Feels like a Fraud: Fifth Circuit Rules in Favor of Insurer; Awards $6M in Fraudulent Claims Case

In Allstate Insurance Company et al. v. Michael Kent Plambeck, DC, et al. United States Court of Appeals for the Fifth Circuit, September 17, 2015, an insurer was awarded a $6 million verdict against a group of chiropractors, lawyers and telemarketers that coerced individuals into making fraudulent claims against the insurer. The District Court awarded the verdict based on the Racketeer Influenced and Corrupt Organizations Act (RICO). On September 17, 2015, the Fifth Circuit Court upheld the verdict.

The insurer accused the telemarketers of …

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Bad Faith Decision Vacated as Insurer Not Responsible for Punitive Damages Where Insurance for Punitive Damages is Prohibited

In Jared Wolfe v. Allstate Property & Casualty Insurance Company, the insurer brought an appeal to the Third Circuit seeking to vacate a jury award against it for bad faith and breach of contract asserted by a plaintiff who was injured in a motor vehicle accident caused by the policyholder of the insurer. The Third Circuit agreed with the insurer and vacated the award, finding that the lower court made a mistake in allowing the plaintiff to introduce evidence of a punitive damages award …

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If It Looks Like An Intentional Act And Sounds Like An Intentional Act, Then It Is An Intentional Act

Allstate Insurance Co. v. Tandon, 2015 WL 1395925 (D. Conn. Mar. 25, 2015), involved homeowners and personal umbrella policies issued to the policyholders, Sapna Tandon and Robert Doohan. The policies provided coverage for damages arising from an “occurrence.”

In May 2010, the policyholders were involved in an altercation with Frank and Donna Genna. The Gennas brought suit against the policyholders, in addition to twelve other defendants, for injuries allegedly sustained in the altercation. The Gennas collectively asserted ten causes of action against the policyholders …

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N.Y. Court of Appeals Upholds Carriers Interpretation of Ensuing Loss Exception to Water Exclusion

In Platek v Town of Hamberg (N.Y. Ct. Apps., Feb. 19, 2015), New York’s highest court reversed the decision of the Fourth Department appeals court siding with the carrier’s interpretation of the water exclusion contained within a homeowner’s all risk policy. The relevant policy language provided as follows:

“ [The policy] does not cover loss to the property . . . consisting of or caused by:

. . .

  1. Water . . . on or below the surface of the ground, regardless of its source
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Claim Against Vehicle Owner Key to Umbrella Coverage for Auto Loss Caused by Permissive Driver

In this insurance coverage action, Allstate  appealed from an order granting summary judgment and determining that a permissive user of a motor vehicle was covered under Allstate’s  umbrella policy.

In August 2007, Alana Proctor, the permissive driver of a vehicle owned by Neil Seiden, collided with Melanie Manzo-Pianelli. Seiden had an insurance policy with State Farm that provided $100,000 in coverage and an umbrella policy with Allstate that provided $1,000,000 in coverage. State Farm tendered its policy limits to Pianelli, and Pianelli sought to recover …

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