Earth Movement Exclusion Effective as Major Cause of Loss
One of Many Causes of Destruction of House was Earth Movement
Post 5111
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Anti-Concurrent Cause Language Required Claim Denial
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Terri Lawrence sued alleging that State Farm breached an insurance contract and acted in bad faith by failing to pay benefits under the contract. The case was removed to the United States District Court based on diversity jurisdiction, and the trial was set to begin on September 8, 2025.
In Terri Lawrence v. State Farm Fire..., No. C24-4008-LTS-MAR, United States District Court, N.D. Iowa, Western Division (June 25, 2025) the USDC applied anti-concurrent cause language to dismiss suit.
SUMMARY JUDGMENT
Relevant Facts
Lawrence purchased a property in Sioux City, Iowa, and insured it with State Farm. In January 2023, a burst water pipe caused significant damage to the property, leading to its condemnation.
On or about January 11, 2023, the Property was placarded as being unfit for human habitation by the Inspection Services Division of the City of Sioux City Iowa because of “major foundation and structural damage due to a burst water pipe.”
ANALYSIS
The earth movement exclusion unambiguously precluded coverage.
The party claiming entitlement to coverage under the policy must prove compliance with its terms.
Because the Policy’s earth movement exclusion unambiguously applies to preclude coverage, Lawrence cannot show that State Farm breached the Policy and her breach of contract claim fails as a matter of law.
Since State Farm had a reasonable basis for denying Lawrence’s claim her bad faith claim fails as a matter of law.
CONCLUSION
State Farm’s motion for summary judgment was granted in its entirety, the action was dismissed and judgment was entered in favor of State Farm and against plaintiffs.
ZALMA OPINION
Insurance litigants must be aware of the anti-concurrent cause language now existing in almost all modern insurance policies before bringing a breach of contract and bad faith suit. “Earth movement” was at least a contributing cause of the damage (and clearly a major one), plaintiffs are not entitled to coverage under the Policy. Even though some of the cause of her damage was a covered peril, earth movement was a major cause and was clearly and unambiguously excluded and State Farm’s claim denial was affirmed.
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Act as Your Own Lawyer and Failure is Almost Certain
No Suit Can be Maintained if Claims are Facially Implausible
Post 5152
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In Gabaryaahla Israel and Akiva Israel, Beneficiaries v. Caliber Home Loans, Inc., et al., No. CIV-24-1255-D, United States District Court, W.D. Oklahoma (July 11, 2025) Wells Fargo Bank, N.A.’s Moved to Dismiss Plaintiffs’ Complaint for Fraud, Quiet Title, Injunctive Relief, Breach of Contract, Declaratory Judgment, Damages, Racketeer Influenced Corrupt Organizations Act (RICO) Violations, and Trover and Midfirst Bank’s Rule 12(b)(6) Motion to Dismiss.
Plaintiffs, who are self-represented, failed to respond to the motions to dismiss within 21 days as required by LCvR7.1(g) (establishing a 21-day deadline, and noting that any motion that is not opposed within 21 days may, in the discretion of the court, be deemed confessed.
BACKGROUND:
The plaintiffs brought this action against the ...
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Workers’ Compensation Insurer Sues to Collect Premiums Avoided by Fraud
It’s Fraud to Lie on Application for Insurance
Post 5121
In The Commissioners Of The State Insurance Fund v. Capcon Construction Industries Corp., Capcon Construction Supply Corp., Jab Masonry Corp., Agra Masonry Inc., Agra Industries Usa Corp, A&A Masonry Corp., Alexander Shvartsberg, Darren Caputo, Maryann Furman, 2025 NY Slip Op 32359(U), Index No. 452680/2024, Motion Seq. No. 002, Supreme Court, New York County (July 2, 2025) the court dealt with a fraudulent application for workers’ compensation insurance.
BACKGROUND
On March 3, 2015, A&A Masonry Corp. applied for workers’ compensation insurance coverage from the New York State Insurance Fund (SIF).
On January 15, 2016, Agra Masonry Inc. was incorporated with Maryann Furman as the sole shareholder and President.
On January 4, 2018, SIF canceled ...
Arrest for False Impersonation Protected Property Owners from Losing Insurance
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In United States Of America v. Christopher J. Gallo and Mehmet Ali Elmas, No. 2:24-cr-00712 (BRM), USDC, D. New Jersey (July 16, 2025) Gallo and Elmas each filed Motions to Dismiss Count Eighteen which charges the CoDefendants with Aggravated Identity Theft.
BACKGROUND
Co-Defendants were charged in a criminal complaint (the “Complaint”) with conspiracy to commit bank fraud. Gallo, as a senior loan officer originated more than $1.4 billion in loans for the Financial Institution.
A grand jury returned an eighteen-count indictment charging Co-Defendants with Conspiracy to Commit Bank Fraud, False Statement to a Financial Institution and Aggravated Identity Theft.
LEGAL PROCEEDINGS
Motions to Dismiss
The court found that the identity theft was central to the fraudulent scheme, as the...
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
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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 ...
