Exemplary Damages Available for Fraud, Malice, or Willful and Wanton Conduct
Post 5039
Read the full article at https://www.linkedin.com/pulse/insurer-who-sues-insured-fraud-without-evidence-zalma-esq-cfe-90osc, see the full video at https://rumble.com/v6rlky1-insurer-who-sues-insured-for-fraud-without-evidence-should-be-punished.html and at https://youtu.be/R21dPn2pLSE, and at https://zalma.com/blog plus more than 5000 posts.
Lack of Evidence Accusing Insured of Fraud Exposes Insurer to Punitive Damages
In Shalz Construction LLC, a Colorado limited liability company; and Bradley Shalz, individually v. Great Lakes Insurance, SE f/k/a Great Lakes Reinsurance UK PLC, a foreign corporation, Civil Action No. 22-cv-03005-NYW-NRN, United States District Court, D. Colorado (March 31, 2025) the Court was asked by Plaintiffs Shalz Construction, LLC and Bradley Shalz’s (collectively, “Plaintiffs” or “Shalz”) for Leave to Amend to Seek Exemplary Damages (“Motion to Amend”).
Background
The case has a complicated history, originating from third-party claims that Great Lakes asserted against Shalz in an earlier lawsuit involving Pinon Sun ConLack of Evidence Accusing Insured of Fraud Exposes Insurer to Punitive Damages
In Shalz Construction LLC, a Colorado limited liability company; and Bradley Shalz, individually v. Great Lakes Insurance, SE f/k/a Great Lakes Reinsurance UK PLC, a foreign corporation, Civil Action No. 22-cv-03005-NYW-NRN, United States District Court, D. Colorado (March 31, 2025) the Court was asked by Plaintiffs Shalz Construction, LLC and Bradley Shalz’s (collectively, “Plaintiffs” or “Shalz”) for Leave to Amend to Seek Exemplary Damages (“Motion to Amend”).
Background
The case has a complicated history, originating from third-party claims that Great Lakes asserted against Shalz in an earlier lawsuit involving Pinon Sun Condominium Association, Inc. Great Lakes alleged that Shalz conspired with Pinon Sun to commit insurance fraud by submitting inflated estimates for roofing repairs.
Legal Proceedings
Judge Christine M. Arguello dismissed the racketeering claims against Shalz and later entered summary judgment in Shalz’s favor on all remaining claims. The court concluded that Great Lakes had relied on its own contractors’ estimates rather than any information provided by Shalz.
Current Lawsuit
Shalz sued Great Lakes for malicious prosecution, claiming actual out-of-pocket damages of approximately $200,000 and seeking damages for lost profits, business opportunities, and damage to their reputation, estimated at approximately $3 million.
Motion to Amend
Shalz asserted that Great Lakes acted with fraud, malice, or willful and wanton conduct in bringing the conspiracy and fraud claims against Shalz, justifying a jury awarding exemplary damages.
Legal Standard
Under Colorado law, exemplary damages are appropriate in civil actions where the injury is attended by circumstances of fraud, malice, or willful and wanton conduct.
ANALYSIS
Plaintiffs have provided evidence that Great Lakes pursued the lawsuit against Shalz maliciously and with evil intent, primarily to exert settlement pressure. Therefore, the Court granted Plaintiffs’ Motion for Leave to Amend to Seek Exemplary Damages.
Legal Standard For Allowing Exemplary Damages Under Colorado Law
A claim for exemplary damages under Colorado law is appropriate in all civil actions in which damages are assessed by a jury for a wrong done to a person or to personal or real property, where the injury complained of is attended by circumstances of fraud, malice, or willful and wanton conduct.
Willful and wanton conduct is defined as conduct purposefully committed which the actor must have realized as dangerous, done heedlessly and recklessly, without regard to consequences, or of the rights and safety of others, particularly the plaintiff.
The statutory requirements are met where the defendant is conscious of his conduct and the existing conditions and knew or should have known that injury would result. Exemplary damages are intended to punish and penalize a defendant for certain wrongful and aggravated conduct and to serve as a warning to other possible offenders
CONCLUSION
Great Lakes brought claims against Shalz for which Great Lakes could not even muster any non-speculative allegations or utterly failed to provide any evidence of, for example, reliance or damages.Plaintiffs brought forward prima facie evidence that Great Lakes sued Shalz for fraud, civil theft with the knowledge that there was little to no support for those claims because Great Lakes had never relied on or been damaged by the alleged conduct.
Plaintiffs’ Motion for Leave to Amend to Seek Exemplary Damages was GRANTED.
ZALMA OPINION
Insurance fraud is both a crime and a tort. If an insured commits fraud any claim owed under an insurance policy becomes void and noncollectable. However, accusing an insured of fraud without evidence is wrongful and can take what an insurer thought was a good defense to a claim into an obvious loss and provide the insured with the ability to punish the insurer. Great Lakes learned that its suit against Shalz for fraud and civil theft with the knowledge that there was little to no support for those claims because Great Lakes had never relied on or been damaged by the alleged conduct, the court allowed the plaintiffs to amend their suit to include a claim seeking exemplary damages.
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Insurance Expert May Not Testify to Speculative and Contains Unsupported Conclusions.
Posted on September 18, 2026 by Barry Zalma
See the full video at and at https://rumble.com/v7fmifw-expert-may-only-testify-to-what-experience-supports.html
In Michele A. Over, and The Estate Of Paul R. Over v. State Farm Mutual Automobile Insurance Company, and State Farm Fire And Casualty Company, Civil Action No. 23-cv-02243-PAB-STV, United States District Court, D. Colorado (September 14, 2026) Michele and Paul Over sued State Farm Fire and State Farm Auto over hail-damage and stolen-vehicle claims.
The operative dispute concerned State Farm Auto’s motion to exclude or limit opinions from plaintiffs’ insurance-industry expert, Aaron Castillo. Castillo.
Law
The proponent of expert testimony must establish by a preponderance of the evidence that an expert is qualified and that the opinions are helpful, sufficiently grounded, and reliably derived and applied. Experience-based opinions must explain how the...
150 Months in Prison for Tax Fraud
Post 4846
Posted on September 17, 2026 by Barry Zalma
See the full video at https://lnkd.in/g8rh3JBX and https://lnkd.in/gmkdy-9C, In United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
In United States Of America v. Thomas Addaquay, United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
Thomas Addaquay controlled United Consolidated Accounting and Business Services (UC), nominally a check-cashing business.
The government proved a three-stage tax-refund scheme that converted the resulting refund checks into usable funds through ...
Major Fraud Perpetrator Asserts Fifth Amendment Privilege to Avoid Prosecution
Post 5489
Posted on September 14, 2026 by Barry Zalma
Fraudster Refuses to Answer Questions About His Alleged Fraud
See the full video at https://lnkd.in/gvicAMDr and at https://lnkd.in/gvicAMDr
In Great American Insurance Co. v. Gemstone Property Management, LLC, et al., No. 23-cv-9100 (LJL), United States District Court, S.D. New York (September 8, 2026) Great American Insurance Company alleged that it was defrauded through a scheme in which Subin Associates, LLP recruited individuals to stage construction-site injuries, arranged unnecessary medical treatment and litigation funding, and pursued fraudulent personal-injury claims.
Luis Manuel Garcia Salcedo, resulted in a $6 million settlement. Non-party Jose Hernandez allegedly worked as an assistant manager at Subin, operated Hernandez Associates, and owned litigation-funding companies that shared office space with Subin and provided services to its clients.
After Great American ...
Inadequately Briefed Issues Defeats Appeal
Post 4852
Issues on Appeal Must be Adequately Briefed
Posted on September 25, 2026 by Barry Zalma
In Emy Ojekwe v. Connecticut Transit District Consortium, No. AC 47389, Court of Appeals of Connecticut (September 22, 2026) Emy Ojekwe alleged that he was injured on September 24, 2020, while leaving a bus operated by Connecticut Transit District Consortium, doing business as Greater Bridgeport Transit Authority.
According to his complaint, the wheelchair ramp began to rise before he had fully exited, causing his wheelchair to fall backward and allegedly injuring several parts of his body and damaging the wheelchair. The defendant denied negligence and alleged comparative negligence. After a two-day jury trial in November 2023, the jury returned a defense verdict.
The trial court denied Ojekwe’s motion to set aside the verdict and for a new trial, and he appealed.
LAW
A trial court’s refusal to set aside a verdict because of counsel’s improper remarks is reviewed for abuse of ...
Inadequately Briefed Issues Defeats Appeal
Post 4852
Issues on Appeal Must be Adequately Briefed
Posted on September 25, 2026 by Barry Zalma
In Emy Ojekwe v. Connecticut Transit District Consortium, No. AC 47389, Court of Appeals of Connecticut (September 22, 2026) Emy Ojekwe alleged that he was injured on September 24, 2020, while leaving a bus operated by Connecticut Transit District Consortium, doing business as Greater Bridgeport Transit Authority.
According to his complaint, the wheelchair ramp began to rise before he had fully exited, causing his wheelchair to fall backward and allegedly injuring several parts of his body and damaging the wheelchair.
LAW
Refusal to set aside a verdict because of counsel’s improper remarks is reviewed for abuse of discretion.
Appellate claims receiving only cursory treatment, without record citations, supporting authority, or legal analysis, are inadequately briefed.
DISCUSSION
Improper opening remarks.
Defense counsel referred to Ojekwe’s national origin,...
Psychiatrist Who Was Convicted of Fraud Asked the First Circuit to Reduce his Punishment
Post 4851
Posted on September 24, 2026 by Barry Zalma
Fraud to Private and Public Health Insurers Doesn’t Pay
In United States v. Gustavo Kinrys, Nos. 24-1592, 24-1716, United States Court of Appeals, First Circuit (September 21, 2026) Gustavo Kinrys, a Massachusetts psychiatrist, submitted fraudulent claims to private and public health insurers from 2015 through 2018, including bills for more than 1,000 sessions when he or the purported patient was outside the country. When insurers requested supporting records, he delayed through a fictitious office manager and created false documentation.
A jury convicted Kinrys on fourteen counts. The district court imposed a 99-month sentence, calculated intended loss at slightly more than $19 million based on billed amounts, ordered $6,537,309.59 in restitution, and ordered $6,527,391.19 in forfeiture.
At sentencing, the district court calculated Kinrys’s base offense level to be ...
