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February 14, 2025
Trial Court Incorrectly Refused Insurer’s Demand for EUO

STATUTORY OBLIGATION TO FIGHT FRAUD INCLUDES THE RIGHT TO EXAMINE PEOPLE CLAIMING NO FAULT INJURIES UNDER OATH

Apparent Staged Accident Requires EUO to Investigate Potential Fraud
Post 4995

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The trial court initially denied Allstate’s suit stating that Allstate failed to show good cause and did not cite any contractual provision compelling the Appellees to provide information in an examination under oath (“EUO”). Allstate argued that it had a duty to investigate suspected insurance fraud and that the Appellees had a contractual obligation to submit to EUOs.

In Allstate Property And Casualty Insurance Company v. Gloria E. Companioni; Isair H. Lubo-Rodriguez; and Mercedes H. Cervantes, No. 2023-CA-1012-MR, Court of Appeals of Kentucky (February 7, 2025) resolved the dispute.

The Court of Appeals of Kentucky vacated the trial court’s total denial of the petition and remanded the case for further proceedings. The appellate court found that the trial court overlooked contractual provisions allowing Allstate to conduct EUOs and binding precedent that permits inquiries into accident-related issues. The appellate court directed the trial court to reconsider whether good cause exists to allow questioning pertaining to medical treatment and solicitation, following the principles set forth in Deadwyler v. Grange Property and Casualty Insurance Company.

The appellate court’s decision emphasized the importance of allowing insurers to conduct thorough investigations, especially when there are concerns about potential fraud. The case highlights the balance between protecting claimants’ rights and ensuring that insurers can fulfill their duty to investigate claims thoroughly.

FACTS

Gloria Companioni was driving a car insured by Allstate which was in an accident with another car. Appellees Isair Lubo-Rodriguez and Mercedes Cervantes were allegedly riding in the car Companioni was driving when the accident happened. All three resided in Kentucky.

Four days after the accident, all three Appellees commenced care at Total Health Chiropractic and Rehab (“Total Health”). The next day (five days after the accident), Appellees submitted Personal Injury Protection (“PIP”) applications through counsel. Appellees requested reimbursement for medical treatment resulting from the accident and for any coverage available, including coverage for basic reparations benefits (“BRB”).

Allstate filed a suit for an EUO pursuant to Kentucky statutes.

ANALYSIS

Trial Court Erred in Finding Allstate Failed to Cite a Contractual Provision Which Required Appellees to Submit to EUOs

The trial court overlooked policy provisions relating to EUOs, but it also overlooked pertinent authority allowing inquiries into predominantly accident-related issues in EUOs. In sum, its total denial of the EUO petition cannot stand and must be vacated with the case remanded to the trial court for further proceedings.

The appellate court directed the trial court to consider its guidance in considering anew whether good cause exists to permit questioning about matters of medical treatment and/or solicitation via EUO and, if so, to establish any appropriate limits on such questioning.

The trial court’s total denial of the EUO petition was vacated and remanded for the trial court to issue a new order allowing an EUO at least regarding purely accident-related issues, to reconsider whether good cause exists to permit inquiries pertaining to medical treatment and solicitation, and to provide direction to the parties as to the permissible scope of inquiry.

ZALMA OPINION

Kentucky, like most states, requires insurers to maintain a Special Fraud Investigative Unit to help the state defeat insurance fraud and to protect every insurer doing business in the state from damages from fraud. Allstate, faced with an apparent staged accident sought to examine the parties claiming injury under oath in its effort to fully investigate a potential insurance fraud. The trial court refused but the Court of Appeals of Kentucky reversed requiring the trial court to approve the EUOs.

(c) 2025 Barry Zalma & ClaimSchool, Inc.

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00:08:08
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Read the full article at https://lnkd.in/gziRzFV8, see the full video at https://lnkd.in/gF4aYrQ2 and at https://lnkd.in/gqShuGs9, and at https://zalma.com/blog plus more than 5050 posts.

Hiscox Insurance Company (“Hiscox”) moved the USDC to Dismiss a suit for failure to state a claim because the insured reported its claim more than 60 days after expiration of the policy.

In Mluxe Williamsburg, LLC v. Hiscox Insurance Company, Inc., et al., No. 4:25-cv-00002, United States District Court, E.D. Missouri, Eastern Division (May 22, 2025) the trial court’s judgment was affirmed.

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Plaintiff, the operator of a massage spa franchise, entered into a commercial insurance agreement with Hiscox that provided liability insurance coverage from July 25, 2019, to July 25, 2020. On or about June 03, 2019, a customer alleged that one of Plaintiff’s employees engaged in tortious ...

00:08:31
June 02, 2025
Zalma’s Insurance Fraud Letter – June 1, 2025

ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Posted on June 2, 2025 by Barry Zalma

Post 5087

See the full video at and at

Read the full article and the full issue of ZIFL June 1, 2025 at https://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-06-01-2025.pdf

Zalma’s Insurance Fraud Letter – June 1, 2025

See the full video at https://lnkd.in/gw-Hgww9 and at https://lnkd.in/gF8QAq4d, and at https://zalma.com/blog plus more than 5050 posts.

ZIFL – Volume 29, Issue 11

The Source for the Insurance Fraud Professional

Read the full article and the full issue of ZIFL June 1, 2025 at https://lnkd.in/gTWZUnnF

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 ...

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May 30, 2025
Plain Language of Policy Enforced

No Coverage if Home Vacant for More Than 60 Days

Failure to Respond To Counterclaim is an Admission of All Allegations

Post 5085

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In Nationwide Mutual Insurance Company v. Rebecca Massey, Civil Action No. 2:25-cv-00124, United States District Court, S.D. West Virginia, Charleston Division (May 22, 2025) Defendant Nationwide Mutual Insurance Company's (“Nationwide”) motion for Default Judgment against Plaintiff Rebecca Massey (“Plaintiff”) for failure to respond to a counterclaim and because the claim was excluded by the policy.

BACKGROUND

On February 26, 2022, Plaintiff's home was destroyed by a fire. At the time of this accident, Plaintiff had a home insurance policy with Nationwide. Plaintiff reported the fire loss to Nationwide, which refused to pay for the damages under the policy because the home had been vacant for more than 60 days.

Plaintiff filed suit ...

00:06:50
May 15, 2025
Zalma's Insurance Fraud Letter - May 15, 2025

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
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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 ...

May 15, 2025
CGL Is Not a Medical Malpractice Policy

Professional Health Care Services Exclusion Effective

Post 5073

See the full video at https://lnkd.in/g-f6Tjm5 and at https://lnkd.in/gx3agRzi, and at https://zalma.com/blog plus more than 5050 posts.

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 ...

April 30, 2025
The Devil’s in The Details

A Heads I Win, Tails You Lose Story
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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...

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