss with more than one cause.
Facts and Background
Lido Hospitality, Inc. operates the Lido Motel in Franklin Park, Illinois. In November 2020, a windstorm caused one of the motel’s brick veneer walls to collapse. At the time, Lido was insured under a policy issued by AIX Specialty Insurance Company which provided coverage for windstorm damage. However, the policy contained an exclusion for any loss or damage directly or indirectly resulting from ...
