Failure to Plead Sufficient Facts to State a Facially Plausible Claim Defeats Suit
Post number 5378
Read the full article at https://www.linkedin.com/pulse/court-applies-law-written-barry-zalma-esq-cfe-itwrc and at https://zalma.com/blog plus more than 5350 posts.
Screwed by Insurance Brokers Judge Allows Plaintiff to Continue some of His Suit
In Wilfredo Cruz, et al. v. Bay Point Insurance LLC, et al., Civil Action No. GLR-25-44, United States District Court, D. Maryland on June 10, 2026 dealt with a suit brought by Wilfredo Cruz who alleged that Bay Point Insurance LLC, Karl Smith, and David Small committed insurance fraud in connection with insurance policies brokered for Cruz’s trucking business, W&DC General Contractor, LLC.
Cruz claimed Defendants represented that they could procure workers’ compensation, commercial general liability, motor cargo, and physical damage coverage even though Bay Point Insurance and Small allegedly were not licensed to transact insurance in Virginia at the relevant time. After two tractors were involved in a January 26, 2024 incident in Baltimore, Cruz reported the matter and sought claim handling and policy documents, but alleged that Defendants failed to provide the policies or benefits.
Cruz further alleged that the lack of coverage caused business losses, the shutdown of W&DC General Contractor, and other damages.
LAW:
The Court applied Rule 12(b)(6), under which a complaint must plead sufficient facts to state a facially plausible claim, and Rule 9(b), which requires fraud-based allegations to be pleaded with particularity.
For the RICO claim, Cruz had to allege conduct of an enterprise through a pattern of racketeering activity and, for conspiracy, knowledge of an agreement to facilitate RICO violations. The Court also applied Virginia law governing the Virginia Consumer Protection Act, common law civil conspiracy, fraud, tortious interference, breach of fiduciary duty, breach of contract, and indemnification, as well as Federal Rule of Civil Procedure 55 governing default.
DISCUSSION/ANALYSIS:
The Court first denied Cruz’s Motion for Entry of Partial Default because Defendants had filed a Motion to Dismiss, which constituted defending the action and postponed the time to answer even if the motion did not address every count.
CONCLUSIONS
On the Motion to Dismiss:
The Court dismissed the RICO conspiracy claim because Cruz alleged only conclusory assertions of agreement and did not plead specific facts showing how, when, or where Defendants agreed to form or participate in a RICO enterprise.
The Court dismissed the Virginia Consumer Protection Act claim because the insurance transactions involved Cruz’s business and tractors, not goods or services primarily for personal, family, or household purposes.
The Court dismissed the common law civil conspiracy claim because Bay Point Insurance, its owner Smith, and employee Small were not legally separate entities capable of conspiring with one another under the intracorporate-conspiracy principle.
However, the Court allowed the fraud claims to proceed because Cruz pleaded alleged misrepresentations about insurance coverage, reliance, damages, requests for policy documents, and licensing dates with enough detail at the pleading stage.
The Court also allowed the tortious interference claim to proceed, finding sufficient allegations that Defendants knew of and interfered with Cruz’s business relationships by allegedly selling insurance without proper licensing.
The breach of fiduciary duty claim survived because an insurance broker may owe fiduciary duties to an insured once an agency relationship is established.
The breach of contract and contractual indemnification claims also survived because W&DC General Contractor had been joined as a party and Defendants raised no other basis for dismissal.
ZALMA OPINION
When an insurance broker or agent fails to deal fairly and in good faith to sue for the damages caused by the action of the insurance agents or brokers caused. That is not necessarily east and usually requires the work of an experienced attorney. A court must, as did the USDC, apply the law when the allegations in the suit are challenged. The court removed the causes of actions that a complaint must plead sufficient facts to state a facially plausible claim, and Rule 9(b), which requires fraud-based allegations to be pleaded with particularity.
(c) 2026 Barry Zalma & ClaimSchool, Inc.
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Arsonist Tried To Represent Himself, Failed, and Sought Habeas Relief
Post number 5357
Read the full article at https://www.linkedin.com/pulse/he-who-acts-his-own-lawyer-has-idiot-client-barry-zalma-esq-cfe-d4bwc, See the full video at and at and at https://zalma.com/blog.
Karacson’s Arson for Profit Attempt Required Skill & Experience to Succeed
In Steve Ellis Karacson v. David Shaver, Warden, No. 25-1089, United States Court of Appeals, Sixth Circuit (May 20, 2026) Steve Karacson was convicted in Michigan state court of arson and insurance fraud after evidence showed he burned his own insured home. Investigators found multiple points of origin, gasoline odor, and evidence tying him to the scene, including cell-phone location data and a receipt showing he had purchased a gas can and gloves shortly before the fire.
FACTS
Karacson initially had appointed counsel, but his relationships with both appointed attorneys ...
Foolish to Repeatedly Disobey Court Orders
All That Remains For Trial Is Plaintiff’s Damages On Each Of These Claims And Establishing Proximate Causation Of Those Damages.
Post number 5348
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In Linh Wang v. Esurance Insurance Company, No. C24-0447-JCC, United States District Court, W.D. Washington, Seattle (May 1, 2026) John C. Coughenour, United States District Judge, found that throughout this case, culminating with its briefing on Plaintiff’s renewed motion and that Defendant has subjected Plaintiff to unnecessary motion practice for clearly discoverable information and made dubious representations (including to the Court).
FACTUAL BACKGROUND
This case involves an underinsured/uninsured motorist insurance bad faith claim arising from a 2017 motor vehicle collision. The plaintiff, Linh Wang, alleges that Esurance Insurance ...
The Right to Negotiate with Insurer is Not an Assignment of Claims
Post number 5347
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Nebraska Requires an Actual Assignment to Allow Contractor to Sue Insurer
In Millard Gutter Company, a corporation doing business as Millard Roofing and Gutter v. Farmers Mutual Insurance Company of Nebraska, also known as Farmers Mutual Insurance, also known as Farmers Mutual, No. A-24-818, Court of Appeals of Nebraska (May 5, 2026) Millard sued Farmers as an assignee of Jane Anzalone who had hired Millard Gutter to repair the roof of her home and agreed to allow Millard Gutter to coordinate with her insurer, Farmers Mutual, concerning reimbursement for repairs authorized under her insurance policy.
FACTUAL BACKGROUND
In ...
Arson and Misrepresentation Sufficient Ground to Deny Claim
Post number 5377
Bad Faith Requires A Showing Of More Than Bad Judgment Or Negligence
Read the full article at https://www.linkedin.com/pulse/bad-faith-requires-conscious-doing-wrong-because-zalma-esq-cfe-xxkdc and at https://zalma.com/blog.
Posted on June 22, 2026 by Barry Zalma
Bad Faith Requires the Conscious Doing of a Wrong Because of Dishonest Purpose or Moral Obliquity
Posted on June 22, 2026 by Barry Zalma
Arson and Misrepresentation Sufficient Ground to Deny Claim
Post number 5377
Bad Faith Requires A Showing Of More Than Bad Judgment Or Negligence
In Jonika K. Nelson v. Allstate Vehicle & Property Insurance Co., et al, No. 4:26-CV-17-RPC-DAS, United States District Court, N.D. Mississippi, Greenville Division (June 15, 2026) under Mississippi law, bad faith requires facts showing that the insurer lacked an arguable or legitimate basis for denying the claim or acted willfully, maliciously, or with gross and reckless disregard for the insured’s rights....
Arson and Misrepresentation Sufficient Ground to Deny Claim
Post number 5377
Bad Faith Requires A Showing Of More Than Bad Judgment Or Negligence
Read the full article at https://www.linkedin.com/pulse/bad-faith-requires-conscious-doing-wrong-because-zalma-esq-cfe-xxkdc and at https://zalma.com/blog.
Posted on June 22, 2026 by Barry Zalma
Bad Faith Requires the Conscious Doing of a Wrong Because of Dishonest Purpose or Moral Obliquity
Posted on June 22, 2026 by Barry Zalma
Arson and Misrepresentation Sufficient Ground to Deny Claim
Post number 5377
Bad Faith Requires A Showing Of More Than Bad Judgment Or Negligence
In Jonika K. Nelson v. Allstate Vehicle & Property Insurance Co., et al, No. 4:26-CV-17-RPC-DAS, United States District Court, N.D. Mississippi, Greenville Division (June 15, 2026) under Mississippi law, bad faith requires facts showing that the insurer lacked an arguable or legitimate basis for denying the claim or acted willfully, maliciously, or with gross and reckless disregard for the insured’s rights....
Flood Policy Limitation of Action Provision Destroys Bad Faith Suit
Post number 5376
Flood Policy Limitation of Action Provision Followed Strictly
Posted on June 19, 2026 by Barry Zalma
In Wayne Gularte, et al. v. Wright National Flood Insurance Company, No. 5:26-cv-01426-PCP, United States District Court, N.D. California (June 15, 2026) Wayne and Doris Gularte alleged that their property sustained flood damage between January 17 and March 23, 2023. They submitted claims to Wright National Flood Insurance Company, which paid part of the claim but denied additional claimed structural losses by email on June 18, 2023.
The Gularte plaintiffs filed suit in state court on December 30, 2025, seeking $12,500 for unpaid structural losses. Wright removed the action to federal court and moved to dismiss.
LAW:
A complaint in Federal Court must plead enough facts to state a plausible claim for relief under Federal Rule of Civil Procedure 8(a)(2), and dismissal under Rule 12(b)(6) is appropriate when the complaint lacks a ...
