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Mealey's Insurance Fraud

  • April 16, 2024

    Parties In Mold, Construction Defects Suit File Supplemental Authorities In 11th Circuit

    ATLANTA — An insurer and insureds involved in a dispute over coverage for mold damage discovered in an insured hotel filed supplemental authorities on April 15 in the 11th Circuit U.S. Court of Appeals, citing cases that each side claims are relevant to the issue of whether the policy at issue provides coverage for losses caused by a construction defect even if the cost to fix the defect is not covered.

  • April 15, 2024

    Judge Dismisses Malpractice Claimant From Professional Liability Coverage Suit

    LAS VEGAS — One day after the parties filed a joint stipulation of dismissal, a federal judge in Nevada dismissed an underlying malpractice claimant from a professional liability insurer’s lawsuit alleging that the attorney insured fraudulently concealed one or more material facts on his renewal insurance applications.

  • April 11, 2024

    Federal Judge Issues Final Forfeiture Order In $38M Nursing Home Fraud Suit

    MIAMI — A Florida federal judge issued a final forfeiture order regarding applying the assets of the former owner of skilled nursing facilities to the $38.7 million judgment entered against him for his role in a health care fraud scheme involving bribing physicians to have patients entered into the facilities he owned.

  • April 10, 2024

    Pharma Companies Seek High Court Review Of Ruling Reversing FCA Suit Dismissal

    WASHINGTON, D.C. — Pharmaceutical companies accused of violating the False Claims Act (FCA) by artificially inflating drug prices filed a petition for writ of certiorari in the U.S. Supreme Court, seeking review of the Ninth Circuit U.S. Court of Appeals’ reversal of a district court’s dismissal of a qui tam suit against them, arguing, in part, that the panel “created a circuit split by holding that a relator can avoid the public disclosure bar by ‘stitching together’ public disclosures.”

  • April 10, 2024

    Panel Denies Rehearing In State Farm Row With Clinics’ Owner Over No-Fault Fraud

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals denied rehearing of its ruling affirming a district court’s orders enforcing a settlement agreement between State Farm and the owner of medical clinics it sued for allegedly orchestrating a fraudulent no-fault billing scheme and compelling the owner to seek consent from the U.S. government to dismiss his claims against State Farm in a separate action under the False Claims Act (FCA).

  • April 09, 2024

    Judge Orders Insurer To Pay $2M To Co-Defendant In Chris Brown Insurance Fraud Row

    MEMPHIS, Tenn. — A Tennessee federal judge ordered the insurer of a recording studio owned by musician Chris Brown, who was previously found liable for submitting a fraudulent insurance claim for burglary and fire at his studio, to pay $2,066,217.30 of a $2.5 million jury verdict to a co-defendant and lessee of the studio, finding that the lessee is entitled to recover that amount, which is based on 90% of the earning value of the lessee’s studio as attributed to its “gear.”

  • April 09, 2024

    U.S. Alleges Medicaid Fraud, Seeks More Than $1M From Behavioral Health Provider

    PHILADELPHIA — The United States, on behalf of the U.S. Department of Health and Human Services, on April 8 sued a former behavioral health provider and its owner in Pennsylvania federal court, seeking recovery of more than $1 million for the defendants’ alleged violations of the False Claims Act (FCA) related to purported false billing to Medicaid for medicine check appointments for services that were inadequate, not provided or “not provided as billed.”

  • April 04, 2024

    Coverage Owed For Mold Damages, Insureds Reiterate In Corrected Reply Brief

    ATLANTA — In a corrected reply brief, filed with the permission of the 11th Circuit U.S. Court of Appeals, insureds reiterate their argument that a district court erred in finding that no coverage is owed for mold damage discovered in an insured hotel because the policy at issue provides coverage for losses caused by a construction defect even if the cost to fix the defect is not covered.

  • April 03, 2024

    Magistrate Recommends Denying Insurer’s Dismissal Bid, Says It Has ‘Chutzpah’

    DENVER — A Colorado federal magistrate judge on April 2 issued a report and recommendation advising the court to deny a general liability insurer’s dismissal motion in an excess insurer’s suit against the liability insurer and the insured seeking a declaration that the excess policy is void ab initio due to fraud, finding that the liability insurer should have known that it would become a defendant in the suit and that to claim otherwise “borders on the definition of chutzpah.”

  • April 02, 2024

    Michigan Panel Vacates Summary Disposition In PIP Auto Accident Coverage Dispute

    DETROIT — A Michigan appellate court vacated and remanded a lower court decision granting summary disposition to an insurer that rescinded a no-fault policy for fraud and denied personal injury protection (PIP) benefits for a woman injured in an auto accident, finding that “because the claim for no-fault benefits involved an innocent third party,” the lower court erred in failing to “balance the equities” between the insurer and the injured innocent third party.

  • March 29, 2024

    Judge Nixes Fraud, Specific Performance Claims In Reinsurer’s Breach Lawsuit

    FORT WORTH, Texas — Granting motions for dismissal of all but two claims in a reinsurer’s case over allegedly inflated provisional commissions and breach of various agreements, a Texas federal judge called the case “a lesson in Murphy’s Law for unwitting contractees” and ruled that “bad looks cannot support a fraud claim where the resulting harm was merely contractual.”

  • March 29, 2024

    FCA Suit Against Allergan Tossed, But Judge Allows ‘Last Opportunity’ To Amend

    CHICAGO  — An Illinois federal judge dismissed without prejudice relators’ third amended qui tam complaint against Allergan asserting violations of the federal False Claims Act (FCA) and numerous state false claims laws regarding allegations that Allergan paid unlawful kickbacks to physicians to prescribe opioid drugs for off-label uses, finding it “appropriate” to allow the relators “one chance to fix the deficiencies the Court has identified.”

  • March 28, 2024

    GEICO Sues Radiology Clinics, Owner, Seeking More Than $290,000 For No-Fault Fraud

    BROOKLYN, N.Y. — GEICO filed a complaint in New York federal court against multiple radiology clinics and their owner, seeking to recover $290,000 it paid on alleged fraudulent billing for services that were medically unnecessary and “otherwise non-reimbursable” and were purportedly provided to auto accident victims insured by GEICO.

  • March 26, 2024

    Expert Testimony Precluded, Judgment Granted To Defendants In Auto Glass Fraud Row

    PHOENIX — An Arizona federal judge on March 25 granted in part insureds’ summary judgment motion in an insurance fraud dispute alleging that they submitted fraudulent bills for automobile glass repair and replacement services, granting the motion as to insurance claims made after the insurer sent cease-and-desist letters to its insureds but denying the motion for claims before the letters were sent due to a dispute of material facts.

  • March 25, 2024

    Judgment Granted For Insurer In Dispute Over Insured’s Hurricane Coverage Fraud

    LAKE CHARLES, La. — A Louisiana federal judge granted summary judgment to a homeowners insurer on its counterclaim to recoup reimbursement paid to a homeowner who sued the insurer for bad faith over its purported failure to adequately compensate her for damage caused by Hurricane Laura, finding that there is no dispute regarding the homeowner's misrepresentations when she applied for insurance.

  • March 21, 2024

    9th Circuit Affirms Judgments For Insurers In Fire Loss Coverage Dispute

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on March 20 affirmed a district court’s grants of summary judgment for insurers in two coverage disputes consolidated on appeal, finding that the district court correctly granted summary judgment for the insurers because no issues of fact remain regarding whether the homeowner misrepresented in the insurance application that she used her property for commercial purposes or that she had prior losses.

  • March 19, 2024

    2nd Circuit Upholds Order Denying Injunction In D&O Case Related To FCA Suit

    NEW YORK — The Second Circuit U.S. Court of Appeals on March 18 affirmed a district court order denying a motion filed by a former manager of affiliated health care companies for preliminary injunction requiring an insurer to defend him pursuant to a directors and officers (D&O) policy in an underlying breach of fiduciary duties suit, finding that “the district court did not abuse its discretion” in denying the manager’s motion.

  • March 19, 2024

    Judgment Granted To Insurer Seeking Policy Voidance For Material Misrepresentation

    BIRMINGHAM, Ala. — An Alabama federal judge granted summary judgment to an insurer seeking to void policies and a declaration that it owes no coverage to the insureds, a construction company and its owner, in underlying suits filed against them alleging construction defects, finding that the insurer is entitled to summary judgment in part because “but for the misrepresentation,” the insurer would not have issued the policies with the applicable provisions.

  • March 18, 2024

    4th Circuit Stands By Ruling That Insurer Can Rescind Professional Liability Policy

    RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on March 15 refused to reconsider its affirmation of a lower federal court’s summary judgment ruling in favor of a professional liability insurer in its lawsuit seeking a declaratory judgment that it can rescind an insurance policy issued to a clinic, standing by its finding that there is no genuine dispute of material fact that the clinic’s founder made a material misstatement in her applications for coverage.

  • March 15, 2024

    Judge Won’t Strike ‘Allegedly Scandalous Material’ In FCA Suit Against Medtronic

    KANSAS CITY, Kan. — A Kansas federal judge denied Medtronic’s request to strike purportedly false allegations in a qui tam suit alleging that Medtronic and its related company and a hospital violated the False Claims Act (FCA) by participating in a scheme to provide medically unnecessary treatment resulting in the submission of false claims for payment to federal health care programs, finding that “the court has no grounds to strike” “the allegedly scandalous material.”

  • March 13, 2024

    Summary Judgment Denied To State Farm In Dispute Over Concealed SSDI Application

    DENVER  — A Colorado federal judge denied State Farm’s motion for summary judgment in a bad faith and breach of contract suit filed against it over coverage for an insured’s uninsured/underinsured motorist (UM/UIM) claims related to an auto accident, finding that the insured did “not technically” make false statements regarding her application for Social Security Disability Income (SSDI) that would void her insurance policy for fraud.

  • March 13, 2024

    Judge Adopts Report, Says Defendants Are Liable For $481K In Insurance Fraud Suit

    BROOKLYN, N.Y. — A New York federal judge issued a docket-only order adopting a magistrate judge’s report and recommendation to grant GEICO’s motion for default judgment against specified defendants and to enter a judgment of $481,233.13 against them in GEICO’s suit alleging that multiple providers participated in a scheme to submit fraudulent charges for medically unnecessary services under New York’s no-fault insurance law.

  • March 12, 2024

    Discovery Orders Granted, Appeal Filed In Vesttoo Chapter 11 Bankruptcy Cases

    WILMINGTON, Del. — A notice of appeal has been filed concerning the confirmation of a Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates, and a Delaware federal bankruptcy judge on March 11 granted four unopposed motions for leave to conduct discovery against banking entities.

  • March 11, 2024

    Judge Amends Consent Decree Order In Case Over Alleged Counterfeit Policies

    LOUISVILLE, Ky. — In a March 8 amended ruling entering a consent decree in a sprawling suit over allegations of fraud, trademark counterfeiting and trademark infringement involving captive reinsurance programs, a Kentucky federal judge said he “inadvertently omitted the names of two parties.”

  • March 08, 2024

    5th Circuit Vacates $553,000 Fee Award In FCA Suit Over False ‘Cost-Reporting’

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on March 7 vacated and remanded a district court’s award of $553,007.83 in attorney fees, costs and expenses in a qui tam suit alleging that a hospital and its owners and officers violated the False Claims Act (FCA) by falsifying “cost reporting practices,” finding that the ruling must be vacated and remanded because the court based its decision on a judgment later modified by the Fifth Circuit.