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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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 ...
Kindness in Sentencing is Often Abused and Probation Becomes Jail
Posted on September 21, 2026 by Barry Zalma
Post 4848
See the full video at and at at https://lnkd.in/gGJpiN_R and at https://lnkd.in/gb56mYsP
In State Of North Carolina v. Tia Allen, No. COA24-1010, Court of Appeals of North Carolina (September 16, 2026) Tia M. Allen pleaded guilty on 18 April 2022 to several offenses under a plea agreement.
On 6 February 2024, her probation officer alleged that Allen had paid nothing, failed to report, and incurred new criminal charges.
The court found all alleged violations, extended probation by 24 months, imposed five months’ confinement as special probation, required reporting after release, and ordered electronic house arrest.
LAW
A probation violation need not be proved beyond a reasonable doubt; competent evidence must reasonably satisfy the trial judge that the defendant willfully violated a valid probation condition.
An in-court admission of a willful violation eliminates the need for ...
Kindness in Sentencing is Often Abused and Probation Becomes Jail
Posted on September 21, 2026 by Barry Zalma
Post 4848
See the full video at and at at https://lnkd.in/gGJpiN_R and at https://lnkd.in/gb56mYsP
In State Of North Carolina v. Tia Allen, No. COA24-1010, Court of Appeals of North Carolina (September 16, 2026) Tia M. Allen pleaded guilty on 18 April 2022 to several offenses under a plea agreement.
On 6 February 2024, her probation officer alleged that Allen had paid nothing, failed to report, and incurred new criminal charges.
The court found all alleged violations, extended probation by 24 months, imposed five months’ confinement as special probation, required reporting after release, and ordered electronic house arrest.
LAW
A probation violation need not be proved beyond a reasonable doubt; competent evidence must reasonably satisfy the trial judge that the defendant willfully violated a valid probation condition.
An in-court admission of a willful violation eliminates the need for...
Kindness in Sentencing is Often Abused and Probation Becomes Jail
Posted on September 21, 2026 by Barry Zalma
Post 4848
See the full video at and at
In State Of North Carolina v. Tia Allen, No. COA24-1010, Court of Appeals of North Carolina (September 16, 2026) Tia M. Allen pleaded guilty on 18 April 2022 to several offenses under a plea agreement. The trial court consolidated the convictions, imposed an 11-to-23-month sentence,
On 6 February 2024, her probation officer alleged that Allen had paid nothing, failed to report, and incurred new criminal charges. At the 26 March 2024 hearing, counsel admitted Allen’s nonpayment but did not admit commission of the new offenses; the court did not inquire into the failure-to-report allegation.
Defendant did not deny this probation violation. Instead, when the trial court asked whether Defendant wanted to admit any of the alleged probation violations, Defendant admitted her ...
