Full Faith and Credit Act Controlled
Read the full article at https://lnkd.in/evHXiiFE and at https://zalma.com/blog.
Posted on June 9, 2026 by Barry Zalma
Post number 5368
Posted on June 9, 2026 by Barry Zalma
In Prime Insurance Company, Inc. v. Medicab Transportation, LLC, Jason Rhodes, and Dale Johnson v. Prime Insurance Company, Inc and Prime Property & Casualty Insurance, Inc. No. 2:24-cv-421-SPC-KRH, United States District Court, M.D. Florida, Fort Myers Division (June 3, 2026) Medicab, a paratransit company, bought two policies in 2021: a Business Auto Policy from PPCI and a Commercial Liability Policy from Prime. Both policies, as originally written, appeared to cover injuries arising from loading and unloading patients from Medicab vans.
After a patient, Margaret St. Aubin, fell while being unloaded from a van and suffered injuries, her Estate made a $1 million demand. Prime and its claims administrator concluded that the Commercial Policy’s loading/unloading language had been included by mutual mistake, because the parties allegedly intended only the Auto Policy to cover such automobile-related risks.
Prime then amended the Commercial Policy and filed a declaratory action in Utah seeking reformation of the Commercial Policy. Medicab did not appear, and the Utah court entered a default judgment reforming the policy and declaring no Commercial Policy coverage.
Later, the Estate obtained a $412,440.71 judgment against Medicab and its employees in Florida, exceeding the Auto Policy’s $100,000 limit. Prime then filed this federal action in Florida, while Medicab counterclaimed for breach of contract, bad faith, fiduciary breach, and misrepresentation.
LAW
Under the Full Faith and Credit Act, 28 U.S.C. § 1738, a federal court must give a state-court judgment the same preclusive effect it would receive in the rendering state. Applying Utah preclusion law, the court distinguished between claim preclusion and issue preclusion (collateral estoppel). Issue preclusion applies when:
1. the issue is identical to one decided previously,
2. there was a final judgment on the merits,
3. the issue was fully and fairly litigated, and
4. the party to be estopped was a party or in privity with a party in the earlier action.
Utah law also recognizes that a default judgment counts as a judgment on the merits, and that an insurer-insured relationship may create fiduciary duties in the third-party insurance context. Fraudulent and negligent misrepresentation claims require falsity, reliance, causation, and damages.
For collateral estoppel to bar a subsequent claim, four elements must be satisfied: (1) the issue challenged must be identical in the previous action and in the present case; (2) the issue must have been decided in a final judgment on the merits in the previous action; (3) the issue must have been competently, fully, and fairly litigated in the previous action; and (4) the party against whom collateral estoppel is invoked in the current action must have been either a party or privy to a party in the previous action.
DISCUSSION
The court held that the Utah default judgment had substantial preclusive effect. Medicab was a party to the Utah action. That preclusion barred Medicab’s contract claims, declaratory claim, and good-faith claim, because the Utah judgment had already determined that the Commercial Policy must be reformed, provided no coverage for the accident, and imposed no duty on Prime to defend or indemnify.
Utah law clearly indicates that default judgment is a judgment on the merits.
ANALYSIS
The case turns almost entirely on issue preclusion. The Florida federal court treated the Utah default judgment as binding not only on Medicab, but also on Medicab’s employees, because their rights depended on the same policy language and coverage position. When federal courts are asked to give res judicata effect to a state court judgment, it must apply the res judicata principles of the law of the state whose decision is set up as a bar to further litigation.
The court was also careful to separate claims that truly overlapped with the Utah adjudication from those that did not.
CONCLUSION
The Court declined Medicab Defendants’ invitation to set aside the Utah judgment. The court held that the Utah judgment precluded Medicab from relitigating whether the Commercial Policy covered the accident or whether Prime had a duty to defend or indemnify. Accordingly, Medicab’s claims for breach of contract, breach of good faith, declaratory relief, and breach of fiduciary duty failed, and PPCI was dismissed entirely.
ZALMA OPINION
Allowing a court to enter a default judgment against a plaintiff is a serious error. Once the judgment is entered it becomes final and all other courts, including federal courts, must give credit to the judgment regardless of claims providing to the judgment. The claims of bad faith died because of the default judgment.
(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 ...
A Proposed Amended Complaint That Includes New Factual Allegations to Remedy Pleading Deficiencies
Posted on November 11, 2026 by Barry Zalma
After Dismissal Fraud Victim May Amend Complaint After Dismissal
Post 4580
If A Proposed Amendment Is Not Clearly Futile, Then Denial Of Leave To Amend Is Improper
In John Hancock Life & Health Insurance Company v. Caring Connections LLC, Arthur Feldheim, and Blime a/k/a Vera Feldheim, Civ. No. 25-7574 (MAS)(JBD), United States District Court, D. New Jersey (November 6, 2026) John Hancock sued Caring Connections LLC, Arthur Feldheim, and Blime a/k/a Vera Feldheim on June 5, 2025, asserting thirteen claims, including fraud, breach of contract, and aiding and abetting fraud.
On March 26, 2026, this Court entered an order granting Caring Connections’ motion to dismiss and granting in part and denying in part the Feldheims’ motion to dismiss. The dismissed claims were dismissed without prejudice, and John Hancock timely sought leave to amend.
They also argued that the New ...
Is Exhaustion Required to Seek Declaratory Relief From an Excess Insurer?
Post 4578
Posted on November 9, 2026 by Barry Zalma
In Fox Paine & Company, LLC, et al. v. Twin City Fire Insurance Company et al., S287404, 593 P.3d 832, 593 P.3d 838, 346 Cal.Rptr.3d 541, Supreme Court of California, (July 27, 2026) the Supreme Court noted that Insurance is sometimes procured in a series of layers, with an insured acquiring a primary insurance policy that provides an initial layer of coverage for loss or liability and an excess insurance policy or policies that provide additional coverage in the event the underlying coverage is exhausted. Usually, the first layer of coverage must be exhausted before the excess layers are available to the insured.
Exhaustion
Fox and Paine’s investment-firm dispute generated extensive litigation and competing insurance claims. Their insurance tower consisted of a $10 million primary policy and four $10 million excess layers.
The Fox Parties alleged that insurers paid their rivals, withheld information,...
Payment of Fines & Completion of Probation Reinstates Right to Vote
Post 4576
Posted on November 5, 2026 by Barry Zalma
To Restore Voting Rights The Felon Must Pay Fines of $546.00
In Florida Supreme Court Mediator Ethics Advisory Committee, ETH F-26-377, No. F-26-377 (October 29, 2026) citizen unnamed and to Ron Desantis Governor, Cord Byrd the Secretary of State Florida Division of Elections provided an advisory opinion to a convicted felon about his right to vote:
To: [redacted] We received your request for an advisory opinion. You indicate that you have one or more felony convictions and request whether you are eligible to vote, including whether you have any outstanding legal financial obligations under section 98.0751, Florida Statutes, and, if so, a statement of the amount that must be paid to make you eligible to vote, and an explanation of how the amount was calculated.
The Division hereby responds to your request pursuant to its legal authority under section 106.23(2), Florida Statutes, and Florida ...
