Notice of Claim Later than 60 Days After Expiration is Too Late
Post 5089
Injury at Massage Causes Suit Against Therapist
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Hiscox Insurance Company (“Hiscox”) moved the USDC to Dismiss a suit for failure to state a claim because the insured reported its claim more than 60 days after expiration of the policy.
In Mluxe Williamsburg, LLC v. Hiscox Insurance Company, Inc., et al., No. 4:25-cv-00002, United States District Court, E.D. Missouri, Eastern Division (May 22, 2025) the trial court’s judgment was affirmed.
FACTUAL BACKGROUND
Plaintiff, the operator of a massage spa franchise, entered into a commercial insurance agreement with Hiscox that provided liability insurance coverage from July 25, 2019, to July 25, 2020. On or about June 03, 2019, a customer alleged that one of Plaintiff’s employees engaged in tortious conduct, and the customer eventually sued on those allegations. Plaintiff made an insurance claim related to the incident, and Hiscox denied coverage.
According to the insurance contract Plaintiff was obligated to give Hiscox written notice of any claim “no later than 60 days after the end of the policy period.” In a letter denying Plaintiff’s claim, Hiscox explained that Plaintiff first reported the claim to Hiscox “on or about October 27, 2020 (94 days after policy expiration), [and therefore] the insuring agreement [was] not triggered and coverage under the Professional Liability Coverage Part [was] unfortunately precluded.”
Plaintiff sued asserting that Hiscox’s erroneous and vexatious refusal to provide coverage under the applicable policy, without cause or excuse, has cost Plaintiff significantly.
ANALYSIS
Hiscox argued the vexatious-refusal claim failed because Plaintiff did not allege that it satisfied its obligations under the applicable insurance agreement. More specifically, the insurance agreement required Plaintiff to notify Hiscox of its claim before September 23, 2020, and according to the Complaint, Plaintiff did not do so.
Because the insurance coverage was never triggered by timely notice, Hiscox argued that its refusal to pay cannot be considered vexatious under the facts alleged, and therefore, Plaintiff has failed to state a claim upon which relief can be granted.
In response Hiscox contended that the purpose of a motion to dismiss under Rule 12(b)(6) is to test the legal sufficiency of the complaint. To withstand Hiscox’s Motion, Plaintiff’s Complaint must contain sufficient factual matter, which, when accepted as true and viewed in the light most favorable to the nonmoving party, states a claim to relief that is plausible on its face. Factual allegations must be enough to raise a right to relief above the speculative level.
A vexatious-refusal claim ultimately requires Plaintiff to prove:
1. the existence of the insurance policy;
2. the insurance company’s refusal to pay; and
3. such refusal was without reasonable cause or excuse.
The Court concluded a vexatious-refusal claim requires an allegation that the insurer’s refusal to be “without reasonable cause or excuse.” This element requires Plaintiff to show that it upheld its end of the bargain as set forth in the insurance agreement. Failing to allege as much in the complaint provides grounds for dismissal under Rule 12(b)(6).
Plaintiff’s Complaint contains no allegation – general or otherwise – that Plaintiff complied with its obligations under the insurance contract at issue. A district court need not conjure up unpled allegations to save a complaint. Therefore, the Court granted Hiscox’s Motion to Dismiss.
The Court found for various other problems with the pleading and the withdrawal of Plaintiff’s counsel, that the better course is to dismiss this entire matter without prejudice. Doing so will allow Plaintiff sufficient time to find and retain new counsel, preserve Plaintiff’s ability to file a new complaint that sufficiently states a claim upon which relief can be granted, and give Plaintiff another opportunity to adequately serve all the defendants named therein.
ZALMA OPINION
Insurance law suits require a lawyer with knowledge of the minimal requirements of the law and the insurance contract. The complaint, as originally alleged, named a defendant who was not served, failed to allege a timely report of claim, and counsel withdrew before the motion was heard. By dismissing without prejudice the court gave the Plaintiff a second byte at the apple if it can find competent counsel to file a better suit. A trial court being kind to the Plaintiff.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Concurrent Cause Doctrine Does Not Apply When all Causes are Excluded
Post 5119
Death by Drug Overdose is Excluded
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Southern Insurance Company Of Virginia v. Justin D. Mitchell, et al., No. 3:24-cv-00198, United States District Court, M.D. Tennessee, Nashville Division (October 10, 2024) Southern Insurance Company of Virginia sought a declaratory judgment regarding its duty to defend William Mitchell in a wrongful death case pending in California state court.
KEY POINTS
1. Motion for Judgment on the Pleadings: The Plaintiff moved for judgment on the pleadings, which was granted in part and denied in part.
2. Duty to Defend: The court found that the Plaintiff has no duty to defend William Mitchell in the California case due to a specific exclusion in the insurance policy.
3. Duty to Indemnify: The court could not determine at this stage whether the Plaintiff had a duty to ...
GEICO Sued Fraudulent Health Care Providers Under RICO and Settled with the Defendants Who Failed to Pay Settlement
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Post 5119
Default of Settlement Agreement Reduced to Judgment
In Government Employees Insurance Company, Geico Indemnity Company, Geico General Insurance Company, and Geico Casualty Company v. Dominic Emeka Onyema, M.D., DEO Medical Services, P.C., and Healthwise Medical Associates, P.C., No. 24-CV-5287 (PKC) (JAM), United States District Court, E.D. New York (July 9, 2025)
Plaintiffs Government Employees Insurance Company and other GEICO companies (“GEICO”) sued Defendants Dominic Emeka Onyema, M.D. (“Onyema”), et al (collectively, “Defendants”) alleging breach of a settlement agreement entered into by the parties to resolve a previous, fraud-related lawsuit (the “Settlement Agreement”). GEICO moved the court for default judgment against ...
ZIFL – Volume 29, Issue 14
Post 5118
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You can read the full 20 page issue of the July 15, 2025 issue at https://lnkd.in/giaSdH29
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
This issue contains the following articles about insurance fraud:
The Historical Basis of Punitive Damages
It is axiomatic that when a claim is denied for fraud that the fraudster will sue for breach of contract and the tort of bad faith and seek punitive damages.
The award of punitive-type damages was common in early legal systems and was mentioned in religious law as early as the Book of Exodus. Punitive-type damages were provided for in Babylonian law nearly 4000 years ago in the Code of Hammurabi.
You can read this article and the full 20 page issue of the July 15, 2025 issue at https://zalma.com/blog/wp-content/uploads/2025/07/ZIFL-07-15-2025.pdf
Insurer Refuses to Submit to No Fault Insurance Fraud
...
Rulings on Motions Reduced the Issues to be Presented at Trial
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CASE OVERVIEW
In Richard Bernier v. State Farm Mutual Automobile Insurance Company, No. 4:24-cv-00002-GMS, USDC, D. Alaska (May 28, 2025) Richard Bernier made claim under the underinsured motorist (UIM) coverage provided in his State Farm policy, was not satisfied with State Farm's offer and sued. Both parties tried to win by filing motions for summary judgment.
FACTS
Bernier was involved in an auto accident on November 18, 2020, and sought the maximum available UIM coverage under his policy, which was $50,000. State Farm initially offered him $31,342.36, which did not include prejudgment interest or attorney fees.
Prior to trial Bernier had three remaining claims against State Farm:
1. negligent and reckless claims handling;
2. violation of covenant of good faith and fair dealing; and
3. award of punitive damages.
Both Bernier and State Farm dispositive motions before ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
