I once, in an argument to a court, used the term "chutzpah" to make my case. The judge had never heard the term and thought I had used a swear word in his court and was about to hold myself in contempt when my opponent, who also happens to be Jewish, joined me and explained the meaning of the word. He and I explained that "chutzpah" means unlimited bile so that he, if he had presided over a trial in which the defendant was found guilty of murdering his parents and asked for friendship because he was an orphan. I State Auto Property And Incidently Insurance Company v. Sigismondi Foreign Car Specialists, Inc. Civil Action No. 19-5578, USDC For the Eastern District of Pennsylvania (April 12, 2021) insured, after admitting under oath that he had produced documents to obtain greater returns from his insurance company, the undisputed chutzpah had sued his insurer for bad faith for refuse to pay their fraudulent claim.
The state's car policy provided Sigismondi with coverage for a commercial property in Philadelphia where the car repair shop is located. In January 2019, Sigismondi submitted a claim in accordance with the policy for water damage to its building and certain inventories, including car and sound equipment.
Sigismondi provided the insurer's rescue number with compensation costs. Many of these figures were significantly higher than the values determined by the rescuer. Sigismondi acknowledged that it used computer software to edit at least some of the invoices sent to State Auto, including by entering price information and dates. As a result, State Auto requested the investigations of Joseph Sigismondi, Sigismondi's owner, and Debbie Miller, an employee of Sigismondi.
During his investigation, Sigismondi testified that State Auto's invoices were scanned into a computer and changed. State Auto claimed that the president of the seller in question submitted a statement that Mr. Sigismondi did not contact the seller to ask for price information. Based on the discovery of the changed invoices, State Auto denied Sigismondi's claim.
Sigismondi pointed to no evidence that State Auto lacked a reasonable basis for denying benefits under the policy, let alone that State Auto "knew of or ruthlessly disregarded" the lack of such a ground. On the contrary, the minutes reflect that State Auto responded reasonably after being informed that Sigismondi had submitted amended supplier invoices to support its claim under the policy.
To invalidate an insurance policy under Pennsylvania law, an insurance company must prove the following factors through clear and convincing evidence:
- the insured made a false claim;
- the insured knew that the petition was false when it was made or the insured made the representation in bad faith; and
- the presentation was significant for the risk of being insured.
The clear and convincing standard of proof requires evidence that is so clear, direct, important and convincing that it enables the examiner to arrive at a clear conviction, no doubt, of the truth of the exact facts in question. State Auto argued that it was justified to summarize an assessment of this count as Sigismondi materially violated the policy's hidden or fraudulent provisions by amending the invoices in question. Pennsylvania courts have long ruled that a breach of fraud and hidden provisions in an insurance policy act as a complete impediment to the insured's recovery under the insurance, and Sigismondi does not deny that it misrepresented State Auto by submitting amended invoices or knowing that its representations were false when it made them.
Therefore, the Court's analysis requires that it be established that the explanations of error were material. A manufactured receipt created by a consumer and presented as an official document from a dealer, without the dealer's knowledge, constitutes false or misleading information and would indeed be essential to the insurance claim. Sigismondi's manufactured invoices were clearly essential to its insurance claims. Interpreting the record in the light that is most favorable to Sigismondi and applying the clear and convincing standard of evidence, no reasonable jury could find that Sigismondi did not knowingly make false statements by submitting amended invoices in support of his claim and that the petitions were essential to its claims. Therefore, State Auto was entitled to a summary judgment on this count.
State Auto also brought a summary judgment on its claim that Sigismondi violated Pennsylvania & # 39 ;s Insurance Fraud Act, creating a private matter for insurance companies to remedy various types of fraud. Sigismondi does not deny that it deliberately made false submissions to State Auto, and the court can only conclude as a matter of law that those erroneous submissions were material to the claim.
In this context, no reasonable jury could find Sigismondi even under the increased clear and convincing standard of evidence. State Auto is entitled to a summary judgment on its Pennsylvania Insurance Fraud Act claim. As a matter of law, Sigismondi intended to mislead State Auto into relying on erroneous petitions.
The court granted State Auto's request for a summary judgment on the declaratory judgment (Count I) and the Pennsylvania Insurance Fraud Act requirement (Count II) but denied its request for a summary judgment on the general legislation on fraud (Count III). The reverse incredible claim (Count IV) was dismissed without effect. State Auto's request for a summary assessment of the counterclaim was denied as a criticism. A hearing on damages will be scheduled at a future date.
To sue an insurance company for handling claims for damages after admitting an obvious attempt at fraud, gives a misrepresentation and concealment of material facts to a person with insignificant chutzpah. In my view, the court should have referred Sigismondi to the local prosecutor for attempted insurance fraud, which, based on his under-oath acknowledgment, would be an easy crime to prosecute. Insurance fraud is crucial to each state's public order and deserves more punishment than a simple dismissal of Sigismondi's attempted fraud.
© 2021 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, handling insurance claims, infidels and insurance fraud almost
insurers and insurers. He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as a lawyer for insurance coverage and claims handling and more than 52 years in the insurance industry. He is available at http://www.zalma.com and firstname.lastname@example.org.
Mr. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award.
For the past 53 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their claims staff to become insurance claims staff.
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