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.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe to my substack at https://gbarryzalma.substack.com/subscribe
Go to X @bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/account/content?type=all; Go to Barry Zalma on YouTube- https://Cwww.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the InsuranceClaims Library – https://lnkd.in/gwEYk.
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 ...
ZIFL – Volume 30, Issue 20 Subscribe to ZIFL here https://lnkd.in/gfpn78FM
Posted on October 15, 2026 by Barry Zalma
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud.
ZIFL is published 24 times a year is written by Barry Zalma.
It is provided FREE to anyone who visits the site at https://lnkd.in/gVT5G9s
Six Insane Fraud Schemes the Trump Administration Has Uncovered Stealing from the taxpayer has now become a multi-billion-dollar industry in America. Obamacare has been a magnet for scammers.
Florida Insurance Agent Pleads Guilty in $300,000 Premium Finance Scheme
Daniel Raney, 41, who managed Raney Insurance and Raney Ventures in Pensacola, was arrested after AFCO Direct.
RIFE WITH FRAUD ALLOWS DEMANDS TO ESTABLISH RESTITUTION
Six Insane Fraud Schemes the Trump Administration Has Uncovered
Stealing from the taxpayer has now become a multi-billion-dollar industry in America – and the ...
Sentence for Stealing from Veterans Administration Reasonably Considers State Insurance Fraud & Arson Convictions
Post 4863
Posted on October 14, 2026 by Barry Zalma
In United States Of America v. Anthony Curtis Brewer, No. 26-10745, United States Court of Appeals, Eleventh Circuit (October 8, 2026) Anthony Curtis Brewer became the fiduciary for an incapacitated recipient of Department of Veterans Affairs survivor benefits and agreed to use her funds solely for her care and support without commingling them with his own.
The VA determined that he misused $67,232.33 and removed him as fiduciary in 2022. Brewer pleaded guilty to theft of more than $1,000 in government property under 18 U.S.C. § 641. At sentencing, the district court attributed $53,567 in loss to him, producing an advisory Guidelines range of 15 to 21 months.
Citing the victim’s vulnerability, Brewer’s attempts to avoid responsibility, and his other fraudulent conduct — including state convictions for arson and insurance fraud — the court ...
Title Insurance Only Insures Real Property
Posted on October 13, 2026 by Barry Zalma
When a Seller Advised it Could Not Obtain Title to the Home Fraud Can’t be Proved
A Manufactured Home is Personal Property Until it Becomes Real Property
Post 4862
In Dale Johnson and Rose Johnson, Husband and Wife v. Stewart Title Guaranty Co., and Lennar Mortgage, LLC; Low Va Rates, LLC; Sandpoint Title Insurance, Inc.; Village Capital & Investment, LLC; and David Cassel, Engineer Agent; and Unknown Does 1-50, inclusively, No. 53126, Court of Appeals of Idaho (October 9, 2026) Dale and Rose Johnson purchased Idaho real property in 2012 with a manufactured home on it. Their purchase addendum acknowledged that the seller could not obtain title to the home, that evidence of title and an ALTA-7 endorsement might not be available, and that they accepted the home “as is.”
In 2020, after a HELOC application was denied, the Johnsons learned that the home had been wrecked and decertified in 2004 and that its 2006 conversion to real ...
