Defaulting Fraud Perpetrator Lets Insurer Defeat Fraud
Post number 5355
Posted on May 21, 2026 by Barry Zalma
In Transamerica Life Insurance Company v. John Joseph Egan, et al., No. 25-cv-06167-JD, United States District Court, N.D. California (May 12, 2026) Transamerica Life Insurance Company issued John Egan a life insurance policy with a long-term care rider that covered in-home skilled nursing or other professional care if he qualified as chronically ill.
FACTUAL BACKGROUND
In 2023, Egan submitted a claim alleging severe pain, major loss of daily functioning, and limited mobility following an auto accident. Transamerica approved coverage and paid benefits based on those representations and repeated proofs of loss describing in-home care services. After later surveillance in 2024 and 2025 showed Egan working, driving, shopping, and otherwise functioning without visible impairment — and showed no evidence of in-home care — Transamerica concluded that the claim was fraudulent and filed suit.
Transamerica surveilled Egan during each period of surveillance, there was no evidence that an in-home care provider actually treated Egan. Based on the surveillance evidence, an independent medical examiner retracted an initial opinion that Egan suffered from function loss and determined that Egan had no loss.
Transamerica concluded that Egan had engaged in fraud and filed this lawsuit in July 2025. The complaint alleges claims against Egan for insurance fraud, negligence, civil theft, breach of contract, and the like, along with a request for declaration that Egan’s policy coverage is lapsed and void. Transamerica alleges that it paid Egan a total of $148,497.47 in benefits, among other damages incurred in relation to Egan’s conduct.
LAW:
The court evaluated the motion under Federal Rule of Civil Procedure 55(b)(2), which permits default judgment against a defendant who fails to defend.
The court also confirmed subject matter jurisdiction under 28 U.S.C. § 1332 and personal jurisdiction based on service within the district. For relief, the court relied on California Penal Code section 496(c) for treble damages and attorney’s fees on the civil theft claim, and California Civil Code section 3288 for prejudgment interest.
DISCUSSION:
The opinion addressed three main issues: whether the court had jurisdiction over the case and the defendant, whether default judgment should be entered after Egan failed to appear, and what relief Transamerica was entitled to recover.
The court first confirmed both subject matter and personal jurisdiction, then turned to the default judgment framework, and finally calculated the recoverable damages, fees, costs, and interest.
ANALYSIS:
The court found that Transamerica had plausibly alleged fraud and related wrongdoing because the complaint described false statements about Egan’s condition, repeated submissions seeking benefits, and later surveillance evidence contradicting those claims. Because Egan was properly served but never appeared, the well-pleaded allegations were taken as true for purposes of default judgment, except as to damages.
The court determined that Transamerica would be prejudiced without a remedy, the complaint was sufficient, the requested damages were tied to documented losses, and there was no indication of excusable neglect or a meaningful factual dispute.
CONCLUSION:
The court granted Transamerica’s motion for default judgment against Egan. It held that jurisdiction was proper, the complaint adequately alleged fraud and related claims, and the default judgment factors supported relief.
Transamerica recovered trebled damages based on benefits paid and investigation costs, along with attorney’s fees, costs, and prejudgment interest, while punitive damages, waiv premiums, and declaratory relief were denied.
THE RELIEF
Transamerica has established by declaration that it paid Egan $148,497.47 in benefits, and paid $23,801.16 for the surveillance and independent medical examinations. The combined amount of $172,298.63 for these losses is trebled under California Penal Code Section 496(c) for the civil theft claim.
Transamerica has incurred attorney’s fees in the amount of $35,072.50, and costs in the amount of $1,031.17, all of which were documented by declaration. See id. ¶ 8. Attorney’s fees and costs may be awarded for the civil theft claim under California Penal Code Section 496(c). The Court’s review of the fees and costs indicates they are reasonable.
Prejudgment interest is awarded under California Civil Code Section 3288 at the rate of 7% per annum.
ZALMA OPINION
It is not nice to ask an insurer to pay for care to which the insured was not entitled. The insurer, once it determined it had been defrauded, it was proactive, sued the fraudster and served him only to have him give up, default, and a judgment was entered in favor of Transamerica and gave it a judgment it might take ten years or more to collect.
(c) 2026 Barry Zalma & ClaimSchool, Inc.
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Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
The Largest Residential Burglary of All Time
Post 5407
Fraud & the Fear of Bad Faith Suits
Posted on July 22, 2026 by Barry Zalma
See the full video at https://lnkd.in/gWQQEySW and at https://lnkd.in/gyhdK6wv
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
After ...
Insurance Requires Fortuity to be an Insured Risk
Post 5485
Posted on September 8, 2026 by Barry Zalma
In Industrial Park Center, LLC, doing business as Mainspring Capital Group v. Great Northern Insurance Company, a foreign insurer, No. CV-25-0330-CQ, Supreme Court of Arizona (September 1, 2026).
The United States Court of Appeals for the Ninth Circuit certified the following question to this Court:
"Is damage to property a “fortuitous” loss when, based on the insured’s knowledge at the time the insurance policy issued, it was reasonably foreseeable that such damage was almost certain to occur if certain preventative measures were not taken?"
FACTUAL BACKGROUND
Mainspring owned commercial property leased to Star Fisheries for decades. Star Fisheries’ use of water and salt allegedly caused structural damage over time. In 2010, Mainspring learned of damage and made some repairs but did not implement all recommended preventive measures. In 2021–2022, additional similar structural damage was discovered, and ...
Qui Tam Relators are not officers of the United States
Posted on September 4, 2026 by Barry Zalma
Attempt to use Constitution to Stop a Qui Tam False Claims Act Case
Post 5486
FCA’s Qui Tam Provisions do not Violate the Appointments Clause.
In United States Of America, Clarissa Zafirov, ex rel; Dr. v. Florida Medical Associates, LLC, d.b.a. Vipcare, Physician Partners, LLC, Anion Technologies, LLC, Freedom Health, Inc., Optimum Healthcare, Inc., Physician Partners Specialty Services, LLC, et al., No. 24-13581, United States Court of Appeals, Eleventh Circuit (September 1, 2026).
The False Claims Act (“FCA”) allows the Attorney General to bring civil suits against perpetrators of fraud against the government. This case involves another portion of the FCA-the qui tam provisions-which allow people, called relators, who have knowledge about fraud against the government to pursue a case against the perpetrator of the fraud.
Dr. Clarissa Zafirov filed a qui tam action under the False Claims Act on behalf of...
Posted on September 3, 2026 by Barry Zalma
You Only Get One Chance to Sue
Post 5484
In David Cromp v. Johnny Harkrider, Monique Harkrider, and their Marital Community, dba Able Plumbing Plus, No. 61678-5-II, Court of Appeals of Washington, Division 2 (August 25, 2026) David Cromp hired Able Plumbing Plus in 2018 to install plumbing, including two toilets, at his residence. In 2019, both toilets allegedly leaked, causing damage. Insurance claims were submitted through Able’s contractor policy, but the insurer eventually denied the claims.
Cromp sued Able in 2022 for breach of contract based on the allegedly defective toilet installation. During that case, Cromp attempted to add claims related to Able’s conduct during the insurance claim process, including fraud, bad faith, tortious conduct, and bond-related claims, but the superior court denied leave to amend. The 2022 breach-of-contract claim was later dismissed with prejudice on summary judgment as time-barred.
On the same day the 2022 case was dismissed, Cromp filed a ...
