Justia Insurance Law Opinion Summaries

Articles Posted in Criminal Law
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James and Levi Garrett, a father and son farming duo in South Dakota, were found guilty by a jury of making false statements in connection with federal crop insurance. The Garretts had participated in a federal crop insurance program, administrated by Crop Risk Services (CRS) and backed by the Risk Management Agency of the United States Department of Agriculture (USDA). They had obtained insurance for sunflower crops in 2018, and James had obtained insurance for a corn crop in 2019. The Garretts were accused of falsely certifying the number of acres of sunflowers and corn they planted in 2018 and 2019 respectively, and subsequently reporting harvest losses to CRS.The case went to trial in October 2022. The jury heard from several witnesses and examined dozens of exhibits. At the conclusion of the trial, James was convicted on two counts of making a false statement in connection with insurance for sunflower and corn crops, and Levi was convicted on one count of making a false statement in connection with insurance for a sunflower crop. The Garretts moved for judgment of acquittal, and in the alternative, a new trial, arguing there was insufficient evidence to support their convictions. The district court denied their motion.The Garretts appealed to the United States Court of Appeals for the Eighth Circuit, challenging the district court’s evidentiary rulings and its denial of their post-trial motions. They argued that the district court erred in admitting certain evidence and excluding others, and that there was insufficient evidence to support their convictions. The Court of Appeals affirmed the judgment of the district court, concluding that the trial record supported the jury verdict and that the district court did not err in its evidentiary rulings or in denying the Garretts' post-trial motions. View "United States v. Garrett" on Justia Law

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The appellant, Demitri Gee, was convicted for driving under the influence resulting in substantial bodily harm. He appealed the judgment of conviction, challenging the restitution amount of $9,940 that was awarded to the State of Nevada Victims of Crime Program. On appeal, the Supreme Court of the State of Nevada found two main issues: whether an order of restitution must be based on competent evidence and whether a defendant’s restitution obligation should be offset by the amount the defendant’s insurance provider paid to the victim for the same losses.Gee had been driving while intoxicated when he lost control of his vehicle and collided with another car, severely injuring the occupants. He subsequently fled the scene. As a result of the collision, Gee was charged with two counts of driving under the influence resulting in substantial bodily harm among other charges. A civil settlement agreement was reached with the victims, and they received compensation through Gee's insurance.The court found that the restitution amount of $9,940 was not supported by competent evidence as the state failed to present evidence to support it. The court also found that the district court had not evaluated whether the restitution should be offset by the insurance payment made by Gee to the victims. Therefore, the Supreme Court of Nevada concluded that the district court had abused its discretion by ordering restitution not supported by competent evidence and by failing to evaluate whether the award needed to be offset by the compensation provided to the victim through Gee’s insurance. The court then vacated the $9,940 in restitution, affirmed the rest of the conviction, and remanded the case for further proceedings regarding the restitution amount. View "Gee v. State" on Justia Law

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In the United States Court of Appeals for the Fourth Circuit, the case involved defendant Glenda Taylor-Sanders, a licensed insurance agent, who pleaded guilty to one count of wire fraud. Taylor-Sanders had used her position to defraud several trucking companies and an insurance finance company, BankDirect Capital Finance, by misappropriating funds meant for insurance premiums and obtaining loans under the guise of non-existent insurance policies. She used the funds for personal expenditures, leading to the lapse of some of the trucking companies' insurance policies.In her plea agreement, Taylor-Sanders agreed to pay full restitution to all victims harmed by her relevant conduct, and she waived all rights to contest the conviction and sentence in any appeal, unless it was due to ineffective assistance of counsel or prosecutorial misconduct. However, she later attempted to withdraw her guilty plea, arguing that she didn't fully understand the implications of her plea and that she never acted with the requisite intent to defraud. The district court denied her motion to withdraw the plea, concluding that her claim was not credible and that she had not provided a fair and just reason to withdraw her guilty plea.After being sentenced to 66 months' imprisonment and ordered to pay over $700,000 in restitution, Taylor-Sanders appealed her conviction, sentence, and the restitution order. She argued that her guilty plea wasn’t knowing and voluntary, that the district court miscalculated her offense level, and that the district court made several errors when awarding restitution.The Court of Appeals found that Taylor-Sanders's guilty plea and plea waiver were valid and the issues she raised on appeal fell within the scope of her appeal waiver. The court distinguished between claims that a sentence is "illegal" because the district court lacked the authority to issue the sentence (which remain reviewable despite an appeal waiver) and claims that a sentence was "imposed in violation of law" because it has otherwise merely "been touched by a legal error" (in which case the court will enforce the appeal waiver). The court dismissed Taylor-Sanders's appeal in its entirety. View "US v. Taylor-Sanders" on Justia Law

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After defendants Frayba and William Tipton pled guilty to committing insurance fraud, they were ordered to pay victim restitution to Nationwide Insurance Company of America (Nationwide). Later, Nationwide petitioned the trial court to convert the criminal restitution orders to civil judgments against both defendants. Defendants opposed. Relying on Penal Code1 section 1214, the trial court granted Nationwide’s petition and entered civil judgments against the defendants. On appeal, defendants argued the trial court erred because (1) Nationwide “failed to provide citation to any . . . authority supporting” conversion of the victim restitution orders to civil judgment; and (2) Nationwide’s petition lacked supporting evidence. The Court of Appeal found no reversible error and affirmed the trial court's judgment. View "Nationwide Ins. Co. of Am. v. Tipton" on Justia Law

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The prosecution filed a complaint alleging that a defendant committed a lewd or lascivious act on a child by force, violence, duress, menace, and fear. The North River Insurance Company and its bail agent (collectively, North River) posted a $100,000 bond to release the defendant. The trial court declared the bond forfeited when the defendant did not appear for a hearing on February 22, 2018. North River moved to vacate the forfeiture and to exonerate the bond under section 1305, subdivision (d) or (g). In the alternative, it moved to toll time under section 1305, subdivision (e) or (h). On July 10, 2019, the court entered a judgment of $100,000 against North River. North River appealed.   The Second Appellate District affirmed. The court explained it decided a similar case against a surety in People v. Tingcungco (2015) 237 Cal.App.4th 249 (Tingcungco). The court reasoned that North River’s position is contrary to the language and legislative history of Penal Code section 1305, subdivisions (g) and (h). North River posted a bail bond on a defendant who fled California. North River chased him but found him too late to get the prosecution’s decision on extradition, which is a necessary part of the statutory process. To save itself now, North River maintains legislative purpose should override, or guide, the interpretation of the words of this statute. However, the court wrote, rescuing anyone who may have pledged assets as security for the bond is not an issue before the court. View "P. v. The North River Insurance Company" on Justia Law

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Following a preliminary hearing, petitioner Dr. Sanjoy Banerjee was charged in an information with two counts of presenting a false or fraudulent health care claim to an insurer (a form of insurance fraud, counts 1-2), and three counts of perjury (counts 3-5). The superior court denied Banerjee’s motion to dismiss the information as unsupported by reasonable or probable cause. Banerjee petitioned for a writ of prohibition to direct the superior court to vacate its order denying his Penal Code section 995 motion and to issue an order setting aside the information. The Court of Appeal issued an order to show cause and an order staying further proceedings on the information, pending the Court's resolution of the merits of Banerjee’s petition. The State filed a return, and Banerjee filed a traverse. The State argued the evidence supported a strong suspicion that Banerjee committed two counts of insurance fraud and three counts of perjury, based on his violations of Labor Code section 139.3(a) between 2014 and 2016. During that period, Banerjee billed a workers’ compensation insurer for services he rendered to patients through his professional corporation and through two other legal entities he owned and controlled. The insurance fraud charges are based on Banerjee’s 2014-2016 billings to the insurer through the two other entities. The perjury charges were based on three instances in which Banerjee signed doctor’s reports, certifying under penalty of perjury that he had not violated “section 139.3.” Banerjee argued: (1) the evidence showed he did not violate the statute's referral prohibition; (2) even if he did not comply with section 139.3(e), the “physician’s office” exception to the referral prohibition applied to all of his referrals to his two other legal entities; and (3) the patient disclosure requirement of section 139.3(e), the referral prohibition of section 139.3(a), and the physician’s office exception to the referral prohibition were unconstitutionally vague. The Court of Appeal concluded: (1) Banerjee did not violate section 139.3(a) by referring his patients to his two other legal entities; and (2) the evidence supported a strong suspicion that Banerjee specifically intended to present false and fraudulent claims for health care benefits, in violation of Penal Code section 550(a)(6), by billing the workers’ compensation insurer substantially higher amounts through his two other legal entities than he previously and customarily billed the insurer for the same services he formerly rendered through his professional corporation and his former group practice. Thus, the Court granted the writ as to the perjury charges but denied it as to the insurance fraud charges. View "Banerjee v. Super. Ct." on Justia Law

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On February 22, a criminal complaint was filed against the defendant for unlawful driving or taking of a vehicle. On February 26, the defendant was in custody and present in court for a pretrial hearing. The court continued the matter to March 20. The Surety posted a bond of $25,000 for the defendant’s release from custody. At the March 20 pretrial hearing, the defendant was not present. The court told defense counsel “I’ll give you a week to bring him back in. … Bench warrant of 35,000 held … it’s not likely to waste your family and friends money and then FTA on a 10851.” On March 28, the defendant again failed to appear. The court ordered bail forfeited. A notice of forfeiture was mailed to the parties on March 29.On October 2, the Surety moved to vacate, forfeit, and exonerate bail or to extend time, arguing that the court lost jurisdiction over the bond because it failed to declare a forfeiture (Penal Code 13051) when the defendant did not appear on March 20. The court of appeal affirmed the denial of the motion. The trial court had a rational basis for believing there may have been an excuse for the defendant’s failure to appear sufficient to warrant continuing the case without declaring a forfeiture and retained jurisdiction to later declare the bail forfeited. View "People v. Bankers Insurance Co." on Justia Law

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Defendant Daniel Clapp plead no contest to concealing the true extent of his physical activities and abilities from his employer, the Department of the California Highway Patrol (CHP), and the State Compensation Insurance Fund (SCIF). Consistent with a resolution negotiated by the parties, the trial court granted defendant three years’ probation, and as a condition of probation, ordered him to pay restitution. Following a hearing, defendant was ordered to pay $30,095.68 to SCIF for temporary disability benefits and $81,768.01 to CHP for benefits wrongfully obtained. He was also ordered to pay $1,350 and $70,159 to SCIF and CHP respectively for investigative costs. Defendant appealed the restitution award as to investigation costs contending that, as public investigative agencies, neither SCIF nor CHP was entitled to reimbursement for the costs of investigating his claim. After review, the Court of Appeal concluded that as direct victims of defendant’s fraud, both CHP and SCIF were indeed entitled to restitution for investigative costs incurred in an effort to justify discontinuance of payments and recoup money defendant fraudulently obtained. View "California v. Clapp" on Justia Law

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Petitioner Andrew Panaggio appealed a New Hampshire Compensation Appeals Board (Board) determination that respondent, CNA Insurance Company (the insurer), could not be ordered to reimburse him for his purchase of medical marijuana because such reimbursement would have constituted aiding and abetting his commission of a federal crime under the federal Controlled Substances Act (CSA). When Panaggio appealed the insurer’s denial to the New Hampshire Department of Labor, a hearing officer agreed with the insurer. Panaggio appealed the hearing officer’s decision to the Board, which unanimously found that his use of medical marijuana was reasonable and medically necessary. Nonetheless, the Board upheld the insurer’s refusal to reimburse Panaggio, concluding that “the carrier is not able to provide medical marijuana because such reimbursement is not legal under state or federal law.” The New Hampshire Supreme Court surmised the issue on appeal raised a question of federal preemption, "which is essentially a matter of statutory interpretation and construction." Although it was an issue of first impression for the New Hampshire Court, other courts considered whether the CSA preempted a state order requiring reimbursement of an employee’s purchase of medical marijuana. Panaggio reasoned that “[b]ecause New Hampshire law unambiguously requires the insurer to pay for the claimant’s medically related treatment,” an insurer that reimburses a claimant for the purchase of medical marijuana acts without the volition required by the federal aiding and abetting statute. The insurer asserted Panaggio’s argument leads to an absurd result, observing that “[c]onflict preemption applies because state law requires what federal law forbids.” The New Hampshire Supreme Court ultimately concluded the CSA did not make it illegal for an insurer to reimburse an employee for his or her purchase of medical marijuana. "[A] Board order to reimburse Panaggio does not interfere with the federal government’s ability to enforce the CSA. Regardless of whether the insurer is ordered to reimburse Panaggio for his medical marijuana purchase, the federal government is free to prosecute him for simple possession of marijuana under the CSA." Under these circumstances, the Court concluded the “high threshold” for preemption “is not met here.” The Board's decision was reversed and the matter remanded for further proceedings. View "Appeal of Andrew Panaggio" on Justia Law

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Defendant was charged with driving under the influence of alcohol and obtained a $35,000 bond for his release from custody. The surety promised to assure Defendant’s appearance for arraignment. The contract stated that, if Defendant left the jurisdiction, he would “voluntarily return” and “waive extradition.” On the day of the arraignment, Defendant's indemnitor informed the surety Defendant told her he was in Mexico. The court forfeited the bail bond. Under Penal Code 1305(c), the court was required to vacate the forfeiture if Defendant appeared in court, either voluntarily or in custody, within 180 days. The court extended the appearance period by six months. The surety then moved to vacate the forfeiture and exonerate the bond or to toll or extend time, arguing that Defendant was located in Mexico and “subject to “constructive custody,” having obtained a Mexican passport and applied for a U.S. visa. The surety contended the People were imposing improper conditions, including a requirement that the surety pay for extradition ($50,000). The surety argued Defendant was in effect detained as a result of immigration laws that precluded his reentry. The People argued they could not extradite Defendant on a misdemeanor charge and that he was not detained but left the country voluntarily. The court of appeal affirmed summary judgment against the surety, rejecting an argument that Defendant suffered from a “temporary disability” under Penal Code 1305(e), View "People v. The North River Insurance Co." on Justia Law