Rescission of a Life Insurance Policy
Misrepresenting the Use Of Drugs Makes Policy Void from its Inception
Post number 5299
Posted on March 9, 2026 by Barry Zalma
In Primerica Life Insurance Company v. Rosalia Castillo Bucio, an individual; Hipolito Castillo Bucio, an individual No. 3:24-cv-01567-RBM-KSC, United States District Court, S.D. California (March 2, 2026) Primerica Life Insurance Company sued Rosalia Castillo Bucio and Hipolito Castillo Bucio, seeking to rescind a term life insurance policy issued to Gilberto Castillo.
FACTUAL BACKGROUND
. The policy, valued at $614,000, named the defendants as co-beneficiaries. Castillo submitted an application on January 15, 2020, in which he denied any history of drug or alcohol abuse in the past ten years. However, after Castillo’s death on March 28, 2021, medical records revealed that he had used methamphetamine and cocaine prior to the application date, contradicting his representations. Both defendants subsequently filed claims for the death benefit, prompting Primerica to investigate during the contestability period.
LEGAL ISSUES
The complaint relied on the principle that insurance policies may be rescinded when material misrepresentations are made in the application. California law allows an insurer to void a policy if the insured provides false, incomplete, or incorrect information that is material to the risk assumed. The application included explicit provisions requiring truth and completeness, and stated coverage could be voided if such misrepresentations were discovered within two years of issuance.
DISCUSSION
The Court found that Castillo’s answers regarding drug use were materially false. The records showed methamphetamine use for two months and daily cocaine use for over a year before the application. These facts were not disclosed to Primerica, violating the terms of the application and the policy. Castillo never corrected or updated his statements. As both co-beneficiaries submitted claims, but the misrepresentation was discovered during the contestability period, Primerica was entitled to investigate and seek rescission.
ANALYSIS
Based on the uncontested evidence and the default of the defendants, the Court determined the misrepresentations were material and justified rescinding the policy. The motion for default judgment was granted as the defendants failed to appear or respond, and the facts supported Primerica’s claim. The Court’s decision reflects the importance of truthful disclosure in insurance applications and enforcement of contestability provisions to protect insurers from fraudulent claims.
Possibility of Prejudice to Plaintiff
If Plaintiff’s Motion is not granted, it will be denied a resolution of its claim that the Policy is rescinded based on Castillo’s material misrepresentations in his Application. Thus, the potential prejudice to Plaintiff supports granting Plaintiff’s Motion.
Based on the allegations of the Complaint, Castillo’s misrepresentations in his Application regarding his use of illegal drugs, i.e. that he had not used illegal drugs during the specified time period when he had were material because Plaintiff asked the questions, and also because Plaintiff would not have issued the Policy had it known Castillo was using illegal drugs. The fact that the insurer has demanded answers to specific questions in an application for insurance is in itself usually sufficient to establish materiality as a matter of law.
Plaintiff sufficiently alleges compliance with the procedural requirements for rescission because it gave notice and returned the premiums paid for the Policy rescission requires notice of the intent to rescind and return of the value received under the contract.
Generally, default judgments are disfavored, and a case should be decided on the merits whenever possible, but where a defendant’s failure to appear makes a decision on the merits impracticable, if not impossible, entry of default judgment is warranted. The Court found entry of default judgment is proper and granted Plaintiff’s Motion for Default Judgment. The Policy (No. 0491628046) is rescinded, void ab initio, and of no legal force or effect.
ZALMA OPINION
Some people do not understand that insurance is a business of the utmost good faith requiring each party to fairly, honestly and capably tell the truth when applying for insurance. When an potential insured answers falsely to a question in an application for life insurance that he did not use illegal drugs when, in fact, he used methamphetamine and cocaine prior to the application date. Fraud in the inception of a policy requires it to be rescinded.
(c) 2026 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 ...
