Zalma on Insurance
Education • Business
Insurance Claims professional presents articles and videos on insurance, insurance Claims and insurance law for insurance Claims adjusters, insurance professionals and insurance lawyers who wish to improve their skills and knowledge. Presented by an internationally recognized expert and author.
Interested? Want to learn more about the community?
March 04, 2025
No Coverage for Known False Statements

Exclusion of Defamatory Or Disparaging Statements Made With Knowledge Of Their Falsity Effective

Post 5007

Liability Insurance is Limited to Unintentional Conduct

Read the full article at https://lnkd.in/gJ2XXKB3, see the full video at https://lnkd.in/g5HA2uAA and at https://lnkd.in/gDd9PE6C, and at https://zalma.com/blog plus more than 5000 posts.

The main issue presented to the Tenth Circuit Court of Appeals was whether the insurance policies’ exclusions, which deny coverage for defamatory or disparaging statements made with knowledge of their falsity, apply. The District Court held that the exclusions do apply, as the underlying complaint alleged that the insureds knowingly published false statements.

In New Hampshire Insurance Company; National Union Fire Insurance Company Of Pittsburgh v. TSG Ski & Golf, LLC; The Peaks Owners Association, Inc.; Peak Hotel, LLC; H. Curtis Brunjes, No. 23-1248, United States Court of Appeals, Tenth Circuit (February 24, 2025) the Tenth Circuit affirmed.

BACKGROUND

TSG Ski & Golf, LLC (TSG) was insured under commercial general-liability insurance policies issued by New Hampshire Insurance Company and National Union Fire Insurance Company of Pittsburgh. The policies provided coverage for personal and advertising injury but excluded coverage for injury arising from the publication of material known to be false.

In late 2018 the TSG Parties began implementing a three-part scheme to coerce the Underlying Plaintiffs into paying annual assessments that the TSG Parties knew were not owed. First, the TSG Parties commissioned a “sham” audit of the annual assessments paid by Telluride between 2009 and mid-2015. They manipulated the audit to overlook payments made by Telluride through the True-Up Process, guaranteeing that TSG’s accountant would erroneously conclude that Telluride had failed to pay any assessments during the relevant time period.

The underlying lawsuit was filed by Telluride Resort & Spa, LLC and its principals against TSG and other parties, alleging that they knowingly published false statements to coerce the plaintiffs into paying assessments that were not owed. The jury returned a verdict for the Underlying Plaintiffs on all claims that proceeded to trial. It awarded the Underlying Plaintiffs $225,000 in compensatory damages but declined to award punitive damages. The court awarded the Underlying Plaintiffs $2,298,225 in statutory attorney fees and $328,510.53 in costs.

THE ISSUES AT THE TENTH CIRCUIT

The insurers sought a declaratory judgment that they had no duty to defend or indemnify the TSG parties in the underlying lawsuit. The District Court granted summary judgment in favor of the insurers, concluding that the knowledge-of-falsity exclusions precluded coverage.

The TSG parties appealed.

DISCUSSION

An insurer need not defend its insured when an exclusion in the insurance policy precludes coverage. To avoid the duty to defend, the insurer must establish that the allegations in the complaint are solely and entirely within the exclusions in the insurance policy; that is, that there is no factual or legal basis on which the insurer might eventually owe coverage.

Because the knowledge-of-falsity exclusions precluded coverage, the Insurers had no duty to defend the TSG Parties in the underlying lawsuit.

The duty to indemnify relates to the insurer’s duty to satisfy a judgment entered against the insured. Unlike the duty to defend, the duty to indemnify arises only when the policy actually covers the harm and typically cannot be determined until the resolution of the underlying claims.

At trial the uncontroverted testimony of TSG and POA officers (all of whom sat on the POA board and approved the debt-collection letter) established that the TSG Parties knew the statements in the debt-collection letter were false when the letter was published. The testimony of multiple witnesses established that the liability imposed against the TSG Parties was precluded from indemnification under the knowledge-of-falsity exclusions. The Tenth Circuit concluded, therefore, that the Insurers owed no duty to indemnify the TSG Parties for their losses in the underlying lawsuit.

BAD FAITH

It is settled law in Colorado that a bad faith claim must fail if coverage was properly denied and the plaintiff’s only claimed damages flowed from the denial of coverage.

The Tenth Circuit affirmed the district court’s decision, holding that the insurers had no duty to defend or indemnify the TSG parties. The district court’s grant of summary judgment on all claims was affirmed.

ZALMA OPINION

Liability insurance is designed to protect the persons or entities insured against claims or suits that they cause damage to third parties from an accidental or fortuitous cause. Since intentional acts are not accidental nor fortuitous there can never be coverage for defense or indemnity of intentional acts. The insurers did not rely on lack of fortuity by including in the policy wording a clear and unambiguous exclusion for claims of defamation if the insured had knowledge-of-the-falsity of the statements when made and were deprived of defense or indemnity.

(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

00:10:16
Interested? Want to learn more about the community?
What else you may like…
Videos
Posts
May 01, 2026
Zalma’s Insurance Fraud Letter – May 1, 2026

Happy Law Day

ZIFL – Volume 30, Issue 9 – May 1, 2026

Read the full article at https://www.linkedin.com/pulse/zalmas-insurance-fraud-letter-may-1-2026-barry-zalma-esq-cfe-2tywc, see the video at at and at https://zalma.com/blog plus more than 5300 posts.

THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL

ZIFL – Volume 30, Issue 9 – May 1, 2026

Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year and is written by Barry Zalma.

DOJ Creates National Fraud Enforcement Division

Will the Feds Take on Insurance Fraud? Possibly as Part of a National Anti-Fraud Effort

On April 7, 2026, the Acting Attorney General, Todd Blanche, issued a memorandum establishing the Department of Justice National Fraud Enforcement Division (NFED). The memo describes an ambitious, but perhaps redundant, vision for this ...

00:08:23
placeholder
April 30, 2026
The Efficient Proximate Cause Doctrine Saves a Claim

When Abalone Died As a Result of Multiple Causes The Efficient Proximate Cause Requires Payment

Post number 5345

Read the full article at https://www.linkedin.com/pulse/efficient-proximate-cause-doctrine-saves-claim-barry-zalma-esq-cfe-yndlc, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.

In American Abalone Farms, LLC v. Star Insurance Company et al., H052643, California Court of Appeals, Sixth District (April 27, 2026) the Court of Appeals dealt with an insurance coverage issue that required application of the efficient proximate cause doctrine.

FACTS

American Abalone Farms, LLC ("American Abalone" ) operates an aquaculture farm in Santa Cruz County, California, raising abalone in tanks. In August 2020, the CZU Lightning Complex Fires led to a prolonged power outage and road closures near the farm. As a result, the farm’s water pumps failed, causing the death of most of the ...

00:08:38
placeholder
April 29, 2026
Breach of a Specific Condition Precedent Is a Complete Defense

Breach of a Specific Condition Precedent Is a Complete Defense

See the video at and at and at https://zalma.com/blog plus more than 5300 posts.

In United Services Automobile Association and State Farm Mutual Automobile Insurance Company v. Anthony Wenzell, 2026 CO 25 (Colo. Apr. 27, 2026) Anthony Wenzell was rear-ended in a car accident. He had a significant prior 2014 accident that required back surgery.

Wenzell claimed underinsured-motorist (UIM) benefits under three policies: (1) the tortfeasor’s liability policy, (2) his own primary UIM policy with State Farm, and (3) an excess UIM policy issued by USAA (under his brother’s policy, which contained an “other insurance” clause making USAA’s coverage excess over any collectible insurance).

After receiving the claims, both USAA and State Farm repeatedly requested that Wenzell execute comprehensive medical-release authorizations so they could obtain his full medical records and ...

00:11:27
placeholder
12 hours ago

It is Fraud to Make the Same Claim Twice

Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.

Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages

Post number 5347

No One is Entitled to be Paid for the Same Loss Twice

In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.

BACKGROUND

In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.

PROCEDURAL HISTORY

State Farm filed motion for summary...

post photo preview
12 hours ago

It is Fraud to Make the Same Claim Twice

Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.

Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages

Post number 5347

No One is Entitled to be Paid for the Same Loss Twice

In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.

BACKGROUND

In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.

PROCEDURAL HISTORY

State Farm filed motion for summary...

post photo preview
April 30, 2026
Investigation of First Party Property Claims

What Must be Done after Notice of a Claim is Received by the Insurer

Read the full article at https://lnkd.in/gzvvdkMZ and at https://zalma.com/blog.

Below you will read from this post until you reach the the end of this blog post as the free part of an Excellence in Claims Handling post. To read the full article and receive all articles for members of Excellence in Claims Handling you should consider joining as a paid member to get full access to articles for members only, to our news, analysis, insurance coverage, claims, insurance fraud and insurance webinars, by clicking at the subscription link below.

A first party property policy does not insure property: it insures a person, partnership, corporation or other entity against the risk of loss of the property. Before an insured can make a claim for indemnity under a policy of first party property insurance the insured must prove that there was damage to property the risk of loss of which was insured by the policy. The obligation imposed on the insured ...

post photo preview
See More
Available on mobile and TV devices
google store google store app store app store
google store google store app tv store app tv store amazon store amazon store roku store roku store
Powered by Locals