Lawyer Acquitted from Fraud Charges Sues Prosecutor & Insurer Who Reported Her
Post 5192
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Probable Cause for Arrest Eliminates Claim of Malicious Prosecution
In Leslie Casaubon v. Texas Mutual Insurance Company and Donna R. Crosby, Travis County District Attorney, No. 1:19-CV-617-RP, United States District Court, W.D. Texas, Austin Division (September 12, 2025) Texas Mutual Insurance Company (“Texas Mutual”) and Donna R. Crosby’s (“Crosby”) (together, “Defendants”) moved to dismiss the suit filed by Leslie Casaubon.
BACKGROUND
Leslie Casaubon, a workers’ compensation attorney, who brought claims against Texas Mutual Insurance Company and Donna R. Crosby, a Travis County District Attorney. Casaubon alleged that Texas Mutual and Crosby conspired to bring false charges of insurance fraud against her due to her success in obtaining favorable decisions against Texas Mutual.
Defendants secured two grand jury indictments against Casaubon for insurance fraud, for which Casaubon alleges Crosby used false or misleading evidence. Casaubon was ultimately acquitted of all charges by a jury .
LEGAL FINDINGS
The court dismissed Casaubon’s claims against Crosby for false arrest, defamation, tortious interference, and conspiracy without prejudice. Crosby’s motion was denied as to Casaubon’s malicious prosecution claim and Section 1983 claim to the extent Crosby is not protected by immunity .
Casaubon’s claims against Texas Mutual for malicious prosecution, false arrest, tortious interference, and conspiracy were dismissed without prejudice. Texas Mutual’s motion was denied as to Casaubon’s defamation claim. The court found that Casaubon sufficiently alleged her defamation claim against Texas Mutual, but not against Crosby.
The court concluded that Casaubon failed to state a claim against Crosby for defamation as she did not identify any specific false statement Crosby made. The court found that Casaubon failed to state a claim for malicious prosecution against Texas Mutual as she did not plausibly allege that Texas Mutual initiated or procured her prosecution.
DISCUSSION
Immunity – Texas Mutual’s Immunity
As a threshold matter, Texas Mutual asserts it is entitled to immunity for its actions that give rise to Plaintiff s claims. Under Texas law, insurers must report suspected fraudulent activity and are “not liable in a civil action . . . and a civil action may not be brought . . ., for furnishing information relating to a suspected, anticipated, or completed fraud insurance act.” Tex. Ins. Code Ann. § 701.052(a) (West). Further, Texas has specifically granted Texas Mutual immunity for “identifying or referring a person for investigation of or prosecution for a possible administrative violation or criminal offense.”
CROSBY’S IMMUNITY
Despite relying on sovereign immunity, Crosby opens her motion by observing that Plaintiff sues Crosby, presumably in her individual capacity only. As Crosby interprets Plaintiff’s state-law torts to be against Crosby in her individual capacity, sovereign immunity does not apply.
Crosby argued Plaintiff must satisfy Rule 9’s requirement of pleading with particularity Plaintiff alleges Crosby intentionally presented false evidence to the grand juries. An allegation that misleading and fabricated evidence was presented to the grand jury is a serious charge, and if properly pleaded, could state an actionable wrong if the Defendants knowingly or with reckless disregard for the truth presented false evidence to the grand jury. Crosby argues Plaintiff fails to plead the “who, what, when, where, and how” of the alleged fraud because Plaintiff does not specify any particular statements made or proffered by Crosby or explain why they were fraudulent.” The Court agreed that Plaintiff failed to identify the allegedly false evidence Crosby presented to the grand juries or explain why it was indeed false. Plaintiff failed to plead with particularity the allegedly false evidence before the grand juries.
Against Texas Mutual, the Court found Plaintiff fails to state a claim for malicious prosecution, false arrest, tortious interference, and conspiracy, but succeeds in stating her claim for defamation. Against Crosby, Plaintiff fails to state a claim for false arrest, tortious interference, conspiracy, and defamation.
MALICIOUS PROSECUTION
Crosby and the grand juries’ roles in initiating and procuring Plaintiff’s prosecution was left to both Crosby and two grand juries after Texas Mutual reported Plaintiff. Because a person is not liable for merely aiding or cooperating in causing a criminal prosecution the Court found Plaintiff failed to state a claim against Texas Mutual for malicious prosecution.
FALSE ARREST
To sufficiently state a claim for false arrest, Plaintiff must show her arrest was made without authority of law. Because Plaintiff was arrested following her indictment, there was probable cause for her arrest, meaning her arrest was not made without authority of law. Therefore, Plaintiff’s claims for false arrest against Texas Mutual and Crosby were dismissed.
TORTIOUS INTERFERENCE
Plaintiff alleges that as a result of Defendants’ actions, clients of her workers’ compensation practice terminated their contracts with her. The Court dismissed Plaintiff’s tortious interference claims against Texas Mutual and Crosby.
DEFAMATION
Finally, the Court found Plaintiff sufficiently alleged her defamation claim against Texas Mutual, but not against Crosby. Accordingly, the Court finds Plaintiff stated a claim against Texas Mutual for defamation.
Plaintiff failed to state a claim against Crosby for defamation. Plaintiff vaguely alleged Crosby’s entire prosecution of her was defamatory, but such allegations are too broad and conclusory to survive a 12(b)(6) motion.
ZALMA OPINION
In the United States reporting a person to prosecutors for a crime is privileged unless made with malice. In this case the charges went to a grand jury that issued an indictment that established probable cause for arrest. That she was acquitted established only that the state failed to prove her claims of malicious prosecution and other torts beyond a reasonable doubt. She may attempt to prove that Texas Mutual defamed her. Note, truth is a perfect defense to a defamation action and the fact that a grand jury issued an indictment indicates that the reports Texas Mutual were truthful.
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Happy Law Day
ZIFL – Volume 30, Issue 9 – May 1, 2026
Read the full article at https://www.linkedin.com/pulse/zalmas-insurance-fraud-letter-may-1-2026-barry-zalma-esq-cfe-2tywc, see the video at at and at https://zalma.com/blog plus more than 5300 posts.
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
ZIFL – Volume 30, Issue 9 – May 1, 2026
Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year and is written by Barry Zalma.
DOJ Creates National Fraud Enforcement Division
Will the Feds Take on Insurance Fraud? Possibly as Part of a National Anti-Fraud Effort
On April 7, 2026, the Acting Attorney General, Todd Blanche, issued a memorandum establishing the Department of Justice National Fraud Enforcement Division (NFED). The memo describes an ambitious, but perhaps redundant, vision for this ...
When Abalone Died As a Result of Multiple Causes The Efficient Proximate Cause Requires Payment
Post number 5345
Read the full article at https://www.linkedin.com/pulse/efficient-proximate-cause-doctrine-saves-claim-barry-zalma-esq-cfe-yndlc, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.
In American Abalone Farms, LLC v. Star Insurance Company et al., H052643, California Court of Appeals, Sixth District (April 27, 2026) the Court of Appeals dealt with an insurance coverage issue that required application of the efficient proximate cause doctrine.
FACTS
American Abalone Farms, LLC ("American Abalone" ) operates an aquaculture farm in Santa Cruz County, California, raising abalone in tanks. In August 2020, the CZU Lightning Complex Fires led to a prolonged power outage and road closures near the farm. As a result, the farm’s water pumps failed, causing the death of most of the ...
Breach of a Specific Condition Precedent Is a Complete Defense
See the video at and at and at https://zalma.com/blog plus more than 5300 posts.
In United Services Automobile Association and State Farm Mutual Automobile Insurance Company v. Anthony Wenzell, 2026 CO 25 (Colo. Apr. 27, 2026) Anthony Wenzell was rear-ended in a car accident. He had a significant prior 2014 accident that required back surgery.
Wenzell claimed underinsured-motorist (UIM) benefits under three policies: (1) the tortfeasor’s liability policy, (2) his own primary UIM policy with State Farm, and (3) an excess UIM policy issued by USAA (under his brother’s policy, which contained an “other insurance” clause making USAA’s coverage excess over any collectible insurance).
After receiving the claims, both USAA and State Farm repeatedly requested that Wenzell execute comprehensive medical-release authorizations so they could obtain his full medical records and ...
It is Fraud to Make the Same Claim Twice
Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
It is Fraud to Make the Same Claim Twice
Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
What Must be Done after Notice of a Claim is Received by the Insurer
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A first party property policy does not insure property: it insures a person, partnership, corporation or other entity against the risk of loss of the property. Before an insured can make a claim for indemnity under a policy of first party property insurance the insured must prove that there was damage to property the risk of loss of which was insured by the policy. The obligation imposed on the insured ...
