INSURANCE FRAUDSTER MUST PAY INSURER FULL RESTITUTION
Post 5049
See the full video at https://lnkd.in/gmW8qimV and at https://lnkd.in/g_AYN2N7, and https://zalma.com/blog plus more than 5000 posts.
Plaintiff Liberty Insurance Corporation (“Liberty”) issued a homeowners insurance policy to Defendant Jack Strunk that was active when his home was damaged by fire. Strunk made two insurance claims: one for fire damage and another for alleged theft of certain personal property after the fire. Strunk sued Liberty for the payment of the alleged damages. That case was removed to federal court and ultimately settled by Liberty paying $100,000 to Strunk.
In Liberty Insurance Corporation v. Jack A. Strunk, Civil Action No. 5:24-128-DCR, United States District Court, E.D. Kentucky (April 4, 2025) Liberty sued Strunk for return of the amounts paid in settlement after he pleaded guilty to defrauding Liberty.
THE CRIMINAL CONVICTION
Strunk was convicted of felony insurance fraud. This is not contested as Strunk admited to this in his Answer. Strunk pleaded guilty to, and was convicted of, a criminal fraudulent insurance act based on his conduct in falsely reporting the property as stolen when he filed an insurance claim with Liberty. Liberty sued to recover the $100,000 settlement because Strunk breached the homeowner policy when he fraudulently alleged certain items were stolen.
Strunk was represented by counsel at the onset of this case who later withdrew because of the defendant’s indigency. No counsel entered an appearance. While Strunk participated in submitting a proposed discovery order, he has not been involved since.
MOTION FOR JUDGMENT ON THE PLEADINGS
Liberty filed a Partial Motion for Judgment on the Pleadings, contending that Strunk breached the insurance contract entitling them to the return of the $100,000 only to be offset by restitution Strunk paid pursuant to his plea. The matter was referred to United States Magistrate Judge Edward B. Atkins who directed Strunk to respond to the motion within a specified time only to see no response from Strunk.
Magistrate Judge Atkins then issued a Report and Recommendation (“R&R”) in which he recommended that the Judge grant the plaintiff’s Partial Motion for Judgment on the Pleadings. The R&R also recommended that the US District Judge enter judgment in Liberty’s favor for the full $100,000.
ANALYSIS
The District Court Judge concluded that Congress did not intend to require district court review of a magistrate’s factual or legal conclusions, under a de novo or any other standard, when neither party objects to those findings. While there were no objections filed, the District Judge decided to limit the relief to what the plaintiff requested: that the Court grant the Partial Motion for Judgment on the Pleadings holding that Strunk breached the Policy and caused damages to Liberty in an amount to be determined through subsequent proceedings.
ORDER
Accordingly, it was ORDERED that Plaintiff Liberty Insurance Corporation’s Partial Motion for Judgment on the pleadings was GRANTED. The case remained referred to Magistrate Judge Atkins for limited discovery on the breach of contract damages to determine the amount, if any, Defendant Strunk has paid in criminal restitution to Plaintiff Liberty Insurance Corporation as an offset against the judgment.
ZALMA OPINION
After an insurance fraud perpetrator is convicted the insurer is entitled to receive as a condition of the judgment, restitution for what the crime cost the insurer. Since Liberty defended Strunk’s lawsuit and paid him $100,000 without knowledge of the crime, it sued for full restitution. It is entitled to at least $100,000 plus interest less any restitution Strunk paid into the court in an attempt to comply with the restitution order. No insurer should let a convicted fraudster keep the funds he stole. Liberty did not and will have both the order of restitution and the judgment to get its money back by executing its judgment on any property Strunk still owns, for example the house Liberty insured.
(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
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
to the Insurance Claims Library – https://lnkd.in/gwEYk
The Professional Claims Handler
Post 5218
Read the full article at https://www.linkedin.com/pulse/zalma-philosophy-claims-handling-part-8-barry-zalma-esq-cfe-zdwsc, see the full video at https://rumble.com/v70zl4s-the-zalma-philosophy-of-claims-handling-part-8.html and at https://youtu.be/MIYcF71ffRQ, and at https://zalma.com/blog plus more than 5200 posts.
Claims Commandment X – Thou Shall Not Pretend to be a Lawyer
Some experienced and professional claims people know the law in their area of expertise better than most lawyers.
Adjusters should be adjusters and leave lawyering to lawyers. Similarly, lawyers should be lawyers and never try to be adjusters.
Claims Commandment XI – Thou Shall Empathize With the Claimant
Everyone presenting a claim is unhappy, disturbed, shocked, injured and needs help.
Empathy is identification with and understanding of another’s situation, feelings, and motives. It is the ability to understand another person’s circumstances, point of view, thoughts, and feelings....
HOW TO CREATE AN EXCELLENCE IN CLAIMS HANDLING PROGRAM
See the full video at https://rumble.com/v70wb2i-the-zalma-philosophy-of-claims-handling-part-6.html and at https://youtu.be/tL5nDKPEs40 and at https://zalma.com/blog plus more than 5200 posts.
Post 5217
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry.
An Excellence in Claims Handling program begins with a statement in the insurer’s claims manual or statement of professionalism that it is dedicated to providing excellence in claims handling to every insured who presents a claim.
The excellence in claims handling program should include, at a minimum:
A series of lectures supported by text materials explaining:
A definition of insurance.
How to read and understand an insurance policy.
How to interview an insured, witness, or claimant.
How to assist an insured in the insured’s obligation to ...
The Professional Claims Handler
Post 5216
Read the full article at https://www.linkedin.com/pulse/zalma-philosophy-claims-handling-part-5-barry-zalma-esq-cfe-jde8c, see the full video at https://rumble.com/v70q4x8-the-zalma-philosophy-of-claims-handling-part-5.html and at https://youtu.be/6b9tZQsEkB4, and at https://zalma.com/blog plus more than 5200 posts.
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry.
Standards to be a Professional Claims Adjuster
The Insurance claims professional should be a person who:
1. Can read and understand the insurance policies issued by the insurer.
2. Understands the promises made by the policy.
3. Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
4. Are competent investigators.
5. Have empathy and recognize the difference between empathy and sympathy.
6. ...
The Professional Claims Handler
Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
How to Create Claims Professionals
To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
