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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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.
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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
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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.
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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 ...
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Post number 5275
Posted on January 30, 2026 by Barry Zalma
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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 ...
