Insurer Immune from Suit for Good Faith Report to Louisiana Department of Insurance of Suspected Fraud
Post 5224
See the video at https://lnkd.in/gtjRffb5 and at https://lnkd.in/ghWutpe9, and at https://zalma.com/blog plus 5200 posts.
Appellate Court Gives Plaintiff a Second Chance to Sue Insurer Who Reported Suspected Fraud
In Solon E. Smith v. State Of Louisiana By And Through The Louisiana Department Of Insurance, Cuna Mutual Group, And CMFG Life Insurance Company, No. 2024 CA 0735, Court of Appeals of Louisiana, First Circuit (October 23, 2025) the appeal addressed whether an insurance company (CMFG Life Insurance Company d/b/a TruStage) is immune from civil liability under Louisiana's Insurance Code for reporting suspected fraud to the Louisiana Department of Insurance (LDI).
FACTS
On December 22, 2022, LDI issued a Suspension Order, ordering Mr. Smith to "cease and desist conducting any business of insurance in the state of Louisiana[.]" On February 8, 2023, LDI issued the Revocation Order permanently revoking Mr. Smith's license to sell insurance and issuing a fine.
On April 19, 2022, the Suspension Order and Revocation Order issued by LDI were reversed by the ALJ as the ALJ determined, "the evidence does not support a finding that [Mr. Smith] violated the relevant statutes." Specifically, the ALJ determined that Mr. Smith having made a typographical error on the application is a much more probable explanation than the alleged act of fraud.
Procedural History
On July 31, 2023 Smith filed a Petition for Damages against LDI, CMFG, and TruStage Financial Group, Inc., alleging defamation, malicious prosecution, abuse of process, and unfair trade practices. CMFG claimed no civil liability for good-faith fraud reports. The trial court sustained the exception and dismissed CMFG with prejudice.
Relevant Law
Peremptory Exception of No Cause of Action (La. Code Civ. P. art. 927(A)(5)):
The statute tests the legal sufficiency of the petition and assumes all well-pleaded facts true, but conclusory statements insufficient. For affirmative defenses like immunity, the exception will be overruled unless facts exclude all reasonable hypotheses supporting defense.
Mandatory Fraud Reporting (La. R.S. 22:1926(A)):
Insurers (and others in insurance business) must report suspected fraud to LDI's Office of Insurance Fraud within 60 days of notice.
Immunity from Liability (La. R.S. 22:1928(A)):
No civil suit (e.g., defamation, torts) exists for required reports or information shared with LDI/NAIC/law enforcement unless malice, fraudulent intent, or bad faith. Plaintiff bears burden to allege facts defeating immunity; conclusory claims (e.g., "reckless disregard" ) insufficient.
Court's Analysis and Holding
CMFG qualifies as a mandatory reporter because it is engaged in the insurance business. The Petition facts show CMFG reported based on Broussard's credible affidavit (her belief of fraud due to non-receipt of policy). There was no duty for CMFG to investigate further because the statute shifts that duty to LDI.
Immunity applies because there were no viable causes of action stated.
CONCLUSION
The Court of Appeals affirmed the trial court's January 18, 2024 judgment insofar as it sustained CMFG's peremptory exception raising the objection of no cause of action. However, it reversed the portion of the judgment dismissing CMFG from Mr. Smith's suit and remand this matter to the trial court to allow Mr. Smith an opportunity to amend his petition with specific facts showing malice. The Court of Appeals concluded that the trial court abused its discretion by not allowing amendment of the Petition. The decision balanced mandatory fraud-reporting duties with protections against malicious reports, emphasizing that conclusory allegations alone cannot defeat immunity.
Dissent (Chief J. McClendon):
The Chief Justice concluded that there was no abuse of discretion because an amendment would be futile given facts of the case. The statute protects insurers from retaliatory suits for good-faith compliance but preserves amendment rights to prevent premature dismissal.
ZALMA OPINION
The statute that requires an insurer to report suspected fraud to the LDI also includes immunity for the insurer's good faith report unless the insurer makes the report with malice. The decision on appeal gives the plaintiff the chance to amend his pleading to find some way to sue the insurer that was not immunized. The Chief Justice's dissent is convincing since an amendment would be futile and defeat the purpose of the immunity statute by making the insurer defend a second time the futile attempt to allege fraud or malice with more than the mere conclusory allegations.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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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 ...
Inadequately Briefed Issues Defeats Appeal
Post 4852
Issues on Appeal Must be Adequately Briefed
Posted on September 25, 2026 by Barry Zalma
In Emy Ojekwe v. Connecticut Transit District Consortium, No. AC 47389, Court of Appeals of Connecticut (September 22, 2026) Emy Ojekwe alleged that he was injured on September 24, 2020, while leaving a bus operated by Connecticut Transit District Consortium, doing business as Greater Bridgeport Transit Authority.
According to his complaint, the wheelchair ramp began to rise before he had fully exited, causing his wheelchair to fall backward and allegedly injuring several parts of his body and damaging the wheelchair. The defendant denied negligence and alleged comparative negligence. After a two-day jury trial in November 2023, the jury returned a defense verdict.
The trial court denied Ojekwe’s motion to set aside the verdict and for a new trial, and he appealed.
LAW
A trial court’s refusal to set aside a verdict because of counsel’s improper remarks is reviewed for abuse of ...
Inadequately Briefed Issues Defeats Appeal
Post 4852
Issues on Appeal Must be Adequately Briefed
Posted on September 25, 2026 by Barry Zalma
In Emy Ojekwe v. Connecticut Transit District Consortium, No. AC 47389, Court of Appeals of Connecticut (September 22, 2026) Emy Ojekwe alleged that he was injured on September 24, 2020, while leaving a bus operated by Connecticut Transit District Consortium, doing business as Greater Bridgeport Transit Authority.
According to his complaint, the wheelchair ramp began to rise before he had fully exited, causing his wheelchair to fall backward and allegedly injuring several parts of his body and damaging the wheelchair.
LAW
Refusal to set aside a verdict because of counsel’s improper remarks is reviewed for abuse of discretion.
Appellate claims receiving only cursory treatment, without record citations, supporting authority, or legal analysis, are inadequately briefed.
DISCUSSION
Improper opening remarks.
Defense counsel referred to Ojekwe’s national origin,...
Psychiatrist Who Was Convicted of Fraud Asked the First Circuit to Reduce his Punishment
Post 4851
Posted on September 24, 2026 by Barry Zalma
Fraud to Private and Public Health Insurers Doesn’t Pay
In United States v. Gustavo Kinrys, Nos. 24-1592, 24-1716, United States Court of Appeals, First Circuit (September 21, 2026) Gustavo Kinrys, a Massachusetts psychiatrist, submitted fraudulent claims to private and public health insurers from 2015 through 2018, including bills for more than 1,000 sessions when he or the purported patient was outside the country. When insurers requested supporting records, he delayed through a fictitious office manager and created false documentation.
A jury convicted Kinrys on fourteen counts. The district court imposed a 99-month sentence, calculated intended loss at slightly more than $19 million based on billed amounts, ordered $6,537,309.59 in restitution, and ordered $6,527,391.19 in forfeiture.
At sentencing, the district court calculated Kinrys’s base offense level to be ...
