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Insurance coverage Protection Agency Sued For Malicious Prosecution After Fraud Case Dismissed | Property Insurance coverage Protection Regulation Weblog

The identical contractor that introduced the RICO motion in opposition to insurers allegedly “zeroing out” insurance coverage claims earlier than conducting investigations has filed a malicious prosecution lawsuit in opposition to a regulation agency that represented an insurer alleging fraud and misrepresentation dedicated by the contractor.1 The introduction to the malicious prosecution lawsuit filed this month states:

It is a case involving a coordinated and calculated effort by Defendants – a regulation agency and one among its fairness companions – to file a meritless lawsuit… to inflict financial and emotional hurt on Plaintiffs and destroy their companies. This case additionally entails a plan by Defendants to problem property injury claims by any means crucial….

A part of Defendants’ regulation observe is to defend insurance coverage firms in property injury litigation. As a substitute of being glad with their insurance coverage protection observe representing carriers when owners and their assignees start litigation resulting from delay, underpayment, or nonpayment of claims, Defendants went additional by falsely accusing Plaintiffs of collaborating in an insurance coverage fraud scheme.

Defendants used American Capital Assurance Corp. (‘AmCap’) because the Plaintiff (an insurer now in receivership) to wrongfully accuse Plaintiffs of prison acts and different misconduct. The objective was not solely to stop Plaintiffs from resolving claims, however to destroy Plaintiffs, their companies, and extract extra favorable declare resolutions on behalf of AmCap and different insurers Defendants characterize.

Defendants didn’t advance the State Court docket Motion in any materials respect, and voluntarily dismissed it over a 12 months after it was initially filed. Throughout this time, Defendants used the State Court docket Motion for illicit functions, aimed to hurt Plaintiffs companies, and their potential to be paid for labored carried out. Plaintiffs’ earnings declined considerably, which was the specified chilling impact Defendants supposed to attain.

As I state in all instances, a lawsuit’s allegations are simply allegations. Proving the reality of these allegations is one other factor altogether. Additional, many readers are going to notice the plaintiff within the previous case, American Capital, was struggling vital monetary issues and should not have been able to fund or financially proceed with the prior lawsuit, which considerably alleged worth gouging of insurance coverage claims. In different phrases, it couldn’t pay to show whether or not the lawsuit was meritorious or not. Additional, the regulation agency representing American Capital is lengthy on expertise and a good regulation agency. The truthfulness of the prior lawsuit allegations concerning worth gouging will once more be at challenge, in addition to the motives for bringing the prior lawsuit.

Lots of the present plaintiffs have uncovered info in regards to the insurance coverage trade’s claims practices, as famous in Zeroed Out Hurricane Claims and Dishonest Claims Practices—Why Are Our Florida Politicians Ignoring These Ongoing Claims Issues and Seemingly Defending Dishonest Insurance coverage Firms? They’re additionally concerned in different “let me inform you the remainder of the story litigation,” as famous in RICO Lawsuit In opposition to United Property & Casualty Amended With Extra Allegations. The present lawsuit will probably be one to look at given the events concerned and the totality of the allegations.

Generally, and solely associated to the prior instances as a result of allegations of worth gouging have been raised, most enterprise house owners can cost no matter they need in the US. Individuals wouldn’t have to pay what’s demanded. But, property insurance coverage protection attorneys are sometimes “fast to the draw” to say fraud in opposition to their purchasers every time any restoration contractor expenses greater than what the insurer deems is “honest.” There are a lot of causes for this, together with showing to be “macho attorneys” to their insurer purchasers. Everyone who was an insurance coverage firm lawyer will inform you about this and is aware of precisely what I imply—as a result of one solution to get insurance coverage firm purchasers within the insurance coverage protection enterprise is to seem like the alpha “canine on a leash” lawyer in opposition to alleged insurance coverage fraud. Seven years in the past, I famous that CBS Information caught on to this in Insurance coverage Firm Attorneys Known as “Canine on a Leash”.

My private view is that insurance coverage firms and their counsel many occasions wrongfully allege insurance coverage fraud in regards to the quantity demanded. It’s a widespread tactic as a result of everyone is in opposition to insurance coverage fraud. I mentioned this and instances saying that is improper in Insurance coverage Firm Attorneys Typically Wrongfully Argue {That a} Fraud Happens When Events Solely Have a Distinction of Opinion:

A latest Florida case1 has a prolonged dialogue about instances the place altering valuations by the insured are then utilized by intelligent insurance coverage firm attorneys to argue {that a} post-loss fraud has occurred. That is now a typical observe in litigation all through the nation as policyholders, public adjusters, and contractors make differing estimates of loss and have completely different opinions about what the measure of the loss needs to be.

These instances usually are not the place a policyholder paid anyone a sum sure for a full and passable substitute of property after which submitted modified invoices or deliberately misstated what was really incurred. It additionally doesn’t embody the state of affairs the place a policyholder deliberately adjustments an estimate or obtains an bill to make it knowingly increased to acquire ‘leverage’ with the insurance coverage firm to cut price the quantity of the loss. These varieties of intentional instances will get famous on Barry Zalma’s weblog about insurance coverage fraud.

There’s hardly ever a precise worth of loss for any broken actual or private property. An inexpensive quantity of loss is a variety, and it may well fluctuate fairly a bit. When the scope and strategies of how you can restore or substitute one thing are in disagreement, the ranges might be fairly vital and nonetheless be good religion opinions and views of the quantity of a loss. So, simply numbers and the variations is commonly not an indicator of intentional fraud by both the policyholder or the insurer.

The day insurance coverage firms and restoration contractors cease preventing about one aspect providing to pay far too little and ripping everyone off whereas the opposite aspect is asking for an excessive amount of is just not going to occur in our lifetime. But, it makes for nice debate within the adjustment area, courtrooms, and property insurance coverage conferences, the place many rise up and hold forth in regards to the matter for one motive or one other.

Thought For The Day

Nothing good ever occurs by itself – it’s achieved via striving, although this generally bears a excessive worth.
—Antonio Munoz Molina
1 SRF Companies, LLC, v. Zinober, Diana & Monteverde, No. 22000511CAAXMX (Fla. Cir. Ct. (Martin Co.) Criticism filed June 13, 2022).



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