Jury’s Findings Interpreting Insurance Contract Affirmed
Post 5105
See the full video at https://lnkd.in/gPa6Vpg8 and at https://lnkd.in/ghgiZNBN, and at https://zalma.com/blog plus more than 5100 posts.
Madelaine Chocolate Novelties, Inc. (“Madelaine Chocolate”) appealed the district court’s judgment following a jury verdict in favor of Great Northern Insurance Company (“Great Northern”) concerning storm-surge damage caused by “Superstorm Sandy” to Madelaine Chocolate’s production facilities.
In Madelaine Chocolate Novelties, Inc., d.b.a. The Madelaine Chocolate Company v. Great Northern Insurance Company, No. 23-212, United States Court of Appeals, Second Circuit (June 20, 2025) affirmed the trial court ruling in favor of the insurer.
BACKGROUND
Great Northern refused to pay the full claim amount and paid Madelaine Chocolate only about $4 million. In disclaiming coverage, Great Northern invoked the Policy’s flood-exclusion provision, which excludes, in relevant part, “loss or damage caused by . . . [the] rising, overflowing[,] or breaking of any boundary, of any . . . body of water . . ., whether driven by wind or not” (the “Flood Exclusion”). In particular, Great Northern relied on a portion of the Flood Exclusion, commonly known in the insurance industry as an anti-concurrent causation (“ACC”) clause, which bars coverage for losses stemming from multiple contributing causes provided that the insurer can demonstrate at least one of those causes is excluded under the Policy. Great Northern’s policy stated the Flood Exclusion applies “regardless of any other cause or event that directly or indirectly . . . contributes . . . to[] the loss or damage”.
According to Great Northern, Madelaine Chocolate’s damage was caused, at least in part, by wind-driven flooding and was thus excluded under the ACC clause of the Flood Exclusion.
Following Great Northern’s denial of coverage, Madelaine Chocolate sued for breach of contract.
After a week-long trial, the jury returned a verdict in favor of Great Northern. New York law imposes a heavy burden on the insurer, who must prove that “its interpretation [of the exclusion] is correct” to avoid application of “the rule of contra proferentem, which generally provides that . . . any ambiguity in the policy should be resolved in favor of the insured.”
Insurance Policy Interpretation:
This case highlights the complexities involved in interpreting insurance policies, especially when multiple clauses and endorsements are present. The ambiguity created by the Windstorm Endorsement’s ACC clause vis-à-vis the Flood Exclusion demonstrates the challenges insurers and insureds face in determining coverage.
Burden of Proof:
The case underscores the heavy burden placed on insurers to prove their interpretation of policy exclusions. Great Northern had to demonstrate that its construction of the policy was the only reasonable interpretation to avoid coverage for storm-surge losses.
Extrinsic Evidence:
The court’s consideration of extrinsic evidence, including the parties’ subjective intent and objective conduct, emphasized the importance of such evidence in resolving ambiguities in insurance contracts.
Jury’s Role:
The case illustrates the significant role juries play in interpreting ambiguous contracts and assessing the intent of the parties. The jury’s verdict in favor of Great Northern, despite the ambiguity, showed the weight given to the evidence presented during the trial.
Policyholder Awareness:
For policyholders, this case serves as a reminder to thoroughly understand their insurance policies and the implications of any exclusions or endorsements. It highlights the importance of clear communication with insurers about coverage expectations and clear communications from the insurer about the coverages provided.
ZALMA OPINION
It is often claimed by pundits that interpretation of insurance contracts is too complex for juries to resolve and should be limited to the wisdom of a District Court Judge. This case makes clear that juries are capable of interpreting an insurance contract’s terms and apply evidence presented at trial to understand the alleged ambiguity in an insurance contract. Judges are no more human than a jury of the peers of the parties to the insurance contract.
(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 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.
Insurance Expert May Not Testify to Speculative and Contains Unsupported Conclusions.
Posted on September 18, 2026 by Barry Zalma
See the full video at and at https://rumble.com/v7fmifw-expert-may-only-testify-to-what-experience-supports.html
In Michele A. Over, and The Estate Of Paul R. Over v. State Farm Mutual Automobile Insurance Company, and State Farm Fire And Casualty Company, Civil Action No. 23-cv-02243-PAB-STV, United States District Court, D. Colorado (September 14, 2026) Michele and Paul Over sued State Farm Fire and State Farm Auto over hail-damage and stolen-vehicle claims.
The operative dispute concerned State Farm Auto’s motion to exclude or limit opinions from plaintiffs’ insurance-industry expert, Aaron Castillo. Castillo.
Law
The proponent of expert testimony must establish by a preponderance of the evidence that an expert is qualified and that the opinions are helpful, sufficiently grounded, and reliably derived and applied. Experience-based opinions must explain how the...
150 Months in Prison for Tax Fraud
Post 4846
Posted on September 17, 2026 by Barry Zalma
See the full video at https://lnkd.in/g8rh3JBX and https://lnkd.in/gmkdy-9C, In United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
In United States Of America v. Thomas Addaquay, United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
Thomas Addaquay controlled United Consolidated Accounting and Business Services (UC), nominally a check-cashing business.
The government proved a three-stage tax-refund scheme that converted the resulting refund checks into usable funds through ...
Major Fraud Perpetrator Asserts Fifth Amendment Privilege to Avoid Prosecution
Post 5489
Posted on September 14, 2026 by Barry Zalma
Fraudster Refuses to Answer Questions About His Alleged Fraud
See the full video at https://lnkd.in/gvicAMDr and at https://lnkd.in/gvicAMDr
In Great American Insurance Co. v. Gemstone Property Management, LLC, et al., No. 23-cv-9100 (LJL), United States District Court, S.D. New York (September 8, 2026) Great American Insurance Company alleged that it was defrauded through a scheme in which Subin Associates, LLP recruited individuals to stage construction-site injuries, arranged unnecessary medical treatment and litigation funding, and pursued fraudulent personal-injury claims.
Luis Manuel Garcia Salcedo, resulted in a $6 million settlement. Non-party Jose Hernandez allegedly worked as an assistant manager at Subin, operated Hernandez Associates, and owned litigation-funding companies that shared office space with Subin and provided services to its clients.
After Great American ...
Employee Report of Fraud Results in Damages Suit After Qui Tam Suit Settled
No Statutory Hearing Right Arose Because No Dental Commission Complaint License Suspension, Revocation, Or Sanction Occurred.
Post 4855
Posted on October 2, 2026 by Barry Zalma
In Abbas Mohammadi et al. v. William M. Tong et al., No. AC 47598, Court of Appeals of Connecticut (September 29, 2026) Abbas Mohammadi owned and operated Columbia Dental, P.C., which provided dental services through multiple Connecticut offices; Columbia Oral Maxillofacial Imaging, LLC served as the billing entity.
From April 2012 to February 27, 2013, Columbia Dental employed Brittany Ames Mahoney as a dental assistant. During her employment, Mahoney claimed to have discovered certain billing irregularities, including, but not limited to, false and fraudulent reimbursement claims submitted to the Department of Social Services for services rendered to Medicaid beneficiaries. Mahoney filed a complaint and an affidavit in the United States District Court for the District of...
Another Anniversary for Barry Zalma, Inc
Posted on October 1, 2026 by Barry Zalma
From October 1, 1979 – 2026
Post 4854
Read the full issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2026/09/ZIFL-10-01-2026.pdf Forty seven years ago today I left the world of the employed and became an entrepreneur by opening my own law firm. The law practice was incorporated shortly thereafter as Barry Zalma, Inc.
When I opened for business on October 1, 1979, I had no clients and no certainty that I would have any in the future. I had borrowed money from the bank to carry me through the first six months and was concerned about my ability to pay the loan with my third child about to be born.
Much to my surprise and pleasure, on October 1, 1979, at 8:10 a.m., the best claims handler in the London market, Alan Warboys, called from London and provided me with my first case as an independent lawyer to represent Certain Underwriters at Lloyd’s, London. He, and the Lloyd’s Underwriters he represented, showed faith in me as a lawyer and insurance expert. Alan is now, although ...
Defendants Successfully Moved for Summary Judgment
Post 4854
Posted on September 30, 2026 by Barry Zalma
In Jeffrey Wayne Phillips v. Creative Website Studios, et al., No. 5:23-CV-568-BO-BM, United States District Court, E.D. North Carolina, Western Division (September 28, 2026) the Court needed to rule on the order and memorandum and recommendation (“M&R”) of the Magistrate.
Jeffrey Wayne Phillips had contracted with Creative Website Studios and SR Telecommunications for website and hosting services. He alleged that defendants repeatedly billed him for hosting periods he had already paid for and later took down his website. Phillips claimed the outage prevented him from bidding on U.S. government security contracts and sought roughly $300 million in consequential damages.
LAW
Under North Carolina law, fraud requires a false material representation or concealment, intent and effect of deception, resulting damage, and reasonable reliance. Obtaining property by false pretenses similarly requires an ...
