Claim for Damage to Property that Existed Before Issuance of Policy is Fraud
After accepting a Plea Agreement the Defendant has no right to expunge his criminal record
See the full article at https://www.linkedin.com/pulse/claim-damage-property-existed-before-issuance-policy-barry and at https://zalma.com/blog. Posted on August 4, 2021 by Barry Zalma
Vsevolod Sergee Garanin appealed from the order, entered in the Court of Common Pleas of Lackawanna County, denying his expungement petition. In Commonwealth Of Pennsylvania v. Vsevolod Sergee Garanin, No. 337 MDA 2020, Superior Court of Pennsylvania (July 30, 2021) the court resolved his claims.
FACTS
On April 4, 2016, Garanin purchased an “Ultrapack Insurance Policy” from Erie Insurance Group for a four-unit rental property on Ripple Street in Scranton, PA. This policy became effective beginning April 4, 2016. Subsequently, on October 14, 2016, Garanin submitted an insurance claim for four freeze-damaged boilers at the insured property, and Erie Insurance Group generated a claim. Garanin claimed that the boilers were damaged by sub-freezing temperatures that occurred in April of 2016. On November 1, 2016, inspection revealed that the freezing damage to the boilers occurred prior to, or during, March 2016, prior to the issuance of the policy.
Moreover, Garanin’s “handyman” and plumber confirmed that the boilers were in the building in March 2016 and that, when he tried to fire them, they were cracked and damaged. Garanin willingly made this fraudulent insurance claim, with misleading support, to obtain a loss payment of $35, 800.00 for damages that occurred before his insurance policy was in effect.
On June 7, 2017, the Commonwealth charged Garanin with three third-degree felonies: theft by deception-false impression, theft by deception-failure to correct, and, insurance fraud.
On May 17, 2018, the Commonwealth’s attorney sent a letter to defense counsel formalizing a final offer of a plea to criminal attempt-theft by deception-failure to correct, a first-degree misdemeanor, in exchange for Garanin’s promise to:
pay $20, 000.00 to the Northeastern Pennsylvania (NEPA) Insurance Fraud Task Force;
withdraw any and all civil lawsuits against the Scranton Housing Authority;
perform 20 hours of community service in Lackawanna County prior to his sentence date; and
dissolve his corporation, Ukrapprop 2 LLC.
The Commonwealth’s offer letter stated that, “in addition, the Commonwealth will be willing to drop all other charges not listed herein.” (emphasis added).]
On June 6, 2018, pursuant to the proffered plea agreement, the Commonwealth dismissed two of the three charges. Furthermore, the Commonwealth amended the remaining charge to a first-degree misdemeanor grading, wherein Garanin entered a guilty plea to criminal attempt-theft by deception- failure to correct. On January 8, 2019, after a thorough review of the pre-sentence investigation report, Sentencing Guidelines, Garanin’s history and characteristics, and the underlying nature of Garanin’s offense, the trial court sentenced Garanin to the restrictive intermediate punishment program for a four-year probationary period including three months incarceration, three months Lackawanna County house arrest program, pay restitution to Erie Insurance Group for the amount of $5, 413.00, and refrain from the use of drugs and alcohol. Thereafter, on June 25, 2019, Garanin filed a petition to expunge, requesting to fully expunge arrests and other court records pertaining to the two nolle prossed [Will not prosecute] charges of theft by deception-false impression and insurance fraud.
ANALYSIS
The Pennsylvania Supreme Court has set forth the well-settled appellate standard of review for a court’s grant or denial of a petition to expunge a criminal arrest record that the decision to grant or deny a petition to expunge rests with the sound discretion of the trial court, and appellate court’s review that court’s decision only for abuse of discretion. [Commonwealth v. Moto, 23 A.3d 989, 993 (Pa. 2011)]
When a prosecution has been terminated without conviction or acquittal, for reasons such as nolle prosse of the charges or the defendant’s successful completion of an accelerated rehabilitative disposition program then the Pennsylvania Supreme Court has required the trial court to “balance the individual’s right to be free from the harm attendant to maintenance of the arrest record against the Commonwealth’s interest in preserving such records.”
However, this Court has distinguished those cases where the prosecution has nolle prossed charges against the defendant from cases in which charges were dropped pursuant to a plea agreement. In those cases where charges are dropped or dismissed pursuant to a plea agreement, expungement is inappropriate because it obscures the true circumstances under which the defendant was convicted.
The trial court found that the charges were actually dropped or dismissed pursuant to a plea agreement because the Commonwealth never conceded that it lacked the necessary evidence to proceed on the felony charges.
It is axiomatic that the Commonwealth’s decision to drop charges pursuant to a plea agreement carries no implicit admission that proof is lacking. Rather, that decision is simply part of a bargain with the defendant to avoid a trial in exchange for a plea to lesser charges. Such a bargain is quasi-contractual. If the court then expunged the dismissed charges, the court would leave no accurate record of the contractual relationship entered into by Appellant and the Commonwealth.
In the absence of an agreement as to expungement, Appellant stands to receive more than he bargained for in the plea agreement if the dismissed charges are later expunged.
Garanin’s case is sufficiently distinguishable from his claimed authorities and a remand for an evidentiary hearing is unnecessary. Garanin’s guilty plea is of record, as is a recitation of the plea agreement by virtue of the Special Prosecutor’s final plea offer letter.
The appellate court concluded that Garanin’s felony charges were dropped pursuant to a plea agreement based upon:
the prosecutor’s statements to the court that there was no agreement as to expungement;
the use of the word “drop” in the plea offer letter;
the lack of a Rule 585 order or nolle prosse request in the record; and
the fact that Garanin did not file a habeas corpus petition.
ZALMA OPINION
Mr. Garanin was lucky, the plea agreement offered to him eliminated the need to go to trial over a five year felony of insurance fraud where the evidence against him was overwhelming and he only had to serve 30 days. He tried to clear his record by a motion to expunge instead of thanking the prosecutors for their kindness to him. His insult appropriately failed. Insurance fraud is a serious crime and it should be prosecuted vigorously rather than change it to a misdemeanor to avoid the need to go to trial. Garanin avoided trial and five years in prison and insulted the court system by trying expungement, failed, and then took the issue up on appeal only to, properly, fail again.
© 2021 – Barry Zalma Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.
He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business.
He is available at
http://www.zalma.com
and zalma@zalma.com. Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award. Over the last 53 years Barry Zalma has dedicated 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 make it possible for insurers and their claims staff to become insurance claims professionals.
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