Formulaic Recitation Of The Elements Of Civil Conspiracy Are Insufficient
Post number 5320

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In Hassan Fayad v. Liberty Mutual Insurance Company, et al., No. 2:25-cv-10930, United States District Court, E.D. Michigan, Southern Division (March 24, 2026) Plaintiff Hassan Fayad, the owner of several businesses providing transportation, diagnostics, testing, and therapy services, regularly billed insurance companies for these services, was arrested and tried for fraud, convicted, had the conviction overruled and sued the insurers and prosecutors he found responsible.

FACTUAL BACKGROUND

By January 2020, Liberty Mutual, Progressive, Allstate, and Esurance suspected fraudulent activity and filed a complaint with the Michigan Department of Attorney General (MDAG). The insurers alleged that Fayad and others billed Michigan auto insurance policies for profit without actually providing medically necessary services, or any services at all.

Fayad was subsequently charged in state court for conspiracy to commit false pretenses and insurance fraud. He sued the insurers and two prosecuting attorneys, asserting violations under 42 U.S.C § 1983 and state law, including claims for false arrest, malicious prosecution, due process violations, civil conspiracy, and gross negligence.

In April 2022, a federal grand jury indicted Fayad for aggravated identity theft and indicted Fayad for wire fraud, conspiracy to defraud the United States, and tax evasion. After a superseding indictment and a judgment of partial acquittal a jury tried and found Fayad guilty of one count of aggravated identity theft in January 2024 but in December 2024, by stipulation of the parties, the Court vacated the jury’s verdict and dismissed that count, along with “all other outstanding counts in the underlying matter” against Fayad.

Fayad sued Fairley and Glenn, as well as Insurer Defendants, claiming that they conspired together to wrongfully charge him, obtain a warrant to arrest him, and freeze and encumber his assets. Defendants Allstate, Liberty Mutual and Progressive also moved to dismiss,

LEGAL ISSUES

Fayad’s complaint alleged federal constitutional violations under 42 U.S.C § 1983 and various state law claims. Section 1983 requires that the defendants be state actors or that their conduct be fairly attributable to the state. Prosecuting attorneys are generally afforded absolute immunity from damages for actions taken within their prosecutorial role. Civil conspiracy claims require specific factual allegations demonstrating an agreement between parties to commit an unlawful act.

DISCUSSION AND ANALYSIS

The court found that the prosecuting attorneys were entitled to immunity from Fayad’s claims, as their actions fell within their official prosecutorial duties. Fayad’s pleadings regarding civil conspiracy were insufficient, lacking factual details necessary to support such a claim. Furthermore, the insurance companies (Insurer Defendants) were not state actors and thus could not be held liable under § 1983 for constitutional violations.

At bottom, Fayad’s complaint plainly reads as “a formulaic recitation of the elements of” civil conspiracy, which “will not do” for a complaint to survive a motion to dismiss under Civil Rule 12(b)(6).

With no viable federal claims remaining, only state law claims were left for adjudication.

Glenn was entitled to absolute prosecutorial immunity because there was no conduct identified as outside of Glenn’s role as an advocate — including her conduct that was allegedly purely investigative. A plaintiff cannot sustain a false arrest claim where a case that was ultimately dismissed for lack of probable cause began with an apparently valid, lawfully obtained, and properly executed warrant

CONCLUSION

In sum, Fayad’s claims against all Defendants will be dismissed under Civil Rule 12(b)(6)

Because the federal claims were dismissed and only state law claims remained, the court declined to exercise jurisdiction over the state claims. Accordingly, the defendants’ motions to dismiss were granted, and the case was dismissed in its entirety.

ZALMA OPINION

Mr. Fayad was a very lucky man with regard to the charges brought against him by the US Department of Justice, found guilty and then had the conviction dropped voluntarily. Adding insult to the failure to convict him convincingly he sued the prosecutors and the insurers who caused his arrest. The case was properly dismissed and he can try his state based claims but might lose those as well. Vengeance is not appropriate in court.

(c) 2026 Barry Zalma & ClaimSchool, Inc.

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