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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Anti-Public Adjuster Clause Is Effective in New York
Post number 5301
Read the full article at https://www.linkedin.com/pulse/public-adjusters-attempt-represent-insured-subject-zalma-esq-cfe-rubfc, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.
Insurers May Contractually Prevent an Insured from Hiring a Public Adjuster
In Peter Barbato & North Jersey Public Adjusters Inc. v. Interstate Fire & Casualty Company, et al, No. 25-cv-5312 (JGK), United States District Court, S.D. New York (December 15, 2025) the plaintiffs, Peter Barbato and North Jersey Public Adjusters, Inc. (“NJPA”), filed suit against several insurance companies, including Interstate Fire & Casualty Company, Independent Specialty Insurance Company, and certain Underwriters at Lloyd’s of London.
FACTS
NJPA is a New Jersey-based public adjusting firm licensed in New York. The dispute centers on ...
Anti-Public Adjuster Clause Is Effective in New York
Post number 5301
Read the full article at https://www.linkedin.com/pulse/public-adjusters-attempt-represent-insured-subject-zalma-esq-cfe-rubfc, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.
Insurers May Contractually Prevent an Insured from Hiring a Public Adjuster
In Peter Barbato & North Jersey Public Adjusters Inc. v. Interstate Fire & Casualty Company, et al, No. 25-cv-5312 (JGK), United States District Court, S.D. New York (December 15, 2025) the plaintiffs, Peter Barbato and North Jersey Public Adjusters, Inc. (“NJPA”), filed suit against several insurance companies, including Interstate Fire & Casualty Company, Independent Specialty Insurance Company, and certain Underwriters at Lloyd’s of London.
FACTS
NJPA is a New Jersey-based public adjusting firm licensed in New York. The dispute centers on ...
Proof of Highly Contaminated Water is Required for Extra Payments
Post number 5300
Read the full article at https://www.linkedin.com/pulse/acting-your-own-lawyer-foolish-barry-zalma-esq-cfe-mbg0c, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.
Acting as Your Own Lawyer is Foolish
Evidence of Breach of Contract Survives Dismissal of All Other Charges
In Lee Lifeng Hsu and Jane Yuchen Hsu v. State Farm Fire And Casualty Company, C. A. No. N24C-09-020 CLS, Superior Court of Delaware (February 27, 2026) a claim to State Farm who paid approximately $61,000 after assessments but denied coverage for additional items including ceramic tiles, the kitchen floor ceiling, underlayment plywood, and numerous personal property items resulted in suit by the Hsu’s acting in pro per.
Facts
Lee Lifeng Hsu and Jane Yuchen Hsu (“Plaintiffs”) purchased a homeowners’ insurance policy from State Farm Fire...
Insurance Condition Requires Following the Intent of the Parties
Post number 5307
Principles of Contract Interpretation Compels Reading Contract as Written
Read the full article at https://www.linkedin.com/pulse/portable-storage-containers-buildings-barry-zalma-esq-cfe-fkg1c and at https://zalma.com/blog.
In Eastside Floor Supplies, Ltd. v. SCS Agency, Inc., Hanover Insurance Company, et al., No. 2024-01501, Index No. 609883/19, 2026 NY Slip Op 01488, Supreme Court of New York, Second Department (March 18, 2026)
In May 2019, a fire damaged business personal property belonging to the plaintiffs, which was stored in portable storage containers at their Manhattan premises. At the time of the fire, the plaintiffs were insured under a businessowners insurance policy (BOP) issued by the defendant Hanover Insurance Company which provided general coverage for business personal property, and which included a specific extension for “Business Personal Property Temporarily in Portable Storage Units” (the portable storage ...
ERISA Saves Fraudulent Claims Suit
Post number 5306
Read the full article at https://www.linkedin.com/pulse/failure-provide-well-pled-facts-defeats-most-action-zalma-esq-cfe-b4zuc and at https://zalma.com/blog plus more than 5300 posts.
Allegations of Fraudulent Insurance Billing Must be Pleaded with Specificity
In Genesis Laboratory Management LLC v. United Healthcare Services, Inc. and Oxford Health Plans, Inc., No. 21cv12057 (EP) (JSA), United States District Court, D. New Jersey (March 13, 2026) Genesis Laboratory Management LLC (“Genesis”), a New Jersey-based molecular diagnostic and anatomic pathology laboratory, provided COVID-19 related testing services and submitted claims for reimbursement as an out-of-network provider to United Healthcare Services, Inc. (“United”) and Oxford Health Insurance, Inc. (“Oxford”). Metropolitan Healthcare Billing, LLC (“Metropolitan”), owned by the same individual as Genesis, handled the billing for Genesis.
FACTUAL BACKGROUND
United and Oxford, who administer both ERISA and ...
ERISA Saves Fraudulent Claims Suit
Post number 5306
Read the full article at https://www.linkedin.com/pulse/failure-provide-well-pled-facts-defeats-most-action-zalma-esq-cfe-b4zuc and at https://zalma.com/blog plus more than 5300 posts.
Allegations of Fraudulent Insurance Billing Must be Pleaded with Specificity
In Genesis Laboratory Management LLC v. United Healthcare Services, Inc. and Oxford Health Plans, Inc., No. 21cv12057 (EP) (JSA), United States District Court, D. New Jersey (March 13, 2026) Genesis Laboratory Management LLC (“Genesis”), a New Jersey-based molecular diagnostic and anatomic pathology laboratory, provided COVID-19 related testing services and submitted claims for reimbursement as an out-of-network provider to United Healthcare Services, Inc. (“United”) and Oxford Health Insurance, Inc. (“Oxford”). Metropolitan Healthcare Billing, LLC (“Metropolitan”), owned by the same individual as Genesis, handled the billing for Genesis.
FACTUAL BACKGROUND
United and Oxford, who administer both ERISA and ...
