Fraud Perpetrators Give Up

Insurer Sues Fraud Perpetrators to Defeat Fraudulent Claim only to Find They Did Not Respond

Barry Zalma

Jul 09, 2024

Transcript

BACKGROUND

On May 3, 2024, the Clerk entered default against Defendants and Plaintiff filed a motion for default judgment against Defendants seeking declaratory relief as articulated in the complaint.

LEGAL STANDARD

Federal Rule of Civil Procedure 55(b) permits the Court to enter a default judgment upon motion by a party and to conduct a hearing to determine the amount of damages, if necessary. A Rule 55(b) Default Judgment is appropriate where the Court determines that the well-pleaded allegations in the complaint support the relief sought in the action. The appropriate inquiry is whether or not the face of the pleadings supports the default judgment and the causes of action therein. Since a defendant’s default does not in itself warrant the court in entering a default judgment it must determine that there is a sufficient basis in the pleadings for the judgment entered.

DISCUSSION

Plaintiff’s complaint and accompanying motion contain well-pleaded allegations of fact and proper claims such that Defendants admit the allegations in the complaint, simply put that:

(1) as to Boyce, the 2017 Ford U-Haul truck involved in Accident #2 is not an “auto” under the Boyce Policy,

(2) that, as to Boyce and Hugue, the defendants involved in said accident knew each other prior to Accident #2 and that Accident #2 was staged for purposes of insurance fraud,

(3) as to Transou, Johnson, and Hay, the defendants involved in said accident knew each other prior to Accident #3 and staged said accident for the purposes of insurance fraud; and

(4) as to all Defendants, Plaintiff is entitled to recover payments made and costs incurred because of Defendants’ fraud and misrepresentations.

CONCLUSION

Therefore, the Court granted Plaintiff’s motion for default judgment against Johnson, Hay, Boyce, Hugue, and Transou and grants Plaintiff the declaratory relief requested in Plaintiff’s complaint as to these individuals.

ZALMA OPINION

Insurance fraud perpetrators are not brave. When an insurer, like Progressive, gathers evidence that it can prove it was the victim of fraud, it may act proactively as did Progressive in this case seeking a judgment refusing to pay further and for money judgments against the fraudsters. They refused to respond, allowed a default to be entered, and a money judgment. Hopefully Progressive will take the profit out of their crime by collecting on the judgment.