Fraud Eliminates Right to No Fault Benefits
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Post 5091
Court Eliminates an Attempt to Defraud No Fault Placement Facility
Aric Lynn Holloway II (plaintiff), appealed the stipulated order of dismissal in favor of defendant-appellee, Citizens Insurance Company of the Midwest (defendant).
In Aric Lynn Holloway II, et al v. Memberselect Insurance Company et al, Michigan Automobile Insurance Placement Facility, No. 367611, Court of Appeals of Michigan (May 29, 2025) the plaintiff attempted to convince the Court of Appeals to allow his fraud to succeed.
In a case involving issues of insurance claims, alleged fraud, and the eligibility for Personal Injury Protection (PIP) benefits the Court of Appeals affirmed the trial court.
FACTUAL BACKGROUND
The case arises from a car accident where the plaintiffs, Holloway and his friends, were rear-ended by another vehicle that fled the scene. Holloway sustained various injuries and underwent spinal surgery at Advanced Surgery Center (ASC), assigning his right to PIP benefits to ASC only to find Holloway had committed fraud.
Holloway sought PIP benefits through MemberSelect Insurance Company, which was issued to his parents, and also applied for benefits through the Michigan Assigned Claims Plan (MACP).
Holloway’s application stated he lived with his girlfriend and daughter, indicating no vehicles were owned in the household. However, he later testified he lived with his parents at the time of the accident. His application included false service dates for attendant-care services, which raised suspicions of fraud.
LEGAL PROCEEDINGS
ASC intervened in the lawsuit to recover PIP benefits it provided to Holloway. Eventually, Citizens moved for summary disposition, arguing that Holloway committed fraudulent acts by submitting false information in his claims.
The court found that Holloway’s claims were based on knowingly false statements, which included fabricated service dates and misrepresentation of his living situation. The court ruled that he was ineligible for PIP benefits due to fraud.
JURISDICTIONAL ISSUES
The court concluded that Holloway was an aggrieved party following the final order dismissing his claims.
SUMMARY DISPOSITION AND FRAUD FINDINGS
The court granted summary disposition in favor of Citizens Insurance, concluding that Holloway’s actions constituted a fraudulent insurance act as defined under Michigan law. The court emphasized that the statements made in his application and affidavits were material to his claim, and he was aware they were false.
Holloway’s assertions that discrepancies were innocent mistakes were rejected. The court found no genuine issue of material fact regarding his knowledge of the false information he submitted.
CONCLUSION
Ultimately, the court dismissed Holloway’s claims for PIP benefits based on the determination that he committed insurance fraud.
When a person injured in a motor vehicle accident lacks insurance, the no-fault act sets forth an order of priority for insurers who may be liable for the payment of PIP benefits. The Court held that a person commits a “fraudulent insurance act” when
1 the person presents or causes to be presented an oral or written statement,
2 the statement is part of or in support of a claim for no-fault benefits, and
3 the claim for benefits was submitted to the MAIPF.
4 the person must have known that the statement contained false information, and
5 the statement concerned a fact or thing material to the claim.
Viewing the evidentiary record in the light most favorable to plaintiff, the court found no genuine issue of material fact that plaintiff committed a fraudulent insurance act.
The record indicates that plaintiff was aware that the attendant-care and replacement-services affidavits he submitted were incorrect.
The Court concluded that Plaintiff failed to demonstrate the existence of a genuine issue of material fact to preclude summary disposition.
ZALMA OPINION
No Fault insurance was designed to help injured people and take the profit out of fraud because of the limited awards for no fault accidents. In this case fraud was obvious, the plaintiff admitted he lied in his deposition but claimed it was just a mistake not an intent to deceive. The argument failed because the evidence established that he intentionally and incompetently committed fraud. Crime doesn’t pay and he will have to pay for his surgery out of his own funds.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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To Recover UIM Benefits the At Fault Driver Must be Underinsured
Post 5092
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Angie Foresee appealed from the judgment of the district court dismissing her complaint and awarding attorney fees in favor of Metropolitan Group Property and Casualty Insurance Company (Metropolitan). In Angie Foresee v. Metropolitan Group Property And Casualty Insurance Company, and DOES I-V, No. 51902, Court of Appeals of Idaho (June 2, 2025) the trial court award was affirmed.
FACTUAL BACKGROUND
Foresee was involved in a rear-end collision with a third-party driver (at-fault driver). At the time of the accident, the at-fault driver carried a liability automobile insurance policy that had a $100,000 coverage limit per person. Foresee had underinsured motorist coverage (UIM) that included a $50,000 coverage limit per person through Metropolitan. Foresee alleged damages in excess of $100,000.
Foresee settled ...
False Report of Theft of Vehicle Established
Post 5090
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Creating a Fake Theft of Vehicle and Insurance Claim is a Crime
Shonda Brown faced multiple charges, including felonies related to false reporting and insurance fraud changed to class A misdemeanors such as tampering with public records and making false statements.
The case arose from allegations that Brown paid an informant to move her inoperable vehicle and then reported it stolen to the NYPD, despite evidence suggesting the vehicle had been tampered with and was found in a damaged state.
In The People of the State of New York v. Shonda Brown, Index No. CR-024423-24KN, 2025 NY Slip Op 25122, Criminal Court of the City of New York, Kings County (May 23, 2025) the Criminal Court concluded that the charges were appropriately filed and rejected Brown’s motion to dismiss.
Sufficiency of the Accusatory Instrument
The ...
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 ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
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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 ...
A Heads I Win, Tails You Lose Story
Post 5062
Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...